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on Labour Economics |
| By: | Fabián Slonimczyk (Higher School of Economics, Moscow); Peter Skott (University of Massachusetts Amherst) |
| Abstract: | This paper analyzes the effects of the minimum wage on wage inequality, relative employment and over-education. We show that over-education can be generated endogenously and that an increase in the minimum wage can raise both total and low-skill employment, and produce a fall in inequality. Evidence from the US suggests that these theoretical results are empirically relevant. The over-education rate has been increasing and our regression analysis suggests that the decrease in the minimum wage may have led to a deterioration of the employment and relative wage of low-skill workers. JEL Categories: J31, J41, J42 |
| Keywords: | Minimum wage, earnings inequality,monopsony, effeciency wage, over-education |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2012-05&r=lab |
| By: | Hartog, Joop (University of Amsterdam); Sattinger, Michael (University at Albany, SUNY) |
| Abstract: | The paper provides a theoretical foundation for the empirical regularities observed in estimations of wage consequences of overeducation and undereducation. Workers with more education than required for their jobs are observed to suffer wage penalties relative to workers with the same education in jobs that only require their educational level. Similarly, workers with less education than required for their jobs earn wage rewards. These departures from the Mincer human capital earnings function can be explained by Nash bargaining between workers and employers. Under fairly mild assumptions, Nash bargaining predicts a wage penalty for overeducation and a wage reward for undereducation, and further predicts that the wage penalty will exceed the wage reward. This paper reviews the established empirical regularities and then provides Nash bargaining results that explain these regularities. |
| Keywords: | overeducation, undereducation, Nash bargaining, qualitative mismatches, Mincer earnings function, wages |
| JEL: | J31 J24 C78 C51 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7025&r=lab |
| By: | Aretz, Bodo (ZEW Mannheim); Arntz, Melanie (ZEW Mannheim); Gregory , Terry (ZEW Mannheim) |
| 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: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7047&r=lab |
| By: | Verónica Amarante (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Rodrigo Arim (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Andrés Dean (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | Based on administrative data combining workers’ earnings histories and unemployment insurance benefits, we document short and long term wage losses for a large sample of Uruguayan formal workers with high tenure. We are able to study how wage losses vary across age groups, gender, industry and size of the firm. We also assess differences between switchers and non switchers, and consider the effect of the economic cycle. Our data allows providing original evidence about the smoothing role of the unemployment insurance program, even in a developing country. Our main findings indicate that workers loose around 48% of their pre-displacement wages in the first quarter after displacement, and after five years, losses are still 3%. |
| Keywords: | Wage losses, Displacement |
| JEL: | J31 J63 J65 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-10-12&r=lab |
| By: | Kamal Vatta (RIEB, Kobe University (Japan) and Department of Economics and Sociology, Punjab Agricultural University (India)); Takahiro Sato (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan) |
| Abstract: | The present study is an attempt to examine the trends in returns to education in light of the long-term economic growth in India during 1983 to 2009-10. It outlines various forms of inequality issues prevalent in Indian labour markets, with respect to the rural/urban areas, gender, caste and nature of work. The unit level data from 6 rounds of National Sample Survey during 1983, 1987-88, 1993-94, 1999-2000, 2004-05 and 2009-10 were used for this study. Mincer wage function was estimated by using the OLS method and the results were also compared to the median wage equation, which proved the consistency of these estimates. The casual wage markets for males provided incentives for higher education till some intermediate levels in the form of higher wage earnings than their illiterate or below primary educated counterparts but no additional advantage for secondary or graduate levels of education. Higher education could not translate into better wage earnings for female casual workers. The returns to all education levels were converging at low levels with the returns for secondary and graduate levels for urban casual male workers declining over time. There was a decline in the returns to secondary and graduate level of education for rural male regular workers with almost no change in the pattern of returns for urban male regular workers. The returns to education for graduation for female workers increased tremendously due to increased employment opportunities for better educated females in the India during the last decade of fast economic growth, led largely by the growth of the service sector. While there is need to enhance public investment in education for improving higher education opportunities in India, there is also a need to reorient rural education by focusing on imparting working skills between middle level of education and secondary levels. The education curriculum must ensure that higher education translates into better wage earnings for the unskilled or semi-skilled majority of the rural workforce in the long run. |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2012-33&r=lab |
| By: | Richard Dickens (Department of Economics, University of Sussex, UK); Rebecca Riley (National Institute of Economic and Social Research, UK); David Wilkinson (National Institute of Economic and Social Research, UK) |
| Abstract: | A general consensus has emerged that while the UK National Minimum Wage (NMW) raised the pay of low wage workers it did little to harm their employment prospects. This is in contrast to the US and other countries where a debate over minimum wage effects still rages on. We re-examine the evidence on the introduction of the NMW and look at subsequent increases through the recession focusing on several groups in the labour market. We find a reduction in employment retention among part-time female workers, the group which is most affected by the NMW. These effects deepen in the recession. |
| Keywords: | Minimum Wage, Employment, Wages, Recession |
| JEL: | J08 J31 J38 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:4612&r=lab |
| By: | Favara, Marta (University of Essex) |
| Abstract: | This paper looks at horizontal sex segregation in education as a factor contributing to gender segregation in the labor market. Economic theories fail to explain why women with the same years of schooling and educational attainment as men are under-represented in many technical degrees, which typically lead to better paid occupations. Following Akerlof and Kranton (2000), I research whether gender identity affects boys' and girls' educational choices and when the gendered pattern appears first. Further, I test the hypothesis that single-sex schools attenuate the influence of gender-stereotypes. I use the National Pupil Database, which is a register of all pupils enrolled in state maintained schools in England and I focus on students in lower and upper secondary education. Results from my analysis suggest that gender stereotyping affects educational choices from the age of 14 and this effect is larger for girls than for boys. I also find that attending a sixth-form-single-sex school leads students to a less stereotyped educational choice, after controlling for endogenous self-selection into single-sex schools. This suggests that gender preferences can be modified by the environment. |
| Keywords: | gender segregation, educational choices, gender stereotypes, single-sex schools |
| JEL: | I2 J16 J24 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7037&r=lab |
| By: | Robert Bifulco (Syracuse University); Jason M. Fletcher (Yale University); Sun Jung Oh (Syracuse University); Stephen L. Ross (University of Connecticut) |
| Abstract: | Using data from the National Longitudinal Study of Adolescent Health, this study examines the impact of high school cohort composition on the educational and labor market outcomes of individuals during their early 20s and again during their late 20s and early 30s. We find that the positive effects of having more high school classmates with a college educated mother on college attendance in the years immediately following high school fade out as students reach their later 20s and early 30s, and are not followed by comparable effects on college completion and labor market outcomes. |
| Keywords: | Education, Peer Effects, Cohort Study |
| JEL: | I21 I24 J15 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2012-43&r=lab |
| By: | Verónica Amarante (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Rodrigo Arim (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Andrés Dean (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | This paper considers the main institutional features of the Uruguayan labor market and its recent evolution, with a focus on unemployment. The main policies aimed at protecting workers against unemployment are analyzed. Using administrative data from social security records, the paper studies the dynamics of the labor market. Particularly examined are inflows and outflows from the formal labor market, as well as the effect, in terms of earnings loss, of episodes out of the formal labor market. Finally, an impact evaluation of recent changes in the unemployment insurance program is presented. |
| Keywords: | Unemployment insurance, Entry and exit rates, Earnings loss, Impact evaluation |
| JEL: | J01 J08 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-08-12&r=lab |
| By: | Gunilla Pettersson (Department of Economics, University of Sussex, UK) |
| Abstract: | Indonesia each year allocates a large proportion of its total public spending to education and it is important to understand whether different groups, for instance, children from less advantageous socioeconomic backgrounds or girls benefit differentially from these public investments. It is also desirable to comprehend whether schooling translates into increases in wages that are similar in size for both for men and for women who obtain additional schooling. This paper uses the large-scale Presidential Instruction Primary School construction programme (SD INPRES) rolled out in Indonesia in the 1970s to examine the effect of increased school supply on schooling attainment: overall, by gender, and by socioeconomic background. It also constructs a new SD INPRES programme exposure variable that is used as an instrument for schooling to assess the causal effect of schooling on wages and whether the additional schooling induced by the programme had differential impacts for men and women. To preview the findings, SD INPRES programme exposure significantly increased schooling both for men and for women. Moreover, women benefitted more from the SD INPRES programme than men and so did individuals from less advantageous socioeconomic backgrounds contributing to a narrowing of schooling gaps by gender and by socioeconomic background. In addition, more schooling is found to cause higher wages for men and women and there appears to be an additional positive effect on wages for women through the additional schooling induced by the SD INPRES programme. |
