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on Labour Economics |
| By: | Jan Kleibrink; Maren M. Michaelsen |
| Abstract: | We analyse wage differentials between Higher Education graduates in the UK, differentiating between polytechnic and university graduates. Polytechnic graduates earned on average lower wages than university graduates prior to the UK Further and Higher Education Act of 1992. The reform changed the system of Higher Education by giving all polytechnics university status. We show that wage differentials can be explained by a glass ceiling which prevented polytechnic graduates from reaching managerial and professional occupations. After the reform, they overtook graduates of traditional universities in terms of average wages. |
| Keywords: | Higher education; wage differentials; occupational sorting; glass ceiling; United Kingdom |
| JEL: | I23 I24 J24 J31 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0377&r=lab |
| By: | Aretz, Bodo; Arntz, Melanie; Gregory, Terry |
| Abstract: | This paper contributes to the sparse literature on employment spillovers on minimum wages by exploiting the minimum wage introduction and subsequent increases in the German roofing sector that gave rise to an internationally unprecedented hard bite of a minimum wage. We look at the chances of remaining employed in the roofing sector for workers with and without a binding minimum wage and use the plumbing sector that is not subject to a minimum wage as a suitable benchmark sector. By estimating the counterfactual wage that plumbers would receive in the roofing sector given their characteristics, we are able to identify employment effects along the entire wage distribution. The results indicate that the chances for roofers to remain employed in the sector in eastern Germany deteriorated along the entire wage distribution. Such employment spillovers to workers without a binding minimum wage may result from scale effects and/or capital-labour substitution. -- |
| Keywords: | minimum wage,Germany,capital-labour substitution,labour-labour substitution,scale effect |
| JEL: | J38 J21 J23 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:12061&r=lab |
| By: | Nora Prean (University of Vienna, Austria); Karin Mayr |
| Abstract: | We analyze differences in unemployment between natives and immigrants over the business cycle. Using matched employer-employee data for Austria, we find that immigrants' unemployment rate and flows into and out of unemployment are significantly more sensitive to labor market shocks than those of comparable natives. This is particularly true for immigrants from outside the European Economic Area. According to existing theory, a greater variability in the employment of immigrants can be due to a selection of immigrant workers into specific industries or temporary jobs. However, we do not find this confirmed in our data. |
| Keywords: | Unemployment rate, Immigration, Guestworker, Immigrant Labor |
| JEL: | J64 J61 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:jku:nrnwps:2012_10&r=lab |
| By: | Merlino, Luca Paolo (Free University of Brussels); Parrotta, Pierpaolo (Aarhus School of Business); Pozzoli, Dario (Aarhus University) |
| Abstract: | Exploiting the richness of the Danish register data on individuals and companies, we are able to provide an overall assessment of the assortative matching patterns arising in the period 1996-2005 controlling for firms and individual characteristics. We find strong differences between men and women in assortativity. While positive assortative matching in job-to-job transitions emerges for good female workers, good male workers are more likely to be promoted. These differences are not present in female friendly firms which have high profits and where good female workers tend to find jobs. Complementary analysis on job-to-unemployment and job-to-self-employment transitions reveals a lower employer's willingness to retain women. Overall, we find strong evidence of glass-ceilings in certain firms preventing women to climb the carrier ladder and pushing them to look for better jobs offered by more female friendly firms. |
| Keywords: | assortative matching, gender gap, glass ceiling, sticky floor |
| JEL: | J16 J24 J62 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6983&r=lab |
| By: | Boockmann, Bernhard; Fries, Jan; Göbel, Christian |
| Abstract: | We analyse the effects of specific measures for older employees (SMOE) on employment duration of workers aged 40 and above. Using longitudinal employer-employee data for German establishments, we account for worker and establishment heterogeneity and correct for stock-sampling. We find a positive effect of mixed-aged team work on employment duration and a negative effect of a part-time scheme addressed at older workers. Employment duration does not appear to be related to other SMOE, such as training and specific equipment of workplaces. -- |
| Keywords: | older workers,human resources policies,SMOE,employment duration,linked employer-employee data,age,tenure |
| JEL: | J14 J21 J26 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:12059&r=lab |
