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on Labour Economics |
| By: | Bachmann, Ronald (RWI); König, Marion (Institute for Employment Research (IAB), Nuremberg); Schaffner, Sandra (RWI) |
| Abstract: | Using a linked employer-employee data set on the German construction industry, we analyse the effects of the introduction of minimum wages in this sector on labour market dynamics. In doing so, we focus on accessions and separations, as well as the underlying labour market flows, at the establishment level. The fact that minimum wages in Germany are sector-specific enables us to use other industries as control groups within a difference-in-differences framework. We find that both accessions and separations rise in East Germany as a result of the minimum wage introduction. The evidence on detailed worker flows suggests that this is mainly due to increased recalls. Furthermore, the minimum wage introduction lowered job-to-job transitions in East Germany, which can be explained by a more compressed wage distribution making on-the-job search less worthwhile. No clear effects on labour market dynamics in West Germany arise. |
| Keywords: | minimum wage, labour market flows, difference-in-differences, linked employer-employee |
| JEL: | J23 J38 J42 J63 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6760&r=lab |
| By: | Baltagi, Badi H. (Syracuse University); Baskaya, Yusuf Soner (Central Bank of Turkey); Hulagu, Timur (Central Bank of Turkey) |
| Abstract: | This paper presents wage curves for formal and informal workers using a rich individual level data for Turkey over the period 2005-2009. The wage curve is an empirical regularity describing a negative relationship between regional unemployment rates and individuals' real wages. While this relationship has been well documented for a number of countries including Turkey, less attention has focused on how this relationship differs for informal versus formal employment. This is of utmost importance for less developed countries where informal employment plays a significant role in the economy. Using the Turkish Household Labor Force Survey observed over 26 NUTS-2 regions, we find that real hourly wages of informal workers in Turkey are more sensitive to variations in regional unemployment rates than wages of formal workers. This is true for all workers as well as for different gender and age groups. |
| Keywords: | formal/informal employment, wage curve, regional labor markets |
| JEL: | C26 J30 J60 O17 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6836&r=lab |
| By: | Hamersma, Sarah (University of Florida); Heinrich, Carolyn J. (University of Texas at Austin); Mueser, Peter R. (University of Missouri-Columbia) |
| Abstract: | Temporary Help Services (THS) employment has been growing in size, particularly among disadvantaged workers, and in importance in balancing cyclical fluctuations in labor demand. Does THS employment provide some benefits to disadvantaged workers, or divert them from better jobs? We investigate whether THS jobs pay a compensating differential, as would be expected for relatively undesirable jobs. We also address multiple job-holding, exploring whether workers get "stuck" in THS jobs. We find lower quarterly earnings at THS jobs relative to others, but a $1 per hour wage premium. We reconcile these findings by examining hours worked at THS and traditional jobs. |
| Keywords: | temporary employment, compensating differential, quarterly earnings, wages, multiple jobs |
| JEL: | J3 J4 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6759&r=lab |
| By: | Guner, Nezih (MOVE, Barcelona); Kaya, Ezgi (Universitat Autònoma de Barcelona); Sánchez-Marcos, Virginia (Universidad de Cantabria) |
| Abstract: | We document recent trends in gender equality in employment and wages in Spain. Despite an impressive decline in gender gap in employment, females are still less likely to work, and if they work they are more likely to be employed part time and with temporary contracts. The gender gap (after controlling for worker and job characteristics) is about 20% and did not change between 1995 and 2006. Furthermore, the gender gap in wages is driven mainly by differences in returns to individual characteristic. While women are more qualified than men in observable labor market characteristics, they end up earning less. Public policy seems to affect female employment. In particular, there was a significant acceleration of female employment in 2000s. This was a period in which many policies that were implemented after early 1990s started to have their longer term effects. It was also a period during which Spain received a large number of immigrants, which had a positive impact on female labor force participation. |
| Keywords: | gender employment gap, gender wage gap, occupational segregation, quantile regressions, public policy |
| JEL: | J16 J21 J22 J24 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6812&r=lab |
| By: | Behaghel, Luc (Paris School of Economics); Moschion, Julie (Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | We provide empirical evidence on the impact of IT diffusion on the stability of employment relationships. We document the evolution of different components of job instability over a panel of 348 local labor markets in France, from the mid-1970s to the early 2000s. Although workers in more educated local labor markets adopt IT faster, they do not experience any increase in job instability. More specifically, we find no evidence that the diffusion of IT increases job-to-job transitions, and we find that it tends to reduce transitions to non-employment among high-school dropouts. Overall, the evidence goes against the view that the diffusion of IT has spurred job instability. Combining local labor market variations with firm data, we argue that these findings can be explained by French firms’ strong reliance on training and internal promotion strategies in order to meet the new skills requirement associated with IT diffusion. |
| Keywords: | technical change, labor turnover, skill bias, job security, internal labor markets |
| JEL: | J23 J24 J41 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6839&r=lab |
| By: | Goodman, Joshua (Harvard University) |
| Abstract: | Labor economists know that a year of schooling raises earnings but have little evidence on the impact of specific courses completed. I identify the impact of math coursework on earnings using the differential timing of state-level increases in high school graduation requirements as a source of exogenous variation. The increased requirements induced large increases in both the completed math coursework and earnings of blacks, particularly black males. Two-sample instrumental variable estimates suggest that each additional year of math raised blacks' earnings by 5-9%, accounting for a large fraction of the value of a year of schooling. Closer analysis suggests that much of this effect comes from black students who attend non-white schools and who will not attend college. The earnings impact of additional math coursework is robust to changes in empirical specification, is not driven by selection into the labor force, and persists when earnings are conditioned on educational attainment. The reforms close one fifth of the earnings gap between black and white males. Estimates for whites are similar to those of blacks but are much noisier due to the reforms' weaker impact on white students' coursework. These results suggest that math coursework is an important determinant of the labor market return to schooling, that simple minimum requirements largely benefit low-skilled students, and that more demanding requirements might be necessary to improve the outcomes of high-skilled students. |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp12-032&r=lab |
| By: | Jung, Philip (University of Bonn); Kuhn, Moritz (University of Bonn) |
| Abstract: | Extensive literature demonstrates that workers with high tenure suffer large and persistent earnings losses when they are displaced. We study the reasons behind these losses in a tractable search model that includes a lifecycle dimension, endogenous job mobility, and worker- and match-heterogeneity. The model jointly explains key characteristics of the U.S. labor market such as large average transition rates, a large share of stable jobs, and earnings losses after displacement. We decompose earnings losses and find that only 50% result from wage loss, and endogenous reactions and selection account for the remainder. These findings have important implications for welfare costs of displacement and labor market policies. |
| Keywords: | earnings losses, lifecycle, labor-market transitions, turbulence |
| JEL: | E24 J63 J64 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6835&r=lab |
| By: | Polidano, Cain (Melbourne Institute of Applied Economic and Social Research); Tabasso, Domenico (Melbourne Institute of Applied Economic and Social Research); Tseng, Yi-Ping (Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | Despite efforts to engage youth in education, there have been only modest improvements in the rates of school completion across OECD countries since the mid-1990s. These modest improvements underline the importance of programs that encourage early school leavers to return to post-school education. The objective of this paper is to better understand the factors that affect the chances of re-engaging early school leavers in education, with a particular focus on the importance of time out from school (duration dependence) and school-related factors. Using data from three cohorts of the Longitudinal Survey of Australian Youth and duration models that control for unobserved heterogeneity, our results suggest that programs that encourage an early return to study and programs that develop post-school career plans may be more effective than programs that concentrate on improving numeracy and literacy scores. |
| Keywords: | educational economics, demand for schooling, human capital |
| JEL: | I20 J01 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6769&r=lab |
