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on Labour Economics |
| By: | Wößmann, Ludger; Hanushek, Eric A.; Zhang, Lei |
| Abstract: | Policy debates about the balance of vocational and general education programs focus on the school-to-work transition. But with rapid technological change, gains in youth employment from vocational education may be offset by less adaptability and thus diminished employment later in life. To test our main hypothesis that any relative labor-market advantage of vocational education decreases with age, we employ a difference-in-differences approach that compares employment rates across different ages for people with general and vocational education. Using micro data for 18 countries from the International Adult Literacy Survey, we find strong support for the existence of such a trade-off, which is most pronounced in countries emphasizing apprenticeship programs. Results are robust to accounting for ability patterns and to propensity-score matching. -- |
| JEL: | J24 I20 J64 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62070&r=lab |
| By: | Arntz, Melanie; Gregory, Terry; Lehmer, Florian |
| Abstract: | This paper examines the determinants of gross labour flows in a context where modeling the migration decision as a wage-maximizing process may be inadequate due to regional wage rigidities that result from central wage bargaining. In such a context, the framework that has been developed by Borjas et al. (1992) on the selectivity of internal migrants with respect to skills has to be extended to allow migrants to move to regions that best reward their skills in terms of both wages and employment. The extended framework predicts skilled workers to be disproportionately attracted to regions with higher mean wages and employment rates as well as higher regional wage and employment inequalities. Estimates from a labour flow fixed effects model and a GMM estimator show that these predictions hold, but only the effects for mean employment rates and employment inequality are robust and significant. The paper may thus be able to explain why earlier attempts to explain skill selectivity in Europe within a pure wage-based approach failed to replicate the US results. -- |
| JEL: | R23 J31 J61 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62309&r=lab |
| By: | Haefke, Christian; Reiter, Michael |
| Abstract: | In this paper we use information on the cyclical variation of labor market participation to learn about the aggregate labor supply elasticity. For this purpose, we extend the standard labor market matching model to allow for endogenous participation. A model that is calibrated to replicate the variability of unemployment and participation, and the negative correlation of unemployment and GDP, implies an aggregate labor supply elasticity along the extensive margin of around 0.3 for men and 0.5 for women. This is in line with recent micro-econometric estimates. -- |
| JEL: | E24 E32 J21 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62055&r=lab |
| By: | Saniter, Nils |
| Abstract: | In this paper I investigate the causal returns to education for different educational groups in Germany. I circumvent potential drawbacks of IV by employing a new method by Klein and Vella (2010). In this approach identification is not based on instruments but on the presence of heteroskedasticity. Using data from the German Socio-Economic Panel Study (SOEP) I find that the causal return to education is 8.5% for the entire sample, 2% for graduates from the basic school track and 11% for graduates from a higher school track. Across these groups the endogeneity bias in simple OLS regressions varies significantly. This confirms recent evidence in the literature on Germany. Various robustness checks support my findings. -- |
| JEL: | C30 I21 J31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62050&r=lab |
| By: | Müller, Kai-Uwe |
| Abstract: | On the basis of a structural labor demand model employment effects of a minimum wage are estimated from a single cross-sectional wage distribution. The main contribution of the paper is to relax restrictive functional form assumptions of earlier papers by introducing more flexible semi-parametric censored quantile regressions to this framework. We apply the model to the sectoral minimum wage in the German construction sector. It can be shown that the semi-parametric estimates are within a plausible range: employment levels would be 4-5% higher without the minimum wage in the East where the minimum was binding. The effect for West Germany is markedly smaller, since the minimum wage level was lower in relation to the wage distribution. This semi-parametrically estimated structural approach can be a useful alternative to more popular panel data or difference-in-difference models when the necessary institutional variation or data base is either not available, or the necessary assumptions are problematic. -- |
| JEL: | J23 J31 J38 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62019&r=lab |
| By: | Göbel, Kristin |
| Abstract: | This study examines the role of migrant's remittances on labor supply in remittance receiving households. A simple labor choice model is developed which is extended to include self-employment. Unlike earlier studies, fixed effects estimations as well as an instrumental approach are applied. Estimates are provided for both participation and hours. Strong evidence is provided that remittances increase self-employment at the extensive margin for women. Overall, no robust effect of reduced labor supply in response to remittances is found. -- |
| JEL: | O15 J22 F24 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:65409&r=lab |
| By: | Jahn, Elke; Hirsch, Boris |
| Abstract: | This paper investigates immigrants and natives labour supply to the firm within a semi-structural approach based on a dynamic monopsony framework. Applying duration models to a large administrative employer employee data set for Germany, we find that once accounting for unobserved worker heterogeneity immigrants supply labour less elastically to firms than natives. Under monopsonistic wage setting the estimated elasticity differential predicts a 4.6 log points wage penalty for immigrants thereby accounting for almost the entire unexplained native immigrant wage differential of 2.9 5.9 log points. Our results imply that discriminating against immigrants is profitable rather than costly. -- |
