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on Labour Economics |
| By: | Gumbau-Brisa, Fabia (J. P. Morgan); Olivei, Giovanni P. (Federal Reserve Bank of Boston) |
| Abstract: | The authors derive an estimate of the Federal Reserve's assessment of the natural rate of unemployment in real time from the Greenbook forecast of inflation. The estimated natural rate starts to rise noticeably in the second half of the mid-1970s. It stays relatively high in the 1980s, and then declines noticeably in the second half of the 1990s. They compare the Greenbook estimates with the estimates obtained in real time from simple relationships that extract information about the natural rate of unemployment from the dynamics of inflation, aggregate demand, and the functioning of the labor market. When differences between these measures and the Greenbook arise, the improvement to the Greenbook inflation forecast that would have been achieved by using a different estimate of the natural rate of unemployment is typically small. |
| JEL: | E37 E47 E5 |
| Date: | 2013–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:13-24&r=lab |
| By: | Caroli, Eve; Godard, Mathilde |
| Abstract: | This paper estimates the causal effect of perceived job insecurity – i.e. the fear of involuntary job loss – on health in a sample of men from 22 European countries. We rely on an original instrumental variable approach based on the idea that workers perceive greater job security in countries where employment is strongly protected by the law, and relatively more so if employed in industries where employment protection legislation is more binding, i.e. in industries with a higher natural rate of dismissals. Using cross-country data from the 2010 European Working Conditions Survey, we show that when the potential endogeneity of job insecurity is not accounted for, the latter appears to deteriorate almost all health outcomes. When tackling the endogeneity issue by estimating an IV model and dealing with potential weak-instrument issues, the health-damaging effect of job insecurity is confirmed for a limited subgroup of health outcomes, namely suffering from headaches or eyestrain and skin problems. As for other health variables, the impact of job insecurity appears to be insignificant at conventional levels. |
| Keywords: | Job insecurity; Health; Instrumental Variables; |
| JEL: | J63 I19 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/13646&r=lab |
| By: | Mariam Camarero (Department of Economics, University Jaume I. Campus de Riu Sec E-12071 Castellón de la Plana, Spain); Gaetano D’Adamo (Department of Applied Economics II, University of Valencia. Av.da dels Tarongers s/n 46022 Valencia, Spain); Cecilio Tamarit (Department of Applied Economics II, University of Valencia. Av.da dels Tarongers s/n 46022 Valencia, Spain) |
| Abstract: | Over the last 15 years, the evolution of labor costs has been very diverse across EMU countries. Since wages have important second-round effects on prices and competitiveness, and EMU countries do not have the tool of the nominal exchange rate to correct for such imbalances, understanding the determinants of the wage is a matter of increasing concern and debate. We estimate the equilibrium wage equation for the Euro Area over the period 1995-2011 using panel cointegration techniques that allow for cross-section dependence and structural breaks. The results show that the equilibrium wage has a positive relation with productivity and negative relation with unemployment, as expected. We also include institutional variables in our analysis, showing that a more flexible labor market is consistent with long-run wage moderation. Allowing for a regime break, we find that, since 2004, possibly due to increased international competition, wage determination was more strictly related to productivity, and real wage appreciation triggers a drop in the real wage. Furthermore, results point to a wage-moderating role of government intervention and concertation in wage bargaining. |
| Keywords: | panel cointegration, wage setting, labor market |
| JEL: | E24 J31 C23 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1407&r=lab |
| By: | Alena Bicakova |
| Abstract: | This paper sets the groundwork for analysis of the effect of selection into labor force on gender unemployment gaps. We derive the Manski bounds for gender unemployment gaps in 21 EU countries and show that in addition to the positive selection documented in the gender wage gap research, there is also evidence of negative selection into the labor force among women after childbirth. While positive selection of women into the labor force leads to downward bias in gender unemployment gaps, negative selection results in overestimation of gender unemployment gaps. |
| Keywords: | labor force participation; gender unemployment gaps; |
| JEL: | J13 J21 J71 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp513&r=lab |
| By: | Davide Suverato (LMU University of Munich) |
| Abstract: | This paper develops a two-sector, two-factor trade model with labor market frictions in which workers search for a job also when they are employed. On the job search (OJS) is a key ingredient to explain the response to trade liberalization of sectoral employment, unemployment and wage i equality. OJS generates wage dispersion and it leads to a reallocation of workers from less productive firms that pay lower wages to more productive ones. Following a trade liberalization the traditional selection effects are more severe than without OJS and the tradable sector experiences a loss of employment, while the opposite is true for the non tradable sector. Starting from autarky, the opening to trade has a positive effect on employment but it increases wage inequality. For an already open economy, a further increase of trade openness can, however, lead to an increase of unemployment. The dynamics of labor market variables is obtained in closed form. The model predicts overshooting at the time of implementation of a trade liberalization, then the paths of adjustment follow a stable transitional dynamics. |
