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on Labour Economics |
| By: | A. Dean |
| Abstract: | This working paper reports on the work undertaken as part of the Tackling Long-term Unemployment Amongst Vulnerable Groups project. It includes the findings of a survey undertaken jointly by the OECD LEED Programme and the World Association of Public Employment Services in 2012, and also case studies and learning models from around the world on innovative practices to support the long-term unemployed into work. The report emphasises the important role a diverse range of actors can play in helping the long-term unemployed address the complex issues which may hinder their move into the labour market. |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2013/11-en&r=lab |
| By: | Oberhofer, Harald; Vincelette, Gallina A |
| Abstract: | This paper builds on the analysis of job creation developed in World Bank (2013) to provide an empirical investigation of the industry and firm-specific determinants of the job creation process in eleven new European Union (EU11) economies. It relies on the Amadeus dataset of firms during 2002-2009. The main results indicate that during the years prior to the global financial crisis, traditional industries were crucial for the net creation of jobs in EU11. However, traditional industries were the ones most severely affected by the financial crisis. By contrast, services firms were less vulnerable to the economic downturn. At the firm level, small and young firms registered the highest employment growth rates. The empirical results also indicate that more productive firms tended to be less vulnerable to economic downturns. Moreover, the results demonstrate that the perceived quality of the business climate by the EU11 enterprises is correlated with not only the firms'employment growth, but also their productivity. In the post-crisis period, poor business restrictions were negatively associated with the creation of jobs. All these findings hold for the group of high-growth firms that disproportionately accounted for the creation of new jobs in the EU11 economies. |
| Keywords: | Labor Markets,Microfinance,Small Scale Enterprise,Environmental Economics&Policies,Labor Policies |
| Date: | 2013–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6533&r=lab |
| By: | David H. Autor; David Dorn; Gordon H. Hanson; Jae Song |
| Abstract: | In the past two decades, China’s manufacturing exports have grown spectacularly, U.S. imports from China have surged, but U.S. exports to China have increased only modestly. Using representative, longitudinal data on individual earnings by employer, we analyze the effect of exposure to import competition on earnings and employment of U.S. workers over 1992 through 2007. Individuals who in 1991 worked in manufacturing industries that experienced high subsequent import growth garner lower cumulative earnings and are at elevated risk of exiting the labor force and obtaining public disability benefits. They spend less time working for their initial employers, less time in their initial two-digit manufacturing industries, and more time working elsewhere in manufacturing and outside of manufacturing. Earnings losses are larger for individuals with low initial wages, low initial tenure, low attachment to the labor force, and those employed at large firms with low wage levels. Import competition also induces substantial job churning among high-wage workers, but they are better able than low-wage workers to move across employers with minimal earnings losses, and are less likely to leave their initial firm during a mass layoff. These findings, which are robust to a large set of worker, firm and industry controls, and various alternative measures of trade exposure, reveal that there are significant worker-level adjustment costs to import shocks, and that adjustment is highly uneven across workers according to their conditions of employment in the pre-shock period. |
| JEL: | F16 J62 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19226&r=lab |
| By: | Gertler, Paul; Heckman, James; Pinto, Rodrigo; Zanolini, Arianna; Vermeerch, Christel; Walker, Susan; Chang-Lopez, Susan; Grantham-McGregor, Sally |
| Abstract: | This paper finds large effects on the earnings of participants from a randomized intervention that gave psychosocial stimulation to stunted Jamaican toddlers living in poverty. The intervention consisted of one-hour weekly visits from community Jamaican health workers over a 2-year period that taught parenting skills and encouraged mothers to interact and play with their children in ways that would develop their children's cognitive and personality skills. The authors re-interviewed the study participants 20 years after the intervention. Stimulation increased the average earnings of participants by 42 percent. Treatment group earnings caught up to the earnings of a matched non-stunted comparison group. These findings show that psychosocial stimulation early in childhood in disadvantaged settings can have substantial effects on labor market outcomes and reduce later life inequality. |
