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on Labour Economics |
| By: | Pencavel, John (Stanford University) |
| Abstract: | Observations on munition workers, most of them women, are organized to examine the relationship between their output and their working hours. The relationship is nonlinear: below an hours threshold, output is proportional to hours; above a threshold, output rises at a decreasing rate as hours increase. Implications of these results for the estimation of labor supply functions are taken up. The findings also link up with current research on the effects of long working hours on accidents and injuries. |
| Keywords: | working hours, output, productivity, women workers |
| JEL: | J24 J22 N34 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8129&r=lab |
| By: | Molloy, Raven (Federal Reserve Board of Governors); Smith, Christopher L. (Federal Reserve Board of Governors); Wozniak, Abigail (University of Notre Dame) |
| Abstract: | Interstate migration has decreased steadily since the 1980s. We show that this trend is not primarily related to demographic and socioeconomic factors, but instead appears to be connected to a concurrent secular decline in labor market transitions. We explore a number of reasons for the declines in geographic and labor market transitions, and find the strongest support for explanations related to a decrease in the net benefit to changing employers. Our preferred interpretation is that the distribution of relevant outside offers has shifted in a way that has made labor market transitions, and thus geographic transitions, less desirable to workers. |
| Keywords: | migration, migration decline, labor market transitions, job transitions, returns to tenure |
| JEL: | J6 J1 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8149&r=lab |
| By: | Kawaguchi, Daiji (Hitotsubashi University); Murao, Tetsushi (Kyushu University) |
| Abstract: | Graduating from a school during a time of adverse economic conditions has a persistent, harmful effect on workers' subsequent employment opportunities. An analysis of panel data from OECD countries during the 1960-2010 periods reveals that a worker who experiences a one-percentage-point higher unemployment rate while the worker is 16-24 years old has a 0.14 percentage-point higher unemployment rate at ages 25-29 and 0.03 percentage points higher at ages 30-34. The persistence of this negative effect is stronger in countries with stricter employment protection legislation. A composite index for labor market rigidity is constructed and the index is shown to have positive correlation with the persistence. Moderating macroeconomic fluctuations is more important in countries that have more persistent labor-market entry effects on subsequent outcomes. |
| Keywords: | persistence, unemployment, port of entry, cohort analysis, hysteresis |
| JEL: | E24 J64 J65 K31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8156&r=lab |
| By: | Reich, MIchael; Jacobs, Ken; Bernhardt, Annette |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2014–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:indrel:qt9pf1225f&r=lab |
| By: | Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy); Karimi, Arizo (IFAU - Institute for Evaluation of Labour Market and Education Policy); Nilsson, Peter (Institute for International Economic Studies (IIES), Stockholm University) |
| Abstract: | This paper studies gender differences in the extent to which social preferences affect workers' shirking decisions. Using exogenous variation in work absence induced by a randomized field experiment that increased treated workers' absence, we find that also non-treated workers increased their absence as a response. Furthermore, we find that male workers react more strongly to decreased monitoring, but no significant gender difference in the extent to which workers are influenced by peers. However, our results suggest significant heterogeneity in the degree of influence that male and female workers exert on each other: conditional on the potential exposure to same-sex co-workers, men are only affected by their male peers, and women are only affected by their female peers. |
| Keywords: | Peer effects; employer-employee data; work absence; randomized field experiment |
| JEL: | C23 C93 J24 |
| Date: | 2014–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2014_009&r=lab |
| By: | Ramos, Raul (University of Barcelona); Sanromá, Esteban (University of Barcelona); Simón, Hipólito (Universidad de Alicante) |
| Abstract: | The article examines public-private sector wage differentials in Spain using microdata from the Structure of Earnings Survey (Encuesta de Estructura Salarial). When applying various decomposition techniques, we find that it is important to distinguish by gender and type of contract. Our results also highlight the presence of a positive wage premium for public sector workers that can be partially explained by their better endowment of characteristics, in particular by the characteristics of the establishment where they work. The wage premium is greater for female and fixed-term employees and falls across the wage distribution, being negative for more highly skilled workers. |
