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on Labour Economics |
| By: | Anna Zaharieva (Bielefeld University) |
| Abstract: | This paper develops a labour market matching model with heterogeneous firms, on-thejob search and referrals. Social capital is endogenous, so that better connected workers bargain higher wages for a given level of productivity. This is a positive effect of referrals on reservation wages. At the same time, employees accept job offers from more productive employers and forward other offers to their unemployed social contacts. Therefore, the average productivity of a referred worker is lower than the average productivity in the market. This is a negative selection effect of referrals on wages. In the equilibrium, wage premiums (penalties) associated with referrals are more likely in labour markets with lower (higher) productivity heterogeneity and lower (higher) worker’s bargaining power. Next, the model is extended to allow workers help each other climb a wage ladder. On-the-job search is then intensified and wage inequality is reduced as workers employed in high paid jobs pool their less successful contacts towards the middle range of the productivity distribution. |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:bie:wpaper:472&r=lab |
| By: | Alain Cohn; Ernst Fehr; Lorenz Goette |
| Abstract: | The presence of workers who reciprocate higher wages with greater effort can have important consequences for labor markets. Knowledge about the determinants of reciprocal effort choices is, however, incomplete. We investigate the role of fairness perceptions and social preferences in workers’ performance in a field experiment in which workers were hired for a one-time job. We show that workers who perceive being underpaid at the base wage increase their performance if the hourly wage increases, while those who feel adequately paid or overpaid at the base wage do not change their performance. Moreover, we find that only workers who display positive reciprocity in a lab experiment show reciprocal performance responses in the field, while workers who lack positive reciprocity in the lab do not respond to the wage increase even if they feel underpaid at the base wage. Our findings suggest that fairness perceptions and social preferences are key in workers’ performance response to a wage increase. They are the first direct evidence of the fair-wage effort hypothesis in the field and also help interpret previous contradictory findings in the literature. |
| Keywords: | Fairness perception, positive reciprocity, field experiment, wage increase |
| JEL: | C93 J31 M52 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:107&r=lab |
| By: | Aretz, Bodo |
| Abstract: | This paper analyzes the evolution of wage inequality and wage mobility separately for men and women in West and East Germany over the last four decades. Using a large administrative data set which covers the years 1975 to 2008, I find that wage inequality increased and wage mobility decreased for male and female workers in East and West Germany. Women faced a higher level of wage inequality and a lower level of wage mobility than men in both parts of the country throughout the entire observation period. The mobility decline was sharper in East Germany so that the level of wage mobility has fallen below that of West Germany over time. Looking at long-term mobility, a slowly closing gap between men and women is observed. -- |
| Keywords: | Wage Mobility,Wage Inequality,Administrative Data |
| JEL: | J31 D63 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13003&r=lab |
| By: | Diego Restuccia; Guillaume Vandenbroucke |
| Abstract: | Consider the following facts. In 1950 the richest ten-percent of countries attained an average of 8.1 years of schooling whereas the poorest ten-percent of countries attained 1.3 years, a 6-fold difference. By 2005, the difference in schooling declined to 2-fold. The fact is that schooling has increased faster in poor than in rich countries. What explains educational attainment differences across countries and their evolution over time? We develop an otherwise standard model of human capital accumulation with two novel but important features: non-homotetic preferences and an operating labor supply margin. We use the model to assess the quantitative contribution of productivity and life expectancy differences across countries in explaining educational attainment. Calibrating the parameters of the model to reproduce the historical time-series data for the United States, we find that the model accounts for 96 percent of the difference in schooling levels between rich and poor countries in 1950 and 89 percent of the increase in schooling over time in poor countries. The model generates a faster increase in schooling in poor than in rich countries consistent with the data. These results highlight the role of development in education and thus have important implications for educational policy. |
| Keywords: | schooling, productivity, life expectancy, education policy, labor supply |
| JEL: | O1 O4 E24 J22 J24 |
| Date: | 2013–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-469&r=lab |
| By: | Jeremy Lise; Costas Meghir; Jean-Marc Robin |
| Abstract: | We develop an empirical search-matching model which is suitable for analyzing the wage, employment and welfare impact of regulation in a labor market with heterogeneous workers and jobs. To achieve this we develop an equilibrium model of wage determination and employment which extends the current literature on equilibrium wage determination with matching and provides a bridge between some of the most prominent macro models and microeconometric research. The model incorporates productivity shocks, long-term contracts, on-the-job search and counter-offers. Importantly, the model allows for the possibility of assortative matching between workers and jobs due to complementarities between worker and job characteristics. We use the model to estimate the potential gain from optimal regulation and we consider the potential gains and redistributive impacts from optimal unemployment insurance policy. Here optimal policy is defined as that which maximizes total output and home production, accounting for the various constraints that arise from search frictions. The model is estimated on the NLSY using the method of moments. |
