|
on Labour Economics |
|
Issue of 2014‒07‒13
forty-one papers chosen by Erik Jonasson National Institute of Economic Research |
| By: | Dohmen, Thomas (University of Bonn) |
| Abstract: | In the past decades, behavioural economics has become an influential and important field of economics. Interest in behavioural economics derives from unease with standard economic models that are based on restrictive assumptions, which confine the nature of human motivation. Although Adam Smith, the founding father of modern economics, had highlighted the multitude of psychological motives that drive human behaviour, and despite the fact that many influential economists thereafter believed in tenets of modern behavioural economics, the homo economicus assumption became prevalent, until this construct was challenged by compelling evidence on social, cognitive and emotional factors that drive decision-making and social interaction. Since human interaction is germane to labour markets, one would expect behavioural economics to be highly relevant for labour economics. This paper gauges whether and how behavioural economics has left its mark on labour economics, considers the timing and structure of this development, and contemplates its future impact on labour economics. |
| Keywords: | behavioural economics, labour economics, behavioural labour economics |
| JEL: | J00 J01 D03 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8263&r=lab |
| By: | John T. Addison; Pedro Portugal; José Varejão |
| 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. |
| JEL: | J23 J3 J4 J5 D4 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201409&r=lab |
| By: | Brown, Alessio J. G. (IZA); Merkl, Christian (University of Erlangen-Nuremberg); Snower, Dennis J. (Kiel Institute for the World Economy) |
| Abstract: | This paper sheds new light on the effects of the minimum wage on employment from a two-sided theoretical perspective, in which firms' job offer and workers' job acceptance decisions are disentangled. Minimum wages reduce job offer incentives and increase job acceptance incentives. We show that sufficiently low minimum wages may do no harm to employment, since their job-offer disincentives are countervailed by their job-acceptance incentives. |
| Keywords: | job offer, unemployment, employment, labor market, minimum wage, job acceptance |
| JEL: | J3 J6 J2 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8252&r=lab |
| By: | Lehmann, Etienne (CRED, Université Panthéon Assas Paris 2); Lucifora, Claudio (Università Cattolica del Sacro Cuore); Moriconi, Simone (Università Cattolica del Sacro Cuore); Van der Linden, Bruno (IRES, Université catholique de Louvain) |
| Abstract: | In this paper we argue that, for a given overall level of labour income taxation, a more progressive tax schedule increases employment. From a theoretical point of view, higher progressivity increases overall employment through a wage moderating effect and also because employment of low-paid workers is more elastic to wages. We test these theoretical predictions on a panel of 21 OECD countries over 1998-2008. Controlling for the burden of taxation at the average wage, our estimates suggest that a more progressive tax schedule reduces the unemployment rate and increases the employment rate. These findings are confirmed when we account for the potential endogeneity of both average taxation and progressivity. Overall, our results suggest that policy-makers should not only focus on the detrimental effects of tax progressivity on in-work effort, but also consider the employment-enhancing effects. |
| Keywords: | wage moderation, employment, taxation |
| JEL: | E24 H22 J68 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8276&r=lab |
| By: | Gindling, T. H. (University of Maryland, Baltimore County); Mossaad, Nadwa (University of Maryland, Baltimore County); Trejos, Juan Diego (University of Costa Rica) |
| Abstract: | In August 2010 the Costa Rican government implemented a comprehensive program to increase compliance with legal minimum wages, the Campaign for Minimum Wages. To evaluate the impact of the Campaign, we use a regression discontinuity approach, which compares what happened to workers who before the campaign had been earning below the minimum wage to those who before the Campaign had been earning above the minimum wage. We analyze a panel data set with information on workers from before the Campaign began (July 2010) and after the Campaign had been in operation for some time (July 2011). We find evidence that the Campaign led to an increase in compliance with minimum wage laws in Costa Rica; the mean earnings of those earning less than the minimum wage in 2010 increased by approximately 10% more than the earnings of those who had been earning more than the minimum wage. The Campaign led to the largest increases in the wages of women, younger workers and less-educated workers. We find no evidence that the Campaign had a negative impact on the employment of full-time workers whose wages were increased. We find some weak evidence that the Campaign had a negative impact on the employment of part-time private sector employees. Although increased inspections were mainly targeting minimum wage violations, we also observe an increase in compliance with a broader set of labor standards and a positive spillover effect relative to other violations of labor laws. |
| Keywords: | Latin America, labor code enforcement, minimum wages, employment, wages |
| JEL: | J3 J33 J38 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8253&r=lab |
| By: | Kuhn, Peter J. (University of California, Santa Barbara); Shen, Kailing (Xiamen University) |
| Abstract: | We study urban Chinese employers' preferences between workers with and without a local residence permit (hukou) using callback information from an Internet job board serving private sector employers. We find that employers prefer migrant workers to locals who are identically matched to the job's requirements; these preferences are especially strong at low skill levels. We argue that migrants' higher work hours and effort help to account for employers' preferences, and present evidence that efficiency wage and intertemporal labor substitution effects might explain these hours/effort gaps. |
| Keywords: | temporary migration, China, hukou, undocumented migrants |
| JEL: | O15 R23 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8289&r=lab |
