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on Labour Economics |
| By: | David L. Dickinson; Ronald L. Oaxaca |
| Abstract: | When membership in a particular group conveys valuable information about an individual’s skills, productivity, or other human capital characteristics, a non-prejudiced agent may still find it rational to statistically discriminate. We frame statistical discrimination in a labor market setting for a series of laboratory experiments. A main objective of our experiments is to examine how varying productivity risk along several dimensions impacts outcomes across worker groups. Our design expands upon existing research by generating laboratory data both on wage contracts and unemployment rates of directly competing worker groups. We find some evidence for statistical wage discrimination against workers with identical expected productivity but higher productivity variance. However, those same subjects are less likely to be unemployed, suggesting that our employers view hiring choice and wage contracts as substitutable. These laboratory results have interesting implications for labor markets where employers select from workers belonging to distinct statistical groups, and suggest that statistical discrimination based on wages alone may overestimate the true effect of such discrimination. Key Words: |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:12-03&r=lab |
| By: | Moreno-Galbis, Eva |
| Abstract: | This paper seeks to gain insights into the relationship between growth and unemployment in a setting with heterogeneous skills, human capital accumulation, on-the-job training and capital-skill complementarity. We use an endogenous job destruction framework in the style of Mortensen and Pissarides (1998) with directed search. We show that, when growth accelerates, a larger share of unskilled workers seeks training, increasing firms’ incentives to update job-specific technology (rather than destroying it). By magnifying the impact of growth on employment, the introduction of human capital issues allows the model to more closely match the estimated sensitivity of unemployment with respect to growth. When calibrated, the model manages to reproduce the aggregate capitalization effect estimated using OECD data. We find that growth reduces unemployment for individuals receiving training, while it increases the unemployment rate of unskilled workers without training (creative destruction effect). |
| Keywords: | growth; unemployment; training; capital-skill complementarity; human capital depreciation; capitalization; creative destruction effect |
| JEL: | J23 J24 O33 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1207&r=lab |
| By: | Govert E. Bijwaard (Netherlands Interdisciplinary Demographic Institute (NIDI)); Christian Schluter (University of Southampton and Aix Marseille School of Economics); Jackline Wahba (University of Southampton) |
| Abstract: | Using administrative panel data on the entire population of new labour immigrants to The Netherlands, we estimate the causal effects of individual labour market spells on immigration durations using the “timing-of-events†method. The model allows for correlated unobserved heterogeneity across migration, unemployment and employment processes. We find that unemployment spells increase return probabilities for all immigrant groups, while re-employment spells typically delay returns. The precise quantitative impacts on migration durations depend on both the timing and lengths of the employment and unemployment spells, and are evaluated in several factual and counterfactual examples. |
| Keywords: | temporary migration, durations, timing of event method, labour market dynamics. |
| JEL: | J61 J64 C41 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1227&r=lab |
| By: | Zierahn, Ulrich |
| Abstract: | The New Economic Geography predicts a positive effect of market access on wages, as represented by the wage equation. Several studies provide empirical evidence in favor of the wage equation. However, a key problem is the endogeneity of market access: it is challenging to identify the causal effects of market access on wages, since market access itself depends on wages. Whereas most approaches rely on instrumental variables and strong assumptions on exogeneity, the present analysis relies on German reunification as an exogenous variation of market access in order to identify the effects. Since the market access shock due to reunification was accompanied by a labor supply shock due to migrants and commuters from eastern Germany, the effects on wages, employment and unemployment are analyzed. The results provide evidence in favor of a labor demand shock due to the increase in market access and a labor supply shock due to migrants and commuters from eastern Germany. -- |
| Keywords: | New Economic Geography,wage equation,market access,natural experiment,differences-in-differences |
| JEL: | F15 R12 R23 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hwwirp:131&r=lab |
| By: | Madeeha Gohar Qureshi (Pakistan Institute of Development Economics, Islamabad.) |
| Abstract: | In this study attempt has been made to link the gender differences in parental resource allocation in demand for education at primary, secondary and tertiary level of education to gender differences in returns to education in these respective categories in Pakistan. The hypothesis was that if we find that labour market rewards male more than female then this may be able to give a plausible explanation of why households invest much less in daughter’s education. However our results suggest otherwise that there is under investment in females education at all levels even though returns to education are much higher for females than males. One possible explanation could be that even though private rate of return to time spent in school than in labour market is higher for a female compared to male but the part of return that goes to parents are much lower for daughters than sons in Pakistan due to dependence of parents on their son for old age support. The key factor from policy point of view that can reduce such discriminatory attitude towards female enrolment in a household are found to be education of parents especially mother’s education. Both father’s and mother’s education are found to have significant positive impact on education of both sons and daughters. However mother’s education compared to father has much more impact in terms of magnitude at all levels of education and especially the role is more pronounced for daughters. |
| Keywords: | Enrolment Rates, Rates of Return, Gender, Pakistan |
| JEL: | I21 J16 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2012:84&r=lab |
| By: | Katja Görlitz; Marcus Tamm |
