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on Labour Economics |
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Issue of 2014‒06‒28
twenty-one papers chosen by Erik Jonasson National Institute of Economic Research |
| By: | Manudeep Bhuller; Magne Mogstad; Kjell G. Salvanes |
| Abstract: | What do the education premiums look like over the life cycle? What is the impact of schooling on lifetime earnings? How does the internal rate of return compare with opportunity cost of funds? To what extent do progressive taxes attenuate the incentives to invest in education? This paper exploits Norwegian population panel data with nearly career long earnings histories to answer these important questions. We provide a detailed picture of the causal relationship between schooling and earnings over the life cycle, following individuals over their working lifespan. To account for endogeneity of schooling, we apply three commonly used identification strategies. Our estimates show that additional schooling gives higher lifetime earnings and steeper age-earnings profile, in line with predictions from human capital theory. These estimates imply an internal rate of return of around 10 percent, after taking into account income taxes and earnings-related pension entitlements. Under standard conditions, this finding suggests it was financially profitable to take additional schooling because the rates of return were substantially higher than the market interest rates. By comparison, Mincer regressions understate substantially the rates of return. We explore the reasons for this downward bias, finding that it is driven by Mincer's assumptions of no earnings while in school and exogenous post-schooling employment. |
| JEL: | J24 J31 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20250&r=lab |
| By: | Meyer S.; Künn-Nelen A.C. (ROA) |
| Abstract: | The aim of this paper is to investigate to what extent occupation-specific demandsexplain the relationship between education and health. We concentrate on ergonomic, environmental, psychical, social and time demands. Merging the German Microcensus 2009 data with a dataset including detailed occupational demands German Employment Survey 2006, we have a unique dataset to analyze the mediating role of occupational demands in the relationship between education and health status on the one hand and education and health behavior BMI and smoking on the other. We base our analyses on the entire working population and therefore also include those who no longer work, taking occupational demands related to their last job. First, we find that occupational demands are significantly related to subjective health and health behaviors. This holds even stronger for those who are no longer employed. Second, we find that whereas occupational demands do not explain educational differences in subjective health status, they do partially mediate the education gradient in the considered health behaviors.Educational differences in smoking status can partly be explained by ergonomic,environmental, psychical and social demands. The educational gradient in BMI is partly attributable to social occupational demands. |
| Keywords: | Health: General; Demand and Supply of Labor: General; |
| JEL: | I10 J20 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umaror:2014005&r=lab |
| By: | Merlino L.P.; Parrotta P.; Pozzoli D. (GSBE) |
| Abstract: | In this paper, we investigate the sorting of workers in firms to understand gender gaps in labor market outcomes. Using Danish employer-employee matched data, we find strong evidence of glass ceilings in certain firms, especially after motherhood, preventing women from climbing the career ladder and causing the most productive female workers to seek better jobs in more female-friendly firms in which they can pursue small career advancements. Nonetheless, gender differences in promotion persist and are found to be similar in all firms when we focus on large career advancements. These results provide evidence of the sticky floor hypothesis, which, together with the costs associated with changing employer, generates persistent gender gaps. |
| Keywords: | Economics of Gender; Non-labor Discrimination; Human Capital; Skills; Occupational Choice; Labor Productivity; Job, Occupational, and Intergenerational Mobility; Promotion; |
| JEL: | J16 J24 J62 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2014022&r=lab |
| By: | Valletta, Robert G. (Federal Reserve Bank of San Francisco) |
| Abstract: | In response to the 2007-09 “Great Recession,” the maximum duration of U.S. unemployment benefits was increased from the normal level of 26 weeks to an unprecedented 99 weeks. I estimate the impact of these extensions on job search, comparing them with the more limited extensions associated with the milder 2001 recession. The analyses rely on monthly matched microdata from the Current Population Survey. I find that a 10-week extension of UI benefits raises unemployment duration by about 1.5 weeks, with little variation across the two episodes. This estimate lies in the middle-to-upper end of the range of past estimates. |
| Keywords: | unemployment benefits, job search |
| JEL: | J64 J65 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8247&r=lab |
| By: | Antonio Di Paolo (Grup d'Anàlisi Quantitativa Regional, AQR-IREA, Universitat de Barcelona, Av. Diagonal, 690, 08034 Barcelona, Spain); Ferran Mañé (Universitat Rovira i Virgili & CREIP) |
