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on Labour Economics |
| By: | Domenico Depalo (Bank of Italy); Raffaela Giordano (Bank of Italy); Evangelia Papapetrou (Bank of Greece) |
| Abstract: | We evaluate the public-private wage differential in ten euro area countries for men in the period 2004-2007. Using the most recent methodologies on a Mincerian equation, we assess how much of the pay differential between public and private sector workers depends on differences in endowments and how much on differences in the remuneration of such skills. For the first time, we look at the contribution of specific covariates at different quantiles of the wage distribution and decompose the variance into an explained and an unexplained component. We find that the pay gap is often decreasing over the distribution, and it is mostly determined by higher endowments in the upper tail of the wage distribution and by higher returns of such endowments at the low tail, with considerable heterogeneity across countries. We further find that the wage distribution in the public sector is more compressed than in the private sector in some countries but not in all countries. This is the results, for all countries, of more dispersed distributions of endowments in the public sector and of returns in the private sector. |
| Keywords: | public employment, wage differentials, wage determination. |
| JEL: | H50 J31 J45 J50 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_907_13&r=lab |
| By: | Henry S. Farber; Robert G. Valletta |
| Abstract: | In response to the Great Recession and sustained labor market downturn, the availability of unemployment insurance (UI) benefits was extended to new historical highs in the United States, up to 99 weeks as of late 2009 into 2012. We exploit variation in the timing and size of UI benefit extensions across states to estimate the overall impact of these extensions on unemployment duration, comparing the experience with the prior extension of benefits (up to 72 weeks) during the much milder downturn in the early 2000s. Using monthly matched individual data from the U.S. Current Population Survey (CPS) for the periods 2000-2005 and 2007-2012, we estimate the effects of UI extensions on unemployment transitions and duration. We rely on individual variation in benefit availability based on the duration of unemployment spells and the length of UI benefits available in the state and month, conditional on state economic conditions and individual characteristics. We find a small but statistically significant reduction in the unemployment exit rate and a small increase in the expected duration of unemployment arising from both sets of UI extensions. The effect on exits and duration is primarily due to a reduction in exits from the labor force rather than a decrease in exits to employment (the job finding rate). The magnitude of the overall effect on exits and duration is similar across the two episodes of benefit extensions. Although the overall effect of UI extensions on exits from unemployment is small, it implies a substantial effect of extended benefits on the steady-state share of unemployment in the cross-section that is long-term. |
| Keywords: | Unemployment ; Labor market - United States |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2013-09&r=lab |
| By: | Fatih Guvenen; Burhanettin Kuruscu; Serdar Ozkan |
| Abstract: | Wage inequality has been significantly higher in the United States than in continental European countries (CEU) since the 1970s. Moreover, this inequality gap has further widened during this period as the US has experienced a large increase in wage inequality, whereas the CEU has seen only modest changes. This paper studies the role of labor income tax policies for understanding these facts, focusing on male workers. We construct a life cycle model in which individuals decide each period whether to go to school, work, or stay non-employed. Individuals can accumulate skills either in school or while working. Wage inequality arises from differences across individuals in their ability to learn new skills as well as from idiosyncratic shocks. Progressive taxation compresses the (after-tax) wage structure, thereby distorting the incentives to accumulate human capital, in turn reducing the cross-sectional dispersion of (before-tax) wages. Consistent with the model, we empirically document that countries with more progressive labor income tax schedules have (i) significantly lower before-tax wage inequality at different points in time and (ii) experienced a smaller rise in wage inequality since the early 1980s. We then study the calibrated model and find that these policies can account for half of the difference between the US and the CEU in overall wage inequality and 84% of the difference in inequality at the upper end (log 90-50 differential). In a two-country comparison between the US and Germany, the combination of skill-biased technical change and changing progressivity of tax schedules explains all the difference between the evolution of inequality in these two countries since the early 1980s. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2013-20&r=lab |