| JEL: | C15 C63 D04 J08 J3 J63 J64 J65 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18719&r=lab |
| By: | Mari Kangasniemi (Labour Institute for Economic Research); Merja Kauhanen (Labour Institute for Economic Research) |
| Abstract: | There is little previous comparative research on how new EU member state immigrant population (NMS) and their labour market performance differ across the old member states. This paper extends the earlier literature by investigating NMS immigrants’ composition and labour market performance in Finland, Germany, the Netherlands, and the United Kingdom which are characterized by considerable differences in their labour market institutions. These institutional structures might also influence the labour market outcomes of NMS immigrants and these countries’ abilities to absorb immigrants. As measures of labour market performance we use labour force participation, employment, type of employment, and occupational attainment. We use pooled cross-sectional data from the European Union Labour Force Survey from years 2004-2009 in the analyses. We find that NMS12 immigrants had on average a lower probability of employment in comparison to natives in all other countries except for the UK during period 2004-2009. With the time spent in the host country the employment gap between NMS12 immigrants and natives narrows in Finland, Germany and the Netherlands. The type of employment and a higher risk of working in low skilled jobs NMS immigrants have in comparison to similar natives also indicate that the NMS immigrants have a more disadvantaged position in the host country labour market. |
| Keywords: | new EU member states, composition of immigrants, labour market outcomes, labour force participation, employment, self-employment, occupational attainment, role of institutions |
| JEL: | J61 F22 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2013002&r=lab |
| By: | Brad J. Hershbein (W.E. Upjohn Institute for Employment Research) |
| Abstract: | Recent studies have found a large earnings premium to attending a more selective college, but the mechanisms underlying this premium have received little attention and remain unclear. In order to shed light on this question, I develop a multidimensional signaling model relying on college grades and selectivity that rationalizes students’ choices of effort and firms’ wage-setting behavior. The model is then used to produce predictions of how the interaction of the signals should be related to wages, namely that the return on college GPA should fall the more selective the institution attended. Using five data sets that span the early 1960s through the late 2000s, I show that the data support the predictions of the signaling model, with support growing stronger over time as college sorting by ability has increased. The findings imply that return to college selectivity depends on GPA, something previously not recognized in the literature, and they can rationalize why employers learn more quickly about college graduates’ productivity than less educated workers’. |
| Keywords: | college graduates, signaling, school quality, grade point average |
| JEL: | I20 I21 J31 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:13-190&r=lab |
| By: | Vincenzo Scoppa (Department of Economics, Statistics and FInance, University of Calabria); Daniela Vuri (Department of Economics and Finance, University of Rome "Tor Vergata") |
| 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 offered 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: | 2013–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:257&r=lab |
| By: | Devereux, Paul J; Hart, Robert A; Roberts, J Elizabeth |
| Abstract: | We show that the distinction between job spells and employer spells matters for returns to tenure. Employer spells encompass between-job wage movements linked to promotions or demotions while job spells don't. Using a 1% sample of the British workforce over the period 1975-2010, we find that a significant proportion of the return to employer tenure arises due to job changes within employer spells. Conditional on tenure with employer, the return to job tenure is negative. This suggests that any positive effects of job-specific human capital on wage growth within jobs are outweighed by the effects of job changes within firms. |
| Keywords: | wage-tenure profiles; employer spells; Job spells |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2013-01&r=lab |
| By: | Kohei Kawamura (University of Edinburgh) and Jozsef Sakovics(University of Edinburgh) |
| Abstract: | We analyse a labour matching model with wage posting, where ?- refl?ecting institutional constraints - firms cannot differentiate their wage offers within certain subsets of workers. Inter alia, we fi?nd that the presence of impersonal wage offers leads to wage compression, which propagates to the wages for high productivity workers who receive personalised offers. |
| Date: | 2013–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:edn:esedps:215&r=lab |
| By: | Grossmann, Volker; Stadelmann, David |
| Abstract: | The international migration of high-skilled workers may trigger productivity effects at the macro level such that the wage rate of skilled workers increases in host countries and decrease in source countries. The authors exploit data on international bilateral migration flows and provide evidence consistent with this theoretical hypothesis. They propose various instrumentation strategies to identify the causal effect of skilled migration on log differences of GDP per capita, total factor productivity, and the wages of skilled workers between pairs of source and destination countries. These strategies aim to address the endogeneity problem that arises when international wage differences affect migration decisions. |
| Keywords: | Population Policies,Labor Markets,International Migration,Labor Policies,Human Migrations&Resettlements |
| Date: | 2013–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6317&r=lab |
| By: | Longhi, Simonetta; Taylor, Mark P. |