| By: | Mavromaras, Kostas G. (NILS, Flinders University); Mahuteau, Stéphane (NILS, Flinders University); Sloane, Peter J. (Swansea University); Wei, Zhang (NILS, Flinders University) |
| Abstract: | We use a random effects dynamic probit model to estimate the effect of overskilling dynamics on wages. We find that overskilling mismatch is common and more likely among those who have been overskilled in the past. It is also highly persistent, in a manner that is inversely related to educational level. Yet, the wages of university graduates are reduced more by past overskilling, than for any other education level. A possible reason for this wage effect is that graduates tend to be in better-paid jobs and therefore there is more at stake for them if they get it wrong. |
| Keywords: | mismatch, overskilling, wages, panel dynamic estimation |
| JEL: | J24 J31 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6985&r=lab |
| By: | Cristini, Annalisa (University of Bergamo); Eriksson, Tor (Aarhus School of Business); Pozzoli, Dario (Aarhus University) |
| Abstract: | High-performance work practices are frequently considered to have positive effects on corporate performance, but what do they do for employees? After assessing the correlation between organizational innovation and firm performance, this article investigates whether high-involvement work practices affect workers in terms of wages, wage inequality and workforce composition. The analysis is based on a survey directed at Danish firms matched with linked employer-employee data and also examines whether the relationship between high-involvement work practices and employee outcomes is affected by the industrial relations context. |
| Keywords: | workplace practices, wage inequality, workforce composition, hierarchy |
| JEL: | C33 J41 J53 L20 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6984&r=lab |
| By: | Ryuta Ray Kato (International University of Japan); Hiroaki Miyamoto (International University of Japan) |
| Abstract: | The paper studies effects of fiscal expansion on the Japanese labor market. First, using a structural VAR model, we find that the unemployment rate falls and employment rises following an increase in government spending. We also find that fiscal expansion affects flows in and out of unemployment. While an increase in government spending increases the job-finding rate, it reduces the separation rate. We then incorporate search and matching frictions into a standard dynamic general equilibrium model, and study whether the model can explain what we observed in data. While the model fails to predict the exact size of the impact of the government spending shock on the Japanese labor market variables, it can consistently capture the empirical pattern of responses of labor market variables to the shock. |
| Keywords: | Policy, Unemployment, Labor market, Search and matching |
| JEL: | E24 E62 J64 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iuj:wpaper:ems_2012_19&r=lab |
| By: | Nicole Schneeweis; Vegard Skirbekk (International Institute for Applied Systems Analysis IIASA, Laxenburg, Austria); Rudolf Winter-Ebmer |
| Abstract: | We study the relationship between education and cognitive functioning at older ages by exploiting compulsory schooling reforms, implemented in six European countries during the 1950s and 1960s. Using data of individuals aged 50+ from the Survey of Health, Aging and Retirement in Europe (SHARE), we assess the causal effect of education on old-age memory, fluency, numeracy, orientation and dementia. We find a positive impact of schooling on memory. One year of education increases the delayed memory score by about 0.3, which amounts to 16% of the standard deviation. Furthermore, for women, we find that more education reduces the risk of dementia. |
| Keywords: | Compulsory schooling, Instrumental Variables, Education, Cognitive functioning, Memory, Aging, Dementia |
| JEL: | I21 J14 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:jku:nrnwps:2012_11&r=lab |
| By: | Nicole Schneeweis; Vegard Skirbekk (International Institute for Applied Systems Analysis IIASA, Laxenburg, Austria); Rudolf Winter-Ebmer |
| Abstract: | We study the relationship between education and cognitive functioning at older ages by exploiting compulsory schooling reforms, implemented in six European countries during the 1950s and 1960s. Using data of individuals aged 50+ from the Survey of Health, Aging and Retirement in Europe (SHARE), we assess the causal effect of education on old-age memory, uency, numeracy, orientation and dementia. We find a positive impact of schooling on memory. One year of education increases the delayed memory score by about 0.3, which amounts to 16% of the standard deviation. Furthermore, for women, we find that more education reduces the risk of dementia. |
| Keywords: | Compulsory schooling, Instrumental Variables, Education, Cognitive functioning, Memory, Aging, Dementia |
| JEL: | I21 J14 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2012_11&r=lab |
| By: | Ogundari, Kolawole |