| Keywords: | wages, schooling, Indonesia, labour, education policy |
| JEL: | O12 J31 I25 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:4912&r=lab |
| By: | Xiaodong Gong (National Centre for Social and Economic Modelling, University of Canberra); Robert Breunig (Treasury, Government of Australia and Research School of Economics, Australian National University) |
| Abstract: | The purpose of this paper is to improve our understanding of the relationship between child care price and women's labour supply. We specify and estimate a discrete, structural model of the joint household decision over women’s labour supply and child care demand. Parents care about the well-being and development of their children and we capture this by including child care directly in household utility. Our model improves on previous papers in that we allow formal child care to be used for reasons other than freeing up time for mothers to work (such as child development) and we allow mothers’ work hours to exceed formal child care hours. As informal and paternal care are important features of the data, this second relaxation of previous hour constraints is particularly important. We estimate the model using data from 2005 to 2007 from the Household Income and Labour Dynamics in Australia (HILDA) Survey. We find that on average a one percent increase in the net price of child care leads to a decrease in hours of labour provided by partnered women of 0.10 per cent and a decrease in the employment rate of 0.06 per cent. These estimates are statistically significant. Furthermore, we find that labour supply responses are larger for women with lower wages, less education, and lower income. |
| Keywords: | Child care demand, child care price, women’s labour supply, elasticities, discrete choice model |
| JEL: | C15 C35 J22 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:tsy:wpaper:wpaper_tsy_wp_2012_1&r=lab |
| By: | Saygin, Perihan Ozge |
| Abstract: | In Turkey, as in many other countries, female students perform better in high school and have higher test scores than males. Nevertheless, men still predominate at highly selective programs that lead to high-paying careers. The gender gap at elite schools is particularly puzzling because college admissions are based entirely on nationwide exam scores. Using detailed administrative data from the centralized college entrance system, I study the impact of gender differences in preferences for programs and schools on the allocation of students to colleges. Controlling for test score and high school attended, I find that females are more likely to apply to lower-ranking schools, whereas males set a higher bar, revealing a higher option value for re-taking the test and applying again next year. I also find that females and males value program attributes differently, with females placing more weight on the distance from home to college, and males placing more weight on program attributes that are likely to lead to better job placements. Together, these differences in willingness to be unassigned and in relative preferences for school attributes can explain much of the gender gap at the most elite programs. |
| Keywords: | gender gap , college admissions , school choice |
| JEL: | C35 I20 I24 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:mnh:wpaper:32599&r=lab |
| By: | Andri Chassamboulli; Theodore Palivos |
| Abstract: | We analyze the impact of the skill-biased immigration influx that took place during the years 2000-2009 in the United States, within a search and matching model that allows for skill heterogeneity, differential search cost between immigrants and natives, capital-skill complementarity and possibly endogenous skill acquisition. Within such a framework, we find that although the skill-biased immigration raised the overall net income to natives, it may have had distributional effects. Specifically, unskilled native workers gained in terms of both employment and wages. Skilled native workers, on the other hand, gained in terms of employment but may have lost in terms of wages. Nevertheless, in one extension of the model, where skilled workers and immigrants are imperfect substitutes, we find that even the skilled wage may have risen. |
| Keywords: | Immigration, Search, Unemployment, Skill-heterogeneity |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:17-2012&r=lab |
| By: | Andrew Kerr |
| Abstract: | In this paper I build an equilibrium search model of the urban Tanzanian labour market that explains the choice between wage and self-employment and the variation in earnings across and within these sectors. Self-employment is very common in urban Tanzania and survey data show both that there are large overlaps in the distribution of earnings in private wage employment and self-employment and that there is little movement between wage and self-employment. This suggests that self-employment represents a worthwhile alternative to wage employment in small, low-productivity firms for the majority of urban Tanzanians, in contrast to the traditional view of African labour markets in which wage employment in small firms and self-employment are lumped together as the informal sector. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2012-21&r=lab |
| By: | Lars Johannessen Kirkebøen (Statistics Norway) |
| Abstract: | Expected earnings are considered to influence individuals' choice of education. However, the presence of nonpecuniary attributes and the different choice set available to prospective students make identification of this relationship difficult. This paper employs a conditional logit model on exceptionally rich application data, which are likely to reflect the actual preferences of the applicants, given their individual choice sets. Controlling for several nonpecuniary attributes, average lifetime earnings is shown to strongly influence educational choice. A one-percent earnings increase for a given education increases the number of male applicants by about 5 percent and female applicants by about 2 percent. However, other attributes also matter, in particular earnings risk. Increasing both earnings and risk as they correlate in the cross section has essentially no effect on the number of female applicants. Difference in earnings and risk preferences both contribute to a gender earnings differential. Finally, there is some preference heterogeneity by education chosen. |
| Keywords: | Rank-ordered logit; nested logit; field of study |
| JEL: | J24 J31 C25 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:725&r=lab |
| By: | Verónica Amarante (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Rodrigo Arim (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Andrés Dean (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | Abundant empirical evidence both for developed and developing countries finds that the design of unemployment insurance program may have important consequences on labor market outcomes. In particular, the design of UI system can affect both unemployment duration and employment outcomes. Recent changes in the design of the Uruguayan UI have implied modifications that may alter various labor market outcomes. In particular, we assess the impacts of the following modifications: the duration of UI was reduced from six to four months in the case of temporary laid off workers (suspension); the scheme of payments was changed for permanent laid off workers (job loss). Instead of a lump sum during six months, a decreasing scheme of payments was installed; and the duration of the UI can be extended up to one year for workers 50 or older. |
| Keywords: | Unemployment insurance, Impact evaluation |
| JEL: | J65 J68 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-09-12&r=lab |
| By: | Asadullah, Niaz (University of Reading); Wahhaj, Zaki (University of Kent) |
| Abstract: | This paper looks at the determinants of secondary school attendance in Bangladesh with a focus on the interaction between community gender norms and relative supply of madrasas (i.e. Islamic schools). We present a theoretical framework where the probability of children's school participation varies with respect to a non‐economic factor – how the community observes social norms regarding female mobility – conditional upon the types of available schools. Household data from the Bangladesh Demographic Health Survey (BDHS) is combined with community information on the availability of non‐religious secondary schools and madrasas to test our theoretical predictions. We find that in communities which are more 'progressive', in the sense that women have a relatively high level of mobility, the effect of non‐religious school availability on attendance does not vary by gender. However in the more 'conservative communities', female schooling is more sensitive to the availability of, or distance to, madrasas. |
| Keywords: | burka, school availability, gender norms, female education, madrasa, Bangladesh |
| JEL: | D04 I21 O15 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7059&r=lab |
| By: | Lilas Demmou |
| Abstract: | The labour market in Estonia is volatile, increasing the risk that groups with some obstacles to enter the labour market (youth, non-Estonian speakers and workers with no upper secondary graduation certificate) may become long-term unemployed, due to the aggravating skills mismatch in the wake of structural change. Avoiding a permanent exit from the labour force makes a multi-pronged strategy necessary, including strengthening activation policies, a better school-to-job transition, improving the cooperation with employers to improve vocational training programmes, stepping up targeting life-long learning support, and improving the access of tertiary studies for students from weak social backgrounds.<P>Faire coïncider compétences et emplois en Estonie<BR>Le marché du travail en Estonie est volatile ce qui, en raison d’une aggravation des problèmes d’inadéquation des compétences, augmente le risque de chômage de long terme pour certains groupes subissant davantage de barrières à l’entrée sur le marché du travail (les jeunes, la population ne parlant pas estonien et les travailleurs sans diplômes du secondaire). Afin de réduire le risque de sortie définitive du marché du travail une stratégie sur plusieurs fronts est nécessaire, incluant le renforcement des politiques actives du marché du travail, l’amélioration de la transition entre l’école et le marché du travail, l’amélioration des programmes d’enseignement professionnel par le biais d’un renforcement de la coopération avec les employeurs, un meilleur ciblage des aides destinées à l’apprentissage tout au long de la vie, et l’amélioration d’un accès aux études supérieures pour les étudiants socialement défavorisés. |
| Keywords: | unemployment, active labour market policies, higher education, Estonia, skills mismatch, life-long learning, chômage, enseignement supérieur, formation continue, Estonie, enseignement professionnel, inéquation des qualifications |
| JEL: | I21 I22 I28 J18 J24 J64 J68 |
| Date: | 2012–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1007-en&r=lab |
| By: | Rees, Daniel I. (University of Colorado Denver); Sabia, Joseph J. (San Diego State University, California) |