| Abstract: | The job search literature suggests that on-the-job search reduces the probability of unemployed people finding a job. However, there is little evidence that employed and unemployed job seekers are similar or apply for the same jobs. We compare employed and unemployed job seekers in terms of their individual characteristics, preferences over working hours, job-search strategies and employment histories, and identify how any differences vary over the business cycle. We find systematic differences which persist over the business cycle. Our results are consistent with a segmented labour market in which employed and unemployed job seekers are unlikely to directly compete with each other for jobs. |
| Date: | 2013–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2013-02&r=lab |
| By: | John P. Conley (Vanderbilt University); Ali Sina Önder (Uppsala University); Benno Torgler (Queensland University of Technology and EBS Business School) |
| Abstract: | Using life cycle publication data of 9,368 economics PhD graduates from 127 U.S. institutions, we investigate how unemployment in the U.S. economy prior to starting graduate studies and at the time of entry into the academic job market affect economics PhD graduates’ research productivity. We analyze the period between 1987 and 1996 and find that favorable conditions at the time of academic job search have a positive effect on research productivity (measured in numbers of publications) for both male and female graduates. On the other hand, unfavourable employment conditions at the time of entry into graduate school affects female research productivity negatively, but male productivity positively. These findings are consistent with the notion that men and women differ in their perception of risk in high skill occupations. In the specific context of research-active occupations that require high skill and costly investment in human capital, an ex post poor return on undergraduate educational investment may cause women to opt for less risky and secure occupations while men seem more likely to “double down” on their investment in human capital. Further investigation, however, shows that additional factors may also be at work. |
| Keywords: | Research Productivity, Human Capital, Graduate Education, Gender Differences |
| JEL: | J16 J24 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.86&r=lab |
| By: | Ryo Kambayashi (Institute of Economic Research, Hitotsubashi University); Daiji Kawaguchi (Faculty of Economics, Hitotsubashi University); Ken Yamada (Singapore Management University, School of Economics) |
| Abstract: | The statutory minimum wage in Japan has steadily increased over the past few decades even during a period of deflation. This paper examines the impact of the minimum wage on wage and employment outcomes under this unusual circumstance. We find that the increased bite of the minimum wage resulted in the compression of the lower tail of the wage distribution among women and that the wage compression is partially attributed to employment loss resulting from the minimum-wage increase. The increased bite of the minimum wage accounts for one half of the reduction in lowertail inequality that occurred among women during the period between 1994 and 2003. |
| Keywords: | minimum wage, wage inequality, employment loss, truncated distribution, deflation |
| JEL: | J23 J31 J38 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:35-2012&r=lab |
| By: | Moritz Ritter (Department of Economics, Temple University) |
| Abstract: | I document that workers in newly tradable service occupations possess more occupation-specific human capital and are more highly educated than workers in previously tradable occupations. Motivated by this observation, I develop a dynamic equilibrium model with labor market frictions and specific human capital to study the labor adjustment process after a trade shock. When calibrated to match the increase in U.S. trade between 1990 and 2010, the model suggests that (1) output increases immediately after a trade shock and converges quickly to the steady state; (2) labor market institutions play a larger role in the adjustment process than specific human capital; (3) the short run distributional effects are small if the labor market is flexible, even in the presence of specific human capital. |
| Keywords: | Offshoring, Sectoral Labor Reallocation, Human Capital |
| JEL: | E24 F16 J24 J62 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:tem:wpaper:1207&r=lab |
| By: | Marcella Corsi; Manuela Samek Lodovici |
| Abstract: | Ageing is a distinctly gendered phenomenon, women being increasingly represented in the older cohorts of the European population, due to their longer life expectancy than men. Furthermore, gender differences and inequalities are a fundamental feature of social exclusion and poverty in old age. The twofold discrimination against older women workers based on gender and age stereotypes, combined with their greater vulnerability in the labour market caused by women-specific work trajectories (i.e. career breaks, part-time employment and the gender pay gap) compound with institutional arrangements in producing higher risks of poverty in old age for women than for men. While inadequate or obsolete skills remain the main barriers for older workers to remain in or re-enter the labour market, for women also unpaid work responsibilities (in particular care burdens) constitute severe constraints. Indeed crucial gender issues in old age relate to the role of older women as both major providers and users of care services.This paper discusses gender inequalities in old age and analyses measures implemented in the main policy areas of active ageing (employment; training and life-long learning; volunteer/community work; age-friendly environment and supportive services), in order to identify effective strategies in a gender equality perspective. |
| Date: | 2013–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/137877&r=lab |
| By: | Gürtler, Marc; Gürtler, Oliver |
