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on Labour Economics |
| By: | Chiara Criscuolo; Peter N. Gal; Carlo Menon |
| Abstract: | Motivated by the ongoing interest of policy makers in the sources of job creation, this paper presents results from a new OECD project on the dynamics of employment (DynEmp) based on an innovative methodology using firm-level data (i.e. national business registers or similar sources). It demonstrates that among small and medium sized enterprises (SMEs), young firms play a central role in creating jobs, whereas old SMEs tend to destroy jobs. This pattern holds robustly across 17 OECD countries and Brazil, extending recent evidence found in the United States. The paper also shows that young firms are always net job creators throughout the business cycle, even during the financial crisis. During the crisis, entry and post-entry growth by young firms were affected most heavily, although downsizing by old firms was responsible for most job losses. The results also highlight large cross-country differences in the growth potential of young firms, pointing to the role played by national policies in enabling successful firms to create jobs. |
| Date: | 2014–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:14-en&r=lab |
| By: | Emin Dinlersoz; Jeremy Greenwood; Henry Hyatt |
| Abstract: | What type of businesses do unions target for organizing? A dynamic model of the union organizing process is constructed to answer this question. A union monitors establishments in an industry to learn about their productivity, and decides which ones to organize and when. An establishment becomes unionized if the union targets it for organizing and wins the union certification election. The model predicts two main selection effects: unions organizing occurs in larger and more productive establishments early in their life-cycles, and among the establishments targeted for organizing, unions are more likely to win elections in smaller and less productive ones. These predictions find support in union certification election data for 1977-2007 matched with data on establishment characteristics. |
| JEL: | D24 E23 J5 J50 J51 L23 L25 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20151&r=lab |
| By: | Heckman, James J. (University of Chicago) |
| Abstract: | This paper celebrates the life and contributions of Gary Becker (1930-2014). |
| Keywords: | human capital, human behavior, lifetime contributions, tribute |
| JEL: | B31 J24 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8200&r=lab |
| By: | Newhouse, David (World Bank); Wolff, Claudia (World Bank) |
| Abstract: | This paper utilizes a cross-country panel of 83 developing countries to examine how changes in cohort size are correlated with subsequent employment outcomes for workers at different ages. The results depend on countries' level of development. In low-income countries, young adults that are born into smaller cohorts are less likely to work, but school attendance remains unchanged. In middle-income countries, young adults in smaller cohorts are less likely to be unemployed and more likely to work outside of agriculture. Neither pattern can be discerned among older adults, although the estimates are imprecise. In sum, reductions in cohort size are associated with moderate improvements in employment outcomes for youth in middle-income countries, but there is scant evidence that these improvements persist into adulthood. |
| Keywords: | demographics, cohort size, youth employment, population |
| JEL: | O10 J11 J21 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8197&r=lab |
| By: | Leopoldo Tornarolli (CEDLAS, FCE - UNLP); Diego Battistón (CEDLAS, FCE - UNLP); Leonardo Gasparini (CEDLAS, FCE - UNLP); Pablo Gluzmann (CEDLAS, FCE - UNLP) |
| Abstract: | Labor informality is a pervasive characteristic of the labor markets in Latin America, and a central issue in the public policy debate. This paper discusses the concept of labor informality and implements alternative definitions using microdata from around 300 national household surveys in all Latin American countries. The analysis covers two decades: while labor informality, defined as lack of social protection related to employment, remained with few changes in the 1990s, there is a discernible downward pattern during the 2000s in most countries. These movements reveal a counter-cyclical behavior of labor informality, that may be linked to segmentation in the labor market. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0159&r=lab |
| By: | Olivier Giovannoni |
| Abstract: | In this second part of our study we survey the rapidly expanding empirical literature on the determinants of the functional distribution of income. Three major strands emerge: technological change, international trade, and financialization. All contribute to the fluctuations of the labor share, and there is a significant amount of self-reinforcement among these factors. For the case of the United States, it seems that the factors listed above are by order of increasing importance. We conclude by noting that the falling US wage shares cointegrates with rising inequality and a rising top 1 percent income share. Thus, all measures of income distribution provide the same picture. Liberalization and financialization worsen economic inequality by raising top incomes, unless institutions are strongly redistributive. The labor share has also fallen, for structural reasons and for reasons related to economic policy. Such explanations are left to parts III and IV of our study, respectively. Part I investigated the theories of income distribution. |
| Keywords: | Wage Share; Labor Share; Profit Share; Technology; International Trade; Finance; Bargaining Power |
| JEL: | D33 E24 E25 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_804&r=lab |
| By: | Glenda Quintini |
