nep-lab New Economics Papers
on Labour Economics
Issue of 2014‒11‒07
twenty papers chosen by
Erik Jonasson
Konjunkturinstitutet

  1. Intergenerational Transmission of Unemployment: Evidence for German Sons By Miriam Mäder; Steffen Müller; Regina T. Riphahn; Caroline Schwientek
  2. The cleansing effect of minimum wages - Minimum wages, firm dynamics and aggregate productivity in China By Sandra PONCET; Florian MAYNERIS; Tao ZHANG
  3. Heterogeneity, Endogeneity, Measurement Error and Identification of the Union Wage Impact By Chrysanthou, Georgios Marios
  4. The global economic crisis and the effect of immigration on the employment of native-born workers in Europe By Vincent Fromentin; Olivier Damette; Benteng Zou
  5. The Glass Ceiling and the Paper Floor: Gender Differences among Top Earners, 1981–2012 By Guvenen, Fatih; Kaplan, Greg; Song, Jae
  6. Does the European country-specific context alter the fatherhood premium? By Anna Baranowska-Rataj; Anna Matysiak
  7. UNEMPLOYMENT DURATION AND GEOGRAPHIC MOBILITY: DO MOVERS FARE BETTER THAN STAYERS? By Christopher Goetz
  8. Flexible pay systems and labour productivity: Evidence from Emilia-Romagna manufacturing firms By Davide Antonioli; Paolo Pini; Roberto Antonietti
  9. Learning and Life Cycle Patterns of Occupational Transitions By Gorry, Aspen; Devon, Gorry; Trachter, Nicholas
  10. JOB-TO-JOB (J2J) FLOWS: NEW LABOR MARKET STATISTICS FROM LINKED EMPLOYER-EMPLOYEE DATA By Henry Hyatt; Erika McEntarfer; Kevin McKinney; Stephen Tibbets; Doug Walton
  11. Social security schemes and labor supply in the formal and informal sectors By Rodrigo Ceni
  12. The Labour Supply Effect of Education Maintenance Allowance and its Implications for Parental Altruism By Holford, Angus
  13. What, If Anything, Can Labor Do to Rejuvenate Itself and Improve Worker Well-being in an Era of Inequality and Crisis-driven Austerity? By Freeman, Richard Barry
  14. Structural Change Accounting with Labor Market Distortions By Wenbiao Cai
  15. Overcoming moral hazard with social networks in the workplace: An experimental approach By Dhillon, Amrita; Peeters, Ronald; Yuksel, Ayse Muge
  16. Addressing the unemployment-mortality conundrum: Non-linearity is the answer By Giorgio Bonamore; Fabrizio Carmignani; Emilio Colombo
  17. Unemployment burden and its distribution: Theory and evidence from India By Sripad Motiram; Karthikeya Naraparaju
  18. Reforming the U.S. Social Security system accounting for employment uncertainty By Hugo Benítez-Silva; J. Ignacio García-Pérez; Sergi Jiménez-Martín
  19. Taxing Top Earners: A Human Capital Perspective By Mark Huggett; Alejandro Badel
  20. Trade and unions: Can exporters benefit from collective bargaining? By Capuano, Stella; Hauptmann, Andreas; Schmerer, Hans-Jörg

  1. By: Miriam Mäder; Steffen Müller; Regina T. Riphahn; Caroline Schwientek
    Abstract: This paper studies the association between the unemployment experience of fathers and their sons. Based on German survey data that cover the last decades we find significant positive correlations. Using instrumental variables estimation and the Gottschalk (1996) method we investigate to what extent fathers' unemployment is causal for offsprings' employment outcomes. In agreement with most of the small international literature we do not find a positive causal effect for intergenerational unemployment transmission. This outcome is robust to alternative data structures and to tests at the intensive and extensive margin of unemployment.