| By: | Petreski, Marjan; Mojsoska-Blazevski, Nikica; Petreski, Blagica |
| Abstract: | The objective of this research is to understand if large gender employment and participation gaps in Macedonia can shed some light on the gender wage gap. A large contingent of inactive women in Macedonia including long-term unemployed due to the transition process, female remittance receivers from the male migrant, unpaid family workers in agriculture and so on, is outside employment, but is not necessarily having the worst labour-market characteristics. In addition, both gender wage gap and participation gap enlarge as education decreases, revealing the importance of non-random selection of women into employment. Though, the standard Heckman-type correction of the selectivity bias suggests that non-random selection exists, but the resulting wage gap remains at the same level even when selection has been considered. Instead, we perform repeated wage imputations for those not in work, by simply making assumptions on the position of the imputed wage observation with respect to the median. Then, we assess the impact of selection into employment by comparing estimated wage gaps on the base sample versus on an imputed sample. The main result is that selection explains most of the gender wage gap in the primary-education group (75%), followed by the secondary-education group (55%). In the tertiary group, the small initial gap vanishes once selection considered. This suggests that indeed non-working women are not those with the worst labour-market characteristics. Results suggest that gender wage discrimination in Macedonia is actually between 5.4% and 9.8% and does not exist for the highly-educated women. The inability of the Heckman-type correction to document a role for selection in explaining the gender wage gap may be due to the criticisms to the exclusion restrictions and the large amount of missing wages. |
| Keywords: | gender wage gap, gender participation gap, selection bias, repeated imputations |
| JEL: | E24 J16 J31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57226&r=lab |
| By: | Addison, John T. (University of South Carolina); Teixeira, Paulino (University of Coimbra); Stephani, Jens (Institute for Employment Research (IAB), Nuremberg); Bellmann, Lutz (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | Using linked employer-employee data, this paper estimates the effect of collective bargaining coverage on wages over an interval of continuing decline in unionism. Unobserved firm and worker heterogeneity is dealt with using two establishment sub-samples, comprising collective bargaining joiners and never members on the one hand and collective bargaining leavers and always members on the other, each in combination with subsets of worker job stayers. The counterfactuals are then reversed for robustness checks. Joining a sectoral agreement is found always to produce higher wages, while exiting a sectoral agreement no longer produces wage losses if the transition is to a firm agreement. Leaving a firm agreement to non-coverage also leads to wage reductions, while joining one from non-coverage seems decreasingly favourable. The reverse counterfactuals yield correspondingly smaller estimates (in absolute value) of wage development than reported for the initial counterfactuals. Finally, although small, the union wage gap persists. |
| Keywords: | Germany, sectoral collective bargaining, firm-level agreements, wages, spell fixed-effects |
| JEL: | J31 J51 J53 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8257&r=lab |
| By: | Bratsberg, Bernt (Ragnar Frisch Centre for Economic Research); Raaum, Oddbjørn (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research) |
| Abstract: | Based on individual longitudinal data, we examine the evolution of employment and earnings of post‐EU accession Eastern European labour immigrants to Norway for a period of up to eight years after entry. We find that the migrants were particularly vulnerable to the negative labour demand shock generated by the financial crisis. During the winter months of 2008/09, the fraction of immigrant men claiming unemployment insurance benefits rose from below 2 to 14 per cent. Some of this increase turned out to be persistent, and unemployment remained considerably higher among immigrants than natives even three years after the crisis. Although we find that negative labour demand shocks raise the probability of return migration, the majority of the labour migrants directly affected by the downturn stayed in Norway and claimed unemployment insurance benefits. |
| Keywords: | migration, assimilation, social insurance |
| JEL: | F22 H55 J22 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8291&r=lab |
| By: | Bi, Sheng (Paris School of Economics); Langot, François (University of Le Mans) |
| Abstract: | We consider a labor market where the competitive search equilibrium is inefficient due to asymmetrical information. At the time when firms commit to specific hiring costs, workers hold private information on their intention of entering into retirement before the termination of the contract. When retirement is an event which occurs exogenously and information is complete, the long term employment relationship is preferred by the risk adverse workers. This implies that firms must implement a screening process when the information is asymmetric. We show that the optimal separating contract (an ascending wage profile) distorts the allocation of the workers who will retire later (the 'good' workers) in order to prevent the workers who will retire early (the 'bad' workers) from applying for these jobs. Secondly, we endogenize the retirement decision by considering two cases: an ex ante or ex post heterogeneity. In these two cases, we show that a separating equilibrium always exists, whereby good workers accept an ascending wage profile in order to make themselves differentiate from the 'bad' workers. These asymmetries in the information lead to an excess of retirement compared to the full information economy. Finally, in the case of ex post heterogeneity, we are able to show that the employment rate is unambiguously lower. |
| Keywords: | competitive search equilibrium, separating equilibrium, retirement |
| JEL: | D82 D86 J14 J26 J64 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8288&r=lab |