| JEL: | J42 J61 J71 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:65417&r=lab |
| By: | Möller, Joachim; König, Marion |
| Abstract: | We use a 100% sample of social security panel micro data for estimating the effects of a minimum wage in the German construction sector. In 1997, a wage floor was introduced at different rates in West and East Germany. For analysing the impact of this natural experiment we conceptually follow a difference-in-differences approach. Since there is only qualitative information on working hours in the data, we propose a probabilistic method for identifying the treatment and control group. The effect of the minimum wage is investigated for wage growth and employment, the latter both from a labor demand and a labor supply perspective. According to our results, there are signi cant positive effects of the minimum wage on wage growth in both parts of the country. Although being lower in absolute terms, the bite of the minimum wage, however, is markedly higher in the East. The employment effects of the wage floor turn out to be different in both parts of the country. The minimum wage effect on the employment retention probability is negative and statistically highly significant in the East and positive, but statistically not significant in the West. When it comes to the inflow of workers into the sector we find a positive and statistically significant effect of the minimum wage in East Germany, but an insignifcant effect for West Germany. The highly differentiated results for the two parts of the country point to nonlinearities in the impact of a minimum wage. Rather than supporting clear-cut effects as in the pure neoclassical approach, our analysis tends to corroborate the relevance of market imperfections like the existence of monopsony power in the market. -- |
| JEL: | J08 J42 J31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62064&r=lab |
| By: | de Pinto, Marco |
| 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) UB financed by a wage tax reduce aggregate employment but increase welfare measured by per capita output. (ii) UB financed by a payroll tax reduce aggregate employment and welfare. If UB exceeds a well-defined threshold, the trade gains will be completely destroyed. (iii) UB financed by a profit tax reduce the unemployment rate of the low-skilled, but also reduces welfare. The threshold for the level of UB, where the trade gains are destroyed by the redistribution scheme, is higher compared to the case of a payroll tax. -- |
| JEL: | F10 F16 H20 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:66059&r=lab |
| By: | Cygan-Rehm, Kamila; Mäder, Miriam |
| Abstract: | This study analyzes the effect of education on the number of children, childlessness, and the timing of the first birth. We use exogenous variation from a mandatory reform to compulsory schooling in West Germany to deal with the endogeneity of schooling. In contrast to studies for other developed countries, we find a significant negative effect of education on completed fertility. We attribute this finding to the particularly high opportunity costs of child-rearing in Germany. -- |
| JEL: | I21 J13 J24 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62037&r=lab |
| By: | Kässi, Otto |
| Abstract: | This paper studies the causal effect of education on income uncertainty using a broad measure of income which encompasses unemployment risk. To accomplish this, the variance of residuals from a Mincer-type income regression is decomposed into unobserved heterogeneity (known to the individual when making their educational choices) and uncertainty (unknown to the individual). The estimation is done using Finnish registry data. The marginal effect of having a secondary or a lower tertiary level education decreases income uncertainty. University level education is found to have a small positive marginal effect on income uncertainty. The effect of education on income uncertainty is roughly similar for men in comparison to women, but income uncertainty is larger for men than for women regardless of education. Contrary to some results from the U.S., the role of unobserved heterogeneity is found to be very small. |
| Keywords: | earnings uncertainty; unobserved heterogeneity; permanent earnings uncertainty; transitory shocks |
| JEL: | J31 C35 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43503&r=lab |
| By: | Baranov, Igor N. |
| Abstract: | In this paper we examine determinants of the quality of secondary education for making informed policy decisions at the levels of student / family, school, country's education system institutions and macroeconomic indicators. The quality of education is estimated by the outcomes of the latest round of PISA from 2009 on mathematics and science skills of 15-year old students from 67 countries. After regression analysis for the pool of countries, we estimate the same determinants for Russia in order to reveal in what way the Russian secondary education system is different from other countries, with a special attention paid to possible explanation of a surprisingly different performance of Russian students on TIMSS and PISA tests. We conclude with the discussion of the limitations of analysis based on international tests and possible policy issues related to the factors of quality of secondary education in Russia. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:sps:wpaper:538&r=lab |
| By: | Lang, Julia |
| Abstract: | This paper reports the effects of training participation on wages and perceived job security for employees of different ages. Based on data from the German Socio-Economic Panel, results indicate that only younger workers benefit from training by an increase in wages, whereas older employees worries about losing their job are reduced. This observation can also be explained by the fact that goals of training courses are related to the age of participants. Moreover, I differentiate between workers who permanently and only occasionally participate in training. The results indicate that there seem to be decreasing marginal returns to training with respect to job security. -- |
| JEL: | J24 J28 J31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62073&r=lab |
| By: | Pedro Abrantes; Manuel Abrantes |