| Keywords: | International Trade, Unemployment, Wage Inequality, Firm Dynamics |
| JEL: | F12 F16 E24 |
| Date: | 2014–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:368&r=lab |
| By: | Alfonso R. Sánchez; J. Ignacio García-Pérez; Sergi Jiménez |
| Abstract: | In this paper, we explore the links between pension reform, early retirement, and the use of unemployment as an alternative pathway to retirement. We use a dynamic rational expectations model to analyze the search and retirement behaviour of employed and unemployed workers aged 50 or over. The model is calibrated to reproduce the main reemployment and retirement patterns observed between 2002 and 2008 in Spain. It is subsequently used to analyze the effects of the 2011 pension reform in Spain, characterized by two-year delays in both the early and the normal retirement ages. We find that this reform generates large increases in labour supply and sizable cuts in pension costs, but these are achieved at the expense of very large welfare losses, especially among unemployed workers. As an alternative, we propose leaving the early retirement age unchanged, but penalizing the minimum pension (reducing its generosity in parallel to the cuts imposed on individual pension benefits, and making it more actuarially fair with age). This alternative reform strikes a better balance between individual welfare and labour supply stimulus. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:761&r=lab |
| By: | Kai-Uwe Müller; Katharina Wrohlich |
| Abstract: | We apply a structural model of mothers' labor supply and child care choices to evaluate the effects of two childcare reforms in Germany that were introduced simultaneously in August 2013. First, a legal claim to subsidized child care became effective for all children aged one year or older. Second, a new benefit called 'Betreuungsgeld' came into effect that is granted to families who do not use public or publicly subsidized child care. Both reforms target children of the same age group and are unconditional on the parents' income or employment status, yet affect mothers' incentives for labor supply and child care choices in opposite directions. Our model facilitates estimating the joint reform impact as well as disentangling the individual effects of both policies. A comprehensive data set with information on labor supply, the use of and potential access restrictions to various child care arrangements provides the basis for the empirical analysis. We find the overall effect of both reforms to be small but positive as far as mother's labor supply and the use of formal care is concerned. The legal claim's positive impact on mothers' labor supply and the use of formal child care is largely offset by the negative effect on both outcomes resulting from the introduction of the 'Betreuungsgeld'. |
| Keywords: | Family policy, labor supply, child care, policy evaluation, structural model |
| JEL: | J22 J18 H31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1396&r=lab |
| By: | J.I.Lopez; V. Olivella Moppett |
| Abstract: | We study the effect of financial shocks in labor market dynamics. We build a model with two types of labor, two types of capital and both search and financial frictions. We find that financial shocks, modeled as exogenous disturbances to the borrowing constraint of firms, can generate realistic movements in aggregate employment and reproduce the volatile and countercyclical ratio of skilled to unskilled employment observed in the data. Tighter financial conditions impact employment through three channels: i) a fall in the marginal product of labor as a result of a reduction in aggregate capital, ii) an increase in the shadow cost of labor in terms of external financing and iii) an endogenous wage rigidity caused by a short-lived increase in households' consumption and in their marginal value of time. This endogenous wage rigidity together with the model’s calibration implying a higher re-hiring probability and lower recruitment costs for unskilled workers, explains the volatility of relative employment. |
| Keywords: | Financial Shocks, Business Cycles, Employment Volatility, Search. |
| JEL: | E24 E32 E44 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:496&r=lab |
| By: | Theresa M. Greaney (Department of Economics, University of Hawaii at Manoa); Yao Li (School of Management and Economics, University of Electronic Science and Technology of China) |
