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on Labour Economics |
| By: | Joseph E. Stiglitz |
| Abstract: | This paper analyzes equilibrium, dynamics, and optimal decisions on the factor bias of innovation in a model of induced innovation. In a model with full employment, we show that (a) if the elasticity of substitution is always less than or greater than unity, there is a unique steady state equilibrium; (b) if the elasticity of substitution is less than unity, the steady state is stable, but convergence is oscillatory; (c) if the elasticity of substitution is greater than unity, the steady state is a saddle point; and (d) if the elasticity of substitution is less than unity for both high and low effective capital labor ratios but greater than unity for intermediate values, then there can be multiple steady states. In a model where efficiency wages lead to equilibrium unemployment, we show that if the elasticity of substitution is less than unity, there will be a bias towards excessive labor augmenting innovation, resulting in too high unemployment, with convergence to the unique steady state being oscillatory, rather than monotonic. Similarly, if the elasticity of substitution between skilled and unskilled labor is less than unity, and there is efficiency wage unemployment for unskilled labor only, there is will be excessively skill-biased innovation. This paper provides an alternative resolution to the Harrod-Domar conundrum of the disparity between the natural and warranted rate of growth to that of Solow, with strong policy implications, for instance, concerning the effects of income distribution and monetary policy both in the short run and the long. |
| JEL: | E24 O30 O31 O33 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20670&r=lab |
| By: | Mohrenweiser, Jens; Zwick, Thomas |
| Abstract: | This paper analyses the risk of unemployment, unemployment duration and the risk of longterm unemployment immediately after apprenticeship graduation. Unemployed apprenticeship graduates constitute a large share of unemployed youth in Germany but unemployment incidence within this group is unequally distributed. Our paper extends previous research in three dimensions. It shows that individual productivity assessment of the trainig firm, initial selection into high reputation trainig firms and occupations, and adverse selection of employer moving graduates are correlated with unemployment after apprenticeship graduation. |
| Keywords: | apprenticeship,youth unemployment,Germany |
| JEL: | J24 J62 J64 M53 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14052&r=lab |
| By: | Kureková, Lucia Mýtna (Slovak Governance Institute); Beblavy, Miroslav (Center for European Policy Studies (CEPS)); Thum, Anna-Elisabeth (Center for European Policy Studies (CEPS)) |
| Abstract: | With the growth of the Internet, online job portals have become an important medium for job matching. This paper focuses on methodological issues arising from the usage of online job vacancy data and voluntary web-based surveys to analyse the labour market. In addition to providing a comprehensive review of the literature based on online data, we highlight the advantages and possible disadvantages of using online data and suggest strategies for overcoming selected methodological issues. We underline the difficulties in adjusting for representativeness of online job vacancies, but nevertheless argue that this rich source of data should be exploited. |
| Keywords: | internet, job, labour market, matching, methodology, occupation, online, representativeness, vacancy |
| JEL: | E4 J2 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8555&r=lab |
| By: | Abowd, John M. (Cornell University); Kramarz, Francis (CREST (ENSAE)); Pérez-Duarte, Sébastien (European Central Bank); Schmutte, Ian M. (University of Georgia) |
| Abstract: | We test for sorting of workers between and within industrial sectors in a directed search model with coordination frictions. We fit the model to sector-specific vacancy and output data along with publicly-available statistics that characterize the distribution of worker and employer wage heterogeneity across sectors. Our empirical method is general and can be applied to a broad class of assignment models. The results indicate that industries are the loci of sorting-more productive workers are employed in more productive industries. The evidence confirms assortative matching can be present even when worker and employer components of wage heterogeneity are weakly correlated. |
| Keywords: | sorting, industries |
| JEL: | J30 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8439&r=lab |
| By: | Deelen, Anja (CPB Netherlands Bureau for Economic Policy Analysis); Euwals, Rob (CPB Netherlands Bureau for Economic Policy Analysis) |
| Abstract: | In this study, we investigate the anatomy of older workers' wages. The central question is whether the wage cushion – i.e., the difference between actual wages and collectively agreed-upon (maximum) contractual wages – contributes to the fact that wages continue increasing at older ages. We follow the wages of individual workers in twenty-two sectors of industry in the Netherlands using administrative data for the period 2006–2010. In the public sector, we find no evidence of a wage cushion. Wage scale ceilings set in collective agreements are guiding for older workers' wages, and workers earning a contractual wage equal to a wage scale ceiling are not compensated with higher additional wages. In the private sector, we do find evidence of a wage cushion. Wage scale ceilings are less restrictive and workers earning a contractual wage exceeding the highest wage scale ceiling experience higher contractual wage growth. The private sector wage cushion enhances wage differentiation and allows for wages that continue increasing at older ages. |
