|
on Labour Economics |
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Issue of 2014‒03‒30
twenty-six papers chosen by Erik Jonasson National Institute of Economic Research |
| By: | Bossler, Mario; Oberfichtner, Michael |
| Abstract: | We provide difference-in-differences evidence from Germany on the effect of deregulating weekday shop opening hours on employment in food retailing. Using data on the universe of German shops, we find that relaxing restrictions on business hours increased employment by 0.4 workers per shop corresponding to an aggregate employment effect of 3 to 4 per cent. The effect was driven by an increase in parttime employment while full-time employment was not affected. The statistical significance of these results hinges on assumptions on error correlation, and we hence report inference robust to clustering at different levels. A back-of-the-envelope calculation gives an employment increase by 0.1 workers per additional actual weekly opening hour. -- Wir untersuchen den Effekt der Freigabe der Ladenöffnungszeiten auf die Beschäftigung im deutschen Lebensmitteleinzelhandel mit der Differenz-von-Differenzen-Methode. Unter Verwendung von Daten über alle deutschen Einzelhändler finden wir, dass die Ausweitung der gesetzlich erlaubten Ladenöffnungszeiten die Beschäftigung um durchschnittlich 0,4 Arbeitnehmer pro Laden erhöht hat, was einer Zunahme der Beschäftigung um 3 bis 4 Prozent entspricht. Getrieben wird dieser Effekt von einer Zunahme der Teilzeitbeschäftigung, wohingegen die Vollzeitbeschäftigung nicht betroffen war. Die statistische Signifikanz der gefundenen Effekte hängt von den Annahmen an die Störtermkorrelation ab und wir berichten daher Ergebnisse bei Clustering auf verschiedenen Ebenen. Eine Überschlagsrechnung zeigt eine Zunahme der Beschäftigung um 0,1 Arbeitnehmer pro Erhöhung der tatsächlichen wöchentlichen Öffnungszeiten um eine Stunde. |
| Keywords: | shop opening regulations,employment,retail sector,Germany |
| JEL: | J23 L51 L81 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:faulre:91&r=lab |
| By: | Schiff, Maurice (World Bank) |
| Abstract: | Prescott (2004) argues that Europeans work much less than Americans because of higher taxes and that they would gain significantly by charging US taxes and working as much as Americans. I argue that the opposite may be true and that Americans work more than Europeans due to a coordination failure. Studies show that utility falls with other people's income, a negative externality that is internalized in Europe through laws on the minimum amount of vacation time (and maximum hours of work), something unthinkable in the US. Thus, Americans may be stuck in an "overworking trap" and would gain by working less. A simple model and data on work time are used to obtain an estimate of the US welfare gain from reducing its work time to Europe's level. On the other hand, if neither EU nor US work time is optimal, then the sign of the EU-to-US welfare difference is positive (ambiguous) if EU work time is greater (smaller) than the optimum, while simulations show that even in the latter case, EU welfare is greater than US welfare if, relative to the optimum, the EU work 'shortage' is smaller than the US work 'surplus'. |
| Keywords: | work, leisure, Europe, US coordination failure |
| JEL: | D70 J22 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8041&r=lab |
| By: | Francisco J. Buera; Roberto Fattal-Jaef; Yongseok Shin |
| Abstract: | Why are financial crises associated with a sustained rise in unemployment? We develop a tractable model with frictions in both credit and labor markets to study the aggregate and micro-level implications of a credit crunch--i.e., a tightening of collateral constraints. When we simulate a credit crunch calibrated to match the observed decline in the ratio of debt to non-financial assets of the United States business sector following the 2007-8 crisis, our model generates a sharp decline in output--explained by a drop in aggregate total factor productivity and investment--and a protracted increase in unemployment. We then explore the micro-level impact by tracking the employment dynamics for firms of different sizes and ages. The credit crunch causes a much larger reduction in the net employment growth rate of small, young establishments relative to that of large, old producers, consistent with the recent empirical findings in the literature. |
| JEL: | E24 E44 L25 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19997&r=lab |
| By: | Picard, Pierre M. (University of Luxembourg); Worrall, Tim (University of Edinburgh) |