| Abstract: | This paper addresses the question to which extent the complementarity between education and training can be attributed to differences in observable characteristics, i.e. to individual, job and firm specific characteristics. The novelty of this paper is to analyze previously unconsidered characteristics, in particular, personality traits and tasks performed at work which are taken into account in addition to the standard individual specific determinants. Results show that tasks performed at work are strong predictors of training participation while personality traits are not. Once working tasks and other job related characteristics are controlled for, the skill gap in training participation drops considerably for off-the-job training and vanishes for on-the-job training. |
| Keywords: | Training, personality traits, working tasks, Oaxaca decomposition |
| JEL: | I21 J24 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp477&r=lab |
| By: | Messe, Pierre-Jean; Rouland, Bénédicte |
| Abstract: | From French data, this paper uses a difference-in-differences approach combined with propensity score matching to identify the effect of an exogenous change in employment protection among older workers on firm’s incentives to sponsor training. Laying off workers aged 50 and above, French firms have to pay a tax to the unemployment insurance system, known as the Delalande tax. In 1999, the measure was subjected to a reform that increased due taxes but that did not concern equally all firms. We find that this exogenous shock to employment protection for older workers substantially rises firms’ incentives to train the 45-49 age group of workers. This result confirms predictions of the simple labor market model we develop in a first stage. |
| Keywords: | older workers; employment protection; firms’ training incentives |
| JEL: | J14 J24 J26 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1206&r=lab |
| By: | Facundo Albornoz; Antonio Cabrales; Esther Hauk |
| Abstract: | Immigration is an important problem in many societies, and it has wide-ranging effects on the educational systems of host countries. There is now a large empirical literature, but very little theoretical work on this topic. We introduce a model of family immigration in a framework where school quality and student outcomes are determined endogenously. This allows us to explain the selection of immigrants in terms of parental motivation and the policies which favor a positive selection. Also, we can study the effect of immigration on the school system and how school quality may self-reinforce immigrants’ and natives’ choices. |
| Keywords: | Education, Immigration, School resources, Parental involvement, Immigrant sorting |
| JEL: | I20 I21 I28 J24 J61 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we1203&r=lab |
| By: | Timothy J. Bartik (W.E. Upjohn Institute for Employment Research); Marta Lachowska (W.E. Upjohn Institute for Employment Research and Stockholm University) |
| Abstract: | In order to study whether college scholarships can be an effective tool in raising students’ performance in secondary school, we use one aspect of the Kalamazoo Promise that resembles a quasi-experiment. The surprise announcement of the scholarship created a large change in expected college tuition costs that varied across different groups of students based on past enrollment decisions. This variation is arguably exogenous to unobserved student characteristics. We estimate the effects of this change by a set of “difference-in-differences” regressions where we compare the change in student outcomes in secondary school across time for different student “length of enrollment” groups. We find positive effects of the Kalamazoo Promise on Promise-eligible students large enough to be deemed important—about a 9 percent increase in the probability of earning any credits and one less suspension day per year. We also find large increases in GPA among African American students. |
| Keywords: | Kalamazoo Promise, academic output, educational incentives, universal scholarship, natural experiment |
| JEL: | I21 I22 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:12-186&r=lab |
| By: | Haroon Bhorat; Ravi Kanbur; Benjamin Stanwix (Development Policy Research Unit; Director and Professor) |
| Abstract: | Assessments of the impact of minimum wages on labour market outcomes in Africa are relatively rare. In part this is because the data available do not permit adequate treatment of econometric issues that arise in such an assessment. This paper attempts to estimate the impact of the introduction of a minimum wage law within the Agriculture sector in South Africa, based on 15 waves of the biannual Labour Force Survey (LFS), starting in September 2000 and ending in September 2007. The chosen sample includes six waves before the legislations effective date (March 2003) and nine afterwards. All 15 waves are pooled and treated as repeated cross sections over time. In order to assess whether the changes experienced by farm workers are unique, we identify a control group that has similar characteristics to the treatment group. Our econometric approach involves using two alternative specifications of a difference-in-differences model. We test whether employers reduced employment, and whether they responded at the intensive margin by reducing hours of work. The law also required non-wage benefits to be implemented, and we track the response here in the form of one such provision, namely that of a written contract. The results suggest a significant reduction in employment in Agriculture from the minimum wage, an increase in wages on average, no significant change in hours worked and a sharp rise in non-wage compliance. Acknowledgements: The research, from which this paper emanates, was funded by the International Development Research Centre (IDRC). |
| Keywords: | Minimum Wage, Agriculture, South Africa, Wage, Employment, Hours of Work |
| JEL: | J23 J31 J32 J38 J41 J43 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctw:wpaper:12149&r=lab |
| By: | Michael Zibrowius |
| Abstract: | Using a rich panel data set, I estimate wage assimilation patterns for immigrants in Germany as an example of a key European destination country. This study contributes to the literature by performing separate estimations by skill groups. Comparisons with similar natives reveal that immigrants’ experience earnings profiles are flatter on average, although clear differences exist between skill groups. The effect of time spent in the host country is significantly positive and thus partly offsetting the diverging trend in the experience earnings profiles. Still, wage differences between natives and immigrants remain. They are particularly noticeable for highly skilled immigrants, the group needed most in Germany’s skill intensive labor market. |