| By: | Strifler, Matthias (University of Jyväskylä); Beissinger, Thomas (University of Hohenheim) |
| Abstract: | We consider a theoretical model in which unions not only take the outside option into account, but also base their wage-setting decisions on an internal reference, called the fairness reference. Wage and employment outcomes and the shape of the aggregate wage-setting curve depend on the weight and the size of the fairness reference relative to the outside option. If the fairness reference is relatively high compared to the outside option, higher wages and lower employment than in the standard model will prevail. If hit by an adverse technology shock, the economy will then react with a stronger downward adjustment in employment, whereas real wages are more rigid than in the standard model. With a low fairness reference the opposite results are obtained. An increase in the fairness weight amplifies the deviations of wages and employment from those of the standard model. It also leads to an increase in the degree of real wage rigidity if the fairness reference is high and an increase in the degree of real wage flexibility if the fairness reference is low. Thus, higher wages go hand in hand with more pronounced wage stickiness. |
| Keywords: | labor unions, fairness, wage rigidity, wage flexibility, wage stickiness, wage-setting curve, wage-setting process, unemployment |
| JEL: | J51 J64 E24 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6799&r=lab |
| By: | Hveem, Joakim (Stockholm University Linnaeus Center for Integration Studies - SULCIS) |
| Abstract: | This paper estimates the causal effect of temporary work agency (TWA) employment on the subsequent probability of employment in the regular labor market. The main purpose is to estimate the stepping-stone effect separately for natives and immigrants, where the latter group potentially benefits the most from TWA employment. Since no quasi-experiment is available, individual Differences-in-Differences and matching is used to deal with the potential selection bias. The results point at a negative regular employment effect, which slowly fades away over a couple of years. Thus no evidence of a stepping-stone effect is found. When conditioning on immigrants this negative effect is absent. A long-run significant effect is found on overall employment probability (including TWA employment), there is even a long-run positive effect on annual earnings (mainly driven by women). Unemployment probabilities decreased, however the results in the estimation were less stable over time compared to the employment estimates, suggesting that the TWAs might keep individuals from exiting the labor market. Stratification on gender showed that the negative regular employment effect on women persisted for two more years compared to men. |
| Keywords: | Temporary work agencies; stepping-stone; labor market; matching |
| JEL: | J15 J40 J60 |
| Date: | 2012–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sulcis:2012_003&r=lab |
| By: | Aysegul Sahin; Joseph Song; Giorgio Topa; Giovanni L. Violante |
| Abstract: | We develop a framework where mismatch between vacancies and job seekers across sectors translates into higher unemployment by lowering the aggregate job-finding rate. We use this framework to measure the contribution of mismatch to the recent rise in U.S. unemployment by exploiting two sources of cross-sectional data on vacancies, JOLTS and HWOL, a new database covering the universe of online U.S. job advertisements. Mismatch across industries and occupations explains at most one-third of the total observed increase in the unemployment rate, whereas geographical mismatch plays no apparent role. The share of the rise in unemployment explained by occupational mismatch is increasing in the education level. |
| Keywords: | Unemployment ; Job hunting ; Education - Economic aspects |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:566&r=lab |
| By: | MacLeod, W. Bentley (Columbia University); Urquiola, Miguel (Columbia University) |
| Abstract: | Friedman (1962) observed that the ability of firms to acquire and maintain reputations for quality is a key ingredient for the efficient provision of goods and services in a market economy. This paper explores the implications of school reputation for skill acquisition and labor market outcomes in an otherwise competitive market. We find that reputation effects can explain several puzzling findings in the economics of education, including the fact that competition can, but does not always, improve skill acquisition. This result follows from an anti-lemons effect (in contrast to Akerlof's lemons effect) that arises when schools can enhance their reputation by positively selecting their students. This leads to excess demand for "high quality" selective schools that drive out non-selective schools. This in turn reduces "relative diversity", a measure of ability dispersion in a school, leading to lower skill acquisition. |
| Keywords: | education, reputation, competition, labor markets |
| JEL: | H2 H4 I21 J31 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6805&r=lab |
| By: | Meta Brown; Elizabeth Setren; Giorgio Topa |
| Abstract: | The limited nature of data on employment referrals in large business and household surveys has so far impeded our efforts to understand the relationships among employment referrals, match quality, wage trajectories, and turnover. Using a new firm-level data set that includes explicit information on whether a worker at the company was referred by a current employee, we are able to provide rich detail on these empirical relationships for a single U.S. corporation and to test various predictions of theoretical models of labor market referrals. Our results align with the following predictions: 1) referred candidates are more likely to be hired, 2) referred workers experience an initial wage advantage, 3) the wage advantage dissipates over time, 4) referred workers have longer tenure in the firm, and 5) the variances of the referred and nonreferred wage distributions converge over time. The richness of the data allows us to analyze the role of referrer-referee relationships, and the size and diversity of the corporation permit analysis of referrals at a wide variety of skill and experience levels. |
| Keywords: | Employment ; Job hunting ; Wages ; Job satisfaction |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:568&r=lab |
| By: | Wunnava, Phanindra V. (Middlebury College) |
| Abstract: | Based on data from the National Longitudinal Surveys of Youth covering years 2000 through 2008, it is evident that both male and female workers in medium/larger establishments receive not only higher wages but also have a higher probability of participating in benefit programs than those in smaller establishments. This reinforces the well-documented 'size' effect. Further, the firm size wage effects are much larger for men than women. The union wage effect decreases with establishment size for both genders. This supports the argument that large nonunion firms pay higher wages to discourage the entrance of unions (i.e., the 'threat' effect argument). In addition, the union wage premium is higher for males for small and medium firm sizes relative to females. This implies that unions in the large establishments may have a role to play in achieving a narrowing of the gender union wage gap. In other words, the threat of unionization could reduce union wage premiums for both genders as firm size increases. Given the presence of noticeable gender differences in estimated union effects on the different components of the compensation structure, unions should not treat both genders similarly with respect to wages and benefits. |
| Keywords: | size effect, threat effect, random effects, fringe benefits, compensation, gender, union-nonunion |
| JEL: | J16 J31 J32 J51 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6779&r=lab |
| By: | McLaren, Zoe (University of Michigan) |
| Abstract: | In the context of South Africa's pervasive poverty and mass unemployment, households provide an important private safety net for the unemployed. Using new South African Labour Force Survey panel data, I investigate how households cope with job separations and the resulting loss of earned income. Unsurprisingly, I find no evidence of an added worker effect among either men or women. Neither increases in employment or labor market attachment in the year following a household job separation. Instead, households rely on remittances and, to a lesser extent, savings in the wake of a job separation. I find some evidence that households are worse off after a job separation: households reduce expenditures (even in the absence of household composition changes), hold fewer financial assets and are more likely to report frequent food insecurity. Households have viable income replacement strategies to cope with the loss of earned income in the short run, but over the long run job separations are likely to strain these strategies. Addressing structural factors in the labor market that constrain an individual's response to a household shock will enable households to respond more quickly to adverse employment events and limit the long term negative repercussions. |
| Keywords: | employment, participation, added worker effect, pension, South Africa, developing countries |
| JEL: | J22 O15 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6811&r=lab |
| By: | Petter Lundborg;; Anton Nilsson;; Dan-Olof Rooth |
| Abstract: | In this paper, we use the Swedish compulsory school reform to estimate the causal effect of parental education on sons’ outcomes. We use data from the Swedish military enlistment register of the entire population of males and focus on outcomes such as cognitive skills, noncognitive skills, and various dimensions of health at the age of 18. We find significant and positive effects of maternal education on sons' skills and health status. Although the reform had equally strong effects on fathers’ and mothers’ education, we find little evidence that paternal education improves sons’ outcomes. |