| Abstract: | While migraine headache can be physically debilitating, no study has attempted to estimate its effects on labor market outcomes. Using data drawn from the National Longitudinal Study of Adolescent Health, we estimate the effect of migraine headache on labor force participation, hours worked, and wages. We find that migraine headache is associated with a decrease in wages. However, there is little evidence that migraine headache leads to reductions in labor force participation or hours worked. We conclude that estimates of the cost of migraine headache to society should include its impact on wages. |
| Keywords: | migraine headache, wages, labor force participation, productivity |
| JEL: | I10 J30 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7034&r=lab |
| By: | Crépon, Bruno; Duflo, Esther; Gurgand, Marc; Rathelot, Roland; Zamora, Philippe |
| Abstract: | This paper reports the results from a randomized experiment designed to evaluate the direct and indirect (displacement) impacts of job placement assistance on the labor market outcomes of young, educated job seekers in France. We use a two-step design. In the first step, the proportions of job seekers to be assigned to treatment (0%, 25%, 50%, 75% or 100%) were randomly drawn for each of the 235 labor markets (e.g. cities) participating in the experiment. Then, in each labor market, eligible job seekers were randomly assigned to the treatment, following this proportion. After eight months, eligible, unemployed youths who were assigned to the program were significantly more likely to have found a stable job than those who were not. But these gains are transitory, and they appear to have come partly at the expense of eligible workers who did not benefit from the program, particularly in labor markets where they compete mainly with other educated workers, and in weak labor markets. Overall, the program seems to have had very little net benefits. |
| Keywords: | Counseling; Displacement effects; Job Placement; Randomized experiment |
| JEL: | C93 J64 J68 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9251&r=lab |
| By: | Verónica Amarante (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Andrés Dean (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | This paper looks at labor force mobility in the formal labor market in Uruguay during 1997-2009. The study is based on a sample of longitudianal labor histories taken from the social security administrative records. Different indicators are considered : entry and exit rates, transitions across different labor market states, job to job mobility and non parametric analysis of flows out of the formal labor market. Our results whow significante mobility in terms of entries and exits from the formal labor market, with important heterogeneities between groups. Job to job flows show an important inertia in terms of firm size and income levels. In addition, duration out of the formal labor market for those workers who become beneficiaries of the unemployment insurance program presents a mode around six months, the maximum duration of the program (until its reformulation in 2009). The document shows that survival rats are higher for women, older owrkers, employers and higher income workers. Also, workers in services (where the presence of the public sector is high) and in bigger firms also present higher survival rates. |
| Keywords: | Labor market dynamics, Transitions, Survival and risk analysis |
| JEL: | C41 H53 J23 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-17-12&r=lab |
| By: | Commander, Simon (EBRD, London); Denisova, Irina (CEFIR, New Economic School, Moscow) |
| Abstract: | The paper uses a unique survey of recruitment firms to look at how Russian firms perceive the supply of skills in the labour market and how well those skills match to their demand for labour. Firms invest significant amounts of time in search to fill vacancies and search time is unambiguously increasing in skills. These skill gaps are associated with significant wage premia and are perceived to have negative consequences for the output mix and productivity. A small job postings experiment also finds that search time increased yet further for activities considered relatively innovative. Further, using Russian Ministry of Labour data for all legal migrant applications in 2010 and matching the migrant to the sponsoring firm, we find that there is some – albeit limited - evidence of firms using migrants to address high skill shortages. However, the overwhelming majority of migrants are skilled or unskilled workers; a reflection of the low underlying rates of innovation and associated demand for high skill jobs. |
| Keywords: | job search, vacancies, skills |
| JEL: | J31 J61 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7041&r=lab |
| By: | Ronald Bachmann; Peggy Bechara; Sandra Schaffner |
| Abstract: | Using data from the European Union Statistics on Income and Living Conditions (EU-SILC), this paper investigates wage inequality and wage mobility in Europe. Decomposing inequality into within and between group inequality, we analyse to what extent wage inequality and mobility can be explained by observable characteristics. Furthermore, we investigate which individual and household characteristics determine transitions within the wage distribution. Finally, we examine the importance of institutions for wage inequality, wage mobility, and wage transitions. We find that overall, mobility reduces wage inequality. While a large part of wage inequality is due to unobservable characteristics, the equalizing effect of mobility mainly occurs within groups. Furthermore, both personal and household characteristics play an important role for wage transitions. Finally, our findings reveal large cross-country differences across Europe, which are partly linked to the institutional set-up of the national labour markets. |
| Keywords: | Wage inequality; wage mobility; wage transitions; cross-country analysis |
| JEL: | J6 J31 P52 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0386&r=lab |
| By: | Aretz, Bodo (ZEW Mannheim); Gürtzgen, Nicole (ZEW Mannheim) |
| Abstract: | In this paper, we study how wage mobility in the low-wage sector has changed in western Germany between 1984 and 2004. Using German individual register data, we document a clear upward trend in the persistence of low-wage employment for both men and women. Next to compositional shifts of the low-wage sector relative to the high-wage sector, this trend may be explained by an increase in "genuine" state dependence, which occurs if low-wage employment today causes low-wage employment in the future for reasons of, e.g., stigmatization or human capital depreciation. To isolate the latter, we model low-pay transitions by estimating a series of multivariate probit models. We address the initial conditions problem and the endogeneity of earnings attrition in our estimation approach by accounting for the selection into low-wage employment and earnings retention. Our findings for men and women point to an upward trend of genuine state dependence among low-paid workers especially since the beginning of the 1990s. Using decomposition techniques, we show that between 35 and 54 per cent of the increase in genuine state dependence during the 1990s is accounted for by compositional effects. |
| Keywords: | wage mobility, trivariate probit, administrative data |
| JEL: | C23 J31 L13 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7046&r=lab |
| By: | Alma Espino (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Fernando Isabella (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Martín Leites (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Alina Machado (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | This research estimates the impact of wages onlabor supply decision in Uruguay considering the extensive and intensive margins, with particular emphasis on female supply. We used the specifications and econometric techniques proposed in Blundel and MaCurdy (1999) and Pencavel (2002) toestimate the supply elasticity over the life cycle (intertemporal elasticity)and the labor supply elasticity responses to parametric changes in the wage profile (uncompensated elasticity). This issue, which has a long history in international and regional literature, has received less attention in the national context, particularly in the case of female labor supply. This topic is relevant for a better understanding of recent changes in decisions to participate in the labor market in Uruguay and because of the policy implications arising from the distinction between both elasticities. The result confirm the regardless of educational level, the participation of the younger cohorts of women in the labor market has increased. Also there found differences in the magnituds between intertemporal and uncompensated elasticitis with a higher substitution effect for women. Finally, heterogeneous behaviors are verified within female population and the different trends relative to decisions on the intensive and extensive margins. |
| Keywords: | Labour supply, Elasticitis, Gender, Pseudopanel |
| JEL: | J10 J20 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-18-12&r=lab |
| By: | MacLeod, W. Bentley (Columbia University); Urquiola, Miguel (Columbia University) |
| Abstract: | Friedman (1962) suggested that in general, unfettered markets ensure the efficient provision of goods and services. Applying this logic to Education, he recommended that students be provided with vouchers and allowed to purchase schooling services in a free market ((Friedman (1955, 1962)). Hoxby (2002) refines this argument and suggests that more choice will lead to higher school productivity. We discuss the evidence in this area, concluding that the impact of competition has proven to be more mixed and modest than expected. We suggest that this in fact should not be surprising, since economic theory on incentives and incomplete contracts (beginning with many contributions also from the 1950s) leads to a more nuanced expectation. Specifically, an examination of the incentives faced by schools, parents, and students leads to predictions that are broadly consistent with the evidence, and suggests that there is no a priori reason to believe that school choice will dramatically improve test scores. We describe a simple model that illustrates this point and further implies that elements of market design might be necessary to ensure that competition enhances educational performance. |
| Keywords: | education, markets, information |
| JEL: | D2 D8 J3 I2 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7063&r=lab |
| By: | Lehmann, Hartmut (University of Bologna); Muravyev, Alexander (St. Petersburg University GSOM and IZA) |
| Abstract: | This paper analyzes, using country-level panel data from transition economies and Latin America, the impact of labor market institutions on informal economic activity. The measure of informal economic activity is taken from Schneider et al. (2010), the most comprehensive study to date. The data on institutions, which cover employment protection legislation (EPL), the tax wedge, the unemployment benefit level, unemployment benefit duration and union density, are assembled at the IZA (transition countries) and the World Bank (LAC countries). We find that a more regulated labor market (higher EPL) increases the size of the informal economy. There is also evidence that a larger tax wedge increases informality. The tax wedge elasticity of informal economy, when evaluated at the sample mean, is rather modest, around 0.1%. Our results are broadly in line with the literature, which identifies labor market regulation and the tax wedge as important drivers of informality. |