| Abstract: | Human capital is key for economic growth. Not only is it linked to aggregate economic performance but also to each individual’s labour market outcomes. However, a skilled population is not enough to achieve high and inclusive growth, as skills need to be put into productive use at work. Thanks to the availability of measures of both the proficiency and the use of numerous types of skills, the Survey of Adult Skills offers a unique opportunity to advance knowledge in this area and this paper presents and discusses evidence on both these dimensions with a particular focus on their implications for labour market policy. This paper explores the role played in the labour market by skill proficiency in the areas of literacy, numeracy and problem solving in technology-rich environments. It also shows how skills use, not only proficiency, affects a number of key labour market phenomena, such as the gender wage gap. Finally, the paper combines information on skill proficiency, educational attainment, skill use and qualification requirements to construct indicators of qualification and skills mismatch and to explore their causes and consequences. Le capital humain est fondamental pour la croissance économique. Non seulement, il est lié à la performance économique à niveau agrégé mais il contribue aussi à la réussite individuelle sur le marché du travail. Toutefois, une population aux compétences élevées ne suffit pas pour obtenir une croissance soutenue et équitable, car les compétences doivent être utilisées de façon productive au travail. Grâce à la disponibilité de données sur les compétences dans plusieurs domaines et leurs utilisation au travail, l’Enquête sur les Compétences des Adultes (PIAAC) offre une opportunité unique d’améliorer les connaissances à ce sujet. Ce papier présente et discute ces deux dimensions en prêtant une attention particulière aux implication pour les politiques du marché du travail. Il analyse le rôle que les compétences en littératie, numératie et résolution de problème dans un environnement riche en technologie jouent sur le marché du travail. Il montre aussi comment l’utilisation de ces compétences, et non seulement leur niveau, impacte sur un nombre important de phénomènes du marché du travail, comme par exemple la différence entre la rémunération des femmes et des hommes. Pour conclure, ce papier joint l’information concernant les compétences en littératie et numératie et leur utilisation au travail ainsi que le niveau d’éducation des travailleurs et celui demandé dans leurs postes pour dériver des indicateurs d’apparemment entre l’offre et la demande de compétences et qualifications et en analyser les causes et les conséquences. |
| JEL: | I25 J08 J21 J24 J31 |
| Date: | 2014–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:158-en&r=lab |
| By: | Cahuc, Pierre (Ecole Polytechnique, Paris) |
| Abstract: | This paper presents a short overview of dynamic models of labor markets with transaction costs. It shows that these models have deeply renewed the understanding of job search, job flows, job creations and destructions, unemployment and wage formation. It argues that this renewal provides a very useful toolkit for analyzing important economic policy issues such as the optimal level of unemployment benefits, the funding of unemployment insurance and the impact of employment protection legislation. |
| Keywords: | job search, job flows, workers flows, unemployment |
| JEL: | J6 J31 J38 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8173&r=lab |
| By: | Saygin, Perihan Ozge (University of Mannheim); Weber, Andrea (University of Mannheim); Weynandt, Michèle (University of Mannheim) |
| Abstract: | Social networks are an important channel of information transmission in the labor market. This paper studies the mechanisms by which social networks have an impact on labor market outcomes of displaced workers. We base our analysis on administrative records for the universe of private sector employment in Austria where we define work-related networks formed by past coworkers. To distinguish between mechanisms of information transmission, we adopt two different network perspectives. From the job-seeker's perspective we analyze how network characteristics affect job finding rates and wages in the new jobs. Then we switch to the perspective of the hiring firm and analyze which types of displaced workers get hired by firms that are connected to a closing firm via past coworker links. Our results indicate that employment status and the firm types of former coworkers are crucial for the job finding success of their displaced contacts. Moreover, 21% of displaced workers find a new job in a firm that is connected to their former workplace. Among all workers that were displaced from the same closing firm those with a direct link to a former coworker are twice as likely to be hired by the connected firm than workers without a link. These results highlight the role of work related networks in the transmission of job information and strongly suggest that job referrals are an important mechanism. |
| Keywords: | social networks, job displacement, plant closure, referral hiring |
| JEL: | J63 J64 M51 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8174&r=lab |
| By: | Elsayed A.E.A.; Fouarge D.; Grip A. de (GSBE) |
| 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:umagsb:2014011&r=lab |
| By: | Dague, Laura (Texas A&M University); DeLeire, Thomas (Georgetown University); Leininger, Lindsey (University of Illinois at Chicago) |
| Abstract: | This study provides plausibly causal estimates of the effect of public insurance coverage on the employment of non-elderly, non-disabled adults without dependent children ("childless adults"). We use regression discontinuity and propensity score matching difference-in-differences methods to take advantage of the sudden imposition of an enrollment cap, comparing the labor supply of enrollees to eligible applicants on a waitlist. We find enrollment into public insurance leads to sizable and statistically meaningful reductions in employment up to at least 9 quarters later, with an estimated size of from 2 to 10 percentage points depending upon the model used. |