| Abstract: | Drawing on a very rich data set from a recent cohort of PhD graduates, we examine the correlates and consequences of qualification and skills mismatch. We show that job characteristics such as the economic sector and the main activity at work play a fundamental direct role in explaining the probability of being well matched. However, the effect of academic attributes seems to be mainly indirect, since it disappears once we control for the full set of work characteristics. We detected a significant earnings penalty for those who are both overqualified and overskilled and also showed that being mismatched reduces job satisfaction, especially for those whose skills are underutilized. Overall, the problem of mismatch among PhD graduates is closely related to demand-side constraints of the labor market. Increasing the supply of adequate jobs and broadening the skills PhD students acquire during training should be explored as possible responses. |
| Keywords: | overskilling, overqualification, doctors, earnings, job satisfaction |
| JEL: | I20 J24 J28 J31 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2014-06&r=lab |
| By: | Ewa Cukrowska (Faculty of Economic Sciences, University of Warsaw); Anna Lovasz (Institute of Economics, Centre for Economic and Regional Studies of the Hungarian Academy of Sciences, and Eotvos Lorand University) |
| Abstract: | The paper examines how much children and responsibilities related with them contribute towards the divergence of men’s and women’s wages, and consequently, to the formation of the gender wage gap. To derive the relative contribution of gender specific wage inequalities caused by the parenthood to the overall gender wage gap, we provide a modification of standard Oaxaca-Blinder decomposition method. Contrary to our expectations, the findings show that most of the gender wage inequality is due to the positive wage gap between men who do and do not have children and not due to the wage penalty incurred by mothers. |
| Keywords: | Gender Wage Gap, Family Gap, Motherhood Penalty, Wage Gap Decomposition |
| JEL: | J13 J22 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2014-16&r=lab |
| By: | Michael P. Cameron (University of Waikato) |
| Abstract: | WNew Zealand’s population is ageing rapidly and alongside this the labour force is also ageing. This paper presents a descriptive analysis of the labour force and employment trends among older New Zealanders (that is, those aged 55 and over). Specifically, the paper focuses on labour force participation by age-group, by cohort and by region, and employment by industry and by occupation. I find that the older labour force is large and growing over time, and the patterns are similar by gender and by region. Employment of older workers is more concentrated in agriculture than other industries or occupations. Cohort analysis reveals that generational differences in labour force participation rates are a significant driver of increases in the older labour force, but that cohort differences do not explain increases in the proportion of full-time employment among older workers to the same extent. |
| Keywords: | labour force participation; older people; New Zealand |
| JEL: | J21 J26 |
| Date: | 2014–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:14/06&r=lab |
| By: | Manuel Hidalgo-Pérez (Department of Economics, Universidad Pablo de Olavide de Sevilla); Sergi Jiménez-Martín (Department of Economics, Universitat Pompeu Fabra and FEDEA); Florentino Felgueroso (Department of Economics, Universidad de Oviedo and FEDEA) |
| Abstract: | In contrast to most EU countries and other developed economies, the Wage Skill Premium (WSP) has been steadily falling over the past decades in Spain. The main purpose of this work is to document and explain the fall in the WSP in Spain over the past two decades using Social Security data. Our estimation procedure follows and extends Dustman and Meghir (2005), which allows us to estimate the returns to various sources of experience, as well as seniority, while controlling for the likely biases and endogeneity associated with these models. The results reveal that the fall in the WSP can be explained in part by an increase in the share of college graduates that are mismatched, that is, working in positions for which they are a priori overeducated. However, this phenomenon only partially explains the fall in the WSP: differences between high and low-educated workers in the returns to all types of experiences and tenure have been substantially reduced since the end of the 90s. |
| Keywords: | wage premium, returns to education, experience, seniority |
| JEL: | J31 J24 J41 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:14.07&r=lab |
| By: | Dhanjal, Sundip; Schirle , Tammy |
| Abstract: | In this study, we investigate whether an aging workforce affects the job opportunities of youth. Provincial data from the 1976-2013 Labour Force Surveys and a fixed-effects model is used to estimate the effect of the share of the adult male labour force that is aged 55 to 69 on the employment and unemployment rates of men aged 25 to 29. We estimate effects on other labour market outcomes including wages and school enrolment, and other samples of younger men and women. There is no evidence to suggest that a growing share of older workers negatively affects the decisions or outcomes of youth in the labour market. To the contrary, there is weak evidence to suggest an aging population has a positive effect on the labour market outcomes of youth. |