| Abstract: | Human capital development, especially higher educational attainment attaches high premium to human skills as an important factor of production. In view of this, the objective of the study is defined in two folds; first, to revisit returns to education in Nigeria and second, to investigate effects of education on the economic welfare of households in Nigeria. The study uses Double Hurdle (DH) model and Quantile Regression (QR), respectively for the objective one and two. Thus, our findings show that returns to schooling (i.e., labour market earnings) at primary, secondary and postgraduate levels are very low relative to schooling at the tertiary education in Nigeria. Also, we find the effects of primary, secondary and postgraduate education on household economic welfare to be substantially lower compared with that of tertiary education in the country. The implication of these findings is that investment up to completing tertiary education is vital for higher welfare through increasing labour market earnings among households in Nigeria. |
| Keywords: | Community/Rural/Urban Development, Industrial Organization, Production Economics, Public Economics, |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nzar12:136051&r=lab |
| By: | Marcus Klemm |
| Abstract: | This paper uses the special occupational status of German civil servants in combination with the unforeseen event of German reunification to study empirically the relationship between job security and fertility. The civil servant-status provides extreme job security as well as good possibilities to combine work and family lives. The fast introduction of the civil service system after reunification represents an exogenous (re-)assignment of individual employment risks in Eastern Germany, and thus allows one to control for occupational self-selection. While no strong evidence for a link between job security and fertility emerges for men, the paper demonstrates a clear link between labor market and demographic outcomes for women, especially in Western Germany and most pronounced for higher educated females between age 25 and 40. This strong relationship is the result of occupational self-selection coupled with a civil servantspecific birth timing pattern and a small causal impact of job security on fertility. It shows that female civil servants are not primarily a selected group of very family oriented individuals, but rather both family as well as career oriented. |
| Keywords: | Job security; fertility; occupational choice |
| JEL: | D12 J13 J24 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0379&r=lab |
| By: | Jonas Maibom Pedersen (Department of Economics and Business, Aarhus University, Denmark); Michael Rosholm (Department of Economics and Business, Aarhus University, Denmark); Michael Svarer (Department of Economics and Business, Aarhus University, Denmark) |
| Abstract: | We analyze the effects of four randomized experiments involving intensive active labour market policy, conducted in Denmark in 2008. The interventions consisted of early and frequent meetings and activation programmes. The effects are remarkable; frequent meetings between newly unemployed workers and case workers increase employment rates over the next two years by 10%. For men, we find evidence of a threat effect of having to participate in early activation programmes. In general, we find large differences between men and women, especially in the dynamics of the effects. A cost-benefit analysis reveals that meetings yield the largest net benefits. |
| Keywords: | Randomized social experiment, treatment effect, active labour market policy, cost-benefit analysis |
| JEL: | J64 J68 |
| Date: | 2012–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2012-26&r=lab |
| By: | Ricky Kanabar |
| Abstract: | Ageing populations place an increasing financial burden on governments. Retired older workers are a source of untapped economic capacity. Maestas (2010) finds 26% of Health and Retirement Study (HRS) sample respondent's `unretire'. We estimate an unretirement rate of 5.11% and 2.70% for women using The English Longitudinal Study of Ageing (ELSA). Earlier studies using US longitudinal data include Rust (1980), Gustman and Steinmeier (1984) and Hardy (1990) estimate similar rates. Results suggest: age, education, financial planning, unanticipated increases in debt, spouse and time effects play an important role in the decision for a male to unretire. |
| Keywords: | ELSA, Labour supply, Labour demand, Unretirement |
| JEL: | J26 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:12/31&r=lab |
| By: | Mariagrazia Squicciarini; Marie Le Mouel |
| Abstract: | This work seeks to quantify investment in Organisational Capital (OC) by looking at the task content of occupations. It relies on the literature suggesting OC to be embodied in a firm’s workforce and defines OC as those tasks performed by employees – irrespective of their occupational titles – likely to affect a firm’s medium to long-term functioning. Using US Occupational Information Network (O*NET) data, it operationalises the task-based definition and identifies 84 occupations, including 22 managerial occupations, performing OC related tasks. Employment and earnings data from the US are used to calculate investment in OC at macro and 2-digit sectoral levels. Estimates suggest that previous measures seemingly underestimated investment in OC at the macro level, and that large sectoral differences exist. Manufacturing shows significant own-account investment in OC relative to the value added it generates. Services appear as larger purchasers of OC from external sources, relative to own-account investment. Building on the insights of the labour mobility literature about the disruptive effect of (voluntary) job separations, this work uses employee tenure and turnover data for the US to obtain sector specific depreciation rates. Estimates mainly range between 10% and 25% and suggest that OC depreciates more slowly than previously assumed. |
