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on Labour Economics |
| By: | Jaison R. Abel; Richard Deitz |
| Abstract: | We study one potential source of urban agglomeration economies: better job matching. Focusing on college graduates, we construct two direct measures of job matching based on how well an individual’s job corresponds to his or her college education. Consistent with matching-based theories of urban agglomeration, we find evidence that larger and thicker local labor markets help college graduates find better jobs by increasing both the likelihood and quality of a match. We then assess the extent to which better job matching of college-educated workers increases individual-level wages and thereby contributes to the urban wage premium. While we find that college graduates with better job matches do indeed earn higher wages on average, the contribution of such job matching to aggregate urban productivity appears to be relatively modest. |
| Keywords: | Wages ; Productivity ; Employment ; College graduates ; Labor market ; Urban economics |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:587&r=lab |
| By: | Sarra Ben Yahmed (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS.) |
| Abstract: | Several empirical studies have shown that the effect of openness on the gender wage gap depends on the skill requirement of the workplace. This paper offers a theoretical explanation to understand that finding. We integrate a statistical discrimination framework with the labour assignment approach to give general conditions under which the matching between firms and workers gives rise to a wider gender wage gap at the upper tail of the distribution, in accordance with empirical evidence. We further look at the effect of trade openness on the gender wage gap along the entire distribution. Workers’ characteristics vary in two dimensions, skills and job commitment. The inability to observe individual’s job commitment induces employers to base partly their decision on group average. Following the literature on labour and international trade, we assume that skills act as complements to technological upgrading. Exporting firms are more skill-intensive and pay higher wages ; assuming further that worker’s job commitment is a complement to technological upgrading, we find that a reduction in trade costs increases wage inequality within-groups and has non-monotonic effects on between-group inequality. Trade openness reduces the gender wage gap among unskilled workers but increases the gender wage gap among high-skill workers. |
| Keywords: | http://www.amse-aixmarseille.fr/sites/default/files/_dt/2012/wp_2012_-_nr_32.pdf |
| JEL: | J24 J7 F16 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1232&r=lab |
| By: | Kohara, Miki (Osaka University); Sasaki, Masaru (Osaka University); Machikita, Tomohiro (Institute of Developing Economies (IDE-JETRO)) |
| Abstract: | This paper examines whether or not a prolonged unemployment period can raise the quality of job matching after unemployment. We focus on job tenure as an indicator of a good quality job match after unemployment. We match two sets of Japanese administrative data compiled by the public employment security offices: one includes information about the circumstances of job seekers receiving unemployment insurance, and the other includes information about job seekers applying for jobs. We first show a negative relationship between unemployment duration and the subsequent job duration. Restricting the sample to job seekers who changed search behaviors in the final 59 days before expiration of unemployment insurance, we secondly show an even greater negative effect of unemployment duration on the following job duration. The importance lies not only in the duration of unemployment. If job seekers keep a high reservation wage and a low search intensity because of the benefits of unemployment insurance, and change them in response to the expiration of insurance, prolonged unemployment will result in short job duration after unemployment. |
| Keywords: | unemployment duration, unemployment insurance, job search, job stability, administrative data, Japan |
| JEL: | J64 J65 J68 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7077&r=lab |
| By: | Hugo Benítez Silva (Economics Department, SUNY at Stony Brook); J. Ignacio García Pérez (Department of Economics, Universidad Pablo de Olavide); Sergi Jiménez Mártin (Department of Economics, Universidat Pompeu Fabra) |
| Abstract: | Unemployment rates in developed countries have recently reached levels not seen in a generation, and workers of all ages are facing increasing probabilities of losing their jobs and considerable losses in accumulated assets. These events have increased the reliance that most (older) workers have on public social insurance programs, exactly at a time that public finances are suffering from a large drop in contributions. Using administrative and household level data we empirically characterize a Life- Cycle model of retirement and claiming decisions in terms of the employment, wage, health, and mortality uncertainty faced by individuals. We analyze the role of three intertwined factors in the recent evolution of work and retirement benefits claiming behavior in the United States; namely, higher unemployment uncertainty, higher unemployment benefits, and wealth shocks. We find that higher employment uncertainty reduces work and increases early claiming, while higher unemployment benefits mildly reduce work and reduce claiming at early ages. Finally, wealth shocks increase both early claiming and work. When all these factors are combined, the final outcome is a mild decline in labor supply and little variation in early claiming. |
| Keywords: | Employment uncertainty, wealth shocks, retirement, labor supply, life-cycle models. |
| JEL: | J14 J26 J65 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:12.11&r=lab |
| By: | Thibault Darcillon (Centre d'Economie de la Sorbonne - Paris School of Economics) |
| Abstract: | This article analyzes the linkages between financial liberalization, labor market institutions and wage inequality for 17 OECD countries over the 1989 to 2005 period. With the help of a fixed effect model with an interacted term, one crucial contribution of this article is to analyze the interacted impact of labor market institutions (i.e., workers' bargaining power and employment protection legislation) on the one hand and financial liberalization on the other hand on wage distribution. Our results indicate that changes in workers' bargaining power and in employment protection affect wage distribution (p9/p1 ratio). Estimates of the marginal effects show that by increasing labor markers regulation (i.e., reinforcing workers' bargaining power and increasing employment protection legislation) one also weakens the impact of financial liberalization on the increase in wage inequality. |
| Keywords: | Wage inequality, financial liberalization, corporate governance, employment protection, political economy. |
| JEL: | G34 J5 P16 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:12089&r=lab |
| By: | Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244-1020); Yusuf Soner Baskaya (Türkiye Cumhuriyet Merkez Bankası); Timur Hulagu (Central Bank of Turkey) |
| Abstract: | This paper presents wage curves for formal and informal workers using a rich individual level data for Turkey over the period 2005-2009. The wage curve is an empirical regularity describing a negative relationship between regional unemployment rates and individuals' real wages. While this relationship has been well documented for a number of countries including Turkey, less attention has focused on how this relationship differs for informal versus formal employment. This is of utmost importance for less developed countries where informal employment plays a significant role in the economy. Using the Turkish Household Labor Force Survey for the period 2005-2009 observed over 26 NUTS-2 regions, we find that real hourly wages of informal workers in Turkey are more sensitive to variations in regional unemployment rates than wages of formal workers. This is true for all workers as well as for different gender and age groups Key Words: Formal/Informal Employment; Wage Curve; Regional Labor Markets JEL No. C26, J30, J60, O17 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:145&r=lab |
| By: | Stephan Kampelmann; François Rycx |
| Abstract: | We provide first evidence regarding the direct impact of educational mismatch on firm productivity. To do so, we rely on representative linked employer-employee panel data for Belgium covering the period 1999-2006. Controlling for simultaneity issues, time-invariant unobserved workplace characteristics, cohort effects and dynamics in the adjustment process of productivity, we find that: i) a higher level of required education exerts a significantly positive influence on firm productivity, ii) additional years of over-education (both among young and older workers) are beneficial for firm productivity, and iii) additional years of under-education (among young workers) are detrimental for firm productivity. |
| Keywords: | Educational mismatch; Productivity; Linked panel data; GMM |
| JEL: | I21 J24 |
| Date: | 2012–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/135592&r=lab |
| By: | Muysken, Joan; Vallizadeh, Ehsan; Ziesemer, Thomas |