| Keywords: | Population aging, employment, unemployment, youth |
| JEL: | J11 J21 |
| Date: | 2014–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2014-30&r=lab |
| By: | Kreiner, Claus Thustrup (University of Copenhagen); Munch, Jakob R. (University of Copenhagen); Whitta-Jacobsen, Hans Jørgen (University of Copenhagen) |
| Abstract: | Inspired by Hayek (1945), we study the distortionary effects of taxation on labor mobility and the long run allocation of labor across different profitable opportunities. These effects are not well detected by the methods applied in the large public finance literature estimating the elasticity of taxable income and quantifying the efficiency loss from taxation. Our analysis builds on a standard search theoretic framework where workers are continually seeking better paid jobs, but are also fired from time to time because of economic development and productivity shocks. We incorporate non-linear taxation into this setting and estimate the structural parameters of the model using employer-employee register based data for the full Danish population of workers and workplaces for the years 2004-2006. Our results indicate that along the intensive margin the Danish taxation generates an overall efficiency loss corresponding to a 12 percent reduction in total income. It is possible to reap 4/5 of this potential efficiency gain by going from a high-tax Scandinavian system to a level of taxation in line with low-tax OECD countries such as the United States. The tax-responsiveness of labor mobility and allocation corresponds to an elasticity of taxable income with respect to the net-of-tax rate in the range 0.15-0.35. |
| Keywords: | tax distortions, labor mobility, elasticity of taxable income |
| JEL: | J62 H24 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8246&r=lab |
| By: | Juan Arroyo Miranda; Roberto Gómez Cram; Carlos Lever Guzmán |
| Abstract: | We use a novel data set on firm vacancies and job seekers from a Mexican government job placement service to analyze whether changes in matching frictions can explain the large and persistent increase in Mexican unemployment after the 2008 global financial crisis. We find evidence of a statistically signicant reduction in the efficiency of the matching function during the crisis. The estimated effect explains about 70 basis points of the 233 basis points observed increase in the unemployment rate. Hence, these results suggest that changes in matching frictions cannot explain most of the increase in unemployment. |
| Keywords: | Matching function estimation, Unemployment, Vacancies |
| JEL: | J63 J64 E24 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2014-08&r=lab |
| By: | Paul Bingley; Nabanita Datta Gupta; Michael Jorgensen; Peder Pedersen |
| Abstract: | There are large differences in labor force participation rates by health status. We examine to what extent these differences are determined by the provisions of Disability Insurance and other pension programs. Using administrative data for Denmark we find that those in worse health and with less schooling are more likely to receive DI. The gradient of DI participation across health quintiles is almost twice as steep as for schooling – moving from having no high school diploma to college completion. Using an option value model that accounts for different pathways to retirement, applied to a period spanning a major pension reform, we find that pension program incentives in general are important determinants of retirement age. Individuals in poor health and with low schooling are significantly more responsive to economic incentives than those who are in better health and with more schooling. Similar gradients in outcomes and behavior by health and schooling partially reflects the less educated having poorer health on average, but also that the less educated have worse job prospects and higher replacement rates due to a progressive formula for DI and other pension benefits. |
| JEL: | H55 I1 J14 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20114&r=lab |
| By: | Laura Juárez González; Tobias Pfutze |
| Abstract: | We estimate the effect of 70 y Mas, an age-conditioned transfer program for individuals age 70 and older in rural Mexico, on the labor force participation of beneficiaries and of younger individuals who live with them. Using data from the 2010 Mexican Census, we exploit the age and locality population thresholds to identify the effects of the program. We find that the program reduces the labor force participation of elderly men, particularly of those who live alone and who are relatively poor, but has a much weaker effect on that of elderly women. The program has no statistically significant effect on the labor force participation of either prime-age men or women who live with potential beneficiaries, and it has a negative and significant effect on the labor force participation of boys age 12 to 17, particularly those in the lowest wealth quintiles, but not on that of same-age girls. These results suggest that the program affects mostly the labor supply of the intended beneficiaries, and that of marginal workers, like adolescent boys. |
| Keywords: | Pensions, Social Protection, Labor Force Participation, Mexico. |
| JEL: | D04 J26 O12 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2014-12&r=lab |
| By: | Tomoki Sekiguchi (Graduate School of Economics, Osaka University); Li Jie (Graduate School of Economics, Osaka University); Masaki Hosomi (Graduate School of Economics, Osaka University) |