| Keywords: | US Current Population Survey (CPS), Organisational capital, tasks, embeddedness, O*NET, US Job Openings and Labor Turnover Survey |
| Date: | 2012–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaaa:2012/5-en&r=lab |
| By: | Andrea Vindigni (IMT Lucca Institute for Advanced Studies); Cristina Tealdi (IMT Lucca Institute for Advanced Studies) |
| Abstract: | This paper investigates the social preferences over labor market flexibility, in a general equilibrium model of dynamic labor demand where the productivity of active firms evolves as a Geometric Brownian motion. A key result demonstrated is that how the economy responds to shocks, i.e. unexpected changes in the drift and standard deviation of the stochastic process describing the dynamics of productivity, depends on the power of labor to extract rents and on the status quo level of firing costs. In particular, we show that when firing costs are initially relatively low, a transition to a rigid labor market is favored by all and only the employed workers with idiosyncratic productivity below some threshold value. A more volatile environment, and a lower rate of productivity growth, i.e. "bad times," increase the political support for more labor market rigidity only where labor appropriates of relatively large rents. Moreover, we demonstrate that when the status quo level of firing costs is relatively high, the preservation of a rigid labor market is favored by the employed with intermediate productivity, whereas all other workers favor more flexibility. The coming of better economic conditions need not favor the demise of high firing costs in rigid high-rents economies, because "good times" cut down the support for flexibility among the least productive employed workers. The model described provides some new insights on the comparative dynamics of labor market institutions in the U.S. and in Europe over the last few decades, shedding some new light both on the reasons for the original build-up of "Eurosclerosis," and for its relative persistence until the present day. |
| Keywords: | employment protection, job creation and destruction, ?ring costs, idiosyncratic productivity, volatility, growth, political economy, voting, rents, status quo, path depen- dency, institutional divergence. |
| JEL: | D71 D72 E24 J41 J63 J65 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:ial:wpaper:6&r=lab |
| By: | Arndt Reichert |
| Abstract: | This study presents credible estimates for the causal effect of a variation in obesity on employment. By exploring random assignment of a weight loss intervention based on monetary rewards, I provide convincing evidence that weight loss positively affects the employment prospects of obese women but not of obese men. Consistent with this, significant effects of weight loss on proxy variables for labor productivity are found only for obese women. |
| Keywords: | Obesity; weight loss intervention; IV estimation; sample selection; labor productivity; employment |
| JEL: | I10 I18 J24 J21 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0381&r=lab |
| By: | Martin Biewen; Bernd Fitzenberger (Albert-Ludwigs-University Freiburg); Aderonke Osikominu; Marie Paul (Albert-Ludwigs-University Freiburg) |
| Abstract: | As the first, substantive contribution, this paper revisits the effectiveness of two widely used public sponsored training programs, the first one focusing on intensive occupational training and the second one on short-term activation and job entry. We use an exceptionally rich administrative data set for Germany to estimate their employment and earnings effects in the early 2000s. We employ a stratified propensity score matching approach to address dynamic selection into heterogeneous programs. As a second, methodological contribution, we carefully assess to what extent various aspects of our empirical strategy such as conditioning flexibly on employment and benefit histories, the availability of rich personal information, handling of later program participations, and further methodological and specification choices affect estimation results. Our results imply pronounced negative lock-in effects in the short run in general and positive medium-run effects on employment and earnings when job-seekers enroll after having been unemployed for some time. We find that data and specification issues can have a large effect on impact estimates. |
| Keywords: | public sponsored training, dynamic treatment effects, multiple treatments, kernel matching, administrative data |
| JEL: | C14 J68 H43 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:jku:nrnwps:2012_09&r=lab |