    Keywords: youth unemployment, non-employment, intergenerational mobility, causal effect, Gottschalk method
    JEL: J62 C21 C26
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp694&r=lab
  2. By: Sandra PONCET (Université de Paris I); Florian MAYNERIS (FERDI); Tao ZHANG (FERDI)
    Abstract: We here consider how Chinese firms adjust to higher minimum wages and how these affect aggregate productivity, exploiting the 2004 minimum-wage reform in China. We find that higher city-level minimum wages reduced the survival probability of firms which were the most exposed to the reform. For the surviving firms, thanks to signicant productivity gains, wage costs rose without any negative employment effect. At the city-level, our results show that higher minimum wages affected aggregate productivity growth via both productivity growth in incumbent firms and the net entry of more productive firms. Hence, in a fast-growing economy like China, there is a cleansing effect of labor-market standards.
    JEL: F10 F14 O14
    Date: 2014–10
    URL: http://d.repec.org/n?u=RePEc:fdi:wpaper:1821&r=lab
  3. By: Chrysanthou, Georgios Marios (Universidad de Alicante, Departamento de Métodos Cuantitativos y Teoría Económica)
    Abstract: We study union wage effects when membership is non-coercive and employers reserve the right of union recognition. Using the BHPS during 1995-2009 we find evidence of membership differentials for the lower male and middle female observed skill groups. The coverage differential at the bottom of the observed male skill distribution suggests free riding. While union members are negatively selected, there is evidence of positive selection at the bottom of the observed skill distribution. Using the unified measurement error and endogeneity bias expression, we obtain a discernible pattern between uncorrected, endogeneity corrected and fixed effects estimates of the union wage effect.
    Keywords: Union wage differentials; measurement error; unobserved heterogeneity; endogeneity
    JEL: C33 C35 J31 J51
    Date: 2014–09–29
    URL: http://d.repec.org/n?u=RePEc:ris:qmetal:2014_004&r=lab
  4. By: Vincent Fromentin (CEREFIGE, Université de lorraine, et CREA, Université de Luxembourg); Olivier Damette (BETA, Université de Lorraine); Benteng Zou (CREA, Université de Luxembourg)
    Abstract: The debate regarding the economic effects of immigration has attracted renewed interest in European countries since the economic crisis. We provide an approximation for the labor market effects of immigrants in four European countries during the global economic crisis after briefly analyzing the situation of native- and foreign-born workers for the recent period. Our analysis focuses on the correlation between the stock of immigrant workers and the number of local labor market workers across several segments of the labor market using a simple model approach. Based on data from Eurostat and the LFS (Labour Force Survey), we estimate a structural dynamic model using the Generalized Method of Moments (GMM) to take into account the adjustment dynamics in the labor market and labor market segment, educational level, country of origin and gender of the workers. Overall, the empirical results suggest that the immigration shock on the employment rates of native-born workers is persistent and very weak over the business cycle. The effect is globally positive and the origin of immigrants does not appear to change the nature of the impact. We offer some explanations for these findings that are linked with the dual labor markets and the differences in the degree of substitution between native and immigrant workers.
    Keywords: Immigration; Employment rates; European countries; dynamic panel analysis
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:luc:wpaper:14-22&r=lab
  5. By: Guvenen, Fatih (Federal Reserve Bank of Minneapolis); Kaplan, Greg (Princeton University); Song, Jae (Social Security Administration)
    Abstract: We analyze changes in the gender structure at the top of the earnings distribution in the United States over the last 30 years using a 10% sample of individual earnings histories from the Social Security Administration. Despite making large inroads, females still constitute a small proportion of the top percentiles: the glass ceiling, albeit a thinner one, remains. We measure the contribution of changes in labor force participation, changes in the persistence of top earnings, and changes in industry and age composition to the change in the gender composition of top earners. A large proportion of the increased share of females among top earners is accounted for by the mending of, what we refer to as, the paper floor – the phenomenon whereby female top earners were much more likely than male top earners to drop out of the top percentiles. We also provide new evidence at the top of the earnings distribution for both genders: the rising share of top earnings accruing to workers in the Finance and Insurance industry, the relative transitory status of top earners, the emergence of top earnings gender gaps over the life cycle, and gender differences among lifetime top earners.