| Abstract: | This paper analyses the impact of the skill composition of migration flows on the host country's labour market in a specific-factors-two-sector model with heterogeneous labour (low, medium, and high skill) and price- and wage-setting behaviour. The low- and medium-skilled labour markets are characterized by frictions due to wage bargaining. Moreover, we assume bumping down of unemployed medium-skilled workers into low-skilled labour supply. Endogenous benefits create an interdependency between the two bargaining processes. Particular attention is paid to medium-skilled migration which enables us to augment the literature by replicating important stylized facts regarding medium skills, such as i) the interaction between immigration, low-skilled unemployment and medium-skilled over-qualification, ii) the polarization effect where both low- and high-skilled wages increase relative to the medium-skilled. The model is calibrated using German data. The key findings are: (i) a migration-induced supply shock of medium-skilled workers decreases the low-skilled unemployment rate because of the endogenous benefits; (ii) immigration of medium-skilled labour together with some high-skilled labour has a positive effect on output per capita; (iii) migration of only medium-skilled labour has a neutral impact on GDP per capita. -- |
| Keywords: | Medium-Skilled Migration,Wage and Price Setting,Specific Factors Model,Unemployment,Over-qualification,Wage Polarization |
| JEL: | F22 J51 J52 J61 J64 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:67479&r=lab |
| By: | Christopher L. Foote; Richard W. Ryan |
| Abstract: | During the last few decades, labor markets in advanced economies have become “polarized” as relative labor demand grows for high- and low-skill workers while it declines for middle-skill workers. This paper explores how polarization has interacted with the U.S. business cycle since the late 1970s. Consistent with previous work, the authors find that recessions are strongly synchronized across workers with different skills. Even high-skill workers favored by polarization suffer during recessions; this is particularly true during the last two downturns. Additionally, there is no evidence that polarization is driving the recent drop in the job-finding rate that has caused an adverse shift in the Beveridge curve. With this synchronization in mind, the authors then investigate the labor-market transitions of unemployed workers during recessions. When job-finding rates fall in recessions, middle-skill workers appear no more apt to leave the labor force or take low- or high-skill jobs than they are during booms. All in all, the results imply that current distress in the U.S. labor market extends far beyond middle-skill workers, and that recessions in general do not induce reallocation of middle-skill workers to jobs with better long-term outlooks. |
| Keywords: | Labor market ; Unemployment ; Business cycles |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpp:12-8&r=lab |
| By: | J. Ignacio García Pérez (Department of Economics, Universidad Pablo de Olavide); Alfonso R. Sánchez Mártin (Department of Economics, Universidad Pablo de Olavide) |
| Abstract: | The job search demands made upon older unemployed workers in developed economies have traditionally been very relaxed. This has recently changed in some European countries (eg, Germany and Finland), as part of an effort to increase the labor force participation of older workers. Is this new approach appropriate? There is some disagreement among academics about the optimality of this new policy stance. We contribute to this debate by exploring the consequences of institutional reform in Spain, a country with a high rate of unemployment and a tolerant attitude toward the use of unemployment benefits as early retirement income. We develop an applied model of job-search and retirement behavior; calibrate it to the specificities of the Spanish case and successfully verify its empirical validity. We use the model to explore the effects of a change in the pension rules to link early retirement penalties to the age when an individual stops paying contributions. This reform removes the incentives to remain unemployed without searching, encouraging individuals to either retire or actively engage in job seeking. It results in welfare losses, especially for those workers that respond by changing behavior; yet the reform also raises enough extra resources whereby the public authorities may more than compensate all the affected workers. |
| Keywords: | unemployment, retirement, pension reform, search models. |
| JEL: | J64 J68 J26 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:12.09&r=lab |
| By: | Björn Erikssoon; Tobias Karlsson; Tim Leunig; Maria Stanfors |
| Abstract: | Women have, on average, been less well-paid than men throughout history. Prior to 1900, most economic historians see the gender wage gap as a reflection of men's greater strength and correspondingly higher productivity. This paper investigates the gender wage gap in cigar making around 1900. Strength was rarely an issue, but the gender wage gap was large. Two findings suggest that employers were not sexist. First, differences in earnings by gender for workers paid piece rates can be fully explained by differences in experience and other productivity-related characteristics. Second, conditioning on those characteristics, women were just as likely to be promoted to the better paying piece rate section. Neither finding is compatible with a simple model of sex-based discrimination. Instead, the gender wage gap can be decomposed into two components. First, women were typically less experienced, in an industry in which experience mattered. Second there were some jobs that required strength, for which men were better suited. Because strength was so valuable in the other jobs at this time, men commanded a wage premium in the general labour market, raising their reservation wage. Hiring a man required the firm to pay a 'man's wage'. This implies that firms that were slow to feminise their time rate workforce ended up with a higher cost structure than those that made the transition more quickly. We show that firms with a higher proportion of women in their workforce in 1863 were indeed more likely to survive 35 years later. |
| Keywords: | gender, productivity, discrimination, piece-rates, time-rates, labour markets, firm survival |
| JEL: | J16 J24 J71 J33 J40 L25 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:385&r=lab |
| By: | Aspen Gorry (UC, Santa Cruz) |
| Abstract: | This paper studies a labor market where workers have incomplete information about the quality of their employment match. The model allows past experience to provide information about the quality of a new match. Allowing workers to learn from past job experience generates a decline in job ï¬Ânding and job separation rates with age that is consistent with patterns found in the data. To provide evidence of this learning mechanism, the model generates a prediction that wage volatility on a new job should decline with past job experience. This decline in wage volatility is documented in data from NLSY79. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed012:154&r=lab |
| By: | Bernhard Boockmann; Raimund Krumm; Michael Neumann; Pia Rattenhuber |
| Abstract: | The introduction, abolition and subsequent re-introduction of the minimum wage in the German electrical trade gave rise to series of natural experiments, which are used to study minimum wage effects. We find similar impacts in all three cases on wages, employment and the receipt of public welfare benefits. Average wages are raised by the minimum wage in East Germany, but there is almost no evidence for employment effects. The results also show that the wage effect is quickly undone after the abolition of the minimum wage. |
| Keywords: | Minimum wage, labor market regulation, employment |
| JEL: | J38 J31 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iaw:iawdip:92&r=lab |
| By: | Vincenzo Scoppa; Daniela Vuri (Dipartimento di Economia e Statistica, Università della Calabria) |
| Abstract: | Efficiency wages theories argue that the threat of firing, coupled with a high unemployment rate, is a mechanism that discourages employee shirking in asymmetric information contexts. Our empirical analysis aims to verify the role of unemployment as a worker discipline device, considering the different degree of job security offred by the Italian Employment Protection Legislation to workers employed in small and large firms. We use a panel of administrative data (WHIP) and consider sickness absences as an empirical proxy for employee shirking. Controlling for a number of individual and firm characteristics, we investigate the relationship between worker's absences and local unemployment rate (at the provincial level). We find a strong negative impact of unemployment on absenteeism rate, which is considerable larger in small firms due to a significantly lower protection from dismissals in these firms. We also find that workers who are absent more frequently face higher risks of dismissal. As an indirect test of the role of unemployment as worker's discipline device we show that public sector employees, almost impossible to fire, do not react to the local unemployment. |
| Keywords: | Shirking, Absenteeism, Employment Protection Legislation, Unemployment |
| JEL: | J41 M51 J45 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:201208&r=lab |
| By: | Didem Tuzemen |