| Keywords: | labor market institutions, informality, macroeconometric regressions, transition countries, Latin America |
| JEL: | E24 J21 J42 O17 P20 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7035&r=lab |
| By: | Lopes, Ana Sofia (Polytechnic Institute of Leiria); Teixeira, Paulino (University of Coimbra) |
| Abstract: | This study compares the determinants of productivity and wages at both firm and worker level. In the firm-level analysis, we follow Hellerstein, Neumark and Troske (1999) and provide improved estimates based on an extended set of covariates including the intensity of firm-provided training. In the worker-level analysis we take a new turn and generate a proxy for unobserved worker productivity. Our results point to the presence of sizeable spillover effects from schooling and training as their impact is bigger on firm-level productivity equations than on the corresponding worker-level equations. In turn, our fully disaggregated model at worker level shows that, by using all possible combinations of worker attributes, we obtain that the wage differences across different worker groups are mostly productivity based and that the gap can be as high as 33%. |
| Keywords: | worker productivity, wages, human capital, LEED |
| JEL: | C23 D24 J31 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7036&r=lab |
| By: | Cobb-Clark, Deborah A. (University of Melbourne); Hanel, Barbara (Melbourne Institute of Applied Economic and Social Research); McVicar, Duncan (Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | We compare alternative methods for estimating immigrant wage and employment assimilation using unique panel data over 2001–2009 for a large, nationally-representative sample of immigrants. Previous assimilation estimates have been mainly based on cross-sectional data and have therefore suffered from a range of potential biases. We find that a fixed-effects model generates estimated employment assimilation profiles that are flatter and significantly different to those produced by cross-sectional and synthetic cohort methods. However, there are no significant differences in the wage assimilation profiles across alternative methods. |
| Keywords: | immigration, immigrant assimilation, employment, wages, Australia |
| JEL: | J15 J61 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7062&r=lab |
| By: | Sara Rica (DFAE II, Universidad del Pais Vasco); Juan Dolado (Universidad Carlos III); Cecilia Garcia Peñalosa (Centre de la Vieille Charité, GREQAM) |
| Abstract: | This paper presents a model of self-fulfilling expectations by firms and households which generates multiplicity of equilibria in pay and housework time allocation for ex-ante identical spouses. Multiplicity arises from statistical discrimination exerted by firms in the provision of paid-for training to workers, rather than from incentive problems in the labor market. Employers´ beliefs about differences in spouses´ reactions to housework shocks lead symmetric (ungendered) and asymmetric (gendered) equilibria. We find that: (i) the ungendered equilibrium tends to prevail as aggregate productivity in the economy increases (regardless of the generosity of family aid policies), (ii) the ungendered equilibrium could yield higher welfare under some scenarios, and (iii) gender-neutral job subsidies are more effective that gender-targeted ones in removing the gendered equilibrium. JEL Classification: J16 and J71. |
| Keywords: | gender wage gaps, housework shares, multiple equilibria |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:aia:ginidp:24&r=lab |
| By: | Daniel Horn (Institute of Economics, Hungarian Academy of Sciences, TÁRKI Social Research Institute (TÁRKI)) |
| Abstract: | This paper argues that preferences for educational redistribution are not driven by income but by the level of education. While income and preferences for educational redistribution follow the conventional story – rich want less spending –, the level of education associates positively with spending on education, which effect is altered by the selectivity of the education system. Highly educated citizens are relatively more likely to support government spending on education in countries where the system is selective compared to highly educated people’s preferences in countries with comprehensive systems. |
| Keywords: | spending on education, selectivity, preferences on government spending, ISSP1996, ISSP2006 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:aia:ginidp:43&r=lab |
| By: | Schüller, Simone (IZA) |
| Abstract: | The major event of the 9/11 terror attacks is likely to have induced an increase in anti-immigrant and anti-foreigner sentiments, not only among US residents but also beyond US borders. Using longitudinal data from the German Socio-Economic Panel and exploiting exogenous variation in interview timing throughout 2001, I find that the terror attacks in the US caused an immediate shift of around 40 percent of one within standard deviation to more negative attitudes toward immigration and resulting in a considerable decrease in concerns over xenophobic hostility among the German population. Furthermore, in exploiting within-individual variation this quasi-experiment provides evidence on the role of education in moderating the negative terrorism shock. |
| Keywords: | immigration, attitudes, education, September 11, terrorism |
| JEL: | F22 I21 J61 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7052&r=lab |
| By: | Eric V. Edmonds; Maheshwor Shrestha |
| Abstract: | Promoting minimum age of employment regulation has been a centerpiece in child labor policy for the last 15 years. If enforced, minimum age regulation would change the age profile of paid child employment. Using micro-data from 59 mostly low-income countries, we observe that age can explain less than 1 percent of the variation in child participation in paid employment. In contrast, child-invariant household attributes account for 63 percent of the variation in participation in paid employment. While age may explain little of the variation in paid employment, minimum age of employment regulation could simultaneously impact time allocation. We do not observe evidence consistent with enforcement of minimum age regulation in any country examined, although light work regulation appears to have been enforced in one country. |
| JEL: | J08 J22 J24 J80 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18623&r=lab |
| By: | Hammitt, James; Liu, Jin-Tan; Tsou, Meng-Wen |
| Abstract: | This paper examines the causal effect of parental schooling on children’s schooling using a large sample of adoptees from Taiwan. Using birth-parents’ education to help control for selective placement of children with adoptive parents, we find that adoptees raised with more highly educated parents have higher educational attainment, measured by years of schooling and probability of university graduation. We also find evidence that adoptive father’s schooling is more important for sons’ and adoptive mother’s schooling is more important for daughters’ educational attainment. These results support the notion that family environment (nurture) is important in determining children’s educational outcomes, independent of genetic endowment. |
| Keywords: | intergenerational transmission, education, schooling, adoption |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:ler:wpaper:25327&r=lab |
| By: | Gioia de Melo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | This paper provides evidence on peer effects in standardized tests by exploiting a unique data set on social networks in Uruguayan primary schools. The identification method enables one to disentangle endogenous from contextual effects via instrumental variables that emerge naturally from the network structure. Correlated effects are controlled for via classroom fixed effects. I find significant endogenous effects in reading and math: a one-standard deviation increase in peers's scores increases own scores by about 40 percent of a standard deviation. Simulation exercises show that, when schools are stratified by socioeconomic status, peer effects may amplify educational inequalities. |
| Keywords: | Peer effects, Education, Networks, Inequality. |
| JEL: | I21 I24 O1 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-15-12&r=lab |
| By: | Kraft, Kornelius; Rammer,Christian; Gottschalk, Sandra |
| Abstract: | This paper analyses the effects of minimum wages on competition in the German roofing sector. The case is particularly interesting since this sector is faced with a uniform minimum wage despite significant regional disparities in productivity and wages. As a control industry we take the plumbing sector, which shows a similar market structure and demand trend but is not subject to a minimum wage. Employing a comprehensive firm panel data and using a difference-in-difference approach, we estimate the impacts of minimum wages on market entries and exits and firms' profitability. We find significant effects for East Germany which point to a substantial shift in industry structure. Minimum wages decreased both market entries and exits for roofing firms while they increased entries of sole traders. A decreasing number of non-sole traders lowered competition for this group of firms and helped them to increase profitability. The increasing share of sole traders may indicate some type of evasion strategy in eastern Germany, particularly since wages for skilled roofers declined towards the minimum wage. In the western part of the country minimum wages had no impact on competition. -- |
| Keywords: | Minimum Wage,Competition,Firm Performance,Labour Market Policy,Evasion Strategy,Sole Traders |
| JEL: | D04 J21 J38 L11 L22 L74 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:12083&r=lab |
| By: | Rodney J. Andrews; Paul Jargowsky; Kristin Kuhne |
| Abstract: | There has been a resurgence in research that investigates the efficacy of early investments as a means of reducing gaps in academic performance. However, the strongest evidence for these effects comes from experimental evaluations of small, highly enriched programs. We add to this literature by assessing the extent to which a large-scale public program, Texas's targeted pre-Kindergarten (pre-K), affects scores on math and reading achievement tests, the likelihood of being retained in grade, and the probability that a student receives special education services. We find that having participated in Texas's targeted pre-K program is associated with increased scores on the math and reading sections of the Texas Assessment of Academic Skills (TAAS), reductions in the likelihood of being retained in grade, and reductions in the probability of receiving special education services. We also find that participating pre-K increases mathematics scores for students who take the Spanish version of the TAAS tests. These results show that even modest, public pre-K program implemented at scale can have important effects on students educational achievement |
| JEL: | H52 I20 I21 I28 J38 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18598&r=lab |
| By: | Immervoll, Herwig (World Bank) |