| Keywords: | public-private sector wage gap, wage distribution, matched employer-employee data, decomposition methods |
| JEL: | C2 E3 J3 J4 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8158&r=lab |
| By: | Nagore García, Amparo (Universidad de Valencia); van Soest, Arthur (Tilburg University) |
| Abstract: | Using administrative records data from Spanish Social Security, we analyse the pattern and the determinants of individual unemployment benefit spell durations. We compare a period of expansion (2005-2007) and the recent recession (2009-2011), allowing us to determine the impact of the current crisis. In line with the duality that characterizes the Spanish labour market, we distinguish between exits to a stable job and exits to an unstable job. We estimate a Multivariate Mixed Proportional Hazard Model for each time period. We find similar effects of the crisis for stable and unstable jobs, which are particularly strong in the first year of the spell. Moreover, slight negative duration dependence is found, especially for stable jobs in the expansion period until the time of unemployment benefit expires. Individuals who are most affected by the financial crisis tend to be males, those aged 16-24 and 40-51 years, those living in regions with higher unemployment rates, individuals who are less qualified or work in manual occupations (particularly construction) and immigrants. |
| Keywords: | unemployment durations, business cycle, dual labour markets, re-employment probability |
| JEL: | J64 C41 E32 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8121&r=lab |
| By: | Zuzana Siebertova (Council for Budget Responsibility); Matus Senaj (National Bank of Slovakia, Research Department); Norbert Svarda (Council for Budget Responsibility); Jana Valachyova (Council for Budget Responsibility) |
| Abstract: | This paper provides a microeconometric analysis of extensive margin labour supply elasticities in Slovakia. We find that a one percent increase in net wage increases the probability of economic activity by 0.263 percentage points. Taking into account tax and transfer system details valid in 2009-2011, a one percent increase in transfers decreases the semi-elasticity of labour force participation by 0.04 percentage points. These results are broadly in line with the elasticities usually reported in the literature. Our results show that low-skilled, females and the elderly are the groups that are particularly responsive to changes in taxes and transfers. Labour market policies aimed to boost employment should concentrate on increasing marginal gains to work, especially for low-educated individuals and women. |
| Keywords: | labour supply elasticity, extensive margin, Heckman model, probit |
| JEL: | H31 H53 I38 J21 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:cbe:wpaper:201401&r=lab |
| By: | Dickson, Matt (University of Bath); Postel-Vinay, Fabien (University College London); Turon, Hélène (University of Bristol) |
| Abstract: | In a context of widespread concern about budget deficits, it is important to assess whether public sector pay is in line with the private sector. Our paper proposes an estimation of differences in lifetime values of employment between public and private sectors for five European countries. We use data from the European Community Household Panel over the period 1994-2001 for Germany, the Netherlands, France, Italy and Spain. We look at lifetime values instead of wage levels because, as we show in our results, differences in earnings mobility, earnings volatility and job loss risk across sectors occur in many instances and these will matter to forward-looking individuals. When aggregated into a measure of lifetime value of employment in either sector, these differences yield estimates of the lifetime premium in the public sector for these five countries. We also present differences in the institutional and labour market structures in these countries and find that countries for which we estimate a positive lifetime premium in the public sector, i.e. France and Spain, are also the countries where access to the public sector requires costly entry procedures. This paper is to the best of our knowledge the first to use this dynamic approach applied to Europe, which we are able to do with a common dataset, time-period and model. |
| Keywords: | income dynamics, job mobility, public-private inequality, selection effects, institutions |
| JEL: | J45 J31 J62 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8159&r=lab |
| By: | Combes, Pierre-Philippe (GREQAM, University of Aix-Marseille); Decreuse, Bruno (GREQAM, University of Aix-Marseille); Laouénan, Morgane (IRES, Université catholique de Louvain); Trannoy, Alain (EHESS, Paris) |
| Abstract: | The paper investigates the link between the over-exposure of African immigrants to unemployment in France and their under-representation in jobs in contact with customers. We build a two-sector matching model with ethnic sector-specific preferences, economy-wide employer discrimination, and customer discrimination in jobs in contact with customers. The outcomes of the model allow us to build a test of ethnic discrimination in general and customer discrimination in particular. We run the test on French individual data in a cross-section of local labor markets (Employment Areas). Our results show that there is both ethnic and customer discrimination in the French labor market. |