| Keywords: | wages, economics of the elderly |
| JEL: | C23 J14 J31 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8467&r=lab |
| By: | Legree, Scott; Schirle, Tammy; Skuterud, Mikal |
| Abstract: | We provide evidence on the potential for reforms in labour law to reverse deunionization trends by relating an index of the favorability to unions of Canadian provincial labour relations statutes to changes in provincial union density rates between 1981 and 2012. The results suggest that shifting every province’s 2012 legal regime to the most union-friendly possible could raise the national union density by up to 7 percentage points in the long run. This effect appears driven by regulations related to the certification of new bargaining units, the negotiation of first contracts and the recruitment of replacement workers. The effects of reform are largest for women, particularly university-educated women employed as professionals in public services. Overall, the results suggest a limited potential for labour relations reforms to address growing concerns about labour market inequality. |
| Keywords: | Labour relations legislation, union density rates, union-management relations |
| JEL: | J50 J58 K31 |
| Date: | 2014–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2014-42&r=lab |
| By: | Lundborg, Petter (Lund University); Plug, Erik (University of Amsterdam); Rasmussen, Astrid Würtz (Aarhus University) |
| Abstract: | This paper introduces a new IV strategy based on IVF induced fertility variation in childless families to estimate the causal effect of having children on female labor supply using IVF treated women in Denmark. Because observed chances of IVF success do not depend on labor market histories, IVF treatment success provides a plausible instrument for childbearing. Our IV estimates indicate that fertility effects are: (a) negative, large and long lasting; (b) much stronger at the extensive margin than at the intensive margin; and (c) similar for mothers, not treated with IVF, which suggests that IVF findings have a wider generalizability. |
| Keywords: | children, extensive and intensive fertility margins, female labor supply |
| JEL: | J13 J22 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8609&r=lab |
| By: | Martins, Pedro S. (Queen Mary, University of London) |
| Abstract: | Several countries extend collective bargaining agreements to entire sectors, therefore binding non-subscriber workers and employers. These extensions may address coordination issues but may also distort competition by imposing sector-specific minimum wages and other work conditions that are not appropriate for many firms. In this paper, we analyse the impact of such extensions along several margins drawing on firm-level monthly data for Portugal, a country where extensions have been widespread until recently. We find that both formal employment and wage bills in the relevant sector fall, on average, by 2% – and by 25% more across small firms – over the four months after an extension is issued. These results are driven by both reduced hirings and increased firm closures. On the other hand, informal work, not subject to labour law or extensions, tends to increase. Our findings are robust to several checks, including a falsification exercise based on extensions that were announced but not implemented. |
| Keywords: | collective agreements, worker flows, wage rigidity |
| JEL: | J31 J52 J23 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8540&r=lab |
| By: | Martin Huber; Michael Lechner; Conny Wunsch (University of Basel) |
| Abstract: | <p style="margin-bottom:12.0pt; line-height:150%"><span lang="EN-GB">This paper investigates the average effects of (firm-provided) workplace health promotion measures in form of the analysis of sickness absenteeism and </span><span lang="EN-GB">health circles/courses</span><span lang="EN-GB"> 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 </span><span lang="EN-GB">decrease the number of job changes across various age groups. A key finding is that </span><span lang="EN-GB">health circles/courses</span><span lang="EN-GB"> 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. </span> |
| Keywords: | Firm health policies, health circles, health courses, analysis of sickness absenteeism, matching |
| JEL: | I10 I19 J32 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2014/06&r=lab |
| By: | Liu, Xing (Michelle) (University of Arizona); Sierminska, Eva (CEPS/INSTEAD) |
| Abstract: | An important underlying determinant of wage discrimination, as well as the gender wage gap is the way the labor market rewards individual physical attractiveness. This article surveys the extensive empirical literature of the effect of physical attractiveness on labor market outcomes. Particular attention is given to the channels through which attractiveness may affect individual labor market outcomes and the way attractiveness affects gender wage differentials. Further research is needed on the effect of attractiveness within occupations in order to provide more evidence on its productivity-enhancing channel of transmission and the effect this has on the gender wage gap. |