| Keywords: | Education, cognitive skills, noncognitive skills, health, causality, school reforms. |
| JEL: | I12 I28 J13 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:12/12&r=lab |
| By: | McGuinness, Seamus (Economic and Social Research Institute, Dublin); Wooden, Mark (Melbourne Institute of Applied Economic and Social Research); Hahn, Markus (Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | This paper uses longitudinal survey data to test the degree to which measures of job insecurity are correlated with changes in labour market status. Three major findings are reported. First, the perceived probability of job loss is only weakly related to both exogenous job separations and subsequent transitions to unemployment and inactivity. Second, while fears of job loss tend to persist across time and job spells, they do so at a highly diminishing rate, suggesting that the impacts on other outcomes (such as psychological well-being) may be quite limited. Third, quit intentions are strongly correlated with both voluntary separations and transitions to alternative employment. The desire to quit, however, does not appear to diminish greatly across successive employment spells. |
| Keywords: | job insecurity, job loss, quits, HILDA survey, Australia |
| JEL: | J63 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6764&r=lab |
| By: | Cervini-Plá, María (Universitat de Girona); Silva, José I. (Universitat de Girona); Vall-Castello, Judit (Universitat de Girona) |
| Abstract: | In this paper, we present both a theoretical and an empirical model in order to identify the effects of disability on wages. In the theoretical model we assume that the wage gap of a disabled worker depends on a permanent and a transitory productivity gap and the model predicts that the wage gap will be lower after gaining some work experience in the new job. We test this theoretical hypothesis using an exogenous health shock and matching methods associated with treatment effect techniques for policy evaluation. In all our specifications, we find that the reduction of the wage for the disabled is between 293 and 342 euros per month expressed in constant terms at 2010 prices (21-24% of the average wage of disabled workers) but this reduction is more than offset when we take into account both the disability benefits and the wage. As predicted in the theoretical model, we observe that the pay gap between the disabled and the non-disabled individuals falls over time once the transitory drop in productivity is disappearing. However, we observe a constant wage gap that remains over time and that corresponds to the permanent fall in productivity predicted by the theoretical model. |
| Keywords: | disabled workers, earnings gap, matching techniques |
| JEL: | I10 J24 J31 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6752&r=lab |
| By: | Mizala, Alejandra (University of Chile); Nopo, Hugo (Inter-American Development Bank) |
| Abstract: | How much are teachers paid in comparison to those in other professions in Latin America? How have these differences evolved at the turn of the 20th century? This paper reports the evolution, between circa 1997 and circa 2007, of teachers´ salaries vis-à-vis workers in other professional and technical occupations for thirteen Latin-American countries. After controlling the earnings differentials by observable characteristics linked to productivity it is found that the hourly earnings gap, although substantial, decreased throughout the decade. This has been the case for earnings gaps at the main and secondary jobs, and also for those measured in terms of monthly and yearly earnings. Nonetheless, behind the region averages there is an important cross-country heterogeneity. |
| Keywords: | wage differentials, professional labor markets, national and international labor standards, Latin America, Caribbean |
| JEL: | J31 J44 J8 O54 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6806&r=lab |
| By: | Saniter, Nils (DIW Berlin) |
| 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: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6813&r=lab |
| By: | Rios-Avila, Fernando (Georgia State University); Hirsch, Barry T. (Georgia State University) |
| Abstract: | Using a common methodology, the effects of unions on wage levels and wage dispersion are estimated for two neighboring countries, Bolivia and Chile, and for the U.S. The analysis shows that unions have broadly similar effects on the wage distribution within these three economies. The findings suggest that the political economy of unions, coupled with market constraints on labor costs, produce commonality in union wage effects that transcend other economic and institutional differences. |
| Keywords: | unions, wages, wage dispersion, Latin America |
| JEL: | J31 J51 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6757&r=lab |
| By: | Blien, Uwe (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Messmann, Susanne; Trappmann, Mark (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Reservation wages indicate the wage threshold for which individual workers are inclined to supply their working capacity. In important theoretical approaches it is assumed that this threshold depends on the unemployment rate. If this is true, the variation of reservation wages might be an important force behind the regional 'wage curve', which has been estimated in many empirical studies. Up to now, the connection of regional unemployment with reservation wages has not been tested, since research possibilities depend on survey data which were not available. With the 'Labour Market and Social Security' study (PASS), a new large panel survey in Germany, information on regional reservation wages is available. The empirical analysis with this data opens up the 'black box' of the wage generation process and delivers insights about its determining factors. The analysis is based on job matching and efficiency wage theory which are used to derive a relationship between unemployment and reservation wages." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Einkommenserwartung, Arbeitslosigkeit, regionale Verteilung, IAB-Haushaltspanel, Lohnkurve, Lohnfindung, regionaler Arbeitsmarkt, Effizienzlohntheorie |
| JEL: | J64 J31 R23 |
| Date: | 2012–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201222&r=lab |
| By: | Caliendo, Marco (University of Potsdam); Künn, Steffen (IZA) |
| Abstract: | A shortage of skilled labor and low female labor market participation are problems many developed countries have to face. Besides activating inactive women, one possible solution is to support the re-integration of unemployed women. Due to female-specific labor market constraints (preferences for flexible working hours, discrimination), this is a difficult task, and the question arises whether active labor market policies (ALMP) are an appropriate tool to do so. Promoting self-employment among the unemployed might be promising. Starting their own business might give women more independence and flexibility in allocating their time to work and family. Access to long-term informative data allows us to close existing research gaps, and we investigate the impact of two start-up programs on long-run labor market and fertility outcomes of female participants. We find that start-up programs persistently integrate former unemployed women into the labor market and partly improve their income situations. The impact on fertility is less detrimental than for traditional ALMP programs. |
| Keywords: | start-up subsidies, evaluation, long-term effects, female labor force participation, fertility |
| JEL: | J68 C14 H43 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6830&r=lab |
| By: | Chicoine, Luke E. (DePaul University) |
| Abstract: | This paper investigates the relationship between women's education and fertility by exploiting a 1985 policy change in Kenya that lengthened primary school by one year. An instrumental variables approach measures the exogenous variation in treatment intensity across birth cohorts. The reform led to an increase in education, a delay in marriage, and reduced fertility beginning at the age of 20. The effect on fertility becomes increasingly negative through age 25. The findings suggest that postponement of marriage, reduction in the marital education gap, and increased early use of modern contraceptives contribute to reduced fertility. These results are consistent with women having greater control over their fertility decision. |
| Keywords: | fertility, education, Kenya |
| JEL: | O15 J13 I25 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6778&r=lab |
| By: | Stennek, Johan (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | This paper demonstrates how unions can increase the general wage level by redirecting their bargaining power from wages in general to a focus on the lowest wages. This opportunity arises as a result of the interplay between two sources of market power, namely union bargaining power and an efficiency wage premium earned by skilled labor. This result may explain the stylized fact that unions not only increase wages but also reduce wage inequality. It is also demonstrated that low-wage policies may be part of the reason why unions succeed to organize workers of heterogeneous skills. |
| Keywords: | wage differences; trade unions |
| JEL: | J31 J51 |
| Date: | 2012–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0539&r=lab |
| By: | Claudia Goldin; Lawrence F. Katz |