| Abstract: | Education is reasonably expected to enhance intergenerational social mobility. However, the extent to which educational systems foster or otherwise constrain social mobility remains controversial. In this paper, data from the European Social Survey covering 22 countries is analysed in order to assess social mobility in the second half of the 20th Century. Variation across five cohesive regional clusters is examined in detail. Results confirm increasing rates of social mobility in Europe and their close relation to massive structural shifts. The erosion of the education-occupation linkage presents a current threat to this trend. Considering formal credentials only, the most equalitarian educational systems are to be found in the United Kingdom and Ireland, but their ability to allocate individuals in the occupational structure is lower than in the other regions. Scandinavian systems show higher chances of social mobility through education, while Mediterranean systems present lower fluidity rates in both the background-education link (like Eastern European countries) and the education-occupation link (like the UK & Ireland). Gender and migration are identified as key factors to explain these differences. |
| Keywords: | education, educational systems, gender, migration, social mobility |
| JEL: | I24 J21 J70 Y10 Z13 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:soc:wpaper:wp012012&r=lab |
| By: | Hartmann, Bastian; Hancioglu, Mine |
| Abstract: | To explore single mothers labor market participation we analyze specific circumstances and dynamics in their life courses. We focus on the question which individual and institutional factors determine both professional advancement and professional descent. Due to dynamics in women s life course identifying and analyzing restrictions and interruptions of employment requires a longitudinal research design. The German Socio-Economic Panel (1984-2009) provides all necessary information identifying episodes of single motherhood and employment during life courses. Since family statuses of single mothers are partially endogenous and can end in multiple ways, we use semi-parametric survival models. Competing risks estimations offer a detailed view by analyzing single mothers transition from non-employment to full-time or part-time work and vice versa simultaneously. Estimates show that occupational careers of single mothers are influenced by both individual factors and institutional circumstances. Whereas specific problems occur shortly after becoming a single mother, these problems seem to be dealt with over time. Enhancing labor market participation or maintaining full-time employment as a single mother can be achieved when certain challenges are met such as appointed and reliable working hours. Single mothers that do not have to rely on public childcare arrangements, but are capable of finding individual solutions are more likely to balance work and family life. Among institutional determinants welfare benefits have a negative effect on the market labor participation of women in low-paid jobs. -- |
| JEL: | C23 C14 J22 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62059&r=lab |
| By: | Hohenleitner, Ingrid; Hillmann, Katja |
| Abstract: | In course of the ''Hartz IV'' reform implementation in January 2005, Germany has tightened unemployment benefit sanctions. In addition, the regulations with respect to job offer acceptance have been strengthened radically. As non-compliant behavior is supposed to entail benefit sanctions, we suspect that in particular sanctioned unemployed tend to make more concessions on the job conditions they are willing to accept, and hence enter employment more quickly. Moreover, we expect that sanctioned persons could otherwise tend to exit from labor market more quickly. In our analysis we examine the impact of sanctions on the probability of reemployment or leaving the labor force. Employing a mixed proportional hazard model enables us to draw causal inference of sanction enforcment on the unemployment exit hazard. Based on a survey sample covering the years 2005-2007, we find evidence for a positive impact of sanctions on reemployment, whereas the effect on leaving the labor market also turns out to be positive. -- |
| JEL: | J64 J68 I38 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:66055&r=lab |
| By: | Krieger, Tim; Brockhoff, Sarah; Meierrieks, Daniel |
| Abstract: | This contribution investigates the role of education in domestic terrorism for 133 countries between 1984 and 2007. The findings point at a nontrivial effect of education on terrorism. Lower education (primary education) tends to promote terrorism in a cluster of countries where the socioeconomic, political and demographic conditions are unfavorable, while higher education (university education) reduces terrorism in a cluster of countries where conditions are more favorable. This suggests that country-specific circumstances mediate the effect of education on the (opportunity) costs and benefits of terrorism. For instance, the prevalence of poor structural conditions in combination with advances in education may explain past and present waves of terrorism and political instability in the Middle East. The results of this study imply that promoting education needs to be accompanied by sound structural change so that it can positively interact with (individual and social) development, thereby reducing terrorism. -- |
| JEL: | D74 I21 I29 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62083&r=lab |
| By: | Luisito Bertinelli (University of Luxembourg CREA); Olivier Cardi (University Pantheon-Assas ERMES and Ecole Polytechnique); Partha Sen (Delhi School of Economics) |
| Abstract: | In a dynamic general equilibrium model with endogenous markups and labor market frictions, we investigate the effects of increased product market competition. Unlike most macroeconomic models of search, we endogenize the labor supply along the extensive mar- gin. We find numerically that a model with endogenous labor force participation decision produces a decline in the unemployment rate which is almost three times larger than that in a model with fixed labor force. For a calibration capturing alternatively European and the U.S. labor markets, a deregulation episode, which lowers the markup by 3 percent- age points, results in a fall in the unemployment rate by 0.17 and 0.07 percentage point, respectively, while the labor share is almost unaffected in the long-run. The sensitivity analysis reveals that product market deregulation is more effective in countries where labor market regulation is high, product markets are initially highly regulated, unemployment benefits are smaller and labor force is more responsive. |