| Abstract: | Empirical evidence shows that worker flows in the U.S. labor market are very large. Previous studies have mainly focused on documenting and modeling worker flows between employment and unemployment only. However, these studies ignore other important labor flows including movements in and out of the labor force, and worker flows from one job directly to another job. Improving our understanding of this broader set of labor market flows is critical for assessing the merits of labor market policies such as unemployment insurance and minimum wage. ; This paper focuses on the broader set of worker flows. In terms of magnitude, flows into and out of the labor force are as large as flows between employment and unemployment. And worker flows from one job directly to another job, termed job-to-job flows, account for the vast majority of worker separations from employment. More specifically, job-to-job flows constitute almost 40 percent of all separations from employment, and they are twice as large as flows from employment to unemployment. ; The main contribution of this paper is to develop a framework in which labor market flows between employment, unemployment and out of the labor force can be studied. Earlier attempts to incorporate the participation margin in the standard real business cycle framework have been discouraging in the sense that the model generated counterfactual results. This paper presents an alternative general equilibrium real business cycle model that features search and matching frictions, and endogenous labor force participation. The model additionally features on-the-job search to capture job-to-job flows, which are crucial for the U.S. labor market dynamics. The model successfully generates countercyclical unemployment and the negative correlation between unemployment and vacancies, also known as the Beveridge Curve, observed in the data. The business cycle statistics reproduced by the model are in line with their empirical counterparts. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp12-07&r=lab |
| By: | Isphording, Ingo (Ruhr University Bochum); Sinning, Mathias (Australian National University) |
| Abstract: | This paper uses data from the 2010 American Community Survey (ACS) to study the returns to language skills of child and adult migrants in the US labor market. We employ an instrumental variable strategy, which exploits differences in language acquisition profiles between immigrants from English- and non-English-speaking countries of origin, to address problems related to endogeneity and measurement error. We find significantly positive returns to language skills and demonstrate that education is an important channel through which language skills affect wages of child migrants. Although the returns of adult migrants do not depend on education, we find that child and adult migrants exhibit similar returns to language skills. |
| Keywords: | international migration, language skills, labor productivity |
| JEL: | F22 J24 J31 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7080&r=lab |
| By: | Premand, Patrick (World Bank); Brodmann, Stefanie (World Bank); Almeida, Rita K. (World Bank); Grun, Rebekka (World Bank); Barouni, Mahdi (CRES, République Tunisienne) |
| Abstract: | In economies characterized by low labor demand and high rates of youth unemployment, entrepreneurship training has the potential to enable youth to gain skills and create their own jobs. This paper presents experimental evidence on a new entrepreneurship track that provides business training and personalized coaching to university students in Tunisia. Undergraduates in the final year of licence appliquée were given the opportunity to graduate with a business plan instead of following the standard curriculum. This paper relies on randomized assignment of the entrepreneurship track to identify impacts on labor market outcomes one year after graduation. The analysis finds that the entrepreneurship track was effective in increasing self-employment among applicants, but that the effects are small in absolute terms. In addition, the employment rate among participants remains unchanged, pointing to a partial substitution from wage employment to self-employment. The evidence shows that the program fostered business skills, expanded networks, and affected a range of behavioral skills. Participation in the entrepreneurship track also heightened graduates' optimism toward the future shortly after the Tunisian revolution. |
| Keywords: | youth employment, self-employment, entrepreneurship training, program evaluation, behavioral skills, soft skills |
| JEL: | O12 J24 I21 L26 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7079&r=lab |
| By: | Pierre André; Jean-Luc Demonsant (THEMA, Universite de Cergy-Pontoise and THEMA; EPS/INSTEAD) |
| Abstract: | This paper studies the substitution between formal education and informal religious education for Senegalese households. We use the timing of the opening of formal schools to estimate whether Koranic and formal education systems compete for the children’s time. Adapting the diff-in-diff strategy in Duflo (2001), we assess the effect of school openings on Koranic and formal schooling. Our estimates show that formal school openings increase formal education attainment, especially in rural areas. Incidentally, this result highlights the lack of primary schools in rural areas : an additional primary school increases the probability to start primary school by 13 percentage points around this school. We then estimate that an additional formal school decreases the time spent in Koranic schools. This proves that, while both school systems are independent in terms of organization and pedagogical content, they still compete for the children’s time. This might increase the opportunity cost of formal primary school, and can narrow the political consensus around universal primary education. |
| Keywords: | Koranic Schools, School demand, Senegal |
| JEL: | D12 I28 O12 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2012-46&r=lab |
| By: | Chassamboulli, Andri; Palivos , Theodore |
| 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 |
| JEL: | F22 J61 J64 |
| Date: | 2012–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43297&r=lab |
| By: | Joyce Wong (NYU); Raquel Fernández (New York University) |
| Abstract: | Women born in 1935 went to college significantly less than their male counterparts and married women's labor force participation (LFP) averaged 40% between the ages of thirty and forty. The cohort born twenty years later behaved very dierently. The education gender gap was eliminated and married women's LFP averaged 70% over the same ages. In order to evaluate the quantitative contributions of the many signicant changes in the economic environment, family structure, and social norms that occurred over this period, this paper develops a dynamic life-cycle model calibrated to data relevant to the 1935 cohort. We find that the higher probability of divorce and the changes in wage structure faced by the 1955 cohort are each able to explain, in isolation, a large proportion (about 60%) of the observed changes in female LFP. After combining all economic and family structure changes, we find that a simple change in preferences towards work can account for the remaining change in LFP. To eliminate the education gender gap requires, on the other hand, for the psychic cost of obtaining higher education to change asymmetrically for women versus men. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed012:176&r=lab |
| By: | Lindbeck, Assar (Research Institute of Industrial Economics (IFN)); Snower, Dennis J. (Birkbeck College, University of London) |
| Abstract: | The paper examines the implications of an important aspect of the ongoing reorganization of work - the move from occupational specialization toward multi-tasking - for centralized wage bargaining. The analysis shows how, on account of this reorganization, centralized bargaining becomes increasingly inefficient and detrimental to firms' profit opportunities, since it prevents firms from offering their employees adequate incentives to perform the appropriate mix of tasks. The paper also shows how centralized bargaining inhibits firms from using wages to induce workers to learn how to use their experience from one set of tasks to enhance their performance at other tasks. In this way, the paper helps explain the increasing resistance to centralized bargaining in various advanced market economies. |
| Keywords: | Centralized wage bargaining; restructuring; organization of firms; technological change; information flows; employment; wage formation; unemployment |
| JEL: | A00 |
| Date: | 2012–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0473&r=lab |
| By: | Sergio Urzua (University of Maryland); Tomas Rau (Universidad Católica de Chile) |
| Abstract: | In this paper we estimate a structural model of sequential decision of higher education and dropout to evaluate the impact of short-term credit constraint on dropouts. In particular, we analyze the impact on dropouts of the State Guaranteed Credit program (CAE) the most important funding program for higher education in Chile. The model allows for heterogeneity in observable and unobservable individual characteristics (Heckman et al. 2006) and controls for selectivity. Our data combine different sources of information, including individual data from standardized tests scores (PSU), higher education enrollment and unemployment insurance system (UI) data. The results show the important role of the abilities of individuals on educational choice. Individuals with higher ability tend to enroll in universities and not to drop out (sorting on ability). We show that household income and access to credit influence the probability of dropping out. Specifically, the results suggest that CAE has a positive impact on reducing the dropouts from higher education, where the program reduces the first year dropout rate in 15.5% for those enrolled in a university and a 24% for enrolled in a Center or Technical Formation (CFT) and Professional Institute (IP). We also found that the CAE is more effective in reducing the probability of dropping out for low-skill individuals from low-income families. However, our results show that CAE beneficiaries have lower wages than those who are not beneficiaries (even after controlling for characteristics, ability and selectivity bias). We attribute this to a incentive problems in the design of CAE which may lead to higher education institutions to reduce the quality of education. The evidence then calls to revise the design of CAE. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed012:228&r=lab |