| Abstract: | Pharmacy has become a female-majority profession that is highly remunerated with a small gender earnings gap and low earnings dispersion relative to other occupations. We sketch a labor market framework based on the theory of equalizing differences to integrate and interpret our empirical findings on earnings, hours of work, and the part-time work wage penalty for pharmacists. Using extensive surveys of pharmacists for 2000, 2004, and 2009 as well as samples from the American Community Surveys and the Current Population Surveys, we explore the gender earnings gap, the penalty to part-time work, labor force persistence, and the demographics of pharmacists relative to other college graduates. We address why the substantial entrance of women into the profession was associated with an increase in their earnings relative to male pharmacists. We conclude that the changing nature of pharmacy employment with the growth of large national pharmacy chains and hospitals and the related decline of independent pharmacies played key roles in the creation of a more family-friendly, female-friendly pharmacy profession. The position of pharmacist is probably the most egalitarian of all U.S. professions today. |
| JEL: | J24 J31 J44 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18410&r=lab |
| By: | Gindling, T. H.; Newhouse, David |
| Abstract: | This paper analyzes heterogeneity among the self-employed in 74 developing countries, representing two-thirds of the population of the developing world. After profiling how worker characteristics vary by employment status, it classifies self-employed workers outside agriculture as"successful"or"unsuccessful"entrepreneurs, based on two measures of success: whether the worker is an employer, and whether the worker resides in a non-poor household. Four main findings emerge. First, jobs exhibit a clear pecking order, with household welfare and worker education highest for employers, followed by wage and salaried employees, non-agricultural own-account workers, non-agricultural unpaid family workers, and finally agricultural workers. Second, a substantial minority of own-account workers reside in non-poor households, suggesting that their profits are often a secondary source of household income. Third, as per capita income increases, the structure of employment shifts rapidly, first out of agriculture into unsuccessful non-agricultural self-employment, and then mainly into non-agricultural wage employment. Finally, roughly one-third of the unsuccessful entrepreneurs share similar characteristics with their successful counterparts, suggesting they have the potential to be successful but face constraints to growth. The authors conclude that although interventions such as access to credit can benefit a substantial portion of the self-employed, effectively targeting the minority of self-employed with higher growth potential is important, particularly in low-income contexts. The results also highlight the potential benefits of policies that facilitate shifts in the nature of work, first from agricultural labor into non-agricultural self-employment, and then into wage and salaried jobs. |
| Keywords: | Income,Labor Markets,Skills Development and Labor Force Training,Economic Theory&Research,Rural Poverty Reduction |
| Date: | 2012–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6201&r=lab |
| By: | Camargo, Braz; Firpo, Sergio; Ponczek, Vladimir P. |
| Abstract: | In this paper we test whether the disclosure of test scores has direct impacts on student performance, school composition and school inputs. We take advantage of the discontinuity on the disclosure rules of The National Secondary Education Examination (ENEM) run in Brazil by the Ministry of Education: In 2006 it was established that the 2005 mean score results would be disclosed for schools with ten or more students who took the exam inthe previous year. We use a regression discontinuity design to estimate the e ects of test disclosure. Our results indicate that private schools that had their average scores released in 2005 outperformed those that did not by 0.2-0.6 in 2007. We did not nd same results for public schools. Moreover, we did not nd evidence that treated schools adjusted their inputs or that there was major changes in the students composition of treated schools.These ndings allow us to interpret that the main mechanism driving the di erences in performance was the increased levels of students', teachers' and principals' e ort exerted by those in schools that had scores publicized. |
| Date: | 2012–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:289&r=lab |
| By: | Brodeur, Abel (Paris School of Economics); Connolly, Marie (University of Québec at Montréal) |
| Abstract: | In this paper, we investigate the effect of a change in childcare subsidies on parental subjective well-being. Starting in 1997, the Canadian province of Québec implemented a generous program providing $5-a-day childcare to children under the age of 5. By 2007, the percentage of children attending subsidized day care had tripled and mothers' labor force participation had increased substantially. Objectively, more labor force participation is seen as a positive improvement, bringing with it higher income, independence and bargaining power. Yet a decrease in women's subjective well-being over previous decades has been documented, perhaps due to a Second Shift effect where women work more but still bear the brunt of housework and childrearing (Hochschild and Machung, 1989). Using data from the Canadian General Social Survey, we estimate a triple-differences model using differences pre- and post- reforms between Québec and the rest of Canada and between parents with young children and those with older children. Our estimates suggest that Québec's family policies led to a small decrease in parents' subjective well-being. Of note, though, we find large and positive effects for poor household families and high school graduates and negative effects for middle household income families. We find similar negative effects on life satisfaction for both men and women, but different effects on satisfaction with work-life balance. This suggests that fathers' life satisfaction could be influenced by their wives' labor supply while their work-life balance is not. |
| Keywords: | childcare, labor supply, subjective well-being, life satisfaction, happiness, work-life balance |
| JEL: | I31 J20 J28 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6804&r=lab |
| By: | Zimmermann, Laura (University of Michigan) |
| Abstract: | Indian girls have significantly lower school enrollment rates than boys. Anecdotal evidence suggests that gender-differential treatment is the main explanation, but empirical support is often weak. I analyze school enrollment using rainfall shocks, a plausibly exogenous source of income variation. Rainfall shocks matter most for young children and monotonically decline with age. Girls' school enrollment is more vulnerable to rainfall shocks than that of boys for 6-10 year olds, but there are no gender differences for older children. I argue that these results need to be interpreted carefully since they are a combination of two underlying effects, but propose that one explanation are age-specific forms of gender discrimination. |
| Keywords: | rainfall, gender discrimination, school enrollment, education, India |
| JEL: | D13 I21 J16 O12 O15 Q54 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6833&r=lab |
| By: | Stancanelli, Elena G. F. (Sorbonne Economics Research Center Paris 1 University) |
| Abstract: | Earlier studies conclude that spouses' retirement strategies are not independent from each other and that policies affecting individuals in a couple are also likely to affect the economic behaviour of their partner. In this study, we exploit retirement age legislation in France as well as a retirement policy change to identify the effect of own and spousal retirement on spouses' hours. To this end, we use a Fuzzy Regression Discontinuity approach combined with Differences in Differences, for both spouses. The data for the analysis are drawn from French Labour Surveys pooled over thirteen years. The sample for the analysis includes over 85,000 dual-earner couples with spouses aged 50 to 70. We find evidence of large and significant jumps in the own retirement probability at the legal early retirement age for both men and women in a couple. We also conclude that the 1993 reform reduced significantly the probability of retirement at the early retirement age for married men while the effect was not significant for married women. Husbands' retirement probability increases significantly when the wife reaches early retirement age while her retirement probability is not responsive to his early retirement age. We conclude that hours fall significantly upon own and partner's retirement for both spouses. On average, her hours fall by 2.7 per cent when he retires while his hours fall by 5 per cent when she retires, implying an average reduction of one hour per week for women and two hours for men if their spouse retires. |
| Keywords: | ageing, retirement, regression discontinuity, policy evaluation |
| JEL: | J14 C1 C36 D04 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6791&r=lab |
| By: | Sjoquist, David L. (Georgia State University); Winters, John V. (University of Cincinnati) |
| Abstract: | We examine the effects of recently adopted state merit-based financial aid programs on college attendance and degree completion. Our primary analysis uses microdata from the 2000 Census and 2001-2010 American Community Survey to estimate the effects of merit programs on educational outcomes for 25 merit aid adopting states. We also utilize administrative data for the University System of Georgia to look more in depth at the effects of the HOPE Scholarship on degree completion in Georgia. We find strong consistent evidence that state merit aid programs have no meaningfully positive effect on college completion. Coefficient estimates for our preferred specifications are small and statistically insignificant. State merit aid programs do not appear to increase the percentage of young people with a college education. |
| Keywords: | merit aid, HOPE, college attainment, degree completion, higher education |
| JEL: | H75 I23 J24 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6801&r=lab |
| By: | Stephane Gregoir;; Tristan-Pierre Maury; |
