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on Labour Economics |
| By: | Fairlie, Robert |
| Abstract: | The Blinder-Oaxaca decomposition technique is widely used to identify and quantify the separate contributions of group differences in measurable characteristics, such as education, experience, marital status, and geographical differences to racial and gender gaps in outcomes especially wage, earnings and other labor market outcomes. The technique cannot be used directly, however, if the outcome is binary and the coefficients are from a logit or probit model. I describe a relatively simple method of performing a decomposition that uses estimates from a logit or probit model. Expanding on the original application of the technique in Fairlie (1999), I provide a more thorough discussion of how to apply the technique, an analysis of the sensitivity of the decomposition estimates to different parameters, and the calculation of standard errors. I also compare the estimates to Blinder-Oaxaca decomposition estimates and discuss an example of when the Blinder-Oaxaca technique may be problematic. Applicaiton to computer ownership and entrepreneurship are used to illustrate the technique.  |
| Keywords: | Social and Behavioral Sciences, decomposition, race, inequality, computer, ICT, entrepreneurship, labor, education |
| Date: | 2014–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucscec:qt7j86n5q3&r=lab |
| By: | Aaronson, Stephanie (Board of Governors of the Federal Reserve System (U.S.)); Cajner, Tomaz (Board of Governors of the Federal Reserve System (U.S.)); Fallick, Bruce C. (Federal Reserve Bank of Cleveland); Galbis-Reig, Felix (Board of Governors of the Federal Reserve System (U.S.)); Smith, Christopher (Board of Governors of the Federal Reserve System (U.S.)); Wascher, William L. (Board of Governors of the Federal Reserve System (U.S.)) |
| Abstract: | Since 2007, the labor force participation rate has fallen from about 66 percent to about 63 percent. The sources of this decline have been widely debated among academics and policymakers, with some arguing that the participation rate is depressed due to weak labor demand while others argue that the decline was inevitable due to structural forces such as the aging of the population. In this paper, we use a variety of approaches to assess reasons for the decline in participation. Although these approaches yield somewhat different estimates of the extent to which the recent decline in participation reflects cyclical weakness rather than structural factors, our overall assessment is that much - but not all - of the decline in the labor force participation rate since 2007 is structural in nature. As a result, while we see some of the current low level of the participation rate as indicative of labor market slack, we do not expect the participation rate to show a substantial increase from current levels as labor market conditions continue to improve. |
| Keywords: | Labor force participation; retirement behavior; disability insurance; implications of an aging population; youth employment; labor market slack; labor market fluctuations and the business cycle |
| Date: | 2014–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2014-64&r=lab |
| By: | Christina DePasquale and Kevin Stange |
| Abstract: | There is concern that state licensure requirements impede efficient mobility of licensed professionals to areas of high demand. Nursing has not been immune to this criticism, especially in light of persistent nurse shortages and large expected future demand. The Nurse Licensure Compact (NLC) was introduced to solve this problem by permitting registered nurses to practice across state lines and making licensure easier to obtain for nurses moving between member states. We exploit the staggered adoption of the NLC across states and over time to examine whether a reduction in licensure-induced barriers alters the nurse labor market. Using data on over 1.5 million nurses and other health care workers from the 1990 and 2000 Census and the 2006-2012 American Community Surveys, we estimate the effects of NLC adoption on commuting patterns and labor force outcomes. We specifically examine whether NLC adoption is associated with a greater likelihood of cross-state commuting, an increase in commuting times, and changes to employment and labor force participation. Our results indicate no effect of NLC adoption on employment and labor force participation. Estimates are precise enough to rule out even small impacts on employment and labor force participation. Thus, it does not appear that cross-state licensing restrictions impact the aggregate labor supply of nurses. However, we find modest positive effects of NLC adoption on travel time to work as well as the likelihood of working across state lines, particularly among nurses living in MSAs that encompass multiple states. This suggests that eliminating cross-state licensure restrictions expands the geographic scope of the nurse labor market. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:1414&r=lab |
| By: | David Tuesta |
| Abstract: | Low contribution levels to pension schemes in Latin America are an enormous obstacle limiting the implementation of a broad-based social security system. Contribution rates measured as a ratio of contributors to the total labour force stand at an average of 40%, or 60% in the best of cases. Although previous studies explain this situation by factors related to growth, economic institutions and market considerations, only a few studies have quantified the specific determinants behind this problem. This study therefore aims to approach the subject by exploring the national household surveys for Brazil, Chile, Colombia, Mexico and Peru. Once the specific question relating to pension contributions has been identified in the surveys, probit models are used to estimate the probability that this event may occur, conditioned by the variables that theory considers to be explanatory. The study finds the enormous relevance of labour markets as a common conditional factor affecting the likelihood to contribute to any pension system in Latin America. Working in the informal economy, being a self-employed worker or working in a micro-enterprise are particularly significant and show the highest coefficients in this geographical region. The high impact of these variables may give clues for economic policy, in its search for eliminating the hurdles in labour market distortions that limit the impact of social security programmes. |
