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on Labour Economics |
| By: | Olivier J. Blanchard; Florence Jaumotte; Prakash Loungani |
| Abstract: | This paper does two things. First, it articulates what are the main implications of theoretical and empirical research for design of labor market policies and labor market institutions. Second, in this light, the paper analyzes the IMF’s labor market recommendations since the beginning of the crisis, both in general, and more specifically in program countries |
| Keywords: | Labor market policy;Developed countries;Economic recession;Unemployment;Minimum wage;Wage bargaining;Technical Assistance;Fund role;Unemployment, labor market institutions, Great Recession |
| Date: | 2013–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfsdn:13/02&r=lab |
| By: | Lizhong Peng; Chad D. Meyerhoefer; Samuel H. Zuvekas |
| Abstract: | We estimated the effect of depression on labor market outcomes using data from the 2004-2009 Medical Expenditure Panel Survey. After accounting for the endogeneity of depression through a correlated random effects panel data specification, we found that depression reduces the likelihood of employment. We did not, however, find evidence of a causal relationship between depression and hourly wages or weekly hours worked. Our estimates are substantially smaller than those from previous studies, and imply that depression reduces the probability of employment by 2.6 percentage points. In addition, we examined the effect of depression on work impairment and found that depression increases annual work loss days by about 1.4 days (33 percent), which implies that the annual aggregate productivity loses due to depression-induced absenteeism range from $700 million to 1.4 billion in 2009 USD. |
| JEL: | C23 I10 J22 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19451&r=lab |
| By: | Garnero, Andrea; Kampelmann, Stephan; Rycx, François |
| Abstract: | We estimate the impact of workforce diversity on productivity, wages and productivity-wage gaps (i.e. profits) using detailed Belgian linked employer-employee panel data. Findings show that educational (age) diversity is beneficial (harmful) for firm productivity and wages. While gender diversity is found to generate significant gains in high-tech/knowledge intensive sectors, the opposite result is obtained in more traditional industries. Estimates neither vary substantially with firm size nor point to sizeable productivity-wage gaps except for age diversity. |
| Keywords: | labour diversity; productivity; wages; linked panel data; GMM |
| JEL: | D24 J24 J31 M12 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1304&r=lab |
| By: | Card, David (University of California, Berkeley); Cardoso, Ana Rute (IAE Barcelona (CSIC)); Kline, Patrick (University of California, Berkeley) |
| Abstract: | An influential recent literature argues that women are less likely to initiate bargaining with their employers and are (often) less effective negotiators than men. We use longitudinal wage data from Portugal, matched to balance sheet information on employers, to measure the relative bargaining power of men and women and assess the impact of the gender gap in bargaining strength on the male-female wage gap. We show that a model with additive fixed effects for workers and gender-specific fixed effects for firms provides a close approximation to the wage structure for both men and women. Building on this model we present three complementary approaches to identifying the impact of differential bargaining strength. First, we perform a simple decomposition by assigning the firm-specific wage premiums for one gender to the other. Second, we relate the wage premiums for men and women to measures of employer profitability. Third, we show that changes in firm-specific profitability have a smaller effect on the wage growth of female than male employees. All three approaches suggest that women are paid only 85-90% of the premiums that men earn at more profitable firms. Overall, we estimate that the shortfall in women‘s relative bargaining power explains around 3 percentage points – or 10-15% – of the gender wage gap in Portugal. |
| Keywords: | wage differentials, discrimination, gender, linked employer-employee data |
| JEL: | J16 J31 J71 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7592&r=lab |
| By: | Gabin Langevin (CREM UMR CNRS 6211, University of Rennes 1, France); David Masclet (CREM UMR CNRS 6211, University of Rennes 1 and CIRANO, France); Fabien Moizeau (CREM UMR CNRS 6211, University of Rennes 1 and IUF, France); Emmanuel Peterle (CREM UMR CNRS 6211, University of Rennes 1, France) |
| Abstract: | We use data from the Trajectoires et Origines survey to analyze the labor-market outcomes of both second-generation immigrants and their French native counterparts. Second-generation immigrants have on average a lower probability of employment and lower wages than French natives. We find however considerable differences between second-generation immigrants depending on their origin: while those originating from Northern Africa, Sub-Saharan Africa and Turkey are less likely to be employed and receive lower wages than French natives, second-generation immigrants with Asian or Southern- and Eastern-European origins do not differ significantly from their French native counterparts. The employment gap between French natives and second-generation immigrants is mainly explained by differences in their education; education is also an important determinant of the ethnic wage gap. Finally we show that these differences in educational attainment are mainly explained by family background. Although the role of discrimination cannot be denied, our findings do point out the importance of family background in explaining lifelong ethnic inequalities. |
