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on Labour Economics |
| By: | Marco Caliendo; Steffen Künn; Arne Uhlendorff |
| Abstract: | In some countries including Germany unemployed workers can increase their income during job search by taking up "marginal employment" up to a threshold without any deduction from their benefits. Marginal employment can be considered as a wage subsidy as it lowers labour costs for firms owing to reduced social security contributions, and increases work incentives due to higher net earnings. Additional earnings during unemployment might lead to higher reservation wages prolonging the duration of unemployment, yet also giving unemployed individuals more time to search for better and more stable jobs. Furthermore, marginal employment might lower human capital deterioration and raise the job arrival rate due to network effects. To evaluate the impact of marginal employment on unemployment duration and subsequent job quality, we consider a sample of fresh entries into unemployment. Our results suggest that marginal employment leads to more stable post-unemployment jobs, has no impact on wages, and increases the job-finding probability if it is related to previous sectoral experience of the unemployed worker. We find evidence for time-varying treatment effects: whilst there is no significant impact during the first twelve months of unemployment, job finding probabilities increase after one year and the impact on job stability is stronger if the jobs are taken up later within the unemployment spell. |
| Keywords: | marginal employment, unemployment duration, job search, employment stability, timing of events model |
| JEL: | J64 C41 C33 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1222&r=lab |
| By: | Brücker, Herbert (Institute for Employment Research (IAB), Nuremberg); Jahn, Elke J. (Institute for Employment Research (IAB), Nuremberg); Upward, Richard (University of Nottingham) |
| Abstract: | We investigate the labor market effects of immigration in Denmark, Germany and the UK, three countries which are characterized by considerable differences in labor market institutions and welfare states. Institutions such as collective bargaining, minimum wages, employment protection and unemployment benefits affect the way in which wages respond to labor supply shocks, and, hence, the labor market effects of immigration. We employ a wage-setting approach which assumes that wages decline with the unemployment rate, albeit imperfectly. We find that wage flexibility is substantially higher in the UK compared to Germany and, in particular, Denmark. As a consequence, immigration has a much larger effect on the unemployment rate in Germany and Denmark, while the wage effects are larger in the UK. Moreover, the elasticity of substitution between natives and foreign workers is high in the UK and particularly low in Germany. Thus, the preexisting foreign labor force suffers more from further immigration in Germany than in the UK. |
| Keywords: | immigration, unemployment, wages, labor markets, panel data, comparative studies |
| JEL: | F22 J31 J61 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6713&r=lab |
| By: | Peggy Bechara |
| Abstract: | Using German linked employer-employee data this paper investigates the gender wage gap at the time of entering the labour market and its development during workers’ early career. The analysis contributes to the existing research on gender wage differentials among young workers by providing evidence on the impact of women’s disproportionate concentration in lower-paying industries, occupations, establishments and job-cells, i.e. occupations within establishments. The estimation results reveal that all types of segregation and particularly job-cell segregation are significant determinants of the gender wage gap, while skill endowments and differences in work histories are found to be of minor importance. At the time of labour market entry women’s wage disadvantages can almost entirely be explained by the fact that they start their working career in lower-paying occupations and establishments. With progressing labour market experience, however, gender segregation becomes less important and cannot fully account for a slight widening of the wage differential among young men and women. Therefore, part of the early career wage gap remains unexplained. |
| Keywords: | Gender wage gap; early career; labour market segregation |
| JEL: | J16 J24 J31 J62 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0352&r=lab |
| By: | Maertens, Miet; Verhofstadt, Ellen |
| Abstract: | In this paper we analyse the indirect effects of the boom in horticultural exports in Senegal on child schooling. The export boom has caused a dramatic increase in female off-farm wage employment, which led to increased female bargaining power in the household. We investigate the causal effect of female wage income on primary school enrolment. We develop a collective household model with endogenous bargaining power to show that, if women have higher preferences for schooling than men, the impact of female wage income on school enrolment will be the result of a positive income effect, a negative labour substitution effect and a positive empowerment effect. We address the question empirically using original household survey data from Senegal. We use different econometric techniques and show that female off-farm wage income has a positive effect on primary school enrolment, and that the effect is larger for girls than for boys. Our results imply that the horticultural export boom in Senegal has indirectly contributed to the second and third Millennium Development Goals of universal primary education and elimination of gender disparities in primary education. |
| Keywords: | Consumer/Household Economics, Labor and Human Capital, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:126856&r=lab |
| By: | Per Krusell; Leena Rudanko |