| Keywords: | discrimination, matching frictions, jobs in contact, ethnic unemployment, local labor markets |
| JEL: | J15 J61 R23 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8150&r=lab |
| By: | Eichhorst, Werner (IZA); Tobsch, Verena (E-x-AKT WIRTSCHAFTSFORSCHUNG) |
| Abstract: | This paper gives an overview of the transformation of the German labour market since the mid-1990s with a special focus on the changing patterns of labour market segmentation or 'dualization' of employment in Germany. While labour market duality in Germany can partially be attributed to labour 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. Our main argument is that the liberalization of non-standard contracts has contributed to the expansion of overall labour market inclusion and job growth in Germany and that at least some forms of non-standard work provide stepping stones into permanent regular jobs. Atypical contracts do not necessarily undermine the dominance of standard employment relationships and job quality in this primary segment but rather form a supplementary part of employment in sectors that depend on more flexible and maybe cheaper forms of labour. |
| Keywords: | Germany, labour market reforms, dualization, non-standard work |
| JEL: | J21 J31 J42 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8155&r=lab |
| By: | Damoun Ashournia; Jakob Munch; Daniel Nguyen |
| Abstract: | The impact of imports from low-wage countries on domestic labor market outcomes has been a hotly debated issue for decades.� The recent surge in imports from China has reignited this debate.� Since the 1980s several developed economies have experienced contemporaneous increases in the volume of imports and in the wage gap between high- and low-skilled workers.� However, the literature has not been able to document a strong causal relationship between imports and the wage gap.� Instead, past studies have attributed the widening wage gap to skill biased technological change.� This paper finds evidence for the direct impact of low wage imports on the wage gap.� Using detailed Danish panel data for firms and workers, it measures the effects of Chinese import penetration at the firm level on wages within job-spells and over the longer term taking transitions in the labor market into account.� We find that greater exposure to Chinese imports corresponds to a negative firm-level demand shock, which is biased towards low-skill intensive products.� Consistent with this an increase in Chinese import penetration results in lower wages for low skilled employees. |
| Keywords: | Chinese import penetration, wage inequality, firm heterogeneity |
| JEL: | F16 |
| Date: | 2014–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:703&r=lab |
| By: | Saniter, Nils (DIW Berlin); Siedler, Thomas (University of Hamburg) |
| Abstract: | This paper studies the causal effect of student internship experience on labor market choices and wages later in life. We use variation in the introduction and abolishment of mandatory internships at German universities as an instrument for completing an internship while attending university. Employing longitudinal data from graduate surveys, we find positive and significant wage returns of about six percent in both OLS and IV regressions. This result is mainly driven by a higher propensity of working full-time and a lower propensity of being unemployed in the first five years after entering the labor market. Moreover, former interns pursue doctoral studies less frequently. The positive returns are particularly pronounced for individuals and areas of study that are characterized by a weak labor market orientation. Heterogeneous effects are not found across other subgroups of the population. |
| Keywords: | internships, skill development, higher education, labor market returns, instrument variable |
| JEL: | I23 J01 J31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8141&r=lab |
| By: | Danziger, Eliav (Princeton University); Danziger, Leif (Ben Gurion University) |
| Abstract: | This paper shows that a graduated minimum wage, in contrast to a constant minimum wage, can provide a strict Pareto improvement over what can be achieved with an optimal income tax. The reason is that a graduated minimum wage requires high-productivity workers to work more to earn the same income as low-productivity workers, which makes it more difficult for the former to mimic the latter. In effect, a graduated minimum wage allows the low-productivity workers to benefit from second-degree price discrimination which increases their income. |
| Keywords: | graduated minimum wage, Pareto improvement |
| JEL: | J30 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8123&r=lab |
| By: | Werner Bönte (University of Wuppertal Schumpeter School of Business and Economics, Jackstädt Center of Entrepreneurship and Innovation Research,); Stefan Krabel (Institute of Economics, Economic Policy Research, University of Kassel) |