| Keywords: | beauty premium, cross-country, discrimination, gender differentials, human capital model, occupational sorting, physical attractiveness, productivity, stereotypes, wages, wage discrimination |
| JEL: | J71 J31 J2 J16 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8526&r=lab |
| By: | Johannes Geyer; Thorben Korfhage |
| Abstract: | In Germany, individuals in need of long-term care receive support through benefits of the long-term care insurance. A central goal of the insurance is to support informal care provided by family members. Care recipients can choose between benefits in kind (formal home care services) and benefits in cash. From a budgetary perspective family care is a cost-saving alternative to formal home care and to stationary nursing care. However, the opportunity costs resulting from reduced labor supply of the carer are often overlooked. We focus on the labor supply decision of family carers and the incentives set by the long-term care insurance. We estimate a structural model of labor supply and the choice of benefits of family carers. We find that benefits in kind have small positive effects on labor supply. Labor supply elasticities of cash benefits are larger and negative. If both types of benefits increase, negative labor supply effects are offset to a large extent. |
| Keywords: | Labor supply, long-term care, long-term care insurance, structural model |
| JEL: | J22 H31 I13 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp702&r=lab |
| By: | Euwals, Rob (CPB Netherlands Bureau for Economic Policy Analysis); Trevisan, Elisabetta (University of Padua) |
| Abstract: | This paper investigates the impact of financial incentives on early retirement behaviour for high and low wage earners. Using a stylized life-cycle model, we derive hypotheses on the behaviour of the two types. We use administrative data and employ a linear random effects model to test the predictions. We exploit exogenous variation in the replacement rate over birth cohorts of workers who are eligible to a transitional early retirement scheme. The empirical results show that low wage earners are, as predicted by the model, more sensitive to financial incentives. This implies that low wage earners will experience a stronger incentive to continue working in an early retirement scheme with a low implicit tax rate. |
| Keywords: | pensions, early retirement, labour market behaviour |
| JEL: | J16 J22 J61 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8466&r=lab |
| By: | Dolls, Mathias; Fuest, Clemens; Neumann, Dirk; Peichl, Andreas |
| Abstract: | We analyze different alternatives how a common unemployment insurance system for the euro area (EA) could be designed and assess their effectiveness to act as an insurance device in the presence of asymmetric macroeconomic shocks. Running counterfactual simulations based on micro data for the period 2000-13, we highlight and quantify the trade-off between automatic stabilization effects and the degree of cross-country transfers. In the baseline, we focus on a non-contingent scheme covering short-term unemployment and find that it would have absorbed a significant fraction of the unemployment shock in the recent crisis. However, 5 member states of the EA18 would have been either a permanent net contributor or net recipient. Our results suggest that claw-back mechanisms and contingent benefits could limit the degree of cross-country redistribution, but might reduce desired insurance effects. We also discuss moral hazard issues at the level of individuals, the administration and economic policy. |
| Keywords: | European fiscal integration,unemployment insurance,automatic stabilizers |
| JEL: | F55 H23 J65 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14095&r=lab |
| By: | Polachek, Solomon (Binghamton University, New York); Xiang, Jun (Rutgers University) |
| Abstract: | The gender wage gap varies across countries. For example, among OECD nations women in Australia, Belgium, Italy and Sweden earn 80% as much as males, whereas in Austria, Canada and Japan women earn about 60%. Current studies examining cross-country differences focus on the impact of labor market institutions such as minimum wage laws and nationwide collective bargaining. However, these studies neglect labor market institutions that affect women's lifetime work behavior – a factor crucially important in gender wage gap studies that employ individual data. This paper explicitly concentrates on labor market institutions that are related to female lifetime work that affect the gender wage gap across countries. Using ISSP (International Social Survey Programme), LIS (Luxembourg Income Study) and OECD wage data for 35 countries covering 1970-2002, we show that the gender pay gap is positively associated with the fertility rate, positively associated with the husband-wife age gap at first marriage, and positively related to the top marginal tax rate, all factors which negatively affect women's lifetime labor force participation. In addition, we show that collective bargaining, as found in previous studies, is negatively associated with the gender pay gap. |
| Keywords: | gender, pay, human capital, international differences |
| JEL: | J3 J7 I3 H8 F55 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8603&r=lab |
