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on Labour Economics |
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Issue of 2013‒03‒16
twenty-two papers chosen by Erik Jonasson National Institute of Economic Research |
| By: | Julia Püschel |
| Abstract: | In this paper, I estimate the impact of service offshoring on the real wages of U.S. workers by controlling for workers’ skill levels and the offshoring susceptibility of different tasks. Matching individual-level wage data with input-output tables over the period from 2006 to 2009, I am further able to account for unobservable individual-level heterogeneity. The results from a Mincerian wage regression indicate that within skill groups, the impact of service offshoring on real wages depends on the task content of the respective occupation. The real wages of medium- and high-skilled workers employed in the least offshorable occupations were positively affected by service offshoring. However, within the groups of medium- and high-skilled workers, service offshoring negatively affected the real wage of the most tradable occupations. |
| Keywords: | Offshoring, services, tasks, wages |
| JEL: | F14 F16 J31 F20 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:wpaper:y:2013:i:107&r=lab |
| By: | Hirsch, Boris (University of Erlangen-Nuremberg); Jahn, Elke J. (Institute for Employment Research (IAB), Nuremberg); Toomet, Ott (University of Tartu); Hochfellner, Daniela (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | This paper analyzes wage assimilation of ethnic German immigrants to Germany. We use unique administrative data that include a standardized measure of immigrants' pre-migration wage based on occupation, industry, tenure, qualification, and the German wage structure. We find that immigrants experience a substantial initial wage disadvantage compared to natives. During their first 15 years in the host country they manage to close a considerable part of this gap, though assimilation is only partial. A 10% higher pre-migration wage translates into a 1.6% higher wage in Germany when also controlling for educational attainment, thus pointing at partial transferability of human capital acquired in the source country to the host country's labor market. We also find that wage assimilation is significantly accelerated for immigrants with a higher pre-migration wage. Our results are in line with strong complementarities between general skills and host country-specific human capital, in particular proficiency in the host country's language. |
| Keywords: | migration, labor market assimilation, ethnic Germans, transferability of human capital |
| JEL: | J61 J31 J24 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7240&r=lab |
| By: | Azevedo, Joao Pedro; Davalos, Maria Eugenia; Diaz-Bonilla, Carolina; Atuesta, Bernardo; Castaneda, Raul Andres |
| Abstract: | Household income inequality has declined in Latin America in the past decades, contributing significantly to poverty reduction in the region. Although available evidence shows that changes in the labor income are among the main factors behind these inequality trends, few studies have analyzed more closely the labor market dynamics that have led to a decline in total income inequality in some countries, but also to an increase in others. Using household survey data for a sample of 15 countries in Latin America from 1995 to 2010, this paper uses an extension of the Juhn-Murphy-Pierce methodology to decompose changes in labor income inequality (hourly wages) into a quantity effect (capturing changes in the distribution of workers'skills), price effect (reflecting returns to skills), and unobservables effect (other components, within skill groups, affecting labor income). The results show that falling returns to skills for both education and experience is, on average, driving the decline in labor income inequality in Latin America. The quantity effect, in turn, has contributed little to inequality reduction, mostly attributable to a larger dispersion in years of experience, possibly linked to the region's demographic transition and to significant increases in female labor force participation. Additional findings show that wage inequality, still high in the region, is coupled with inequality in terms of hours worked. The paper complements the existing literature by presenting separate results for males and females, as well as formal and informal sector workers as an attempt to control for secular shifts in these characteristics. |
| Keywords: | Poverty Impact Evaluation,Inequality,Services&Transfers to Poor,Labor Policies,Labor Markets |
| Date: | 2013–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6384&r=lab |
| By: | Elgin, Ceyhun; Kuzubas, Tolga Umut |
| Abstract: | The Walrasian theory of labor market equilibrium predicts that in the absence of any market frictions, workers earn a wage rate equal to their marginal productivity. However, this observation is not supported empirically for various economies. Based on the neoclassical tradition, the ratio of the marginal product of labor to real wages is generally defined as the Pigouvian exploitation rate. In this paper, the authors calculate this specific wage-productivity gap for the manufacturing sector in OECD economies and investigate its relation to the unemployment rate along with other variables such as government taxation, capital expansion, unionization, inflation. The authors find that the wage productivity gap gives a robust and significantly positive response to shocks to the unemployment rate and negative response to shocks to unionization. -- |