| Abstract: | Previous literature stressed on the gender differences in job satisfaction and the factors influencing the job satisfaction of men and women. Two rationales are usually provided for the finding that women tend to be relatively more satisfied with their jobs than men although disadvantaged in labour markets: first, women may have relatively lower expectations of career and income, and second, they may attach relatively less importance to extrinsic rewards than men. In order to analyse whether substantial gender differences exist already at the beginning of the career, we employ information of over 20000 graduates collected through a large-scale survey of German university graduates who recently entered the labour market. We find that the job satisfaction of female graduates is on average slightly lower than the job satisfaction of male graduates, but our results do not point to substantial gender differences. In our sample of highly qualified individuals, men and women are very similar in what they want from their jobs and also in their perceptions of what they get. While our results point to substantial similarity of men and women in the early career stage, gender differences may emerge at later stages of the career life cycle. |
| Keywords: | ob satisfaction, gender differences, working conditions |
| JEL: | J16 J28 J81 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:schdps:sdp14007&r=lab |
| By: | Azmat, Ghazala (Queen Mary, University of London); Petrongolo, Barbara (Queen Mary, University of London) |
| Abstract: | We discuss the contribution of the experimental literature to the understanding of both traditional and previously unexplored dimensions of gender differences and discuss their bearings on labor market outcomes. Experiments have offered new findings on gender discrimination, and while they have identified a bias against hiring women in some labor market segments, the discrimination detected in field experiments is less pervasive than that implied by the regression approach. Experiments have also offered new insights into gender differences in preferences: women appear to gain less from negotiation, have lower preferences than men for risk and competition, and may be more sensitive to social cues. These gender differences in preferences also have implications in group settings, whereby the gender composition of a group affects team decisions and performance. Most of the evidence on gender traits comes from the lab, and key open questions remain as to the source of gender preferences – nature versus nurture, or their interaction – and their role, if any, in the workplace. |
| Keywords: | gender, field experiments, lab experiments, discrimination, gender preferences |
| JEL: | J16 J24 J71 C91 C92 C93 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8135&r=lab |
| By: | Ashenfelter, Orley (Princeton University) |
| Abstract: | This paper contains a review of the early history of program evaluation research at the US Department of Labor. Some broad lessons for successful evaluation research are summarized. |
| Keywords: | program evaluation, training programs, active labor market programs |
| JEL: | B4 C21 J8 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8118&r=lab |
| By: | Elitas, Zeynep; Ercan, Hakan; Tumen, Semih |
| Abstract: | Among better-educated employed men, the fraction of full-time full-year (FTFY) workers is quite high and stable -- around 90 percent -- over time in the U.S. Among those with lower education levels, however, this fraction is much lower and considerably more volatile, moving within the range of 62-82 percent for high school dropouts and 75-88 percent for high school graduates. These observations suggest that the composition of unobserved skills may be subject to sharp movements within low-educated employed workers, while the scale of these movements is potentially much smaller within high-educated ones. The standard college-premium framework accounts for the observed shifts between education categories, but it cannot account for unobserved compositional changes within education categories. Our paper uses Heckman's two-step estimator on repeated Current Population Survey cross sections to calculate a relative supply series that corrects for unobserved compositional shifts due to selection into and out of the FTFY status. We find that the well-documented deceleration in the growth rate of relative supply of college-equivalent workers after mid-1980s becomes even more pronounced once we correct for selectivity. This casts further doubt on the relevance of the plain skill-biased technical change (SBTC) hypothesis. We conclude that what happens to the within-group unobserved skill composition for low-educated groups is critical for fully understanding the trends in the relative supply of college workers in the United States. We provide several interpretations to our selection-corrected estimates. |
| Keywords: | Wage inequality; self selection; relative supply index; college premium; SBTC; FTFY |
| JEL: | I24 J23 J24 J31 O33 |
| Date: | 2014–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55396&r=lab |
| By: | Timothy Halliday (Department of Economics, University of Hawaii at Manoa) |
