|
on Labour Economics |
|
Issue of 2013‒10‒25
thirty-six papers chosen by Erik Jonasson National Institute of Economic Research |
| By: | Werner Eichhorst; Verena Tobsch |
| Abstract: | This paper gives an overview of the transformation of the German labor market since the mid-1990s with a special focus on the changing patterns of labor market segmentation or ‘dualization’ of employment in Germany. While labor market duality in Germany can partially be attributed to labor market reforms promoting in particular non-standard forms of employment and allowing for an expansion of low pay, structural changes in the economy as well as strategic choices by employers and social partners also play a prominent role. |
| Keywords: | Germany, non-standard work, low pay, labor market segmentation |
| JEL: | J21 J31 J58 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp596&r=lab |
| By: | Mühlemann, Samuel (University of Bern); Pfeifer, Harald (BIBB) |
| Abstract: | This paper analyzes the structure of hiring costs of skilled workers in Germany. Using detailed and representative firm-level data on recruitment and adaptation costs of new hires, we find that average hiring costs amount to more than 8 weeks of wage payments (4,700 Euros). The structure of hiring costs is convex, as an increase in the number of hires by 1% increases hiring costs by 1.3%. We find moderate effects of labor market institutions on the magnitude but none on the structure of hiring costs. Furthermore, we provide evidence in favor of monopsony power in the German labor market. |
| Keywords: | labor adjustment costs, hiring costs, search costs, adaptation costs |
| JEL: | J32 J63 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7656&r=lab |
| By: | Neil Foster-McGregor (The Vienna Institute for International Economic Studies, wiiw); Anders Isaksson; Florian Kaulich |
| Abstract: | Abstract In this paper we examine whether foreign-owned firms pay higher wages and have higher levels of employment than domestically-owned firms in a cross-section of sub-Saharan African (SSA) firms using data from 19 SSA countries. We also test for the presence of wage spillovers, examining whether the wages offered by foreign-owned firms in an industry impact upon the wages paid by domestically-owned firms. Our results indicate that foreign-owned firms tend to pay higher average wages, employ more workers and generate positive human capital effects. This tends to be true for total employment and average wages for all workers as well as for blue- and white-collar workers separately. The effects of foreign ownership tend to be stronger for white-collar workers when considering wages and for blue-collar workers when considering employment. Our results also suggest that the presence of foreign-owned firms does not significantly impact upon the wages paid by domestically-owned firms however. |
| Keywords: | foreign ownership, employment, wage premium |
| JEL: | J21 J31 F23 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:99&r=lab |
| By: | Lalive, Rafael (University of Lausanne); Landais, Camille (London School of Economics); Zweimüller, Josef (University of Zurich) |
| Abstract: | This paper offers quasi experimental evidence of the existence of spillover effects of UI extensions using a unique program that extended unemployment benefits drastically for a subset of workers in selected regions of Austria. We use non-eligible unemployed in treated regions, and a difference-in-difference identification strategy to control for preexisting differences across treated and untreated regions. We uncover the presence of important spillover effects: in treated regions, as the search effort of treated workers plummets, the job finding probability of untreated workers increases, and their average unemployment duration and probability of long term unemployment decrease. These effects are the largest when the program intensity reaches its highest level, then decrease and disappear as the program is scaled down and finally interrupted. We use this evidence to assess the relevance of different assumptions on technology and the wage setting process in equilibrium search and matching models and discuss the policy implications of our results for the EUC extensions in the US. |
| Keywords: | unemployment insurance, benefit extension, market externality, macro effects |
| JEL: | J65 J21 J22 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7650&r=lab |
| By: | Brenzel, Hanna; Gartner, Hermann; Schnabel, Claus |
| Abstract: | Using a representative establishment dataset, this paper is the first to analyze the incidence of wage posting and wage bargaining in the matching pro-cess from the employer's side. We show that both modes of wage determination coexist in the German labor market, with about two-thirds of hirings being charac-terized by wage posting. Wage posting dominates in the public sector, in larger firms, in firms covered by collective agreements, and in part-time and fixed-term contracts. Job-seekers who are unemployed, out of the labor force or just finished their apprenticeship are also less likely to get a chance of negotiating. Wage bar-gaining is more likely for more-educated applicants and in jobs with special requirements as well as in tight regional labor markets. -- Dieser Aufsatz analysiert erstmals mit Hilfe einer reprä-sentativen Betriebsbefragung die Verbreitung von fixen Lohnangeboten der Arbeit-geber und von Lohnverhandlungen bei Neueinstellungen. Wir zeigen, dass sowohl individuelle Lohnverhandlungen als auch fixe Lohnangebote in Deutschland vor-kommen, wobei bei rund zwei Drittel der Neueinstellungen ein fixer Lohn angeboten wird. Besonders häufig gibt es fixe Lohnangebote im öffentlichen Dienst, in tarif-gebundenen Firmen und bei Teilzeit- oder befristeter Beschäftigung. Mit Personen, die vorher nicht erwerbstätig waren oder eine Ausbildung beendet haben, wird seltener über den Lohn verhandelt. Wahrscheinlicher ist eine Lohnverhandlung, wenn die eingestellte Person höher qualifiziert ist, wenn spezielle Qualifikationen verlangt werden oder wenn die regionale Arbeitslosigkeit gering ist. |