| By: | Kory Kroft; Fabian Lange; Matthew J. Notowidigdo; Lawrence F. Katz |
| Abstract: | We explore the extent to which composition, duration dependence, and labor force non-participation can account for the sharp increase in the incidence of long-term unemployment (LTU) during the Great Recession. We first show that compositional shifts in demographics, occupation, industry, region, and the reason for unemployment jointly account for very little of the observed increase in LTU. Next, using panel data from the Current Population Survey for 2002-2007, we calibrate a matching model that allows for duration dependence in the exit rate from unemployment and for transitions between employment (E), unemployment (U), and non-participation (N). We model the job-finding rates for the unemployed and non-participants, and we use observed vacancy rates and the transition rates from E-to-U, E-to-N, N-to-U, and U-to-N as the exogenous "forcing variables'' of the model. The calibrated model can account for almost all of the increase in the incidence of LTU and much of the observed outward shift in the Beveridge curve between 2008 and 2013. Both negative duration dependence in the job-finding rate for the unemployed and transitions to and from non-participation contribute significantly to the ability of the model to match the data after 2008. |
| JEL: | E24 J64 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20273&r=lab |
| By: | Beckmann, Klaus (Helmut Schmidt University, Hamburg); Franz, Nele (Carinthian School of Applied Sciences); Schneider, Andrea (University of Münster) |
| Abstract: | This paper deals with discrete labour supply decisions of different groups of persons in response to a change in net wage rates. The centrepiece of this approach is individuals' switching between working time categories, while facing switching costs that arise when people expand or reduce working hours. We define a degree of persistence of individual behaviour as well as its complement, labour supply mobility. Using the German Socio-Economic Panel (SOEP), we estimate persistence and mobility by gender and type of household. |
| Keywords: | labour mobility; discrete choice approach; labour supply elasticity |
| JEL: | C25 H31 J22 |
| Date: | 2014–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:vhsuwp:2014_145&r=lab |
| By: | Gandolfi, Davide (Macalester College, Minnesota); Halliday, Timothy J. (University of Hawaii at Manoa); Robertson, Raymond (Macalester College, Minnesota) |
| Abstract: | Neoclassical trade theory suggests that factor price convergence should follow increased commercial integration. Rising commercial integration and foreign direct investment followed the 1994 North American Free Trade Agreement between the United States and Mexico. This paper evaluates the degree of wage convergence between Mexico and the United States between 1988 and 2011. We apply a synthetic panel approach to employment survey data and a more descriptive approach to Census data from Mexico and the US. First, we find no evidence of long-run wage convergence among cohorts characterized by low migration propensities although this was, in part, due to large macroeconomic shocks. On the other hand, we do find some evidence of convergence for workers with high migration propensities. Finally, we find evidence of convergence in the border of Mexico vis-à-vis its interior in the 1990s but this was reversed in the 2000s. |
| Keywords: | migration, labor-market integration, factor price equalization |
| JEL: | F15 F16 J31 F22 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8254&r=lab |
| By: | Bratsberg, Bernt (Ragnar Frisch Centre for Economic Research); Raaum, Oddbjørn (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research) |
| Abstract: | Using longitudinal data from the date of arrival, we study long‐term labor market and social insurance outcomes for all major immigrant cohorts to Norway since 1970. Immigrants from high-income countries performed as natives, while labor migrants from low‐income source countries had declining employment rates and increasing disability program participation over the lifecycle. Refugees and family migrants assimilated during the initial period upon arrival, but labor market convergence halted after a decade and was accompanied by rising social insurance rates. For the children of labor migrants of the 1970s, we uncover evidence of intergenerational assimilation in education, earnings and fertility. |
| Keywords: | migration, assimilation, social insurance |
| JEL: | F22 H55 J22 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8292&r=lab |
| By: | Mai Dao; Davide Furceri; Prakash Loungani |
| Abstract: | We examine patterns of regional adjustments to shocks in the US during the past 40 years. Using state-level data, we estimate the dynamic response of regional employment, unemployment, participation rates and net migration to state-relative labor demand shocks. We find that (i) the long-run effect of a state-specific shock on the state employment level has decreased over time, suggesting less overall net migration in response to a regional shock, (ii) the role of the participation rate as absorber of regional shocks has increased, (iii) the response of net migration to regional shocks is stronger, while that of relative unemployment is weaker during aggregate downturns, and (iv) the change in the response intensity of migration is related to the declining trend in regional dispersion of labor market conditions. Finally, using regional data for a set of 21 European countries, we show that while the short-term response of participation rates to labor demand shocks is typically larger in Europe than in the US, the immediate response of net migration in Europe has increased over time. |
| Keywords: | Labor markets;United States;Europe;Regional shocks;Labor mobility;Demand;Labor supply;Migration;Interstate migration, labor mobility, regional labor markets |
| Date: | 2014–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/26&r=lab |
| By: | Kleibrink, Jan (University of Duisburg-Essen); Michaelsen, Maren M. (Ruhr University Bochum) |