| Keywords: | health insurance, labor supply |
| JEL: | I13 J22 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8187&r=lab |
| By: | Kato, Takao (Colgate University); Kodama, Naomi (Hitotsubashi University) |
| Abstract: | This paper provides novel evidence on the causal effect on female employment of labor market deregulation by using the 1985 amendments to the Labor Standards Law (LSL) in Japan as a natural experiment. The original LSL of 1947 prohibited women from working overtime exceeding two hours a day; six hours a week; and 150 hours a year. The 1985 amendments exempted a variety of occupations and industries from such overtime restriction on women. We first define "jobs" using an industry by occupation matrix. For each job (close to 5,000 jobs in total), we carefully identify whether or not it was made exempt from the overtime restriction on women by the 1985 amendments. Applying a difference-in-difference model to census data, we find a statistically significant and economically meaningful impact on female employment of this particular piece of labor market deregulation. Furthermore the 1985 treatment is found to have a lasting and growing impact on female employment. Our finding is consistent with the recent literature that points to the importance of paying particular attention to the issues surrounding working hours when policymakers design public policy to promote female employment. |
| Keywords: | female employment, labor market deregulation, natural experiment, overtime restriction on women, Labor Standards Law |
| JEL: | J16 J78 J81 J82 J88 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8189&r=lab |
| By: | Bergolo, Marcelo (IECON, Universidad de la República); Cruces, Guillermo (CEDLAS-UNLP) |
| Abstract: | This article studies how social insurance programs shape individual's incentives to take up registered employment and to report earnings to the tax authorities. The analysis is based on a social insurance reform in Uruguay that extended healthcare coverage to the dependent children of registered private-sector workers. The identification strategy relies on a comparison between individuals with and without dependent children before and after the reform. The reform increased benefit-eligible registered employment by 1.6 percentage points (about 5 percent above the pre-reform level), mainly due to an increase in labor force participation rather than to movement from unregistered to registered employment. The shift was greater for parents with younger children and for cohabiting adults whose partners' jobs did not provide the couples' children with access to the benefit. Finally, the reform increased the incidence of underreporting of salaried earnings by about 4 percentage points (25 percent higher than the pre-reform level), mostly for workers employed at small firms. The increase in fiscal revenue from higher levels of registered employment was several orders of magnitude greater than the loss of revenue due to an increase in underreporting. |
| Keywords: | labor supply, work incentives, social insurance, tax evasion |
| JEL: | J22 H26 O17 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8198&r=lab |
| By: | Fakih, Ali (Lebanese American University) |
| Abstract: | Using Canadian linked employer-employee data covering the period 1999-2005, I examine the determinants of the availability of family-friendly "care" practices and the impact of such practices on wages. The results show that the provision of family-friendly practices is not mainly derived from socio-demographic characteristics of workers but rather from job- and firm-related factors. The findings also reveal that there is a trade-off between the provision of family-friendly practices and earnings indicating the existence of an implicit market in which workers face reductions in their wages. This result supports the hypothesis that family-friendly benefits are to some extent conceived as a gift or a signal that employers care about employees' family responsibilities and, in return, employees are willing to “buy” these practices and thus accept a wage offset. |
| Keywords: | family-friendly "care" practices, linked employer-employee data, simultaneous probit model, wage equation |
| JEL: | J13 J32 J70 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8190&r=lab |
| By: | Brown, Meta (Federal Reserve Bank of New York); Setren, Elizabeth (MIT); Topa, Giorgio (Federal Reserve Bank of New York) |
| Abstract: | Using a new firm-level dataset that includes explicit information on referrals by current employees, we investigate the hiring process and the relationships among referrals, match quality, wage trajectories and turnover for a single U.S. corporation, and test various predictions of theoretical models of labor market referrals. We find that referred candidates are more likely to be hired; experience an initial wage advantage which dissipates over time; and have longer tenure in the firm. Further, the variances of the referred and non-referred wage distributions converge over time. The observed referral effects appear to be stronger at lower skill levels. The data also permit analysis of the role of referrer-referee pair characteristics. |
| Keywords: | referrals, human resources, turnover, wage trajectory |
| JEL: | J30 J63 J64 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8175&r=lab |
| By: | Tindara Addabbo; Paula Rodr íguez-Modroño; Lina Gálvez-Muñoz |