| By: | Massimiliano Calì (World Bank); Sami H. Miaari (World Bank) |
| Abstract: | Using data on Israeli closure in the Palestinian West Bank, we provide new evidence on the labour market effects of conflict-induced restrictions to mobility. We exploit the fact that the placement of physical barriers by Israel was exogenous to local labour market conditions and find a causal negative effect of these barriers on employment, wages and days worked per month. On the other hand the barriers had a positive impact on the number of hours per working day. These effects are driven mainly by checkpoints and only a tiny portion of the effects is due to direct restrictions on workers’ mobility. Despite being an under-estimation of the actual effects, the overall costs of the barriers on the West Bank labour market are far from being negligible: in 2007 for example these costs amounted to 6% of GDP. |
| Keywords: | Conflict, Palestine, Israel, mobility, closures, Intifada |
| JEL: | J21 J40 J61 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:130&r=lab |
| By: | Burda, Michael C. (Humboldt University Berlin); Hamermesh, Daniel S. (University of Texas at Austin); Stewart, Jay (U.S. Bureau of Labor Statistics) |
| Abstract: | We examine monthly variation in weekly work hours using data for 2003-10 from the Current Population Survey (CPS) on hours/worker, from the Current Employment Survey (CES) on hours/job, and from the American Time Use Survey (ATUS) on both. The ATUS data minimize recall difficulties and constrain hours of work to accord with total available time. The ATUS hours/worker are less cyclical than the CPS series, but the hours/job are more cyclical than the CES series. We present alternative estimates of productivity based on ATUS data and find that it is more pro-cyclical than other productivity measures. |
| Keywords: | time use, macroeconomic fluctuations, work hours |
| JEL: | E23 J22 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7070&r=lab |
| By: | Mankart, Jochen; Oikonomou, Rigas |
| Abstract: | Sharing risks is one of the essential economic roles of families. The importance of this role increases in the amount of uncertainty that households face in the labor market and in the degree of incompleteness of financial markets. We develop a theory of joint household search in frictional labor markets under incomplete financial markets. Households can insure themselves by savings and by timing their labor market participation. We show that this theory can match one aspect of the US data that conventional search models, which do not incorporate joint household search, cannot match. In the data, aggregate employment is pro-cyclical and unemployment counter-cyclical, but their sum, the labor force, is acyclical. In our model, and in the US data, when a family member loses his job in a recession, the other family member joins the labor force to provide insurance. |
| Keywords: | Heterogeneous Agents, Family Self Insurance, Labor Market Search, Aggregate Fluctuations |
| JEL: | E24 E25 E32 J10 J64 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2012:25&r=lab |
| By: | Jose Mustre-del-Rio |
| Abstract: | A central question in economics is how business cycles affect the allocation of resources. Focusing on the labor market, an unresolved issue is whether recessions lead to above or below average productive arrangements. Typical models of the labor market imply that recessions cleanse the labor market as low quality employer-employee matches are destroyed and only exceptionally high quality matches are created. These models, however, ignore the potential sullying effect of recessions through on-the-job search, i.e. the process by which workers transit between jobs without an intervening spell of unemployment. Theory suggests this process is stymied in recessions and leads to worse matches. ; Distinguishing between these two possible effects of recessions is important for monetary policy. If recessions are cleansing, then accommodative policy may be delaying the natural process of creative reallocation. Alternatively, if recessions are sullying, then accommodative policy may improve labor market outcomes by stimulating job creation and promoting worker reallocation. ; This paper quantifies these alternative views of recessions by using data from the National Longitudinal Survey of Youth (NLSY) from 1979 to 2006. Using the duration of an employer-employee relationship as a proxy for its quality, the analysis tests for the cleansing and sullying effects of recessions. The results provide no systematic evidence for the cleansing effect, but do suggest a role for the sullying effect. As predicted by theory, the quality of matches formed from workers transiting between jobs, without an intervening spell of unemployment, falls in recessions. This suggests an active role for monetary policy in the labor market during recessions for the aforementioned reasons. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp12-08&r=lab |
| By: | Autor, David (MIT); Dorn, David (CEMFI, Madrid) |
| Abstract: | We offer an integrated explanation and empirical analysis of the polarization of U.S. employment and wages between 1980 and 2005, and the concurrent growth of low skill service occupations. We attribute polarization to the interaction between consumer preferences, which favor variety over specialization, and the falling cost of automating routine, codifiable job tasks. Applying a spatial equilibrium model, we derive, test, and confirm four implications of this hypothesis. Local labor markets that were specialized in routine activities differentially adopted information technology, reallocated low skill labor into service occupations (employment polarization), experienced earnings growth at the tails of the distribution (wage polarization), and received inflows of skilled labor. |
| Keywords: | skill demand, job tasks, inequality, polarization, technological change, occupational choice, service occupations |
| JEL: | E24 J24 J31 J62 O33 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7068&r=lab |
| By: | Julio J. Rotemberg |
| Abstract: | A model is presented in which people base their labor search strategy on the average wage and the average unemployment duration of people who belong to their peer group. It is shown that, if the distribution of wage offers is not stationary so lower wage offers tend to arrive before higher wage ones, such learning can induce a great deal of wage inequality. An equilibrium model is developed in which firms can choose either to advertise their job openings prominently or not. Prominent ads are assumed to have more influence on more inexperienced job searchers who are less able to identify a multiplicity of viable jobs. Equilibria can then feature groups that learn naively from the experience of their members and accept low wage offers from prominent ads while other groups do not find these offers acceptable. A new test statistic is proposed that measures whether, as predicted by the model, the gains from increasing one's reservation wage are larger than either those that people expect or those predicted by models in which job offers are stationary. |
| JEL: | D83 J31 J64 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18638&r=lab |
| By: | Hartmut Egger; Daniel Etzel |
| Abstract: | This paper sets up a general oligopolistic equilibrium model with two countries that differ in the centralization of union wage setting. Being interested in the consequences of openness, we show that, in the short-run, trade increases welfare and employment in both locations, and it raises income of capital owners as well as workers. In the long run, capital outflows from the country with the more centralized wage setting generate winners and losers and make the two countries more dissimilar in terms of unemployment of welfare. Decentralization of wage setting can successfully prevent capital outflow and the export of jobs. |
| Keywords: | General oligopolistic equilibrium, Union wage setting, Asymmetric labor market institutions, Trade liberalization, Capital mobility, Decentralization in union wage setting |
| JEL: | F12 F16 J51 L13 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201209&r=lab |