| Abstract: | We analyze a labor market with search and matching frictions where wage setting is controlled by a monopoly union. We take a benevolent view of the union, assuming it to care equally about employed and unemployed workers, to treat identical workers in identical jobs the same, as well as to be fully rational, taking job creation into account when making its wage demands. Under these assumptions, if the union is able to fully commit to future wages, it achieves an efficient level of long-run unemployment. In the short run, however, the union raises current wages above the efficient level, in order to appropriate surpluses from firms with existing matches. The union wage policy is thus time-inconsistent. Without commitment, and in a Markov-perfect equilibrium, not only is unemployment well above its efficient level, but the union wage also exhibits endogenous real stickiness, which leads to increased volatility in the labor market. We consider extensions to partial unionization and collective bargaining between the union and an employers’ association. |
| JEL: | E02 E24 J51 J64 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18218&r=lab |
| By: | Kirdar, Murat G.; Dayioglu, Meltem; Koc, Ismet |
| Abstract: | This study examines the effects of the extension of compulsory schooling from 5 to 8 years in Turkey—which substantially increased the grade completion rates not only during the new compulsory years but also during the high school years—on the equality of educational outcomes among various subpopulations. While longer compulsory schooling decreases the educational gap for most subgroups—in particular, the gender gap in rural areas, the ethnic gap among men in both urban and rural areas, and the ethnic gap among women in urban areas; at the same time, it increases the gender gap in urban areas as well as the ethnic gap among women in rural areas. For instance, the gap in the 8th grade completion rate between ethnic Turkish and Kurdish women in rural areas increases from 22.5 to 44.6 percentage points for the 1989 birth-cohort. These findings suggest that the differences among subpopulations in the change in schooling costs (both monetary and psychic) during the new compulsory schooling years, in the costs of non-compliance with the policy, in labor force participation, and in the drop-out behavior in earlier grades are the key underlying factors. |
| Keywords: | Compulsory Schooling; Gender; Ethnicity; Parental Schooling; Regression Discontinuity |
| JEL: | I21 J15 I28 J16 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39995&r=lab |
| By: | Priya Ranjan (Department of Economics, University of California-Irvine) |
| Abstract: | It is shown that when wages are determined through collective bargaining, there is a non-monotonic relationship between the cost of o§shoring and unemployment. Starting from a high cost of off- shoring, a decrease in the cost of o§shoring reduces unemployment first and then increases it. The non-monotonicity of unemployment in the cost of offshoring does not obtain if wages are determined by individual Nash bargaining instead of collective bargaining. The non-monotonic relationship between the cost of offshoring and unemployment is verified through a calibration exercise performed using parameters for Sweden. The calibration exercise predicts that a decrease in the cost of o§shoring, starting from the present level, would reduce unemployment in Sweden. In a two country framework of o§shoring (source country and host country) it is shown how changes in the labor market institutions in one country affect labor market outcomes in both countries. |
| Keywords: | Offshoring; Unemployment; Collective bargaining; Unions; Unemployment benefits; Recruitment cost |
| JEL: | F16 J64 J50 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:121302&r=lab |
| By: | Manuela Deidda; Adriana Di Liberto; Marta Foddi; Giovanni Sulis |
| Abstract: | We analyse the effects of an active labour market program for disadvantaged workers recently implemented in an Italian depressed area. Our sample includes 859 workers, mostly women, who entered the program before April 2008 and were subsequently interviewed in 2009-10. We complement the existing administrative data with survey data that enables us to control for numerous individual and labour market characteristics for both treated and non-treated individuals. Using propensity-score matching methods, we do find that the employment subsidy had a positive and significant effect (ATT) on both the probability of finding a job for participants and on their level of income. We also control for effect heterogeneity and find that the outcome of the policy was higher for women and, among them, we also find that the program was more effective on less educated and older female workers. Finally, we exploit unique information on previous contacts between workers and firms and on the use of informal channels for job search activity to explore the role of underground employment relations for the effectiveness of the policy. |
| Keywords: | Active Labour Market Programs; Female Labour-force participation; Employment Subsidies; Propensity Score Matching; Informal networks |
| JEL: | C14 J64 J16 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201216&r=lab |
| By: | Cristian Bartolucci; Francesco Devicienti |
| Abstract: | We propose a test that uses information on workers’ mobility, wages and firms’ profits to identify the sign and strength of assortative matching. The basic intuition underlying our empirical strategy is that, in the presence of positive (negative) assortative matching, good workers are more (less) likely to move to better firms than bad workers. Assuming that agents’ payoffs are increasing in their own types allows us to use within-firm variation on wages to rank workers by their types and firm profits to rank firms. We exploit a panel data set that combines Social Security earnings records for workers in the Veneto region of Italy with detailed balance-sheet information for employers. We find robust evidence that positive assortative matching is a pervasive phenomenon in the labor market. This result is in contrast with what we find from correlating the worker and firm fixed effects in standard Mincerian wage equations. |