| Abstract: | This paper studies the costs and benefits of the adoption of the policy of free movement for workers. For the countries to agree on uncontrolled movement of workers, the short run costs must be outweighed by the long term benefits that result from better labor market flexibility and income smoothing. We show that such policies are less likely to be adopted when workers are impatient and less risk averse workers, when production technologies display decreasing returns and when countries trade a share of their products. |
| Keywords: | labor market flexibility, migration, sustainable plan |
| JEL: | F22 J61 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8035&r=lab |
| By: | Betcherman, Gordon |
| Abstract: | Labor market regulation is a high-profile, and often contentious, area of public policy. Although these regulations have been studied most extensively in developed countries, there is a growing body of literature on their effects in developing countries. This paper reviews that literature and focuses on the impacts of two important types of labor market regulation, minimum wages and employment protection legislation (EPL), on employment, earnings, and productivity. Strong and opposing views exist regarding the costs and benefits of these regulations, but the results of this review suggest that their impacts are generally smaller than the heat of the debates would suggest. Efficiency effects are found sometimes, but not always, and the effects can be in either direction and are usually modest. The distributional impacts of both minimum wage and employment protection legislation are clearer, with two effects predominating: an equalizing effect among covered workers, but with groups such as youth, women, and the less skilled disproportionately outside the coverage and its benefits. Although the overall conclusion is one of modest effects in most cases, the policy implication is not that these regulations do not matter. On the one hand, both minimum wages and EPL can affect distributional objectives. On the other hand, these regulations can generate undesirable economic or social impacts if they are established or operate in ways that exacerbate the labor market imperfections that they were designed to address. |
| Keywords: | Labor Markets,Labor Policies,Banks&Banking Reform,Markets and Market Access,Tertiary Education |
| Date: | 2014–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6819&r=lab |
| By: | Fabrice Murtin; Jean-Marc Robin (Institute for Fiscal Studies and Sciences Po) |
| Abstract: | In this paper, we quantify the contribution of labor market reforms to unemployment dynamics in nine OECD countries (Australia, France, Germany, Japan, Portugal, Spain, Sweden, the United Kingdom and the United States). We build and estimate a dynamic stochastic search-matching model with heterogeneous workers, where aggregate shocks to productivity fuel up the cycle, and unanticipated policy interventions shift structural parameters and displace the long-term equilibrium. We show that the heterogeneous-worker mechanism proposed by Robin (2011) to explain unemployment volatility by productivity shocks works well in all countries. The amount of resources injected into placement and employment services, the reduction of UI benefits and product market deregulation stand out as the most prominent policy levers for unemployment reduction. All other LMPs have a significant but lesser impact. We also find that business cycle shocks and LMPs explain about the same share of unemployment volatility (except for Japan, Portugal and the US). |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:13/14&r=lab |
| By: | Fouarge D.; Grip A. de; Elsayed A.E.A. (ROA) |
| Abstract: | Using data from the UK Skills Surveys, we show that the part-time pay penalty for female workers within low- and medium-skilled occupations decreased significantly over the period 1997-2006. The convergence in computer use between part-time and full-time workers within these occupations explains a large share of the decrease in the part-time pay penalty. However, the lower part-time pay penalty is also related to lower wage returns to reading and writing which are performed more intensively by full-time workers. Conversely, the increasing returns to influencing has increased the part-time pay penalty despite the convergence in the influencing task input between part-time and full-time workers. The relative changes in the input and prices of computer use and job tasks together explain more than 50 percent of the decrease in the part-time pay penalty. |
| Keywords: | Human Capital; Skills; Occupational Choice; Labor Productivity; Wage Level and Structure; Wage Differentials; |
| JEL: | J24 J31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umaror:2014003&r=lab |
| By: | Andrea Garnero; Stephan Kampelmann; François Rycx |