| By: | Pieter Gautier (Free, University, Amsterdam); Paul Muller (Free, University, Amsterdam); Bas van der Klaauw, (Free, University, Amsterdam); Michael Rosholm (Department of Economics and Business, Aarhus University, Denmark); Michael Svarer (Department of Economics and Business, Aarhus University, Denmark) |
| Abstract: | Randomized experiments provide policy relevant treatment effects if there are no spillovers between participants and nonparticipants. We show that this assumption is violated for a Danish activation program for unemployed workers. Using a difference-in-difference model e show that the nonparticipants in the experiment regions find jobs slower after the introduction of the activation program (relative to workers in other regions). We then estimate an equilibrium search model. This model shows that a large scale role out of the activation program decreases welfare, while a standard partial microeconometric cost-benefit analysis would conclude the opposite. |
| Keywords: | randomized experiment, policy-relevant treatment |
| JEL: | C21 E24 J64 |
| Date: | 2012–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2012-27&r=lab |
| By: | Yonsung Chang (University of Rochester, Yonsei University); Sun-Bin Kim (Yonsei University); Kyooho Kwon (University of Rochester) |
| Abstract: | We develop a heterogeneous-agent general equilibrium model that incorporates both intensive and extensive margins of labor supply. A nonconvexity in the mapping between time devoted to work and labor services distinguishes between extensive and intensive margins. We consider calibrated versions of this model that dier in the value of a key preference parameter for labor supply and the extent of heterogeneity. The model is able to capture the key features of the empirical hours worked distribution, including how individuals transit within this distribution. We then study how the various specications in uence labor supply responses to temporary shocks and permanent tax changes, with a particular focus on the intensive and extensive margin elasticities in response to these changes. We nd important interactions between heterogeneity and the extent of curvature in preferences. |
| Keywords: | Hours, Employment, Cross-section, Business Cycles |
| Date: | 2012–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:yon:wpaper:2012rwp-48&r=lab |
| By: | Michael Kind; John P. Haisken-DeNew |
| Abstract: | This study focuses on the long term effects of unemployment on subjective wellbeing in a family context for 17-24 year old sons living with at least one parent, using data from the German SOEP. As fathers enter unemployment, sons‘ subjective wellbeing is not only reduced immediately, but also 5 years into the future. As this future reduction remains unexpected by the sons, this suggests even higher true costs of unemployment than previously thought. |
| Keywords: | Life satisfaction; unemployment; intergenerational transmission; expectations |
| JEL: | Z1 J64 J65 J13 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0375&r=lab |
| By: | G. Cardullo; M. Conti; Giovanni Sulis |
| Abstract: | In this paper we test for the hold-up problem by considering the effect of unions’ bargaining power on the rate of growth of investment per worker and labour productivity across sectors characterised by different levels of sunk capital investments. We develop a search and matching model with hetereogeneous sectors and ex-post collective wage bargaining and test the predictions of the model using a difference-in-difference approach on manufacturing sector data in a set of OECD countries during the period 1980-2005. We do find that union power slows down investment and labour productivity particularly in high sunk capital industries. We refine our empirical analysis showing that the underlying hold-up problem is exacerbated when strikes are not regulated after a collective contract is signed and there is no arbitration, while the concentration of unions and the presence of social pacts sustain cooperative equilibria and alleviate such a problem. Our results are robust to a series of controls and possible endogeneity of union power. |
| Keywords: | Hold-Up; Unions; Sunk Investments; Search and Matching; Difference- in- Difference; Sectors |
| JEL: | J51 J64 O43 L60 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201226&r=lab |
| By: | Drange , Nina (Statistics Norway); Havnes, Tarjei (University of Oslo); Sandsør, Astrid M. J. (University of Oslo) |
| Abstract: | Theory and evidence point towards particularly positive effects of high-quality child care for disadvantaged children. At the same time, disadvantaged families often sort out of existing programs. To counter differences in learning outcomes between children from different socioeconomic backgrounds, European governments are pushing for universal child care. However, evidence on the effects of universal programs is scarce. We provide evidence on the long-run effect on schooling of mandating kindergarten at age 5–6. Our identifying variation comes from a reform that lowered school starting-age from 7 to 6 in Norway in 1997. Our precise DD estimates reveal hardly any effect, both overall, across subsamples, and over the grading distribution. A battery of specification checks support our empirical strategy. |