| Keywords: | labor-market discrimination, second-generation immigrants, educational attainment, family background, decomposition methods |
| JEL: | I2 J15 J24 J41 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201327&r=lab |
| By: | Estache, Antonio; Foucart, Renaud |
| Abstract: | In a model of horizontal matching on the labor market, we show that increasing workers’ bargaining power may increase some employers’ incentive to switch to new production 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 economic adjustments because search costs could cut the surplus for a majority of workers, even when it creates jobs for the other ones and increases aggregate surplus. |
| JEL: | C78 J3 J6 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9475&r=lab |
| By: | Michael Lechner; Patrycja Scioch; Conny Wunsch (University of Basel) |
| Abstract: | This paper investigates the link between variation in the supply of workers who participate in specific types of active labour market policies (ALMPs) and firm performance using a new exceptionally informative German employer-employee data base. For identification we exploit that German local employment agencies (LEAs) have a high degree of autonomy in determining their own mix of ALMPs and that firms' hiring regions overlap only imperfectly with the areas of responsibility of the LEAs. Our results indicate that in general firms do not benefit from ALMPs and in some cases may even be harmed by certain programs, in particular by subsidized employment and longer training programs. These findings complement the negative assessment of the cost-effectiveness of ALMPs from the empirical literature on the effects for participants. |
| Keywords: | Subsidized employment programs, training programs, regional variation, program evaluation. |
| JEL: | J68 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2013/11&r=lab |
| By: | Almosova, Anna |
| Abstract: | Integration processes in Europe resulted in intensification of migration flows. Immigrants account now for a large share of population in many European countries. A point of view that immigrants take jobs form natives is quite widespread. The European Monitoring Centre on Racism and Xenophobia published a special analysis of the attitudes towards minorities in EU countries Eurobarometer 2000. They found that one in two EU citizens worry about competing with immigrants for the same vacancies and afraid of losing their jobs because of presence of foreign workers. Different measures and institutions which protect native workers have nevertheless an ambiguous effect. On the one hand labor protective institutions such as minimal wage, replacement rate or firing restrictions will protect existing workers and reduce a firing rate. On the other hand, firms will take into consideration these additional costs of firing and will be less likely to employ new workers. At the same time, it is argued that immigrants are probably less likely to be covered by these institutions. These facts imply that protective institutions cover mostly natives and therefore make immigration labor force comparatively less costly. Labor market protection may therefore amplify a negative effect of immigrants on native employment if it exists.This paper attempts to evaluate the effect of immigration in flow on employment level of natives and reveal whether this effect changes in different institutional environments using EU-countries data. In addition to static specification it uses a dynamic specification to draw conclusions about long-term and short-term effects separately. The results show no long-run effect of immigration inflow. Short-term effect of is found to be positive. Protective labor market institutions fulfill their function of protecting existing workers.The results are also different for men and women. |
| Keywords: | Immigration, Labor Market Institutions, Displacement Effect |
| JEL: | J30 J61 J65 |
| Date: | 2013–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:49785&r=lab |
| By: | Zhong Zhao; Zhaopeng Qu |
| Abstract: | The paper studies the levels and changes in wage inequality among Chinese rural-urban migrants from 2002 to 2007. We use the Chinese Household Income Project dataset and the Rural to Urban Migration in China dataset to construct a unique dataset that allows us to document changing wage inequality among migrants and among urban natives between 2002 and 2007. We find that wage inequality among migrants decreased significantly between 2002 and 2007, whereas it increased among urban natives during the same period. Our results show that the high-wage migrants experienced slower wage growth than middle- and low-wage migrants, a primary cause of declining inequality among migrants. We used distributional decomposition methods, and find that the overall between-group effect (coefficient effect) dominates in the whole wage distribution of the migrants, which means that the change in returns to the characteristics (education and experience) play a key role, but on the upper tails of the wage distribution, the within group effect (residual price effect) dominates which implies that the unobservable factors or institutional barriers do not favor the migrants at the top tail of the wage distribution. |