| Abstract: | The authors use matched employer-employee panel data on Belgian private-sector firms to estimate the relationship between wage/productivity differentials and the firm’s labor composition in terms of part-time and sex. Findings suggest that the groups of women and part-timers generate employer rents, but also that the origin of these rents differs (relatively lower wages for women, relatively higher productivity for part-timers). Interactions between gender and part-time suggest that the positive productivity effect is driven by male part-timers working more than 25 hours, whereas the share of female part-timers is associated with wage penalties. The authors conclude that men and women differ with respect to motives for reducing working hours and the types of part-time jobs available to them: women often have to accommodate domestic constraints by downgrading to more flexible jobs, whereas male part-time work is frequently related to training and collectively negotiated hours reductions that do not affect hourly pay. |
| Keywords: | wages; productivity; part-time employment; gender; matched panel data; GMM |
| JEL: | J39 |
| Date: | 2013–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:2013/151596&r=lab |
| By: | Marco Di Cintio (Department of Management, Economics, Mathematics and Statistics, University of Salento, Italy); Emanuele Grassi (Department of Management, Economics, Mathematics and Statistics, University of Salento, Italy) |
| Abstract: | This paper formalizes the use of flexible labor contracts in an efficiency wage framework and derives market dualism as an endogenous outcome. By allowing temporary contracts to be either renewed or converted into permanent contracts, new theoretical insights emerge both on the equilibrium wage structure and the incentive problem faced by workers and firms. Since temporary workers weigh the outside option of entering the labor market through permanent positions, the rate at which fixed-term contracts are converted into open-ended contracts is itself an incentive device which acts as a substitute for the wage. It follows that, even if temporary workers face a higher job loss risk, firms pay a wage differential in favor of permanent workers. The model also predicts that in equilibrium firms hire exclusively under flexible contracts, then half of them is converted into stable contracts while the remaining contracts are left to expire. Thus, in steady state, firms let permanent positions to survive in order to sustain the wage incentive structure. |
| Keywords: | Dual Labor Market, Efficiency Wages, Wage Differentials, Flexible Contracts |
| JEL: | J31 J41 J63 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.22&r=lab |
| By: | Nguyen Viet Cuong |
| Abstract: | This study measures the effect of minimum wage increases on firm outcomes using fixed effects regression and panel data from Vietnam Enterprise Censuses during 2008-2010. It is found that minimum wages reduce firms’ labor size, albeit at a small magnitude. A one percent increase in real minimum wages leads to a 0.1 percent reduction in the number of workers of firms. Firms are more likely to reduce male workers and those without social insurance. As a result, the proportion of female workers and workers with social insurance in firms increases due to minimum wages. Interestingly, under pressure of minimum wages, firms tend to increase assets, especially fixed assets, for labor substitution. |
| Keywords: | minimum wages, firms, impact evaluation, panel data, Vietnam. |
| JEL: | J31 L25 P42 |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-179&r=lab |
| By: | Sandra Nieto (Faculty of Economics, University of Barcelona) |
| Abstract: | The literature on educational mismatches finds that overeducated workers suffer a wage penalty compared with properly educated workers with the same level of education. Recent literature also suggests that individuals’ skill heterogeneity could explain wage differences between overeducated and properly matched workers. The hypothesis is that overeducated workers earn less due to their lower competences and skills in relative terms. However, that hypothesis has been rarely tested due to data limitations on individuals’ skills. The aim of this paper is to test the individuals’ skill heterogeneity theory in Spain using microdata from PIAAC, because it is one of the developed countries supporting the highest overeducation rates and where its adult population holds the lowest level of skills among a set of developed countries. Our hypothesis is that the wage penalty of overeducation in Spain is explained by the lower skill level of overeducated workers. The obtained evidence confirms this hypothesis but only to a certain extent as skills only explain partially the wage penalty of overeducation. |
| Keywords: | overeducation, individual’s skill heterogeneity, wages JEL classification: J31, I21, C13 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201411&r=lab |
| By: | Rasmus Lentz |