| Keywords: | Assortative matching, workers’ mobility, matched employer-employee data. |
| JEL: | J6 J31 L2 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:259&r=lab |
| By: | Devashish Mitra (Department of Economics, Syracuse University); Priya Ranjan (Department of Economics, University of California-Irvine) |
| Abstract: | Fairness considerations within the firm are introduced into the determination of wages in a two factor Pissarides-style model of search unemployment to study its implications for the unemployment rates of unskilled and skilled workers in both the closed economy case and when the economy can offshore some inputs. While the effect of a fair-wage constraint on unskilled workers takes the form of an increase in their wage and unemployment, we also Önd interesting effects on skilled workers in a closed economy. The skilled wage and skilled unemployment move in directions opposite to each other, with the actual direction of their movement depending on the elasticity of substitution between skilled and unskilled labor. The impact of offshoring of the services of unskilled labor on the unemployment of unskilled workers is stronger in the presence of fairness considerations than in the case when search frictions are the only source of unemployment. Finally, offshoring insulates the skilled labor market outcomes from fairness concerns that are present in a closed economy. |
| Keywords: | Fair wages; Unemployment; Overhiring effect, offshoring |
| JEL: | F16 F40 E24 J64 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:121303&r=lab |
| By: | John Deke; Lisa Dragoset; Karen Bogen; Brian Gill |
| Keywords: | Student Achievement, Educational Services, Charter Schools, Education |
| JEL: | I |
| Date: | 2012–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:7450&r=lab |
| By: | Nils Saniter |
| Abstract: | In this paper I investigate the causal returns to education for different educational groups in Germany by employing a new method by Klein and Vella (2010) that bases identification on the presence of conditional heteroskedasticity. Compared to IV methods, key advantages of this approach are unbiased estimates in the absence of instruments and parameter interpretation that is not bounded to local average treatment effects. Using data from the German Socio-Economic Panel Study (SOEP) I find that the causal return to education is 8.5% for the entire sample, 2.3% for graduates from the basic school track and 11% for graduates from a higher school track. Across these groups the endogeneity bias in simple OLS regressions varies significantly. This confirms recent evidence in the literature on Germany. Various robustness checks support the findings. |
| Keywords: | Return to education, wage equation, control function approach, second moment exclusion restriction |
| JEL: | C3 I21 J31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp458&r=lab |
| By: | Kevin S. Milligan; David A. Wise |
| Abstract: | While longevity increased substantially over the last 50 years and health at older ages has improved, labor force participation at older ages has declined. We use mortality rates as a marker for the “health capacity” to work at older ages in 12 OECD countries. Mortality rates can be compared across countries and over time within the same country. For a given level of mortality, we find employment rates of older men vary substantially through time and across countries. At each mortality rate in 2007, if men in France worked as much as men in the United States, they would work 4.6 years more over ages 55 to 69 than they actually did. Comparing the work and mortality of American men in 2007 to the base year of 1977, the same calculation yields 3.7 years more work. These findings suggest a large increase in the health capacity to work, as measured by mortality. The relationship between cross-country mortality and changes in work over time at older ages is weak, suggesting the take-up of this extra capacity to work has varied. However, the dispersion in employment given mortality is strongly influenced by the retirement incentives inherent in public pension programs. |
| JEL: | J14 J26 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18229&r=lab |
| By: | David SAHN (Centre d'Etudes et de Recherches sur le Développement International); Francesca MARCHETTA (Centre d'Etudes et de Recherches sur le Développement International) |
| Abstract: | This paper examines the role of education and family background on age at marriage, age at first birth, and age at labor market entry for young women in Senegal using a rich individual-level survey conducted in 2003. We use a multiple-equation framework that allows us to account for the endogeneity that arises from the simultaneity of the decisions that we model. Differences in the characteristics of the dependent variable informed the choice of the models that are used to estimate each equation: an ordered probit model is used to analyze the number of completed years of schooling, and a generalized hazard model for the other three decisions. Results show the importance of parental education, especially the father, on years of schooling. We find that each additional year of schooling of a woman with average characteristics delays marriage and the age at first birth by 0.5 and 0.4 years, respectively. Parents' education also reduces the hazard of marriage and age of first birth, while the death of parents has just the opposite effect, with the magnitudes of effects being larger for mothers. Delaying marriage also leads to an increase in the hazard of entering the formal labor market, as does the education and death of the women's parents. |
| Keywords: | Multiple equations; duration models; unobserved heterogeneity; Senegal. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1372&r=lab |