| Keywords: | international migration, wage differentials, assimilation, longitudinal data |
| JEL: | F22 J31 J61 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp479&r=lab |
| By: | Julia Lang |
| Abstract: | This study analyses the effects of training participation on wages and perceived job security for employees of different ages. Based on data from the German Socio-Economic Panel, results indicate that only younger workers benefit from training by an increase in wages, whereas older employees’ worries about losing their job are reduced. This observation can also be explained by the fact that goals of training courses are related to the age of participants. Moreover, I differentiate between workers who permanently and only occasionally participate in training. The results indicate that there seem to be decreasing marginal returns to training with respect to job security. |
| Keywords: | Training, Wages, Job security |
| JEL: | J24 J28 J31 M53 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp478&r=lab |
| By: | Edward P. Lazear; James R. Spletzer |
| Abstract: | The recession of 2007-09 witnessed high rates of unemployment that have been slow to recede. This has led many to conclude that structural changes have occurred in the labor market and that the economy will not return to the low rates of unemployment that prevailed in the recent past. Is this true? The question is important because central banks may be able to reduce unemployment that is cyclic in nature, but not that which is structural. An analysis of labor market data suggests that there are no structural changes that can explain movements in unemployment rates over recent years. Neither industrial nor demographic shifts nor a mismatch of skills with job vacancies is behind the increased rates of unemployment. Although mismatch increased during the recession, it retreated at the same rate. The patterns observed are consistent with unemployment being caused by cyclic phenomena that are more pronounced during the current recession than in prior recessions. |
| JEL: | E24 J6 M5 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18386&r=lab |
| By: | Cain Polidano; Ha Vu |
| Abstract: | In this paper we estimate the causal impacts of disability onset on labour market outcomes up to four years after onset using longitudinal data from the Household Income and Labour Dynamics Australia (HILDA) survey and difference-in-difference propensity score matching techniques. We find lasting negative impacts on full-time employment, which is linked more to people foregoing opportunities to move to full-time work rather than downshifting from full-time to part-time work. Impacts are greater for those without post-school qualifications because they face poor prospects once dislocated from work. These results point to the importance of prevention and vocational rehabilitation programs that are targeted at lowskilled workers. |
| JEL: | J20 I10 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2012-583&r=lab |
| By: | Hillmann, Katja; Hohenleitner, Ingrid |
| Abstract: | Similar to many other European countries, Germany's unemployment policy made a paradigm shift towards activation policy with a tightened monitoring and sanction regime. In our analysis, we examine the impact of benefit sanctions on the probability of getting employed or leaving the labor force. Using a mixed proportional hazard model, we draw causal inference of sanction enforcement on unemployment exit hazards. Based on a survey sample, covering the first three years after implementation of the Hartz IV law in 2005, we find evidence for a positive impact of sanctions on getting employed, but also on leaving the labor market. -- |
| Keywords: | unemployment benefit sanctions,unemployment duration,employment,nonemployment,mixed proportional hazard estimation |
| JEL: | J48 J63 J64 J68 I38 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hwwirp:129&r=lab |
| By: | Kory Kroft; Fabian Lange; Matthew J. Notowidigdo |
| Abstract: | This paper studies the role of employer behavior in generating "negative duration dependence" -- the adverse effect of a longer unemployment spell -- by sending fictitious resumes to real job postings in 100 U.S. cities. Our results indicate that the likelihood of receiving a callback for an interview significantly decreases with the length of a worker's unemployment spell, with the majority of this decline occurring during the first eight months. We explore how this effect varies with local labor market conditions, and find that duration dependence is stronger when the labor market is tighter. We develop a theoretical framework that shows how the sign of this interaction effect can be used to discern among leading models of duration dependence based on employer screening, employer ranking, and human capital depreciation. Our results suggest that employer screening plays an important role in generating duration dependence; employers use the unemployment spell length as a signal of unobserved productivity and recognize that this signal is less informative in weak labor markets. |
| JEL: | J64 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18387&r=lab |
| By: | Frank M. Fossen; Tobias J.M. Büttner |
| Abstract: | We assess the relevance of formal education for the productivity of the self-employed and distinguish between opportunity entrepreneurs, who voluntarily pursue a business opportunity, and necessity entrepreneurs, who lack alternative employment options. We expect differences in the returns to education between these groups because of different levels of control. We use the German Socio-economic Panel and account for the endogeneity of education and non-random selection. The results indicate that the returns to a year of education for opportunity entrepreneurs are 3.5 percentage points higher than the paid employees’ rate of 8.1%, but 6.5 percentage points lower for necessity entrepreneurs. |
| Keywords: | returns to education, opportunity, necessity, entrepreneurship |
| JEL: | J23 J24 J31 I20 L26 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp482&r=lab |
| By: | Giuliano Guerra (Ufficio per lo sviluppo economico, Repubblica e Cantone Ticino, Switzerland); Roberto Patuelli (Department of Economics, University of Bologna, Italy; The Rimini Centre for Economic Analysis (RCEA), Italy) |