| Abstract: | The focus of this paper is on the effects of the Great Recession on young women's labour supply decision. Given the deep effect of the Great Recession on the Spanish labour market and in particular on youth labour supply, in the empirical part of this paper we focus on the Spanish labour market and estimate women's labour supply models by age groups, with a special focus on those aged 20 to 29 and 30 to 39 to detect how young women living in couples show different labour supply probabilities according to their partner's labour market status by using EU-SILC 2007 and 2012 micro data for Spain. We correct also for the non random selection of women living in couple in the younger age groups. This first step of analysis allows us to detect a negative effect, on the likelihood of forming a new household, of precarious employment conditions. The results of our analysis on women's labour supply by age group confirm the discouragement effect of young children for the youngest mothers' labour supply and also a positive effect of being an owner of a house with a mortgage. The literature shows that different effects can be at work with the crisis: the added-worker effect (AWE), showing a countercyclical behaviour of labour supply that implies an increase in individual labour supply in response to transitory shocks in his/her partner’s earnings, and the procyclical discouraged-worker effect.The results of our estimation support the existence of AWE in 2012 for young women living in couples. If in 2012 the discouragement effect dominates only for women older than 40, in 2007 it dominates also amongst younger women. Women's higher propensity to enter the labour market when their partner becomes unemployed or is persistently unemployed coupled with their likelihood to be inactive in the presence of young children would call for labour market policies targeted towards young women who are also more likely to withdraw from the labour market in presence of children. Childcare facilities could mitigate the latter effect and produce a more continuous workprofile thus avoiding the negative effect of work experience interruptions on labour supply over women's life cycle. |
| Keywords: | Labor supply, Great Recession, Gender, added-worker effect, discouragedworker effect, youth labor supply |
| JEL: | J22 J21 J16 J64 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:mod:cappmo:0114&r=lab |
| By: | Galí, Jordi; van Rens, Thijs |
| Abstract: | We document three changes in postwar US macroeconomic dynamics: (i) the procyclicality of labor productivity vanished, (ii) the relative volatility of employment rose, and (iii) the relative (and absolute) volatility of the real wage rose. We propose an explanation for all three changes that is based on a common source: the decline in labor market turnover, which reduced hiring frictions. We develop a simple model with hiring frictions, variable effort, and endogenous wage rigidities to illustrate the mechanisms underlying our explanation. We show that the decline in turnover may also have contributed to the observed decline in output volatility. |
| Keywords: | effort choice; hiring frictions; labor hoarding; labor market turnover; wage rigidities |
| JEL: | E24 E32 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9853&r=lab |
| By: | Knoef, Marike (Leiden University); van Ours, Jan C. (Tilburg University) |
| Abstract: | We present the results from a natural experiment in which single mothers on welfare were stimulated to find a job. Two policy instruments were introduced: an earnings disregard and job creation. The experiment was performed at the level of municipalities in The Netherlands, a country with relatively high benefits and low incentives for single mothers to leave welfare for work. In our analysis, we make a distinction between native and immigrant welfare recipients. For immigrant single mothers and some groups of native single mothers we find a positive employment effect of an earnings disregard. Job creation in addition to the earnings disregard increased working hours for some groups of single mothers. Although the outflow from welfare was not affected, welfare expenditures were reduced. |
| Keywords: | welfare, single mothers, natural experiment |
| JEL: | C41 C93 I38 J64 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8188&r=lab |
| By: | Fairlie, Robert |
| Abstract: | We show that entrepreneurship rates differ substantially across 60 ethnic and racial groups in the United States. These differences exist within broad combinations of groups such as Asians and Hispanics, and are almost as great after regression controls, including age, education, immigrant status, and time in the country. We then provide evidence on a number of theories of entrepreneurship. An ethnic/racial group's self-employment rate is positively associated with the difference between average self-employment and wage/salary earnings for that group. Ethnic/racial groups which immigrate from countries with high business ownership rates do not have high business ownership rates in the U.S. Finally, we find that the more advantaged ethnic/racial groups, measured by wage/salary earnings, self-employment earnings, and unearned income, and not the more disadvantaged groups, have the highest self-employment rates. |
| Keywords: | Business, entrepreneurship, inequality, race, immigration, business ownership, self-employment, labor |
| Date: | 2014–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucscec:qt24p7v6gc&r=lab |
| By: | Zhelyazkova N. (UNU-MERIT) |