| Abstract: | We estimate foreign ownership wage premiums for every 3-digit manufacturing industry in China and discover a wide range of premiums both for so-called “foreign†ownership and for overseas Chinese ownership of firms. Foreign ownership generates larger and more prevalent wage premiums than overseas Chinese ownership of firms, but both types of foreign ownership produce wage premiums that respond similarly in hypothesis testing of determinants. Using the number of computers per worker as an indicator of a firm’s technology level, we find support in 76-78% of industries for the hypothesis that foreign firms pay higher wages to reduce the risk of worker turnover and the accompanying technology leakage to domestic rivals. However, this determinant explains only 5-6% of the foreign wage premium, on average. We find the most intensive support for the “fair wage†hypothesis that foreign firms pay higher wages because they are more profitable than domestic firms and workers in more profitable firms expect to be paid more, otherwise they will shirk. This hypothesis explains an average of 8-9% of the foreign wage premiums, with support for the hypothesis found in 72-75% of the industries using firm’s total profits per worker as the added wage determinant. Intangible assets and training costs were found to be much weaker individual determinants of foreign wage premiums. When we consider the best combination of explanatory variables to include in each industry’s wage regression, we find support for our combined hypotheses in the vast majority of industries, but we still find large residual wage premiums attached to foreign ownership in China. |
| Keywords: | FDI, foreign ownership, wages, China |
| JEL: | F16 F23 J31 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201420&r=lab |
| By: | Gustavo Gonzaga; Beatriz Muriel; Cristina Terra (PUC Rio; PUC Rio; Université de Cergy-Pontoise, THEMA and CEPII) |
| Abstract: | We build a theoretical model that incorporates unionization in the labor market into a Heckscher-Ohlin-Samuelson (HOS) framework to in- vestigate the impact of unionization on the Stolper-Samuelson Theorem. To capture the American economy case, we assume that unskilled labor in the manufactured goods sector is unionized, and that sector is intensive in skilled labor, and that trade liberalization increases the relative price of manufactured goods. In the HOS model, trade liberalization induces a reallocation of production towards the sector that uses intensively the country's most abundant factor. The resulting change in relative labor de- mand impacts wage bargaining in the unionized sector, which, in turn, has a dampening eect on the Stolper-Samuelson eect. Moreover, wages of unionized workers are even less responsive to trade liberalization. Through traditional mandated-wages regressions, we show that skilled-wage dier- entials changes were less pronounced among more unionized sectors in the U.S. economy for the 1979-1990 period. |
| Keywords: | Stolper-Samuelson Theorem, wage bargaining,unionization |
| JEL: | F16 J31 J51 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2014-11&r=lab |
| By: | Gibson, Matthew; Shrader, Jeffrey |
| Abstract: | While economists have long been interested in effects of health and human capital on productivity, less attention has been paid to the influence of time use. We investigate the productivity effects of the single largest use of time--sleep. Because sleep influences performance on memory and focus intensive tasks, it plausibly affects economic outcomes. We identify the effect of sleep on wages by exploiting the relationship between sunset time and sleep duration. Using a large, nationally representative set of time use diaries from the United States, we provide the first causal estimates of the impact of sleep on wages: a one-hour increase in long-run average sleep increases wages by 16%, equivalent to more than one year of schooling. We also document the nonlinearity of the sleep-wage relationship. Our results highlight the economic importance of sleep and pose potentially fruitful questions about the effects of time use on labor market outcomes. (JEL No. J22, J24, J31) |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2014–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucsdec:qt8zp518hc&r=lab |
| By: | Bruno Martorano; Marco Sanfilippo |
| Abstract: | This paper analyses the long run determinants of wage inequality in the manufacturing sector for a group of East Asian countries that have experienced rapid structural transformations over the last decades. In line with the Skill Biased Technological Change hypothesis, our results show that within manufacturing structural change –fostering the participation of higher skilled workers – is a strong determinant of the wage premium. However, the paper highlights also the peculiarity of the East Asian model, which shows how well-designed education policies, a prudent macroeconomic management and selective policies towards foreign capital can contribute to buffer the pressure of structural change on wage inequality, even in an open economy context. |
| Keywords: | Structural change; Wage Inequality; East Asia |
| JEL: | L16 E24 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2014_09.rdf&r=lab |
| By: | Juan Carlos Suárez Serrato; Owen Zidar |
| Abstract: | This paper estimates the incidence of state corporate taxes on workers, landowners, and firm owners in a spatial equilibrium model in which corporate taxes affect the location choices of both firms and workers. Heterogeneous, location-specific productivities and preferences determine the mobility of firms and workers, respectively. Owners of monopolistically competitive firms receive economic profits and may bear the incidence of corporate taxes as heterogeneous productivity can make them inframarginal in their location choices. We derive a simple expression for equilibrium incidence as a function of a few estimable parameters. Using variation in state corporate tax rates and apportionment rules, we estimate the reduced-form effects of tax changes on firm and worker location decisions, wages, and rental costs. We then use minimum distance methods to recover the parameters that determine equilibrium incidence as a function of these reduced-form effects. In contrast to previous assumptions of infinitely mobile firms and perfectly immobile workers, we find that firms are only approximately twice as mobile as workers over a ten-year period. This fact, along with equilibrium impacts on the housing market, implies that firm owners bear roughly 40% of the incidence, while workers and land owners bear 35% and 25%, respectively. Finally, we derive revenue-maximizing state corporate tax rates and discuss interactions with other local taxes and apportionment formulae. |