    Keywords: Top earners; Glass ceiling; Gender gap; Paper floor; Industry
    JEL: E24 G10 J31
    Date: 2014–10–22
    URL: http://d.repec.org/n?u=RePEc:fip:fedmwp:716&r=lab
  6. By: Anna Baranowska-Rataj (Institute of Statistics and Demography, Warsaw School of Economics); Anna Matysiak (Institute of Economy, Warsaw School of Economics)
    Abstract: This paper contributes to the discussion on the effects of childbearing on fathers’ labour market opportunities in Europe. We use instrumental variable models and data from EU-SILC to examine the cross-country variation in the causal effects of family size on the labour market outcomes of fathers. We provide an overview of the impact of family size on the employment careers of fathers, as measured on a range of dimensions: the probability of work, the number of working hours, the job rank and level of pay, and the degree of job stability based on the type of employment contract. Our findings indicate that men increase their number of working hours and earnings in response to having more children, but that the stability of men’s employment contracts does not change. These effects are prevalent across all European countries, but they are somewhat stronger in more conservative societies in which men are expected to be the main breadwinners, and they are weaker in egalitarian societies in which men are expected to participate in household and family duties.
    Keywords: fatherhood, labour market, gender roles
    JEL: J13 J21
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:isd:wpaper:74&r=lab
  7. By: Christopher Goetz
    Abstract: This study uses a sample of unemployed workers constructed from the American Community Survey and the LEHD database, to compare the unemployment durations of those who find subsequent employment by relocating to a metropolitan area outside of their originally observed residence, versus those who find employment in their original location. Results from a hazard analysis confirm the importance of many of the determinants of migration posited in the literature, such as age, education, and local labor market conditions. While simple averages and OLS estimates indicate that migrating for a new job reduces the probability of re-employment within a given time frame and lengthens the spell of unemployment in the aggregate, after controlling for selection into migration using an IV approach based on local house price changes, the results suggest that out-migrating for employment actually has a large and significant beneficial effect of shortening the time to re-employment. This implies that those who migrate for jobs in the data may be particularly disadvantaged in their ability to find employment, and thus have a strong short-term incentive to relocate.
    Date: 2014–10
    URL: http://d.repec.org/n?u=RePEc:cen:wpaper:14-41&r=lab
  8. By: Davide Antonioli; Paolo Pini; Roberto Antonietti
    Abstract: The aim of this paper is to analyse the link between flexible pay systems (FPS) and labour productivity, with a close look at wage premium determinants as elements disclosing specific managerial strategies. The analysis was conducted on a sample of more than 500 manufacturing firms located in the Emilia-Romagna region, Italy. Results show that the adoption of flexible pay schemes is linked to union involvement and organizational changes within the firm, supporting the idea that flexible wages do not constitute merely an economic premium, but a more complex strategy aimed at increasing employees’ flexibility and autonomy. Notwithstanding the positive effects on productivity, the relation with economic performance does not emerge as extremely innovative. On the one hand, it is driven by a traditional form of premiums (PRP) targeted to individual employees and linked to a simple “effort improvement and control†motivation and “ability to pay†of the firm. On the other, it is driven by premiums (PFP) provided ex-ante and aimed at developing employees’ participation and competencies
    Keywords: performance related pay; pay for participation; organizational innovation; industrial relations; labour productivity
    JEL: J24 J33 J51
    Date: 2014–10–08
    URL: http://d.repec.org/n?u=RePEc:udf:wpaper:2014143&r=lab
  9. By: Gorry, Aspen (Utah State University); Devon, Gorry (Utah State University); Trachter, Nicholas (Federal Reserve Bank of Richmond)
    Abstract: Data reveal that individuals experience a high number of occupational switches. Over 40% of high school graduates transition between white and blue collar occupations more than once between the ages of 18 and 28. This paper develops a life cycle model of occupational choices based on workers learning about their type and sorting themselves to the best job match. Documenting life cycle patterns of occupational choices using data from the NLSY79 supports key predictions from the model. Initial characteristics are predictive of future patterns of occupational switching, including the timing and number of switches. In addition, the average time to the first occupational switch is longer than the time to the second switch for individuals with multiple occupational transitions.