| Abstract: | The Further and Higher Education Act of 1992 changed the Higher Education system in the UK by giving all polytechnics university status. Using the British Household Panel Survey and accounting for different sources of selection bias, we show that wage differentials between university and polytechnic graduates can be explained by a glass ceiling preventing polytechnic graduates from reaching professional occupations. After the reform, the glass ceiling disappeared and average wages of post-reform polytechnic graduates are not statistically different from average wages of post-reform graduates of traditional universities any more. This implies that the abolition of the 'two-tier' education system has reduced inequality among Higher Education graduates – a result that may be desirable in other systems of a 'two-tier' nature. |
| Keywords: | higher education, education reform, wage differentials, occupational sorting, United Kingdom |
| JEL: | I23 J31 J64 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8255&r=lab |
| By: | Löffler, Max; Peichl, Andreas; Siegloch, Sebastian |
| Abstract: | There is still considerable dispute about the magnitude of labor supply elasticities. While differences in micro and macro estimates are recently attributed to frictions and adjustment costs, we show that relatively low labor supply elasticities derived from microeconometric models can also be explained by modeling assumptions with respect to wages. Specifically, we estimate 3,456 structural labor supply models each representing a plausible combination of frequently made choices. While most model assumptions do not systematically affect labor supply elasticities, our analysis shows that the results are very sensitive to the treatment of wages. In particular, the often-made but highly restrictive independence assumption between preferences and wages is key. To overcome this restriction, we propose a flexible estimation strategy that nests commonly used models. We show that loosening the exogeneity assumption leads to labor supply elasticities that are much higher. -- |
| Keywords: | labor supply,elasticity,random utility models,wages |
| JEL: | C25 C52 H31 J22 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14040&r=lab |
| By: | Huber, Martin; Lechner, Michael; Wunsch, Conny |
| Abstract: | This paper investigates the average effects of (firm-provided) workplace health promotion measures in form of the analysis of sickness absenteeism and health circles/courses on labour market outcomes of the firms’ employees. Exploiting linked employer-employee panel data that consist of rich survey-based and administrative information on firms, workers and regions, we apply a flexible propensity score matching approach that controls for selection on observables as well as on time-constant unobserved factors. While the effects of analysing sickness absenteeism appear to be rather limited, our results suggest that health circles/courses increase tenure and decrease the number of job changes across various age groups. A key finding is that health circles/courses strengthen the labour force attachment of elderly employees (51-60), implying potential cost savings for public transfer schemes such as unemployment or early retirement benefits. |
| Keywords: | Firm health policies, health circles, health courses, analysis of sickness absenteeism, matching |
| JEL: | I10 I19 J32 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2014:17&r=lab |
| By: | Brown, Sarah (University of Sheffield); Gray, Daniel (University of Sheffield); McHardy, Jolian (University of Sheffield); Taylor, Karl (University of Sheffield) |
| Abstract: | We explore the relationship between employee trust of managers and workplace performance. We present a theoretical framework which serves to establish a link between employee trust and firm performance as well as to identify possible mechanisms through which the relationship may operate. We then analyse matched workplace and employee data in order to ascertain whether the average level of employee trust within the workplace influences workplace performance. We exploit the 2004 and 2011 Work Place and Employee Relations Surveys (WERS) to analyse the role of employee trust in influencing workplace performance in both pre and post recessionary periods. Our empirical findings support a positive relationship between three measures of workplace performance (financial performance, labour productivity and product or service quality) and employee trust at both points in time. We then exploit employee level data from the WERS to ascertain the determinants of employee trust as well as how trust is influenced by measures taken by employers to deal with the recent recession. Our findings suggest that restricting paid overtime and access to training potentially erode employee trust. In addition, we find that job or work reorganisation experienced at either the employee or organisation level are associated with lower employee trust. |
| Keywords: | employee trust, financial performance, labour productivity, product quality |
| JEL: | J20 J50 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8284&r=lab |
| By: | Gomes, Pedro Maia (Universidad Carlos III de Madrid); Kuehn, Zoë (Universidad Autónoma de Madrid) |
| Abstract: | Countries that have relatively fewer workers with a secondary education have smaller firms. The shortage of skilled workers limits the growth of more productive firms. Two factors influence the availability of skilled workers: i) the education level of the workforce and ii) large public sectors that predominantly hire individuals with a better education. We set up a model economy with a government and private firm formation where production requires unskilled and skilled jobs. Workers with a secondary education are pivotal as they can perform both types of jobs. We find that level of education and public sector employment account for 40-45% of the differences between the United States and Mexico in terms of average firm size, GDP per capita, and GDP per hour worked. We also show that the impact of public employment on skill premiums and productivity measures depends on the skill bias in public hiring. |
| Keywords: | firm size, educational attainment, skill complementarities, public employment, college premium, high school premium |
| JEL: | J24 J45 E24 H30 O11 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8268&r=lab |
| By: | Margolis, David N. (Paris School of Economics) |