| JEL: | F22 F23 H2 H22 H25 H32 H71 J23 J3 R23 R30 R58 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20289&r=lab |
| By: | Alex Bryson; Arnaud Chevalier |
| Abstract: | Research on employers' hiring discrimination is limited by the unlawfulness of such activity. Consequently, researchers have focused on the intention to hire. Instead, we rely on a virtual labour market, the Fantasy Football Premier League, where employers can freely exercise their taste for racial discrimination in terms of hiring and firing. The setting allows us to eliminate co-worker, consumer-based and statistical discrimination as potential sources of discrimination, thus isolating the effects of taste-based discrimination. We find no evidence of racial discrimination, either in initial hiring or through the season, in a context where employers are fully aware of current and prospective workers' productivity. |
| Keywords: | Race, labour market discrimination, football |
| JEL: | J15 J23 J24 J71 M51 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1283&r=lab |
| By: | Josephine Jacobs; Courtney Van Houtven; Audrey Laporte; Peter Coyte |
| Abstract: | With increasing pressure on retirement-aged individuals to provide informal care while remaining in the workforce, it is important to understand the impact of informal care demands on individuals' retirement decisions. This paper explores whether different intensities of informal caregiving can lead to retirement for women in the United States. Using the National Longitudinal Survey of Mature Women, we control for time-invariant heterogeneity and for time-varying sources of bias with a two-stage least squares model with fixed effects. We find that there is no significant effect on retirement for all informal caregivers, but there are important incremental effects of caregiving intensity. Women who provide at least 20 hours of informal care per week are 3 percentage points more likely to retire relative to other women. We also find that when unobserved heterogeneity is controlled for with fixed effects, we cannot reject exogeneity. These findings suggest that policies encouraging both informal care and later retirement may not be feasible without allowances for flexible scheduling or other supports for working caregivers. |
| Keywords: | Informal caregiving, unpaid care, retirement, United States |
| JEL: | J22 J1 I11 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:cch:wpaper:140008&r=lab |
| By: | González Chapela, Jorge |
| Abstract: | The split work shift has been argued as one of the reasons behind the different Spanish time schedule, characterized by reduced sleep and a more difficult work-family balance. This paper presents direct evidence on the effect that being on a split shift has on Spanish workers’ wellbeing and time use. The split shift is found associated to more time spent working in the market, sleeping, and eating, and less time spent doing housework, caring for children, and at leisure. An increased feeling of being overwhelmed by tasks and having little time to do them is also found among female split-shifters. |
| Keywords: | work shift; role overload; time use; Spanish Time Use Survey |
| JEL: | I32 J22 |
| Date: | 2014–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57301&r=lab |
| By: | Galina Besstremyannaya (Stanford University, Department of Economics; New Economic School, CEFIR) |
| Abstract: | The paper evaluates the effect of residency matching and prospective payment on technical and cost efficiency of local public hospitals. Efficiency is estimated using panel data quantile regression models with two endogenous treatment variables. We exploit nationwide longitudinal databases on Japanese hospital participation in the two reforms and on financial performance of local public hospitals in 2005-2012. The results demonstrate that more efficient hospitals opt for each of the reforms, and participation further improves efficiency. The introduction of regional caps in residency matching resulted in efficiency losses, particularly in large prefectures, while a step towards best-practice rate setting in inpatient prospective payment system had no effect on efficiency dynamics. |
| JEL: | C44 C61 I13 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0206&r=lab |
| By: | Rikard Eriksson; Martin Henning; Anne Otto |
| Abstract: | This paper follows the industry employment histories of all individuals at some point affiliated with the dismantling Swedish shipbuilding industry 1970-2000. We analyse the situation of the individual workers leaving shipbuilding through investigating to what extent they were employed at all, tended to move to related sectors inside or outside the region, and whether such moves were beneficial for the individuals. By cross-using German and Swedish data, our findings indicate a notable impact of regional industrial structure on the movement and success of individuals, and that individuals moving from shipbuilding to related sectors benefit more from moving than others. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1415&r=lab |