| Abstract: | This paper analyses the use of parental leave after birth of a child for working mothers. Even though employment rates of women in industrialized countries are rising, women continue to assume the primary responsibility for caring for young children after they are born. Therefore it is interesting and important to understand what factors account for womens decision to use or not use parental leave. The behaviour of mothers is conceptualized as a series of three decisions taking place after the compulsory period of maternity leave. The first decision is to retain a relationship with the pre-birth employment or to leave the labour force. Women who do not quit their employment, make a second choice to return to work immediately or to take parental leave for a fixed period of time, which guarantees them the right to return to work. Finally at the end of parental leave, women decide whether to return to work or to quit their job. The empirical analysis is performed on administrative data provided by the Grand Duchy of Luxembourg. In order to account for the sequential nature of the decisions, the model for nested dichotomies Fox, 1997 has been used. The result lend partial evidence to economic reasoning about womens decision making. Salary-related opportunity cost seems to be particularly important in the first and third decision, but not in the second. There are also interesting differences based on the nationality of the women. Keywords work-family reconciliation; parental leave; labour supply of women |
| Keywords: | Fertility; Family Planning; Child Care; Children; Youth; Economics of Gender; Non-labor Discrimination; Time Allocation and Labor Supply; |
| JEL: | J13 J16 J22 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2014023&r=lab |
| By: | Kaiser, Lutz C. (North Rhine-Westphalia University of Applied Sciences) |
| Abstract: | The paper discusses gender differences with regard to the self- and reciprocal estimation of career expectations. Firstly, the theoretical background and the literature are identified. Within this frame, the instance of self-under-estimated career prospects of female workers and statistical discrimination in the labor market are described. Both aspects are jointly assessed as a self-fulfilling prophecy-phenomenon redounded to women's disadvantage on the labor market. Secondly, the empirical part analysis the respective self- and reciprocal estimation of female and male career prospects for public sector workers in Germany. The results display obvious discrepancies between self- and reciprocally estimated career expectations that constitute a gender-career estimation gap. As the German public sector contains specific devices to equalising career chances of male and female employees, the findings even underpin the insistency of under-estimated career prospects of female workers despite the existing public sector regime of equality. Finally, approaches of how to equalize male and female career chances are critically reviewed. |
| Keywords: | self- and reciprocal estimation of career opportunities, self-fulfilling prophecy, gender-career estimation gap, statistical discrimination, public sector |
| JEL: | J16 J24 J4 J71 J78 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8185&r=lab |
| By: | Agnese, Pablo (FH Düsseldorf); Hromcová, Jana (Universitat Autònoma de Barcelona) |
| Abstract: | We analyze the effect of low-skill workers offshoring on the welfare of the economy. In the context of a matching model with different possible equilibria, we discuss two policies that could potentially outweigh the negative welfare effects of offshoring, namely, an increase of the unemployment benefits and the flexibilization of the labor market. Our results suggest that, while both policy instruments can theoretically bring the economy back to previous welfare levels, careful thought should be given to the practicability of either measure. In particular, while it would require a significant increase in the unemployment benefits to compensate for the negative welfare effects of offshoring, it would only take a small reduction in the vacancy cost to achieve the same outcome. Not only will this last measure be more financially advantageous, but it will avoid the strong disincentives to work that come with the adoption of the alternative. |
| Keywords: | offshoring, welfare, unemployment benefits, labor market flexibility |
| JEL: | J68 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8164&r=lab |
| By: | Sato, Yasuhiro; Zenou, Yves |
| Abstract: | We develop a model where the unemployed workers in the city can find a job either directly or through weak or strong ties. We show that, in denser areas, individuals choose to interact with more people and meet more random encounters (weak ties) than in sparsely populated areas. We also demonstrate that, for a low urbanization level, there is a unique steady-state equilibrium where workers do not interact with weak ties, while, for a high level of urbanization, there is a unique steady-state equilibrium with full social interactions. We show that these equilibria are usually not socially efficient when the urban population has an intermediate size because there are too few social interactions compared to the social optimum. Finally, even when social interactions are optimal, we show that there is over-urbanization in equilibrium. |
| Keywords: | labor market.; social interactions; strong ties; urban economics; Weak ties |
| JEL: | J61 R14 R23 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9805&r=lab |
| By: | Fairlie, Robert |
| Abstract: | A rapidly growing literature examines the impact of immigrants on the labor market outcomes of native-born Americans. However, the impact of immigration on natives in entrepreneurship has not been examined, despite the over-representation of immigrants in that sector and theoretical reasons why the impact might be greater for the self-employed. We first present a new general equilibrium model of self-employment and wage/salary work. For a range of plausible parameter values, the model predicts small negative effects of immigration on native self-employment rates and earnings. Using 1980 and 1990 Census microdata, we then examine the relationship between changes in immigration and native self-employment rates and earnings across 132 of the largest metropolitan areas in the United States. We find evidence supporting the hypothesis that self-employed immigrants displace self-employed natives. The effects are much larger than those predicted by simulations of the theoretical model. Immigrants, however, do not have a negative effect on native self-employment earnings. Our findings are similar if we weight immigration