| Keywords: | rural to urban migrants, wage inequality, quantity decomposition, China |
| JEL: | J30 J45 J61 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:pmmacr:2013-04&r=lab |
| By: | Bonthuis, Boele; Jarvis, Valerie; Vanhala, Juuso |
| Abstract: | This paper studies unemployment and vacancy developments in the euro area at the aggregate and country level over the Great Recession. The recent crisis has had a heterogeneous impact on euro area labour markets, leading to significant employment losses, especially in some sectors. The extent to which the rise in unemployment and particularly long-term unemployment reflects growing mismatch across euro area labour markets is one of the biggest questions facing euro area labour market policy makers. This paper attempts to shed light on this question by analysing developments in euro area Beveridge curves over the past 20 years, at both the aggregate level and on a disaggregated basis for all euro area countries. Using a simple model of Beveridge curve developments, we test for statistical significance of observed developments and find a significant shift in the euro area Beveridge curve since the onset of the crisis, but considerable heterogeneity at the country level. At the extremes, country level differences include a significant outward shift in the Beveridge curve for Spain and France, an inward shift for Germany, while some euro area countries reveal no significant changes in the responsiveness of unemployment to vacancy developments over the course of the crisis. We include an examination of factors underlying the observed developments across the countries. JEL Classification: J62, J63, E24, E32 |
| Keywords: | Beveridge curve, labour shortages, mismatch, Unemployment, vacancies |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20131586&r=lab |
| By: | Junankar, Pramod N. (Raja) (University of New South Wales); Shonchoy, Abu (Institute of Developing Economies (IDE-JETRO)) |
| Abstract: | This paper studies the characteristics of the workers in the informal economy and whether migrants treat this sector as a temporary location before moving on to the organised or formal sector to improve their life time income and life style. We limit our study to the Indian urban (non-Agricultural) sector and study the characteristics of the household heads that belong to the Informal Sector (Self Employed and Informal Wage Workers) and the Formal Sector. We find that household heads that are less educated, come from the poorer households, lower social groups (castes and religions) are more likely to be in the informal sector. We distinguish between migrants who come from rural areas and urban areas to their present urban location. We find that the longer duration of a rural migrant in the urban area, the lower the probability that the household head would be in the informal wage labour sector. |
| Keywords: | informal labour markets, migrant, caste, religion |
| JEL: | O17 J15 J61 J42 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7587&r=lab |
| By: | Andrea De Michelis; Marcello M. Estevão; Beth Anne Wilson |
| Abstract: | Traditionally, shocks to total factor productivity (TFP) are considered exogenous and the employment response depends on their effect on aggregate demand. We raise the possibility that in response to labor supply shocks firms adjust efficiency, rendering TFP endogenous to firms’ production decisions. We present robust cross-country evidence of a strong negative correlation between growth in TFP and labor inputs over the medium to long run. In addition, when using instruments to capture changes in hours worked that are independent of TFP shocks, we find that cross-country increases in labor input cause reductions in TFP growth. These results have important policy implications, including that low productivity growth in some countries may partly be a side effect of strong labor market performance. By the same token, countries facing a declining workforce, say, because of aging, may see accelerating TFP as firms find better ways of employing workers. |
| Keywords: | Productivity;Employment;Labor supply;External shocks;Labor productivity;total factor productivity, employment performance, technology choices |
| Date: | 2013–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:13/97&r=lab |
| By: | Melissa M. Favreault; Owen Haaga |
| Abstract: | Rapid growth in the earnings of the highest earners over the past two and a half decades has contributed to strains on Social Security’s finances and made projecting lifetime earnings on a year-by-year basis – already a complicated technical problem – even more challenging. This project uses various descriptive techniques and high-quality administrative earnings data matched to household surveys to explore related questions about the changing wage distribution. We first describe the characteristics of high earners, both at a point in time and over longer periods (from 1983 through 2010). We then evaluate how well SSA’s MINT7 dynamic microsimulation model projects inequality in the earnings distribution and the long-term characteristics of earnings paths. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2013-19&r=lab |
| By: | Giuseppe Croce; Edoardo Di Porto; Emanuela Ghignoni; Andrea Ricci |