| Abstract: | We use micro-data to investigate the relationship between unemployment and mortality in the United States using Logistic regression on a sample of over 16,000 individuals. We consider baselines from 1984 to 1993 and investigate mortality up to ten years from the baseline. We show that poor local labor market conditions are associated with higher mortality risk for working-aged men and, specifically, that a one percentage point increase in the unemployment rate increases their probability of dying within one year of baseline by 6%. There is little to no such relationship for people with weaker labor force attachments such as women or the elderly. Our results contribute to a growing body of work that suggests that poor economic conditions pose health risks and illustrate an important contrast with studies based on aggregate data. |
| Keywords: | Recessions, Mortality, Health, Aggregation, Unemployment |
| JEL: | I0 I12 J1 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201413&r=lab |
| By: | Palokangas, Tapio K. (University of Helsinki) |
| Abstract: | In this paper, I study the political rationale for labor market regulation. Oligopolists employ raw labor and human capital (i.e. key workers) for production and R&D. There are many jurisdictions, in each of which a self-interested policy maker can regulate/deregulate the local labor market. I show that the observed tendency to labor market deregulation results from labor market policies being set up at the local level. In small jurisdictions, the fall of income due to wage increases is so large that the labor markets are deregulated. With labor market integration, jurisdictions get larger and face less competition from outside. Then, the fall of income due to wage increases is reduced and labor market regulation becomes more attractive to workers' lobbies. |
| Keywords: | political economy, labour market regulation, R&D, union power |
| JEL: | F15 J50 O40 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8147&r=lab |
| By: | Addison, John T. (University of South Carolina); Portugal, Pedro (Banco de Portugal); Varejão, José (University of Porto) |
| Abstract: | At first blush, most advances in labour demand were achieved by the late 1980s. Since then progress might appear to have stalled. We argue to the contrary that significant progress has been made in understanding labour market frictions and imperfections, and in modelling search behaviour and heterogeneous preferences. Perhaps most notable have been the improvements in data, in the form of longitudinal matched employer-employee data, and in techniques and algorithms (e.g. for solving heterogeneous parameter models). In short, the Cinderella status of the field is frankly overdrawn. Nevertheless, a chief lacuna remains the need for a better match between theory and data. This paper provides a critical albeit eclectic assessment of these developments, along the dimensions of the static and dynamic theory of labour demand, wage formation, and estimation, noting advances and limitations. As is conventional, somewhat greater emphasis is placed on the latter. |
| Keywords: | labour demand, input heterogeneity, labour adjustment costs, wage and employment determination, product and labour market imperfections, multiple fixed effects, exogenous wages, establishment-level functions |
| JEL: | J23 J3 J4 J5 D4 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8125&r=lab |
| By: | Harald Pfeifer (Federal Institute for Vocational Education and Training (BIBB) Bonn, Research Centre for Education and the Labour Market (ROA) Maastricht) |
| Abstract: | This paper examines the influence of works councils on apprenticesÕ absence from the workplace in Germany. The analysis draws on merged administrative and survey data, including information on the cumulated days apprentices are absent from work due to sickness. On average, apprentices are absent nine working days per year, whereas strong differences exist with respect to the training occupation and several firm characteristics. Regression results imply that the presence of a works council in a firm significantly reduces apprenticesÕ absence. This result supports the hypothesis that works councils effectively exercise their legally anchored ÔvoiceÕ function in the German apprenticeship system. |
| Keywords: | Absenteeism, Apprenticeship Training, Works Councils |
| JEL: | J24 J52 K31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0098&r=lab |
| By: | Alfred Michael Dockery (Bankwest Curtin Economics Centre, Curtin Business School); Sherry Bawa (School of Economics and Finance, Curtin Business School) |
| Abstract: | There is concern that workers are finding it increasingly difficult to balance work and family life and face growing time stress. Working from home is one form of flexibility in working arrangements that may assist workers to juggle work and non-work commitments. However, it may also provide a pathway for greater intrusion of work into family life and for added work-related stress. Around 17% of Australian employees work some of their usual working hours from home, and one-third of these do so under a formal agreement with their employer. Based on evidence from the Household, Income and Labour Dynamics in Australia Survey, these proportions seem to have remained surprisingly stable over the past decade. Overall, the ability to work some hours from home is seen by employees as a positive job attribute that provides flexibility to balance work and non-work commitments and this is particularly so for employees who have a formal agreement to work from home. However, working from home is also associated with long hours of work and the evidence provides grounds for concern that working from home does facilitate greater intrusion into non-work domains of life through this channel. |