| By: | Marianna Riggi (Bank of Italy) |
| Abstract: | I consider an economy growing along the balanced growth path that is hit by an adverse shock to its capital accumulation process. The model integrates efficiency wages due to imperfect monitoring of the quality of labour in a search and matching framework with methods of dynamic general equilibrium analysis. I show that, depending on the firms' abilities to assess workers' performance, the discipline device role of unemployment may account for sharp declines in employment and jobless recoveries driven by exceptional increases in the work effort of employees. The model also explains why rigid real wages may prevail in equilibrium: the large movements in unemployment are indeed associated with real wage rigidity, which is generated endogenously by efficiency wages. |
| Keywords: | jobless recoveries, efficiency wages, productivity, capital depreciation, real wage rigidities. |
| JEL: | E24 E32 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_871_12&r=lab |
| By: | Francesca Marchetta (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); David Sahn (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I) |
| Abstract: | This paper examines the role of education and family background on age at marriage, age at first birth, and age at labor market entry for young women in Senegal using a rich individual-level survey conducted in 2003. We use a multiple-equation framework that allows us to account for the endogeneity that arises from the simultaneity of the decisions that we model. Differences in the characteristics of the dependent variable informed the choice of the models that are used to estimate each equation: an ordered probit model is used to analyze the number of completed years of schooling, and a generalized hazard model for the other three decisions. Results show the importance of parental education, especially the father, on years of schooling. We find that each additional year of schooling of a woman with average characteristics delays marriage and the age at first birth by 0.5 and 0.4 years, respectively. Parents' education also reduces the hazard of marriage and age of first birth, while the death of parents has just the opposite effect, with the magnitudes of effects being larger for mothers. Delaying marriage also leads to an increase in the hazard of entering the formal labor market, as does the education and death of the women's parents. |
| Keywords: | Multiple equations; duration models; unobserved heterogeneity; Senegal. |
| Date: | 2012–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00717813&r=lab |
| By: | Diego Restuccia; Guillaume Vandenbroucke |
| Abstract: | An average person born in the United States in the second half of the nineteenth century completed 7 years of schooling and spent 58 hours a week working in the market. By contrast, an average person born at the end of the twentieth century completed 14 years of schooling and spent 40 hours a week working. In the span of 100 years, completed years of schooling doubled and working hours decreased by 30 percent. What explains these trends? We consider a model of human capital and labor supply to quantitatively assess the contribution of exogenous variations in productivity (wage) and life expectancy in accounting for the secular trends in educational attainment and hours of work. We find that the observed increase in wages and life expectancy account for 80 percent of the increase in years of schooling and 88 percent of the reduction in hours of work. Rising wages alone account for 75 percent of the increase in schooling and almost all the decrease in hours in the model, whereas rising life expectancy alone accounts for 25 percent of the increase in schooling and almost none of the decrease in hours of work. In addition, we show that the mechanism emphasized in the model is consistent with other trends at a more disaggregate level such as the reduction in the racial gap in schooling and the decrease in the cross-sectional dispersion in hours. |
| Keywords: | Schooling, hours of work, productivity, life expectancy, trends, United States |
| JEL: | E1 I25 J11 O4 |
| Date: | 2012–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-460&r=lab |
| By: | Berlinschi, Ruxanda; Swinnen, Johan F.M.; Van Herck, Kristine |
| Abstract: | Agricultural employment in industrialized countries has been steadily decreasing despite important levels of farm subsidies. In this paper we provide a new explanation for this puzzle, namely the positive impact of subsidies on the education level of farmers’ children. If farmers are credit constrained, they may underinvest in their children’s education. By increasing farmers’ incomes, subsidies increase investment in education. If more educated children are less willing to become farmers, in the long term subsidies may lead to a reduction of labor supply in the agricultural sector. We provide both theoretical and empirical evidence supporting this argument. Keywords: |
| Keywords: | Agricultural Employment, Structural change, Subsidies, Education, Credit Constraints, Agricultural and Food Policy, Labor and Human Capital, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:126776&r=lab |
| By: | Gerson Javier Pérez V. |
| Abstract: | This paper measures the impact of strengthening the security policy on the rural labour market in Colombia by exploiting the structural change in the number of rural seizures. The new policy produced dissimilar effects across gender, age-groups, and types of occupation. For adults, especially for women, there were important reductions in the labour participation, with simultaneous reductions in the income across the most representative types of workers, self-employees and day-laborers. For male youths and children there was an increase in the labor participation through the day-labor activities, while females seemed to participate less as self-employees. In general there was a socioeconomic loss in terms of reductions of adult’s labour supply and income, while for youths and children there is a differentiated effect by gender in the labour participation, and no significant connections were found with school enrollment. |
