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on Labour Economics |
| By: | Georganas, Sotiris (Royal Holloway, University of London); Tonin, Mirco (University of Southampton); Vlassopoulos, Michael (University of Southampton) |
| Abstract: | Peer effects arise in situations where workers observe each other's work activity. In this paper we disentangle the effect of observing a peer from that of being observed by a peer, by setting up a real effort experiment in which we manipulate the observability of performance. In particular, we randomize subjects into three groups: in the first one subjects are observed by another subject, but do not observe anybody; in the second one subjects observe somebody else's performance, but are not observed by anybody; in the last group subjects work in isolation, neither observing, nor being observed. We consider both a piece rate compensation scheme, where pay depends solely on own performance, and a team compensation scheme, where pay also depends on the performance of other team members. Overall, we find some evidence that subjects who are observed increase productivity at least initially when compensation is team based, while we find that subjects observing react to what they see in a non-linear but monotonic way when compensation is based only on own performance. |
| Keywords: | peer effects, piece rate, team incentives, real-effort experiment |
| JEL: | D03 J24 M52 M59 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7523&r=lab |
| By: | Smith, Jennifer C (University of Warwick) |
| Abstract: | Theories of wage rigidity often rely on a positive relationship between pay changes and utility, arising from concern for fairness or gift exchange. Supportive evidence has emerged from laboratory experiments, but the link has not yet been established with ?eld data. This paper contributes a ?rst step, using representative British data. Workers care about the level and the growth of earnings. Below-median wage increases lead to an insult e¤ect except when similar workers have real wage reductions or ?rm production is falling. Nominal pay cuts appear insulting even when the ?rm is doing badly. |
| Keywords: | Pay cuts, Social comparisons, Gift exchange |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cge:warwcg:129&r=lab |
| By: | Fabling, Richard (Motu Economic and Public Policy Research Trust); Maré, David C. (Motu Economic and Public Policy Research Trust) |
| Abstract: | We examine the correlates of reported hiring difficulties at the firm level using linked employer-employee and panel survey data over 2005-2011, focussing on the relative influence of firm-level characteristics, persistence, the business cycle and local labour market liquidity. At both the aggregate and the firm-level, hiring difficulties eased after the onset of the Global Financial Crisis. Even in the presence of large cyclical changes in demand and labour market conditions, firm-level persistence is a dominant feature of the data, with one- and two-year lags of reported hiring difficulties both positively related to current difficulties. Firms paying higher wages are more likely to report difficulties when trying to hire skilled workers, while firms with more long tenure workers are less likely to report any difficulty hiring. Local labour market conditions appear unrelated to reported hiring difficulties. |
| Keywords: | hiring difficulties, hard-to-fill vacancies, local labour market, Global Financial Crisis |
| JEL: | E24 J23 J63 M51 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7534&r=lab |
| By: | Telegdy, Álmos (Institute of Economics, Budapest) |
| Abstract: | I identify wage spillovers from the public to the corporate sector with the help of a large and sudden public sector wage increase, which raised real compensation by 40 percent in two years, changing the average public wage premium from minus 10 to plus 12 percent. Using a dataset covering about 7 percent of Hungarian workers and their employer, the spillover effect is identified with the variation of the share of public sector employment within groups defined by gender, experience and occupation. The analysis shows that 10 percent higher share of public sector workers within worker-type induces an additional wage growth of 15-20 percent around the wage increase. Controlling for firm (worker spell) fixed effects does not change the results qualitatively and results in a spillover effect of 11-14 (7.5-12) percent. The spillover effect is positively correlated with the public wage premium within worker type, with occupations which are abundant in the public sector, with the availability of public sector jobs and being hired after the wage increase. |
| Keywords: | wage spillover, public sector, Hungary |
| JEL: | J31 J45 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7524&r=lab |
| By: | Domadenik, Polona (University of Ljubljana); Farčnik, Daša (University of Ljubljana); Pastore, Francesco (University of Naples II) |
| Abstract: | We follow Brodaty et al. (2008) and develop a model within the signalling literature where an employer decides whether to hire a worker or not conditionally on the signals she sends – field and length of study and high education (HE) institution. The empirical design of our paper builds on evidence relative to first labour market entry of graduates to identify a signalling effect of individual and institutional quality of study on individual horizontal match quality. First, based on a matched unique employer-employee dataset we report the extent of horizontal mismatch for graduates of different fields of education for a post-transition economy (Slovenia). Second, we test the signal of HE institutions and above average study duration on the likelihood of a horizontal mismatch separately for each field of education. We find that graduates from specific HE institutions experience significantly higher likelihood to get a job that matches the field of study for social sciences, namely business and administration and to a smaller extent education. On the contrary, HE institutions do not signal skills or abilities in the most technical fields of education (engineering, computing, manufacturing). The above average study duration has mixed effects based on the field of education. It can either signal lower innate ability (i.e. for law graduates) or increased skills due to student work (i.e. computing graduates). |