| Abstract: | Disability has consequences on the dynamic changes in the positions on the labour and housing markets that may be magnifying each other. We estimate the share in the gap in labour force participation between able-bodied and disabled people that can be attributed to differences in individual home tenure histories. Based on an original multivariate dynamic panel data model relying on BHPS data from 1992 to 2008 and sequential estimation of two models related on the one hand to individual annual transition probabilities on the labour and housing markets and on the other hand to transition probabilities regarding health, we show that some of the medium run (between 5 and 8 years) decrease in employment probability for the disabled can be attributed to a negative social housing sector channel. The discrimination effect on employment for disabled people cumulates with a lower probability of participating in the job market when living in the public housing sector. |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:12/22&r=lab |
| By: | Stoyanov, A.; Zubanov, N.V. |
| Abstract: | Using data from the universe of Danish manufacturing firms and workers over the period 1995-2007, we estimate output gains linked to productivity spillovers through worker mobility, and calculate the shares in these gains accrued to firms, to the workers who bring spillovers, and to the rest of the workers. Applying our results to the manufacturing sector as a whole, the total output gains average at 0.16% per year, of which 80% is retained by the firms, 15% by the rest of the workers, and only 5% goes to the workers who bring spillovers. We therefore conclude that output gains through worker mobility are largely a positive externality for hiring firms. |
| Keywords: | wages;matched employer-employee data;productivity spillovers;worker mobility |
| Date: | 2012–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765032994&r=lab |
| By: | Jepsen, Christopher (University of Kentucky); Mueser, Peter R. (University of Missouri-Columbia); Troske, Kenneth (University of Kentucky) |
| Abstract: | We evaluate the labor-market returns to General Educational Development (GED) certification using state administrative data. We develop a fuzzy regression discontinuity (FRD) method to account for the fact that GED test takers can repeatedly retake the test until they pass it. Our technique can be applied to other situations where program participation is determined by a score on a "retake-able" test. Previous regression discontinuity estimates of the returns to GED certification have not accounted for retaking behavior, so these estimates may be biased. We find that the effect of GED certification on either employment or earnings is not statistically significant. GED certification increases postsecondary participation by up to four percentage points for men and up to eight percentage points for women. |
| Keywords: | GED, high school dropouts |
| JEL: | J24 I21 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6758&r=lab |
| By: | Fossen, Frank M. (Free University of Berlin); Büttner, Tobias J. M. (Technical University of Berlin) |
| 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: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6819&r=lab |
| By: | Lundborg, Petter (Department of Economics, Lund University); Nordin, Martin (Department of Economics, Lund University); Rooth, Dan Olof (Linnaeus University) |
| Abstract: | We provide new evidence on the causal mechanisms reflected in the intergenerational transmission of human capital. Applying both an adoption and a twin design to rich data from the Swedish military enlistment, we show that greater parental education increases son's cognitive and non-cognitive skills, as well as their health. The estimates are in many cases similar across research designs and suggest that a substantial part of the effect of parental education on the children's education works through improving children's skills and health. |
| Keywords: | Intergenerational Transmission; Human Capital; Education; Health |
| JEL: | C41 I11 I12 J12 J14 |
| Date: | 2012–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2012_022&r=lab |
| By: | Gaddis, Isis (University of Göttingen); Pieters, Janneke (IZA) |
| Abstract: | While there is a large literature analyzing the distributional impacts of trade reforms across the income or skill distribution, very little is known about the gender effects of trade reforms. This paper seeks to fill this gap and investigates the impact of Brazil's 1987-1994 trade liberalization on labor force participation of women. To identify the causal effect of trade reforms we exploit exogenous variation in exposure to tariff reductions across states linked to spatial differences in states' initial industry composition. We find that tariff reductions were associated with an increase in female labor force participation and employment after a period of around two years. Our results are robust to a variety of different approaches in dealing with the potential endogeneity of regional exposure to trade liberalization, alternative measures of trade protection and different time periods. Moreover, we find evidence that employment flows across sectors, especially an accelerated shift from agriculture and manufacturing to trade and other services, but also greater labor market insecurity and male unemployment are behind the observed increase in female economic activity. This suggests that both push and pull factors induced women to join the labor force. |
| Keywords: | female labor force participation, trade liberalization, Brazil |
| JEL: | F13 F16 J16 J21 O15 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6809&r=lab |
| By: | Kalb, Guyonne (Melbourne Institute of Applied Economic and Social Research); Le, Trinh (Melbourne Institute of Applied Economic and Social Research); Hunter, Boyd H. (Australian National University); Leung, Felix (Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | Despite several policy efforts to promote economic participation by Indigenous Australians, they continue to have low participation rates compared to non-Indigenous Australians. This study decomposes the gap in labour market attachment between Indigenous and non- Indigenous Australians in non-remote areas, combining two separate data sources in a novel way to obtain access to richer information than was previously possible. It shows that among women at least two thirds of the gap can be attributed to differences in the observed characteristics between the two populations. For men, the differences in observed characteristics of the two populations can account for 36 to 47 percent of the gap. A detailed decomposition shows that lower education, worse health, and larger families (particularly for women) explain the lower labour market attachment of Indigenous Australians to a substantial extent. Compared with previous studies, this study is able to explain a larger proportion of the gap in employment between Indigenous and non-Indigenous people due to being able to include a larger set of explanatory variables. |
| Keywords: | labour market attachment, Indigenous Australians, non-linear decomposition |
| JEL: | J15 J21 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6808&r=lab |
| By: | Colombino, Ugo (University of Turin); Narazani, Edlira (University of Turin) |
| Abstract: | We use a microeconometric model of household labour supply in order to evaluate, with Italian data, the behavioural and welfare effects of gender based taxation (GBT) as compared to other policies based on different optimal taxation principles. The comparison is interesting because GBT, although technically correct, might face implementation difficulties not shared by other policies that in turn might produce comparable benefits. The simulation procedure accounts for the constraints implied by fiscal neutrality and market equilibrium. Our results support to some extent the expectations of GBT's proponents. However it is not an unquestionable success. GBT induces a modest increase of women's employment, but similar effects can be attained by universal subsidies on low wages. When the policies are evaluated in terms of welfare, GBT ranks first among single women but for the whole population the best policies are subsidies on low wages, unconditional transfers or a combination of the two. |
| Keywords: | gender based taxation, wage subsidies, basic income, guaranteed minimum income, labour supply, social welfare |
| JEL: | H2 I3 J2 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6828&r=lab |
| By: | Ozdemir, Zeynel Abidin (Gazi University); Balcilar, Mehmet (Eastern Mediterranean University); Tansel, Aysit (Middle East Technical University) |
| Abstract: | This paper shows that the structural breaks are an important characteristic of the monthly labor force participation rate (LFPR) series of Australia, Canada and the USA. Therefore we allow for endogenously determined multiple structural breaks in the empirical specifications of fractionally integrated ARMA model. The findings indicate that contrary to the previous research the LFPRs of Australia, Canada and the USA are stationary implying that the informational value of the unemployment rates about the behavior of labor markets and the causes of joblessness are useful. |
| Keywords: | labor force participation rates, structural change, stationarity |
| JEL: | C22 E24 J21 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6776&r=lab |
| By: | Fabio Clementi (University of Macerata); Michele Giammatteo (Bank of Italy) |
| Abstract: | <div style="text-align: justify;">This paper provides an empirical examination of the distribution of labour earnings in Italy. Using four waves of data from the Participation Labour Unemployment Survey, a database of information on the Italian labour market supply, we find the shape of the observed distributions to be positively skewed with a “fat” and long tail on the right. We also address the question of earnings dispersion by applying a “nested” decomposition procedure of the Theil inequality measure, which combines into a unified framework the standard decompositions by population subgroups and income sources. The empirical evidence obtained points to the key role played by the self-employees in shaping labour income inequality, especially at the upper extreme of the earnings distribution, and the emergence of non-standard forms of employment as an important feature of the contemporary workplace.</div> |