| Keywords: | Brazil, Chile, Colombia, Latin America, Mexico, Pension, Peru, AFORE, AFP, Pension contribution, Pension coverage, Retirement |
| JEL: | G23 H55 H75 J01 J26 J38 J32 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:1419&r=lab |
| By: | Daniel Arnold (Institute for Labour Law and Industrial Relations in the EU, University of Trier); Tobias Brändle (Institut für Angewandte Wirtschaftsforschung (IAW), University of Tübingen); Laszlo Goerke (Institute for Labour Law and Industrial Relations in the EU, University of Trier) |
| Abstract: | Using both household and linked employer-employee data for Germany, we assess the effects of non-union representation in the form of works councils on (1) individual sickness absence rates and (2) a subjective measure of personnel problems due to sickness absence as perceived by a firm's management. We find that the existence of a works council is positively correlated with the incidence and the annual duration of absence. We observe a more pronounced correlation in western Germany which can also be interpreted causally. Further, personnel problems due to absence are more likely to occur in plants with a works council. |
| Keywords: | Absenteeism, LIAB, personnel problems, sickness absence, SOEP, works councils |
| JEL: | J53 I18 M54 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201410&r=lab |
| By: | Beatrice Scheubel |
| Abstract: | In countries with strong employment protection laws it is often considered to be unwise to hire a woman in childbearing age because she might get pregnant. However, such labour demand e ects of job protection measures related to maternity leave are often rather anecdotal. To provide analytical evidence, this paper studies the impact of changes in maternity-related job protection in Germany on employment opportunities for women in childbearing age without children for whom the observed e ects should be largely demand-related. Exogenous, discrete policy changes in the German labour market of the 1980s and 1990s constitute the setting for a difference-in-differences analysis of the transition into employment as well as wages. The data for this study are taken from the German Socio-Economic Panel and from the German Microcensus. Doubling the job-protected leave period from 6 months to 12 months between 1986 and 1988 led to an approximately 6% lower probability of being hired for women in childbearing age without a university degree.In addition, I nd a 5-10% increase in wages for women in childbearing age associated with the latter reform. Since this effect disappears when controlling for having a child in the future, this may indicate an increased need to signal commitment by increased effort after the reform. |
| Keywords: | Maternity leave legislation, gender pay gap, education, unemployment, difference-in-differences with group-correlated errors, quasi-natural experiment |
| JEL: | J64 J18 J16 J31 K31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp685&r=lab |
| By: | Luca Marchiori (Central Bank of Luxembourg); Patrice Pieretti (CREA, Université du Luxembourg); Benteng Zou (CREA, Université du Luxembourg) |
| Abstract: | This paper investigates the theoretical effects of immigration in an occupational choice model with three sectors: a low-skilled, a high-skilled and a public sector. The originality of our approach is to consider (i) intersectoral mobility of labor and (ii) public employment. We highlight the fact that including a public sector is crucial, since omitting it implies that low-skilled immigration unambiguously reduces wages and welfare of all workers. However, when public employment is considered, we demonstrate that immigration increases wages in the high-skilled and the public sectors, provided that the immigrant workforce is not too large and the access to public jobs is not too easy. The average wage of natives may also increase accordingly. Moreover, immigration may improve workers’ welfare in each sector. Finally, the mechanism underlying these results does not require complementarity between natives and immigrants. |
| Keywords: | Immigration, occupational choice model, public employment |
| JEL: | J24 J61 J45 H44 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:bie:wpaper:516&r=lab |
| By: | Annarita COLASANTE (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Alberto RUSSO (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali) |
| Abstract: | In this paper we focus on the impact of involuntary unemployment on wage formation using experimental evidence. We use the well-known Gift Exchange Game to analyze players' interaction in a simplified job market. The aim of this paper is twofold: on the one hand, we are interested in analyzing the relation between involuntary unemployment and wages; on the other hand, we aim at understanding whether the interaction between employers and employees could be affected by reciprocity. Our results show that unemployment has a negative impact on wages. Moreover, there is a positive correlation between wage and effort. |
| Keywords: | Gift Exchange, Reciprocity, Unemployment |
| JEL: | C91 E24 J28 J30 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:404&r=lab |
| By: | Doerr, Annabelle; Fitzenberger, Bernd; Kruppe, Thomas (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Paul, Marie; Strittmatter, Anthony |