| Keywords: | horizontal mismatch, signalling, Slovenia |
| JEL: | J21 J24 J44 I21 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7527&r=lab |
| By: | Eva O. Arceo-Gomez (CIDE); Raymundo M. Campos-Vazquez (El Colegio de Mexico) |
| Abstract: | In Mexico, as in most Latin American countries with indigenous populations, it is commonly believed that European phenotypes are preferred to mestizo or indigenous phenotypes. However, it is hard to test for such racial biases in the labor market using official statistics since race can only be inferred from native language. Moreover, employers may think that married females have lower productivity, and hence they may be more reluctant to hire them. We are interested in testing both hypotheses through a field experiment in the labor market. The experiment consisted on sending fictitious curriculums (CVs) responding to job advertisements with randomized information of the applicants. The CVs included photographs representing three distinct phenotypes: Caucasian, mestizo and indigenous. We also randomly vary marital status across gender and phenotype. Hence, our test consists on finding whether there are significant differences in the callback rates. We find that females have 40 percent more callbacks than males. We also find that indigenous looking females are discriminated against, but the effect is not present for males. Interestingly, married females are penalized in the labor market and this penalty is higher for indigenous-looking women. We did not find an effect of marital status on males. |
| Keywords: | Discrimination; Gender; Race; Labor market; Mexico; Hiring; Correspondence study |
| JEL: | I24 J10 J16 J70 O54 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:emx:ceedoc:2013-03&r=lab |
| By: | Beugnot, Julie (Université Laval); Fortin, Bernard (Université Laval); Lacroix, Guy (Université Laval); Villeval, Marie Claire (CNRS, GATE) |
| Abstract: | This paper extends the standard work effort model by allowing workers to interact through networks. We investigate experimentally whether peer performances and peer contextual effects influence individual performances. Two types of network are considered. Participants in Recursive networks are paired with participants who played previously in isolation. In Simultaneous networks, participants interact in real-time along an undirected line. Mean peer effects are identified in both cases. Individual performances increase with peer performances in the recursive network. In the simultaneous network, endogenous peer effects vary according to gender: they are large for men but not statistically different from zero for women. |
| Keywords: | peer effects, social networks, work effort, piece rate, experiment |
| JEL: | C91 J16 J24 J31 M52 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7521&r=lab |
| By: | Jean-Baptiste Michau (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X) |
| Abstract: | This paper investigates the provision of insurance to workers against search-induced wage uctuations. I rely on numerical simulations of a model of on-the-job search and precautionary savings. The model is calibrated to low skilled workers in the U.S.. The extent of insurance is determined by the degree of progressivity of a non-linear transfer schedule. The fundamental trade-off is that a more generous provision of insurance reduces incentives to search for better paying jobs, which is detrimental to the production efficiency of the economy. I show that progressivity raises the search intensity of unemployed worker, which reduces the equilibrium rate of unemployment, but lowers the search intensity of employed job seekers, which results in a lower output level. I also solve numerically for the optimal non-linear transfer schedule. The optimal policy is to provide almost no insurance up to a monthly income level of $1450, such as to preserve incentives to move up the wage ladder, and full insurance above $1650. This policy halves the standard deviation of labor incomes, increases output by 2.4% and generates a consumption-equivalent welfare gain of 1.3%. Forbidding private savings does not fundamentally change the shape of the optimal transfer function, but tilts the optimal policy towards more insurance at the expense of production efficiency. |
| Keywords: | Moral hazard on the job, Optimal social insurance, Progressivity, Search frictions |
| Date: | 2013–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00850547&r=lab |
| By: | Coulter, Rory (University of Cambridge); van Ham, Maarten (Delft University of Technology); Findlay, Allan M. (University of St. Andrews) |
| Abstract: | While researchers are increasingly reconceptualising international migration, less interest is being shown in rethinking the geographies of short-distance residential mobility and immobility. Short-distance moves are crucial for the structuration of everyday life, the operation of housing and labour markets and the (re)production of social inequalities. This paper argues that a deeper understanding of residential mobility and immobility can be gained by exploring developments in longitudinal analysis while seeking theoretical innovations derived from extending life course theories. Rethinking the geographies of residential mobility around notions of 'linked lives' will allow us to understand, critique and address major contemporary challenges. |
| Keywords: | biography, life course, linked lives, longitudinal analysis, relationality, residential mobility |
| JEL: | J61 R23 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7525&r=lab |
| By: | Michal Myck; Anna Kurowska; Michal Kundera |