| By: | Hetschko, Clemens |
| Abstract: | German panel data is used to show that the decrease in life satisfaction caused by an increase in the probability of losing work is higher when self-employed than when paid employed. Further estimations reveal that becoming unemployed reduces self-employed workers´ satisfaction considerably more than salaried workers´ satisfaction. These results indicate that losing self-employment is an even more harmful life event than losing dependent employment. Monetary and non-monetary reasons seem to account for the difference between the two types of work. Moreover, it originates from the process of losing self-employment and the consequences of unemployment rather than from advantages of self-employment. |
| Keywords: | life satisfaction,self-employment,probability of losing work,unemployment |
| JEL: | I31 J24 J65 L26 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201426&r=lab |
| By: | Barth, Erling (Institute for Social Research, Oslo); Bryson, Alex (National Institute of Economic and Social Research (NIESR)); Davis, James C. (U.S. Census Bureau); Freeman, Richard B. (Harvard University) |
| Abstract: | This paper links data on establishments and individuals to analyze the role of establishments in the increase in inequality that has become a central topic in economic analysis and policy debate. It decomposes changes in the variance of log earnings among individuals into the part due to changes in earnings among establishments and the part due to changes in earnings within-establishments and finds that much of the 1970s-2010s increase in earnings inequality results from increased dispersion of the earnings among the establishments where individuals work. It also shows that the divergence of establishment earnings occurred within and across industries and was associated with increased variance of revenues per worker. Our results direct attention to the fundamental role of establishment-level pay setting and economic adjustments in earnings inequality. |
| Keywords: | earnings, earnings inequality, productivity |
| JEL: | J3 J31 D3 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8437&r=lab |
| By: | Yi Huang; Prakash Loungani; Gewei Wang |
| Abstract: | This paper provides the first systematic study of how minimum wage policies in China affect firm employment over the 2000-2007 periods. Using a novel dataset of minimum wage regulations across more than 2,800 counties matched with firm-level data, we investigate both the effect of the minimum wage and its policy enforcement tightening in 2004. A dynamic panel (difference GMM) estimator is combined with a “neighbor-pairs-approach†to control for unobservable heterogeneity common to “border counties†that are subject to different minimum wage changes. We show that minimum wage increases have a significant negative impact on employment, with an estimated elasticity of -0.1. Furthermore, we find a heterogeneous effect of the minimum wage on employment which depends on the firm's wage level. Specifically, the minimum wage has a greater negative impact on employment in low-wage firms than in high-wage firms. Our results are robust for different treatment groups, sample attrition correction, and placebo tests. |
| Keywords: | Minimum wages;China;Employment;Business enterprises;Labor demand;Labor supply;Wage policy;Econometric models;China, employment, minimum wages |
| Date: | 2014–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/184&r=lab |
| By: | Tansel, Aysit; Dalgıç, Başak; Güven, Aytekin |
| Abstract: | This paper investigates wage inequality and wage mobility in Turkey using the Surveys on Income and Living Conditions (SILC). This is the first paper that explores wage mobility for Turkey. It differs from the existing literature by providing analyses of wage inequality and wage mobility over various socioeconomic groups such as gender, age, education and sector of economic activity. We first present an overview of the evolution of wages and wage inequality over the period 2005-2011. Next, we compute several measures of wage mobility and explore the link between wage inequality and wage mobility. Further, we compute the transition matrices which show movements of individuals across the wage distribution from one period to another and investigate the determinants of transition probabilities using a multinomial logit model. The results show that overall the real wages increased over the study period and wage inequality exhibits a slight increase.. Wage inequality is one of the highest among the European Union (EU) countries. The wage mobility in Turkey is lower than what is observed in the European Union countries although it increases as time horizon expands. Wage mobility has an equalizing impact on the wage distribution, however; this impact is not substantial enough to overcome the high and persistent wage inequality in Turkey. |
| Keywords: | Wage Inequality, Wage Mobility, Heterogeneity, Turkey |
| JEL: | D31 D63 J31 J60 |
| Date: | 2014–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59764&r=lab |
| By: | Bertranou, Fabio; Casanova, Luis; Jiménez, Maribel; Jiménez, Mónica |
| Abstract: | This working paper examines employment quality and labour market segmentation in Argentina. The labour market in the country is marked by heterogeneity; the rate of informal employment is high, though it diminished significantly during the 2003-2011 period. |