| Abstract: | Based on the relational perspective of work, we examine the role of job autonomy, social skill, and employee status as factors related to employee job crafting. We found that job autonomy and social skill both directly and interactively influenced job crafting for part-time employees in Japan. We further found that for full-time employees in Japan, job autonomy had a stronger impact on job crafting when employee status was high, and that social skill had the strongest impact on job crafting when job autonomy was high and employee status was low. Our results demonstrate that social skill is a critical predictor of job crafting and that employee status alters the role of job autonomy and social skill in promoting job crafting. |
| Keywords: | job crafting; job autonomy; social skill; employee status |
| JEL: | M10 M12 M54 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1426&r=lab |
| By: | Yuliia Stupnytska (Center for Mathematical Economics, Bielefeld University; Center for Mathematical Economics, Bielefeld University) |
| Abstract: | This paper presents a search model with heterogeneous workers, social networks and endogenous search intensity. There are three job search channels available to the unemployed: costly formal applications and two costless informal channels - through family and professional networks. The gain from being employed is increasing in the productivity, so the lowest motivation for preparing formal applications is proved to be among the least productive worker types. We assume that professional contacts exhibit a strong degree of homophily, thus it is profitable for firms to direct their network search towards the more productive incumbent employees. So the probability of a professional referral is increasing in the productivity of the worker, which mitigates the incentives to use the formal channel of search. Therefore, the model predicts that workers in the right (left) tail of the productivity distribution have the highest propensity of finding a job with a help of professional (family) contacts, whereas the formal channel of search is mostly utilized by workers in the middle range of the distribution. This explains the U-shaped referral hiring pattern in the model. The endogenous sorting of workers across channels also implies that professional (family) referrals are associated with wage premiums (penalties) compared to the formal channel of search. The average effect of referrals on wages is, however, ambiguous and depends on the relative proportions of high and low productivity types in the population. These findings help to explain the contradicting empirical evidence concerning the effect of referrals on wages. |
| Keywords: | endogenous search intensity, family contacts, professional networks, U-shape, referral puzzle, wage premiums and penalties |
| JEL: | J23 J31 J38 J64 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:bie:wpaper:511&r=lab |
| By: | Lott, Yvonne |
| Abstract: | To be able to combine work with activities and duties outside the workplace successfully, employees need time adequacy. Time adequacy is the fit between working time and all other time demands and can be achieved through working time flexibility and autonomy. However, past research has shown that working time flexibility and autonomy do not necessarily foster employees' time sovereignty. Studies suggest that the benefits of working time arrangements depend on work organization. Analyzing performance-related pay, target setting and self-directed teamwork as moderators for working time arrangements and time adequacy is therefore the main interest of the study. The data used is taken from the European Survey of Working Conditions in 2010. Multi-level analyses show that working time flexibility and autonomy, as well as self-directed teamwork, are positively associated with time adequacy. However, employees experience time squeeze with performance-related pay and target setting. Moreover, performance-related pay undermines the positive effect of working time autonomy. The study indicates that management practices have distinct connotations for time adequacy. Moreover, wage flexibility limits employees' benefits from working time autonomy. -- |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wsidps:188&r=lab |
| By: | John P. Martin (UCD Geary Institute, University College Dublin) |
| Abstract: | Activation policies aimed at getting working-age people off benefits and into work have become a buzzword in labour market policies. Yet they are defined and implemented differently across OECD countries and their success rates vary too. The Great Recession has posed a severe stress test for these policies with some commentators arguing that they are at best 2fair weather” policies. This paper sheds light on these issues mainly via the lens of recent OECD research. It presents the stylized facts on how OECD countries have responded to the Great Recession in terms of ramping up their spending on active labour market policies (ALMPs), a key component in any activation strategy. It then reviews the macroeconomic evidence on the impact of ALMPs on employment and unemployment rates. This is followed by a review of the key lessons from recent OECD country reviews of activation policies. It concludes with a discussion of crucial unanswered questions about activation. |
| Keywords: | activation, active labour market policies, Great Recession, unemployment insurance, benefit conditionality |
| JEL: | J01 J08 J68 |