| Keywords: | kindergarten, early childhood intervention, distributional effects, difference-in-differences, child care, child development |
| JEL: | J13 H40 I28 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6986&r=lab |
| By: | Norbäck, Pehr-Johan (Research Institute of Industrial Economics (IFN)); Duanmu , Jing-Lin (School of Management); Skedinger, Per (Research Institute of Industrial Economics (IFN)) |
| Abstract: | In this paper we show, theoretically and empirically, that stronger employment protection legislation (EPL) in a host country has important and differing effects on the various activities of multinational enterprises (MNEs). Using micro data on affiliates to Swedish multinational firms in 20 countries for the period of 1965–1998, we find that increased stringency in EPL is associated with fewer investments in new affiliates and lower employment in existing affiliates. We also find that it is mainly affiliate exports that are affected negatively by stronger EPL, while the impact on local sales is small. This is in accordance with our theoretical model, which predicts that the impact of EPL on the costs of competing firms is likely to put affiliates at a smaller disadvantage when selling for the local market than in the production for exports. |
| Keywords: | Labor market institutions; Firm heterogeneity; Oligopoly; Platform-FDI; Horizontal-FDI; Micro data |
| JEL: | C20 F23 J80 |
| Date: | 2012–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0935&r=lab |
| By: | Jakub Growiec (Warsaw School of Economics, Institute of Econometrics, and National Bank of Poland, Economic Institute); Christian Groth (University of Copenhagen, Department of Economics) |
| Abstract: | Based on a general framework for computing the aggregate human capital stock under heterogeneity across population cohorts, the paper derives aggregate human capital stocks in the whole population and in the labor force, and relates these variables to average years of schooling and average work experience. Under the scenarios considered here, the "macro-Mincer" (log-linear) relationship between aggregate human capital and average years of schooling is obtained only in cases which are inconsistent with heterogeneity in years of schooling and based on empirically implausible demographic survival laws. Our numerical results indicate that the macro-Mincer equation can be a reasonable approximation of the true relationship only if returns to schooling and work experience are roughly constant across countries. |
| Keywords: | human capital, aggregation, heterogeneity, population cohort, Mincer equation |
| JEL: | J24 O47 |
| Date: | 2012–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1213&r=lab |
| By: | Peter Gal; Alex Hijzen; Zoltan Wolf |
| Abstract: | This paper investigates the role of policies and institutions for aggregate labour market dynamics during the global financial crisis using firm-level data. The use of firm-level data is important if firms are heterogeneous in their labour input adjustment technologies. In this case, cross-country differences in aggregate labour market dynamics may not just stem from cross-country differences in average labour input technologies - here assumed to be largely due to differences in institutional settings -, but also from differences in the distribution of shocks across firms within countries and the composition of firms across countries. The contribution of this paper is threefold. First, the paper provides comparable estimates of the labour input adjustment behaviour of firms in response to output shocks across countries, industries and firm-size groups. Second, it makes use of decomposition methods to get a first indication of the importance of cross-country differences in adjustment technologies, the distribution of shocks across firms and the composition of firms across countries. We find that differences in the adjustment behaviour of firms account for about 40% of the cross-country variation in aggregate employment growth during the global financial crisis. We interpret this as prima facie evidence that differences in institutional settings accounted for a substantial part of the variation in aggregate employment growth during the crisis. Third, we find that employment-protection provisions with respect to regular workers reduce the output elasticity of employment, but increase the output elasticity of earnings per worker. Thus, employment protection tends to shift the burden of adjustment from the extensive to the intensive margin. However, the quantitative impact of employment protection for explaining the variation in aggregate labour dynamics during the global financial crisis is relatively small.