| Keywords: | Imperfect competition; Endogenous markup; Search theory; Unemployment; Deregulation |
| JEL: | E24 J63 L16 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:12-04&r=lab |
| By: | Nicola Pavoni; Ofer Setty; Giovanni L. Violante |
| Abstract: | Some existing welfare programs (“work-first”) require participants to work in exchange for benefits. Others (“job search-first”) emphasize private job-search and provide assistance in finding and retaining a durable employment. This paper studies the optimal design of welfare programs when (i) the principal/government is unable to observe the agent’s effort, but can assist the agent’s job search and can mandate the agent to work, and (ii) agents’ skills depreciate during unemployment. In the optimal welfare program, assisted search is implemented between an initial spell of private search (unemployment insurance) and a final spell of pure income support where search effort is not elicited. To be effective, job-search assistance requires large reemployment subsidies. The optimal program features compulsory work activities for low levels of program’s generosity (i.e., its promised utility or available budget). The threat of mandatory work acts like a punishment that facilitates the provision of search incentives without compromising consumption smoothing too much. |
| JEL: | D82 H21 J24 J64 J65 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18666&r=lab |
| By: | Wrede, Matthias |
| Abstract: | Combining a spatial equilibrium model with a matching unemployment model, this paper analyzes the regional quality of life when wages, rents, and unemployment risk compensate for local amenities and disamenities. In particular, the paper shows for quasi-linear utility that the effects of any amenity on wages and unemployment rates are of opposite sign. Additionally, the wage rate and the labor market tightness increase and the unemployment ratio decreases in reaction to an increase in the level of an amenity if the amenity is marginally more beneficial to producers than to consumers per unit of land. Based on the model, quality of life of the unemployed in West German counties is estimated. -- |
| JEL: | R12 H73 R14 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62034&r=lab |
| By: | Kübler, Dorothea; Braun, Sebastian; Dwenger, Nadja; Westkamp, Alexander |
| Abstract: | Quotas for special groups of students often apply in school or university admission procedures. This paper studies the performance of two mechanisms to implement such quotas in a lab experiment. The fi rst mechanism is a simplifi ed version of the mechanism currently employed by the German central clearinghouse for university admissions, which first allocates seats in the quota for top-grade students before allocating all other seats among remaining applicants. The second is a modifi ed version of the student-proposing deferred acceptance (SDA) algorithm, which simultaneously allocates seats in all quotas. Our main result is that the current procedure, designed to give top-grade students an advantage, actually harms them, as students often fail to grasp the strategic issues involved. The modi ed SDA algorithm signifi cantly improves the matching for top-grade students and could thus be a valuable tool for redesigning university admissions in Germany. -- |
| JEL: | C78 C92 I20 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62048&r=lab |
| By: | Sánchez-Romero, Miguel; Sambt, Jože; Prskawetz, Alexia |
| Abstract: | This paper investigates the role of recent pension reforms for the development of the social security system and economic growth in Austria. We use a computable general equilibrium model that is built up of overlapping generations that differ by their household structure, longevity, educational attainment, and capital accumulation. Each household optimally decides over its consumption paths, work effort, and retirement age according to the life-cycle theory of labor, while they face survival risk. We find that the pension reforms implemented from 2000 to 2004, although in the correct direction, are not sufficient to solve the labor market distortion caused by the Austrian PAYG pension system. Using alternative policy options, our simulations indicate that a change to a notional defined contribution system and an increase in the educational distribution of the work force would increase the incentive for later retirement ages and thereby increase labor supply and economic growth. -- |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuweco:042012&r=lab |
| By: | Vincent Fromentin (CERFIGE, Université de Lorraine and CREA, University of Luxembourg) |
| Abstract: | This paper examines whether or not immigration has a positive influence on the duration of unemployment, in a macroeconomic perspective. The integration of immigrants into the labor market is a recurrent topic in literature on the economic consequences of immigration, and it is a central concern to policy makers aiming to design policies. However, to our knowledge, few researchers have studied the impact of immigration on the duration of unemployment. By using panel estimations (OLS and GMM), we show that migration seems to influence short– term unemployment positively and long-term unemployment negatively, for 14 OECD destination countries between 1975 and 2008. |
| Keywords: | International migration, unemployment duration, OECD countries, panel data |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:12-02&r=lab |
| By: | Lüthen, Holger; Bönke, Timm; Corneo, Giacomo |
| Abstract: | This paper documents the magnitude, pattern, and evolution of lifetime earnings inequality in Germany. Based on a large sample of earning biographies from social security records, we show that the intra-generational distribution of lifetime earnings of male workers has a Gini coefficient around .2 for cohorts born in the late 1930s and early 1940s; this amounts to about 2/3 of the value of the Gini coefficient of annual earnings. Within cohorts, mobility in the distribution of yearly earnings is substantial at the beginning of the lifecycle, decreases afterwards and virtually vanishes after age forty. Earnings data for thirty-one cohorts reveals striking evidence of a secular rise of intra-generational inequality in lifetime earnings: West-German men born in the early 1960s are likely to experience about 80 % more lifetime inequality than their fathers. In contrast, both short-term and long-term intra-generational mobility have been rather stable. Longer unemployment spells of workers at the bottom of the distribution of younger cohorts contribute to explain 30 to 40 % of the overall increase in lifetime earnings inequality. -- |