| Abstract: | In this paper I explore optimal employment contract design in a random search framework, where workers search on and off the job for employment opportunities similar to that of Lentz (2010) and Bagger and Lentz (2013). The worker determines the frequency by which employment opportunities arrive through a costly choice of search intensity, which is unobserved by the firm and cannot be directly contracted upon. Firms differ in productivity by which they employ workers. Firms compete over workers in terms of utility promises in a fashion otherwise similar to that of Postel-Vinay and Robin (2002). As in Burdett and Coles (2003) and Burdett and Coles (2010), optimal tenure conditional contracts are shown to be back loaded to discourage the worker from generating outside competitive pressure. The analysis establishes existence, uniqueness and provides characterization of the core mechanism. The paper applies the framework to the analysis of firm provided general human capital training. It is shown that more productive firms provide more training and pay higher wages. |
| JEL: | E24 J01 J24 J31 J33 J41 J6 J63 J64 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19988&r=lab |
| By: | Bruno Amable (Centre d'Economie de la Sorbonne); Baptiste Françon (Centre d'Economie de la Sorbonne) |
| Abstract: | In this paper, we investigate the microeconomic effects of one major feature of the German Hartz Reforms (2003-2005), namely the reduction in compensation duration for older unemployed above 45 years of age. We look at two potential effects of this measure: on job take-up rates, but also on post-unemployment outcomes, through various indicators of matching quality (job stability, skill adequacy) and job quality (type of job contract). Applying difference-in-differences estimators, we show that the effects of this specific feature were rather scant. Regarding unemployment duration, only unemployed within a specific age group (55 to 59 years old) were affected by the reform. Evidence suggests that this is because they previously used unemployment schemes as a bridge to early retirement. In addition, there is some evidence of detrimental effects on job or matching quality. |
| Keywords: | Unemployment benefits, unemployment duration, job matching, job quality, early retirement, difference-in-differences. |
| JEL: | C41 J64 J26 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:14020&r=lab |
| By: | Hoherz, Stefanie |
| Abstract: | This research focuses on re-entry for mothers after maternity leave. The empirical analysis focuses on the first twenty-two years of post-reunification Germany, using proportional hazards models. Results show that the re-entry into part-time employment is primarily affected by the mothers own resources and former career, the return to full-time work is more linked to the partners resources. This behaviour is especially prevalent in families where the mother has a higher earning potential than the father, a group having the highest re- entry chances for mothers, especially into full-time employment. The results concerning experiences of unemployment for the male partner show that mothers try to compensate uncertainties with increased labour force participation. |
| Date: | 2014–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2014-15&r=lab |
| By: | Marino, Marianna (EPFL, Lausanne); Parrotta, Pierpaolo (Maastricht University); Pozzoli, Dario (KORA - Danish Institute for Local and Regional Government Research) |
| Abstract: | This article contributes to the literature on knowledge transfer via labor mobility by providing new evidence regarding the role of educational diversity in knowledge transfer. In tracing worker flows between firms in Denmark over the period 1995-2005, we find that knowledge carried by workers who have been previously exposed to educationally diverse workforces significantly increases the productivity of hiring firms. Several extensions of our baseline specification support this finding and show that insignificant effects are associated with the prior exposure of newly hired employees to either demographic or culturally diverse workplaces. |
| Keywords: | educational diversity, knowledge transfer, inter-firm labor mobility, firm productivity |
| JEL: | J24 J60 L20 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8033&r=lab |
| By: | John T. Addison (Department of Economics, Moore School of Business, University of South Carolina, Department of Economics and Finance, Durham University Business School, and GEMF, University of Coimbra); Orgul D. Ozturk (Department of Economics, Moore School of Business, University of South Carolina); Si Wang (Department of Economics, Moore School of Business, University of South Carolina) |