| Keywords: | wage posting,wage bargaining,hiring,matching,Germany |
| JEL: | E24 J30 J63 M51 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:faulre:85&r=lab |
| By: | Launov, Andrey (University of Mainz); Wälde, Klaus (University of Mainz) |
| Abstract: | To which extent does an increase in operating effectiveness of public employment agencies on the one hand and a reduction of unemployment benefits on the other reduce unemployment? Using the recent labour market reform in Germany as background we find that the role of unemployment benefit reduction for the reduction of unemployment is very modest (7% of the observed decline). Enhanced effectiveness of public employment agencies, to the contrary, explains a substantial part (34%) of the observed post-reform unemployment decline. If disincentive effects of PEA reforms had been avoided, the effect could have increased to 51%. |
| Keywords: | employment agencies, unemployment benefits, labour market reform, unemployment, structural model |
| JEL: | E24 J65 J68 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7659&r=lab |
| By: | Emma Tominey (University of York) |
| Abstract: | Female labor supply can insure households against shocks to paternal employment. The paper estimates whether the female labor supply response to a paternal employment shock differs by eligibility to maternity employment protection. We exploit time-state variation in the implementation of unpaid maternity leave through the Family and Medical Leave Act (FMLA) in the US which increased employment protection from 0 to 12 weeks. We find that mothers eligible for FMLA speed up their return to work in response to a paternal shock, with a conditional probability of being in work 53% higher than in households with no paternal shock. In contrast, there was a negligible insurance response for mothers with no employment protection. |
| Keywords: | female labor supply, insurance, maternity leave |
| JEL: | I30 J13 J20 J64 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2013-16&r=lab |
| By: | Velden R.K.W. van der; Allen J.P.; Levels M. (GSBE) |
| Abstract: | In this paper we develop and test a new set of measures of skill mismatches, based on data on skill levels and skill use in the domains of literacy and numeracy from the PIAAC project. The measures we develop represent the extent of skill use relative to ones own skill level. We test the measures by examining their relation to a number of labour market outcomes. We subsequently examine how mismatches are distributed across and within a large number of countries, and use our results to reflect on possible causes and consequences of mismatches. We find that, in general, higher skill utilization is always beneficial in terms of productivity and job satisfaction, and that overutilization of skills therefore points more towards a fuller use of the available human capital, rather than to a serious skill shortage. We find an asymmetry in returns between literacy and numeracy skills although numeracy skill level appears to pay higher dividends than literacy skill level, shifts in skill utilization within skill levels have greater consequences for literacy than for numeracy. The distribution of mismatches across and within countries is broadly consistent with the expectation that skills will be used more fully under competitive market conditions with few institutional or organizational barriers. Finally, skill mismatches are only quite weakly related to educational mismatches, reflecting the heterogeneity in skill supply and demand that cross-cuts the dividing lines set by formally defined qualification levels and job titles. |
| Keywords: | Analysis of Education; Education and Economic Development; Labor Demand; Human Capital; Skills; Occupational Choice; Labor Productivity; |
| JEL: | I25 I21 J23 J24 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013061&r=lab |
| By: | Michael Kind |
| Abstract: | In the case of collective redundancies, employers are forced to regard certain characteristics when deciding who is going to be dismissed. This paper develops a procedure to derive an empirical based weighting scheme between the characteristics relevant for this selection (age, disability, dependencies and tenure). First, panel data from the German Socio-Economic Panel (SOEP) for the years 1991-2010 is used to estimate, conditional on the existence of dismissal protection, the relationships of the four characteristics with respect to reemployment probabilities and the quality of the new job (measured in terms of wage). Second, the individual valuation of the two outcomes is compared applying a life satisfaction analysis. Finally, based on the empirical results a weighting scheme for the characteristics is proposed, which serves as an evidence based guideline for employers, employees and unions in the process of collective redundancies. |
| Keywords: | Dismissal protection, reemployment probability, wage hit |
| JEL: | J63 J64 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp597&r=lab |
| By: | Danzer, Natalia (Ifo Institute for Economic Research) |