    JEL: E24 J24 J31 J62
    Date: 2014–10–02
    URL: http://d.repec.org/n?u=RePEc:fip:fedrwp:14-15&r=lab
  10. By: Henry Hyatt; Erika McEntarfer; Kevin McKinney; Stephen Tibbets; Doug Walton
    Abstract: Flows of workers across jobs are a principal mechanism by which labor markets allocate workers to optimize productivity. While these job flows are both large and economically important, they represent a significant gap in available economic statistics. A soon to be released data product from the U.S. Census Bureau will fill this gap. The Job-to-Job (J2J) flow statistics provide estimates of worker flows across jobs, across different geographic labor markets, by worker and firm characteristics, including direct job-to-job flows as well as job changes with intervening nonemployment. In this paper, we describe the creation of the public-use data product on job-to-job flows. The data underlying the statistics are the matched employer-employee data from the U.S. Census Bureau’s Longitudinal Employer-Household Dynamics program. We describe definitional issues and the identification strategy for tracing worker movements between employers in administrative data. We then compare our data with related series and discuss similarities and differences. Lastly, we describe disclosure avoidance techniques for the public use file, and our methodology for estimating national statistics when there is partially missing geography.
    Date: 2014–09
    URL: http://d.repec.org/n?u=RePEc:cen:wpaper:14-34&r=lab
  11. By: Rodrigo Ceni (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: This paper analyzes how changes in the social security scheme affect the participation path of workers between the formal and the informal sectors. The choice between the formal and informal sectors is completely voluntary. In this framework, individuals, depending on the retirement program and their endowment of human capital, construct their decision paths in the labor market. I use Argentinean panel data from the period 1995-2011 to estimate a structural model, and this is used to evaluate changes in the workers' behavior when the pension scheme changes. Among the main results, if the parameters are fixed as in the PAYG, there is a slight reduction in the years of the formality and the percentage of workers who achieve a full pension. Moreover, the increase of the requirement to achieve a full pension to 35 years in the formality, increases the percentage of workers in formality over 45 and the number of the years working formally but it decreases the achievement of a pension at all educational levels. The decrease of that requirement has an effect on the reduction of the years in formality even for those who are not affected directly, the high part of the distribution of the high educated. Finally, if the minimum age to achieve a pension is now 67 instead of 65, there is an important increment in the formality and the full pension achievement especially for the low educated workers.
    Keywords: informality, discrete choice, pension schemes, Argentina
    JEL: E26 J24 J26 O17
    Date: 2014–10
    URL: http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-12-14&r=lab
  12. By: Holford, Angus
    Abstract: Education Maintenance Allowance (EMA) was a UK government cash transfer paid directly to children aged 16-18 in post-compulsory full-time education. Using data from the Longitudinal Study of Young People in England, we find an EMA payment of £30 per week reduces teenagers’ labour supply by 3 hours per week. We show this is consistent with parents withdrawing cash and in-kind transfers from their child to a value between £7.80 and £20.10 per week. We therefore argue that making this cash transfer directly to the child produces higher child welfare than if the equivalent transfer were made to parents.