rates by the propensity of immigrant groups to be self-employed or if we try alternative estimation techniques and specifications. A rapidly growing literature examines the impact of immigrants on the labor market outcomes of native-born Americans. However, the impact of immigration on natives in entrepreneurship has not been examined, despite the over-representation of immigrants in that sector and theoretical reasons why the impact might be greater for the self-employed. We first present a new general equilibrium model of self-employment and wage/salary work. For a range of plausible parameter values, the model predicts small negative effects of immigration on native self-employment rates and earnings. Using 1980 and 1990 Census microdata, we then examine the relationship between changes in immigration and native self-employment rates and earnings across 132 of the largest metropolitan areas in the United States. We find evidence supporting the hypothesis that self-employed immigrants displace self-employed natives. The effects are much larger than those predicted by simulations of the theoretical model. Immigrants, however, do not have a negative effect on native self-employment earnings. Our findings are similar if we weight immigration rates by the propensity of immigrant groups to be self-employed or if we try alternative estimation techniques and specifications. |
| Keywords: | Business, entrepreneurship, inequality, immigration, business ownership, self-employment, labor |
| Date: | 2014–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucscec:qt7bq2h9rh&r=lab |
| By: | Antonio Di Paolo (Grup d'Anàlisi Quantitativa Regional, AQR-IREA, Universitat de Barcelona, Av. Diagonal, 690, 08034 Barcelona, Spain); Anna Matas (Dept. Economia Aplicada, Universitat Autònoma de Barcelona, Bellaterra, Spain); Josep Lluís Raymond (Dept. Economia Aplicada, Universitat Autònoma de Barcelona, Bellaterra, Spain) |
| Abstract: | This paper analyses the effect of job accessibility by public and private transport on labour market outcomes in the metropolitan area of Barcelona. Beyond employment, we consider the effect of job accessibility on job-education mismatch, which represents a relevant aspect of job quality. We adopt a recursive system of equations that models car availability, employment and mismatch. Public transport accessibility appears as an exogenous variable in the three equations. Even though it may reflect endogenous residential sorting, falsification proofs suggest that the estimated effect of public transport accessibility is not entirely driven by the endogenous nature of residential decisions. |
| Keywords: | employment, job-education mismatch, job accessibility, public transport, Barcelona |
| JEL: | J61 J21 O18 P25 R41 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2014-05&r=lab |
| By: | Hedegaard, Morten; Tyran, Jean-Robert |
| Abstract: | We present a new type of field experiment to investigate ethnic prejudice in the workplace. Our design allows us to study how potential discriminators respond to changes in the cost of discrimination. We find that ethnic discrimination is common but remarkably responsive to the "price of prejudice", i.e. to the opportunity cost of choosing a less productive worker on ethnic grounds. In addition, we find that the standard theory of statistical discrimination fails to explain observed choices, and that taking ethnic prejudice into account helps to predict the incidence of discrimination. |
| Keywords: | discrimination; field experiment; labor market |
| JEL: | C93 J71 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9953&r=lab |
| By: | SEONYOUNG PARK (Department of Economics,University of Delaware) |
| Abstract: | This study investigates the effects of changes in various determinants of labor supply on the dramatic changes from the older (the 1950s and earlier) cohorts to the younger (the 1960s and later) cohorts in life-cycle labor supply behavior, and ultimately provides a model-based quantitative explanation of the recent decline in the aggregate labor supply of married women. On the basis of the Current Population Survey data, it first documents that, while life- cycle labor supply profiles are non-overlapping and bell-shaped for the older cohorts, they are roughly flat for the younger cohorts, and from the mid-thirties of the life-cycle, the younger cohorts continue to supply less labor than the 1950s cohort does. Then in a life-cycle model of women’s labor supply, the behavioral changes are explained by a combination of changes in various labor supply determinants, with the opportunity cost of childbearing (as represented by returns to work experience and the rate of human capital depreciation during a nonworking period) being the dominant contributor. In particular, relative to the older cohorts, the higher opportunity cost for the younger cohorts makes them supply more labor at the early stage of the life-cycle, delay childbearing to a later stage, and upon childbearing, stay out of the labor force, other things being constant. A calibration of the model demonstrates that the aggregate labor supply of married women would increase by 1.96 percentage points from 2000 to 2010 if there were no changes between the older and the younger cohorts in the labor supply determinants; however changing the determinants for the same period actually results in a reduction of aggregate labor supply by 1.36 percentage points. Of the 3.32 percentage points of the pseudo-reduction of married women’s aggregate labor supply (difference between the hypothetical 1.96 percentage point increase and the actual 1.36 percentage point reduction), 67 percent is explained by the increased opportunity cost for the younger cohorts, and the rest is accounted for by a combination of changes in the tax code, business cycle conditions, and preferences, among others. |
| Keywords: | Labor Supply, Married Women, Recent Decline, Cohort, Returns to Experience |