| Keywords: | wages,marginal productivity of labor,panel-VAR,OECD economies |
| JEL: | J24 J30 J64 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201318&r=lab |
| By: | Michael Gebel |
| Abstract: | While many previous studies on temporary work have found disadvantages for temporary workers as compared to workers with a permanent contract, this study compares temporary work to the alternative of unemployment. Specifically, this paper investigates the potential integrative power of taking up a temporary job for unemployed workers as compared to the counterfactual situation of remaining unemployed and searching for another job. Applying a dynamic propensity-score matching approach based on British, (West and East) German, and Swiss panel data during the period of 1991–2009, it is shown that taking up a temporary job increases the employment chances during the subsequent five years in (West and East) Germany and the UK. Moreover, the chances of having a permanent contract remain higher and a persistent wage premium can be found during the subsequent five years of the career. Advantages of taking up a temporary job are slightly stronger in West Germany compared to East Germany, where temporary contracts are often based on public job creation measures with limited integration potential. Neither long-run advantages nor disadvantages of taking up a temporary job can be found in the case of the flexible Swiss labour market. |
| JEL: | C14 C41 J41 J60 J64 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp543&r=lab |
| By: | Olivier Thévenon; Anne Solaz |
| Abstract: | This paper considers how entitlements to paid leave after the birth of children affect female labour market outcomes across countries. Such entitlements are granted for various lengths of time and paid at different rates, reflecting the influence of different objectives including: enhancing children’s wellbeing, promoting labour supply, furthering gender equality in labour market outcomes, as well as budget constraints. Although parental care is beneficial for children, there are concerns about the consequences of prolonged periods of leave for labour market outcomes and gender equality. This paper therefore looks at the long-run consequences of extended paid leave on female, male, and gender differences in prime-age (25-54) employment rates, average working hours, and earnings in 30 OECD countries from 1970 to 2010.<P> It finds that extensions of paid leave lengths have a positive, albeit small, influence on female employment rates and on the gender ratio of employment, as long as the total period of paid leave is no longer than approximately two years. Additional weeks of leave, however, exert a negative effect on female employment and the gender employment gap. This paper also finds that weeks of paid leave positively affect the average number of hours worked by women relative to men, though on condition – once again – that the total duration of leave does not exceed certain limits. By contrast, the provision of paid leave widens the earnings gender gap among full-time employees. |
| JEL: | E24 J16 J38 |
| Date: | 2013–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:141-en&r=lab |
| By: | Nicole Bosch; Bas ter Weel |
| Abstract: | This paper analyses changes in job opportunities of older workers in the Netherlands in the period 1996-2010. The standard human capital model predicts that, as a result of human capital obsolescence, mobility becomes more costly when workers become older. We measure and interpret how changing job opportunities across 96 occupations affect different age and skill groups. Older workers end up in shrinking occupations, in occupations with a lower share of high-skilled workers, in occupations facing a higher threat of offshoring tasks abroad, more focus on routine-intensive tasks and less rewarding job content. This process is not only observed for the oldest group of workers, but for workers aged 40 and above. Observing older workers in declining occupations is to a large extent a market outcome, but declining job opportunities in terms of less satisfying working conditions and job tasks and content could potentially raise incentives to retire early. |
| JEL: | J24 J60 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:234&r=lab |
| By: | Mahapatro, Sandhya Rani |
| Abstract: | The recent evidence from NSS reveals a decline in female labour force participation in India. The decline is difficult to explain in terms of economic variable as country is experiencing rapid economic changes. Perhaps age and cohort factors meaning that educational and time period advantages might be leading to postponement of labour market participation. The objective of the study is to investigate the declining trends in female labour force participation by sorting out the trends into age, period and cohort effect. To study this OLS regression model is used and the data for the study drawn from NSSO rounds. The findings suggest that age and period changes can account for a substantial decline in labour force participation though the importance of cohort is not undermined. Provision of higher education and creation of employment opportunities to younger cohorts of women will increase the labour force participation rate in near future. |