    Date: 2014–10–17
    URL: http://d.repec.org/n?u=RePEc:ese:iserwp:2014-37&r=lab
  13. By: Freeman, Richard Barry
    Abstract: The economic position of workers has weakened in much of the advanced world. Over the past 30–40 years the share of national income going to labor has fallen. Labor earnings have become more unequally distributed. The proportion of workers in trade unions has trended downward, accompanied in some countries with commensurate declines in collective bargaining coverage. Union influence on the direction of the economy has diminished even in countries where firms and unions negotiate wage and working conditions for most employees and where left-oriented parties are in government. Increases in government deficits and debt resulting from the Great Recession have induced many governments to introduce austerity policies that are likely to perpetuate high joblessness and inequality into the foreseeable future. Finance's speculative excesses fed market capitalism but much of the costs of the implosion of finance and ensuing Great Recession will fall on labor into the foreseeable future. There is no easy answer to the title question. As the phrase “if anything†indicates, it is unclear whether labor can rejuvenate itself and pressure societies to restore full employment and raise living standards in the face of inequality and pressures for austerity programs. Differences in the labor relations systems among countries, in levels of inequality, in the importance of money in politics, and in the post Great Recession state of economies will undoubtedly produce different responses across countries and labor movements. In this paper I examine the situation in the US, where the ability of trade unions to represent labor's interest has declined more than in any other major economy. Collective bargaining in the US is co-terminus with union density. For over half a century union density has fallen in the private sector. In 2012 6.6% of private sector workers were union members (US BLS, 2013, table 3) – below the 1900 level when total density, then based almost entirely on private sector workers, was 6.8% (Freeman, 1998, p 291). In the 2000s unions gained so few members in National Labor Relations Board representation elections or in other ways that the anti-unionists’ once quixotic dream of a union-free labor market has become a reality in the private sector. American labor law and custom makes it difficult for workers and firms to substitute other forms of workplace labor activity for collective bargaining. The law forbids employer-initiated works councils. There are no mechanisms for extending collective contracts beyond the firm and local unions who negotiate and sign a contract. Employer associations are more interested in undermining collective bargaining than in discussing labor issues with the AFL-CIO or some other union federation. Unionism and collective bargaining have followed a different path in the public sector. Union density increased from the 1960s to the 2000s when about 37% of employees were union members, including teachers, police, firefighters, university professors, graduate student teaching assistants, as well as bus drivers, clerical workers, and so on.1 When recession-induced budget crises hit cities and states in the late 2000s, however, opponents of unions attacked public sector bargaining as a contributing factor to the deficits. In the US federal system, state law governs state and local government collective bargaining. Some states encourage public sector collective bargaining. Other states, largely in the South, make it illegal for public sector employers to bargain with unions. Following the 2008 elections, Republican-dominated legislatures in several states that had encouraged collective bargaining passed bills to restrict bargaining, outlaw dues checkoffs/agency fees (which provide a funding stream to unions), and limit union political activities. Wisconsin, which had pioneered laws favorable to public sector bargaining, added provisions to its budget bill that effectively eliminated collective bargaining for all state and local workers except police and fire. Ohio enacted legislation of a similar kind that targeted all state and local employees including police and fire. Opponents of the Wisconsin legislation forced the state's governor into a recall election but failed to turn him out of office or reverse the legislative decision. Opponents of the Ohio legislation overturned their law in a referendum (Freeman and Han, 2012), which seemed to stem the anti-union movement. But in 2012 the Republican dominated legislature in historically pro-union Michigan passed a bill to weaken unions there. At this writing anti-union groups have bills pending in the legislatures of many other states. Unions have circled their wagons to defend the one part of the labor market where they still hold considerable sway. The experience of the US is extreme but nonetheless informative for other advanced countries where crisis-driven austerity and increased inequality weaken union ability to represent workers and may embolden groups opposed to collective action, welfare state protections of workers and the like to follow the lead of their US counterparts. The failure of US unions to develop alternatives to collective bargaining to advance worker interests as union density fell is a “canary in the mine†warning to labor elsewhere. The new efforts by US labor activists, social entrepreneurs, some unions, and in 2013 the AFL-CIO itself to mobilize citizens to defend workers’ interests without collective bargaining directs attention to innovative ways for labor to develop countervailing power and press for full employment and rising living standards for all. The paper is divided into three sections. Section one reviews the decline in labor as a force determining outcomes in modern capitalism, with particular attention to the collapse of the firm-based collective bargaining model in the US. Section two highlights the need for a strong labor movement to help reform the finance-dominated model of capitalism that underlies the implosion of Wall Street and ensuing economic crisis. Section three examines the ways that labor activists, social entrepreneurs, and unions are developing ways to rejuvenate labor power and improve labor conditions absent collective bargaining. There is a brief conclusion.