| Keywords: | Labour Supply; Crime; Regional Economics Classification JEL: J21, K15, R23 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:718&r=lab |
| By: | Michael Kind; Jan Kleibrink |
| Abstract: | This paper studies the effect of parenthood timing on future wages. Using data from the German Socio-Economic Panel (SOEP), we employ an instrumental variable approach to identify the causal effect of delaying parenthood on wages of mothers and fathers. Consistent with previous studies, we provide evidence for a positive delaying effect on wages. We further study the underlying mechanisms of the wage premium, paying particular attention to the relationship between career stage and fertility timing. We find that delaying parenthood by one additional year during the career implies a wage premium of 7%. |
| Keywords: | Fertility; wage differentials; career path |
| JEL: | J13 J24 J31 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0344&r=lab |
| By: | Huttunen, Kristiina (Aalto University); Kellokumpu, Jenni (University of Jyväskylä) |
| Abstract: | This paper analyzes the effects of job displacement on fertility using Finnish longitudinal employer-employee data (FLEED) matched to birth records. We distinguish between male and female job losses. We focus on couples where one spouse has lost his/her job due to a plant closure or mass layoff and follow them for several years both before and following the job loss. As a comparison group we use similar couples that were not affected by job displacement. In order to examine the possible channels through which job loss affects fertility we examine also the effect on earnings, employment and divorce. The results show that woman's own job loss decreases fertility mainly for highly educated women. For every 100 displaced females there are approximately 4 less children born. Male job loss has no significant impact on completed fertility. |
| Keywords: | plant closure, employment, earnings, divorce, fertility |
| JEL: | J65 J13 J12 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6707&r=lab |
| By: | Robin Lake; Melissa Bowen; Allison Demeritt; Moira McCullough; Joshua Haimson; Brian Gill |
| Abstract: | A new Mathematica study, conducted with the Center on Reinventing Public Education, highlights approaches five successful charter school management organizations (CMOs) use to help improve student achievement. This report expands on a previous report showing that CMOs with the greatest positive impact on student achievement were most likely to establish consistent schoolwide behavior expectations for students, as well as use an intense approach to monitoring and coaching teachers. The latest report offers guidance for schools and districts looking to replicate these promising practices. |
| Keywords: | CMOs, Charter Management Organizations, Student Behavior, Teacher Coaching |
| JEL: | I |
| Date: | 2012–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:7402&r=lab |
| By: | Stéphane Bonhomme (CEMFI, Centro de Estudios Monetarios y Financieros); Laura Hospido (Banco de España) |
| Abstract: | We use detailed information on labor earnings and employment from social security records to document the evolution of earnings inequality in Spain from 1988 to 2010. Male earnings inequality was strongly countercyclical: it increased around the 1993 recession, showed a substantial decrease during the 1997-2007 expansion, and then a sharp increase during the recent recession. This evolution was partly driven by the cyclicality of employment and earnings in the lower-middle part of the distribution. We emphasize the importance of the housing boom and subsequent housing bust, and show that demand shocks in the construction sector had large effects on aggregate labor market outcomes. |
| Keywords: | Earnings Inequality, Social Security data, Unemployment, Business cycle. |
| JEL: | D31 J21 J31 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2012_1209&r=lab |
| By: | Richard Akresh; Emilie Bagby; Daien de Walque; Harounan Kazianga |
| Abstract: | Using data collected in rural Burkina Faso, this working paper examines how children's cognitive abilities influence households' decisions to invest in their education. The analysis uses variations in rainfall experienced in utero or early childhood to measure ability. It finds that rainfall shocks experienced in utero have direct negative impacts on a child's education and increase labor hours compared with the child's siblings. |
| Keywords: | Child Labor, Schooling, Child Ability, International |
| JEL: | F Z C |
| Date: | 2012–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:7478&r=lab |
| By: | POTHIER, David |
| Abstract: | We study a model of occupational choice where workers must rely on their social contacts to acquire job vacancy information. Contrary to the existing literature, we allow for worker heterogeneity in terms of their idiosyncratic skill-types. In this case, the allocation of talent (the matching of skills to tasks) becomes a welfare-relevant consideration. A worker’s skill-type determines both his relative cost of specialising in different occupations and his productivity on the job. The model shows that relying on word-of-mouth communication for job search generates both positive externalities (due to improved labour market matching) and negative externalities (due to a poor allocation of talent). Which effect dominates depends on the properties of the job search and productivity functions. Taking into account worker heterogeneity shows that the degree of occupational segregation in competitive labour markets is generally not efficient. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2012/18&r=lab |
| By: | Rozana Himaz; Harsha Aturupane |