| Abstract: | Policies that support the unemployed, while reducing employment barriers and benefit dependency, are of particular interest in the current economic climate. This paper examines alternative policy approaches for combining adequate income support for the jobless with incentives to keep out-of-work spells short. After summarising the main parameters of existing income support measures for the unemployed in EU and OECD countries, I review evidence on the economic relevance of work incentives and discuss their significance when labour markets are weak during and after an economic downturn. Based on the available evidence, I propose a set of policy priorities to strengthen both the "protection" and the "promotion" functions of unemployment support. |
| Keywords: | unemployment benefits, income support, work incentives, activation |
| JEL: | H31 H53 J08 J68 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp50&r=lab |
| By: | Saleh, Mohamed (TSE,IAST) |
| Abstract: | I examine the impact of the transformation of elementary religious schools (kuttabs) into modern primary schools in 1953-56 on the educational and occupational differentials between religious groups in Egypt. Before the reform, non-Muslims enjoyed better educational and occupational outcomes than the Muslim majority and, unlike Muslims, were almost all enrolled in modern schools. Using several new data sources, the individual-level census sample from 1996, the official schooling reports from 1907 to 1969, and the village/urban quarter-level census data from 1897 to 1986, I find that the inter-religious educational and occupational gaps both declined in the second half of the twentieth century. The educational reform seems to explain the reduction in the occupational gap, but cannot explain the decline of the educational gap. |
| Keywords: | educational modernization; religious schools; Middle Eastern economic history; human capital; modern schools |
| JEL: | I N35 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:tse:iastwp:26616&r=lab |
| By: | Servaas van der Berg (Department of Economics, University of Stellenbosch); Hendrik van Broekhuizen (Department of Economics, University of Stellenbosch) |
| Abstract: | Increasing reference in the media and public discussions to high and rising levels of graduate unemployment in the South African labour market has raised concern about the functionality of South Africa’s higher education system and the employability of the graduates that it produces. While such references are generally premised on the findings of a handful of published research studies that have made reference to rising graduate unemployment, the results of those studies are subject to a number of criticisms, ranging from inadequate definitions of “graduates” to the use of incomplete, dated, or unrepresentative data. This paper reviews the existing evidence on graduate unemployment in South Africa and analyses levels of, and trends in, graduate unemployment in the country since 1995. To overcome the deficiencies of previous studies, “graduates” are explicitly defined as individuals with bachelor’s degrees or equivalents and higher educational qualifications (honours, Masters, and doctorate degrees) and all of the available nationally representative labour force survey data for South Africa between 1995 and 2011 is exploited. In contrast to what appears to be a growing consensus regarding the extent of graduate unemployment in the country, the analysis conducted shows no evidence of a high level or a markedly upward trend in graduate (i.e. degreed) unemployment. Instead levels and rates of graduate unemployment are found to be quite low in an international context, revealing that there is little cause for concern about broad trends in graduate unemployment. |
| Keywords: | graduate unemployment, higher education, graduate employability |
| JEL: | I23 J01 J21 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers175&r=lab |
| By: | Bigoni, Maria (University of Bologna); Camera, Gabriele (University of Basel); Casari, Marco (University of Bologna) |
| Abstract: | We study the individual behavior of students and workers in an experiment where they repeatedly face the same cooperative task. The data show that clerical workers differ from college students in overall cooperation rates, strategy adoption and use of punishment opportunities. Students cooperate more than workers. Cooperation increases in both subject pools when a personal punishment option is available. Students are less likely than workers to adopt strategies of unconditional defection, and more likely to select strategies of conditional cooperation. Finally, students are more likely than workers to sanction uncooperative behavior by adopting decentralized punishment, and also personal punishment when available. |
| Keywords: | non-standard subject pools, prisoner's dilemma, peer punishment, artefactual field experiment, stranger matching |
| JEL: | C90 C70 D80 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7051&r=lab |
| By: | Elise S. Brezis (Bar-Ilan University); Ariel Soueri |
| Abstract: | Globalization has led to a vast flow of migration of workers but also of students. The purpose of this paper is to analyze the migration of individuals encompassing decisions already at the level of education. We develop a “unified brain drain” model that incorporates the decisions of an individual vis‐à‐vis both education and migration. In the empirical part, this paper addresses international flows of migration within the EU and presents strong evidence of concentration of students in countries with high-quality education. This phenomenon, as the usual brain drain, has two opposite effects on social mobility. |
| Keywords: | Brain drain; Globalization, Higher education; Human capital; Migration, Mobility, Bologna process. |
| JEL: | F22 I23 J24 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:biu:wpaper:2012-15&r=lab |
| By: | Falco, Paolo (University of Oxford); Maloney, William F. (World Bank); Rijkers, Bob (World Bank); Sarrias, Mauricio (Universidad Catolica del Norte) |
| Abstract: | By exploiting recent advances in mixed (stochastic parameter) ordered probit estimators and a unique longitudinal dataset from Ghana, this paper examines the distribution of subjective wellbeing across sectors of employment and offers insights into the functioning of developing country labor markets. We find little evidence for the overall inferiority of the small firm informal sector: there is not a robust average satisfaction premium for formal work vis a vis self-employment or informal salaried work and, in fact, informal firm owners who employ others are on average significantly happier than formal workers. Moreover, the estimated underlying random parameter distributions unveil substantial latent heterogeneity in subjective wellbeing around the central tendency that fixed parameter models cannot detect. All job categories contain both relatively happy and disgruntled workers. Concretely, roughly 67%, 50%, 40% and 59% prefer being a small firm employer, sole proprietor, informal salaried, and civic worker respectively, to formal work. Hence, there is a high degree of overlap in the distribution of satisfaction across sectors. The results are robust to the inclusion of fixed effects, and using alternate measures of satisfaction. Job characteristics, self-perceived autonomy and experimentally elicited measures of attitudes toward risk do not appear to explain these distributional patterns. |
| Keywords: | subjective wellbeing, mixed ordered probit, self-employment, informality, developing country labor markets, Africa |
| JEL: | C35 J2 J3 J41 L26 I32 O17 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7057&r=lab |
| By: | Dror Brenner; Yona Rubinstein |
| Abstract: | We use non-random sorting into interethnic marriage and salient differences between Sephardic and Ashkenazi surnames to evaluate the causal impact of Sephardic affiliation on wages. Using the 1995 Israeli Census, we estimate the effect of a Sephardic affiliation on wages. We first compare the wages of Israeli Jewish males born to Sephardic fathers and Ashkenazi mothers (SA), who are more likely to carry a Sephardic surname, with the wages of Israeli Jewish males born to Ashkenazi fathers and Sephardic mothers (AS). We find that SA workers earn significantly less than their AS counterparts. We then exploit the custom of women to adopt their husbands. surnames to disentangle actual ethnicity from the ethnicity perceived by the market. Consistent with our interpretation of the results for males, we find that it is father-in-law's ethnicity - rather than father's ethnicity - that shapes female wage rates, yet only for daughters of interethnic couples and others with mild skin tone who have equal chances to be perceived either as an Ashkenazi or as a Sephardic group member. |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1180&r=lab |
| By: | Jessica Dye (Department of Economics, Auckland University of Technology); Stephanie Rossouw (Department of Economics, Auckland University of Technology); Gail Pacheco (Department of Economics, Auckland University of Technology) |
| Abstract: | As the first country to give women the right to vote in 1893, New Zealand (NZ) has often been viewed as a leader in the global movement towards gender equality. This paper aims to assess trends in overall well-being for NZ women, by pulling together a range of statistical indicators across five key facets of well-being: demographic and family changes, education, employment, health, and crime and violence. From our analysis two contrasting pictures emerge. The first is that NZ women are clearly making up ground in respect of their education, participation in the labour force (less so in terms of wage equality), and overall health outcomes (barring mental health issues, such as depression). In the second, however, NZ women are trailing behind their other developed nation counterparts when one considers crime and violence, both committed against and by them. |
| Keywords: | Gender equality, women's well-being |
| JEL: | I10 J10 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:aut:wpaper:201207&r=lab |
| By: | John Jerrim (Institute of Education, University of London); Anna Vignoles (Faculty of Education, University of Cambridge); Ross Finnie (Graduate School of Public and International Affairs, University of Ottawa) |
| Abstract: | In this paper we consider whether certain countries are particularly adept (or particularly poor) at getting children from disadvantaged homes to study for a bachelor’s degree. A series of university access models are estimated for four English speaking countries (England, Canada, Australia and the United States) which include controls for comparable measures of academic achievement at age 15. We not only consider access to any university but also admission to a ‘selective’ institution. Our results suggest that socio-economic differences in university access are more pronounced in England and Canada than Australia and the United States, and that cross-national variation in the socio-economic gap remains even once we take account of differences in academic achievement. We discuss the implications of our findings for the creation of more socially mobile societies. |
| Keywords: | : University access, educational inequality, social mobility, PISA. |
| JEL: | I20 I21 I28 |