| Abstract: | In 2003, Germany moved from a system in which participants in training programs for the unemployed are assigned by caseworkers to an allocation system using vouchers. Based on the rich administrative data for all vouchers and on actual program participation, we provide inverse probability weighting and ordinary least squares estimates of the employment and earnings effects of a voucher award. Our results imply that after the award, voucher recipients experience long periods of lower labor market success. On average, there are only small positive employment effects and no gains in earnings even four years after the voucher award. However, we do find significantly positive effects both for lowskilled individuals and for degree courses. The strong positive selection effects implied by our estimates are consistent with sizeable cream-skimming effects. |
| JEL: | J68 H43 C21 |
| Date: | 2014–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201423&r=lab |
| By: | Leonardo Fabio Morales; Lina Cardona-Sosa |
| Abstract: | Using data from Medellín, second largest city in Colombia, we asses in this paper how a set of neighborhood characteristics determines wages and labor supply for workers in the city. We use GIS data to construct measures of the quality of environments where workers live. This paper focuses in the impact in labor supply and wages of the following set of characteristics: availability of public transportation, crime levels and density of economic activity. The empirical methodology consist of the estimation of linear equations for wages and worked hours, and we control for the selection of individuals into the neighborhoods they are observed. In order to do this we estimate in a first stage a probabilistic model of neighborhood selection from which selection correction terms are obtained; these correction terms and included in the linear equations for wage and worked hours in a second stage. In addition, we control for sample selection as well. We find that the endogeneity of the location decision tends to overestimate the magnitude of the effect of neighborhood characteristics on labor market outcomes. Nevertheless, the effect of some characteristics is still significant and important after we control for the possibility of selection into neighborhoods. Classification JEL: J01, J22, O18, R21. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:844&r=lab |
| By: | John T. Addison (University of South Carolina, Durham University, University of Coimbra and IZA Bonn); Arnd Kölling (Berlin School of Economics and Law); Paulino Teixeira (GEMF/Faculty of Economics, University of Coimbra and IZA Bonn) |
| Abstract: | Recent studies have pointed to the association between declining collective bargaining coverage and rising overall wage inequality. This association holds more or less across-the-board, at least for broad swathes of recent history. That said, the exact contribution of deununionization is a matter of debate, perhaps no more so than in Germany, our case study. The present paper takes a less conventional approach to this particular source of rising inequality by examining intra-plant wage dispersion in the wake of establishments either exiting from or entering into collective agreements. Several measures of inequality are constructed for German establishments over the twelve-year period 1996-2008, an interval of continuously declining union representation. Using linked employer-employee data, our estimation strategy hinges upon the identification of comparable groups of establishments and on both instantaneous and medium- to long-term changes in the wage structure. A modest widening effect on dispersion of exiting from a sectoral agreement is detected in the data once we effect a comparison across observationally-equivalent individuals. The converse does not apply in respect of joiners. The scale of the former effect casts doubt on some of the more exaggerated claims of the importance of deunionization to wage inequality and the resurgence of Germany more generally. |
| Keywords: | Germany, collective bargaining, deunionization, intra-plant wage inequality, sectoral agreement exits and accessions. |
| JEL: | J31 J51 J53 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2014-15.&r=lab |
| By: | Charlotte Senftleben-Koenig; Hanna Wielandt; ; |
| Abstract: | During the last decades, wage inequality in Germany has considerably increased both within and across regions. Building on concepts of the task-based approach, this paper studies whether and to what extent these developments are driven by technological change. We present novel evidence that technological change is positively related to intra-regional wage inequality. This is driven by increases in the compensation for non-routine cognitive tasks that are prevalent at upper percentiles of the wage distribution combined with decreases in the compensation for non-routine manual tasks, which are located at lower percentiles. Because there exists substantial variation in the degree of technology exposure across German regions, technological change can also explain part of the rise in inter-regional wage inequality. |
| Keywords: | Spatial Changes, Wage Inequality, Job Tasks, Technological Change |
| JEL: | J31 O33 R23 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2014-038&r=lab |
| By: | F. Barigozzi; N. Burani |