| Keywords: | Educational Sciences,Disease Control&Prevention,Health Monitoring&Evaluation,Primary Education,Labor Policies |
| Date: | 2013–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6529&r=lab |
| By: | Cahuc, Pierre (Ecole Polytechnique, Paris); Carcillo, Stéphane (OECD); Rinne, Ulf (IZA); Zimmermann, Klaus F. (IZA and University of Bonn) |
| Abstract: | France and Germany are two polar cases in the European debate about rising youth unemployment. Similar to what can be observed in Southern European countries, a "lost generation" may arise in France. In stark contrast, youth unemployment has been on continuous decline in Germany for many years, hardly affected by the Great Recession. This paper analyzes the diametrically opposed developments in the two countries to derive policy lessons. As the fundamental differences in youth unemployment are primarily resulting from structural differences in labor policy and in the (vocational) education system, any short-term oriented policies can only have temporary effects. Ultimately, the youth unemployment disease in France and in other European countries has to be cured with structural reforms. |
| Keywords: | labor policy, labor market institutions, Great Recession, youth unemployment, minimum wages, demographic trends, vocational education and training, employment protection |
| JEL: | J24 J38 J68 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7490&r=lab |
| By: | Jason Fletcher |
| Abstract: | Recent evidence has suggested that popularity during high school is linked with wages during mid-life using the Wisconsin Longitudinal Study. The results were shown to be robust to a large set of individual-level heterogeneity included completed schooling, cognitive ability, and personality measures. This paper revisits this question by first replicating the results using an alternative dataset that is very similar in structure. Like the previous results, the Add Health baseline effects suggest that an additional high school friendship nomination is linked to a 2% increase in earnings around age 30. However, leveraging the unique sibling structure of the Add Health shows that sibling comparisons eliminate any associations between popularity and earnings. The findings suggest that families, rather than friends, may be the cause of the association. |
| JEL: | J01 J1 J3 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19232&r=lab |
| By: | Tommaso Colussi (Queen Mary, University of London and fRDB) |
| Abstract: | This paper investigates how the job search outcomes of displaced migrants are affected by the labor market outcomes of past co-workers of the same nationality. For this exercise I use matched employer-employee micro data on the universe of private-sector employees in Italy between 1975 and 2001. The analysis shows that a 10 percentage point increase in the network employment rate raises the re-employment probability within 36 months after job loss by 5.7 percentage points. The paper also sheds light on the different mechanisms generating the social effect and it highlights the role of migrant networks in explaining immigrant segregation. |
| Keywords: | Migration, Job displacements, Networks |
| JEL: | J61 J63 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp706&r=lab |
| By: | Bakis, Ozan (Galatasaray University Economic Research Center); Polat, Sezgin (Galatasaray University Economic Research Center) |
| Abstract: | This paper studies the evolution of wage inequality over the last decade in Turkey using household labor force survey between 2002 and 2010. During the period between 2002 and 2004, the relative supply of more educated workers to less educated workers stayed almost constant while their relative wages have decreased in the benefit of less educated workers. However, in the second period between 2004 and 2010 the relative supply of more educated workers to less educated workers had risen while their relative wages remained constant or kept increasing in the benefit of more educated workers. Both of these developments calls for factors other than those implied by a simple supply-demand model such as skill-biased technical change or minimum wage changes. The decomposition of wage inequality reveals that price(wage) eect is dominant over the composition particularly in the period between 2002 and 2004. Our results show that the real minimum wage hike in 2004 corresponds to a major institutional change which proves to be welfare increasing in terms of wage inequality. The upper-tail (90/50) wage inequality decreased between 2002 and 2004 and stayed constant thereafter. The lower-tail (50/10) wage inequality decreased smoothly between 2002 and 2010. Our findings provide another evidence to the institutional view. |
| Keywords: | Wage inequality; Wage structure; Labor Demand; Decomposition; Turkey |
| JEL: | J23 J31 |
| Date: | 2013–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:ris:giamwp:2013_009&r=lab |