| JEL: | D31 D33 H24 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62074&r=lab |
| By: | Basten, Christoph; Fagereng, Andreas; Telle, Kjetil |
| Abstract: | We identify the causal effect of lump-sum severance payments on non-employment duration in Norway by exploiting a discontinuity in eligibility at age 50. We find that a severance payment worth 1.2 months' earnings at the median lowers the fraction re-employed after a year by six percentage points. Data on household wealth enable us to verify that the effect is decreasing in prior wealth, which favors an interpretation as liquidity constraints over the alternative of mental accounting. Finding liquidity constraints in Norway, despite its equitable wealth distribution and generous welfare state, means they are likely to exist also in other countries. -- |
| JEL: | C41 E24 J65 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62085&r=lab |
| By: | Goldbach, Stefan |
| Abstract: | Policy makers are interested in fostering economic growth and employment. Therefore, it is important to know how to boost innovation in an effective way. This paper investigates whether entrepreneurs with technical education are more innovative in high-tech industries than economists. The main contribution to the literature is in using the type of education as main explanatory variable for innovation. To analyze this question, the KfW/ZEW Start-Up Panel between 2005 and 2007 is used. Two independent OLS regressions are conducted for entrepreneurs with university degree and practical education. The results suggest that education matters for individuals with a university degree in high-tech industries but not for people with practical education. Having an economics degree is correlated with higher innovativeness. Therefore, for the underlying sample we do not find a nerd effect . -- |
| JEL: | A20 L26 I21 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62307&r=lab |
| By: | Matthias S. Hertweck; Oliver Sigrist (University of Basel) |
| Keywords: | SOEP gross worker flows, Hartz reform, matching efficiency, unemployment fluctuations |
| JEL: | E24 E32 J63 J64 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2013/01&r=lab |
| By: | Warnke, Arne Jonas; Ederer, Peer; Schuller, Philipp |
| Abstract: | The authors investigate on the basis of primary and secondary data the relationship between individual cognitive skills and the complexity of the particular work those individuals perform. Additionally, the relationship between skills and mobility between more or less complex jobs in an highly homogenous industrial environment is analyzed. The primary data consists of a survey conducted in 2011 of anonymously tested 305 participants in selected factories of four different companies. The survey consists of a newly developed dynamic problem solving test and a standard general intelligence test. Skill measurement is supplemented by information about tasks and personal background. Results are compared to larger scale secondary data sources. Special focus is placed on different employment groups within a company: assemblers, craftsmen, technicians and engineers. Using this data, we can show that non-routine content of individual work is strongly related to cognitive skills. Also, higher cognitive skill levels predict upward occupational mobility. Finally, we demonstrate that the established task-based approach helps to explain why the occupational mobility between some occupational groups is lower than between others. These findings can be useful for the discovery of opportunities for occupational upward mobility in a homogenous environment. -- |
| JEL: | J24 J62 J60 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62026&r=lab |
| By: | Wielandt, Hanna; Senftleben, Charlotte |
| Abstract: | This paper uses the task-based view of technological change to study employment and wage polarization at the level of local labor markets in Germany between 1979 and 2007. In order to directly relate technological change to subsequent employment trends, we exploit variation in the regional task structure which reflects a region s potential of being affected by computerization. We build a measure of regional routine intensity to test whether there has been a reallocation from routine towards non-routine labor conditional on a region s initial computerization potential. We find that routine intensive regions have witnessed a differential reallocation towards non-routine employment and an increase in low- and medium-skilled service occupations. Our results corroborate the predictions of the task-based framework and confirm previous evidence on employment polarization in Germany in the sense that employment growth deteriorates at the middle of the skill distribution relative to the lower and the upper tail of the distribution. -- |
| JEL: | R23 J24 J62 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62063&r=lab |
| By: | Aretz, Bodo; Gürtzgen, Nicole |
| 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. To explore whether the observed rise in persistence is accounted for by an increase in "genuine" state dependence or by compositional shifts of the low-wage sector, we model low-pay transitions by estimating a series of multivariate probit models. To address the initial conditions problem and the endogeneity of earnings attrition, our estimation approach accounts for the selection into low-wage employment and earnings retention. Using the estimates from the transition model, we determine the evolution of genuine state dependence which is defi ned as the average diff erence in low-pay transition probabilities conditional on being initially low and high paid, respectively. For men, our findings strongly argue against an upward trend of genuine state dependence, as the latter exhibits a fairly stationary development. This contrasts with women, whose evolution of genuine state dependence displays a slight upward trend. -- |
| JEL: | C23 J31 L13 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62049&r=lab |
| By: | Antonio Di Paolo (AQR – IREA, University of Barcelona, Avda Diagonal, 690, 08034 Barcelona) |