| Abstract: | Over half of all workers in the developing world are self-employed. Although some self-employment is chosen by entrepreneurs with well-defined projects and ambitions, roughly two thirds results from individuals having no better alternatives. The importance of self-employment in the overall distribution of jobs is determined by many factors, including social protection systems, labor market frictions, the business environment, and labor market institutions. However, self-employment in the developing world tends to be low productivity employment, and as countries move up the development path, the availability of wage employment grows and the mix of jobs changes. |
| Keywords: | self-employment, entrepreneurship, development |
| JEL: | J21 L26 O14 O17 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8273&r=lab |
| By: | Gimpelson, Vladimir (CLMS, Higher School of Economics, Moscow); Kapeliushnikov, Rostislav (CLMS, Higher School of Economics, Moscow) |
| Abstract: | Economic growth in Russia in the first decade of this century almost doubled the country's GDP but was accompanied by substantial reallocation of labor to the unregulated sector while formal employment was on gradual decline. The paper overviews evolution of the Russian labour market during the period of 2000-10 and discusses most general implications of informality to employment and earnings as well as the associated political economy challenges and consequences. |
| Keywords: | informal labour market, employment, Russia |
| JEL: | J31 J40 P2 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8279&r=lab |
| By: | Hirsch, Boris; Merkl, Christian; Mueller, Steffen; Schnabel, Claus |
| Abstract: | This paper is the first to show theoretically and empirically how firms' production technology affects the choice of their preferred wage formation regime. Our theoretical framework predicts, first, that the larger the total factor productivity of a firm, the more likely it is to opt for centralized wage formation where it can hide behind less productive firms. Second, the larger a firm's scale elasticity, the higher its incentive to choose centralized rather than decentralized wage setting due to labor cost and straitjacket effects. As firms in Germany are allowed to choose their wage formation regime, we test these two hypotheses with representative establishment data for West Germany. We find that establishments with centralized bargaining agreements indeed have economically and statistically significantly larger total factor productivities and scale elasticities than comparable establishments outside the centralized bargaining regime. -- Diese Studie zeigt erstmals theoretisch und empirisch, wie die Produktionstechnologie die betriebliche Wahl des Lohnfindungssystems beeinflusst. Unser theoretisches Modell erlaubt zwei Vorhersagen: Erstens, je höher die totale Faktorproduktivität einer Firma ist, desto wahrscheinlicher entscheidet sie sich für eine zentralisierte Lohnfindung auf Branchenebene, wo sie sich hinter weniger produktiven Firmen verstecken kann. Zweitens, je höher die Skalenelastizität einer Firma, desto höher ist aufgrund von Arbeitskosten- und Zwangsjacken-Effekten ihr Anreiz, eine zentralisierte statt einer dezentralisierten Lohnfindung zu wählen. Da Arbeitgeber in Deutschland das Lohnfindungsregime frei wählen können, überprüfen wir diese Hypothesen mit repräsentativen Betriebsdaten für Westdeutschland. Es zeigt sich, dass Betriebe mit zentralisierten (Branchen-)Tarifverträgen tatsächlich ökonomisch und statistisch signifikant höhere totale Faktorproduktivitäten und Skalenelastizitäten aufweisen als vergleichbare Betriebe mit dezentraler Lohfindung. |
| Keywords: | collective bargaining,bargaining coverage,Germany |
| JEL: | J50 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:faulre:92&r=lab |
| By: | Roel van Veldhuizen (WZB Berlin Social Science Center); Hessel Oosterbeek (Universiteit van Amsterdam); Joep Sonnemans (Universiteit van Amsterdam) |
| Abstract: | In an influential study, Mas and Moretti (2009) find that “worker effort is positively related to the productivity of workers who see him, but not workers who do not see him”. They interpret this as evidence that social pressure can reduce free riding. In this paper we report an attempt to reproduce the findings of Mas and Moretti in a lab experiment. Lab experiments have the advantage that they can shut down alternative channels through which workers can influence the productivity of colleagues whom they observe. Although the subjects in our experiment are aware of the productivity of others and although there is sufficient scope for subjects to vary their productivity, we find no evidence of the type of peer effects reported by Mas and Moretti. This suggests that their findings are less generalizable than has been assumed. |
| Keywords: | peer effects, experiment, laboratory experiment |
| JEL: | C91 J24 |
| Date: | 2014–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140051&r=lab |
| By: | Hogrefe, Jan; Wrona, Jens |
| Abstract: | We offer a theoretical explanation and empirical evidence for a positive link between increased offshoring and individual skill upgrading. Skill upgrading takes the form of on-thejob training, complementing the existing literature, which mainly focuses on the retraining of workers after a direct job displacement through offshoring. To establish a link between offshoring and on-the-job training, we introduce an individual skill upgrading margin into a variant of the Grossman and Rossi-Hansberg (2008) model of offshoring. By scaling up worker's wages, offshoring in our model creates previously unexploited skill upgrading possibilities and, thus, leads to more on-the-job training. Using data from German manufacturing, we establish a causal link between the growth in industry-level offshoring and an increased on-the-job training propensity at the individual level. -- |
| Keywords: | Offshoring,Tasks,Skill upgrading,On-the-job training |
| JEL: | F10 F16 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:148&r=lab |
| By: | d'Haultfoeuille, Xavier (CREST-INSEE); Maurel, Arnaud (Duke University); Zhang, Yichong (Duke University) |
| Abstract: | We consider the estimation of a semiparametric location-scale model subject to endogenous selection, in the absence of an instrument or a large support regressor. Identification relies on the independence between the covariates and selection, for arbitrarily large values of the outcome. In this context, we propose a simple estimator, which combines extremal quantile regressions with minimum distance. We establish the asymptotic normality of this estimator by extending previous results on extremal quantile regressions to allow for selection. Finally, we apply our method to estimate the black-white wage gap among males from the NLSY79 and NLSY97. We find that premarket factors such as AFQT and family background characteristics play a key role in explaining the level and evolution of the black-white wage gap. |