<BR>Cet article étudie le rôle des politiques et des institutions sur la dynamique générale du marché du travail au cours de la crise financière mondiale au moyen de données au niveau des entreprises. Le recours aux données au niveau des entreprises devient nécessaire si les entreprises sont hétérogènes en termes de techniques d’ajustement du facteur travail. Dans ce cas, les différences entre pays en matière de dynamique générale du marché du travail peuvent non seulement provenir de différences des techniques de l’ajustement moyen du facteur travail entre pays - supposées ici être dues en grande partie à des différences d’environnement institutionnel -, mais également d’écarts au niveau de la répartition des chocs entre les entreprises au sein des pays et de la composition des entreprises entre pays. La contribution de cet article est triple. Tout d'abord, cet article fournit des estimations comparables du comportement d'ajustement du facteur travail des entreprises en réponse à des chocs de production entre pays, branches d’activité et taille d'entreprise. Deuxièmement, il fait appel à des méthodes de décomposition pour obtenir une première indication de l'importance des différences entre pays en matière d’ajustement, de répartition des chocs entre les entreprises et de composition des entreprises entre pays. Nous constatons que les différences dans le comportement d'ajustement des entreprises représentent environ 40% de la variation entre pays de la croissance globale de l'emploi pendant la crise financière mondiale. Nous interprétons cela comme une preuve prima facie que les différences d’environnement institutionnel représentent une part substantielle de la variation de la croissance globale de l'emploi pendant la crise. Troisièmement, nous constatons que les dispositions en matière de protection de l’emploi des travailleurs réguliers réduisent l’élasticité de l’emploi à la production, mais augmentent l'élasticité des gains par travailleurs à la production. La protection d’emploi incite les entreprises à ajuster moins à la marge extensive mais davantage à la marge intensive. Pourtant l'impact quantitatif de la protection de l'emploi est limité pour expliquer la variation globale de la dynamique du travail au cours de la crise financière mondiale. |
| Keywords: | employment protection, global financial crisis |
| JEL: | E24 J23 |
| Date: | 2012–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:134-en&r=lab |
| By: | Siedler, Thomas (University of Hamburg); Sonnenberg, Bettina (DIW Berlin) |
| Abstract: | This paper analyzes the extent to which intergenerational upward and downward mobility in earnings are related to individuals' preferences for redistribution. A novel survey question from the German Socio-Economic Panel Study – whether the taxes paid by unskilled workers are too high, adequate or too low – are used to elicit attitudes toward redistribution. Intergenerational mobility with regard to long-term earnings is measured using a rich panel data spanning an observation window of 22 years. The results reveal that intergenerational mobility is significantly related to preferences for redistribution. The empirical results yield strong and robust support for Piketty's (1995) rational-learning theory: individuals who experience upward (downward) intergenerational mobility are less (more) likely to favor redistribution taxation policies. |
| Keywords: | preferences for redistribution, intergenerational mobility, long-run earnings, panel data |
| JEL: | J62 H23 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6981&r=lab |
| By: | Marcus Klemm |
| Abstract: | This paper investigates the co-movements of job security perceptions and household saving rates using data from the 1992 to 2010 waves of the German Socio-Economic Panel. The empirical analysis reveals that higher job insecurity is generally accompanied by slightly lower saving which suggests that employment and financial insecurity typically go hand-in-hand. When confounding changes in the perception of financial security are controlled for, slight evidence for precautionary saving behavior is found. This behavior is of rather small economic importance and limited to households that are somewhat worried about their financial situation who increase their saving by about 0.3%-points or EUR 100 annually in the light of increased job insecurity. In contrast, no significant change in saving is observed for households that are either very concerned or not at all concerned about their financial situation, i.e., either financially constrained or in possession of a buffer-stock of wealth. |
| Keywords: | Precautionary saving behavior; job insecurity; unemployment risk |
| JEL: | D12 D91 J65 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0380&r=lab |
| By: | Nina Boberg-Fazlic (University of Copenhagen, Department of Economics) |
| Abstract: | It is often conjectured that higher life expectancy leads to longer schooling. The reasoning behind this notion is that a longer lifespan increases the recovery period of human capital investment and thus, makes it more profitable to invest in education. This notion goes back to Ben-Porath (1967) and is therefore often termed the Ben-Porath mechanism. However, the original Ben-Porath mechanism concerns the length of economic life and not the length of life per se. This distinction is important in the presence of retirement and especially so as earlier retirement ages are observed in many western countries. This paper presents an overlapping generations model including both an educational and a retirement decision, thereby being able to test the Ben-Porath mechanism using the correct denition of length of working life. It is found that an increase in life expectancy does not necessarily increase the expected length of economic life as also early retirement can occur. Schooling still increases, however not due to the increase in the recovery horizon but due to an increase in the probability of surviving the recovery period. |