| Keywords: | inequality,size distribution,labour income |
| JEL: | D33 D63 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:mcr:wpaper:wpaper00042&r=lab |
| By: | Brendan Epstein |
| Abstract: | In the United States, the aggregate vacancy-unemployment (V/U) ratio is strongly procyclical, and a large fraction of its adjustment associated with changes in productivity is sluggish. The latter is entirely unexplained by the benchmark homogeneous-agent model of equilibrium unemployment theory. I show that endogenous search and worker-side horizontal heterogeneity in production capacity can be important in accounting for this propagation puzzle. Driven by differences in unemployed and on-the-job seekers' search incentives, the probability that any given firm with a job opening matches with a worker endowed with a comparative advantage in that job exhibits a stage of procyclical slow-moving adjustment. Consequently, so do the expected gains from posting vacancies and, hence, the V/U ratio. The model has channels through which the majority of both the V/U ratio's sluggish-adjustment properties and its elasticity with respect to output per worker can be accounted for. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1053&r=lab |
| By: | Bachmann, Ronald (RWI); Baumgarten, Daniel (Ruhr Graduate School in Economics) |
| Abstract: | Using harmonized micro data, this paper investigates the job search behaviour of the unemployed in Europe. The analysis focuses on the importance of individual and household characteristics in this context, as well as on cross-country differences in Europe. Our findings suggest that both individual and household characteristics play an important role, with the latter being more decisive for women. However, even when controlling for these factors, remarkable differences remain between countries, which are associated with institutional characteristics at the country level. |
| Keywords: | job search, search channels |
| JEL: | J20 J64 C38 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6753&r=lab |
| By: | Firpo, Sergio; Fortin, Nicole M; Lemieux, Thomas |
| Abstract: | This paper argues that changes in the returns to occupational tasks have contributed to changes in the wage distribution over the last three decades. Using Current Population Survey (CPS) data, we first show that the 1990s polarization of wages is explained by changes in wage setting between and within occupations, which are well captured by tasks measures linked to technological change and offshorability. Using a decomposition based on Firpo, Fortin, and Lemieux (2009), we find that technological change and deunionization played a central role in the 1980s and 1990s, while offshorability became an important factor from the 1990s onwards. |
| Date: | 2012–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:284&r=lab |
| By: | KODAMA Naomi; INUI Tomohiko; KWON Hyeog Ug |
| Abstract: | In this article, we examine the change in the wages of regular employed workers through the 1990s and the 2000s using Japanese establishment level data drawn from the Basic Survey on Wage Structure. Contrary to previous literature that found that the wages in the manufacturing industries embedded in internationally competitive markets, particularly with relatively low-wage countries, have faced strong downward pressure, we find that the decline in wages in the service industries was more significant than their manufacturing counterparts during these periods.<br />The main finding of this article is that wages in the service industries have consistently declined since 1993, while, on the other hand, wages in the manufacturing sector were stable, sometimes even increasing, during the period of 1993 through 2009. Moreover, the rate of decline in wages in the service industries accelerated over time during the respective periods as follows: 3.0% between 1993 and 1998, 7.8% between 1998 and 2003, and 7.9% between 2005 and 2009. We take into consideration the main determinants of this constant decline in wages for each period. From 1993 through 1998, the decline in wages in the service industries was caused by an increase in the share of low-paid, part-time workers in the sector. From 1998 through 2003, the wage of workers declined in almost every service sector and affected every group (sex, age, education, region, firm size) in the sector. In the period of 2003 through 2008, it was caused by a decrease in working hours and an increase in the share of part-time workers in the sector as well.<br />We also find that the wage differences between male and female workers, and between part-time and full-time workers, narrowed in both the 1990s and the 2000s and in both the manufacturing and service sectors. Another finding is that, though the age-wage profile has been little changed in the manufacturing industries over time, in the service industries, the wage slope flattened in the 2000s, especially for workers in their 20s and 30s, compared to that in the 1990s. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:12031&r=lab |
| By: | Gerards, Ruud (ROA, Maastricht University); de Grip, Andries (ROA, Maastricht University); Witlox, Maaike (Maastricht University) |
| Abstract: | This article studies the use and impact of a firm-sponsored training ("Employability-miles") voucher scheme that aims to stimulate employees to develop a more active attitude toward their own employability. Using data from two surveys of the firm's workforce, we find that voucher use is related to various personality traits and personal characteristics. In particular, a worker's ambition, goal setting, and education level are positively related to voucher use. In addition, women and those with longer tenure spend their vouchers more often. Conversely, workers with a more positive self-image as well as those who are negatively reciprocal spend their vouchers less often. The negative relation between voucher use and negative reciprocity suggests that workers who are more negatively reciprocal perceive the voucher as an HR tool for outplacement. Further, we find that voucher use positively affects worker employability awareness and willingness to train. Remarkably, participation in non-voucher training shows little relation to personality traits. From a human resources perspective, this finding suggests that by employing a voucher scheme, the firm makes training participation more dependent on employee personality and individual characteristics instead of the human resources development strategy of the firm. |
| Keywords: | employability, voucher, training, human resource development, human capital |
| JEL: | J24 M53 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6818&r=lab |
| By: | Priya Ranjan (University of California, Irvine); Nishith Prakash (University of Connecticut) |
| Abstract: | This paper assesses the status of education, both quantity and quality, in Bihar in both absolute terms and relative to other states in India. It then performs a regression exercise using a panel data of Indian states to identify the correlates of educational outcomes. It also surveys the broader literature on education policies which provides a perspective on the current policies in the field of education in Bihar. Finally, it makes a case for several policy initiatives that should be accorded priority by the policymakers in Bihar. JEL Classification: I2, J31, O15, O22 Key words: Education, Enrollment, Out-of-School, Bihar, India |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2012-19&r=lab |
| By: | Eva Garcia-Moran (The Center for Economic and Political Research on Aging , University of Lugano); Zoe Kuehn (Departmento de Economia Cuantitativa, Universidad Complutense de Madrid.) |
| Abstract: | Grandparents are regular providers of free child care. Similar to any other form of child care, availability of grandparent-provided child care affects fertility and labor market decisions of women positively. We find that women in Germany, residing close to parents or in-laws are more likely to have children and that as mothers they are more likely to hold a regular part-or fulltime job. However, different from any other type of child care, for individuals to enjoy grandparent-provided child care on a regular basis, residence choices must coincide with those of parents or in-laws. Thus while living close provides access to free child care, it imposes costly spatial restrictions. We find that hourly wages of mothers residing close to parents or in-laws are lower compared to those residing further away, and having relatives taking care of ones' children increases the probability of having to commute. We build a general equilibrium model of residence choice, fertility decisions, and female labor force participation that can account for the relationships between grandparent-provided child care, fertility and female labor market outcomes. We simulate our model to analyze how women's decisions on residence, fertility, and labor force participation change under distinct scenarios regarding availability of grandparent provided childcare and different family policies. |
| Keywords: | informal child care, fertility, labor force participation, spatial restrictions, regional labor markets |
| JEL: | J13 J61 H42 R23 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:lug:wcepra:1202&r=lab |
| By: | L.J.H. Bettendorf (CPB Netherlands Bureau for Economic Policy Analysis); Egbert L.W. Jongen (CPB Netherlands Bureau for Economic Policy Analysis); Paul Muller (VU University Amsterdam) |
| Abstract: | 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. 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. |
| Keywords: | Childcare subsidies; labour participation; hours worked; difference-in-differences |