| By: | Daghbashyan, Zara (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Hårsman, Björn (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | This paper aims at shedding light upon the impact of universities on graduates’ entrepreneurial choice. Previous studies (Dale and Krueger, 2002, Brand and Halaby, 2006, McGuinness, 2003) have analyzed the relationship between the choice of university and labor market success of graduates in terms of their subsequent wages, employability or over-education, whereas the possible link between the choice of university and entrepreneurial choice has been neglected.Using 1998-2008 data on graduates from Swedish higher education institutions (HEI), the paper finds significant variation in the impact of universities on the career choice of graduates. The results suggest that graduates with degrees in the social sciences, natural sciences, medicine and teacher education from more prestigious universities systematically differ from others in their entrepreneurial choice. At the same time, no statistically significant difference is found for technical science graduates. |
| Keywords: | universities; education; entrepreneurship; graduates |
| JEL: | L26 M53 M54 |
| Date: | 2012–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0292&r=lab |
| By: | Daghbashyan, Zara (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Hårsman, Björn (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | The aim of this paper is to improve understanding of the observed high level of entrepreneurship among arts graduates. Specifically, the entrepreneurship rates of university graduates in the arts, architecture and engineering are compared. The occupational choice model applied has three options: wage employment, owning and a combination of the two. The utility function governing the choice includes income as well as an indicator of the disutility resulting from differences between the skills required and the skills supplied. The model implies that an alternative providing a better match might be preferred to one providing a higher income. Using Swedish data, this paper shows that the possibility of using artistic skills has stronger impact on the choice of occupation than income considerations. |
| Keywords: | Arts graduates; education; occupational choice |
| JEL: | I21 L26 M53 M54 |
| Date: | 2012–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0295&r=lab |
| By: | Perry Singleton (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020) |
| Abstract: | This study measures the effect of disability insurance on labor supply and health insurance coverage. The effect is identified by a policy in 1990 that increased the generosity of Social Security’s disabled-widow program. Using data from the Current Population Survey, the results suggest that, in this context, disability benefits led to a one-to-one decline in labor force participation, employment, and private insurance coverage. The results imply that the demand for disability benefits may not reflect a latent demand for public health insurance. Key Words: disability insurance, health insurance, labor force participation, Social Security, widows JEL No. H55, J20 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:148&r=lab |
| By: | Marcus Hagedorn; Tzuo Hann Law; Iourii Manovskii |
| Abstract: | Does the market allocate the right workers to the right jobs? Since observable (to economists) variables account for only a small fraction of the wage variance in the data, to answer this question it is essential to study assortative matching between employers and employees based on their unobserved characteristics. This paper enables this line of research. We show theoretically that all parameters of the classic model of sorting based on absolute advantage in Becker (1973) with search frictions can be identified using only matched employer-employee data on wages and labor market transitions. In particular, these data are sufficient to assess whether matching between workers and firms is assortative, whether sorting is positive or negative, and to measure the potential effect on output from moving any given worker to any given employer in the economy. We provide computational algorithms that implement our identification strategy given the limitations of the available data sets. Finally, we extend our identification and implementation strategies to the commonly used class of models of sorting based on comparative advantage and provide a test that discriminates between these models. |
| JEL: | C63 C78 E24 J31 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18661&r=lab |
| By: | Tocco, Barbara; Davidova, Sophia; Bailey, Alastair |
| Abstract: | This paper explores the process of structural change in the post-transition Romania. A multinomial logit provides the technique to investigate the determinants of labour adjustments in the period 2003-06.The results suggest that male, younger and better educated individuals are more likely to leave agriculture and flow to industry and services, whereas self-employed farmers and family workers are less inclined to leave the agricultural sector. The findings are important from a policy point of view, suggesting the need for investments in human capital specifically in education with the purpose of enhancing the mobility of labour and facilitating a more efficient labour allocation. At the same time favourable labour market conditions need to be in place to sustain job creation and a smooth transition across activities. |
| Keywords: | labour adjustments, inter-sectoral movements, agriculture, multinomial logit, Romania, Labor and Human Capital, J24, J43, J62, O13, Q12, |
| Date: | 2012–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa132:139503&r=lab |
| By: | Raquel Carrasco (Department of Economics, Universidad Carlos III de Madrid); J. Ignacio García Pérez (Department of Economics, Universidad Pablo de Olavide) |
| Abstract: | This paper studies how unemployment and employment durations for immigrants and natives respond differently to changes in the economic conditions due to the 2008 crisis and to the receipt of unemployment benefits when the economy declines. Using administrative data for Spain, we estimate multi-state multi-spell duration models that disentangle unobserved heterogeneity from true duration dependence. Our findings suggest that immigrants are more sensitive to changes in economic conditions, both in terms of unemployment and employment hazards. Moreover, the effect of the business cycle is not constant but decreases with duration at a higher rate among immigrants. The results also point to a disincentive effect of unemployment benefits on unemployment duration, which is stronger for immigrants but only at the beginning of the unemployment spell and mainly during good times (before the 2008 recession). Finally, we find evidence of a positive effect of unemployment benefits on subsequent employment duration, but only for native workers with temporary contracts. Nonetheless, this effect vanishes as workers qualify again for unemployment benefits. |
| Keywords: | Duration models; Multiple spells; Unobserved heterogeneity; Unemployment Benefits; Economic cycle; Immigration. |
| JEL: | J64 J61 C23 C41 J65 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:12.13&r=lab |
| By: | Andrew L. Dabaleno (The World Bank); Saumik Paul (Osaka University) |
| Abstract: | In this paper we estimate the causal effects of civil war on years of education in the context of a school-going age cohort who are exposed to armed conflict in Cote d’Ivoire. Using year and department of birth to identify an individual’s exposure to war, the difference-in-difference outcomes indicate that the average years of education for a school-going age cohort is .94 years fewer compared to an older cohort in war-affected regions. To minimize the potential bias in the estimated outcome, we further use a set of victimization indicators to identify the true effect of war. The propensity score matching estimates do not alter the main findings. In addition, the outcomes of double-robust models minimize the specification errors in the model. Moreover, we find the outcomes are robust across alternative matching methods, estimation by using subsamples and other education outcome variables. Overall, the findings across different models suggest a drop in average years of education by a range of .2 to .9 fewer years. |
| Keywords: | war, human capital, education, propensity score matching, evaluation, Africa |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:120&r=lab |
| By: | Marco de Pinto (Institute for Labour Law and Industrial Relations in the EU, University of Trier) |
| Abstract: | Trade liberalization is no Pareto-improvement - there are winners (high-skilled) and losers (low-skilled). To compensate the losers the government is assumed to introduce unemployment benefits (UB). These benefits are financed by either a wage tax, a payroll tax, or a profit tax. Using a Melitz-type model of international trade with unionized labour markets and heterogeneous workers we show that: (i) there is a threshold level of UB where all trade gains are destroyed, (ii) this threshold differs between different kind of taxes, (iii) there is a clearcut ranking in terms of welfare for the chosen funding of the UB: 1. wage tax, 2. profit tax, 3. payroll tax. |
| Keywords: | trade liberalization, heterogeneous firms, trade unions, skill-specific unemployment, unemployment benefits, taxes |
| JEL: | F1 F16 H2 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201204&r=lab |
| By: | Jenny Kragl (Department of Governance &Economics, EBS University für Wirtschaft und Recht Wiesbaden, Germany); Anja Schöttner (Department of Economics, University of Konstanz, Germany) |