| Abstract: | Drawing on data from two successive cohorts of PhD graduates, this paper analyses differences in overall job satisfaction and specific job domain satisfaction among PhDs employed in different sectors four years after completing their doctorate degrees. Covariate-adjusted job satisfaction differentials suggest that, compared to faculty members, PhD holders employed outside traditional academic and research jobs are more satisfied with the pecuniary facets of their work (principally, because of higher earnings), but significantly less satisfied with the content of their job and with how well the job matches their skills (and, in the case of public sector workers, with their prospects of promotion). The evidence regarding the overall job satisfaction of the PhD holders indicates that working in the public or private sectors is associated with less work well-being, which cannot be fully compensated by the better pecuniary facets of the job. It also appears that being employed in academia or in research centres provides almost the same perceived degree of satisfaction with the job and with its four specific domains. We also take into account the endogenous sorting of PhD holders into different occupations based on latent personal traits that might be related to job satisfaction. The selectivity-corrected job satisfaction differentials reveal the importance of self-selection based on unobservable traits, and confirm the existence of a certain penalisation for working in occupations other than academia or research, which is especially marked in the case of satisfaction with job content and job-skills match. The paper presents additional interesting evidence about the determinants of occupational choice among PhD holders, highlighting the relevance of certain academic attributes (especially PhD funding and pre-and-post-doc research mobility) in affecting the likelihood of being employed in academia, in a research centre or in other public or private sector job four years after completing their doctorate programme. |
| Keywords: | Job Satisfaction, Job Domain Satisfaction, Occupational Choices, Self-Selection, PhD Holders, Catalonia |
| JEL: | J24 J28 J45 C31 C35 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2012-21&r=lab |
| By: | Lucht, Michael; Haas, Anette |
| Abstract: | Economic debate about the consequences of immigration in Germany has largely focused on the wage effects for natives at an aggregate level. Especially the role of imperfect substitutability of migrants and natives gained importance. A new micro oriented approach is to focus on the firm level by estimating production functions in an equilibrium framework to gain more detailed information including firm heterogeneity. Another branch of recent literature emphasizes the role of task dimension of occupations additionally to the qualification of workers: migrants work in different jobs than natives do and are concentrated in agglomerations. The task approach is thus a key to understand imperfect substitution on the firm level. Our contribution in this article is manifold: we examine the effects of the relative (dis-)advantages in performing certain tasks and their implications on the labor market outcomes. Using this framework we construct a general equilibrium model with monopolistic competition a la Dixit-Stiglitz considering heterogeneous firms with different productivity levels and two types of jobs for migrants and natives. Firms differ in the ability to employ migrants which gives rise to wage differences between natives and migrants. Therefore firms with a higher share of migrants realize wage cost advantages. In the long run equilibrium only those firms survive in the market which are highly productive or are able to compensate their lower productivity level by wage cost advantages. We show that a higher migrant share is able to explain the increase of productivity. Further, the heterogeneous distribution of migrants in our model is the source of regional disparities. Thus part of the agglomeration advantages can be explained by the empirical stable observation that migrants tend to move to cities. The conclusions of the model are in line with three empirical facts in Germany. Firstly, the average productivity of firms is higher in cities. Secondly, the wage difference between migrants and natives in a region is increasing in the share of migrants in that region. Thirdly, less productive firms are more likely to employ a higher share of migrants, as wage advantages and productivity acts as a substitute. keywords: immigration, firm heterogeneity, skills, tasks, regional labor markets JEL: R23, J15, J24, J61 -- |
| JEL: | R23 J15 J63 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62053&r=lab |
| By: | Fidrmuc, Jarko; Senaj, Matus |
| Abstract: | This paper focuses on human capital and physical capital of households in Slovakia during the economic reforms of the last two decades. We compare households who entered the labor market before and after the economic reforms in 1990. On the one hand, we study the returns to education by different labor market cohorts using household consumption surveys. On the other hand, we analyze the determinants of housing wealth and its impact on consumption. We show that old cohorts are characterized by lower returns to human capital and consumption levels, but higher housing wealth. Thus, we do not identify a clear pattern of winners and losers from transition. -- |
| JEL: | D12 J24 C31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62058&r=lab |
| By: | Drepper, Bettina; Effraimidis, Georgios |
| Abstract: | We introduce a dynamic treatment to the mixed proportional hazard competing risks model and allow for selection on unobservables. Our model can e.g. be used to evaluate the effect of benefit sanctions on the transition rate out of unemployment when more than one exit risk is of interest. Imposing a benefit sanction will influence the transition rate to employment. However, the sanction can also affect the decision of an individual to exit the labor force. The latter effect is often ignored in empirical work. In this paper we present a general model which allows to identify different effects of a treatment such as a sanction on several competing exit risks such as 'finding work' vs. 'exit the labor force'. Our approach exploits the timing at which the individual enters into treatment by adding the hazard rate of the duration to treatment as an additional equation to the competing risks model. We present a new identification result of this model for single-spell duration data. Furthermore, we intend to include an empirical application in this paper to illustrate the estimation procedure. -- |