| Abstract: | Are public sector jobs better than private sector jobs? To answer this question, this paper investigates observed differences in job satisfaction between public- and private-sector workers and disentangles the effect of worker sorting from the one caused by sector-specific job characteristics. A natural experiment – the massive privatization process in post-Soviet countries – allows correcting potential self-selection bias. Industry-specific privatization probabilities are assigned to workers based on unique individual-level survey information regarding pre-determined Soviet jobs during the 1980s. The results reveal a causal public-sector satisfaction premium and a negative selection of individuals into the public sector. Part of the public-private satisfaction gap can be explained by the different availability of fringe benefits in the two sectors. |
| Keywords: | public sector, job satisfaction, self-selection, quasi-experiment, privatization, fringe benefits |
| JEL: | J28 J45 J31 J32 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7644&r=lab |
| By: | Katherine Baicker; Amy Finkelstein; Jae Song; Sarah Taubman |
| Abstract: | In 2008, a group of uninsured low-income adults in Oregon was selected by lottery for the chance to apply for Medicaid. We use this randomized design and 2009 administrative data to evaluate the effect of Medicaid on labor market outcomes and participation in other social safety net programs. We find no significant effect of Medicaid on labor force participation or earnings: our 95 percent confidence intervals allow us to reject that Medicaid causes a decline in labor force participation of more than 4.4 percentage points, or an increase of more than 1.2 percentage points. We find that Medicaid increases receipt of food stamps, but has little, if any, impact on receipt of other government benefits, including SSDI. |
| JEL: | H51 H53 I13 J20 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19547&r=lab |
| By: | Dengler, Katharina (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Many studies have analysed the effectiveness of single active labour market programmes (ALMPs) for welfare recipients in different countries. As empirical evidence reveals that welfare recipients in Germany often participate in multiple programmes, I evaluate the sequential participation of unemployment benefit II (UB-II)-recipients in ALMPs in Germany. My study uses comprehensive, administrative data to control for dynamic selection that arises in the evaluation of sequences. Using a dynamic matching approach and an inflow sample of UB-II-recipients, I analyse the effects of sequences of One-Euro-Jobs and/or UB-II-receipt on labour market outcomes. I focus on two questions: Is participating in two consecutive One-Euro-Jobs compared with receiving UB II for two consecutive periods better for individuals' employment outcomes? Is it more effective to take part in a One-Euro-Job directly after entry into UB II or in a later period? For female participants in One-Euro-Jobs in the first period, especially in West Germany, I find that participating in two consecutive One- Euro-Jobs compared with receiving UB-II-receipt for two consecutive periods better facilitates integration into regular employment. It is also more effective for participants in One-Euro- Jobs in the first period to take part in a One-Euro-Job directly after entry into UB II rather than take part in a One-Euro-Job in a later period, especially for East German men (although not for West German women). However, I also find evidence of so-called programme careers and stepwise integration into regular employment through direct job creation schemes (without One-Euro-Jobs)." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | C31 I38 J68 |
| Date: | 2013–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201316&r=lab |
| By: | Wadensjö, Eskil (Stockholm University) |
| Abstract: | The labor market differs from other markets in many respects. Most important is that those who supply labor also have to deliver it in person. It means firstly that the work environment and organization of work are important for those who deliver labor, since they are in the work place. Secondly, the result of a person's work varies with the price of labor (remuneration) and how the work is organized. Thirdly, the definition of work or a job for an employed person is not fixed but dependent on the person. The paper firstly deals with economic models of labor supply, labor demand, labor remuneration and labor market information. The subsequent sections discuss complications regarding labor market transparency in the context of international migration and public policy and policy implications regarding labor market transparency. A final section concludes. |
| Keywords: | transparency in the labor market, international migration, wages, labor supply, labor demand, labor market information |
| JEL: | F22 J22 J23 J30 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7658&r=lab |
| By: | Ma, Yuanyuan (University College Dublin); Walsh, Patrick Paul (University College Dublin) |
| Abstract: | The "dual-track approach" for transition would have to be facilitated by an endogenous movement of workers away from the state into private jobs. Yet, using the Chinese Household Income Project Series (CHIPs) data for the year 2002, we document preferences and premiums for state jobs in urban China over private jobs. The state sector attracted the best workers in more favorable industries and regions and offered higher earning premiums. In addition, family party membership is found to be instrumental in allocating workers into state jobs which explains a good deal of the earnings differentials in terms of an endogenous state premium. |