| Abstract: | Using data from the National Longitudinal Survey of Youth (NLSY79), this paper considers the role of gender in promotion and subsequent earnings development and how this evolves over a career. In its use of three career stages, the study builds on earlier work using the NLSY79 that considers gender differences in the early career years alone. The raw data suggest reasonably favorable promotion outcomes for females over a career. But the advantages seem to be confined to less-educated females. And while there are strong returns to education for males through enhanced promotion probability and attendant wage growth in later career this is not the case for females. Although this latter finding is not inconsistent with fertility choices on the part of educated females, choice is seemingly only part of the explanation. |
| Keywords: | promotion, earnings, early/mid/peak career, gender, public sector, private sector. |
| JEL: | J16 J31 J51 J62 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2014-07.&r=lab |
| By: | Andrea Garnero; Stephan Kampelmann; François Rycx |
| Abstract: | This paper explores how the diversity of minimum wage systems affects earnings inequalities within European countries. It relies on the combination of (a) harmonized micro-data from household surveys, (b) data on national statutory minimum wages and coverage rates, and (c) hand-collected information on minimum rates from more than 1,100 sectoral-level agreements across Europe. The analysis covers 18 countries over the period 2007-2009. Empirical results confirm the intuition of many practitioners that the combination of sectoral minimum rates and high coverage of collective bargaining can, at least for earnings inequalities, be regarded as a functional equivalent to a binding statutory minimum wage at the national level. Regression results suggest indeed that both a national statutory minimum wage and, in countries with sectoral-level minima, a higher collective bargaining coverage are significantly associated with lower levels of (overall and inter-industry) wage inequalities and a smaller fraction of workers paid below prevailing minima. Several robustness checks confirm these findings. |
| Keywords: | Minimum wage systems; collective bargaining; wage inequality; Europe |
| JEL: | J31 J33 J51 |
| Date: | 2013–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:2013/143851&r=lab |
| By: | Drydakis, Nick (Anglia Ruskin University) |
| Abstract: | This study investigates the differences in four aspects of job satisfaction between gay men/lesbians and heterosexuals. The analysis results suggest that gay men and lesbians are less satisfied with their jobs, by all job satisfaction measures, than heterosexual employees, all other factors being held constant. Gay men and lesbians who have disclosed their sexual orientation at their present job are more satisfied with their jobs than those who have not. In addition, gay men and lesbians who disclosed their sexual orientation at their current workplace longer ago are more satisfied with their jobs than gay men and lesbians who disclosed their sexual orientation more recently. Moreover, adverse mental health symptoms have the same negative impact on employees' job satisfaction regardless of sexual orientation. Furthermore, gay men and lesbians receive lower wages than comparable heterosexual employees. Whilst, the wage gap due to sexual orientation is greater in the group of very dissatisfied men than in the group of very satisfied men, and gay men and lesbians who have disclosed their sexual orientation at their present job receive lower wages than those who have not, but they still have higher levels of job satisfaction. It seems that the effect of disclosure on job satisfaction is the net effect of the connections between disclosure and job satisfaction. |
| Keywords: | job satisfaction, sexual orientation |
| JEL: | J28 C93 J7 J16 J31 J42 J64 J71 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8045&r=lab |
| By: | La, Vincent |
| Abstract: | The effect of education on wages has been a widely explored topic. This paper will contribute to the existing literature by studying the causal effect of education on wages in China, a context which has been far less studied. China's compulsory education laws and minimum age labor laws provide potentially exogenous changes in educational attainment. The first goal of this paper will be to estimate the private return to education in China (the effect of an extra year of individual educational attainment on wages). Using China's compulsory education law as an instrument for individual educational attainment, we fail to find a statistically significant return on education in aggregate. However, using China's minimum age labor law as an instrument, we find that an increase in individual educational attainment by one year raises earnings by about 9%. |
| Keywords: | Labor Market, Education, Effect of Education on Wages, Private Return to Schooling |