| Abstract: | This study employs the pseudo-panel approach to estimate returns to education among income earners in Sri Lanka. Pseudo-panel data are constructed from nine repreated cross-sections of Sri Lanka’s Labor Force Survey data from 1997-2008 for workers born during 1953-1974. The results show that for males, one extra year of education increases monthly earnings by about 5 per cent using the pseudo panel estimation rather than 8 per cent as in the OLS estimation. This indicates that not controlling for unobservables such as ability and motivation bias the OLS estimation of returns upwards by about 3 per cent on average. It also suggests that males with higher ability seem to be acquiring more years of education contrary to what has been observed recently in countries such as Thailand (Warunsiri and McKnown 2010) where the opportunity cost of education seems to be high. |
| Keywords: | Sri Lanka, Education, Returns, Pseudo panels, Synthetic cohorts |
| JEL: | I00 I20 I25 C23 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:615&r=lab |
| By: | Laura Leker (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Grégory Ponthière (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | Following Ben-Porath (1967), the influence of life expectancy on education has attracted much attention. Whereas existing growth models rely on an education decision made either by the child or by his parent, we revisit the Ben-Porath effect when the education is the outcome of a bargaining between the parent and the child. We develop a three-period OLG model with human capital accumulation and endogenous life expectancy, and show that, as a result of the unequal life horizons faced by parents and children, the Ben-Porath effect depends on the distribution of bargaining power within the family, which in turn affects the long-run dynamics of the economy. Using data on 17 OECD countries (1940-1980), we show that the introduction of intergenerational bargaining on education helps to rationalize the observed education patterns across countries. |
| Keywords: | Education ; Life Expectancy ; Family Bargaining ; OLG Model |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-00715104&r=lab |
| By: | Hanna Frings |
| Abstract: | This paper estimates the employment effects of industry-specific, collectively-bargained minimum wages in Germany for two occupations associated with the construction sector. I propose a truly exogenous control group in contrast to the control group design used in the literature. Further, a difference-in-differences-in-differences estimator is presented as a robustness test for occupation-specific and/or industry-specific, timevarying, unobserved heterogeneity. I do not find a significantly negative employment effect, even though the minimum wage is binding in (East) Germany. This result can be explained by substitution effects, noncompliance and models of monopsonic competition. |
| Keywords: | Minimum wage; monopsonic competition; difference-in-differences |
| JEL: | J38 J42 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0348&r=lab |
| By: | Aedin Doris (Economics,Finance and Accounting National University of Ireland, Maynooth); Donal O'Neill (Economics,Finance and Accounting National University of Ireland,); Olive Sweetman (Economics,Finance and Accounting National University of Ireland,) |
| Abstract: | This paper uses data on 9 year old Irish children to examine the determinants of mathematical achievement among young children. We find that boys perform better in maths than girls and that this gender gap is driven by differences at the top of the achievement distribution. While there is no difference between the proportion of boys and girls in the bottom quartile of the maths distribution, boys are significantly over-represented in the top quartile. We exploit the fact that single-sex schooling is widespread in Ireland to test whether the gender composition of schools affects this gender maths gap. Contrary to suggestions in the literature, we find no evidence that single-sex schooling reduces the gap. In fact the maths gap is larger for children educated in single-sex schools than in co-educational schools. |
| JEL: | J24 I2 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n224-12.pdf&r=lab |
| By: | David SAHN (Centre d'Etudes et de Recherches sur le Développement International); Christopher HANDY; Peter GLICK |
| Abstract: | We jointly model the determinants of educational attainment, marriage age, and age of first birth among females in Madagascar, explicitly accounting for the endogeneities that arise from modeling these related outcomes simultaneously. An additional year of schooling results in a delay of marriage by 1.6 years. Marrying one year later delays childbearing by 0.5 years. Parental education and wealth also have important effects on schooling, marriage, and childbearing ages. For example, the women's first birth is delayed by 0.75 years for four additional years of schooling of her mother. |
| Keywords: | education, marriage, fertility |
| JEL: | J13 J12 I21 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1373&r=lab |
| By: | David SAHN (Centre d'Etudes et de Recherches sur le Développement International); Peter GLICK; Thomas F. WALKER |
| Abstract: | This paper measures the extent to which households in Madagascar adjust children's school attendance in order to cope with exogenous shocks. We model the household's decisions to enroll children in school, and remove them from school, and measure the impact on these decisions of shocks to household income, assets and labor supply. In order to explore these questions more fully, we use a unique dataset with ten years of recall data on school attendance and household shocks. We estimate hazard models of school entry and exit, and measure the effect of shocks on these decisions. The probability of dropping out of school is significantly increased when a child's household experiences an illness, death or asset shock. The presence of a health and nutrition program in the local school is associated with earlier school entry and reduced probability of dropout among enrolled students. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1374&r=lab |