| Keywords: | Age, Period, Cohort, Labour, Female |
| JEL: | J1 |
| Date: | 2013–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44373&r=lab |
| By: | John T. Addison (Department of Economics, Moore School of Business, University of South Carolina, and GEMF/University of Coimbra); McKinley L. Blackburn (Department of Economics, Moore School of Business, University of South Carolina); Chad D. Cotti (Department of Economics, University of Wisconsin-Oshkosh) |
| Abstract: | Do seemingly large minimum-wage increases in an environment of deep recession produce clearer evidence of disemployment than is often observed in the modern minimum wage literature? This paper uses three data sets to examine the employment effects of the most recent increases in the U.S. minimum wage. We focus on two high-risk groups – restaurant-and-bar employees and teenagers – for the years 2005-2010. Although the evidence for a general disemployment effect is not uniform, estimates do suggest the presence of a negative minimum wage effect in states hardest hit by the recession. |
| Keywords: | minimum wages, disemployment, earnings, low-wage sectors, geographically-disparate employment trends, recession. |
| JEL: | J2 J3 J4 J8 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2013-08.&r=lab |
| By: | Antonio Estache; Renaud Foucart |
| Abstract: | In a model of horizontal matching on the labor market, we show that increasing the bargainingpower of workers may increase the incentive of some employers to switch to newproduction activities. In particular, this could lead to (i) higher wages, (ii) more jobs, (iii)better jobs and (iv) higher profits. Paradoxically, the median voter may object to the economicadjustments because search costs could cut the surplus for workers of the majority type, evenwhen it creates jobs for the other ones and increases aggregate surplus. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/142066&r=lab |
| By: | Hyatt, Henry R. (U.S. Census Bureau); Spletzer, James R. (U.S. Census Bureau) |
| Abstract: | In recent years, the rate at which workers and businesses exchange jobs has declined in the United States. Between 1998 and 2010, rates of job creation, job destruction, hiring, and separation declined dramatically, and the rate of job-to-job flows fell by about half. Little is known about the nature and extent of these changes, and even less about their causes and implications. In this paper, we document and attempt to explain the recent decline in employment dynamics. Our empirical work relies on the four leading datasets of quarterly employment dynamics in the United States – the Longitudinal Employer-Household Dynamics (LEHD), the Business Employment Dynamics (BED), the Job Openings and Labor Turnover Survey (JOLTS), and the Current Population Survey (CPS). We find that changes in the composition of the labor force and of employers explain relatively little of the decline. Exploiting some identities that relate the different measures to each other, we find that job creation and destruction could explain as much of a third of the decline in hires and separations, while job-to-job flows may explain more of the decline. We end our paper with a discussion of different possible explanations and their relative merits. |
| Keywords: | hires, separations, job creation, job destruction, job-to-job flows |
| JEL: | E24 J63 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7231&r=lab |
| By: | Epstein, Gil S. (Bar-Ilan University); Heizler (Cohen), Odelia (Academic College of Tel-Aviv Yaffo) |
| Abstract: | In this paper, we explore employers' decisions regarding the employment of legal and illegal immigrants in the presence of endogenous adjustment cost, minimum wages and an enforcement budget. We show that increasing the employment of legal foreign workers will increase the number of illegal immigrants which will replace the employment of the local population and thus creating illegal migration. |
| Keywords: | illegal immigration, foreign worker, minimum wages |
| JEL: | J3 K42 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7220&r=lab |
| By: | Louis N. Christofides; Alexandros Polycarpou; Konstantinos Vrachimis |
| Abstract: | We consider and attempt to understand the gender wage gap across 26 European countries, using 2007 data from the European Union Statistics on Income and Living Conditions. The size of the gender wage gap varies considerably across countries, definitions of the gap, and selection-correction mechanisms. Most of the gap cannot be explained by the characteristics available in this data set. Quantile regressions show that, in a number of countries, the wage gap is wider at the top (‘glass ceilings’) and/or at the bottom of the wage distribution (‘sticky floors’). We find larger mean/median gender gaps and more evidence of glass ceilings for full-time full-year employees, suggesting more female disadvantage in ‘better’ jobs. These features may be related to country-specific policies that cannot be evaluated at the individual country level, at a point in time. We use the cross-country variation in the unexplained wage gaps of this larger-than-usual sample of states to explore the influence of (i) country policies that reconcile work and family life and (ii) their wage-setting institutions. We find that country policies and institutions are related to features of their unexplained gender wage gaps in systematic, quantitatively important, ways. |