| Keywords: | sample selection models, extremal quantile regressions, black-white wage gap |
| JEL: | C21 C24 J31 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8256&r=lab |
| By: | Grimani, Katerina |
| Abstract: | The starting point of this paper is the idea that individuals are characterized by hierarchical behavior. The theory of hierarchical needs implies that individuals have a priority approach to psychological well-being. This means that the most important needs must be satisfied first before the secondary needs come into the picture. The theory can also offer additional insights to the research field which investigates the relationship between labor earnings and psychological well-being levels. The paper uses the 5th European Working Conditions Survey (2010) which contains data from 33 European countries and Turkey. In the proposed models, psychological well-being and work related stress are placed as the dependent variables and labor earnings as the independent variable. The ordinary least squares (OLS) and ordered logistic regressions are the main statistical tools of the work. The empirical results indicate that there is a strong positive relationship between labor earnings and psychological well-being for low paid group, and a non-significant relationship between labor earnings and psychological well-being for well paid group. This result supports the presence of hierarchical behaviour. In addition, the labor earnings for low paid group show an insignificant effect on employees’ work related stress, while a highly significant positive effect on the work related stress of well-paid group is implied, hilighting the stress of higher status hypothesis. The models also contains personal variables such as gender, age, educational level, type of occupation, working hours per week, country dummy variables and employment status. The relationship of these variables to psychological well-being and work-related stress levels is also examined. Finally, there is a comparison of the empirical findings to results in the relevant literature. |
| Keywords: | Psychological well-being, Work related stress, Hierarchical needs, Stress of higher status hypothesis |
| JEL: | I0 I10 J01 |
| Date: | 2014–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57098&r=lab |
| By: | Schneider, Friedrich (University of Linz) |
| Abstract: | This survey presents the various methods to estimate the size of the shadow economy, their strengths and weaknesses and the estimation results. The purpose of the survey is threefold. Firstly, it demonstrates that no ideal method to estimate the size and development of the shadow economy exists. Because of its flexibility, the MIMIC method used to get macro-estimates of the size of the shadow economy is discussed in greater detail. Secondly, the paper focuses on the definition and causal factors of the shadow economy as well as on a comparison of the size of the shadow economy using different estimation methods. Thirdly, estimations of the size of the shadow economy and shadow labor force are presented and discussed. |
| Keywords: | shadow economy estimates, shadow labor force, MIMIC approach, methods to estimate the shadow economy, advantages and disadvantages of the measurement methods, shadow labor force and unemployment, micro studies on shadow labor force |
| JEL: | D78 E26 H2 H11 H26 K42 O5 O17 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8278&r=lab |
| By: | Bertrand, Marianne (University of Chicago); Black, Sandra E. (University of Texas at Austin); Jensen, Sissel (Norwegian School of Economics); Lleras-Muney, Adriana (University of California, Los Angeles) |
| Abstract: | In late 2003, Norway passed a law mandating 40 percent representation of each gender on the board of publicly limited liability companies. The primary objective of this reform was to increase the representation of women in top positions in the corporate sector and decrease gender disparity in earnings within that sector. We document that the newly (post-reform) appointed female board members were observably more qualified than their female predecessors, and that the gender gap in earnings within boards fell substantially. While the reform may have improved the representation of female employees at the very top of the earnings distribution (top 5 highest earners) within firms that were mandated to increase female participation on their board, there is no evidence that these gains at the very top trickled-down. Moreover the reform had no obvious impact on highly qualified women whose qualifications mirror those of board members but who were not appointed to boards. We observe no statistically significant change in the gender wage gaps or in female representation in top positions, although standard errors are large enough that we cannot rule economically meaningful gains. Finally, there is little evidence that the reform affected the decisions of women more generally; it was not accompanied by any change in female enrollment in business education programs, or a convergence in earnings trajectories between recent male and female graduates of such programs. While young women preparing for a career in business report being aware of the reform and expect their earnings and promotion chances to benefit from it, the reform did not affect their fertility and marital plans. Overall, in the short run the reform had very little discernable impact on women in business beyond its direct effect on the newly appointed female board members. |
| Keywords: | gender discrimination, board of directors |
| JEL: | J1 J3 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8266&r=lab |
| By: | Loken, Katrine Vellesen (University of Bergen); Lundberg, Shelly (University of California, Santa Barbara); Riise, Julie (University of Bergen) |