| By: | Cappellari, Lorenzo (Università Cattolica del Sacro Cuore); Jenkins, Stephen P. (London School of Economics) |
| Abstract: | We provide new evidence about earnings and labour market volatility in Britain over the period 1992-2008, and for women as well as men. (Most research about volatility refers to earnings volatility for US men.) We show that earnings volatility declined slightly for both men and women over the period but the changes are not statistically significant. When we look at labour market volatility, i.e. including in the calculations individuals with zero earnings as well as employees with positive earnings, there is a marked and statistically significant decline for both women and men, with the fall greater for men. Using variance decompositions, we show that the fall in labour market volatility is largely accounted for by changes in employment attachment rates. Labour market volatility trends in Britain, and what contributes to them, differ from their US counterparts in several respects. |
| Keywords: | labour market volatility, earnings volatility, earnings instability, BHPS |
| JEL: | J31 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7491&r=lab |
| By: | Guzi, Martin (IZA) |
| Abstract: | Paper demonstrates the existence of a welfare trap in the Czech Republic, created by the tax and social security systems. Combining individual data from the Czech Labor Force Survey and the Czech Household Income Survey, the analysis exploits the difference between the available social benefits and the net household income when a person is employed. This information allows us to calculate the net replacement rate based on the parameters of the taxation system and rules for means-tested social benefits at the household level. Estimates imply the existence of a welfare trap, which means that individuals who receive relatively higher social benefits are also more likely to remain unemployed. It is shown that the most affected groups are those with low education and long unemployment spells. Furthermore, the paper documents the disadvantaged position of women in the Czech labor market. The estimates imply that women outflows to employment are particularly influenced by the high social benefits, and the existence of a welfare trap persists even when the job-search intensity is controlled. This finding contributes to the discussion on the persistent and large unemployment gender gap in the Czech Republic. The results of the analysis support policy improvements towards low-income households. A better harmonization of tax and social security systems is necessary in order to ensure that the incentives to leave unemployment are not hampered by high social benefits. |
| Keywords: | labour supply, welfare trap, net replacement rate |
| JEL: | J22 J31 I38 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7478&r=lab |
| By: | Campos-Vazquez, Raymundo M.; Velez, Roberto |
| Abstract: | Using a national representative sample for Mexico, we analyse the effect of a husband having a working mother on the probability that he has a working wife. Our results show that labour force participation by a husband’s mother increases the probability of the labour force participation of his wife by 15 percentage points. The effect is mainly driven by males with less than a high school education. One possible confounding factor is the effect of labour force participation of the wife’s mother on the wife’s labour participation decision. However, in a different sample, we do not find any effect of work force participation of wives’ mothers on wives’ decisions to join the labour force. Finally, we test the effect of the work force participation of a husband’s mother on the husband’s preferences regarding child-rearing practices. We find that having a working mother strongly reduces the probability that daughters will be tasked to care for siblings and fosters preferences for a more egalitarian allocation of educational resources among children. Hence, promoting female labour force participation can have important dynamic implications, especially for developing countries. |
| Keywords: | Female Labour Supply; Family; Preferences; Social Norms; Role Models |
| JEL: | D10 J12 J16 J22 O54 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48282&r=lab |
| By: | Masso, Jaan (University of Tartu); Eamets, Raul (University of Tartu); Mõtsmees, Pille (University of Tartu) |
| Abstract: | The existing literature on return migration has resulted in several studies analysing the impact of foreign work experience on the returnees' earnings or their decision to become self-employed; however, in this paper we analyse the less studied effect on occupational mobility – how the job in the home country after returning compares to the job held before migration. The effect of temporary migration on occupational mobility is analysed using unique data from an Estonian online job search portal covering approximately 10-15% of the total workforce, including thousands of employees with temporary migration experience. The focus on data from a Central and Eastern European country is motivated given that the opening of labour markets in old EU countries to the workforce of the new member states has led to massive East-West migration. We did not find any positive effect of temporary migration on upward occupational mobility and in some groups, such as females, the effect was negative. These results could be related to the typically short-term nature of migration and occupational downshifting abroad as well as the functioning of the home country labour market. |