| Keywords: | Gender wage gap, Selection, Quantiles, Work-family reconciliation, Wage-setting institutions |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:02-2013&r=lab |
| By: | Nicole Bosch; Miriam Gielen; Egbert Jongen; Mauro Mastrogiacomo (DNB; CPB) |
| Abstract: | We estimate the labour supply elasticity for a large number of groups on the Dutch labour market. We exploit a large administrative household panel data set for the period 1999-2005. The idenfication of the parameters benefits from the large 2001 Dutch tax reform that led to substantial exogenous variation in household budget constraints. Read also the accompanying attachment below, with supplementary material. For couples we find that men have much smaller elasticities than women, in particular when children are present. Furthermore, cross elasticities of men's wages on women's labour supply in couples are non-negligible. When they are single, men and women have similar labour supply elasticities. The elasticity is relatively high for single parents with small children, but much lower for single parents with children in secondary school. Low skilled singles and single parents have much higher labour supply elasticities than their high skilled counterparts. Differences by skill are less pronounced for couples. For all groups, the decision whether to participate or not is much more responsive to nancial incentives than the hours per week decision. |
| JEL: | C25 C52 H31 J22 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:235&r=lab |
| By: | Charlot, Olivier (University of Cergy-Pontoise); Malherbet, Franck (University of Rouen); Ulus, Mustafa (Galatasaray University) |
| Abstract: | This paper studies the effects of the introduction of unemployment compensation (UC) in countries characterized by pervasive informality. We provide a simple framework to analyze the impact of UC on the allocation of workers between formal and informal activities, as well as the allocation of workers between sectors featuring different incentives to go informal. We show that a reasonable amount of UC may reduce informality, while larger amounts of UC induce large disincentives to go formal because of the level of taxation involved. We also argue that the financing of UC should be part and parcel of a well- conceived UC system. We show that UC finance based on payroll taxes is likely to entail an excess level of informality resulting from cross-subsidies between heterogenous sectors. The introduction of a simple layoff tax meant to finance the UC system is then shown to reduce informality, hence highlighting how a well-designed financing scheme may be used as a supplementary instrument to curb informality. |
| Keywords: | informality, labor market imperfections, unemployment compensation |
| JEL: | E24 E26 J60 L16 O1 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7233&r=lab |
| By: | Murat Ungor |
| Abstract: | Turkey has the lowest hours worked (the product of total employment and annual hours per worker, divided by the size of the working-age population) among the OECD countries. We study the changes in hours of work following Ohanian, Raffo, and Rogerson (Journal of Monetary Economics, 2008) and find that the intratemporal first-order condition from the neoclassical growth model accounts for the decline in total hours worked during 1998-2009 in Turkey. Hours worked increased in Turkey since 2009 and the model accounts for half of that increase between 2009 and 2011. Our findings suggest that time-varying taxes on consumption and labor play significant roles in explaining the hours worked in Turkey. The subsistence term is quantitatively important during 2003-2011. The presence of government consumption in the utility function does not seem very important. |
| Keywords: | Labor supply, employment, hours of work, growth model, taxes, Turkey |
| JEL: | E13 E20 E60 J22 O50 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1314&r=lab |
| By: | Lin, Carl (Beijing Normal University) |
| Abstract: | Using 1990, 2000 censuses and a 2010 survey, I examine the economic performance of ethnically Chinese immigrants from mainland China, Hong Kong and Taiwan (CHT) in the U.S. labor market. Since 1990, relative wages of CHT migrants have been escalating in contrast to other immigrants. I show these widening gaps are largely explained by individual's endowments, mostly education. Rising U.S.-earned degrees by CHT migrants can account for this relatively successful economic assimilation. Cohort analysis shows that the economic performance of CHT migrants admitted to the U.S. has been improving, even allowing for the effect of aging. |
| Keywords: | Chinese immigration, economic assimilation, Oaxaca decomposition, synthetic cohort analysis |
| JEL: | J31 J61 J24 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7208&r=lab |
| By: | Ana Rute Cardoso; Paulo Guimarães; Pedro Portugal |