| Abstract: | We investigate the effect of employee heterogeneity on the incentive to put forth effort in a market-based tournament. Employers use the tournament's outcome to estimate employees' abilities and accordingly condition their wage offers. Employees put forth effort, because by doing so they increase the probability of outperforming the rival, thereby increasing their ability assessment and thus the wage offer. We demonstrate that the tournament outcome provides more information about employees' abilities in case they are heterogeneous. Thus, employees get a higher incentive to affect the tournament outcome, and employers find it optimal to hire heterogeneous contestants. -- |
| Keywords: | tournament,competitive labor market,heterogeneity,learning |
| JEL: | D83 J24 J31 M51 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tbsifw:if42v1&r=lab |
| By: | David H. Autor |
| Abstract: | An emerging literature argues that changes in the allocation of workplace “tasks” between capital and labor, and between domestic and foreign workers, has altered the structure of labor demand in industrialized countries and fostered employment polarization—that is, rising employment in the highest and lowest paid occupations. Analyzing this phenomenon within the canonical production function framework is challenging, however, because the assignment of tasks to labor and capital in the canonical model is essentially static. This essay sketches an alternative model of the assignment of skills to tasks based upon comparative advantage, reviews key conceptual and practical challenges that researchers face in bringing the “task approach” to the data, and cautions against two common pitfalls that pervade the growing task literature. I conclude with a cautiously optimistic forecast for the potential of the task approach to illuminate the interactions among skill supplies, technological capabilities, and trade and offshoring opportunities, in shaping the aggregate demand for skills, the assignment of skills to tasks, and the evolution of wages. |
| JEL: | J23 J24 J31 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18711&r=lab |
| By: | Mari Kangasniemi (Labour Institute for Economic Research); Merja Kauhanen (Labour Institute for Economic Research) |
| Abstract: | This paper investigates outmigration of Estonian immigrants from Finland and their economic assimilation. We use a register-based panel data set on new Estonian immigrants from years 2000-2006 to analyse the determinants of outmigration in a duration model framework and to examine the economic assimilation of Estonian immigrants in terms of wages and employment. The results show that earnings have a negative coefficient in the estimated hazard function, in particular when interacted with the second to the fourth year of migration spells. In terms of employment, there is a considerable employment differential between immigrants and natives in the first year of immigration spells, but this gap narrows over time even at the longest observed durations, though changes in some of the earlier years are minimal. Employment assimilation also occurs within individual work histories. For wages, the initial immigrant-native gap is heavily dependent on the age at arrival and gender. Though immigrants initially gain in terms of wage, this trend fades after a few years. When we exclude those who are identified as outmigrants we observe largely similar patterns. |
| Keywords: | migration, temporary migration, immigrant assimilation, employment, earnings |
| JEL: | J15 J61 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2013001&r=lab |
| By: | Juanna Schrøter Joensen (Stockholm School of Economics, Sweden); Helena Skyt Nielsen (Department of Economics and Business, Aarhus University, Denmark) |
| Abstract: | There is a large gender gap in advanced math coursework in high school that many believe exists because girls are discouraged from taking math courses. In this paper, we exploit an institutional change that reduced the costs of acquiring advanced high school math to determine if access is, in fact, the mechanism - in particular for girls at the top of the math ability distribution. By estimating marginal treatment effects of acquiring advanced math qualifications, we document substantial beneficial wage effects from encouraging even more females to opt for these qualifications. Our analysis suggests that the beneficial effect comes from accelerating graduation and attracting females to high-paid or traditionally male-dominated career tracks and to CEO positions. Our results may be reconciled with experimental and empirical evidence suggesting there is a pool of unexploited math talent among high ability girls that may be retrieved by changing the institutional set-up of math teaching. |
| Keywords: | Math, gender, career choice, high school curriculum, instrumental variable |
| JEL: | I21 J24 |
| Date: | 2013–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2013-01&r=lab |
| By: | Alina Sorgner; Michael Fritsch |
| Abstract: | Often, a person will become an entrepreneur only after a period of dependent employment, suggesting that occupational choices precede entrepreneurial choices. We investigate the relationship between occupational choice and self-employment. The findings suggest that the occupational choice of future entrepreneurs at the time of labor market entry is partly guided by a taste for skill variety, the prospect of high<br /> earnings, and occupational earnings risk. Entrepreneurial intentions may also emerge after gaining work experience in a chosen occupation. We find that occupations characterized by high levels of unemployment and earnings risk, relatively many job opportunities, and high self-employment rates foster the founding of an own business. Also, people who fail to achieve an occupation-specific income have a tendency for selfemployment. |
| Keywords: | Entrepreneurial choice, occupation-specific determinants of entrepreneurship, risk preferences, taste for variety |
| JEL: | L26 J24 D01 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp533&r=lab |
| By: | Jason Fletcher; Adalbert Mayer |