| JEL: | I20 J16 J30 |
| Date: | 2014–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54578&r=lab |
| By: | Jože P. Damijan (Faculty of Business and Economics, University of Ljubljana); Luca Marcolin (Faculty of Economics and Business, KU Leuven) |
| Abstract: | In this paper we explore the extent to which firms engaged in international trade and FDI activities share profits. We allow for differences not only between domestic and foreign owned firms, but also between firms with outward FDI, importers and exporters. We argue that firms engaged in international trade enhance their performance through knowledge spillovers and technology upgrading – similar to what happens to companies that are part of multinational groups – and that this superior performance can translate into substantial wage premia to workers. Using a unique dataset for Slovenian firms for the period 1994-2002, we confirm positive profit-sharing for foreign firms, firms that engage in outward FDI and two-way traders, but not for firms that only import or export. |
| Keywords: | firm heterogeneity, multinational firms, wage determination, profit-sharing |
| JEL: | F23 J31 J50 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:ebd:wpaper:164&r=lab |
| By: | Johannes Geyer; Peter Haan; Katharina Wrohlich |
| Abstract: | Parental leave and subsidized child care are prominent examples of family policies supporting the reconciliation of family life and labor market careers for mothers. In this paper, we combine different empirical strategies to evaluate the employment effects of these policies for mothers in Germany. In particular we estimate a structural labor supply model and exploit a natural experiment, i.e. the reform of parental leave benefits. By exploiting and combining the advantages of the different methods, i.e the internal validity of the natural experiment and the external validity of the structural model, we can go beyond evaluation studies restricted to one particular methodology. Our findings suggest that a combination of parental leave benefits and subsidized child care leads to sizable employment effects of mothers. |
| Keywords: | Labor supply, parental leave benefits, childcare costs, structural model, natural experiment |
| JEL: | J22 H31 C52 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1366&r=lab |
| By: | Magali Beffy (Institute for Fiscal Studies); Richard Blundell (Institute for Fiscal Studies and University College London); Antoine Bozio (Institute for Fiscal Studies and Paris School of Economics); Guy Laroque (Institute for Fiscal Studies and University College London) |
| Abstract: | A model of labour supply is developed in which individuals face restrictions on hours choices. Observed hours reflect both the distribution of preferences and the distribution of offers. In this framework the choice set is limited and observed hours may not appear to satisfy the revealed preference conditions for `rational' choice. We show first that when the offer distribution is known, preferences can be identified. We then show that, where preferences are known, the offer distribution can be fully recovered. We also develop conditions for identification of both preferences and the offer distribution. We illustrate this approach in a labour supply setting with non-linear budget constraints. The occurrence of non-linearities in the budget constraint can directly reveal restrictions on choices. This framework is then used to study the labour supply choices of a large sample of working age mothers in the UK, accounting for nonlinearities in the tax and welfare benefit system, fixed costs of work and restrictions on hours choices. |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:14/04&r=lab |
| By: | Xavier Raurich (Facultat d'Economia i Empresa; Universitat de Barcelona (UB)); Valeri Sorolla (Univrsitat Autònoma de Barcelona) |
| Abstract: | We introduce wage setting via efficiency wages in the neoclassical one-sector growth model to study the growth effects of wage inertia. We compare the dynamic equilibrium of an economy with wage inertia with the equilibrium of an economy without it. We show that wage inertia affects the long run employment rate and that the transitional dynamics of the main economic variables will be different because wages are a state variable when wage inertia is introduced. In particular, we show that the model with wage inertia can explain some growth patterns that cannot be explained when wages are flexible. We also study the growth effects of permanent technological and fiscal policy shocks in these two economies. During the transition, the growth effects of technological shocks obtained when wages exhibit inertia may be the opposite of those obtained when wages are flexible. These technological shocks may have long run effects if there is wage inertia. |