| Keywords: | occupational mobility, temporary migration, Central- and Eastern Europe |
| JEL: | F22 J62 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7482&r=lab |
| By: | Justine S. Hastings; Christopher A. Neilson; Seth D. Zimmerman |
| Abstract: | We use administrative data from Chile from 1985 through 2011 to estimate the returns to postsecondary admission as a function of field of study, course requirements, selectivity, and student socioeconomic status. Our data link high school and college records to labor market earnings from federal tax forms. We exploit hundreds of regression discontinuities from the centralized, score-based admissions system to estimate the causal impacts of interest. Returns are positive and significant only among more-selective degrees. Returns are highly heterogeneous by field of study, with large returns in health, law and social science, as well as selective technology and business degrees. We find small to negative returns in arts, humanities and education degrees. We do not find evidence that vocational curriculum focus increases returns for less selective degrees. We do not find differential outcomes for students coming from low- versus high-socioeconomic backgrounds admitted to selective degrees. |
| JEL: | H52 I23 I24 I25 I28 J24 J31 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19241&r=lab |
| By: | Ebru Isgin (West Chester University); Barry Sopher (Rutgers University) |
| Abstract: | The paper studies the role of information transparency on fairness concerns,welfare and efficiency. When the firm's productivity and ultimately profits are revealed, wage offers induce relatively fair divisions of potential gains and workers respond with higher performance. Workers respond not only to wages but also to firms' intentions concerning fairness. Information transparency serves as a mechanism that promotes fairness and performance while the lack of transparency results in reduced earnings for workers and market inefficiency. |
| Keywords: | Experiments, Incomplete Contracts, Fairness, Information Transparency |
| JEL: | C9 D8 J |
| Date: | 2013–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:rut:rutres:201303&r=lab |
| By: | Luciano Fanti; Nicola Meccheri |
| Abstract: | Can a merger from duopoly to monopoly be detrimental for profits? This paper deals with this issue by focusing on the interaction between decreasing returns to labour (which imply firms’ convex costs) and centralised unionisation. Firstly, it is highlighted that a wage “non-rigidity” result applies: the post-merger wage is higher than in the pre-merger equilibrium. Secondly, it is shown that a “reversal result” in relation to merger profitability actually realises when the union is sufficiently oriented towards wages. Moreover, the higher the reservation wage, the degree of product differentiation and the union’s relative bargaining power, the higher the probability that merger reduces profits. |
| Keywords: | wage rigidity result, merger profitability, unionised duopoly, convex costs. |
| JEL: | D43 L13 J50 |
| Date: | 2013–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2013/167&r=lab |
| By: | Monica Andini (Bank of Italy); Guido de Blasio (Bank of Italy); Gilles Duranton (Wharton School, University of Pennsylvania); William C. Strange (Rotman School of Management, University of Toronto) |
| Abstract: | This paper employs a unique Italian data source to take a comprehensive approach to labor market pooling. It jointly considers many different aspects of the agglomeration - labor market relationship, including turnover, learning, matching, and hold up. It also considers labor market pooling from the perspective of both workers and firms and across a range of industries. Overall, the paper finds some support for theories of labor market pooling, but the support is weak. Specifically, there is a general positive relationship of turnover to local population density, which is consistent with theories of agglomeration and uncertainty. There is also evidence of on-the-job learning that is consistent with theories of labor pooling, labor poaching, and hold up. In addition, the paper provides evidence consistent with agglomeration improving job matches. However, the labor market pooling gains that we measure are small in magnitude and seem unlikely to account for a substantial share of the agglomeration benefits accruing to Italian workers and firms. |
| Keywords: | local labor markets, matching, turnover, learning, hold-up, agglomeration |