| Abstract: | This paper analyzes the role of the employer in workplace training, a novelty with respect to the literature on this topic. Taking advantage of a unique dataset on Italy, we study how individual employer profile and the agglomeration of employers influence firms’ propensity to invest in training. Our findings show that highly educated employers have a greater propensity to invest in workplace training. Moreover, we are able to capture the effect of employers’ human capital agglomeration on the training decision. We assert that such agglomeration leads to two different alternative scenarios: 1) a poaching effect may prevail, therefore competition among employers induces less propensity to train workers; 2) a positive knowledge spillover effect may prevail leading to a greater propensity to engage in training. We test these two options discovering that in the Italian case, where small businesses are prominent, the first effect is stronger. Several econometrics issues are considered in our empirical strategy: the skewed and bounded nature of the training decision indicator, the endogeneity issues derived from the agglomeration effect as well as the cross section dependence problems affecting standard errors. |
| Keywords: | workplace training; poaching; knowledge spillovers; entrepreneurship cluster, employer’s education, social capital, proximity. |
| JEL: | J24 O15 O18 R23 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:sap:wpaper:wp162&r=lab |
| By: | Melvin Stephens, Jr.; Dou-Yan Yang |
| Abstract: | Causal estimates of the benefits of increased schooling using U.S. state schooling laws as instruments typically rely on specifications which assume common trends across states in the factors affecting different birth cohorts. Differential changes across states during this period, such as relative school quality improvements, suggest that this assumption may fail to hold. Across a number of outcomes including wages, unemployment, and divorce, we find that statistically significant causal estimates become insignificant and, in many instances, wrong-signed when allowing year of birth effects to vary across regions. |
| JEL: | J24 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19369&r=lab |
| By: | Wolfgang Dauth; Sebastian Findeisen; Jens Suedekum |
| Abstract: | We analyze the effects of the unprecedented rise in trade between Germany and “the East” – China and Eastern Europe – in the period 1988 – 2008 on German local labor markets. Using detailed administrative data, we exploit the cross-regional variation in initial industry structures and use trade flows of other high-income countries as instruments for regional import and export exposure. We find that the rise of “the East” in the world economy caused substantial job losses in German regions specialized in import-competing industries, both in manufacturing and beyond. Regions specialized in export-oriented industries, however, experienced even stronger employment gains and lower unemployment. In the aggregate, we estimate that this trade integration has caused some 493,000 additional jobs in the economy and contributed to retaining the manufacturing sector in Germany. We also conduct our analysis at the individual worker level, and find that trade had a stabilizing overall effect on employment relationships. |
| Keywords: | International trade, import competition, export opportunities, local labor markets, employment, China, Eastern Europe, Germany |
| JEL: | F16 J31 R11 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:zur:uceswp:003&r=lab |
| By: | Peter Cappelli; Monika Hamori |
| Abstract: | We examine an aspect of job search in the important context of executive-level jobs using a unique data set from a prominent executive search firm. Specifically, we observe whether or not executives pursue offers to be considered for a position at other companies. The fact that the initial call from the search firm, which we observe, is an exogenous event for the executive makes the context particularly useful. We use insights from the Multi-Arm Bandit problem to analyze the individual’s decision as it emphasizes assessments of future prospects in the decision process, which are particularly relevant for executive careers. More than half the executives we observe were willing to be a candidate for a job elsewhere. Executives are more likely to search where their current roles are less certain and where their career experience has been broader. Search is more likely even for broader experience within the same employer. In the latter case, the array of likely opportunities is also broader, making search more useful. |
| JEL: | M12 M51 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19295&r=lab |
| By: | Gabaix, Xavier; Landier, Augustin; Sauvagnat, Julien |
| Abstract: | In the "size of stakes" view quantitatively formalized in Gabaix and Landier (2008), CEO compensation is determined in a competitive talent market, and re flects the size of firms affected by talent. This paper offers empirical update on this view. The years 2004-2011, which include the recent crisis, were not part of the initial study and oer a laboratory to examine the theory as they include new positive and negative shocks to the size of large firms. Executive compensation at the top (ex ante) did closely track the evolution of average rm value during those years. During the crisis (2007 - 2009), average total firm value decreased by 17%, and CEO pay decreased by 28%. During 2009-2011, we observe a rebound of firm value by 19% and of CEO pay increased by 22%. These fairly proportional changes provide a validity check in favor of the "size of stakes" view. |
| Keywords: | assignment models; economics of superstars; Executive pay; inequality; matching. |