| Keywords: | Wage inertia, Growth, Efficiency wages, Transitional dynamics, Unemployment. |
| JEL: | O41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ewp:wpaper:309web&r=lab |
| By: | Satoshi Shimizutani; Takashi Oshio; Mayu Fujii |
| Abstract: | This study examined the factors that affect the retirement decisions of the middle-aged and elderly in Japan, focusing especially on their earnings, public pension benefits, and health status. Using two-year panel data from the JSTAR and applying the OV model proposed by Stock and Wise (1990a, 1990b), we found that the probability of retirement has a negative and significant correlation with the OV of work, and that correlation does not depend on the health status. Our counter-factual simulation based on the OV model showed that, if the probability of being enrolled in the disability program were zero, the average years of work when individuals are in their 50s and 60s would increase. However, it should be emphasized that, in Japan—where being enrolled in the disability program is unlikely to make one a candidate for the retirement path—the result of this simulation does not indicate that satisfying the eligibility criteria for disability pension receipts will more stringently increase the labor supplied by the middle-aged and elderly. |
| JEL: | H55 I14 J26 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20001&r=lab |
| By: | Vivien Procher; Nolan Ritter; Colin Vance |
| Abstract: | Drawing on German household data from 1992 to 2011, this paper analyzes how couples allocate housework against the backdrop of three questions: (1) Does an individual’s contribution to household income - both in absolute and relative terms - influence his or her contribution to housework? (2) If so, does the magnitude of this influence differ by gender? and (3) How important are traditional gender roles on housework allocation? We address these issues by applying panel quantile regression models and find that as both the share and absolute level of income increase, the amount of housework undertaken decreases, with the latter effect being roughly equal across genders. At the same time, traditional gender roles also appear to dictate housework allocation, which is evidenced by women increasing their housework if they earn more than their partner. |
| Keywords: | Housework; income; gender; longitudinal study; quantile panel regression |
| JEL: | D13 J16 J22 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0472&r=lab |
| By: | Bo Honore (Institute for Fiscal Studies and Princeton); Aureo de Paula (Institute for Fiscal Studies and University College London) |
| Abstract: | This paper introduces a bivariate version of the generalized accelerated failure time model. It allows for simultaneity in the econometric sense that the two realized outcomes depend structurally on each other. The proposed model also has the feasure that it will generate equal durations with positive probability. The motivating example is retirement decisions by married couples. In that example it seems reasonable to allow for the possibility that the each partner's optimal retirement time depends on the retirement time of the spouse. Moreover, the data suggest that the wife and the husband retire at the same time for a non-negligible fraction of couples. Our approach takes as starting point a stylized economic model that leads to a univariate generalized accelerated failure time model. The covariates of that generalized accelerated failure time model act as utility-flow shifters in the economic model. We introduce simultaneity by allowing the utility flow in retirement to depend on the retirement status of the spouse. The econometric model is then completed by assuming that the observed outcome is the Nash bargaining solution in that simple economic model. The advantage of this approach is that it includes independent realizations from the generalized accelerated failure time model as a special case, and deviations from this special case can be given an economic interpretation. We illustrate the model by studying the joint retirement decisions in married couples using the Health and Retirement Study. We provide a discussion of relevant identifying variation and estimate our model using indirect inference. The main empirical nding is that the simultaneity seems economically important. In our preferred specication the indirect utility associated with being retired increases by approximately 5% if one's spouse is already retired and unobservables exhibit positive correlation. The estimated model also predicts that the indirect eect of a change in husbands' pension plan on wives' retirement dates is about 4% of the direct eect on the husbands. |
| JEL: | J26 C41 C3 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:08/14&r=lab |