| Abstract: | Earlier literature on the gender pay gap has taught us that occupations matter and so do firms. However, the role of the firm has received little scrutiny; occupations have most often been coded in a rather aggregate way, lumping together different jobs; and the use of samples of workers prevents any reliable determination of either the extent of segregation or the relative importance of access to firms versus occupations. Our contribution is twofold. We provide a clear measure of the impact of the allocation of workers to firms and to job titles shaping the gender pay gap. We also provide a methodological contribution that combines the estimation of sets of high-dimensional fixed effects and Gelbach's (2009) unambiguous decomposition of the conditional gap. We find that one fifth of the gender pay gap results from segregation of workers across firms and one fifth from job segregation. We also show that the widely documented glass ceiling effect operates mainly through worker allocation to firms rather than occupations. |
| JEL: | J31 J16 J24 J71 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201302&r=lab |
| By: | Mullers, Manuel (UNU-MERIT/MGSoG); Muysken, Joan (Department of Economics, Maastricht University); Regt, Erik de (Department of Economics, Maastricht University) |
| Abstract: | In this paper we present data on flows in the labour market for the period 1980 - 2010, which have been constructed using various sources. The focus of our analysis is on four labour market states within the working age population of age 15 - 64: Employment, Unemployment, Not working and Disabled. A comparison is provided with the earlier studies of Broersma and den Butter (1994) and Kock (1998), and with the data published by the CBS from the labour force survey (EBB). The latter comparison is also used to indicate the presence of the time aggregation bias in the CBS data. |
| Keywords: | labour market flows, time aggregation bias, the Netherlands |
| JEL: | J60 J63 J64 J82 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2013008&r=lab |
| By: | Bredtmann, Julia; Otten, Sebastian |
| Abstract: | Using data from the European Social Survey 2002-2011 covering immigrants in 26 European countries, this paper analyzes the impact of source- and host-country characteristics on female immigrant labor supply. We find that immigrant women’s labor supply in their host country is positively associated with the labor force participation rate in their source country, which serves as a proxy for the country’s preferences and beliefs regarding women’s roles. The effect of this cultural proxy on the labor supply of immigrant women is robust to controlling for spousal, parental, and a variety of source-country characteristics. This result suggests that the culture and norms of their source country play an important role for immigrant women’s labor supply. Moreover, we find evidence for a strong positive correlation between the host-country female labor force participation rate and female immigrant labor supply, suggesting that immigrant women assimilate to the work behavior of natives. |
| Keywords: | female labor force participation, immigration, cultural transmission |
| JEL: | J16 J22 J61 |
| Date: | 2013–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44544&r=lab |
| By: | Derek Yu (Departments of Economics, Universities of Stellenbosch and Western Cape) |
| Abstract: | One of the most pressing socio-economic problems of the South African economy is high youth unemployment. Recent studies only briefly examined how the youths fared since the transition by comparing the 1995 October Household Survey (OHS) with a Labour Force Survey (LFS), and hardly investigated whether the discouraged workseekers are different from the unemployed. Moreover, a new labour market status derivation methodology has been adopted since the inception of Quarterly Labour Force Survey (QLFS) in 2008. Although the unemployed in QLFSs are derived similarly as in OHSs and LFSs, the discouraged workseekers are distinguished very differently. This paper applies the QLFS methodology with minor revisions on all LFSs to derive comparable youth labour market trends since 2000, before re-examining the extent of youth unemployment. The characteristics of discouraged workseekers and narrow unemployed are then compared, before investigating whether different policies are needed to boost youth employment in each group. |
| Keywords: | Youths, employment, unemployment, discouraged workseekers, wage subsidy, labour market trends South Africa |
| JEL: | J00 J21 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers180&r=lab |
| By: | He, Xiaobo |
| Abstract: | Using China Household Income Project Survey (2002) data, this paper addresses the causal relationship between individual wages and access to international markets. The ordinary least squares estimates show statistically insignificant and quantitatively zero effects of accessibility to international markets proxied by the length of contemporary transport routes connecting the origin city and its nearest major seaport. However, using prefecture-level population density in 1820 as exogenous variation in current transport routes, the two-stage least squares regressions provide an opposite picture indicating that every 1 percent increase in distance from the origin city to international markets (i.e. the nearest seaport), ceteris paribus, has a negative impact on individual wages of 0.086 percent. This causal effect remains robust to various sensitivity tests which include current labor market structure, historical factor endowments and initial population development. |
| Keywords: | O12, O15, F16 |
| JEL: | F16 O12 O15 |
| Date: | 2013–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44537&r=lab |