| JEL: | C21 H40 J13 J22 |
| Date: | 2012–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20120093&r=lab |
| By: | Ive Marx (Centre for Social Policy, University of Antwerp); Brian Nolan (School of Applied Social Science, University College Dublin) |
| Abstract: | While in-work poverty is not a new problem, the degree of attention it is receiving in Europe is more recent, reflecting at least two concurrent sources of concern (Andreβ and Lohmann 2008; OECD 2008; European Foundation 2010; Fraser et al. 2011; Crettaz 2011; European Commission 2011). Deindustrialisation, intensifying international trade and skill-biased technological change are said to be threatening if not effectively eroding the (potential) earnings and living standards of some workers in advanced economies. Yet at the same time, policy at EU level and in many countries has become focused on increasing the number of people relying on earnings, and particularly on drawing into the labour market those with the weakest education and work history profiles. The Europe 2020 target of boosting employment rates to 75 per cent of the population aged 20 to 64 shows this drive to be undiminished. Sharply increased unemployment in some countries following on from the onset of the economic crisis has only served to increase the emphasis on getting people into jobs. In light of these trends, there would appear to be legitimate concern that larger sections of the workforce are being expected to rely on jobs that do not generate sufficient income to escape poverty.... |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:aia:ginidp:dp51&r=lab |
| By: | Vinod Mishra; Russell Smyth |
| Abstract: | We examine the relationship between research and development (R&D) intensity and wages, using a unique matched employer-employee dataset. The dataset has the advantage that it links firm-level investment in R&D to individual employee wages and allows us to control for both employee and employer characteristics. Our main finding is that a one standard deviation increase in R&D intensity is associated with an increase in the hourly wage rate between 3.4 per cent and 6.9 per cent for the full sample, depending on the exact specification. We find that the wage elasticity with respect to R&D intensity is higher in larger firms as well as for better educated workers and workers with technical certification/skills. We also find, consistent with the rent-sharing hypothesis, that the wage elasticity with respect to R&D intensity is higher for workers who belong to the Communist Party or trade union. |
| Keywords: | R&D, China, Wages, Shanghai |
| JEL: | J31 O31 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2012-28&r=lab |
| By: | Caliendo, Marco (University of Potsdam); Hogenacker, Jens (IZA) |
| Abstract: | The reaction of the German labor market to the Great Recession 2008/09 was relatively mild – especially compared to other countries. The reason lies not only in the specific type of the recession – which was favorable for the German economy structure – but also in a series of labor market reforms initiated between 2002 and 2005 altering, inter alia, labor supply incentives. However, irrespective of the mild response to the Great Recession, there are a number of substantial future challenges the German labor market will soon have to face. Female labor supply still lies well below that of other countries and a massive demographic change over the next 50 years will have substantial effects on labor supply as well as the pension system. In addition, due to a skill-biased technological change over the next decades, firms will face problems of finding employees with adequate skills. The aim of this paper is threefold. First, we outline why the German labor market reacted in such a mild fashion, describe current economic trends of the labor market in light of general trends in the European Union, and reveal some of the main associated challenges. Thereafter, the paper analyzes recent reforms of the main institutional settings of the labor market which influence labor supply. Finally, based on the status quo of these institutional settings, the paper gives a brief overview of strategies to combat adequately the challenges in terms of labor supply and to ensure economic growth in the future. |
| Keywords: | benefit systems, labor supply, labor force participation, unemployment, public policy |
| JEL: | J26 J38 J68 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6810&r=lab |
| By: | Mu, Ren (Texas A&M University); Du, Yang (Chinese Academy of Social Sciences) |
| Abstract: | When social security is established to provide pensions to parents, their reliance upon children for future financial support decreases; and their need to save for retirement also falls. We use the expansion of pension coverage from the state sector to the non-state sector in urban China as a quasi-experiment to analyze the intergenerational impact of social security on educational investments in children. With a difference-in-differences framework, we find a significant increase in the total education expenditure attributable to pension expansion. The results are unlikely to be driven by trends in medical insurance, wages, bonus income, and housing values. They are robust to the inclusion of a large set of control variables and to different specifications, including one based on the instrumental variable method. |
| Keywords: | pension, education expenditure, gender difference, urban, China |
| JEL: | J26 J24 O15 D13 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6797&r=lab |
| By: | Goerke, Laszlo (IAAEG, University of Trier); Pannenberg, Markus (Bielefeld University of Applied Sciences) |
| Abstract: | In 1996, statutory sick pay was reduced for private sector workers in Germany. Using the empirical observation that trade union members are dismissed less often than non-members, we construct a model to predict how absence behaviour will respond to the sick pay reform. We show that union members may have stronger incentives to be absent and to react to the cut in sick pay. In the empirical investigation, we find a positive relationship between trade union membership and absence due to sickness and observe more pronounced reactions to the cut in sick pay among union members than among non-members. These findings suggest that more flexibility in the use of paid absence due to sickness constitutes a private gain from trade union membership. |
| Keywords: | difference-in-differences, sickness-related absence, Socio-Economic Panel (SOEP), statutory sick pay, trade union membership |
| JEL: | I18 J51 J22 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6777&r=lab |
| By: | Boeri, Tito (Bocconi University); Garibaldi, Pietro (University of Turin); Moen, Espen R. (Norwegian Business School (BI)) |
| Abstract: | The recent financial crises, alongside a dramatic rise in unemployment on both sides of the Atlantic, suggest that financial shocks do translate into the labor markets. In this paper we first document that financial recessions amplify labor market volatility and Okun's elasticity over the business cycle. Second, we highlight a key mechanism linking financial shocks to job destruction, presenting and solving a simple model of labor market search and endogenous finance. While finance increases job creation and net output in normal times, it also augments their aggregate response in the aftermath of a financial shock. Third, we present evidence coherent with the idea that more leveraged sectors experience larger employment volatility during financial recessions. Theoretically, the job destruction effect of finance works as follows. Leveraged firms may find themselves in a position in which their liquidity is suddenly called back by the lender. This has direct consequences on a firm ability to run and manage existing jobs. As a result, firms may be obliged to shut down part of their operations and destroy existing jobs. We argue that with well-developed capital markets, firms will have an incentive to rely more on liquidity, and in normal times deep capital markets lead to tight labor markets. After an adverse liquidity shock, firms that rely much on liquidity are hit disproportionally hard. This may explain why the unemployment rate in the US during the Great Recession increased more than in European countries experiencing larger output losses. Empirically, the paper uses a variety of datasets to test the implications of the model. At first we identify crises that, just like in the model, caused a sudden reduction of liquidity to firms. Next we draw on sector-level data on employment and leverage in a number of OECD countries at quarterly frequencies to assess whether highly leveraged equilibria originate more employment adjustment under financial recessions. We find that highly leveraged sectors and periods are associated with higher employment- to-output elasticities during banking crises and this effect explains the observation of higher Okun's elasticities during financial recessions. We also argue that the effect of leverage on employment adjustment can be interpreted as a causal effect, if our identification assumptions are considered plausible. All this amounts essentially for a test of the labor demand channel of adjustment. |
| Keywords: | financial shocks, matching, Okun's elasticities |
| JEL: | G1 J2 J6 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6826&r=lab |
| By: | Gustav Ranis (Economic Growth Center, Yale University) |
| Abstract: | Unskilled labor is the abundant resource in many developing countries, especially at an early stage of their development. Yet, even as at given technologies labor markets have not cleared, neo-classical economists have rejected the notion of an institutional or bargaining wage not based on competitive full employment marginal productivity fundamentals. This paper puts to rest some objections to labor surplus theory based on “red herrings” and then addresses the substantive challenges from the micro-econometric branch of neo-classical economics. We contend that the finding of inelastic supply curves of labor is based on a cross-section static analysis of labor supply within agriculture while the labor surplus model deals with tracing the dynamic reallocation of labor from a traditional to a neo-classical organized sector in a dualistic economy. We present data for a number of labor surplus developing countries showing that institutional wages lag behind agricultural productivity increases as countries move towards a “turning point” when inter-sectoral balanced growth has eliminated unskilled labor and the economy has lost its dual characteristic. |