| Abstract: | We analyze the effects of wage floors on optimal job design in a moral-hazard model with asymmetric tasks and imperfect aggregate performance measurement. Due to cost advantages of specialization, assigning the tasks to different agents is efficient. A sufficiently high wage floor, however, induces the principal to dismiss one agent or to even exclude tasks from the production process. Imperfect performance measurement always lowers profit under multitasking, but may increase profit under specialization. We further show that variations in the wage floor and the agents' reservation utility have significantly different effects on welfare and optimal job design. |
| Keywords: | Job Design, Limited Liability, Minimum Wage, Moral Hazard, Multitasking, Performance Measurement |
| JEL: | M51 M52 M54 D82 D86 |
| Date: | 2012–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1236&r=lab |
| By: | Eric French; Jae Song |
| Abstract: | This paper estimates the effect of Disability Insurance receipt on labor supply, accounting for the dynamic nature of the application process. Exploiting the effectively random assignment of judges to disability insurance cases, we use instrumental variables to address the fact that those allowed benefits are a selected sample. We find that benefit receipt reduces labor force participation by 26 percentage points three years after a disability determination decision when not considering the dynamic nature of the applications process. OLS estimates are similar to instrumental variables estimates. We also find that over 60% of those denied benefits by an Administrative Law Judge are subsequently allowed benefits within 10 years, showing that most applicants apply, re-apply, and appeal until they get benefits. Next, we estimate a dynamic programming model of optimal labor supply and appeals choices. Consistent with the law, we assume that people cannot work and appeal at the same time. We match labor supply, appeals, and subsequent allowance decisions predicted by the model to the decisions observed in the data. We use the model to predict labor supply responses to benefit denial when there is no option to appeal. We find that if there was no appeals option, those denied benefits are 35 percentage points more likely to work. However, there is considerable heterogeneity in responses. Most individuals in their 40s would return to work if denied benefits, for example. Our results suggest that many of those denied benefits not because they are unable to work, but because they remain out of the labor force in order to appeal their benefit denial. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-2012-12&r=lab |
| By: | Patricia Apps; Jan Kabátek; Ray Rees; Arthur van Soest |
| Abstract: | This paper introduces a static structural model of hours of market labor supply, time spent on child care and other domestic work, and bought in child care for married or cohabiting mothers with pre-school age children. The father's behavior is taken as given. The main goal is to analyze the sensitivity of hours of market work, parental child care, other household production and formal child care to the wage rate, the price of child care, taxes, benefits and child care subsidies. To account for the non-convex nature of the budget sets and, possibly, the household technology, a discrete choice model is used. The model is estimated using the HILDA dataset, a rich household survey of the Australian population, which contains detailed information on time use, child care demands and the corresponding prices. Simulations based on the estimates show that the time allocations of women with pre-school children are highly sensitive to changes in wages and the costs of child care. A policy simulation suggests that labor force participation and hours of market work would increase substantially in a fiscal system based solely on individual rather than joint taxation. |
| Keywords: | Time use, income tax, child care subsidies |
| JEL: | J22 J13 H24 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:auu:dpaper:677&r=lab |
| By: | Haile, Getinet Astatike (University of Nottingham); Bryson, Alex (National Institute of Economic and Social Research (NIESR)); White, Michael (Policy Studies Institute) |
| Abstract: | This paper examines if workplace and co-worker union status affect employee wellbeing. It departs from the standard approach in the literature by employing an innovative approach, which focuses principally on non-union employees. It uses two different measures of wellbeing, offering a richer framework than has been used in much of the literature. Using linked employer-employee data confined to the private sector and employing alternative econometric estimators, the paper finds that being in a union workplace and having union co-workers affect the job satisfaction of non-union employees negatively, lending some support to the sorting hypothesis. No such link is found with respect to affective wellbeing outcomes on the other hand. |
| Keywords: | trade union, well-being, linked employer-employee data, Britain |
| JEL: | J5 J51 J28 J82 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7075&r=lab |
| By: | Thomas Breda; Son Thierry Ly |
| Abstract: | Stereotypes, role models played by teachers and social norms influence girls' academic self-concept and push girls to choose humanities rather than science. Do recruiters reinforce this strong selection by discriminating more against girls in more scientific subjects? Using the entrance exam of a French higher education institution (the Ecole Normale Supérieure) as a natural experiment, we show the opposite: discrimination goes in favor of females in more male-connoted subjects (e.g. math, philosophy) and in favor of males in more female-connoted subjects (e.g. literature, biology), inducing a rebalancing of sex ratios between students recruited for a research career in science and humanities majors. We identify discrimination by systematic differences in students' scores between oral tests (non-blind toward gender) and anonymous written tests (blind toward gender). By making comparisons of these oral/written scores differences between different subjects for a given student, we are able to control both for a student's ability in each subject and for her overall ability at oral exams. The mechanisms likely to drive this positive discrimination toward the minority gender are also discussed. |
| Keywords: | discrimination, gender stereotypes, natural experiment, sex and science |
| JEL: | I23 J16 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:386&r=lab |
| By: | Christian Pfeifer (Leuphana University Lueneburg, Germany) |
| Abstract: | Questions about compensation structures and incentive effects of pay-for-performance components are important for firms' Human Resource Management as well as for economics in general and labor economics in particular. This paper provides scarce insider econometric evidence on the structure and the incentive effects of fixed base salaries, paid bonuses, and agreed bonuses under a Management-by-Objectives (MBO) incentive scheme. Six years of personnel data of 177 managers in a German company are analyzed. The main findings are: (1) base salaries increase significantly with age, whereas bonuses decrease with age; (2) larger agreed bonuses are correlated with fewer absent working days. |
| Keywords: | Absenteeism, Bonus, Effort, Incentives, Insider econometrics, Wages |
| JEL: | J22 J24 J31 J33 M12 M52 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:259&r=lab |
| By: | Greg Kaplan (Department of Economics, Princeton University); Guido Menzio (Department of Economics, University of Pennsylvania) |
| Abstract: | We propose a novel theory of self-fulfilling fluctuations in the labor market. A firm employing an additional worker generates positive externalities on other firms, because employed workers have more income to spend and have less time to shop for low prices than unemployed workers. We quantify these shopping externalities and show that they are sufficiently strong to create strategic complementarities in the employment decisions of different firms and to generate multiple rational expectations equilibria. Equilibria differ with respect to the agents’ (rational) expectations about future unemployment. We show that negative shocks to agents’ expectations lead to fluctuations in vacancies, unemployment, labor productivity and the stock market that closely resemble those observed in the US during the Great Recession. |
| Keywords: | Self-fulfilling fluctuations, strategic complementarity, unemployment |
| JEL: | D11 D21 D43 E32 |
| Date: | 2012–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:12-048&r=lab |
| By: | Maite Blázquez Cuesta; Santiago Budria |
| Abstract: | Using a random effects dynamic panel data model and the 2000-2008 waves of the German SOEP this paper shows that non-cognitive skills have a predictive power on unemployment transitions. |
| Keywords: | non-cognitive skills, dynamic random effects model, unemployment persistence |
| JEL: | C33 J64 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp513&r=lab |
| By: | Pastore, Francesco (University of Naples II); Tyrowicz, Joanna (Warsaw University) |
| Abstract: | This paper aims to study whether the local variation in unemployment rates is related to labour turnover and what is the sign of such relationship. In addition, the paper aims to assess the relative impact of inflow and outflow from unemployment on the dynamics of the local unemployment rate. The empirical analysis is based on a newly available unique dataset from the employment registry of a transition economy (Poland), encompassing nine years of monthly data (from 2000 to 2008) at a county (poviat) level. We find that turnover, as well as inflows and outflows separately, are ceteris paribus positively related to the unemployment level. This general conclusion is robust to sub-sampling that addresses potential heterogeneity of the analysed local labour markets. It is also robust to the use of different panel estimators as well as for spatial clustering of poviats. We also find that elasticity is larger in the case of the inflow rate than for the outflow rate. Finally, we demonstrate that the effect is stronger in low unemployment regions. |