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:hrv:faseco:13047660&r=lab
  14. By: Wenbiao Cai
    Abstract: This paper quantifies the relative importance of sectoral productivity and labor market distortions for structural change. I use a model in which labor productivity is the product of TFP and human capital in each sector, but distortions generate wedges in wage per efficiency worker across sectors. I calculate human capital by sector using micro census data, and use the model to infer TFP and distortions such that it replicates structural change in the US, India, Mexico and Brazil between 1960 and 2005. I find that (1) TFP growth in agriculture drives most of the decline in its share of labor; (2) the role of labor market distortions is limited.
    Date: 2014–10
    URL: http://d.repec.org/n?u=RePEc:win:winwop:2014-03&r=lab
  15. By: Dhillon, Amrita (King's College London); Peeters, Ronald (Maastricht University); Yuksel, Ayse Muge (Maastricht University)
    Abstract: The use of social networks in the workplace has been documented by many authors, although the reasons for their widespread prevalence are less well known. In this paper we present evidence based on a combined eld-laboratory experiment that social networks are used by employers to reduce worker moral hazard. The worker chooses an eort level given a xed wage under dierent settings of social proximity. Social proximity is captured using actual Facebook friendship information revealed anonymously to subjects once they have been recruited. Since employers themselves do not have access to social connections, they delegate the decision to referrers who can select among workers with dierent degrees of social proximity to themselves. We show that employers choose referrals over anonymous hiring about 80% of the time. In keeping with our predictions, referrers also choose workers with a greater social proximity to themselves and workers who are closer to referrers indeed pay back more to the referrer. The advantage of the lab setting is that we can isolate moral hazard and directed altruism as the main driving forces for these results.
    Keywords: Eciency wage contracts, Moral hazard, Dictator game, Referrals, Altruism, Reciprocity, Directed altruism, Social proximity, Facebook, Experiment, Social networks, Strength of ties, Spot market.
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:cge:wacage:206&r=lab
  16. By: Giorgio Bonamore; Fabrizio Carmignani; Emilio Colombo
    Abstract: The effect of unemployment on mortality is the object of a lively literature. However, this literature is characterized by sharply conflicting results. We revisit this issue and suggest that the relationship might be non-linear. We use regional (NUTS 2) data from 23 European countries to estimate a multivariate regression of mortality. The estimating equation allows for a quadratic relationship between unemployment and mortality. We control for various other determinants of mortality at regional and national level and we include region-specific and time-specific fixed effects. The model is also extended to account for the dynamic adjustment of mortality and possible lagged effects of unemployment. We find that the relationship between mortality and unemployment is U shaped. In the benchmark regression, when the unemployment rate is low, at 3%, an increase by one percentage point decreases average mortality by 0.7%. As unemployment increases, the effect decays: when the unemployment rate is 8% (sample average) a further increase by one percentage point decreases average mortality by 0.4%. The effect changes sign, turning from negative to positive, when unemployment is around 17%. When the unemployment rate is 25%, a further increase by one percentage point raises average mortality by 0.4%. Results hold for different causes of death and across different specifications of the estimating equation. We argue that the non-linearity arises because the level of unemployment affects the psychological and behavioural response of individuals to worsening economic conditions.
    Keywords: unemployment, economic crisis, mortality, Europe
    JEL: I15 J64
    Date: 2014–10
    URL: http://d.repec.org/n?u=RePEc:mib:wpaper:281&r=lab
  17. By: Sripad Motiram (Indira Gandhi Institute of Development Research (IGIDR), Mumbai, India); Karthikeya Naraparaju (Indira Gandhi Institute of Development Research (IGIDR), Mumbai, India)
    Abstract: We develop a measure of unemployment that takes into account both the level and intensity of unemployment and that satisfies several desirable properties, including distribution sensitivity (dealing with differences among the unemployed). It can also be decomposed into mean and distributional components and contributions to unemployment by various subgroups of the population. We then apply this measure to understand unemployment in India using data from National Sample Surveys on employment and unemployment during the period 1993-2012. We show that unemployment has generally fallen in this period, but this finding has to be seen in light of considerable underemployment. Moreover, unemployment is driven to a greater extent by higher educated groups; the unemployment among these groups is also fairly substantial. The distribution of unemployment has also worsened. We explain these findings and suggest some policies.