| JEL: | D1 J13 J22 J24 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:dlw:wpaper:14-10.&r=lab |
| By: | Wildasin, David (University of Kentucky) |
| Abstract: | Mobility of highly-skilled workers affects and is affected by labor market conditions, taxes, and other policies. This paper documents the demographic and fiscal importance of international migration, especially in aging societies, reviews the efficiency and distributional effects of mobility, and analyzes the economic incidence of fiscal transfers to low-skilled workers that are financed by taxes on imperfectly-mobile high-skilled workers in a dynamic model, distinguishing the short-run, transitional, and long-run gains and losses to contributors and beneficiaries. |
| Keywords: | migration, taxes, redistribution, dynamic incidence |
| JEL: | J11 J24 J61 H2 H5 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8199&r=lab |
| By: | Florian Noseleit (Faculty of Economics and Business, Rijksuniversiteit Groningen) |
| Abstract: | Women carry on to provide substantially more work in the household compared to men despite increasing female labor force participation. This inequality in household production can be considered an informal institution that may affect occupational choices of women. This paper argues that such informal institutional arrangements cause adverse selection into selfemployment among women since the promise of flexibly combining household production and labor force participation offered by self-employment is more appealing to women than men. However, formal institutions like childcare arrangements outside the household may reduce such adverse selection. We hypothesize that childcare availability influences the selection of females into self-employment conditional on the frequency of young children in households. Our empirical evidence suggests that better childcare availability causes fewer women to enter self-employment but those that enter tend to have higher levels of formal education and hire more often employees. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:msm:wpaper:2014/15&r=lab |
| By: | Kosfeld, Michael; Von Siemens, Ferdinand |
| Abstract: | Team production is a frequent feature of modern organizations. Combined with team incentives, team production can create externalities among workers, since their utility upon accepting a contract depends on their team’s performance and therefore on their colleagues’ productivity. We study the effects of such externalities in a competitive labor market if workers have private information on their productivity. We find that in any competitive equilibrium there must be Pareto-efficient separation of workers according to their productivity. We further find that externalities facilitate equilibrium existence, where under a particular condition on workers’ indifference curves even arbitrarily small externalities guarantee equilibrium existence. |
| Keywords: | adverse selection; competition; externality; team production |
| JEL: | D24 D82 J30 L22 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9833&r=lab |
| By: | Bogaard, Hein; Svejnar, Jan |
| Abstract: | We exploit organizational reforms in a foreign-owned bank in Central-East Europe to study the implementation of modern HRM policies in an emerging market context. We have branch-level data and use our knowledge of the process that led to the adoption of the reforms to implement two estimators that address endogeneity bias in a complementary fashion: an IV approach and Generalized Propensity Score estimation. Our results show that some of the reforms had a positive impact on productivity, but they also underscore the risks of quantity-based incentives where quality is important. |
| Keywords: | Banking; Central and Eastern Europe; Endogeneity of HRM Policies; Foreign Ownership; Incentives; Insider Econometrics |
| JEL: | F23 G21 M52 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9789&r=lab |
| By: | Lechner, Michael; Sari, Nazmi |
| Abstract: | Based on the Canadian National Population Health Survey we estimate the effects of individual sports and exercise on individual labor market outcomes. The data covers the period from 1994 to 2008. It is longitudinal and rich in life-style, health, and physical activity in-formation. Exploiting these features of the data allows for a credible identification of the effects as well as for estimating dose-response relationships. Generally, we confirm previous findings of positive long-run income effects. However, an activity level above the current recommendation of the WHO for minimum physical activity is required to reap in the long-run benefits. |
| Keywords: | Canadian National Population Health Survey; human capital; individual sports participa¬tion; labor market; matching estimation.; Physical activity |
| JEL: | C21 I12 I18 J24 L83 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9851&r=lab |
| By: | Jan Kabatek (Tilburg University [Tilburg] - Netspar); Arthur Van Soest (Tilburg University [Tilburg] - Netspar); Elena Stancanelli (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | Earlier studies suggest that income taxation may affect not only labour supply but also domestic work. Here we investigate the impact of income taxation on partners' labour supply and housework, using data for France that taxes incomes of married couples jointly. We estimate a household utility model in which the marginal utilities of leisure and housework of both partners are modelled as random coefficients, depending on observed and unobserved characteristics. We conclude that both partners' market and housework hours are responsive to changes in the tax system. A policy simulation suggests that replacing joint taxation of married spouses' incomes with separate taxation would increase the husband's housework hours by 1.3% and reduce his labour supply by 0.8%. The wife's market hours would increase by 3.7%, and her housework hours would fall by 2.0%. |