| Keywords: | time allocation, labour supply, working conditions, job satisfaction. |
| JEL: | J13 J22 I32 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ozl:bcecwp:wp1402&r=lab |
| By: | Ohtake, Fumio (Osaka University); Okuyama, Naoko (Kobe University); Sasaki, Masaru (Osaka University); Yasui, Kengo (Ritsumeikan University) |
| Abstract: | This paper explores the effects of the 1995 Hanshin–Awaji Earthquake on the wages of people in the area of the earthquake over the 17 years after its occurrence and identified which part of the wage distribution has been most affected by this event by comparing the wage distributions of disaster victims and non-victims. To do this, we used three decomposition methods, developed by (i) Oaxaca (1973) and Blinder (1973); (ii) DiNardo, Fortin, and Lemieux (1996) ("DFL"); and (iii) Machado and Mata (2005) and Melly (2006). Our findings are as follows. First, the Oaxaca and Blinder decomposition analysis shows that the negative impact of the earthquake still affects the mean wages of male workers. Second, the DFL decomposition analysis shows that middle-wage males would have earned more had the 1995 Hanshin–Awaji Earthquake not occurred. Finally, the Machado–Mata–Melly decomposition analysis shows that the earthquake had a large, adverse impact on the wages of middle-wage males, and that their wages have been reduced since the earthquake, by 5.0–8.6%. This result is similar to that from the DFL decomposition analysis. In the case of female workers, a long-term negative impact of the earthquake was also observed as the wages of high-wage females were reduced by 8.3–13.8%. |
| Keywords: | natural disasters, wage distribution, wage decomposition, earthquake |
| JEL: | J31 Q54 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8124&r=lab |
| By: | Guner, Duygu (K.U.Leuven); Uysal, Gökce (Bahcesehir University) |
| Abstract: | Does culture affect female labor supply? In this paper, we address this question using a recent approach to measuring the effects of culture on economic outcomes, i.e. the epidemiological approach. We focus on migrants, who come from different cultures, but who share a common economic and institutional set-up today. Controlling for various individual characteristics including parental human capital as well as for current economic and institutional setup, we find that female employment rates in 1970 in a female migrant's province of origin affects her labor supply behavior in 2008. We also show that it is the female employment rates and not male in the province of origin in 1970 that affects the current labor supply behavior. We also extend the epidemiological approach to analyze the effects of religion on female labor supply. More specifically, we use a proxy of parental religiosity, i.e. share of party votes in 1973 elections in Turkey to study female labor supply in 2008. Our findings indicate that female migrants from provinces that had larger (smaller) shares of the religious party votes in 1973 are less (more) likely to participate in the labor market in 2008. An extended model where both cultural and religiosity proxies are included shows that culture and religiosity have separately significant effects on female labor supply behavior. |
| Keywords: | culture, female labor force participation, gender |
| JEL: | J16 J21 Z10 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8132&r=lab |
| By: | Kurt Mitman (Department of Economics, University of Pennsylvania); Stanislav Rabinovich (Department of Economics, Amherst College) |
| Abstract: | The last three recessions in the United States were followed by jobless recoveries: while labor productivity recovered, unemployment remained high. In this paper, we show that countercyclical unemployment benefit extensions lead to jobless recoveries. We augment the standard Mortensen-Pissarides model to incorporate unemployment benefits expiration and state-dependent extensions of unemployment benefits. In the model, an extension of unemployment benefits slows down the recovery of vacancy creation in the aftermath of a recession. We calibrate the model to US data and show that it is quantitatively consistent with observed labor market dynamics, in particular the emergence of jobless recoveries after 1990. Furthermore, counterfactual experiments indicate that unemployment benefits are quantitatively important in explaining jobless recoveries. |
| Keywords: | Unemployment Insurance, Business Cycles, Jobless Recoveries |
| JEL: | E24 E32 J65 |
| Date: | 2014–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:14-013&r=lab |
| By: | Dutta, Nabamita (University of Wisconsin, La Crosse); Kar, Saibal (Centre for Studies in Social Sciences, Calcutta); Roy, Sanjukta (World Bank) |