| Abstract: | The Texas 10% law states that students who graduated among the top 10% of their high school class are guaranteed admission to public universities in Texas. We estimate the causal effects of this admissions guarantee on a sequence of connected decisions: students’ application behavior, admission decisions by the university, students’ enrollment choices conditional on admission; as well as the resulting college achievement. We identify these effects by comparing students just above and just below the top 10% rank cutoff. While this design is in the spirit of a regression discontinuity, we note important differences in approach and interpretation. We find that students react to incentives created by the admissions guarantee - for example, by reducing applications to competing private universities. The results also suggest that the effects of the admissions guarantee depend on the university and the type of students it attracts, and that the law is binding and alters the decisions of the admissions committees. We find little evidence that the law increases diversity or leads to meaningful mismatch for the marginal student admitted. |
| JEL: | I21 I23 I28 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18721&r=lab |
| By: | Dammert, Ana (Carleton University); Ural Marchand, Beyza (University of Alberta, Department of Economics); Wan, Chi (University of Massachusetts) |
| Abstract: | In the absence of discrimination, there should be no wage-productivity differentials as relative wages should be equal to the relative marginal productivity levels of workers. This paper investigates the role of globalization on the structure and evolution of gender differentials in China by simultaneously estimating demand-side wage and productivity outcomes using nonlinear least squares. The analyses are based on a comprehensive population-wide panel survey of manufacturing firms between the years of 2004 and 2007, covering 94 percent of total industry output and providing an accurate representation of labor demand. The results suggest that more exposure to globalization through increased exports is associated with lower gender wage-productivity differentials, and more exposure through increased foreign investment leads to differentials in favor of female workers. On the other hand, gender discrimination is found to be prevalent among domestically owned and non-exporting firms. |
| Keywords: | China; gender wage discrimination; globalization; firm ownership |
| JEL: | D22 F21 J16 J31 |
| Date: | 2013–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2013_001&r=lab |
| By: | Carlos Medina; Jairo Núñez; Jorge Andrés Tamayo |
| Abstract: | We assess the effects of the Colombian Unemployment Subsidy (US) program on future labor participation, unemployment, formality, school attendance and earnings of its beneficiaries, on household earnings and school attendance of the household members, and on weight and height of their children at birth. In addition to providing benefits, the program also provides training to some recipients. We use regression discontinuity and matching differences-in-differences estimators and find that both approaches indicate that participation in the labor market, the earnings of beneficiaries, and household income, do not increase, and for some populations decrease during the 18 months after leaving from the Unemployment Subsidy program. Enrollment in formal health insurance falls. The effects on male household heads include larger reductions in their earnings, larger decreases in their labor participation, and greater increases in their unemployment rates. We also find a small though statistically significant positive effect of the program on school attendance of the beneficiaries, but none on their children’s weight or height at birth. The results also are sensitive to the type of training that beneficiaries receive in the Unemployment Subsidy program. Overall, the program serves as a mechanism for smoothing consumption and providing social assistance rather than as a mechanism for promoting a more efficient labor market. |
| Date: | 2013–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:col:000094:010393&r=lab |
| By: | Gupta, Prachi; Das, Upasak; Singh, Ashish |
| Abstract: | Using data from the India Human Development Survey, this paper analyses the relationship between child disability and maternal work participation for India. The authors' findings suggest a significant positive relationship between child disability and the work participation of the urban mothers who are wives of household heads. These mothers are 1.27 times as likely to participate in labour market as mothers (wives in urban areas) without a disabled child. However, for the same mothers, child disability significantly affects the weekly work hours of those participating in the labour market in a negative manner with presence of a disabled child reducing the weekly work hours by 3.6 hours. For the rural mothers and the mothers in urban areas who are household heads, our findings do not suggest any significant association between child disabilities and their work participation (or weekly work hours). -- |
| Keywords: | Child disability,maternal work participation,India |
| JEL: | J10 J22 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20136&r=lab |
| By: | Matthias S. Hertweck; Oliver Sigrist |
| Abstract: | This paper quantifies the impact of the Hartz reforms on matching efficiency, using monthly SOEP gross worker flows (1983-2009). We show that, until the early 2000s, close to 60% of changes in the unemployment rate are due to changes in the inflow rate (job separation). On the contrary, since the implementation of the reforms in the mid-2000s, the importance of the outflow rate (job finding) has been steadily increasing. This indicates that matching efficiency has improved substantially in recent years. Results from an estimated matching function — pointing to efficiency gains of more than 20% — corroborate this finding. |
| Keywords: | SOEP gross worker flows, Hartz reforms, matching efficiency, unemployment fluctuations |
| JEL: | E24 E32 J63 J64 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp532&r=lab |
| By: | Alexandra Litsa (University of Caen Basse-Normandie - CREM UMR CNRS 6211); Jean-François Maguet (University of Caen Basse-Normandie - CREM UMR CNRS 6211) |