| Abstract: | In this paper, we use a 1998 reform in the federal funding of local home-based care for the elderly in Norway to examine the effects of formal care expansion on the labor supply decisions and mobility of middle-aged children. Our main finding is a consistent and significant negative impact of formal care expansion on work absences longer than 2 weeks for the adult daughters of single elderly parents. This effect is particularly strong for daughters with no siblings, and this group is also more likely to exceed earnings thresholds after the reform. We find no impacts of the reform on daughter's mobility or parental health, and no effects on adult sons. Our results provide evidence of substitution between formal home-based care and informal care for the group that is most likely to respond to the parent's need for care – adult daughters with no siblings to share the burden of parental care. These results also highlight the importance of labor market institutions that provide flexibility in enabling women to balance home and work responsibilities. |
| Keywords: | formal and informal care, elderly, welfare state, women's career |
| JEL: | J14 J22 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8267&r=lab |
| By: | Dmitry Plotnikov |
| Abstract: | This paper develops and estimates a general equilibrium rational expectations model with search and multiple equilibria where aggregate shocks have a permanent effect on the unemployment rate. If agents' wealth decreases, the unemployment rate increases for a potentially indefinite period. This makes unemployment rate dynamics path dependent as in Blanchard and Summers (1987). I argue that this feature explains the persistence of the unemployment rate in the U.S. after the Great Recession and over the entire postwar period. |
| Keywords: | Unemployment;Economic recession;Economic recovery;Employment;Business cycles;Economic models;Unemployment, hysteresis, business cycles, sunspots |
| Date: | 2014–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/77&r=lab |
| By: | Alfred Stiassny (Department of Economics, Vienna University of Economics and Business); Christina Uhl (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | Does an increase of elderly employment cause a decline in youth employment? A simplified view of a demand driven economy would give a positive answer to this question. Econometric studies based on a single equation approach deliver little support for this belief. However, these studies typically suffer from identification problems to which no attention is paid in most cases. We therefore use a general equilibrium framework when trying to quantify these effects. Using yearly and quarterly Austrian labor and gdp data, we estimate two model variants by Bayesian methods: a) a standard equilibrium model where the degree of complementarity between old, young and primary labor is crucial for the sign and strength of the relevant effects and b) a simple, solely demand driven model which always leads to a crowding out of young through an increase in employment of the old. It turned out that the demand driven model is inferior in fitting the data compared to the standard model. Further, the degree of complementarity is estimated to be strong enough to lead to a small positive effect of elderly employment on youth employment. |
| Keywords: | Labor market, pension reform, equilibrium models, Bayesian estimation |
| JEL: | A10 C11 E10 J01 J26 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp178&r=lab |
| By: | Martin Binder; Alex Coad |
| Abstract: | Unemployment has been robustly shown to strongly decrease subjective well-being (or "happiness"). In the present paper, we use panel quantile regression techniques in order to analyze to what extent the negative impact of unemployment varies along the subjective well-being distribution. In our analysis of British Household Panel Survey data (1996-2008) we find that, over the quantiles of our subjective well-being variable, individuals with high well-being suffer less from becoming unemployed. A similar but stronger effect of unemployment is found for a broad mental well-being variable (GHQ-12). For happy and mentally stable individuals, it seems their higher well-being acts like a safety net when they become unemployed. We explore these findings by examining the heterogeneous unemployment effects over the quantiles of satisfaction with various life domains. |
| Keywords: | Subjective Well-being; Unemployment; Quantile Analysis; Heterogeneity; British Household Panel Survey; Domain Satisfaction |
| JEL: | I31 J01 J64 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_808&r=lab |
| By: | Hallberg, Daniel (Swedish Social Insurance Inspectorate (ISF)); Johansson, Per (IFAU); Josephson, Malin (Swedish Social Insurance Inspectorate (ISF)) |
| Abstract: | This paper studies empirically the consequences of retirement on health. We make use of a targeted retirement offer to army employees 55 years of age or older. Before the offer was implemented in the Swedish defense, the normal retirement age was 60 years of age. Estimating the effect of the offer on individuals' health within the age range 56-70, we find support for a reduction in both mortality and in inpatient care as a consequence of the early retirement offer. Increasing the mandatory retirement age may thus not only have positive government income effects but also negative effects on increasing government health care expenditures. |
| Keywords: | health, mortality, inpatient care, retirement, health care, pensions, occupational pensions |
| JEL: | J22 J26 I18 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8260&r=lab |
| By: | Cory Koedel (Department of Economics, University of Missouri-Columbia); Rajeev Darolia; Paco Martorell; Katie Wilson; Francisco Perez-Arce |
| Abstract: | This paper reports results from a resume-based field experiment designed to examine employer preferences for job applicants who attended for-profit colleges. For-profit colleges have seen sharp increases in enrollment in recent years despite alternatives such as public community colleges being much cheaper. We sent almost 9,000 fictitious resumes of young job applicants who recently completed their schooling to online job postings in six occupational categories and tracked employer callback rates. We find no evidence that employers prefer applicants with resumes listing a for-profit college relative to those whose resumes list either a community college or no college at all. |
| Keywords: | for profit college, 2-year college, returns to education, resume field experiment, sub-baccalaureate degree |