| Abstract: | As observed in many advanced economies experiencing an increase of self-employment rates since the late 1970s, a flourishing small- and medium-size enterprise sector is traditionally associated with positive economic development and growth. In the regional context, areas benefiting from an established entrepreneurial culture are in general more successful and innovative, as well as better equipped to sustain structural changes and to lessen unemployment. It is therefore important to investigate the reasons why individuals choose self-employment, and why they do it despite lower protection, higher risks, and possibly more effort than what is required in a comparable wage employment position. Existing research identifies better prospects of entrepreneurial earnings as compared to wages as a major stimulus towards self-employment. However, besides pecuniary motivations, other factors may be considered when it comes to the occupational choice. These include displacement, uncertainty, (the threat of) unemployment, and (dis)-satisfaction. Building on a job quits model, we propose a representation of transition behaviour from wage to self-employment which includes subjective evaluations of pecuniary and nonpecuniary satisfaction on the previous job. Individual microdata are drawn from the Swiss Household Panel (SHP), and cover the time period 1999–2008. Additionally, we focus on the dynamics of job satisfaction in order to highlight the role played by shocks in subjective evaluations, and introduce their interaction with levels to control for threshold effects. |
| Keywords: | self-employment, job satisfaction, job transition, Switzerland |
| JEL: | C25 J62 M13 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:63_12&r=lab |
| By: | Alfonso Miranda; Yu Zhu |
| Abstract: | We focus on the effect of English deficiency on the native-immigrant wage gap for employees in the UK using the first wave of the UK Household Longitudinal Survey (Understanding Society). We show that the wage gap is robust to controls for age, region of residence, educational attainment and ethnicity, particularly for men. However, English as Additional Language (EAL) is capable of explaining virtually all the remaining wage gap between natives and immigrants. Using the interaction of language of country of birth and age-at-arrival as instrument, we find strong evidence of a causal effect of EAL on the native-immigrant wage gap. |
| Keywords: | native-immigrant wage gap; English as Additional Language (EAL); age-at-arrival |
| JEL: | J15 J61 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1213&r=lab |
| By: | Katrin Sommerfeld |
| Abstract: | Performance pay is of growing importance to the wage structure as it applies to a rising share of employees. At the same time wage dispersion is growing continuously. This leads to the question of how the growing use of performance pay schemes is related to the increase in wage inequality? German SOEP data for the years 1984 to 2009 confirm the large increase in the application of performance pay schemes. This in turn led to an upward shift of the wage distribution by about one log point. However, it did not contribute to the growth in wage inequality. Even though wage inequality grew within the group of employees who receive performance pay, it grew even more so within the group who do not receive it. Still, the wage difference between both wage schemes remained flat over the distribution. The empirical analysis employs sequential decompositions in a quantile regression framework. |
| Keywords: | Performance pay, wage structure, quantile regression, sequential decomposition |
| JEL: | J31 J33 C21 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp476&r=lab |
| By: | Simona Cociuba (University of Western Ontario); Alexander Ueberfeldt (Bank of Canada) |
| Abstract: | From 1980 until 2007, U.S. average hours worked increased by thirteen percent, due to a large increase in female hours. At the same time, the U.S. labor wedge, measured as the discrepancy between a representative household's marginal rate of substitution between consumption and leisure and the marginal product of labor, declined substantially. We examine these trends in a model with heterogeneous households: married couples, single males and single females. Our quantitative analysis shows that the shrinking gender wage gaps and increasing labor income taxes observed in U.S. data are key determinants of hours and the labor wedge. Changes in our model's labor wedge are driven by distortionary taxes and non-distortionary factors, namely the cross-sectional differences in households' labor supply and productivity. We conclude that the labor wedge measured from a representative household model partly reflects inaccurate household aggregation. |
| Keywords: | Female and Male Labor Supply; Labor Wedge; Gender Wage Gap; Labor Income Taxation; Household Aggregation |
| JEL: | E24 H20 H31 J22 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:hcuwoc:20124&r=lab |
| By: | Franciscos Koutentakis (University of Crete) |
| Abstract: | This short empirical paper examines the unemployment dynamics in Greece both in the long run and during the current crisis. Using monthly data from 2001 until mid-2012 it finds that unemployment fluctuations were predominantly driven by the job finding rate. Nevertheless, during the current unemployment boom, the separation rate has become more significant, indicating that the recent reforms relaxing Employment Protection Legislation (EPL) have deteriorated the situation. |
| Date: | 2012–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:crt:wpaper:1205&r=lab |
| By: | Artuc, Erhan; McLaren, John |
| Abstract: | A number of authors have argued that a worker's occupation of employment is at least as important as the worker's industry of employment in determining whether the worker will be hurt or helped by international trade. This paper investigates the role of occupational mobility on the effects of trade shocks on wage inequality in a dynamic, structural econometric model of worker adjustment. Each worker in the model can switch either industry, occupation, or both, paying a time-varying cost to do so in a rational-expectations optimizing environment. The authors find that the costs of switching industry and occupation are both high, and of similar magnitude, but in simulations they find that a worker's industry of employment is much more important than either the worker's occupation or skill class in determining whether he or she is harmed by a trade shock. |
| Keywords: | Labor Markets,Labor Policies,Economic Theory&Research,Housing&Human Habitats,Work&Working Conditions |
| Date: | 2012–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6194&r=lab |
| By: | Jonathan M. Lee; Laura O. Taylor |