| Abstract: | In traditional school choice theory, the assignment mechanisms of students to schools suppose preferences for students and priorities for schools. In this paper, interested in the admission of students to colleges, we assume that all agents have priorities over the members of the opposite side. By considering that students have priorities over colleges, we reduce the incoherence and unfairness of assignments in order to respect the best possible students' educational needs. |
| Keywords: | Matching, Preference, Priority, Coherence, Fairness, Mechanism |
| JEL: | C78 D03 D63 I20 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201301&r=lab |
| By: | Ajay K. Agrawal; Nicola Lacetera; Elizabeth Lyons |
| Abstract: | Online markets reduce certain transaction costs related to global outsourcing. We focus on the role of verified work experience information in affecting online hiring decisions. Prior research shows that additional information about job applicants may disproportionately help or hinder disadvantaged populations. Using data from a major online contract labor platform, we find that contractors from less developed countries (LDCs) are disadvantaged relative to those from developed countries (DCs) in terms of their likelihood of being hired. However, we also find that although verified experience information increases the likelihood of being hired for all applicants, this effect is disproportionately large for LDC contractors. The LDC experience premium applies to other outcomes as well (wage bids, obtaining an interview, being shortlisted). Moreover, it is stronger for experienced employers, suggesting that learning is required to interpret this information. Finally, other platform tools (e.g., monitoring) partially substitute for the LDC experience premium; this provides additional support for the interpretation that the effect is due to information about experience rather than skills acquired from experience. We discuss implications for the geography of production and public policy. |
| JEL: | F01 J24 J7 O19 O33 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18720&r=lab |
| By: | Norma B. Coe; Matthew S. Rutledge |
| Abstract: | In 1990, the U.S. Supreme Court decision in the Sullivan v. Zebley case fundamentally changed, albeit temporarily, the criteria under which children qualified for the Supplemental Security Income (SSI) program based on disability. Instead of a system based on medical criteria alone, 1996 enactment of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) tied children’s eligibility for SSI, in part, to the effects of their medically determinable impairments on their ability to function day-to-day in age-appropriate activities at home, at school, and in their communities. This paper examines what happened to the Zebley cohort after the age of 18 relative to cohorts who received SSI payments under stricter criteria. This paper evaluates the long-term impact on educational attainment, earnings, SSI and Social Security Disability Insurance (SSDI) participation, and other markers of adult development for the Zebley cohort. We find that, overall, SSI receipt in childhood is associated more positive outcomes than negative ones. The Zebley cohort has a longer attachment to the labor force and a lower likelihood of welfare receipt in adulthood, but also a higher likelihood of lacking health insurance coverage. In addition, those with health conditions most likely to be affected by the new evaluation criteria appear to substitute welfare benefits for disability benefits These results are consistent with the hypothesis that SSI receipt at the margin improves adult outcomes. |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2013-3&r=lab |
| By: | Vivien Procher (Schumpeter School of Business and Economics, University of Wuppertal); Colin Vance (RWI, Hohenzollernstraße 1-3, 45128 Essen) |
| Abstract: | The labor force participation rate of women and men is converging in industrialized countries, but disparities nevertheless remain with respect to unpaid activities. Shopping for household maintenance, in particular, is a time-consuming, out-of-home activity that continues to be undertaken primarily by women, irrespective of their employment status. The present study employs panel methods to analyze, descriptively and econometrically, gender disparities in shopping behavior among couples using data from the German Mobility Panel (MOP) for 1996 to 2009. While women still shop more than men, we find evidence that the differential has narrowed in recent years, particularly among couples with children. Several individual and household characteristics are found to be significant determinants of shopping behavior, whereby employment status and children emerge as the most important single factors. In addition, the possession of a driver’s license coupled with unrestricted car availability increase each partner’s time in shopping. |
| Keywords: | Shopping, Time-use, gender differences |
| JEL: | D13 J16 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:schdps:sdp13001&r=lab |
| By: | Ricky Kanabar; Peter Simmons |
| Abstract: | US males labour force behaviour shows lifecycle effects. We develop a lifecycle model of individual labour supply, with a single financial asset and non labour income. With widely used preferences, we derive the analytical form of the value function and optimal labour participation for any period, t. Consumption and savings switches its form as participation changes. A spell of part time work has strong implications for earlier decisions on participation, consumption, savings and the marginal value of leisure and wealth. We apply our framework to explain the increasing prevalence of non standard retirement noted in the literature. |
| Keywords: | Lifecycle, Labour supply decision, Retirement, Unretirement |
| JEL: | J22 J26 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:13/01&r=lab |
| By: | Ignacio A. Inoa; Nathalie Picard; André de Palma (THEMA, Universite de Cergy-Pontoise and THEMA; THEMA, Universite de Cergy-Pontoise and THEMA; ENS Cachan) |