| Keywords: | labor mobility, earnings differentials, party networks, state jobs, urban China |
| JEL: | J42 J62 O15 P23 R23 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7643&r=lab |
| By: | Sandra Nieto (Faculty of Economics, University of Barcelona); Alessia Matano (Faculty of Economics, University of Barcelona); Raul Ramos (Faculty of Economics, University of Barcelona) |
| Abstract: | The objective of this paper is to analyse and explain the factors behind the observed differences in skill mismatches (vertical and horizontal) between natives and immigrants in EU countries. Using microdata from the 2007 wave of the Adult Education Survey (AES), different probit models are specified and estimated to analyse differences in the probability of each type of skill mismatch between natives and immigrants. Next, Yun’s decomposition method is used to identify the relative contribution of characteristics and returns to explain the differences between the two groups. Our analysis shows that immigrants are more likely to be skill mismatched than natives, being this difference much larger for vertical mismatch. In this case, the difference is higher for immigrants coming from non-EU countries than for those coming from other EU countries. We find that immigrants from non-EU countries are less valued in the EU labour markets than natives with similar characteristics, a result that is not observed for immigrants from EU countries. These results could be related to the limited transferability of the human capital acquired in non-EU countries. The findings suggest that specific programs to adapt immigrants’ human capital acquired in home country are required to reduce differences in the incidence of skill mismatch and a better integration in the EU labour markets. |
| Keywords: | Immigrant overeducation, vertical mismatch, horizontal mismatch, human capital transferability. JEL classification: |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:aqr:wpaper:201310&r=lab |
| By: | Cabane, Charlotte; Clark, Andrew E. |
| Abstract: | We here ask whether sports participation at school is positively correlated with adult labour-market outcomes. There are many potential channels for this effect, although, as usual, identifying a causal relationship is difficult. We appeal to two widely-separated waves of Add Health data to map out the correlation between school sports and adult labourmarket outcomes. We show that different types of school sports are associated with different types of jobs and labour-market insertion when adult. We take the issue of the endogeneity of sport seriously and use data on siblings in order to obtain estimates that are as close to unbiased as possible. Last, we compare the effect of sporting activities to that of other leisure activities. |
| Keywords: | Job characteristics, Education, Sport, School |
| JEL: | J24 J13 L83 I2 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2013:28&r=lab |
| By: | Ron Boschma; Rikard Eriksson; Urban Lindgren |
| Abstract: | This study investigates the relationship between labour market externalities and regional growth based on real labour flows. In particular, we test for the importance of labour mobility across so-called skill-related industries. We make use of a sophisticated indicator that measures the degree of skill-relatedness between all industries, and we employ actual labour flows between 435 4-digit industries within 72 Swedish functional labour market regions to estimate how labour market externalities are related to regional growth in the period 1998-2002. Both our fixed effect models and GMM-estimates demonstrate that a strong intensity of intra-regional labour flows between skill-related industries impacts positively on regional productivity growth, but less so on regional employment growth. Labour mobility between unrelated industries tends to dampen regional unemployment growth while a high degree of intra-industry labour flows is only found to be associated with rising regional unemployment. |
| Keywords: | agglomeration externalities, related variety, regional growth, labour mobility, related labour market externalities, skill-relatedness |
| JEL: | R11 R12 O18 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1318&r=lab |
| By: | Allen J.P.; Velden R.K.W. van der; Levels M. (GSBE) |
| Abstract: | In this paper, we empirically explore how the often reported relationship between overeducation and wages can best be understood. Exploiting the newly published Programme for International Assessment of Adult Competencies PIAAC data OECD 2013, we are able to achieve a better estimation of the classical ORU-model Duncan and Hoffman, 1981, by controlling for heterogeneity of observable skills. Our findings suggest that 1 a considerable part of the effect of educational mismatches can be attributed to skills heterogeneity, and 2 that the extent to which skills explain educational mismatches varies by institutional contexts. These observations suggest that skills matter for explaining wage effects of education and educational mismatches, but the extent to which this is the case also depends on institutional contexts. |
| Keywords: | Analysis of Education; Education and Economic Development; Labor Demand; Human Capital; Skills; Occupational Choice; Labor Productivity; |
| JEL: | I21 I25 J23 J24 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013062&r=lab |
| By: | Paolo Falco |