| Keywords: | regional unemployment, labour turnover, panel data, Poland |
| JEL: | C33 J63 P25 P52 R23 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7074&r=lab |
| By: | Pierre André (THEMA, Universite de Cergy-Pontoise and THEMA) |
| Abstract: | This paper investigates the connection between grade repetition and school outcomes. It uses the fact that pupils need to meet class-specific standards to pass to the next grade. It measures the differences in the link between learning achievement and grade repetition between classes with different requirements to pass to the next grade. This double difference identifies the effect of grade repetition. The results show a negative effect of the grade repetition decision on the probability to be enrolled at school the next year, and on the probability to start secondary school. Despite this mechanism, pupils from schools with tough grade repetition policies are on average more likely to be enrolled during the follow-up survey and to start secondary school. These schools do not seem to be located in particularly favorable places for this. This emphasizes that grade repetition policies might have other consequences than affecting repeating pupils. |
| Keywords: | Grade repetition, School demand, School dropouts, Senegal |
| JEL: | D12 I28 O12 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2012-47&r=lab |
| By: | Lixin Cai; Amy Y.C. Liu |
| Abstract: | This study examines the wage differentials along the entire distribution between immigrants and the Australian-born. The results show that the productivity characteristics and the returns to the characteristics reinforce each other for immigrants from English-speaking countries, putting them in a favourable position relative to the native-born. Male immigrants from non-English-speaking (NESC) have little wage difference from their native-born counterparts since their favourable productivity characteristics are offset by disadvantage in the returns to the characteristics. Female immigrants from NESC are advantaged at the upper but disadvantaged at the lower part of the wage distribution relative to their native-born counterparts. Our results suggest that the increasingly skill-based immigration policy in Australia has resulted in increasing skill levels of immigrants relative to the Australian born. However, due to unfavourable rewards to their productivity factors NESC immigrants, especially males, earn less than the Australian born. |
| Keywords: | Immigrants, quantile regression, decomposition |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:een:crwfrp:1212&r=lab |
| By: | Sandra E. Black; Paul J. Devereux; Kjell G. Salvanes |
| Abstract: | Job reallocation is considered to be a key characteristic of well-functioning labor markets, as more productive firms grow and less productive ones contract or close. However, despite its potential benefits for the economy, there are significant costs that are borne by displaced workers. We study how job displacement in Norway affects cardiovascular health using a sample of men and women who are predominantly aged in their early forties. To do so we merge survey data on health and health behaviors with register data on person and firm characteristics. We track the health of displaced and non-displaced workers from 5 years before to 7 years after displacement. We find that job displacement has a negative effect on the health of both men and women. Importantly, much of this effect is driven by an increase in smoking behavior. These results are robust to a variety of specification checks. |
| JEL: | I10 J63 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18660&r=lab |
| By: | Pierre-Carl Michaud; Philip Merrigan; Pierre Lefebvre |
| Abstract: | Using data from three waves of the General Social Survey on retirement and older workers (1994, 2002 and 2007), we document the evolution of retirement patterns over the last three decades. We combined the analysis of retirement ages of actual retirees with data on expected retirement ages of current workers to create a longer perspective on changes in retirement behaviour in Canada. We also investigate trends in work after retirement. Our findings are in line with findings from other countries. There is an upward trend in retirement ages which likely started around year 2000 for cohorts born after 1945. This trend contrasts with the slow decline in retirement ages observed prior to the end of the millennium. While the downward trend was likely due to factors such as the offering of early retirement programs in private firms, the upward trend is likely to be caused by a wider variety of sources, including better health, less pervasive defined benefit pensions and in general less generous pensions. <P> |
| Keywords: | retirement, pensions, Canada, |
| JEL: | J26 |
| Date: | 2012–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2012s-37&r=lab |
| By: | Sarra Ben Yahmed (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS.) |
| Abstract: | International trade has been expected to reduce the gender wage gap by increasing competition and thus reducing the rents that allow employers to discriminate. However, some empirical assessments find an opposite effect. We provide an explanation for the puzzling result that trade openness widens the gender wage gap under certain circumstances. This paper introduces employer taste discrimination in an open economy model with imperfect competition to shed light on the heterogeneous impacts of openness on the gender wage gap. Firms operate in an oligopoly where and prejudiced employers can use their rents to pay men a premium, in line with Becker’s theory. Penetration of foreign products in the domestic market triggers a surge in competition thus heightening incentives to reduce costs differences which reduces the wage gap. However, an easier access to foreign markets is an opportunity for domestic firms to enhance profits. The model determines under which conditions new export opportunities enable discriminatory firms to maintain their discretionary expenditures. The theoretical predictions are confronted with data for Uruguayan manufacturing sectors that experienced a sharp liberalization of trade in the 1990s. Market access of Uruguayan firms as well as competitors’ access to the Uruguayan market, computed at the industry level, are used for the first time to assess the impact of trade openness on the gender wage gap in a specification inspired by the theory. |
| Keywords: | Gender wage gap, Employer taste Discrimination, Trade Openness, Imperfect.Competition. |
| JEL: | F16 J31 J7 L13 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1233&r=lab |
| By: | Robert Dur (Erasmus University Rotterdam); Robin Zoutenbier (Erasmus University Rotterdam) |
| Abstract: | We examine differences in altruism and laziness between public sector employees and private sector employees. Our theoretical model predicts that the likelihood of public sector employment increases with a worker's altruism, and increases or decreases with a worker's laziness depending on his altruism. Using data from the German Socio-Economic Panel Study, we find that public sector employees are significantly more altruistic and lazy than observationally equivalent private sector employees. A series of robustness checks show that these patterns are stronger among higher educated workers; that the sorting of altruistic people to the public sector takes place only within the caring industries; and that the difference in altruism is already present at the start of people's career, while the difference in laziness is only present for employees with sufficiently long work experience. |
| Keywords: | public service motivation; altruism; laziness; sorting; public sector employment; personality characteristics |
| JEL: | H1 J45 M5 |
| Date: | 2012–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20120135&r=lab |
| By: | YAMAMOTO Isamu; MATSUURA Toshiyuki |
| Abstract: | This paper examines how firm practices that could contribute to worker attainment of work-life balance (WLB) affect the total factor productivity (TFP) of a firm, by using panel data of Japanese firms from the 1990s. We observed a positive correlation between the WLB practices and TFP among sampled firms. However, that correlation vanished when we controlled for unobserved firm heterogeneity, and we found no general causal relationship in which WLB practices increase firm TFP in the medium or long run. For firms with the following characteristicsmdash;large, manufacturing, and have exhibited labor hoarding during recessionsmdash;we found positive and sizable effects. Since these firms are likely to incur large fixed employment costs, we infer that firms investing in firm-specific human skills or having large hiring/firing costs can benefit from WLB practices through a decrease in turnover or an increase in recruiting effectiveness. |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:12079&r=lab |
| By: | Anika Jansen (German Federal Institute for Vocational Education and Training (BiBB), Bonn); Mirjam Strupler Leiser (University of Bern, Centre for Research in Economics of Education); Felix Wenzelmann (German Federal Institute for Vocational Education and Training (BiBB), Bonn); Stefan C. Wolter (University of Bern, CESifo & IZA) |