| Abstract: | This research employs the first quasi-experimental design within a labor market setting to provide causal evidence on the existence and magnitude of compensating wages for workplace fatality and accident risks. Federal programmed inspections conducted by the Occupational Safety and Health Administration that randomly select plants for inspection (conditioned on known and measured plant characteristics) are used to instrument for plant-level risks. Inspection records are combined with confidential U.S. Census data on plant-level wages and worksite characteristics to estimate the compensating wages associated with riskier working conditions. Results strongly suggest that compensating wage differentials for risky working conditions do indeed exist as suggested by theory and explored empirically in the hedonic wage literature for over 40 years. However, our results also suggest that the empirical challenges inherent in estimating these differentials via cross-sectional or panel-data hedonic wage models have not yet been fully addressed. Data limitations, especially with regards to the measurement of risk faced by workers at their worksite, and correlated unobservables are likely the key impediments to identification of wage/risk tradeoffs. Our results are important for environmental, health and public safety policies that rely on labor market studies to provide measures of the value of reducing fatality risks. Our point estimates suggest that prior studies may substantially overstate the value workers place on reducing workplace risks. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:12-21&r=lab |
| By: | Bruno Chiarini; Paolo Piselli (-) |
| Abstract: | Using the theoretical framework based on the monopoly union model described in Kidd and Oswald (1987) and Jones (1987), this paper provides an explicit framework to assess the role of wage moderation in Italy in the last twenty years. There are two crucial ingredients to the model: the composition of union membership and the pension system. We show that the increase in pensioners' membership in the presence of a pay-as-you-go (PAYG) pension scheme has led unions to moderate wage claims. However, this result is reversed when we shift from a PAYG system to a fully-funded (FF) regime (recently adopted in Italy): in this case, the model predicts a rise in wages with respect to the standard model, regardless of the share of pensioners in the membership. |
| Keywords: | Union membership, Pensioners, Wage-pension trade-off |
| JEL: | J11 J51 |
| Date: | 2012–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:prt:dpaper:2_2012&r=lab |
| By: | Diana Alessandrini (Department of Economics and finance, University of Guelph, Canada); Stephen Kosempel (Department of Economics and finance, University of Guelph, Canada); Thanasis Stengos (Department of Economics and finance, University of Guelph, Canada) |
| Abstract: | This paper studies the cyclicality of human capital accumulation by using a lifecycle RBC model with two types of heterogeneity: age and productivity in learning. Results show that individuals invest more in human capital during economic downturns. In particular, schooling acts as a buffer sector and allows agents to compensate for the shock by accumulating more human capital. However, human capital accumulation is more countercyclical for young and low-productivity individuals because they face lower opportunity costs of education and a higher marginal product of human capital. These results are confirmed empirically using US data from the Current Population Survey. |
| Keywords: | human capital accumulation, business cycles, labor supply |
| JEL: | J24 E32 J22 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:62_12&r=lab |
| By: | Brown, W. Mark<br/> Scott, Darren |
| Abstract: | A growing literature has found a positive association between human capital and long-run employment growth across cities. These studies have increased interest in understanding the location choices of university degree-holders, a group often used as a proxy measure of human capital. Based on data from the 2001 Canadian Census of Population, this paper investigates determinants of the location choices of degree- and non-degree-holders. With a multinomial logit model, it tests a series of hypotheses about the differential effects of thick labor markets and amenities on the location choice of these groups across metropolitan and non-metropolitan areas in Canada. |
| Keywords: | Labour, Population and demography, Mobility and migration |
| Date: | 2012–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp1e:2012027e&r=lab |
| By: | Kantarci, T. (Tilburg University) |
| Abstract: | Abstract: The five essays in this dissertation address a range of topics in the micro-economic literature on partial retirement. The focus is on the labor market behavior of older age groups. The essays examine the economic and non-economic determinants of partial retirement behavior, the effect of partial retirement on retirement income and health, and the factors that could limit workers to participate in partial retirement. The analysis is mainly empirical and makes use of survey data on actual retirement opportunities and retirement decisions, but also on stated preferences concerning abrupt and partial retirement scenarios. The data are collected in the United States and the Netherlands through national surveys and through a web-based questionnaire specifically designed for the stated preference analysis. The empirical analysis relies on micro-econometric methods of discrete choice to estimate the empirical relationships between the variables of interest. In the analysis throughout the dissertation, while the main interest lies in partial retirement, the alternative abrupt full retirement scenario is also examined. Other alternative exit routes such as unemployment or disability are not analyzed in this dissertation. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ner:tilbur:urn:nbn:nl:ui:12-5637281&r=lab |
| By: | Nattavudh Powdthavee; James Vernoit |
| Abstract: | Using a longitudinal data of British youths, this paper explores the consequences of past parental unemployment on the current happiness and self-esteem of the children. We find that a past unemployment spell of the father has important consequences for their children and leads to them having both lower subjective well-being and self-confidence. In addition, this paper also presents evidence that both subjective well-being and self-confidence responds differently to maternal unemployment compared to paternal unemployment. In our final table, we show changes in adolescents' well-being and self-esteem predicts educational attainments at 16. Together these findings offer new evidence of unemployment scarring on children's livelihood. |
| Keywords: | Unemployment, scarring, children, happiness, self-esteem, noncognitive skills |
| JEL: | D1 I3 J6 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1165&r=lab |