| Date: | 2012–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1211&r=lab |
| By: | Cole, Harold; Kim, Soojin; Krueger, Dirk |
| Abstract: | This paper constructs a dynamic model of health insurance to evaluate the short- and long run effects of policies that prevent firms from conditioning wages on health conditions of their workers, and that prevent health insurance companies from charging individuals with adverse health conditions higher insurance premia. Our study is motivated by recent US legislation that has tightened regulations on wage discrimination against workers with poorer health status (Americans with Disability Act of 2009, ADA, and ADA Amendments Act of 2008, ADAAA) and that will prohibit health insurance companies from charging different premiums for workers of different health status starting in 2014 (Patient Protection and Affordable Care Act, PPACA). In the model, a trade-off arises between the static gains from better insurance against poor health induced by these policies and their adverse dynamic incentive effects on household efforts to lead a healthy life. Using household panel data from the PSID we estimate and calibrate the model and then use it to evaluate the static and dynamic consequences of no-wage discrimination and no-prior conditions laws for the evolution of the cross-sectional health and consumption distribution of a cohort of households, as well as ex-ante lifetime utility of a typical member of this cohort. In our quantitative analysis we find that although a combination of both policies is effective in providing full consumption insurance period by period, it is suboptimal to introduce both policies jointly since such policy innovation induces a more rapid deterioration of the cohort health distribution over time. This is due to the fact that combination of both laws severely undermines the incentives to lead healthier lives. The resulting negative effects on health outcomes in society more than offset the static gains from better consumption insurance so that expected discounted lifetime utility is lower under both policies, relative to only implementing wage nondiscrimination legislation. |
| Keywords: | Health; Incentives; Insurance; No-Prior-Condition-Legislation; Wage Discrimination |
| JEL: | E61 H31 I18 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9239&r=lab |
| By: | Marcus Böhme |
| Abstract: | International migration not only enables individuals to earn higher wages but also exposes them to new environments. The norms and values experienced at the destination country could change the behavior of the migrant but also of family members left behind. In this paper we argue that a brain gain could take place due to a change in educational aspirations of caregivers in migrant households. Using unique survey data from Moldova, we find that international migration raises parental aspirations in households located at the lower end of the human capital distribution. The identification of these effects relies on GDP growth shocks in the destination countries and migration networks. We conclude that aspirations are a highly relevant determinant of intergenerational human capital transfer and that even temporary international migration can shift human capital formation to a higher steady state by inducing higher educational aspirations of caregivers |
| Keywords: | education, aspirations, migration, brain gain |
| JEL: | D03 O12 I21 J61 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1811&r=lab |
| By: | Gimenez-Nadal, Jose Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza) |
| Abstract: | This paper analyzes the relationship between time allocation decisions of the unemployed, gender, and regional unemployment rates. Using the Spanish Time Use Survey 2002-2003 and 2009-2010, we find that higher regional unemployment rates are associated with increases in the time devoted to study by men, and to household production by women, and with decreases in the time devoted to personal care by men and leisure by women. We also find evidence favoring consumption smoothing as the channel through which others' unemployment affects time allocation decisions of the unemployed. As higher regional unemployment rates imply a lower availability of jobs for the unemployed, it decreases the expectations individuals have of finding a job, and thus households may try to increase their time spent on household production to reduce the market expenditures needed to maintain their consumption. We interpret our results as evidence that others' unemployment has several effects that need to be considered in the analysis of the wellbeing of the unemployed during business cycles. |
| Keywords: | unemployment, time use, regional unemployment rates, gender |
| JEL: | D13 J16 J22 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7043&r=lab |
| By: | Lefranc, Arnaud (University of Cergy-Pontoise); Ojima, Fumiaki (Doshisha University); Yoshida, Takashi (Shizuoka University) |
| Abstract: | This paper estimates the extent of intergenerational income mobility in Japan among sons and daughters born between 1935 and 1975. Our estimates rely on a two-sample instrumental variables approach using representative data from the Japanese Social Stratification and Mobility (SSM) surveys, collected between 1965 and 2005. Father's income is predicted on the basis of a rich set of variables including education, occupation and job characteristics and we discuss changes in the Japanese earnings structure for cohorts born between the early 1900s and the 1960s. Our main results indicate that the intergenerational income elasticity (IGE) for both sons and daughters, in Japan lies around .35, which is an intermediate value, by international standards. We discuss the sensitivity of the IGE to using either personal or family income as the income variable for both fathers and children and perform some robustness analysis with respect to the first-step specification and to the age selection rule for children. We also examine changes across cohorts in the IGE. Results indicate that intergenerational mobility has been roughly stable over the last decades. Lastly, we estimate the intergenerational correlation of earnings. |
| Keywords: | intergenerational mobility, elasticity, correlation, earnings differentials, income, inequality, trends, Japan, assortative mating, education |
| JEL: | D1 D3 J3 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7045&r=lab |
| By: | Godart, Olivier (Kiel Institute for the World Economy); Görg, Holger (Kiel Institute for the World Economy); Greenaway, David (University of Nottingham) |
| Abstract: | Using information on a panel of multinational firms operating in the United Kingdom from 1996 to 2005, we find that labour demand in domestic multinationals is less sensitive to labour cost changes than in foreign multinationals. This difference in the wage elasticity of labour demand persists even when we control for the skill intensity of firms or their level of intangible assets. This is in line with an interpretation that the provision of headquarter services in domestic multinational firms protects against strong fluctuations in labour demand. Overall, our results suggest that the wage elasticity of labour demand is about 40 percent lower in domestic than in foreign multinationals. |
| Keywords: | labour demand elasticity, multinational firms, headquarter services, skill intensity |
| JEL: | F23 J23 J24 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7061&r=lab |
| By: | Gralla, Rafael (TU Dortmund); Kraft, Kornelius (TU Dortmund) |
| Abstract: | This study examines differences in employment growth between firms with and without works councils by separating introduction effects from potential selectivity effects. Using a difference in differences framework, we show that firms with works councils have higher employment growth before establishing a works council. However, employment growth declines after introduction. We identify the reason for lower employment growth in reduced hiring rates but constant dismissal rates. |
| Keywords: | works councils, hires, dismissals, employment growth, difference-in-differences |
| JEL: | J53 J63 C23 M54 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7022&r=lab |
| By: | Diris, Ron Emiel Marie (Maastricht University) |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ner:maastr:urn:nbn:nl:ui:27-31026&r=lab |
| By: | Pfeifer, Christian (Leuphana University Lüneburg); Wagner, Joachim (Leuphana University Lüneburg) |
| Abstract: | This empirical research note documents the relationship between composition of a firm's workforce (with a special focus on age and gender) and its performance with respect to innovative activities (outlays and employment in research and development (R&D)) for a large representative sample of enterprises from manufacturing industries in Germany using unique newly available data. We find that firms with a higher share of older workers have significantly lower proportions of R&D outlays in total revenues and of R&D employment in total employment, whereas firms with a higher share of female employment seem to be more active in R&D. |
| Keywords: | ageing, firm performance, gender, Germany, innovation, R&D |
| JEL: | D22 D24 J21 J24 L25 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7050&r=lab |
| By: | Elena Stancanelli (Centre d'Economie de la Sorbonne - Paris School of Economics); Arthur Van Soest (Tilburg University) |
| Abstract: | The economic litterature on retirement argues that individuals in a couple tend to retire at a choice time because of externalities in leisure. Ealier studies dit not investigate the extent to which partners actually spend more leisure time together upon retiring. Exploiting the law on early retirement age in France, we use a regression discontinuity approach to identify the causal effect of retirement on hours of leisure, separate and together, of the man and woman in a couple. We use a sample of couples drawn from a French Time Use Survey for the analysis. Using four different definitions of joint leisure, we conclude that generally both separate and joint leisure hours of partners increase significantly upon own retirement. In particular, the hours of leisure spent together by the couple increase on average by about an hour and a half per day upon wife's retirement and by less than an hour upon husband's retirement. The positive effect of partners' retirement on joint leisure is close in size to that on separate leisure or house work hours of partners. |
| Keywords: | Regression discontinuity, retirement, leisure. |
| JEL: | C26 C31 J26 J22 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:12085&r=lab |
| By: | Acemoglu, Daron; Gancia, Gino A; Zilibotti, Fabrizio |