| Abstract: | The effect of an individual-specific measure of accessibility to jobs is analyzed using a three-level nested logit model of residential location, workplace, and job type choice. This measure takes into account the attractiveness of different job types when the workplace choice is anticipated in the residential location decision. The model allows for variation in the preferences for job types across individuals and accounts for individual heterogeneity of preferences at each choice level in the following dimensions: education, age, gender and children. Using data from the Greater Paris Area, estimation results indicate that the individual-specific accessibility measure is an important determinant of the residential location choice and its effect differ along the life cycle. Results also show that the job type attractiveness measure is a more significant predictor of workplace location than the standard measures. |
| Keywords: | residential location, job location, accessibility, nested logit, Greater Paris. |
| JEL: | R21 C35 C51 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2013-02&r=lab |
| By: | Bénabou, Roland; Tirole, Jean |
| Abstract: | This paper analyzes the impact of labor market competition and skill-biased technical change on the structure of compensation. The model combines multitasking and screening, embedded into a Hotelling-like framework. Competition for the most talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort away from less easily contractible tasks such as long-term investments, risk management and within-firm cooperation. Under perfect competition, the resulting efficiency loss can be much larger than that imposed by a single firm or principal, who distorts incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete more aggressively, the monopsonistic underincentivization of low-skill agents first decreases, then gives way to a growing overincentivization of high-skill ones. Aggregate welfare is thus hill-shaped with respect to the competitiveness of the labor market, while inequality tends to rise monotonically. Bonus caps and income taxes can help restore balance in agents' incentives and behavior, but may generate their own set of distortions. |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:26667&r=lab |
| By: | François Rycx; Stephan K. S. Kampelmann |
| Abstract: | This paper aims to provide a comprehensive, evidence-based, and up-to-date assessment of minimum wages in a range of European countries. A first step towards a better understanding of where Europe stands today on this issue requires to grasp the diversity of European minimum wage systems, a key objective of the paper at hand. The second objective is to document international differences in the so-called "bite" of the minimum wage. This leads to questions such as "how do national minimum wages compare to the overall wage distribution?" and "how many people earn minimum wages in each country?" that are assessed for a set of nine countries from Western, Central and Eastern Europe: Belgium, Bulgaria, Germany, Hungary, Ireland, Poland, Romania, Spain, and the United Kingdom. This sample was designed to include countries for which recent evidence has been missing prior to this paper. What is more, the study also overcomes the narrow focus of extant overviews that have typically focussed only on full-time employment. Crucially, the study improves on existing work by looking beyond aggregate numbers; it provides a detailed panorama of the population of minimum wage earners in each country under investigation, notably by describing their composition in terms of a range of socio-demographic characteristics. |
| Keywords: | Minimum wage systems; Socio-economic consequences; Europe |
| Date: | 2013–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/137056&r=lab |
| By: | Mahanta, Bidisha; Nayak, Purusottam |
| Abstract: | The present paper is an attempt to analyze the status of gender inequality in North East India using various indicators based on secondary data. The study reveals that the northeast is better off than that of the nation as a whole in terms of gender equality. However inequality between women and men exists in the region in spite of the predominance of various ethnic groups who by and large do not believe in sex discrimination. The study reveals that women are relatively disempowered and enjoy somewhat lower status than that of men in the region. Gender gap exists in terms of access to education, employment and health. A large gender gap exists in political participation both at the levels of state and nation. Among the northeastern states, Meghalaya, Manipur and Mizoram show relatively lesser degree of gender inequality in terms of work participation, literacy, infant mortality and sex ratio. The situation is however adverse in case of Tripura, Assam and Sikkim. The study concludes with an observation that access to education, employment and health are only the enabling factors that may not guarantee the achievement towards the goal, which however, largely depends on the mindset of the people. |
| Keywords: | Gender; Inequality; North East India |
| JEL: | O1 |
| Date: | 2013–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43846&r=lab |
| By: | Andrea Colciago; Lorenza Rossi |
| Abstract: | Recent U.S. evidence suggests that the response of labor share to a productivity shock is characterized by countercyclicality and overshooting. These findings cannot be easily reconciled with existing business cycle models. We extend the Diamond-Mortensen-Pissarides model of search in the labor market by considering strategic interactions among an endogenous number of producers, which leads to countercyclical price markups. While Nash bargaining delivers a countercyclical labor share, we show that countercyclical markups are fundamental to address the overshooting. On the contrary, we find that real wage rigidity does not seem to play a crucial role for the dynamics of the labor share of income. |
| Keywords: | Labor Share Overshooting; Endogenous Market Structures; Search and Matching Frictions |
| JEL: | E24 E32 L11 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:367&r=lab |
| By: | Maria Bas |