| Abstract: | Financial support for families with children implies inherent trade-offs some of which are less obvious than others. In the end these trade-offs determine the effectiveness of policy with respect to the material situation of families and employment of their parents. We analyse several kinds of trade-offs involved using a careful selection of potential changes to the system of financial support for families with children. We focus on: 1) the trade-off between redistribution of income to poorer households and improving work incentives, 2) the trade-off between improving work incentives for first and for second earners in couples, 3) the trade-off between improving work incentives for those facing strong and weak incentives in the baseline system. The exercise is conducted on data from Poland, a country characterized by high levels of child poverty, low female employment and one of the lowest fertility rates in Europe. We demonstrate the complexity of potential consequences of family support policy and stress the need for well-defined policy goals and careful analysis ahead of any reform. |
| Keywords: | labour supply, tax and benefit reforms, microsimulation, family policy |
| JEL: | J22 J13 J18 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1315&r=lab |
| By: | Jürgen Janger; Anna Strauss; David Campbell |
| Abstract: | Asymmetric international mobility of highly talented scientists is well documented. We try contributing to the explanation of this phenomenon, looking at the “competitiveness” of higher education systems in terms of being able to attract talented scientists in their field. We characterise countries’ capability to offer attractive entry positions into academic careers using the results of a large scale experiment on the determinants of job choice in academia. Examined areas refer to the level of salaries, quality of life, PhD-studies, career perspectives, research organisation, balance between teaching and research, funding and probability of working with high quality peers. Our results indicate that overall, the US research universities offer the most attractive jobs for early stage researchers, consistent with the asymmetric flow of talented scientists to the US. Behind the US is a group of well performing European countries, the Netherlands, Sweden, Switzerland and the UK. Austria and Germany are next, closely followed by France, which in turn is followed by Italy. Spain and Poland are, according to our results, least able to offer attractive entry positions to an academic career. |
| Keywords: | Academic careers, academic labour market, university organisation, brain drain |
| JEL: | I23 I25 I28 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:8:d:0:i:37&r=lab |
| By: | Jürgen Janger; Klaus Nowotny |
| Abstract: | Based on a unique survey, we conduct a stated choice experiment to examine the determinants of career choice in academia. Both early and later stage researchers value a balance between teaching and research, appropriate salaries, working with high-quality peers and good availability of external grants. Attractive academic jobs for early stage researchers feature in addition a combination of early independence and career (tenure) perspectives; later stage researchers favour jobs which make it easy to take up new lines of research, which pay according to a public scheme including a performance element and where research funding is provided by the university. Ourfindings have important implications for the structure of academic careers and for the organisational design of research universities. Furthermore, they shed light on the institutional determinants of the asymmetric mobility of highly talented scientists between the EU and the U. S. |
| Keywords: | Academic careers, academic labour market, university organisation, brain drain |
| JEL: | I23 I25 I28 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:8:d:0:i:36&r=lab |
| By: | Anna Belova; Wayne B. Gray; Joshua Linn; Richard D. Morgenstern |
| Abstract: | This paper examines the impact of environmental regulation on industry employment, using a structural model based on data from the Census Bureau’s Pollution Abatement Costs and Expenditures Survey. This model was developed in an earlier paper (Morgenstern, Pizer, and Shih (2002) - MPS). We extend MPS by examining additional industries and additional years. We find widely varying estimates across industries, including many implausibly large positive employment effects. We explore several possible explanations for these results, without reaching a satisfactory conclusion. Our results call into question the frequent use of the average impacts estimated by MPS as a basis for calculating the quantitative impacts of new environmental regulations on employment. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:13-36&r=lab |
| By: | Tocco, Barbara; Bailey, Alastair; Davidova, Sophia |
| Abstract: | The objective of this paper is to explore the determinants to leave agriculture and change occupational sector. We adopt a 3-step multivariate probit where we control for selection bias at two stages in the decisions to work and, at a later stage, exit agriculture. The analysis is based on the European Union Labour Force Survey data expanded with additional regional indicators. The main results suggest that younger individuals are more likely to leave farming activities, although the largest outflows of agricultural labour are mainly associated with the retirement of people. Self-employed and family workers are generally less likely to leave agriculture and those with low levels of educations are found to be significantly constrained in entering the non-farm economy. Moreover, labour market conditions at the regional level do matter for switching occupational sector. Differences in the results among the selected NMS and the EU-15 can be explained by the diverse production structures, suggesting different capacities to release and absorb labour. |
| Keywords: | Agricultural Employment, Labour mobility, Sample Selection Bias, Agricultural and Food Policy, Labor and Human Capital, Research Methods/ Statistical Methods, J24, J43, J62, Q12, |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr13:152324&r=lab |