| Abstract: | This paper investigates the role of risk-aversion in the allocation of workers between formal and informal jobs in Ghana. In the model I propose risk-averse workers can opt between the free-entry informal sector and queuing for formal occupations. Conditional on identifying the riskier option, the model yields testable implications on the relationship between risk-preferences and workers’ allocation. My testing strategy proceeds in two steps. First, I estimate expected income uncertainty through panel data and find it significantly higher in the informal sector. Second, using novel experimental data to elicit individual attitudes to risk, I estimate the direct effect of risk-aversion on occupational choices and find that, in line with the first result, more risk-averse workers are more likely to queue for formal jobs and less likely to be in the informal sector. The results bear important implications for the optimal design of employment policies and social security. |
| Keywords: | sector allocation; occupational choices; risk-aversion; informality |
| JEL: | C93 J21 J24 J64 O17 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2013-15&r=lab |
| By: | Lina Gálvez-Muñoz; Paula Rodríguez-Modroño; Tindara Addabbo |
| Abstract: | Contrary to consolidated economic theory principles, in Europe (but also in other world regions), austerity policy has been implemented instead of stimulus measures which have proven to be successful in crisis associated with credit crunch and insufficient demand. These policies cannot be only considered as an "austericide" due to ideological blindness. They also need to be considered as a strategy for imposing an economic and social reform which proved too difficult to be implemented in the years previous to the great recession. The ongoing fiscal contraction policies include the typical adjustment measures which are now driving the European economy towards a new type of insertion within the international economy. And as a consequence, they imply deep changes on the gender division of work deepening gender inequality. This article analyses the different effects of European Union austerity policy on women and men’s participation in the labour markets in two Southern European countries beaten by the Debt crisis: Spain and Italy. During the first part of this economics crisis, unemployment grew higher for men than for women, but in the second phase with the all sectors hit by the recession and the implementation of harsh austerity policies affecting public-sector jobs, women are also losing their jobs at the same rate than men. We have estimated labour supply models for individuals aged 25 to 54 living in couples with or without children by gender by using the EU-SILC 2011 micro data for Spain and Italy. The analysis carried out shows a strong countercyclical added-worker effect for women in response to transitory shocks in partner’s earnings, in contrast with a procyclical discouraged-worker effect for men. However though the added-worker effect prevails for women in Spain, in Italy still the discouraged worker effect dominates. The results show also a positive effect of the provision of childcare services on women’s labour supply. A cut in social and care services due to austerity promotion may turn the tendency to a decline in women’s participation and employment rates in the labour force with the subsequent loss of total well-being, due to gender differences in education performance, and especially of women’s well-being. |
| Keywords: | gender, labour supply, austerity policy, Great Recession |
| JEL: | J22 J16 H53 E62 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:mod:cappmo:0108&r=lab |
| By: | von Scheve, Christian (Freie Universität Berlin); Esche, Frederike (Humboldt University Berlin); Schupp, Jürgen (DIW Berlin) |
| Abstract: | Unemployment continues to be one of the major challenges in industrialized societies. Aside from its economic dimensions and societal repercussions, questions concerning the individual experience of unemployment have recently attracted increasing attention. Although many studies have documented the detrimental effects of unemployment for subjective well-being, they overwhelmingly focus on life satisfaction as the cognitive dimension of well-being. Little is known about the emotional antecedents and consequences of unemployment. We thus investigate the impact of unemployment on emotional well-being by analyzing the frequency with which specific emotions are experienced in anticipation of and reaction to job loss. Using longitudinal data of the German Socio-Economic Panel (SOEP) and fixed effects regressions, we find that becoming unemployed leads to more frequent experiences of unpleasant emotions only in the short run and that adaptation occurs more rapidly as compared to life satisfaction. Contrary to existing studies, we find decreases in emotional well-being but not in life satisfaction in anticipation of unemployment. |
| Keywords: | unemployment, emotions, well-being, life satisfaction, SOEP |
| JEL: | A14 D63 J17 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7654&r=lab |
| By: | Delfgaauw, Josse (Erasmus University Rotterdam); Dur, Robert (Erasmus University Rotterdam); Non, Arjan (ROA, Maastricht University); Verbeke, Willem (Erasmus University Rotterdam) |
| Abstract: | We conduct a field experiment among 189 stores of a retail chain to study dynamic incentive effects of relative performance pay. Employees in the randomly selected treatment stores could win a bonus by outperforming three comparable stores from the control group over the course of four weeks. Treatment stores received weekly feedback on relative performance. Control stores were kept unaware of their involvement, so that their performance generates exogenous variation in the relative performance of the treatment stores. As predicted by theory, we find that treatment stores that lag far behind do not respond to the incentives, while the responsiveness of treatment stores close to winning a bonus increases in relative performance. On average, the introduction of the relative performance pay scheme does not lead to higher performance. |