| Abstract: | We study optimal contracts offered by two firms competing for the exclusive services of one worker, who is privately informed about her ability and her motivation. Firms differ both in their production technology and in the mission they pursue and a motivated worker is keen to be hired by the mission-oriented firm. We find that the matching of worker types to firms is always Pareto-efficient. When the difference in firms’ technology is high, only the most efficient firm is active. When the difference is not very high, then agent types sort themselves by motivation: the mission-oriented firm hires motivated types and the profit-oriented firm employs non-motivated ones, independently of ability. Effort provision is higher when the worker is hired by the mission-oriented firm, but a compensating wage differential might exist: the motivated worker is paid less by the mission-oriented firm. Such an earnings penalty is driven entirely by motivation, is increasing in ability and is associated to low power of incentives. |
| JEL: | D82 D86 J31 M55 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp953&r=lab |
| By: | Etienne Wasmer (Département d'économie); Alexandre Janiak (Departamento de Ingenieria Industrial (DII)) |
| Abstract: | Employment protection (EPL) has a well known negative impact on labor flows as well as an ambiguous but often negative effect on employment. In contrast, its impact on capital accumulation and capital-labor ratio is less well understood. The available empirical evidence suggests a non-monotonic relation between capital-labor ratios and EPL: positive at very low levels of EPL, and then negative. We explore the theoretical effects of EPL on physical capital in a model of a firm facing labor frictions. Under standard assumptions, theory always implies a motononic negative link between capital-labor ratios and EPL. For a positive link to arise, a very specific pattern of complementarity between capital and workers protected by EPL(senior workers, as opposed to unprotected new entrants, or junior workers) has to be assumed. Further, no standard production technology is able to reproduce the inverted U-shape pattern of the data. Instead, endogenous specific skills investment leads to an inverted U-shape pattern: EPL protects and therefore induces investments in specific skills. We develop such a model and calibrate the returns to seniority by using estimates from the empiricalliterature. Under complementarity between capital and specific human capital, physical capital and senior workers having accumulated specific human capital are de facto complement production factors and EPL may increase capital demand at the firm level. The paper concludes that labor market institutions may sometimes favor physical and human capital investments in second-best environments. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpecon:info:hdl:2441/2ennjqtovk8lvprrqlro5ni69v&r=lab |
| By: | Eckhardt Bode; Lucia Perez Villar |
| Abstract: | This paper substantiates the debate following Richard Florida’s suggestion to measure regional human capital by creative occupations rather than education. Consistent with Florida’s notion of creativity, it suggests a microfoundation that relates creativity to workers’ cognitive and noncognitive skills. It shows that this microfoundation is similar to that of human capital in recent labor economics, which has facilitated important new insights. It also shows that Florida’s measure is too crude to make a difference. Nonethe-less, it is time to rethink regional human capital. Occupations may help project workers’ cognitive and noncognitive skills from the micro to the regional level |
| Keywords: | Human Capital, Education, Creativity, Cognitive Skills, Noncognitive Skills, Occupation, Regional Wages, Regional Growth |
| JEL: | I21 I25 J24 R12 R23 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1958&r=lab |
| By: | Maarten Dossche (National Bank of Belgium, Research Department); Vivien Lewis (Center for Economic Studies, KU Leuven, Belgium); Céline Poilly (University of Lausanne, HEC-DEEP Switzerland) |
| Abstract: | We characterize optimal monetary policy in a New Keynesian search-and-matching model where multiple-worker firms satisfy demand in the short run by adjusting hours per worker. Imperfect product market competition and search frictions reduce steady state hours per worker below the efficient level. Bargaining results in a convex ‘wage curve’ linking wages to hours. Since the steadystate real marginal wage is low, wages respond little to hours. As a result, firms overuse the hours margin at the expense of hiring, which makes hours too volatile. The Ramsey planner uses inflation as an instrument to dampen inefficient hours fluctuations. |
| Keywords: | employment, hours, wage curve, optimal monetary policy |
| JEL: | E30 E50 E60 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201409-262&r=lab |
| By: | Hottenrott, Hanna; Lawson, Cornelia (University of Turin) |
| Abstract: | Academic researchers face mobility related decisions throughout their careers. We study the importance of team and organisational characteristics of the home departments for career choices of departing researchers in the fields of science and engineering at higher education institutions in Germany. We find that the organisational environments–the nests–shape career paths. Research funding, research performance in terms of patents and publications as well as the industry ties of department heads shape job choices. In particular, public research grants increase the probability that departing researchers take a research job at a university or public research centre, while grants from industry increase the likelihood that they take a job in industry. Publication performance of the department head relates to R&D jobs in public, but not in industry and patents predict the probability that departing researchers will move to small and medium-sized firms. For these firms seeking technological knowledge from former university employees may be particularly crucial. Academic start-ups are more likely to be a job destination for departing researchers from technical universities, from departments with higher publication output and with a research focus on experimental development. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201409&r=lab |