| Abstract: | Labor market frictions are seen in many extensions of the classical human capital theory as a prerequisite for firms financing general training. The labor market reforms in Germany at the beginning of the millennium have therefore been seen by many as a danger to the firms’ willingness to support the apprenticeship training system. This paper analyzes the training strategies German firms deployed to cope with the greater labor market flexibility as a result of the labor market reform. Switzerland where no reforms had taken place serves as the counterfactual. The results show that firms successfully reduced the net-costs of training by involving apprentices in more work and reducing non-productive tasks, like practicing. Contrary to the widespread fear, this adapted training strategy resulted also in a substantial increase in work-related competencies and productivity of apprentices. |
| Keywords: | Apprenticeship training, difference-in-differences matching estimator, cost-benefit, labor market reforms |
| JEL: | C0 I20 J50 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0083&r=lab |
| By: | Lindgren, Karl-Oskar (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | This study examines how workplace size relates to transitions in- and out-of sickness absence. Overall, the study finds important differences in the long-term sickness absence behavior of individuals working in small and large workplaces. In particular, the results show that the sickness spells are of higher incidence, but somewhat shorter duration in large workplaces. However, the results also show that the strength of these relationships varies across different labor market groups. The analysis is based on rich administrative data from Sweden over the period 1994–2008. |
| Keywords: | Sickness absence; workplace size; hazard model |
| JEL: | J22 J23 |
| Date: | 2012–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2012_026&r=lab |
| By: | Oluyemisi Kuku; Orazem, Peter; Sawkut Rojid; Vodopivec, Milan |
| Abstract: | Many developing countries have tried to increase firm provision of training by providing subsidies funded by taxes proportional to the firm’s wage bill. These training funds, however, may backfire if the adverse effect of the tax on training incentives outweighs the positive effects of the subsidy. We show that the value of these training funds depends critically on the extent to which firms are liquidity constrained. If the effective firm discount rate is low, the disincentives outweigh the benefits. Using an administrative dataset on the Mauritius training fund, we show that larger, high-wage and more capital intensive firms are the most likely to offer to training without the subsidy, but that the subsidy creates an increased incentives for small firms to train. As a result, the largest firms pay more in taxes than they gain in subsidies while the smallest firms receive more benefits than they pay in taxes. Consequently, the program shifts net training investments away from the firms that would normally have the greatest return from training and toward smaller firms that would normally have the lowest return from training. It is doubtful that the program actually raises the incidence of training overall. |
| Keywords: | training; General Skills; firm-specific skills; training fund; externality; cross-subsidy; tax |
| JEL: | M53 O15 O2 O55 |
| Date: | 2012–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:35729&r=lab |
| By: | Tor Eriksson |
| Abstract: | A key feature of the Danish labour market is its so-called flexicurity, the coexistence of flexibility (low adjustment costs for both employers and employees) and security (owing to a developed social safety net with high coverage and high replacement ratios). This is often believed to have contributed to the resilience of the Danish labour market and especially to its ability to maintain a low and stable unemployment rate. The aim of this paper is to examine the performance of the flexicurity system and changes therein during the previous three decades, including the first years of the Great Recession. We carry out two types of analyses: at the levels of establishments and employees, respectively. First, we use linked employer-employee data for the private sector to examine how labour demand responds to output shocks by a study of firms’ labour adjustment behaviour during economic upturns and downturns. Second, based on the same data set we examine how the flexicurity system protects workers from income losses associated with job losses due to plant closures or major lay-offs. In particular, we are interested in how the transformation of the flexicurity system since the mid-nineties to increasingly emphasise activation and to reduce maximum unemployment benefit durations has changed employees’ security in case of displacement. We document large worker flows that exhibit strong cyclical variation giving rise to volatile unemployment dynamics. External flexibility of firms has remained unchanged for almost three decades. While we find no clear traces of trend changes in employers’ labour adjustment behaviour, we do find that income losses of displaced workers have declined over time, mainly due to their faster re-employment. Although it is still early days to conclude with certainty, there are so far no strong indications of the reemergence of unemployment hysteresis to the same extent as in previous recessions.<BR>Une des principales caractéristiques du marché du travail danois est définie par ce qu’on appelle la flexicurité, coexistence de flexibilité (faibles coûts d'ajustement pour les employeurs et les employés) et de sécurité (en raison d'un filet de sécurité sociale mis au point avec une couverture élevée et des taux de remplacement élevés). On estime souvent que cela a contribué à la bonne tenue du marché du travail danois et spécialement à sa capacité à maintenir un taux de chômage faible et stable. L’objectif de cet article est d'examiner la performance du système de flexicurité et ses évolutions survenues au cours des trois dernières décennies, y compris les premières années de la Grande Récession. Nous réalisons deux types d'analyses: au niveau des établissements et des salariés, respectivement. Tout d'abord, nous utilisons des données appariées employeurs-salariés pour le secteur privé afin d'examiner la façon dont la demande de travail réagit aux chocs de production en étudiant le comportement des entreprises en termes d’ajustement du facteur travail en période de reprise et de ralentissement économique. En second lieu, sur la base des mêmes données, nous examinons comment le système de flexicurité protège les travailleurs contre des pertes de revenus liées a des pertes d'emplois consécutifs à des fermetures d'entreprises ou des licenciements massifs. En particulier, nous nous intéressons à la façon dont la transformation du système de flexicurité depuis le milieu des années 90, en mettant plus fortement l'accent sur l'activation et en réduisant la durée maximale de versement des prestations de chômage a modifié la sécurité des salariés en cas de suppressions d’emploi. Nous documentons les larges flux de travailleurs présentants de fortes variations au cycle et qui sont à l’origine d’une dynamique volatile du chômage. La flexibilité « externe » des entreprises est restée inchangée depuis près de trois décennies. Bien que nous ne trouvons aucun indice manifeste de changements de tendance dans le comportement des employeurs en termes d’ajustement de la main-d’oeuvre, nous constatons néanmoins que les pertes de revenu des travailleurs victimes de suppressions d’emplois ont diminué au fil du temps, principalement en raison de leur rapide retour à l'emploi. Bien qu'il soit encore trop tôt pour conclure avec certitude, il n’existe à ce jour aucune indication claire de la réémergence de l'hystérésis du chômage de même ampleur que lors des récessions précédentes. DELSA/ELSA |
| Keywords: | hires and separations, earnings losses, flexicurity |
| JEL: | J2 J3 J63 |
| Date: | 2012–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:139-en&r=lab |
| By: | Nicholas Bloom; James Liang; John Roberts; Zhichun Jenny Ying |
| Abstract: | Over 10% of US employees now regularly work from home (WFH), but there is widespread skepticism over its impact highlighted by phrases like "shirking from home". We report the results of a WFH experiment at Ctrip, a 13,000 employee NASDAQ listed Chinese multinational. Call center employees who volunteered to WFH were randomly assigned to work from home or in the office for 9 months. Work from home led to a 13% performance increase, of which about 9.5% is from working more minutes per shift (fewer breaks and sick-days) and 3.5% from more calls per minute (attributed to a quieter working environment). Home workers also reported improved work satisfaction and their job attrition rate fell by 50%. After the experiment, the firm rolled the program out to all employees, letting them choose home or office working. Interestingly, only half of the volunteer group decided to work at home, with the other half changing their minds in favor of office working. After employees were allowed to choose where to work, the performance impact of WFH more than doubled, highlighting the benefits of choice alongside modern management practices like home working. |
| Keywords: | working from home, organization, productivity, field experiment, and China |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:384&r=lab |