| By: | Rahim, Fazeer; Tavares, José |
| Abstract: | This paper models gender discrimination in the labor market as originating from bargaining between husbands and wives within the family. The husband-wife household bargains over resource distribution, with each spouse's bargaining power determined by his/her market income. Men are reluctant to grant women easy access to the labor market as, despite the obvious income drag on family income, gender discrimination allows the male to benefit from greater bargaining power. In a model with endogenous savings, fertility, labor force participation, and gender wage discrimination, we demonstrate how economic development, which increases the financial cost of discrimination, gives rise to a positive cycle of greater female participation, lower fertility, and higher income. We use data from the World Value Survey and the International Social Survey Program and show that economic development is negatively related to male preference for discrimination. For low levels of development, a majority of men have discriminatory views; at around annual per capita incomes of 15.000 USD there is a turning point and non-discriminatory men become the majority. We then exploit the National Longitudinal Survey of Youth in the U.S. to examine how men change their discriminatory views over time. Other things equal, men with high-income spouses are more likely to change their views on women toward less discrimination, while the exact opposite holds for men with low-income spouses. Our findings suggest that discriminatory views are indeed endogenous and lose strength over the course of economic development. |
| Keywords: | Economic Development; Female Labor Force Participation; Fertility; Gender Discrimination |
| JEL: | D13 J13 J16 J7 O15 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9045&r=lab |
| By: | Kvaløy, Ola (UiS Business School, University of Stavanger); Olsen, Trond E. (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration) |
| Abstract: | When a worker is offered performance related pay, the incentive effect is not only determined by the shape of the incentive contract, but also by the probability of contract enforcement. We show that weaker enforcement may reduce the worker's effort, but lead to higher-powered incentive contracts. This creates a seemingly negative relationship between effort and performance pay. |
| Keywords: | Effort; performance pay; incentive contract |
| JEL: | J30 |
| Date: | 2012–07–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2012_008&r=lab |
| By: | Kyle F. Herkenhoff; Lee Ohanian |
| Abstract: | Through a purely positive lens, we study and document the growing trend of mortgagors who skip mortgage payments as an extra source of "informal" unemployment insurance during the 2007 recession and the subsequent recovery. In a dynamic model, we capture this behavior by treating both delinquency and foreclosure not as one period events, but rather as protracted and potentially reversible episodes that influence job search behavior and wage acceptance decisions. With a relatively conservative parameterization, we find that the observed foreclosure delays increase the unemployment rate by an additional 1/3%-1/2% and increase the stock of delinquent loans by 8%-12%. When interpreted as an implicit line of credit, those that use their mortgage as “informal" unemployment insurance borrow at a real rate of at least 18%.> |
| Keywords: | Foreclosure ; Unemployment |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2012-017&r=lab |
| By: | Burdín, Gabriel (Associazione Italiana per la Cultura della Cooperazione e del Non Profit) |
| Abstract: | Worker-managed firms (WMFs) represent a marginal proportion of total firms and aggregate employment in most countries. The bulk of firms in real economies is ultimately controlled by capital suppliers. Different theoretical explanations suggest that worker managed firms (WMFs) are prone to failure in competitive environments. Using a panel of Uruguayan firms based on social security records and including the entire population of WMFs over the period January 1997-July 2009, I present new evidence on worker managed firms´ survival. I find that the hazard of exit is 24%-38% lower for WMFs than for conventional firms. This result is robust to alternative estimation strategies based on semi parametric and parametric frailty duration models that impose different distributional assumptions about the shape of the baseline hazard and allow to consider firm-level unobserved heterogeneity. The evidence suggests that the marginal presence of WMFs in market economies can hardly be explained by the fact that these organizations exhibit lower survival chances than conventional firms. This paper adds to the literature on labor managed firms, shared capitalism and to the Industrial Organization literature on firm survival. |
| Keywords: | labor-managed firms; capitalist firms; survival analysis |
| JEL: | C41 P13 P51 |
| Date: | 2012–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:ris:aiccon:2012_108&r=lab |
| By: | Steven Glazerman; Allison Seifullah |
| Abstract: | Mathematica's final report on the Chicago Teacher Advancement Program (Chicago TAP) found that the program did not raise student math or reading scores, but it increased teacher retention in some schools. For example, teachers in Chicago TAP schools at the start of the program in fall 2007 were about 20 percent more likely than teachers in comparison schools to be in those same schools three years later (67 percent versus 56 percent retention rate). However, the program did not have an impact on student achievement overall in the four-year rollout period in the Chicago Public Schools (CPS). Although Chicago TAP increased the amount of mentoring, promotion opportunities, and compensation in participating schools relative to non-TAP schools, the program did not fully implement its performance-based pay or value-added components as intended. |