| Date: | 2014–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201409&r=lab |
| By: | Gabriela Calderón |
| Abstract: | In 2007, seeking to increase female labor force participation and more generally ease burdens on working women, the Mexican government introduced an enormous expansion of a child care program: Estancias Infantiles para Apoyar a Madres Trabajadoras (EI). EI covers 90 percent approximately of the cost of enrolling a child under age four at a formal child care center and is intended to benefit women who are looking for work, in school, or working -with the exception of those who already have access to child care because their job is covered by Mexico's social security system (IMSS). The roll-out of EI was so fast and intense that, by mid-2010, it had approximately 357,000 child care spaces. In order to identify the effects of the program I use a combination of triple differences and synthetic control methods, and find that EI increased women's probability of working and reduced the time they devoted to child rearing. EI also caused women to obtain more stable jobs and it increased their labor incomes. Affected husbands spent less time on child rearing and housework, and they were more likely to switch to a better-paid job. |
| Keywords: | Time allocation, female labor supply, child care, intrahousehold allocations, synthetic control method |
| JEL: | J22 J13 J32 D10 C26 O12 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2014-07&r=lab |
| By: | Lott, Yvonne |
| Abstract: | This study examines the effect of working time flexibility and autonomy on time adequacy using the European Working Conditions Survey (EWCS) in 2010. Drawing on gender theory and welfare state theory, gender differences and the institu-tional contexts of the UK, Sweden, Germany and the Nether-lands are taken into account. The study reveals that time ar-rangements have gendered meanings. While working time flexibility and autonomy are positively related to time adequa-cy for women, men tend to experience overtime and work in-tensification in connection with working time autonomy. Fur-thermore, working time regimes also shape time arrange-ments. In the UK, employees have time adequacy primarily when they work fixed hours, while in the Netherlands, em-ployees profit most from working time autonomy. Moreover, unlike in Germany and the UK, men and women in the Nether-lands and Sweden benefit more equally from working time flexibility and autonomy. -- |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wsidps:190&r=lab |
| By: | Manuel Bagues; Mauro Sylos-Labini; Natalia Zinovyeva |
| Abstract: | This paper analyzes whether the presence of women in academic committees benefits female candidates. We exploit evidence from Italy, where candidates to Full and Associate Professor positions are required to qualify in a nation-wide evaluation known as Abilitazione Scientifica Nazionale. In 2012, these evaluations involved around 66,000 applications in all academic disciplines and around 900 (randomly chosen) evaluators. We estimate the causal effect of committees' gender composition exploiting the procedure of random assignment of evaluators to committees. Each additional female evaluator decreases by 2 percentage points the success rate of female candidates. The effect is similar in magnitude in evaluations for Full and Associate Professor positions, but it is only statistically significant in the later case. Information from 260,000 individual evaluations suggests that the presence of women in the committee affects the voting behavior of men. Overall, our results cast doubts on the convenience of introducing gender quotas in academia. |
| Keywords: | gender quotas, discrimination, academic promotions |
| Date: | 2014–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2014/14&r=lab |
| By: | Verme, Paolo |
| Abstract: | The Middle East and North Africa region is known for having low female labor market participation rates as compared with its level of economic development. A possible explanation is that these countries find themselves at the turning point of the U-shape hypothesis when countries transition from declining to rising female participation rates. This paper tests the U-shape hypothesis in countries in the Middle East and North Africa. It finds that the region has outperformed other world regions in terms of the main drivers of the U-shape hypothesis, including gross domestic product per capita, economic transformation away from the agricultural sector, female education, and fertility rates. These facts are consistent with nonparametric evidence that shows countries in the region are distributed over a U-shaped curve. However, parametric tests of the hypothesis point in a different direction. The region shows an inverted U-shape overall and great heterogeneity across countries and age cohorts that defies any law on the relation between gross domestic product and female participation rate. The explanation behind these findings may be economic and cultural. Jobless growth and the lack of growth in employment sectors such as manufacturing and services, which proved critical for female employment in other countries, weaken labor demand and strengthen the role of institutions that may discourage female participation, such as marriage, legislation, and gender norms. |
| Keywords: | Population Policies,Regional Economic Development,Economic Theory&Research,Labor Policies,Labor Markets |
| Date: | 2014–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6927&r=lab |