| Abstract: | Microeconometric studies have shown that foreign-owned firms pay a wage premium in developing countries. This paper investigates one of the possible channels that explain why foreign firms pay higher wages than their domestic counterparts in developing economies. Under imperfect financial markets, foreign affiliates have a greater access to funds to finance high-technology investments and to compensate their workers. The empirical analysis relies on firm-level data from Romania during the 1998-2006 period. The identification strategy exploits the financial sector reform in Romania during this period as a proxy of an exogenous shock of improvement of financial resources. Changes in the IMF financial reform index across manufacturing industries are related to the ownership status of the firm to investigate how the differential access to finance of foreign firms shapes wages. The findings suggest that a one-standarddeviation increase in the financial reform index increases firms’ wages by 7 percent for domestic firms and 11.2 percent for foreign affiliates. These results are mainly driven by foreign firms from developed countries that might benefit from connections with foreign-owned banks. These findings are stable and robust to different sensitivity tests related to the financial reform indicator, other reforms and industry trends. |
| Keywords: | foreign-wage premium;financial reform;developing countries;firm level data |
| JEL: | O10 O12 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2012-24&r=lab |
| By: | Guy Michaels; Ferdinand Rauch; Stephen J. Redding |
| Abstract: | We develop a new methodology for quantifying the tasks undertaken within occupations using 3,000 verbs from around 12,000 occupational descriptions in the Dictionary of Occupational Titles (DOTs). Using micro-data from the United States from 1880-2000, we find an increase in the employment share of interactive occupations within sectors over time that is larger in metro areas than non-metro areas. We provide evidence that this increase in the interactiveness of employment is related to the dissemination of improvements in transport and communication technologies. Our findings highlight a change in the nature of agglomeration over time towards an increased emphasis on human interaction. |
| JEL: | N92 O18 R12 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18715&r=lab |
| By: | Marco Angrisani (RAND Corporation); Michael D. Hurd (RAND Corporation); Erik Meijer (RAND Corporation) |
| Abstract: | The rapid transition from defined benefit (DB) pension plans to defined contribution (DC) plans has a potential benefit of offering pension holders greater control over how their pension accumulations are invested. If pension holders are willing to take some risk, investments in the stock market could increase their economic preparation for retirement, and, indeed, economic theory as well as the typical advice of financial advisors calls for stock market investments. Yet, the rate of stock holding is much below what theory suggests it should be, undoing any benefit associated with the greater control coming from DC plans. The leading explanations for this under-investing include excessive risk aversion, costs of entry, and misperceptions about possible returns in the stock market. We show that excessive risk aversion is not able to account for the low fraction of stock holding. However, a model with heterogeneous subjective expectations about stock market returns is able to account for low stock market participation, and tracks the share of risky assets conditional on participation reasonably well. Based on the model with subjective expectations, we estimate a welfare loss of up to 12% compared to investment under rational expectations, if actual returns follow the same distribution as in the past 50 years. The policy implication is that there is considerable scope for welfare improvement as a result of consumer education regarding stock market returns. However, the welfare loss is much smaller if individuals are not very risk averse or if actual returns follow the same distribution as in the past 10 years. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp274&r=lab |
| By: | Aylit Tina Romm |
| Abstract: | In this paper we demonstrate that the magnitude of the reaction of saving behavior to a change in the anticipated retirement date is largely determined by the degree to which utility is additively separable in consumption and leisure. We show that the relative decrease in saving in response to a later anticipated retirement date is larger when preferences are non-separable in consumption and leisure, and the cross-derivative of the utility function is negative, than when preferences are separable. In particular, based on our simulations, the short term decrease in aggregate pre-retirement saving in response to a later anticipated retirement date may be up to 61.5% in the non-separable case as against 31% in the separable case. In the long-term , the decrease in pre-retirement saving would be as much as 28.5% in the non-separable case, as against 16.5% in the separable case. |
| Keywords: | Non-separable preferences; retirement date; saving |
| JEL: | D91 J26 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:323&r=lab |
| By: | Ignacio Lozano; María Adelaida Martínez |
| Abstract: | This paper provides empirical evidence of the impact of fiscal decentralization on Colombia’s public basic education. Based on the social and economic data available for 1,003 municipalities and 13,670 public schools, for the last decade, we confirmed that decentralization has had a positive and non-monotone effect on education enrollment. Likewise, our results suggest that it has had a positive impact on quality, once several variables, commonly used to explain performance differences, were controlled. Assuming that the effects of decentralization might have been uneven between regions and within them, we specified panel data and cross section econometric models for all municipalities as a whole, for size-based municipal categories, and for the towns which receive education funding directly from the central government or not. |
| Keywords: | Public Goods, Local Taxation, Intergovernmental Relations, Education Expenditures, Government Programs. Classification JEL: H41, H71, H77, I22, I38 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:747&r=lab |