| Keywords: | labour market segmentation, informal economy, informal workers, employment security, Argentina, segmentation du marché du travail, économie informelle, travailleurs informels, sécurité de l'emploi, Argentine, segmentación del mercado de trabajo, economía informal, trabajadores informales, seguridad en el empleo, Argentina |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:485422&r=lab |
| By: | Hyeok Jeong; Yong Kim; Iourii Manovskii |
| Abstract: | We identify a key role of factor supply, driven by demographic changes, in shaping several empirical regularities that are a focus of active research in macro and labor economics. In particular, demographic changes alone can account for the large movements of the return to experience over the last four decades, for the differential dynamics of the age premium across education groups emphasized by Katz and Murphy (1992), for the differential dynamics of the college premium across age groups emphasized by Card and Lemieux (2001), and for the changes in cross-sectional and cohort-based life-cycle profiles emphasized by Kambourov and Manovskii (2005). |
| JEL: | E24 E25 J24 J31 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20457&r=lab |
| By: | Chaparro, Juan; Lora, Eduardo |
| Abstract: | Based on Akerlof and Kranton (2005), who argue that group identity and social norms influence individual preferences towards work effort, a model is developed to understand why firms create good job conditions, taking into account the cost of implementing them and their impact on wages and productivity. Then, using individual-level data from the Gallup World Poll for 18 Latin American countries, the main predictions of the model are tested using propensity score matching. We find a positive link between good job conditions, workers’ labor income and productivity when there are several simultaneous signals of a good work environment. We conclude that there is a positive payoff of investing in good job conditions for both workers and firms. |
| Keywords: | Job Conditions, Human Resources Management, Labor Productivity, Identity Economics, Propensity Score Matching, Latin America, International Development, Labor and Human Capital, Productivity Analysis, J24, J64, M12, M54, O54, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169810&r=lab |
| By: | Baltagi, Badi H. (Syracuse University); Rokicki, Bartlomiej (Warsaw University); Barreiro de Souza, Kênia (CEDEPLAR/UFMG) |
| Abstract: | This paper reconsiders the Brazilian wage curve using individual data from the National Household Survey at 27 Federative Units over the period 2002 - 2009. We find evidence in favor of the Brazilian wage curve with an unemployment elasticity of -0.08 when the lagged unemployment rate is used as an instrument for current unemployment rate. We also find that males in Brazil are significantly more responsive to local unemployment rates (-0.13) than their female counterparts. In fact, we find that the unemployment elasticity for women is statistically insignificant. Applying gender specific unemployment rates, the elasticity for men decreases to -0.09, while the elasticity for women remains statistically insignificant. This paper also finds that the estimates for Brazilian wage curve are completely different for the case of formal and informal workers. |
| Keywords: | wage curve, fixed effects, regional labor markets, household surveys, informal workers |
| JEL: | C26 J30 J60 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8468&r=lab |
| By: | Vassil, Kristjan (University of Tartu); Eamets, Raul (University of Tartu); Mõtsmees, Pille (University of Tartu) |
| Abstract: | Estonia ranks consistently on top of the list of countries with the largest gender pay gap. However, irrespective of abundant aggregate level evidence, little is known what motivates the gap at the individual level. In this paper we precisely address the issue of gender pay gap at the individual level. We examine how large is the gender pay gap in actual and expected wages and how it can be explained. We use a rich dataset from Estonian Labour Force Survey on actual wages, and the data from CV Keskus on people's wage expectations. Findings show that education and ethnicity are primary sources for gender based wage discrimination hinting at structural cleavages in Estonian society. Results have major policy implications for other multi-lingual countries with similar historical background. |
| Keywords: | gender wage gap, Estonia, expected wage gap, actual wage gap |
| JEL: | J16 J31 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8604&r=lab |
| By: | Cronin, Hugh (Economic and Social Research Institute, Dublin); McGuinness, Seamus (Economic and Social Research Institute, Dublin) |
| Abstract: | This paper uses a linked employer-employee dataset, the National Employment Survey, to examine the determinants of organisational change and employee resistance to change and, specifically, to examine the influence of employee inflexibility on the implementation of firm-level policies aimed at increasing competitiveness and workforce flexibility. Key finding arising from the research is that while workforce resistance to job-related change often forces firms to seek alternative means of achieving labour flexibility, there appears little that firms can do to prevent such resistance occurring. The presence of HRM staff, consultation procedures, wage bargaining mechanisms, bullying and equality polices etc were found to have little impact on the incidence of workforce resistance to changes in job conditions. |