| JEL: | G34 J24 J3 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9498&r=lab |
| By: | Thomas Bolli (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Jörg Schläpfer (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | Analysing a comprehensive panel dataset of economists working at Austrian, German, and Swiss universities, we investigate how the local environment influences a scientist’s research productivity. The research environment varies if a scientist joins another department or if the characteristics of his colleagues change. We find no influence of the research environment on the average researcher’s productivity, if we control for individual characteristics. This result indicates that with today’s communication technologies spillovers are not bounded locally. |
| Keywords: | University, economics, productivity, mobility, peer effects, bibliometrics |
| JEL: | I23 J62 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:13-342&r=lab |
| By: | Peter J. Kuhn; Marie-Claire Villeval |
| Abstract: | We conduct a real-effort experiment where participants choose between individual compensation and team-based pay. In contrast to tournaments, which are often avoided by women, we find that women choose team-based pay at least as frequently as men in all our treatments and conditions, and significantly more often than men in a well-defined subset of those cases. Key factors explaining gender patterns in attraction to co-operative incentives across experimental conditions include women’s more optimistic assessments of their prospective teammate’s ability and men’s greater responsiveness to efficiency gains associated with team production. Women also respond differently to alternative rules for team formation in a manner that is consistent with stronger inequity aversion |
| JEL: | C91 J16 J24 J31 M5 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19277&r=lab |
| By: | Casey B. Mulligan |
| Abstract: | The Affordable Care Act includes four significant, permanent, implicit unemployment assistance programs, plus various implicit subsidies for underemployment. Every sector of the economy, and about half of nonelderly adults, is directly affected by at least one of those provisions. This paper calculates the ACA’s impact on the average reward to working among nonelderly household heads and spouses. The law increases marginal tax rates by an average of five percentage points (of employee compensation), on top of the marginal tax rates that were already present before the it went into effect. The ACA’s addition to labor tax wedges is roughly equivalent to doubling both employer and employee payroll tax rates for half of the population. |
| JEL: | E24 H31 I18 I38 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19365&r=lab |
| By: | Alessandro Cigno (Università degli Studi di Firenze); Annalisa Luporini (Università degli Studi di Firenze) |
| Abstract: | In an economy where graduate jobs are allocated by tournament, and some of the potential participants cannot borrow against their expected future earnings, the government can increase efficiency and ex ante equity by redistributing wealth or, if that is not possible, by borrowing wholesale and lending to potential participants. Both policies replace some of the less able rich with some of the more able poor and bring education investments closer to their first-best levels. |
| Keywords: | higher education, matching tournaments, credit. |
| JEL: | C78 D82 H42 I22 J24 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2013_15.rdf&r=lab |
| By: | Dmitry Plotnikov (University Of California, Los Angeles) |
| Abstract: | This paper develops and estimates a general equilibrium rational expectations model with search and multiple equilibria where aggregate shocks have a permanent effect on the unemployment rate. If agents' wealth decreases, the unemployment rate increases for a potentially indefinite period. This makes unemployment rate dynamics path dependent as in Blanchard and Summers (1987). I argue that this feature explains the persistence of the unemployment rate in the U.S. after the Great Recession and over the entire postwar period. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed013:208&r=lab |
| By: | Ernest Miguélez (Economics and Statistics Division, WIPO and AQR-IREA); Rosina Moreno (Faculty of Economics, University of Barcelona) |
| Abstract: | The goal of this paper is twofold: first, we aim to assess the role played by inventors’ cross-regional mobility and collaborations in fostering knowledge diffusion across regions and subsequent innovation. Second, we intend to evaluate the feasibility of using mobility and co-patenting information to build cross-regional interaction matrices to be used within the spatial econometrics toolbox. To do so, we depart from a knowledge production function where regional innovation intensity is a function not only of the own regional innovation inputs but also external accessible knowledge stocks gained through interregional interactions. Differently from much of the previous literature, cross-section gravity models of mobility and co-patents are estimated to use the fitted values to build our ‘spatial’ weights matrices, which characterize the intensity of knowledge interactions across a panel of 269 regions covering most European countries over 6 years. |
| Keywords: | inventors’ spatial mobility, co-patenting, gravity models, weights matrix, knowledge production function. JEL classification: C8, J61, O31, O33, R0. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:aqr:wpaper:201306&r=lab |