| Keywords: | dynamic incentives, relative performance pay, field experiment |
| JEL: | C93 M52 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7652&r=lab |
| By: | Brian Bell; John Van Reenen |
| Abstract: | The pay of financial sector workers ("bankers") is a focus of public concern especially since the onset of the financial crisis. We document the remarkable rise in the share of aggregate pay going to those at the very top of the distribution over the last decade in the UK and highlight the role of the financial sector. Rising bonuses paid to bankers accounted for around two-thirds of the increase in the national wage bill ("earnings pie") taken by the top one percent of workers since 1999. Surprisingly, even after the crisis bankers took at least as large a share of the earnings pie in 2011 as they did at the peak of the boom in 2007 and saw no worsening in their employment outcomes relative to other similar workers. Having described the scale of bankers' pay, we discuss the policy responses that have been proposed to address the issue such as transparency, numerical bonus targets, bonus clawbacks and taxation. |
| Keywords: | wage inequality, financial services, bonuses |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepops:35&r=lab |
| By: | Joseph Lanfranchi (LEM - Laboratoire d'Économie Moderne - Université Paris II - Panthéon-Assas : EA4442, CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé); Mathieu Narcy (CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé, TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris-Est Créteil Val-de-Marne (UPEC) : EA437 - Université Paris-Est Marne-la-Vallée (UPEMLV)) |
| Abstract: | Women are overrepresented in the public and nonprofit sectors. This article aims to bring to light the reasons behind this phenomenon. The originality of the employer-employee matched data used allows us to consider a large scope of potential reasons. Using a non-linear decomposition technique (Fairlie, 2005), we find that in addition to the well-known occupational segregation effect, the overrepresentation of women in the public and nonprofit sectors is associated with two common factors: greater offerings of family-friendly practices and higher attraction of men for certain fringe benefits that are more frequently provided by the for-profit sector. Sector-specific factors also exist. The higher wage advantage obtained by women compared with men working in the public sector rather than in the for-profit sector contributes to the feminization of the public sector. Similarly, the overrepresentation of women in the nonprofit sector is linked to greater access to part-time jobs and shorter workweeks there. |
| Keywords: | Public and nonprofit sectors, overrepresentation of women, occupational segregation, family-friendly policies |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00872954&r=lab |
| By: | Clément Bosquet (London School of Economics and Political Science (SERC) and AixMarseille School of Economics); Pierre-Philippe Combes (Aix-Marseille University (Aix-Marseille School of Economics, EHESS & CNRS.); Cecilia García-Peñalosa (Aix Marseille University (Aix Marseille School of Economics), Cnrs and Ehess) |
| Abstract: | Differences in promotion across genders are still prevalent in many occupations. Recent work based on experimental evidence indicates that women participate less in or exert lower effort during contests. We exploit the unique features of the promotion system for French academics to look at women's attitudes towards competition in an actual labour market. Using data for academic economists over the period 1991-2008 we find that, conditional on entering the competition, there is no difference in promotions across the genders, which is diffcult to reconcile with either discrimination or a poorer performance of women in contests. In contrast, women have a substantially lower probability than men to enter the promotion contest. Our data does not support that this gap is due to differences in costs or in preferences concerning department prestige, indicating that women are less willing than men to take part in contests. |
| Keywords: | gender gaps, promotions, academic labour markets |
| JEL: | J7 I23 |
| Date: | 2013–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1351&r=lab |
| By: | Monga, Celestin |
| Abstract: | This paper assesses some of the main strands of the theoretical literature on unemployment and employment and shows that their interesting conclusions may not be transferable to low-income countries whose endowment and production structures are profoundly different from that of high-income economies. It then tackles the knowledge deficit on employment creation by shedding light on the new economic opportunities that latecomers may derive from the dynamics of globalization -- especially the economic success of large emerging economies such as China and Brazil. It offers a simple analytical framework for identifying opportunities for labor arbitrage in the global economy and suggests a practical policy framework for exploiting them. |
| Keywords: | Labor Markets,Labor Policies,Economic Theory&Research,Population Policies,Banks&Banking Reform |
| Date: | 2013–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6661&r=lab |
| By: | Heywood, John S. (University of Wisconsin, Milwaukee); Siebert, W. Stanley (University of Birmingham); Wei, Xiangdong (Lingnan University) |