| Abstract: | Does higher educational attainment lead to greater participation in self-employment? Available studies agree and disagree on this subject through various explanations. We invoke an empirical example from the experiences of immigrants moving from poor countries to rich countries. Further, we focus exclusively on the self-employment participation among south Asian immigration in the United States (using IPUMS Data), which the related literature has clearly neglected thus far despite long traditions of successful business ventures. We establish that higher educational attainment for immigrants from south Asia reduces the likelihood of being self-employed. In fact, a South Asian immigrant with higher educational attainment has 10% less chance of being self-employed than one without. In addition, we show that factors such as longer stay in USA and being a male, affect the likelihood of being self-employed positively. However, another interesting finding of our paper is that being a 'citizen immigrant' affects the probability of being self-employed positively. Though citizen immigrants with higher education attainment are less likely to choose self-employment, the probability is relatively higher in comparison to the non-citizen immigrant group with similar levels of education. This trend lends itself to a more than proportionate participation in self-employment by the citizen immigrants and the difference with immigrant non-citizen group becomes statistically significant. These results have various static and dynamic implications for the native labor market in host countries. |
| Keywords: | immigration, occupation, microdata, USA, South Asia |
| JEL: | J11 J15 J24 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8152&r=lab |
| By: | Devillanova, Carlo (Bocconi University); Fasani, Francesco (Queen Mary, University of London); Frattini, Tommaso (University of Milan) |
| Abstract: | This paper estimates the causal effect of the prospect of legal status on the employment outcomes of undocumented immigrants. Our identification strategy exploits a natural experiment provided by the 2002 amnesty program in Italy that introduced an exogenous discontinuity in eligibility based on date of arrival. We find that the prospect of legal status significantly increases the employment probability of immigrants that are potentially eligible for the amnesty relative to other undocumented immigrants. The size of the estimated effect is equivalent to about two thirds of the increase in employment that undocumented immigrants in our sample normally experience in their first year after arrival in Italy. These findings are robust to several falsification exercises. |
| Keywords: | illegal immigration, natural experiment, legalization |
| JEL: | F22 J61 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8151&r=lab |
| By: | Thomas Beissinger (University of Hohenheim, Germany); Nathalie Chusseau (EQUIPPE, University of Lille, France); Joel Hellier (EQUIPPE, Univ. of Lille and LEMNA, Univ. of Nantes, France) |
| Abstract: | A usual interpretation of the high performance of the German economy since 2006 is that the Hartz labour market reforms have boosted German competitiveness, resulting in higher exports, higher production and lower unemployment. We start from the diagnosis that this explanation is at odds with the sequence of observed facts. We propose and model an alternative scenario in which offshoring explains the gains in competitiveness but increases unemployment and inequality, and the subsequent labour market reforms lower unemployment by lessening the reservation wage and expanding the non-tradable sector, amplifying the rise in inequality. The model outcomes are consistent with all the developments of the German economy since 1995: 1) The model explains why Germany offshored earlier and more intensively than other Eurozone countries; 2) The increase in competitiveness and in the exports/production ratio occurs before the setting of the labour market reform, and this comes with both higher inequality and higher unemployment; 3) The setting of the labour market reform reduces unemployment and increases production, and this comes with a decrease in the exports/production ratio and an increase in inequality. We finally discuss (i) the possible extension of this `strategy' to other Eurozone countries, and (ii) alternative policies that act through similar mechanisms, but without increasing inequality. |
| Keywords: | Germany, inequality, labour market reform, offshoring, unemployment. |
| JEL: | H55 J31 J65 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2014-330&r=lab |
| By: | L. Cattani; G. Guidetti; G. Pedrini |
| Abstract: | This paper investigates three dimensions of overeducation: incidence, impact on earnings and possible determinants. The analysis focuses on Italian graduates and refers to the cohort that graduated in 2007 using data from the AlmaLaurea survey on graduates' career paths. A new measure of overeducation is introduced and it is jointly examined along with other pre-existing measures based on workers' self-assessment. The analysis is carried out by comparing the different results obtained adopting the two different measures of overeducation. Results show that the newly introduced measure can deal with the biases affecting workers' self-assessment measures. |