| By: | Loughrey, Jason; Hennessy, Thia; Hanrahan, Kevin; Donnellan, Trevor; Raimondi, Valentina; Olper, Alessandro |
| Abstract: | This paper examines the effect of the decoupling of farm direct payments upon the off-farm labour supply decisions of farmers in both Ireland and Italy. We use panel data from the Farm Business Survey (REA) and FADN database covering the period from 2002 to 2009 to model these decisions. Drawing from the conceptual agricultural household model, we hypothesise that the decoupling of direct payments led to an increase in off-farm labour activity despite some competing factors. This hypothesis rests largely upon the argument that the effects of changes in relative wages have dominated other factors. At a micro level, the decoupling induced decline in the farm wage relative to the non-farm wage ought to have provoked a greater incentive for off-farm labour supply. The main known competing argument is that decoupling introduced a new source of non-labour income i.e. a wealth effect. This may in turn have suppressed or eliminated the likelihood of increased off-farm labour supply for some farmers. For the purposes of comparative analysis, the Italian model utilises the data from the REA database instead of the FADN as the latter has a less than satisfactory coverage of labour issues. Both models are developed at a national level. We draw from the literature on female labour supply and use a sample selection corrected ordinary least squares model to examine both the decisions of off farm work participation and the decisions regarding the amount of time spent working off-farm. The preliminary results indicate that decoupling has not had a significant impact on off-farm labour supply in the case of Ireland but there appears to be a significantly negative relationship in the Italian case. It still remains the case in both countries that the wealth of the farmer is negatively correlated with the likelihood of off-farm employment. |
| Keywords: | Labour Supply, Off Farm Employment, Farm Holder, Italy, Ireland, Agribusiness, Farm Management, International Relations/Trade, Labor and Human Capital, J22, J43, Q12, |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr13:152331&r=lab |
| By: | Olper, Alessandro; Raimondi, Valentina; Cavicchioli, Daniele; Vigani, Mauro |
| Abstract: | The paper deals with the determinants of labour out-migration from agriculture across 149 EU regions over the 1990-2008 period. The central aim is to shed light on the role played by CAP payments on this important adjustment process. Using static and dynamic panel data estimators, we show that standard neo-classic drivers, like the relative income and the relative labour share, represent significant determinants of the inter-sectoral migration of agricultural labour. Overall, CAP payments contributed significantly to job creation in agriculture, although the magnitude of the economic effect was quite moderate. We also found that Pillar I subsidies exerted an effect approximately two times greater than that of Pillar II payments. |
| Keywords: | Out-farm Migration, Labour Markets, CAP Payments, Panel Data Analysis, Agricultural and Food Policy, International Relations/Trade, Labor and Human Capital, Q12, Q18, O13, J21, J43, J60, |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr13:152326&r=lab |
| By: | Caria, Antonia Stefano; Hassen, Ibrahim Worku |
| Abstract: | In this study we focus on exclusion from job contact networks, which constitutes a major disadvantage for labor market participants in settings where referral hiring is common and information about jobs hard to obtain. In a mid-size town in northern Ethiopia, where these mechanisms are at work, we observe that many individuals do not access local job contact networks. Models of strategic network formation and behavioral decision theory suggest that given the right incentives, job contact networks should be more inclusive. On these grounds we hypothesize that workers would link to peripheral peers when this maximizes their chances of referral and when self-regarding concerns are absent due to social preferences. |
| Keywords: | social network, Labor market, field experiment, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1282&r=lab |
| By: | Drydakis, Nick (Anglia Ruskin University) |
| Abstract: | The purpose of this study is to estimate whether sexual activity is associated with wages, and also to estimate potential interactions between individuals' characteristics, wages and sexual activity. The central hypothesis behind this research is that sexual activity, like health indicators and mental well-being, may be thought of as part of an individual's set of productive traits that affect wages. Using two stage estimations we examine the relationship between adult sexual activity and wages. We estimate that there is a monotonic relationship between the frequency of sexual activity and wage returns, whilst the returns to sexual activity are higher for those between 26 and 50 years of age. In addition, heterosexuals' sexual activity does not seem to provide higher or lower wage returns than that of homosexuals, but wages are higher for those health-impaired employees who are sexually active. Over-identification tests, robustness checks, falsification tests, as well as, decomposition analysis and sample selection modelling enhance the study's strength. Contemporary social analysis suggests that health, cognitive and non-cognitive skills and personality are important factors that affect the wage level. Sexual activity may also be of interest to social scientists, since sexual activity is considered to be a barometer for health, quality of life, well-being and happiness. The paper adds to the literature on the importance of unobserved characteristics in determining labour market outcomes. |
| Keywords: | sexual activity, wages, endogeneity, sample selection, decompositions |
| JEL: | J10 J30 J24 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7529&r=lab |