| Abstract: | This field experiment examines output quantity and quality for workers in a data input business. We observe two sets of workers that differ in monitoring intensity as they move from time to piece rates. The application of piece rates increases quantity, and we find that the resultant quality can be improved with sufficient monitoring. "Committed" workers also produce higher quantity and quality, showing the role of worker selection - which appears especially strong under time rates. Our results thus show how a firm can refine its worker selection and monitoring options together with the payment system to deliver its chosen quality-quantity combination. |
| Keywords: | piece rate, monitoring, shirking, quantity and quality trade off, field experiment, worker committment |
| JEL: | D2 J3 L2 M5 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7660&r=lab |
| By: | Fleury, Nicolas |
| Abstract: | This paper analyses the differences in the determinants of the accumulation of human capital for second-generation immigrants relatively to natives for the French case. We use the Training and Occupational Skills survey to conduct our econometric analysis, where we distinguish the natives, the second-generation immigrants from ‘North Africa’ and from ‘Southern Europe’ origins. We don’t observe striking differences in the determinants between the second-generation immigrants as a whole and the natives. Moreover, the ‘second-generation immigrants’ group is a heterogeneous one. The significant determinants as well as the magnitude of the impact of these determinants substantially differ between the natives and the two main considered origins. There seems to be a lower ‘determinism’ through parental education for ‘Southern Europe’ than ‘North Africa’ origin, but differences in intergenerational correlations of education could be explained by parental transmission of education and/or by selection effects of the migrants. The Blinder-Oaxaca decomposition shows that parental endowments in education account for a large part of the mean outcome differences, but transmissions of education (and other components) also seems to be some relevant to explain differences in accumulation of human capital of second-generation migrants vs natives or between migrants. |
| Keywords: | accumulation of human capital, intergenerational mobility, immigrants |
| JEL: | J1 J24 J6 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50682&r=lab |
| By: | Casey B. Mulligan |
| Abstract: | Uncertainty and its composition can affect the demand for social insurance, and thereby the labor market. This paper shows that small to medium-sized increases in uncertainty or risk aversion are enough to recommend an expansion of the safety net that would be broadly similar to the actual safety net expansions, which significantly depressed the labor market. Labor market effects of uncertainty through investment and insurance channels are also examined with employer and employee labor wedges. |
| JEL: | D33 E24 I38 J22 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19553&r=lab |
| By: | Tindara Addabbo; Jaya Krishnakumar; Elena Sarti |
| Abstract: | This paper is an empirical study on the work opportunities of people with disability using Italian data collected through a survey carried out by ISTAT in 2004. Our analysis is guided by the conceptual framework of the capability approach and investigates the role of conversion factors in the ability to be employed and the type of employment. We first use a simple probit for labour force participation and then a sequential logit for the outcomes of participation as well as employment status. In all variants we and that chronic illness is a stronger deterrent for labour force participation than disability.Women are more discouraged by disability compared to men. Among the various types of disabilities, `intellectual' disability is the strongest barrier as can be expected and hearing the least influential. In a sequential decision-making process, we and that disability affects both labour force participation decision and the ability to be employed but not so much the choice between part-time and full-time |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:mod:cappmo:0109&r=lab |
| By: | Słoczyński, Tymon |
| Abstract: | In this paper I use the National Supported Work (NSW) data to examine the finite-sample performance of the Oaxaca–Blinder unexplained component as an estimator of the population average treatment effect on the treated (PATT). Precisely, I follow sample and variable selections from Dehejia and Wahba (1999), and conclude that Oaxaca–Blinder performs better than any of the estimators in this influential paper, provided that overlap is imposed. As a robustness check, I consider alternative sample (Smith and Todd 2005) and variable (Abadie and Imbens 2011) selections, and present a simulation study which is also based on the NSW data. |
| Keywords: | Decomposition methods; Manpower training; Treatment effects. |
| JEL: | C21 J24 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50660&r=lab |
| By: | Kaditi, Eleni |
| Abstract: | The labour force engaged in the agricultural sector is declining over time, and one can observe the reallocation of labour from family members to hired workers. Using farm-level data, this paper analyses the on-farm labour structure in Greece and assesses the factors driving its evolution over the period 1990-2008. The impact of agricultural policies and farm characteristics is examined in a dynamic panel analysis. Family and hired labour are found to be substitutes rather than complements, while agricultural support measures appear to negatively affect demand for both family and hired labour. Decoupled payments and subsidies on crops are found to have a significant impact on both sources of labour, as well as subsidies for rural development that do not favour on-farm labour use. The paper also finds that structural labour adjustments are the result of farm characteristics, such as farm size and location. The results are robust to various estimation techniques and specifications. |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:eps:fmwppr:177&r=lab |