| JEL: | C41 C31 J64 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:66060&r=lab |
| By: | Wolff, Joachim; Nivorozhkin, Anton |
| Abstract: | In Germany, due to special rules 15- to 24-year-old welfare recipients, registered with Public Employment Office, are highly targeted by mandatory activation policies. This paper investigates the effects of the special rules in terms of enhancing the (re-)employment probability, increasing earnings and reducing benefit dependency of targeted people in East and West Germany in the short- and the long-run. Using registry dataset of the inflow into unemployment and welfare over the period October 2005 to January 2006 the paper exploits the age related eligibility rule to identify a suitable counterfactual using a regression discontinuity design. Our estimates imply zero or negative effects of targeting for selected population subgroups. A possible explanation to our finding is that an excessive targeting of young welfare recipients by active labour market programmes may lead to a low quality matches between programmes and participants. -- |
| JEL: | C13 I38 J68 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62046&r=lab |
| By: | Van Leeuwen, Bas; van Leeuwen-Li, Jieli; Foldvari, Peter |
| Abstract: | In this paper, we address the issue of how education affected income inequality in twentieth-century Africa. Three channels are identified through which education may affect income inequality. First, an increase in the average educational level is correlated with an increase in average income, which, ceteris paribus, reduces inequality. Second, a reduction in educational inequality may, given a positive correlation between education level and income, reduce income inequality. Thirdly, an increase in the supply of education may decrease the price of skilled labour thus lowering income inequality. We find that in the long-run education does not affect income growth, indicating that in twentieth-century Africa it was inspiration (i.e., Total Factor Productivity [TFP]) rather than perspiration (i.e., education and physical capital) that drove economic development. Testing for the effects of the remaining two channels, we found a significant non-linear relationship between educational and income inequality suggesting that, contrary to the level of education, these two channels were important in determining income inequality in Africa. Taking an example from the end of the twentieth century, if educational equality had been eliminated, then income inequality would decline by no less than 81%. |
| Keywords: | Africa; education; history; inequality; economic growth |
| JEL: | N1 O55 D6 N3 N17 |
| Date: | 2012–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43574&r=lab |
| By: | Mohamad Fahmi (Department of Economics, Padjadjaran University); Achmad maulana (Department of Economics, Padjadjaran University); Arief Anshory Yusuf (Department of Economics, Padjadjaran University) |
| Abstract: | We see a weakness of the merit-based government scholarship program for students from poor families, Bidik Misi, as most of them fail to meet the minimum academic requirement. This paper provide a policy simulation that compares two programs, private tutoring voucher (PTV) and conditional cash transfer (CCT), to complement the Bidik Misi scholarship to boost the number of poor students to get the support. To this end, we offer a policy targeted for second and third year high school students at public schools. The data sources that we used in this study are the Indonesia Family Life Survey (IFLS), the Indonesia Social and Economic Survey (SUSENAS), and some primary data. To choose the best alternatives, we compare the cost effectiveness of both program and we find that the cost effectiveness per student in private tutoring voucher (PTV) is lower than conditional cash transfer program. The PTV program is also more convincing than CCT as PTV could directly influence the quality of instruction. We also check the robustness of the scenario using two one way sensitivity analyses. The sensitivity analyses support our finding that PTV program has more cost effective than the CCT. |
| Keywords: | Policy simulation, Cost Effectiveness Analysis, Sensitivity Analysis, Private Tutoring Voucher, Conditional Cash Transfer |
| JEL: | I24 I28 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:unp:wpaper:201301&r=lab |
| By: | Xu, Yi; Foldvari, Peter; Van Leeuwen, Bas |
| Abstract: | The traditional education system in Qing China has been widely debated over the past decades. Some have argued it was efficient and furthered economic growth, while others have stressed its inefficient nature, which led to the introduction of the modern education system in the closing decades of the 19th century, followed by its total collapse in 1905. In this paper we make a first try to quantify above debate. Starting from the observation that below the well-known civil examination system there existed a whole system of popular and vocational education, we find that years of education in the population were still lower than in many European countries. More interestingly, whereas in European countries years of education increased strongly in the 19th century, our estimates of average years of education and the ABCC indices show that the level of education remained stable well into the 1920s when it accelerated. However, the main rise only occurred during the late 20th century. This finding leads to an interesting question since per capita income only started to grow significantly since the 1950s. This means that the rise of education since the mid-1920s was not as such driven by per capita income. Apparently this was the same for both the traditional and modern education since the latter had already started to transform Chinese education from the 1890s onwards. Hence, we have to look at the question why persons decided to follow education, i.e. was it individually profitable to follow education (positive private returns)? However, testing for this latter hypothesis shows that, after correction for foregone earnings, life expectancy, and probability of passing the exams, only the below shengyuan level students actually had positive returns. For an ordinary person it was therefore uneconomical to join in the civil examination system. Apparently this did not change, not even after the introduction of the modern education system, until the 1950s. |