| By: | Jeffrey R. Brown; Stephen G. Dimmock; Scott Weisbenner |
| Abstract: | Charitable donations are an important revenue source for many institutions of higher education. We explore how donations respond to economic and financial market shocks, accounting for both supply and demand channels through which these shocks operate. In panel data with fixed effects to control for unobservable differences across universities, we find that overall donations to higher education – and especially capital donations for university endowments or for buildings– are positively and significantly correlated with the average income and house values in the state where the university is located (supply effects). We also find that when a university suffers a negative endowment shock that is large relative to its operating budget, donations increase (demand effects). This is especially true for donations earmarked for current use. We conclude by discussing the importance of understanding how donations respond to economic shocks for effective financial risk management by colleges and universities. |
| JEL: | H41 I2 I22 I23 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18389&r=lab |
| By: | Rickne, Johanna (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Fifteen years after the introduction of highly ambitious social insurance programs for urban Chinese workers, a large number of them remain un-insured. This paper examines the relationship between labor market conditions and social insurance participation among industrial firms in the pre-crisis years of 2000–2007. I find that increased labor tightness over this period was a quantitatively important driver of participation. Comparing different segments of the labor market, stronger response to tightness is found in sectors with the largest shares of un-insured: private firms, those with a larger share of low-educated workers, and those without labor unions. Increased tightness in the years ahead can therefore be expected to aid policy makers in social insurance implementation and in combating insurance inequality. |
| Keywords: | Social insurance; Employer participation; Labor market tightness; People’s Republic of China |
| JEL: | D21 J64 J65 |
| Date: | 2012–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0924&r=lab |
| By: | Geiler, P.H.M. (Tilburg University) |
| Abstract: | Chapter 4 examines the existence of the gender pay gap among top managers in the UK. The study suggests the existence of substantial differences in both the level and mix of executive remuneration between male and female executives, but fails to establish a gender pay gap at the CEO level. The fourth chapter also shows that the pay-for-performance sensitivity of female CEOs is higher than that of male CEOs. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ner:tilbur:urn:nbn:nl:ui:12-5590842&r=lab |
| By: | Leon Bettendorf; Egbert Jongen; Paul Muller (University Amsterdam/Tinbergen) |
| Abstract: | <p>Over the period 2005-2009 the Dutch government increased childcare subsidies substantially, reducing the average effective parental fee by 50%, and extended subsidies to so-called guestparent care. We estimate the labour supply effect of this reform with a difference-in-differences strategy, using parents with older children as a control group.</p><p>We find that the reform had a moderately sized impact on labour supply. Furthermore, the effects are an upper bound since there was also an increase in an earned income tax credit for the same treatment group over the same period. The joint reform increased the maternal employment rate by 2.3%-points (3.0%). Average hours worked by mothers increased by 1.1 hours per week (6.2%). Decomposing the hours effect we find that most of the increase in hours is due to the intensive margin response. A number of robustness checks confirm our results.</p><p> </p> |
| JEL: | C21 H40 J13 J22 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:217&r=lab |
| By: | Mareike Wagner |
| Abstract: | Given shortages in public child care in Germany, this paper asks whether social support with child care and domestic work by spouses, kin and friends can facilitate mothers’ return to full-time or part-time positions within the first six years after birth. Using SOEP data from 1993-2009 and event history analyses for competing risks, the author compares the employment transitions of West German, East German and migrant mothers of pre-school children. The results indicate that West German and migrant mothers return to work sooner if they have access to kin, and that kinship support is particularly important when public child care is unavailable. Furthermore, West German and migrant mothers are more likely to work full-time if their spouses partipate in domestic work. In contrast, social support does not affect employment transitions in East Germany where public child care is more easily accessible and continuous female employment is a prevalent social norm. |
| Keywords: | Maternal employment, child care, social support |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp483&r=lab |
| By: | Folke, Olle (Research Institute of Industrial Economics (IFN)); Rickne, Johanna (Research Institute of Industrial Economics (IFN)) |
| Abstract: | A large literature has studied the context that affects women’s numerical representation, but few have moved beyond numbers to study the drivers of a gender gap in political influence among elected politicians. Using panel data for the careers of 35.000 Swedish municipal politicians over six election cycles we first document the said gender gap. Women are substantially less likely to be re-elected for office, which is the most important pre-condition for obtaining influential appointments. Turing to the determinants we find that supply factors, primarily family responsibilities, explain some of this gap. Meanwhile, demand factors such as experience, age, education and income do not. Finding that competition between political parties closes the gap, we argue that a negative bias against women among party selectors thrives in contexts where meritocracy is not enforced. Positive correlations between competition and measures of competence for elected politicians of both genders further support this conclusion. |
| Keywords: | Careers in politics; Political competition; Supply of politicians |
| JEL: | H10 J16 J21 J45 |
| Date: | 2012–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0923&r=lab |
| By: | Flore-Anne Messy; Chiara Monticone |