| By: | Richard Blundell (University College London); Monica Costa Dias (Institute for Fiscal Studies and CEF-UP at the University of Porto); Costas Meghir (Cowles Foundation, Yale University); Jonathan Shaw (Institute for Fiscal Studies and University College London) |
| Abstract: | We consider the impact of Tax credits and income support programs on female education choice, employment, hours and human capital accumulation over the life-cycle. We thus analyze both the short run incentive effects and the longer run implications of such programs. By allowing for risk aversion and savings we are also able to quantify the insurance value of alternative programs. We find important incentive effects on education choice, and labor supply, with single mothers having the most elastic labor supply. Returns to labour market experience are found to be substantial but only for full-time employment, and especially for women with more than basic formal education. For those with lower education the welfare programs are shown to have substantial insurance value. Based on the model marginal increases to tax credits are preferred to equally costly increases in income support and to tax cuts, except by those in the highest education group. |
| Keywords: | Female labor supply, Welfare reform, Tax credits, Education choice, Dynamic discrete choice models, Life cycle models |
| JEL: | H2 H3 J22 J24 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1892&r=lab |
| By: | Laun, Tobias (Department of Economics, Uppsala University); Wallenius, Johanna (Dept. of Economics, Stockholm School of Economics) |
| Abstract: | In this paper we study the role of social insurance, namely old-age pensions, disability insurance and healthcare, in accounting for the differing labor supply patterns of older individuals across OECD countries. To this end, we develop a life cycle model of labor supply and health with heterogeneous agents. The key features of the framework are: (1) people choose when to stop working, and when/if to apply for disability and pension benefits, (2) the awarding of disability insurance benefits is imperfectly correlated with health, and (3) people can partially insure against health shocks by investing in health, the cost of which is dependent on health insurance coverage. We find that the incentives faced by older workers differ hugely across countries. In fact, based solely on differences in social insurance programs, the model predicts even more cross-country variation in the employment rates of people aged 55-64 than we observe in the data. |
| Keywords: | Life cycle; Retirement; Disability insurance; Health |
| JEL: | E24 J22 J26 |
| Date: | 2013–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hastef:0744&r=lab |
| By: | Peng, Fei; Kang, Lili |
| Abstract: | This paper analyses wage flexibility in Chinese labor market using the China Health and Nutrition Survey (CHNS) for the period 1989-2009. China has highly coordinated wage-setting institutions which might contribute to higher wage sensitivity of the coordinated workers, but lower sensitivity in the workers with coordination failures. Using micro-data matched to local unemployment rates, we find the reaction of wages to local unemployment varies significantly across different employee groups, suggesting disparate wage setting institutions within China. The highly coordinated big firms and public sector show more significant wage flexibility than the lagging small/medium firms and private sector. Workers with characteristics of weak bargaining power also have less flexible wages. The major wage flexibility occurred in the 1990s when the labor market moved from a centrally-planned system to a market-oriented system. After the public sector retrenchment, the labor market seems recover the rigidity in the 2000s. Moreover, sensitivity test using Heckman selection model really shows significant selectivity effects, but the Heckman adjusted results would not change our basic conclusions. |
| Keywords: | Wage flexibility; Local unemployment; Panel data |
| JEL: | C33 E32 J31 J64 |
| Date: | 2013–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:46651&r=lab |
| By: | Dusan Paredes Araya (IDEAR - Department of Economics, Universidad Católica del Norte - Chile); Iván Jamett Sasonov (IDEAR - Department of Economics, Universidad Católica del Norte - Chile) |
| Abstract: | This paper suggests that long distance commuters obtain a wage compensation of 10% on average. With respect to the length of the trip, wages increase 5.7% per commuted hour. Regions with the highest influx of commuters are simultaneously those with higher wage compensations. This research suggests that the labor market alone does not seem to present evidence which foreshadows a reduction in LDC flows Moreover, this paper display how the labor market offers workers higher incentives in order to maintain the flow of long distance commuting. |
| Keywords: | Long Distance Commuting, Coarsened Exact Marching, wage compensation, wage distance gradient. |