| JEL: | R23 J60 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_922_13&r=lab |
| By: | James Zuccollo; Sholeh Maani; Bill Kaye-Blake; Lulu Zeng (NZIER; University of Auckland Business School) |
| Abstract: | How do private returns to tertiary education in New Zealand compare internationally? According to the latest OECD measures, the private rate of return for New Zealand is 8.9%, compared to an OECD average of 12.4%, placing New Zealand toward the bottom of the OECD ranking. The aim of this study is to better understand the reasons for that gap and determine whether the low returns could be considered as problems amenable to policy interventions. We identify a number of measurement issues with the OECD standardisation. We develop a decomposition approach and provide a series of decompositions of the New Zealand-OECD gap. Our analysis shows that about half of the gap in New Zealand’s private returns can be explained by the way OECD private tertiary returns are measured (eg, old tax rates, New Zealand’s higher employment rates, and compositional issues which have not been controlled for in the OECD analysis such as the mix of degrees and graduates in New Zealand) rather than a “real” gap. However, once those factors are taken into account there remains a gap between New Zealand and the OECD average. We identify a number of endowment, policy, and decision-related contributing factors, and identify directions for future research. |
| Keywords: | Private Returns; Higher Education; Earnings; OECD Index; Decomposition, Measurement Issues |
| JEL: | J24 J31 J38 B49 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nzt:nztwps:13/10&r=lab |
| By: | Avdic, Daniel (Uppsala University); Johansson, Per (IFAU) |
| Abstract: | Women are on average more absent from work for health reasons than men. At the same time, they live longer. This conflicting pattern suggests that part of the gender difference in health-related absenteeism arises from differences between the genders unrelated to actual health. An overlooked explanation could be that men and women's preferences for absenteeism differ, for example because of gender differences in risk preferences. These differences may originate from the utility-maximizing of households in which women's traditional dual roles influence household decisions to invest primarily in women's health. Using detailed administrative data on sick leave, hospital visits and objective health measures we first investigate the existence of gender-specific preferences for absenteeism and subsequently test for the household investment hypothesis. We find evidence for the existence of gender differences in preferences for absence from work, and that a non-trivial part of these preference differences can be attributed to household investments in women's health. |
| Keywords: | sickness absence, gender norms, health investments |
| JEL: | J22 D13 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7480&r=lab |
| By: | Pottenger, Mike (University of Melbourne); Leigh, Andrew (Australian National University) |
| Abstract: | Outside the US, little is known of long-run trends in executive compensation. We fill this gap by studying BHP, a resources giant that has long been one of the largest companies on the Australian stock market. From 1887 to 2013, trends in CEO and director remuneration (relative to average earnings) follow a U-shape. This matches the pattern for US executive compensation, Australian top incomes, and (for the past two decades) average trends in executive compensation in top Australian firms. Like the US, Australia experienced a post-war 'great compression' prior to the recent 'great divergence'. |
| Keywords: | executive remuneration, inequality, income distribution |
| JEL: | D31 J31 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7486&r=lab |
| By: | Koehne, Sebastian (IIES, Stockholm University); Kuhn, Moritz (University of Bonn) |
| Abstract: | We study asset-tested unemployment insurance in an incomplete markets model with moral hazard during job search. Asset testing has two counteracting effects on welfare. On the one hand, it improves consumption insurance by introducing state contingent transfers to agents most in need. On the other hand, it worsens the moral hazard problem, since workers have a reduced incentive to save and fewer private resources are used for consumption smoothing during unemployment. Our results show that in a realistically calibrated model of the U.S. economy the two effects nearly offset each other – the optimal rate of asset-testing is approximately zero. This finding is robust to several alternative specifications of the model, including a case with heterogeneous time-discount factors. We conclude that the current U.S. unemployment insurance system is approximately optimal. |
| Keywords: | unemployment insurance, asset-testing, incomplete markets, consumption and saving |
| JEL: | E21 E24 J65 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7488&r=lab |