| Abstract: | To study the short-run and long-run implications on wage inequality, we introduce directed technical change into a Ricardian model of offshoring. A unique final good is produced by combining a skilled and an unskilled product, each produced from a continuum of intermediates (tasks). Some of these tasks can be transferred from a skill-abundant West to a skill-scarce East. Profit maximization determines both the extent of offshoring and technological progress. Offshoring induces skill-biased technical change because it increases the relative price of skill-intensive products and induces technical change favoring unskilled workers because it expands the market size for technologies complementing unskilled labor. In the empirically more relevant case, starting from low levels, an increase in offshoring opportunities triggers a transition with falling real wages for unskilled workers in the West, skill-biased technical change and rising skill premia worldwide. However, when the extent of offshoring becomes sufficiently large, further increases in offshoring induce technical change now biased in favor of unskilled labor because offshoring closes the gap between unskilled wages in the West and the East, thus limiting the power of the price effect fueling skill-biased technical change. The unequalizing impact of offshoring is thus greatest at the beginning. Transitional dynamics reveal that offshoring and technical change are substitutes in the short run but complements in the long run. Finally, though offshoring improves the welfare of workers in the East, it may benefit or harm unskilled workers in the West depending on elasticities and the equilibrium growth rate. |
| Keywords: | Directed Technical Change; Growth and Productivity; Offshoring; Skill Premium |
| JEL: | F43 O31 O33 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9247&r=lab |
| By: | C. Kirabo Jackson |
| Abstract: | This paper presents a model where students have cognitive and non-cognitive ability and a teacher’s effect on long-run outcomes is a combination of her effect on both ability types. Conditional on cognitive scores, an underlying non-cognitive factor associated with student absences, suspensions, grades, and grade progression, is strongly correlated with long-run educational attainment, arrests, and earnings in survey data. In administrative data teachers have meaningful causal effects on both test-scores and this non-cognitive factor. Calculations indicate that teacher effects based on test scores alone fail to identify many excellent teachers, and may greatly understate the importance of teachers on adult outcomes. |
| JEL: | H0 I2 J0 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18624&r=lab |
| By: | Hoareau, Cécile (Maastricht University); Ritzen, Jo (IZA and Maastricht University); Marconi, Gabriele (Maastricht University) |
| Abstract: | Higher education contributes to economic innovation. This study measures and compares the extent to which national governments’ policies foster this contribution across Europe. The study stresses the relevance of policies which are ‘empowering’ for higher education institutions, or in other words provide them with appropriate resources and regulatory environments. The assessment relies on quantitative scores, based on the contribution of policies regarding funding and autonomy to higher education performance in education, research and economic innovation, using non-arbitrary weights and eighteen policy indicators across 32 European countries. A large number of countries belong to a ‘middle group’ in our overall assessment, indicating a relative cohesion in Europe. Yet, substantial variations exist in terms of higher education policy in Europe, each European country having room for policy improvement. |
| Keywords: | higher education, research, innovation, Europe, public policy, institutions |
| JEL: | I23 I28 J24 L38 O31 O38 O43 O52 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp51&r=lab |
| By: | Dur, Robert (Erasmus University Rotterdam); Zoutenbier, Robin (Erasmus University Rotterdam) |
| Abstract: | A rich literature in public administration has shown that public sector employees have stronger altruistic motivations than private sector employees. Recent economic theories stress the importance of mission preferences, and predict that altruistic people sort into the public sector when they subscribe to its mission. This paper uses data from a representative survey among more than 30,000 employees from 50 countries to test this prediction. We find strong evidence for a mutually reinforcing role of altruism and mission alignment in sorting to the public sector, particularly among highly educated workers and among workers in less-developed countries. |
| Keywords: | public service motivation, altruism, mission preferences, sorting, World Values Survey |
| JEL: | H1 J45 M5 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7058&r=lab |
| By: | Nicole Stanga |
| Date: | 2012–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwneu:neurusp155&r=lab |
| By: | Wenya Cheng; John Morrow; Kitjawat Tacharoen |
| Abstract: | Optimal production decisions depend on local market characteristics. This paper develops a model to explain firm labor demand and firm density across regions. Firms vary in their technology to combine imperfectly substitutable worker types, and locate across regions with distinct distributions of workers and wages. Firm technologies which best match regional labor markets explain both productivity differences and firm density. Estimating structural model parameters is simple and relies on a two stage OLS procedure. The first stage estimates local market conditions using firm employment and regional data, while the second incorporates regional costs into production function estimation. The method is applied to Chinese manufacturing, population census and geographic data to estimate local market costs and production technologies. In line with the model, we find that labor markets which provide cost advantages explain substantial differences in firm productivity. Furthermore, regions which have lower optimal hiring costs attract more firms per capita. |
| Keywords: | Structural estimation, productivity, firm location, China |
| JEL: | D22 D24 J24 J30 O15 R11 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1181&r=lab |
| By: | Gralla, Rafael (TU Dortmund); Kraft, Kornelius (TU Dortmund) |
| Abstract: | This study examines the differences in the likelihood of overpayment and overemployment in establishments with and without works councils. In contrast to other studies, we use assessments by the management concerning the existence of such problems. Furthermore, we also analyze how different types of works councils influence the probability of overemployment and overpayment. Using the wave 2006 of the IAB Establishment Panel, we show that establishments with works councils that are prepared to interfere with the management are more likely to suffer from overemployment but do not differ in the likelihood of overpayment compared to establishments without works councils. Establishments with works councils that are in line with the management, however, do not differ from establishments without a works council with regard to the likelihood of overemployment but have a lower likelihood of overpayment. |
| Keywords: | works councils, wages, employment |
| JEL: | J23 J31 J53 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7021&r=lab |
| By: | William B. Peterman |
| Abstract: | There are large differences between the microeconometeric estimates of the Frisch labor supply elasticity (0-0.5) and the values used by macroeconomists to calibrate general equilibrium models (2-4). The microeconometric estimates of the Frisch are typically estimated by regressing changes in hours on changes in wages conditional on the individual being a married male head of household, working some minimum number of hours and being of prime working age. In contrast macroeconomic calibration values are typically set such that fluctuations in a general equilibrium model match the observed changes in the aggregate hours and wages from the whole population over time. This paper aims to explain the gap by estimating an aggregate Frisch elasticity which is consistent with the concept of macro calibration values using the microeconometric techniques. In order to estimate the Frisch consistent with the macro concept, this paper alters the typical microeconometric approach in order to incorporate fluctuations on the extensive margin and also broadens the scope of the sample to include single males, females, secondary earners, young individuals, and old individuals. This paper finds that estimates of the aggregate macro Frisch elasticity are in the middle of the range of macroeconomic calibration values (around 3.0). Furthermore, it finds that the key to explaining the difference are the fluctuations on the extensive margin of single males, females, secondary earners, older individuals, and younger individuals. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2012-75&r=lab |
| By: | Francesco D'Amuri (Bank of Italy); Juri Marcucci (Bank of Italy) |
| Abstract: | We suggest the use of an index of Internet job-search intensity (the Google Index, GI) as the best leading indicator to predict the US monthly unemployment rate. We perform a deep out-of-sample forecasting comparison analyzing many models that adopt our preferred leading indicator (GI), the more standard initial claims or combinations of both. We find that models augmented with the GI outperform the traditional ones in predicting the unemployment rate for different out-of-sample intervals that start before, during and after the Great Recession. Google-based models also outperform standard ones in most state-level forecasts and in comparison with the Survey of Professional Forecasters. These results survive a falsification test and are also confirmed when employing different keywords. Based on our results for the unemployment rate, we believe that there will be an increasing number of applications using Google query data in other fields of economics. |
| Keywords: | Google econometrics, forecast comparison, keyword search, US unemployment, time series models |
| JEL: | C22 C53 E27 E37 J60 J64 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_891_12&r=lab |
| By: | Uwe Dulleck; Jonas Fooken; Yumei He |
| Abstract: | We study discrimination based on the hukou system, a policy segregating migrants and locals in urban China. We hired household aids as participants in our artefactual field experiment and use a gift exchange game to study labor market discrimination. We find that social discrimination based on hukou status also implies individual level discrimination. To identify whether discrimination is statistical or taste-based we introduce the wage promising game, a gift exchange game with a cheap talk wage promise. We find that discrimination is taste-based: Status is exogenous for our participants, migrants and locals behave similarly and discrimination increases when reasons for statistical discrimination are removed. |
| Keywords: | labor market discrimination, artefactual field experiment, hukou |
| JEL: | J7 C93 P36 |
| Date: | 2012–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:qut:qubewp:wp002&r=lab |
| By: | Edwin Leuven and Marte Rønning (Statistics Norway) |
| Abstract: | This paper exploits discontinuous grade mixing rules in Norwegian junior high schools to estimate how classroom grade composition affects pupil achievement. Pupils in mixed grade classrooms are found to outperform pupils in single grade classrooms. This finding is driven by pupils benefiting from sharing the classroom with more mature peers from higher grades. The presence of lower grade peers is detrimental for achievement. Pupils can therefore benefit from de-tracking by grade, but the effects depend crucially on how the classroom is balanced in terms of lower and higher grades. These results reconcile the contradictory findings in the literature. |
| Keywords: | educational production; combination classes; class size; peer effects |
| JEL: | I2 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:722&r=lab |