| Abstract: | While the African situation displays disparities both within and between countries in terms of economic and human development, on average, many African countries have relatively low school enrolment ratios, highly informal labour markets, high poverty rates, as well as low financial inclusion and financial literacy levels. Against this backdrop, it is desirable to improve the level of financial literacy among the most vulnerable parts of the African population. Well-designed financial education initiatives can reduce demand-side barriers to more effective financial inclusion and can empower vulnerable individuals economically, so that they can better manage household resources and develop income generating activities. This report provides an overview of the status of financial education programmes developed in Africa, discusses their rationale, and offers initial guidance for policy makers. In recent years public authorities, as well as the non-profit and the private sector, engaged in the development of financial education programmes in several African countries. These programmes typically aim at improving financial knowledge and skills, raising awareness of financial issues, and improving financial inclusion. They usually target vulnerable groups, including low-income people, women, and youth, and sometimes deliver financial literacy training in combination with access to financial products. |
| Keywords: | Africa, financial education, financial literacy, financial inclusion, Afrique, éducation financière, inclusion financière, compétences financières |
| JEL: | D14 D18 I28 O16 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaad:25-en&r=lab |
| By: | Dur, Umut |
| Abstract: | Abstract This paper characterizes the top trading cycles mechanism for the school choice problem. Schools may have multiple available seats to be assigned to students. For each school a strict priority ordering of students is determined by the school district. Each student has strict preference over the schools. We first define weaker forms of fairness, consistency and resource monotonicity. We show that the top trading cycles mechanism is the unique Pareto efficient and strategy-proof mechanism that satisfies the weaker forms of fairness, consistency and resource monotonicity. To our knowledge this is the first axiomatic approach to the top trading cycles mechanism in the school choice problem where schools have a capacity greater than one. |
| Keywords: | Top Trading Cycles Mechanism; School Choice Problem |
| JEL: | C78 I20 D78 D61 |
| Date: | 2012–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41366&r=lab |
| By: | Stéphanie Payet |
| Abstract: | Considering the growing role of private and funded pension provision and the sensitivity of private pension provision to the economic climate, there is an increasing need of comparable and reliable information on private pension plans in order to better monitor retirement income adequacy and the role of private provision in retirement income. Key indicators of the extent to which private pension provision contributes to the adequacy of pensions are the level of coverage that private pensions have across countries‘ workforce, contributions made into pension funds and personal retirement accounts, and benefits paid to retirees. This paper provides the assessment of data sets available to estimate pension coverage, contributions and benefits in private pensions and discusses ways to use available data sets in order to better inform policy discussions on the role of private pensions on retirement benefit adequacy. It covers all EU-27 Member States and selected non-EU countries.<P>Identification et évaluation des sources de données disponibles pour le calcul d'indicateurs sur les pensions privées<BR>Dans un contexte où le rôle des dispositifs de retraite privés et par capitalisation s'accroit et où les dispositifs de retraite privés sont sensibles au climat économique, il existe un besoin croissant d'information comparable et fiable sur les plans de retraite privés afin de mieux contrôler l'adéquation du revenu de retraite et le rôle des dispositifs privés dans le revenu de retraite. Les indicateurs clés qui permettent de mesurer dans quelle mesure les dispositifs privés de retraite contribuent à l'adéquation des pensions sont le niveau de couverture atteint par les pensions privées au sein de la population active des pays, les cotisations effectuées dans les fonds de pension et les compte de retraite personnels, et les prestations payées aux retraités. Ce document fournit l‘évaluation des bases de données disponibles permettant l‘estimation de la couverture, des cotisations et des prestations des pensions privées et discute des moyens d‘utiliser les bases de données disponibles afin de mieux informer les discussions politiques sur le rôle des pensions privées dans l'adéquation des prestations de retraite. Il couvre les 27 États Membres de l'Union Européenne et certains pays hors de l'Union. |
| Keywords: | private pensions, benefits, contribution, coverage, funded pensions |
| JEL: | C81 G23 J26 J32 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaad:21-en&r=lab |
| By: | Hullegie, P.G.J. (Tilburg University) |
| Abstract: | Abstract: This thesis deals with a range of topics in health and labor economics. The first part examines the validity of a method that aims at improving the interpersonal comparability of self-reports in surveys. The second part is concerned with the question how the demand for medical care is related to health insurance, and to health. The third part studies whether job search requirements help older workers to find a job more quickly. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ner:tilbur:urn:nbn:nl:ui:12-5637283&r=lab |
| By: | Pablo Antolin; Stéphanie Payet; Juan Yermo |
| Abstract: | To adapt pension systems to demographic trends, many countries are reducing pay-as-you-go public pension levels and lifting retirement ages. In this context, funded pensions could play a major role to avoid adequacy gaps. Yet, as this paper shows, the coverage of funded private pensions, as measured by enrolment rates, is highly uneven across countries and between individuals, especially in voluntary systems. Some countries have made funded pensions compulsory (e.g. Australia, Chile) or quasimandatory (e.g. Denmark, the Netherlands) to ensure that most workers are covered and therefore have access to a sufficiently high complementary pension. However, in other countries with relatively low pay-as-you-go public pension benefits, funded private provision remains voluntary. The low level of funded pensions’ coverage in such countries should be a major policy concern. Recent policy initiatives in Germany and New Zealand, involving the introduction of financial incentives (and auto enrolment in New Zealand) have been effective in raising coverage to the highest levels among voluntary pension arrangements, but coverage gaps remain that need to be addressed.