| Keywords: | longevity, human capital, retirement, overlapping generations |
| JEL: | D91 I20 J10 J26 |
| Date: | 2012–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1215&r=lab |
| By: | Nisticò, Sergio; Bevilacqua, Mirko |
| Abstract: | During the 1990s, some important European countries such as Italy and Sweden radically transformed their public pension systems by adopting defined-contribution rules while retaining a pay-as-you-go financial architecture. The paper inquires into the theoretical properties of such notional defined contribution pension schemes in order to identify the determinants of the replacement rates awarded to individuals with different income patterns. Three typical career patterns are taken into consideration, according to whether the individual's wage growth is equal to, higher than, or lower than average wage growth. The impact of, and the possible remedies to, a possible discontinuity in replacement rates is assessed by means of a sensitivity analysis of replacement rates with respect to career length (for a given retirement age), the retirement age, and the rate of return credited to individual accounts. -- |
| Keywords: | Notional Defined Contribution (NDC),replacement rates,income patterns |
| JEL: | H55 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201258&r=lab |
| By: | Bingley, Paul (SFI - Danish National Centre for Social Research); Cappellari, Lorenzo (Università Cattolica del Sacro Cuore) |
| Abstract: | We model the correlations of brothers' life-cycle earnings separating for the first time the effect of paternal earnings from additional residual sibling effects. We identify the two effects by analysing sibling correlations and intergenerational correlations jointly within a unified framework. Our multi-person model of earnings dynamics distinguishes permanent earnings from transitory – serially correlated – shocks, allows for life-cycle effects and nests the models of previous research that have focussed either on intergenerational or sibling correlations. Using data on the Danish population of father/first-son/second-son triplets we find that sibling effects explain between one fourth and one half of inequality in life-cycle earnings, and largely account for individual differences in earnings growth. Intergenerational associations account for a considerable share of overall sibling correlations, between 30 and 60 per cent from youth to maturity. We also find that transitory shocks are correlated across family members, in particular between brothers. Extensions of the model show a distinctive effect of mothers' human capital on top of fathers' earnings and no evidence of differential intergenerational transmission between brothers. |
| Keywords: | intergenerational transmission, sibling correlations, life-cycle earnings |
| JEL: | D31 J62 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6987&r=lab |
| By: | Belo, Frederico (University of MN); Lin, Xiaoji (OH State University); Bazdresch, Santiago (University of MN) |
| Abstract: | We study the impact of labor market frictions on asset prices in the cross section of US publicly traded firms. On average, firms with low hiring rates have higher future stock returns than firms with high hiring rates, a difference of 5.2% per annum. Interpreting a hiring decision as analogous to an investment decision, we propose a dynamic neoclassical investment-based model with labor and capital adjustment costs to explain this hiring return spread. Firms that are hiring relatively more have lower macroeconomic risk which explains why high hiring rates predicts low stock returns. The model matches the observed levels of the hiring return spread, key properties of the firm-level hiring and investment rates, and other empirical regularities. Our analysis suggest that labor market frictions can have a significant impact on asset prices in financial markets. |
| JEL: | E22 E23 E44 G12 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ohidic:2012-17&r=lab |
| By: | Barbara A. Butrica; Karen Elizabeth Smith |
| Abstract: | The booms and busts of the late 1990s and 2000s have taken 401(k) plan participants on a rollercoaster ride. Using data from administrative tax records and household surveys, this paper examines how participants responded to these periods of economic expansions and contractions by documenting changes in 401(k) participation, contributions, and investment allocation from 1990 through 2010. Controlling for earnings, job changes, and other household factors, we show that 401(k) participation and contributions decline during recessions. The Great Recession could lower the 401(k) assets of the typical 30-year-old by as much as 9 percent at age 62. |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2012-24&r=lab |