| By: | Clemens, Michael A. (Center for Global Development); Tiongson, Erwin R. (World Bank) |
| Abstract: | Labor markets are increasingly global. Overseas work can enrich households but also split them geographically, with ambiguous net effects on decisions about work, investment, and education. These net effects, and their mechanisms, are poorly understood. We study a policy discontinuity in the Philippines that resulted in quasi-random assignment of temporary, partial-household migration to high-wage jobs in Korea. This allows unusually reliable measurement of the reduced-form effect of these overseas jobs on migrant households. A purpose-built survey allows nonexperimental tests of different theoretical mechanisms for the reduced-form effect. We also explore how reliably the reduced-form effect could be measured with standard observational estimators. We find large effects on spending, borrowing, and human capital investment, but no effects on saving or entrepreneurship. Remittances appear to overwhelm household splitting as a causal mechanism. |
| Keywords: | migration, households, remittances, policy discontinuity |
| JEL: | J61 O15 R23 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7028&r=lab |
| By: | Biavaschi, Costanza (IZA) |
| Abstract: | This paper studies in- and out-migration from the U.S. during the first half of the twentieth century and assesses how these flows affected state-level labor markets. It shows that out-migration positively impacted the wages of remaining workers, while in-migration had a negative impact. Hence, immigrant arrivals were substitutes of the existing workforce, while out-migration reduced the competitive pressure on labor markets. |
| Keywords: | migration flows, impact of migration |
| JEL: | F22 J01 J61 N32 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7049&r=lab |
| By: | Petra Moog (University of Siegen); Arndt Werner (Institute for SME Research Bonn (IfM Bonn)); Stefan Houweling (University of Siegen); Uschi Backes-Gellner (Department of Business Administration (IBW), University of Zurich) |
| Abstract: | To date, little is known about the effects of the composition of skills on academic entrepreneurship. Therefore, in this paper, following Lazear’s (2005) jack-of-all-trades approach, we study how his or her composition of skills affects a scientist’s intention of becoming an entrepreneur. Extending Lazear, we examine how the effect of balanced entrepreneurial skills is moderated by a balanced working time allocations and peer effects. Using unique data collected from 480 life sciences researchers, we provide the first evidence that scientists with more balanced skills are more likely to have higher entrepreneurial intentions, particularly when they are in contact with entrepreneurial peers. Furthermore, we find even higher entrepreneurial intentions when balanced skill sets are combined with balanced working time allocations. Thus, to encourage the entrepreneurial intentions of life scientists, one has to ensure that they are exposed to diverse work experiences, have balanced working time allocations across different activities and work with entrepreneurial peers; i.e., collaborating with colleagues or academic scientists who have started new ventures in the past is important. |
| Keywords: | Jack-of-all-Trades, Skills, Entrepreneurial Intentions, Academic Entrepreneurship, Peer Effects, Working Time Balance |
| JEL: | O32 M13 J24 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:zrh:wpaper:325&r=lab |
| By: | Zwick, Thomas |
| Abstract: | This paper measures determinants of individual academic achievements. In addition to an extensive list of individual characteristics, skills obtained during study and socio-economic background factors, many dimensions of selectivity into academic study subjects are shown to drive individual academic achievement, such as differences between average student grades during tertiary education or cognitive skills. This paper is based on a large and representative graduate survey of graduates in the academic year 2003/2004 in the German state of Bavaria. -- |
| Keywords: | Academic Achievement,Selectivity Effects,Graduates |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:12081&r=lab |
| By: | Melissa Engel; Sandra Schaffner |
| Abstract: | The European Union Statistics on Income and Living Conditions (EU-SILC) is a rotational panel provided by Eurostat that covers important variables over all EU Member States. Unfortunately, Eurostat provides separate data sets which do not cover all waves. Furthermore, information on monthly income and hourly wages are missing. In this paper, we make two contributions: first, we develop a method for combining the different waves in order to increase the number of observations; second, we derive monthly and hourly pay. |
| Keywords: | EU-SILC; sampling weights; income; Europe; data quality; panel data |
| JEL: | C81 C83 D31 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0390&r=lab |
| By: | Epstein, Gil S. (Bar-Ilan University) |
| Abstract: | This paper presents a model in which promotion of employees within the internal firm hierarchy is determined by the individuals' allocation of time between promotion/rent-seeking and productive activity. We consider the effect of an increase in the employer's knowledge (information) regarding the employees' productivity levels on the total time spent by the workers in non-productive promotion-seeking activities. |
| Keywords: | promotion-seeking activities, contest, knowledge |
| JEL: | D2 D72 J2 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7023&r=lab |
| By: | Vincent Boucher; Yann Bramoullé; Guy Lacroix; Bernard Fortin |
| Abstract: | We provide the first empirical application of a new approach proposed by Lee (2007) to estimate peer effects in a linear-in-means model when individuals interact in groups. Assuming sufficient group size variation, this approach allows to control for correlated effects at the group level and to solve the simultaneity (reflection) problem. We clarify the intuition behind identification of peer effects in the model. We investigate peer effects in student achievement in French, Science, Mathematics and History in secondary schools in the Province of Québec (Canada). We estimate the model using conditional maximum likelihood and instrumental variables methods. We find some evidence of peer effects. The endogenous peer effect is large and significant in Math but imprecisely estimated in the other subjects. Some contextual peer effects are also significant. In particular, for most subjects, the average age of peers has a negative effect on own test score. Using calibrated Monte Carlo simulations, we find that high dispersion in group sizes helps with potential issues of weak identification. <P> |
| Keywords: | peer effects, student achievement, reflection problem, |
| Date: | 2012–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2012s-31&r=lab |
| By: | Paul Oyer; Scott Schaefer |
| Abstract: | We study the sources of match-specific value at large American law firms by analyzing how graduates of law schools group into law firms. We measure the degree to which lawyers from certain schools concentrate within firms and then analyze how this agglomeration can be explained by "natural advantage" factors (such as geographic proximity) and by productive spillovers across graduates of a given school. We show that large law firms tend to be concentrated with regard to the law schools they hire from and that individual offices within these firms are substantially more concentrated. The degree of concentration is highly variable, as there is substantial variation in firms' hiring strategies. There are two main drivers of variation in law school concentration within law offices. First, geography drives a large amount of concentration, as most firms hire largely from local schools. Second, we show that school-based networks (and possibly productive spillovers) are important because partners' law schools drive associates' law school composition even controlling for firm, school, and firm/school match characteristics and when we instrument for partners' law schools. |
| JEL: | J44 K00 M51 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18620&r=lab |
| By: | de la Roca, Jorge; Puga, Diego |
| Abstract: | Individual earnings are higher in bigger cities. We consider three reasons: spatial sorting of initially more productive workers, static advantages associated with workers' current location, and learning by working in big cities. Using rich administrative data for Spain, we find that workers in bigger cities do not have higher unobserved initial ability, as reflected in individual fixed-effects. Instead, they obtain an immediate static premium while working in bigger cities and also accumulate more valuable experience, which increases their earnings faster. The additional value of experience accumulated in bigger cities persists even after workers move away and is even stronger for those with higher unobserved initial ability. This combination of effects explains both the higher mean and the greater dispersion of earnings in bigger cities. |
| Keywords: | agglomeration economies; city size; earnings premium; learning |
| JEL: | J31 R10 R23 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9243&r=lab |
| By: | Nicolai Suppa |
| Abstract: | Using the capability approach as conceptual framework, the present study examines empirically the effect of job characteristics on subjective well-being. First, I suggest a measurement model for four latent job characteristics, using a confirmatory factor analysis. Then, I examine the job characteristics’ influence on life and job satisfaction, using Australian panel data. The results suggest that (i) the four latent job characteristics are valid constructs, (ii) favourable job characteristics increase life and job satisfaction significantly, (iii) job characteristics account for some of the unemployed’s dissatisfaction, and (iv) controlling for unobserved heterogeneity is crucial in such exercises. |
| Keywords: | Job characteristics; life satisfaction; capability approach; factor analysis |
| JEL: | I31 J20 D60 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0388&r=lab |
| By: | Stacey H. Chen (Institute of Economics, Academia Sinica, Taipei, Taiwan); Shakeeb Khan (Duke University) |
| Abstract: | Policy evaluations require estimation of program impacts on both mean and dispersion of potential outcomes, even though the previous identication eorts have focused mostly on impacts on the mean. We propose the use of instrumental variables and pairwise matching to identify the average treatment eect on conditional variance in potential outcomes. We show that it is possible to identify and estimate program impact on conditional dispersion of potential outcomes in an endogenous switching model, without using the identification-at-infinity argument, if we impose semi-parametric conditions on the error structure of the outcome equation. In the presence of a multi-valued or continuously distributed instrument, we recommend the pairwise-matching method if the error term and the latent index are symmetrically distributed around zero. Simulation results show that the proposed estimators converge at the regular parametric rate. We apply the new estimators to a well-known empirical study of the eect of education on potential wage inequality. |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:sin:wpaper:12-a013&r=lab |