| JEL: | J61 R23 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:cat:dtecon:dt201302&r=lab |
| By: | Angelov, Nikolay (IFAU - Institute for Evaluation of Labour Market and Education Policy); Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy); Lindahl, Erica (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | This study investigates possible reasons for the gender difference in sickness absence. We estimate both short- and long-term effects of parenthood in a within-couple analysis based on the timing of parenthood. We find that after entering parenthood, women increase their sickness absence by between 0.5 days per month (during the child's third year) and 0.85 days per month (during year 17) more than their spouse. By investigating possible explanations for the observed effect, we conclude that the effect mainly stems from higher home commitment, which reduces women's labour market attachment and, in turn, increases female sickness absence. |
| Keywords: | Double burden; health investment; household work; labour market work; moral hazard; parenthood; sickness insurance; work absence |
| JEL: | C23 D13 I19 J22 |
| Date: | 2013–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2013_009&r=lab |
| By: | Raluca Prelipceanu (University of Evry and University of Paris Est Créteil) |
| Abstract: | Our paper sets forth two possible explanations for the fall in female labour force participation in Romania. The first explanation focuses on the increase in temporary labour migration rates, while the second relies on the existence of gender norms. We consider the existence of a social norm that sets the participation of women into household production. We test these assumptions on a 10 percent sample of the Romanian 2002 census. The results show the existence of important differences between women who do not work at all, those who do not move in the labour market and those who move for work, be it within the country or abroad. They also prove the importance of social norms for women who work in their residential locality and for those who temporarily migrate abroad for work. |
| Keywords: | Labour market, Household production, Social norms, Temporary international migration, Internal labour mobility |
| JEL: | D13 J16 J22 J61 R23 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:eve:wpaper:13-08&r=lab |
| By: | Nordmeier, Daniela (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Weber, Enzo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "This paper studies the patterns of unemployment dynamics in Germany. To provide a deeper insight into the margins of unemployment adjustment, we employ a structural VAR model and identify the effects of a technology shock as well as two policy shocks. We find that the worker reallocation process varies substantially with the identified shocks. The job finding rate plays a larger role following a technology shock and a monetary policy shock, while the separation rate appears as the dominant margin after a fiscal policy shock. Technology shocks are relatively important for variations in the transition rates, though they do not seem to trigger the high volatilities of German labor market variables. Considering policy shocks, our results point towards fiscal interventions as a promising instrument, but with several limitations." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Arbeitslosigkeitsentwicklung - Determinanten, Geldpolitik, technischer Wandel, Finanzpolitik |
| JEL: | J63 E24 E32 |
| Date: | 2013–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201302&r=lab |
| By: | Suguru Mizunoya (UNICEF); Sophie Mitra (Fordham University, Department of Economics) |
| Abstract: | This paper examines differences in employment rates between persons with and without disabilities in 15 developing countries using the World Health Survey. We find that people with disabilities have lower employment rates than persons without disabilities in nine countries. Across countries, disability gaps in employment rates are more often found for men than women. The largest disability gap in employment rates is found for persons with multiple disabilities. For countries with a disability gap, results from a logistic decomposition suggest that observable characteristics of persons with/without disabilities do not explain most of the gap. |
| Keywords: | disability, employment, self-employment, developing countries, logit decomposition |
| JEL: | J14 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:frd:wpaper:dp2012_03&r=lab |
| By: | Bradler, Christiane; Dur, Robert; Neckermann, Susanne; Non, Arjan |
| Abstract: | This paper reports the results from a controlled field experiment designed to investigate the causal effect of public recognition on employee performance. We hired more than 300 employees to work on a three-hour data-entry task. In a random sample of work groups, workers unexpectedly received recognition after two hours of work. We find that recognition increases subsequent performance substantially, and particularly so when recognition is exclusively provided to the best performers. Remarkably, workers who did not receive recognition are mainly responsible for this performance increase. This result is consistent with workers having a preference for conformity. -- |