    Keywords: Measurement of unemployment, welfare costs of unemployment, distribution sensitivity, Indian unemployment.
    JEL: J60 J64 J68
    Date: 2014–09
    URL: http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2014-341&r=lab
  18. By: Hugo Benítez-Silva; J. Ignacio García-Pérez; Sergi Jiménez-Martín
    Abstract: The discussion about the need for Social Security reforms has recently resurfaced, and is expected to continue to be part of the political agenda in the near future. Our paper is a step in the direction of providing a framework for policy analysis that accounts for employment uncertainty, something that has been relatively overlooked in terms of its link with retirement decisions. In this context, we explicitly consider the participation decision of older individuals along with their decision to claim Social Security retirement benefits, using a sequential decision structure. We have numerically solved and simulated a benchmark model of the inter-temporal decision problem that individuals face in the United States. Our results show that the model is able to explain with great accuracy the strikingly high proportion of individuals who claim benefits exactly at the Early Retirement Age. The model is also able to replicate the declining labor force participation at older ages. Additionally, we discuss a number of policy experiments that suggest that individuals claiming and labor supply decisions are responsive to measures likely to be on the table for policy makers when considering the reforms of the U.S. Social Security system.
    Date: 2014–10
    URL: http://d.repec.org/n?u=RePEc:fda:fdaddt:2014-12&r=lab
  19. By: Mark Huggett (Department of Economics, Georgetown University); Alejandro Badel (Research Division, Federal Reserve Bank of St. Louis)
    Abstract: We assess the consequences of substantially increasing the marginal tax rate on U.S. top earners using a human capital model. The top of the model Laffer curve occurs at a 53 percent top tax rate. Tax revenues and the tax rate at the top of the Laffer curve are smaller compared to an otherwise similar model that ignores the possibility of skill change in response to a tax reform. We also show that if one applies the methods used by Diamond and Saez (2011) to provide quantitative guidance for setting the tax rate on top earners to model data then the resulting tax rate exceeds the tax rate at the top of the model Laffer curve.
    Keywords: Human Capital, Marginal Tax Rates, Inequality, Laffer Curve
    JEL: D91 E21 H2 J24
    Date: 2014–07–23
    URL: http://d.repec.org/n?u=RePEc:geo:guwopa:gueconwpa~14-14-02&r=lab
  20. By: Capuano, Stella (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Hauptmann, Andreas (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Schmerer, Hans-Jörg (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Unions are often stigmatized as being a source of inefficiency due to higher collective bargaining outcomes. This is in stark contrast with the descriptive evidence presented in this paper. Larger firms choose to export and are also more likely to adopt collective bargaining. We rationalize those stylized facts using a partial equilibrium model that allows us to evaluate firms' value functions under individual or collective bargaining. Exporting further decreases average production costs for large firms in the collective bargaining regime, allowing them to benefit from additional external economies of scale due to lower bargaining costs. Our findings suggest that the positive correlation between export status and collective bargaining can be explained through size. Including controls for firm-size destroys the estimated positive relationship between export status and collective bargaining. Using interaction terms between size and the export status, we find that larger exporters tend to do collective bargaining, whereas smaller exporters tend to refrain from collective agreements." (Author's abstract, IAB-Doku) ((en))
    Keywords: Export, Tarifverhandlungen, Lohnfindung, Gewerkschaft, Unternehmensgröße, IAB-Betriebspanel
    JEL: F16 J51 E24 J3
    Date: 2014–10–17
    URL: http://d.repec.org/n?u=RePEc:iab:iabdpa:201424&r=lab

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