| Keywords: | development, labor surplus, neo-classical economics, turning point labor markets |
| JEL: | O10 O11 O17 O18 O41 O43 O57 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:1016&r=lab |
| By: | Abdulkadiroğlu, Atila (Duke University); Angrist, Joshua (MIT); Pathak, Parag A. (MIT) |
| Abstract: | Parents gauge school quality in part by the level of student achievement and a school's racial mix. The importance of school characteristics in the housing market can be seen in the jump in house prices at school district boundaries where peer characteristics change. The question of whether schools with more attractive peers are really better in a value-added sense remains open, however. This paper uses a fuzzy regression-discontinuity design to evaluate the causal effects of peer characteristics. Our design exploits admissions cutoffs for Boston and New York City's heavily over-subscribed exam schools. Successful applicants near admissions cutoffs for the least selective of these schools move from schools with scores near the bottom of the state SAT score distribution to a school with scores near the median. Successful applicants near admissions cutoffs for the most selective of these schools move from above-average schools to schools with students drawn from the extreme upper tail. Exam school students can also expect to study with fewer nonwhite classmates than unsuccessful applicants. Our estimates suggest that the marked changes in peer characteristics at exam school admissions cutoffs have little causal effect on test scores or college quality. |
| Keywords: | human capital, peer effects, school quality |
| JEL: | I21 I28 C21 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6790&r=lab |
| By: | Winters, John V. (University of Cincinnati); Hirsch, Barry T. (Georgia State University) |
| Abstract: | Progress in narrowing black-white earnings differences has been far from continuous, with some of the apparent progress resulting from labor force withdrawal among lower-skilled African Americans. This paper builds on prior research and documents racial and ethnic differences in male earnings from 1950 through 2010 using data from the decennial census and American Community Surveys. Emphasis is given to annual rather than weekly or hourly earnings. Treatment of imputed earnings greatly affects measured outcomes. We take a quantile approach, providing evidence on medians and other percentiles of the distribution. Black male joblessness rose to over 40% in 2010, the median black-white earnings gap being the largest in at least sixty years. The experience of black men contrasts with that of Hispanic men during the last decade, who exhibited earnings growth similar to white men. Black men are being left behind economically, a process exacerbated by weak labor market conditions. |
| Keywords: | inequality, race, earnings, wages, median regression, imputed earnings |
| JEL: | J15 J31 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6766&r=lab |
| By: | Liu, Kai (Norwegian School of Economics (NHH)); Salvanes, Kjell G. (Norwegian School of Economics (NHH)); Sørensen, Erik Ø. (Norwegian School of Economics (NHH)) |
| Abstract: | We show that cyclical skill mismatch, defined as mismatch between the skills supplied by college graduates and skills demanded by hiring industries, is an important mechanism behind persistent career loss from graduating in recessions. Using Norwegian data, we find a strong countercyclical pattern of skill mismatch among college graduates. Initial labor market conditions have a declining but persistent effect on the probability of mismatch early in their careers. We provide a simple model of industry mobility that is consistent with our empirical findings. The initially mismatched graduates are also more vulnerable to business cycle variations at the time of graduation. |
| Keywords: | mismatch, business cycle, graduation |
| JEL: | E32 J31 J62 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6820&r=lab |
| By: | Aniko Biro; |
| Abstract: | I analyze the decisions on undertaking breast screening by women aged 50-64 in the UK. I provide estimation results on the discounting of the potential future benefits of screening. I also analyze the education di¤erences in mammography decisions,and examine the underlying mechanism how education in‡uences breast screening attendance. The reduced form estimation results suggest that the observed education gradient is mainly due to di¤erences in health behaviors and health care attitudes.Using the institutional settings of the UK, I estimate a structural model, which reveals that although there are di¤erences in the disutility of breast screening along the education level, there is no such di¤erence in the estimated discount factor. I also …nd some evidence that women are forward looking when deciding on mammography attendance,and might even overestimate the potential bene…ts of mammography. |
| Keywords: | mammography, health discount rate, education gradient |
| JEL: | C25 I11 I12 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:12/11&r=lab |
| By: | Rodrigues, Clarissa G.; Rios-Neto, Eduardo L G; Pinto, Cristine Campos de Xavier |
| Abstract: | To assess the quality of school education, much of educational research is concerned with comparisons of test scores means or medians. In this paper, we shift this focus and explore test scores data by addressing some often neglected questions. In the case ofBrazil, the mean of test scores in Math for students of the fourth grade has declined approximately 0,2 standard deviation in the late 1990s. But what about changes in the distribution of scores? It is unclear whether the decline was caused by deterioration instudent performance in upper and/or lower tails of the distribution. To answer this question, we propose the use of the relative distribution method developed by Handcock and Morris (1999). The advantage of this methodology is that it compares twodistributions of test scores data through a single distribution and synthesizes all the differences between them. Moreover, it is possible to decompose the total difference between two distributions in a level effect (changes in median) and shape effect(changes in shape of the distribution). We find that the decline of average-test scores is mainly caused by a worsening in the position of all students throughout the distribution of scores and is not only specific to any quantile of distribution. |
| Date: | 2012–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:282&r=lab |
| By: | Vinod Mishra; Russell Smyth |
| Abstract: | We estimate the returns to schooling using matched employer-employee data from Shanghai. To do so, we use a novel identification strategy, proposed by Lewbel (2012), which utilizes a heteroscedastic covariance restriction to construct an internal instrumental variable (IV). We find that, for the full sample, the Lewbel (2012) IV estimation suggests returns to schooling generally in the range 25-30 per cent, which is higher than extant studies using conventional IVs. The findings in this study underpin the need for the Chinese government to continue to invest in education and help explain why private demand for education remains strong, despite rising cost. |
| Keywords: | China; Schooling; Income; Lewbel |
| JEL: | I25 J31 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2012-33&r=lab |
| By: | Kooreman, Peter (Tilburg University) |
| Abstract: | Resit exams – extra opportunities to do an exam in the same academic year – are widely prevalent in European higher education, but uncommon in the US. I present a simple theoretical model to compare rational student behavior in the case of only one exam opportunity versus the case of two exam opportunities. Numerical examples for a wide range of plausible parameter values show that a second exam opportunity increases the ultimate passing probability only slightly, but strongly reduces average total student effort. |
| Keywords: | frequency of examinations, education production function, rationality |
| JEL: | D01 I21 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6832&r=lab |
| By: | Helene Blake;; Clementine Garrouste |
| Abstract: | How does the retirement age affect the physical and mental health of seniors? We identify this effect based on the 1993 reform of the French pension system, which was heterogeneously introduced among the population. The French government gradually increased the incentive to work using two tools: the contribution period required for entitlement to a full pension and the number of reference earning years taken to calculate pensions. This created heterogeneity of incentives to work among the population. We use a unique database on health and employment in France in 1999 and 2005, when the cohorts affected by the reform started to retire. Taking the reform as a tool to filter out the potential influence of health on employment choices, we show that retirement improves physical and social health. The more physically impacted are the low-educated individuals. Subsequently, a difference-indifferences approach among the working population, with the control group comprising public sector employees (not concerned by the 1993 reform), finds that the people more affected by the reform, and hence with a stronger incentive to work, were those posting less of an improvement and even a deterioration in their health between 1999 and 2005. |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:12/16&r=lab |