| JEL: | I2 J31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp939&r=lab |
| By: | Annette Zeilstra; Adam Elbourne |
| Abstract: | This study investigates wage leadership in the Netherlands. We empirically examine public and private wages using several wage definitions for the period 1980-2012. We find no evidence for public wage leadership. Moreover, public wages return to their previous equilibrium value three to four years after an exogenous shock in public wages. By contrast, an exogenous shock to private wages has a permanent influence on both private and public wages. These findings suggest that although a public wage freeze lowers public expenditure in the short-run, it is not an effective policy measure to lower public expenditure in the medium and long-run. |
| JEL: | C32 H50 J30 E62 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:274&r=lab |
| By: | Aleksynska, Mariya |
| Abstract: | In a series of recent IMF papers, Bernal-Verdugo, Furceri and Guillaume (2012a,2012b), Crivelli, Furceri and Toujas-Bernaté (2012), and Furceri (2012) report finding strong evidence that more flexible labour markets are negatively associated with unemployment and positively associated with employment elasticities, and that large-scale reforms of labour market institutions towards flexibility may help reduce unemployment. This paper examines the reliability of the data and of the methodology used in these papers. It reports serious flaws both in the data and in the way they are used, such as employing the suspended World Bank Employing Workers Indicators, or interpreting methodological breaks in series as reform processes. When these breaks in series are accounted for, the majority of reforms identified in Bernal-Verdugo, Furceri and Guillaume (2012a) cannot be replicated. Moreover, the methodology of identifying reforms from the data employed in the latter paper does not capture actual reform processes and ignores the scope and the size of the reforms. Taken together, our findings call into question most of the empirical results of these papers and policy advice based on them. |
| Keywords: | labour flexibility, unemployment, economic indicator, data collecting, methodology, flexibilité du travail, chômage, indicateur économique, collecte des données, méthodologie, flexibilidad del trabajo, desempleo, indicador económico, recopilación de datos, metodología |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:484966&r=lab |
| By: | Andini, Corrado (University of Madeira) |
| Abstract: | A well-established empirical literature suggests that individual wages are persistent. Several theoretical arguments support this empirical finding. Yet, the standard approach to the estimation of schooling returns does not account for this fact. This paper investigates the consequences of disregarding earnings persistence. In particular, it shows that the most commonly used static-model estimators of schooling coefficients are subject to an omitted-variable bias which can be named "persistence bias". |
| Keywords: | schooling, wages, dynamic panel-data models |
| JEL: | C23 I21 J31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8143&r=lab |
| By: | Chakrabarti, Ritashree (IHS Global Insight); Zhang, Junfu (Clark University) |
| Abstract: | It is widely believed that unaffordable housing could drive businesses away and thus impede job growth. However, there is little evidence to support this view. This paper presents a simple model to clarify how housing affordability is linked to employment growth and why unaffordable housing could negatively affect employment growth. The paper then investigates this effect empirically using data on California municipalities. For various reasons, a simple correlation between unaffordable housing and employment growth cannot be interpreted as causal. Several empirical strategies are employed to identify the causal effect of unaffordable housing on employment growth. The estimation results provide consistent evidence that unaffordable housing indeed slows local employment growth. Policy implications of these findings are briefly discussed. |
| Keywords: | housing affordability, employment growth, amenity, California |
| JEL: | R11 R12 R13 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8122&r=lab |
| By: | Ngai, L. Rachel (London School of Economics); Petrongolo, Barbara (Queen Mary, University of London) |
| Abstract: | This paper investigates the role of the rise of services in the narrowing of gender gaps in hours and wages in recent decades. We document the between-industry component of the rise in female work for the U.S., and propose a model economy with goods, services and home production, in which women have a comparative advantage in producing market and home services. The rise of services, driven by structural transformation and marketization of home production, acts as a gender-biased demand shift raising women's relative wages and market hours. Quantitatively, the model accounts for an important share of the observed trends. |
| Keywords: | gender gaps, structural transformation, marketization |
| JEL: | E24 J22 J16 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8134&r=lab |