<P>Couverture des systèmes de pensions privées : preuve et options politiques<BR>Pour adapter les systèmes de retraite aux tendances démographiques, de nombreux pays réduisent les niveaux des retraites publiques par répartition et relèvent les âges de départ à la retraite. Dans ce contexte, les retraites par capitalisation pourraient jouer un rôle majeur pour éviter des écarts d’adéquation. Toutefois, comme le montre ce document, la couverture des pensions privées par capitalisation, telle que mesurée par les taux d’adhésion, est fortement inégale entre les pays et entre les individus, en particulier dans les systèmes volontaires. Certains pays ont rendu les pensions par capitalisation obligatoires (par ex. l’Australie, le Chile)ou quasi-obligatoires (par ex. le Danemark, les Pays-Bas) pour s’assurer que la plupart des travailleurs sont couverts et ont ainsi accès à une retraite complémentaire suffisamment élevée. En revanche, dans d’autres pays, où les prestations des retraites publiques par répartition sont relativement faibles, l’offre privée par capitalisation reste volontaire. La faible couverture des pensions par capitalisation dans ces pays devrait être un souci politique majeur. De récentes initiatives politiques en Allemagne et en Nouvelle-Zélande, impliquant l’introduction d’incitations financières (et l’adhésion automatique en Nouvelle-Zélande), ont été efficace à augmenter la couverture parmi les plus hauts niveaux au sein des dispositifs de retraites volontaires, mais des écarts de couverture demeurent et doivent être abordés. |
| Keywords: | coverage, compulsion, funded pensions, auto-enrolment, financial incentives, benefit adequacy, Couverture, retraite par capitalisation, coercition, adhésion automatique, incitations financières, adéquation des prestations |
| JEL: | G23 J26 J32 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaad:20-en&r=lab |
| By: | Markus Knell |
| Abstract: | In this paper I study how PAYG pension systems of the notional defined contribution type can be designed such that they remain financially stable in the presence of increasing life expectancy. For this to happen two crucial parameters must be set in an appropriate way. First, the remaining life expectancy has to be based on a crosssection measure and, second, the notional interest rate has to include a correction for labor force increases that are only due to rises in the retirement age which are necessary to "neutralize" the increase in life expectancy. It is shown that the selfstabilization is effective for various patterns of retirement behavior and also – under certain assumptions – if life expectancy reaches an upper limit. JEL classification: H55, J1, J18, J26 |
| Keywords: | Pension System, Demographic Change, Financial Stability |
| Date: | 2012–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:onb:oenbwp:179&r=lab |
| By: | David Amirault; Daniel de Munnik; Sarah Miller |
| Abstract: | Using census data at the economic region level from 1991 to 2006 and a gravity model framework, this paper examines the factors that influence migration within Canada. Results from both Poisson pseudo-maximum likelihood and negative binominal regression models suggest that provincial borders are statistically significant barriers to migration but the magnitude of their effect varies by model specification. The regression results also indicate that differences in employment rates, household incomes and language are important in explaining migration between Canadian economic regions. We also find evidence that the negative effect of distance on migration may be declining over time. |
| Keywords: | Econometric and statistical methods; Labour markets; Regional economic developments |
| JEL: | J61 R23 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:12-28&r=lab |
| By: | Steven N. Kaplan |
| Abstract: | In this paper, I consider the evidence for three common perceptions of U.S. CEO pay and corporate governance: (1) CEOs are overpaid and their pay keeps increasing; (2) CEOs are not paid for performance; and (3) boards do not penalize CEOs for poor performance. While average CEO pay increased substantially through the 1990s, it has declined since then. CEO pay levels relative to other highly paid groups today are comparable to their average levels in the early 1990s. In fact, the relative pay of large company CEOs is similar to its average level since the 1930s. The ratio of large company CEO pay to firm market value also has remained roughly constant since 1960. This suggests that similar forces, likely technology and scale, have played a meaningful role in driving CEO pay and the pay of others with top incomes. With regard to performance, CEOs are paid for performance and penalized for poor performance. Finally, boards do monitor CEOs. The rate of CEO turnover has increased in the 2000s compared to the 1980s and 1990s, and is significantly tied to poor stock performance. While corporate governance failures and pay outliers as well as the very high average pay levels relative to the typical household undoubtedly have contributed to the common perceptions, a meaningful part of CEO pay appears to be market determined and boards do appear to monitor their CEOs. Consistent with that, top executive pay policies at over 98% of S&P 500 and Russell 3000 companies received majority shareholder support in the Dodd-Frank mandated Say-On-Pay votes in 2011. |
| JEL: | G30 G32 J33 L2 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18395&r=lab |
| By: | Alicia H. Munnell; Rebecca Cannon Fraenkel; Josh Hurwitz |
| Abstract: | Pension discussions in the last few years have focused primarily on the financial health of state/local plans or on the shift from defined benefit to 401(k) plans in the private sector. Often forgotten is that while coverage at the state/local level is virtually universal, only 42 percent of private sector workers age 25-64 have any pension coverage in their current job. As a result, more than one third of households end up with no coverage at all during their entire worklives and others, who move in and out of coverage, end up with inadequate 401(k) balances. This brief proceeds as follows. The first section describes the pension coverage problem in the private sector. The second section explores the implications of the coverage gap. The third section presents policy options to address the gap. The key finding is that, absent a government initiative to create a new tier of retirement saving, pension coverage is unlikely to increase and many – both with and without 401(k) plans – will end up with inadequate retirement income. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2012-16&r=lab |