| Keywords: | Teacher Advancement Program (TAP), Chicago Public Schools, random assignment, student achievement |
| JEL: | I |
| Date: | 2012–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:7391&r=lab |
| By: | Emauela Ghignoni; Alina Veashchagina |
| Abstract: | Most papers dealing with individual overeducation risks focus on labour supply characteristics and workers behaviour. On the other hand, only few studies consider labour demand characteristics and technological change. In this paper we analyse the influence of both demand and supply factors on educational mismatch in a set of ten European countries. Our hypothesis, confirmed by results obtained using ordered probit model with sample selection, is that demand factors generally play major role in reducing educational mismatch in technologically more advanced countries, whereas supply factors are more important in countries that are lagging behind in the international division of labour. At the same time, important cross-country and gender differences have been identified in the way the demand/supply factors operate. All this calls for the fine-tuning of policies aimed to tackle the problem of educational mismatch. Apparently, EPL does not appear neither to hinder technological development, nor increase overeducation. |
| Keywords: | Educational mismatch, Overeducation, Undereducation, Demand, Supply, Ordered Probit |
| JEL: | I2 J24 C35 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:sap:wpaper:wp154&r=lab |
| By: | Thomas Barnay (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée); François Legendre (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée) |
| Abstract: | Economic literature clearly establishes the link between socio-economic status, good health and a high level of education. Health status also appears to be a determining factor in an individual's present and future preferences (Disney et al., 2006). The relationship between health status and employment status is the subject of numerous research studies and can be apprehended from the principle of double causality: healthy worker effect and reverse causality (Currie and Madrian, 1999). We focus on these both noncontradictory and potentially simultaneous working assumptions. The aim of this work is to simultaneously measure the effects of health-related selfselection on employment status and the reverse causality effect within the population aged 30-59 in France by using an original method of SBOP (Simultaneous Bi-Ordered Probit Model). |
| Date: | 2012–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00717439&r=lab |
| By: | Balan, Ana Maria |
| Abstract: | For the efficient running of activities in the labor market it is required a rational use of working age people. This article analyzes theoretically and then in terms of its evolution, the use of labor in terms of employment, taking out the values which people actually occupied, so used, have recorded during 2002 - 2010 , on the ownership of the job: public, private, mixed or cooperative. Also, I made a forecast of the occupancy rate for 2020, based on the values of this index during the same period-from 2002 to 2010. We note therefore that the purpose of this paper is to inform the reader how the use of labor evolved in Romania and also its evolutionary possible perspectives. |
| Keywords: | Employment; use of labor; quantitative analysis; ownership of job; forecast |
| JEL: | J21 G32 J11 |
| Date: | 2012–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40022&r=lab |
| By: | Mizuochi, Masaaki |
| Abstract: | This study examines the effect of Japan's 2005 work-family legislation?the Act on Advancement of Measures to Support Raising Next-Generation Children? on childbirth and women's job continuity. This Act requires firms to support their employees in bearing and rearing children. In particular, it helps working women to continue their careers, thereby reducing the opportunity cost of having children and boosting childbirth. Although the Act requires large firms to support their employees in this regard, it merely recommends that smalland medium-sized firms do so. In consequence, it potentially has greater influence on employees of large firms than on those of small- and medium-sized firms. Using this quasiexperimental condition, we determine the Act's effect by comparing data from before and after its implementation in firms of various sizes. Difference-in-differences estimation results demonstrate that the Act has a positive effect on the joint probability of childbirth and women's job continuity |
| Keywords: | Childbirth, Women’s job continuity, Work-family balance policy, Quasi-experiment |
| JEL: | J13 J18 J22 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:575&r=lab |
| By: | Jennifer Brown; David A. Matsa |
| Abstract: | This paper examines the impact of corporate financial distress on firms’ ability to attract job applicants. Using novel, proprietary data from a leading online job search platform, we find that firms’ financial health impacts job seekers’ perceptions and behavior. First, using survey responses, we find that job seekers accurately perceive firms’ financial health, as measured by the companies’ credit default swap prices and other proxies. Second, we analyze responses to job postings by major financial firms during the recent financial crisis and find that these perceptions affect job seekers’ application decisions. An increase in an employer’s financial distress results in fewer applicants for job openings at the firm. We find fewer applications even when comparing applications to the exact same positions before and after entering distress. These effects are particularly evident in locations where the social safety net provides workers with weaker protections against unemployment and for positions requiring advanced training. |
| JEL: | G20 G32 G33 J64 M5 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18208&r=lab |