| Keywords: | Time use; Taxation; Discrete choice models |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00966801&r=lab |
| By: | Fairlie, Robert |
| Abstract: | We examine trends in entrepreneurship among white and black men from 1910 to 1990 using Census and CPS microdata. Self-employment rates fell over most of the century and then started to rise after 1970. For white men, we find that the decline was due to declining rates within industries, but was counterbalanced somewhat by a shift in employment towards high self-employment industries. Recently, the increase in business ownership was caused by an end to the within industry decline and the continuing shift in employment towards high self-employment industries. We also find that social security benefits, and immigration patterns do not explain the recent upturn in self-employment. For black men, we find that the self-employment rate remained at a level of roughly one-third the white rate from 1910 to 1990. The large and constant gap between the black and the white rates is not due to blacks being concentrated in low self-employment rate industries. We also find that absent continuing forces holding down black self-employment, a simple inter-generational model of self-employment suggests that black and white rates would converge quickly. |
| Keywords: | Business, entrepreneurship, inequality, race, business ownership, self-employment, labor |
| Date: | 2014–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucscec:qt7pf033tn&r=lab |
| By: | Heggedal, Tom-Reiel; Moen, Espen R; Preugschat, Edgar |
| Abstract: | Do firms have the right incentives to innovate in the presence of productivity spillovers? This paper proposes an explicit model of spillovers through labor flows in a framework with search frictions. Firms can choose to innovate or to imitate by hiring a worker from a firm that has already innovated. We show that if innovation firms can commit to long-term wage contracts with their workers, productivity spillovers are fully internalized. If firms cannot commit to long-term wage contracts, there is too little innovation and too much imitation in equilibrium. Our model is tractable and allows us to analyze welfare effects of various policies in the limited commitment case. We find that subsidizing innovation and taxing imitation improves welfare.Moreover, allowing innovation firms to charge quit fees or rent out workers to imitation firms also improves welfare. By contrast, non-pecuniary measures like covenants not to compete, interpreted as destruction of matches between imitation firms and workers from innovation firms, always reduce welfare. |
| Keywords: | efficiency; imitation; innovation; productivity; search frictions; spillovers; worker flows |
| JEL: | J63 J68 O38 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9850&r=lab |
| By: | Clougherty, Joseph A.; Gugler, Klaus Peter; Sørgard, Lars; Szücs, Florian |
| Abstract: | Two literatures exist concerning cross-border merger activity’s impact on domestic wages: one focusing on spillover-effects; the other focusing on bargaining-effects. Motivated by scarce theoretical scholarship spanning these literatures, we nest both mechanisms in a single conceptual framework. Considering the separate phenomena of inward and outward cross-border merger activity, we predict that ‘bargaining’ (‘spillover’) effects are relatively more dominant under high (low) unionization rates and under high (low) degrees of relatedness. Employing US firm-level panel data on wages combined with industry-level data on unionization and merger activity (covering 1989-2001), we find support for our propositions as inward and outward cross-border merger activity generate positive spillovers to wages, but are more likely to generate firm-level wage decreases when unionization rates are high and when cross-border merger activity is best characterized as related. |
| Keywords: | bargaining; Cross-Border Mergers; FDI; spillovers; wages |
| JEL: | F23 J30 L21 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9863&r=lab |
| By: | Greenwood, Jeremy; Guner, Nezih; Kocharkov, Georgi; Santos, Cezar |
| Abstract: | Has there been an increase in positive assortative mating? Does assortative mating contribute to household income inequality? Data from the United States Census Bureau suggests there has been a rise in assortative mating. Additionally, assortative mating affects household income inequality. In particular, if matching in 2005 between husbands and wives had been random, instead of the pattern observed in the data, then the Gini coefficient would have fallen from the observed 0.43 to 0.34, so that income inequality would be smaller. Thus, assortative mating is important for income inequality. The high level of married female labor-force participation in 2005 is important for this result. |
| Keywords: | Assortative mating; inequality; married female labor supply |
| JEL: | D31 J11 J12 J22 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9825&r=lab |
| By: | Piraino, Patrizio (School of Economics, University of Cape Town) |
| Abstract: | The paper estimates the degree of intergenerational earnings persistence in South Africa. It explores the link between this measure of social mobility and an index of inequality of opportunity. Using microdata from the National Income Dynamics Study (NIDS), the paper finds that intergenerational earnings mobility in South Africa is low. In addition, a limited set of inherited circumstances explains a significant fraction of earnings inequality among male adults. Adding South Africa to the existing international literature supports the hypothesis that low levels of intergenerational mobility and equality of opportunity are emblematic of high-inequality emerging economies. |
| Keywords: | Intergenerational earnings mobility, inequality of opportunity |
| JEL: | J62 D63 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:131&r=lab |