| JEL: | J24 H52 I28 |
| Date: | 2014–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1411&r=lab |
| By: | Yongsung Chang (University of Rochester); Sun-Bin Kim (Yonsei University); Kyooho Kwon (Korea Development Institute); Richard Rogerson (Princeton University) |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:roc:rocher:583&r=lab |
| By: | Bellmann, Lutz (Institute for Employment Research (IAB), Nuremberg); Hübler, Olaf (Leibniz University of Hannover) |
| Abstract: | This paper investigates the development of skill shortage during the period 2007-2012. Using the IAB establishment panel, we find differences for the years before, during and after the Great Recession. Furthermore, we analyze the importance of firm characteristics and that of some specific measures with respect to skill shortage based on probit, random effects probit and instrumental variables estimates. The empirical analysis confirms that apprentice and further training serves to reduce the number of unfilled qualified jobs. Plans for the long-run personnel development of the staff are also helpful. Skill shortage within a firm is often only a short-term phenomenon and less often observed over a longer period. During the Great Recession itself, the estimates reveal a weaker relationship between structural characteristics of the firm and skill shortage than in other years. Post-recession effects can be detected. Robustness checks are conducted that account for endogeneity, sample selection, outliers and causality. Least angle regression is applied to select the relevant firm characteristics. |
| Keywords: | skill shortage, Great Recession, firm characteristics, measures |
| JEL: | D21 D22 E32 J63 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8290&r=lab |
| By: | Dürnecker, Georg; Herrendorf, Berthold |
| Abstract: | We document for the US and Continental Europe that home–production time remained essentially flat during the last 50 years while changes in market time and leisure offset each other. We then focus on the US and France during 1970–2005 which are on the opposite sides of the spectrum: while US market time did not change much, French market time decreased most strongly. We document for the US and France that capital in home production and imputed labor productivities of home production have risen. We build a version of the growth model with capital in market and home production to account for the time allocation in both countries. We find that the interaction between taxes, home capital, and home–labor–augmenting technical change is crucial. |
| Keywords: | time allocation , home production , leisure , taxes |
| JEL: | B1 J4 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:mnh:wpaper:35937&r=lab |
| By: | Ordóñez, Javier (Universitat Jaume I de Castelló); Sala, Hector (Universitat Autònoma de Barcelona); Silva, José I. (University of Kent) |
| Abstract: | We examine the trajectories of the real unit labour costs (RULCs) in a selection of Eurozone economies. Strong asymmetries in the convergence process of the RULCs and its components – real wages, capital intensity, and technology – are uncovered through decomposition and cluster analyses. In the last three decades, the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) succeeded in reducing their RULCs by more than their northern partners. With the exception of Ireland, however, technological progress was weak; it was through capital intensification that periphery economies gained efficiency and competitiveness. Cluster heterogeneity, and lack of robustness in cluster composition, is a reflection of the difficulties in achieving real convergence and, by extension, nominal convergence. We conclude by outlining technology as the key convergence factor, and call for a renewed attention to real convergence indicators to strengthen the process of European integration. |
| Keywords: | real unit labour costs, Eurozone, real wages, capital intensity, technology |
| JEL: | F43 O47 O52 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8258&r=lab |
| By: | Herzer, Dierk (Helmut Schmidt University, Hamburg) |
| Abstract: | Although a large body of research has examined the effects of unions on the wage distribution, surprisingly little attention has been devoted to the effects of unions on the distribution of income. This paper examines the long-run relationship between unionization and income inequality for a sample of 20 countries. Using heterogeneous panel cointegration techniques, we find that (i) unions have, on average, a negative long-run effect on income inequality, (ii) there is considerable heterogeneity in the effects of unionization on income inequality across countries (in about a third of cases the effect is positive), and (iii) long-run causality runs in both directions, suggesting that, on average, an increase in unionization reduces income inequality and that, in turn, higher inequality leads to lower unionization rates. |
| Keywords: | unions; income inequality; cross-country heterogeneity; causality; panel cointegration |
| JEL: | C23 D31 J51 |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ris:vhsuwp:2014_146&r=lab |
| By: | Martina Kirchberger |
| Abstract: | Children are increasingly treated as active members in the household.� However, their preferences over consumption and leisure are rarely modelled.� This paper considers heterogeneity in siblings' preferences over leisure and consumption and builds a theoretical and empirical model for children's time and consumption allocations in a household.� We test the predictions of the model with unique data from Ethiopia, India, Peru and Vietnam which contain detailed information on time use and allocations of assignable goods for sibling pairs.� We find that conditioning on observable variables, the residuals of these simultaneous decisions are significantly negatively correlated.� This suggests that differences in siblings' relative time and consumption allocations are driven by their relative preferences over leisure and consumption rather than differences in parents' relative altruism.� Families seem to function as market economies in which children trade off leisure and consumption, select their optimal bundle, and are rewarded by their parents accordingly. |
| Keywords: | Intra-household allocation, children |
| JEL: | D1 J1 J2 |
| Date: | 2014–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:713&r=lab |