| Keywords: | human capital; China; private returns; economic development |
| JEL: | I21 N15 |
| Date: | 2013–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43525&r=lab |
| By: | Koehne, Sebastian; Kuhn, Moritz |
| Abstract: | Empirical studies show that job search behavior depends on the financial situation of the unemployed. Starting from this observation, we ask how unemployment insurance policy should take the individual financial situation into account. We use a quantitative model with a realistically calibrated unemployment insurance system, individual consumption-saving decision and moral hazard during job search to answer this question and find that the optimal policy provides unemployment benefits that increase with individual assets. By implicitly raising interest rates, asset-increasing benefits encourage self-insurance, which facilitates consumption smoothing during unemployment, but does not exacerbate moral hazard for job search. Asset-increasing benefits also have desirable properties from a dynamic perspective, because they emulate key features of the dynamics of constrained efficient allocations. The welfare gain from introducing asset-increasing benefits is substantial and amounts to 1.5 % of consumption when comparing steady states and 0.8 % of consumption when taking transition costs into account. More generous replacement rates or benefits targeted to asset-poor households, by contrast, have a negative effect on welfare. -- |
| JEL: | E21 H21 J65 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:66056&r=lab |
| By: | Piper, Alan T. |
| Abstract: | This paper tests whether there are wider considerations for undertaking than just income enhancements and improved working conditions. Hence, the investigation here is to ascertain whether there is a happiness premium to education over and above any human capital benefits? A novel feature of the paper is the extended methodological discussion which results from the finding of omitted dynamics. This complicates the analysis, and means that standard FE methods are not wholly appropriate. The discussion details the options available, and offers advice for happiness research where there are omitted dynamics. The empirical results are broadly supportive of human capital theory, and suggest a substantial ‘structural break’ regarding gender. |
| Keywords: | Education; Human Capital Theory; Life Satisfaction |
| JEL: | I31 I21 J24 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43496&r=lab |
| By: | Fehr, Hans; Uhde, Johannes |
| Abstract: | The present paper aims to quantify efficiency properties of real world social security systems of various institutional designs in order to identify an optimal pension design. Starting from a benchmark economy without social security, we introduce alternative pension systems and compare the costs arising from liquidity constraints as well as labor and savings distortions versus the benefits from insurance provision against income and lifespan uncertainty. Our findings highlight strong efficiency losses arising from both means-testing pension benefits against private assets and restricting the contribution base while indicating a positive impact of means-testing flat benefits against earnings-related benefits within pension systems resting on several tiers. Furthermore, our results suggest that the negative correlation between pension progressivity and pension generosity may be justified on efficiency grounds. In our model a single-tier universal earnings-related pension system yields the highest efficiency gains dominating flat benefits as well as two-tier systems of any form. -- |
| JEL: | C68 H55 H31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62024&r=lab |
| By: | Zhou, Xiangyi; Zhang, Jie; Song, Xuetao |
| Abstract: | We study gender discrimination in hiring markets by sending 19,130 fictitious matched resumes in response to professional employment advertisements posted on major Internet employment boards in China for positions such as engineers, accountants, secretaries, and marketing professionals in Beijing, Shanghai, Guangzhou, Shenzhen, Wuhan, and Chengdu. Our results show that, in general, state-owned firms tend to prefer male applicants. Foreign and private firms tend to prefer female applicants. On one hand, this evidence supports the hypothesis that economic reform and the market economy may mitigate gender discrimination. On the other hand, this evidence is consistent with statistics that describe discrimination based on gender segregation and information asymmetry that originated with higher ratios of female workers in foreign and private firms. With respect to regional income disparity, we find that the differences in gender discrimination between first- and second-tier cities are not significant. This result indicates that economic reform exerts limited mitigation effect on discrimination. We also find no evidence of taste discrimination based on traditional son preference in China. |
| Keywords: | Discrimination; Audit Study; Gender; Employment |
| JEL: | J71 O12 |
| Date: | 2013–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43543&r=lab |
| By: | Ochsenfeld, Fabian |
| Abstract: | In her recent study Bobbitt-Zeher (2007) takes on the important task of identifying the contribution of educational factors relative to non-educational factors in the making of the gender income gap among the college-educated and finds that “family formation has virtually no effect on the income gap” (Ibid.:13). In this methodological comment we argue that she was led to this conclusion prematurely because her analysis falls short in several respects. We explicate the problems, delineate alternatives and replicate her analysis with similar German data. We find that each of the shortcomings leads to negative bias concerning the influence of family formation. Our results show that family formation is likely to be the single most important factor in the explanation of the income gap. |
| Keywords: | gender inequality; motherhood penalty; discrimination; regression analysis; decomposition |
| JEL: | C50 J70 J16 |
| Date: | 2012–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43205&r=lab |