| Keywords: | employee motivation,recognition,reciprocity,conformity,field experiment |
| JEL: | C93 M52 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13017&r=lab |
| By: | Zabel, Cordula (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "This paper investigates employment effects of further vocational training, short classroom training, as well as One-Euro-Jobs for lone mothers receiving Unemployment Benefit II (UB II) in Germany. Lone mothers receiving UB II participate in these active labor market programs at very high rates. As soon as their youngest child is aged three or above, their program entry rates are as high as for childless singles. This paper examines whether lone mothers can actually profit from partici-pating in these programs, given low levels of childcare provision. The empirical analyses are based on administrative data. A timing-of-events approach is used to control for possible selectivity in program entries. Separate models are estimated for entries into minor employment, regular contributory employment in general, and regular contributory employment connected to a complete exit from benefit receipt. Findings are that lone mothers profit especially strongly from participating in vocational training programs in terms of entering regular contributory employment in general as well as regular contributory employment connected to a complete exit from benefit receipt. Presumably, they can particularly benefit from updating their job skills after interrupting their employment for some time to care for their children. Effects of short classroom training programs are somewhat smaller, and One-Euro-Jobs have small positive effects for some, but not all, groups of lone mothers." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | allein Erziehende, Mütter, Arbeitslosengeld II-Empfänger, arbeitsmarktpolitische Maßnahme - Erfolgskontrolle, Weiterbildungsförderung, Arbeitsgelegenheit, Trainingsmaßnahme, berufliche Reintegration |
| JEL: | J12 J68 I38 |
| Date: | 2013–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201303&r=lab |
| By: | Fabio Landini (MEDAlics and CRIOS, Bocconi University); Antonio Nicolò (University of Padua); Marco Piovesan (Department of Food and Resource Economics, University of Copenhagen) |
| Abstract: | Given the advantages of specialization, employers encourage their employees to acquire distinct expertise to better satisfy clients’ needs. However, when the client is unaware of the employees’ expertise and cannot be sorted out to the most competent employee by means of a gatekeeper, a mismatch can occur. In this paper we attempt to identify the optimal condition so an employer can eliminate this mismatch and offer a team bonus that provides the first-contacted employee with an incentive to refer the client to the correct expert. We show that the profitability of this referral contract increases with the agents’ degree of specialization and decreases with the clients’ competence at identifying the correct expert. Interestingly, a referral contract may be more profitable than an individual contract -that does not pay a team bonus- even if the former provides less incentive to the agents to improve their expertise. Thus, we provide a new rationale for the use of team bonuses even when the production function depends on a single employee’s effort. |
| Keywords: | Team and Individual Contracts, Matching Client-Expert, Incentives to Refer |
| JEL: | C72 D01 D21 D86 M52 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:foi:wpaper:2013_9&r=lab |
| By: | MATSUURA Toshiyuki |
| Abstract: | This paper examines whether there is any link between export openness and the temporary workers ratio at firms. First, we investigate the effect of export openness on sales volatility using Japanese firm-level data. Next, we examine whether firms will increase the number of temporary workers as their sales volatility changes. Finally, we calculate to what extent changes in the temporary workers ratio are attributable to the sales volatility that is caused by exporting. We find statistically significant evidence that a foreign demand shock through exports affects the sales volatility at the firm level and that increases in the sales volatility induce the extensive use of temporary workers. Indeed, we find that those firms that incur a higher fixed employment cost make extensive use of temporary workers when the sales growth volatility rises. However, quantitative evaluation of the effects of exporting on the temporary workers ratio shows that the magnitude of these effects is quite small. We conclude that the impacts of firms' exporting status and export share on the temporary workers ratio are statistically significant but economically negligible in size. Thus, it is not appropriate to attribute the cause of increases in the temporary workers ratio to increased foreign shocks that occur because of exporting. |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:13036&r=lab |