| By: | Thomas Dee; James Wyckoff |
| Abstract: | Teachers in the United States are compensated largely on the basis of fixed schedules that reward experience and credentials. However, there is a growing interest in whether performance-based incentives based on rigorous teacher evaluations can improve teacher retention and performance. The evidence available to date has been mixed at best. This study presents novel evidence on this topic based on IMPACT, the controversial teacher-evaluation system introduced in the District of Columbia Public Schools by then-Chancellor Michelle Rhee. IMPACT implemented uniquely high-powered incentives linked to multiple measures of teacher performance (i.e., several structured observational measures as well as test performance). We present regression-discontinuity (RD) estimates that compare the retention and performance outcomes among low-performing teachers whose ratings placed them near the threshold that implied a strong dismissal threat. We also compare outcomes among high-performing teachers whose rating placed them near a threshold that implied an unusually large financial incentive. Our RD results indicate that dismissal threats increased the voluntary attrition of low-performing teachers by 11 percentage points (i.e., more than 50 percent) and improved the performance of teachers who remained by 0.27 of a teacher-level standard deviation. We also find evidence that financial incentives further improved the performance of high-performing teachers (effect size = 0.24). |
| JEL: | I2 J45 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19529&r=lab |
| By: | Kräkel, Matthias; Nieken, Petra |
| Abstract: | We analyze whether incentives from relative performance pay are reduced or enhanced if a department is possibly terminated due to a crisis. Our benchmark model shows that incentives decrease in a severe crisis, but are boosted given a minor crisis since efforts are strategic complements in the former case but strategic substitutes in the latter one. We tested our predictions in a laboratory experiment. The results confirm the effort ranking but show that in a severe crisis individuals deviate from equilibrium significantly stronger than in other situations. This behavior contradicts the benchmark model and leads to a five times higher survival probability of the department. We develop a new theoretical approach that may explain players’ behavior. |
| Keywords: | crisis; incentives; strategic complements; strategic substitutes; tournament |
| JEL: | C9 J3 J6 M5 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:425&r=lab |
| By: | Kang, Lili; Peng, Fei |
| Abstract: | This paper examines effects of the formation of physical and human capital on the growth of labour productivity, Total Factor Productivity (TFP) and wages in China, incorporating the market reform factors such as ownership shifts, population policy, openness and fiscal expenditures on education. We find that Chinese economic miracle is mainly pushed by the (physical) capital service rather than formation of human capital. The physical capital inputs contribute even more after 1994 as the returns to education decrease with the education expansion and increasing tuition fees. The traditional four economic regions of China show different growth patterns. The capital inputs mostly help the labour productivity growth in the West region and the wages growth in the Interior region, while human capital formation contributes to the TFP in all four regions. Moreover, provinces within each region present strong evidence of convergence of economic growth. The convergence is most prominent in the provinces within the Northeast and Coastal regions for labour productivity and TFP growth, suggesting fast technology spill-over within these regions. |
| Keywords: | labour productivity, convergence, regional inequality |
| JEL: | D24 D63 J24 O47 |
| Date: | 2013–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50810&r=lab |
| By: | Thor O. Thoresen; Trine E. Vattø (Statistics Norway) |
| Abstract: | Given that structural labor supply models continue to play a key role in the process of policy design, it is important to validate their capacity to provide reasonable predictions of alternative hypothetical policy options. Comparing outcomes before and after a realized policy change (such as a tax reform) provides a source of information about behavioral response that can be used to certify the structural labor supply model. The elasticity of taxable income (ETI) measures the response in taxable income to a change in the net-of-tax rate and is a key concept in the quasi-experimental approach. The present paper shows how the ETI methodology can be used to validate predictions from a discrete choice structural labor supply model. Practical guidance is given on how such comparisons can be carried out, and results of these two main methods of obtaining empirical response estimates are contrasted and interpreted. |
| Keywords: | Model validation; Response to tax change; Discrete choice structural labor supply model; Elasticity of taxable income |
| JEL: | H21 H24 H31 J22 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:738&r=lab |