| Keywords: | workforce resistance, organisational change, linked employer-employee data |
| JEL: | J31 J51 J53 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8441&r=lab |
| By: | Carrillo-Tudela, Carlos (University of Essex); Hobijn, Bart (Federal Reserve Bank of San Francisco); She, Powen (University of Essex); Visschers, Ludo (University of Edinburgh) |
| Abstract: | Using quarterly data for the U.K. from 1993 through 2012, we document that in economic downturns a smaller fraction of unemployed workers change their career when starting a new job. Moreover, the proportion of total hires that involves a career change for the worker also drops in recessions. Together with a simultaneous drop in overall turnover, this implies that the number of career changes declines during recessions. These results indicate that recessions are times of subdued reallocation rather than of accelerated and involuntary structural transformation. We back this interpretation up with evidence on who changes careers, which industries and occupations they come from and go to, and at which wage gains. |
| Keywords: | labour market turnover, occupational and industry mobility, wage growth |
| JEL: | J63 J64 G10 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8430&r=lab |
| By: | Lars Kunze; Nicolai Suppa |
| Abstract: | This article examines the impact of unemployment on social participation for Germany using the German Socio-Economic Panel. We find significant negative, robust and, for some activities, lasting effects of unemployment on social participation. Causality is established by focussing on plant closures as exogenous entries into unemployment. Social norms, labor market prospects and the perception of individual failure are shown to be relevant for explaining these findings. Furthermore, our results not only (i) provide novel insights into the determinants of the unemployed's unhappiness but also (ii) highlight an hitherto unexplored channel through which unemployment influences economic outcomes, namely by altering the long-run level of social capital, and (iii) point to an alternative explanation of unemployment hysteresis based on access to information. |
| Keywords: | Unemployment, social participation, plant closure, fixed effects, well-being |
| JEL: | J64 I31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp703&r=lab |
| By: | Backes, Benjamin (American Institutes for Research); Holzer, Harry J. (Georgetown University); Dunlop Velez, Erin (RTI International) |
| Abstract: | In this paper we examine a range of postsecondary education and labor market outcomes, with a particular focus on minorities and/or disadvantaged workers. We use administrative data from the state of Florida, where postsecondary student records have been linked to UI earnings data and also to secondary education records. Our main findings can be summarized as follows: 1) Gaps in secondary school achievement can account for a large portion of the variation in postsecondary attainment and labor market outcomes between the disadvantaged and other students, but meaningful gaps also exist within achievement groups, and 2) Earnings of the disadvantaged are hurt by low completion rates in postsecondary programs, poor performance during college, and not choosing high-earning fields. In particular, significant labor market premia can be earned in a variety of more technical certificate and Associate (AA) programs, even for those with weak earlier academic performance, but instead many disadvantaged (and other) students choose general humanities programs at the AA (and even the Bachelor’s or BA) level with low completion rates and low compensation afterwards. A range of policies and practices might be used to improve student choices as well as their completion rates and earnings. |
| Keywords: | postsecondary education, earnings, certificates, associate degrees, bachelor degrees, fields of study, low-income students, minority students |
| JEL: | I23 I24 J24 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8474&r=lab |
| By: | Henry S. Farber |
| Abstract: | In a seminal paper, Camerer, Babcock, Loewenstein, and Thaler (1997) find that the wage elasticity of daily hours of work New York City (NYC) taxi drivers is negative and conclude that their labor supply behavior is consistent with target earning (having reference dependent preferences). I replicate and extend the CBLT analysis using data from all trips taken in all taxi cabs in NYC for the five years from 2009-2013. The overall pattern in my data is clear: drivers tend to respond positively to unanticipated as well as anticipated increases in earnings opportunities. This is consistent with the neoclassical optimizing model of labor supply and does not support the reference dependent preferences model. I explore heterogeneity across drivers in their labor supply elasticities and consider whether new drivers differ from more experienced drivers in their behavior. I find substantial heterogeneity across drivers in their elasticities, but the estimated elasticities are generally positive and only rarely substantially negative. I also find that new drivers with smaller elasticities are more likely to exit the industry while drivers who remain learn quickly to be better optimizers (have positive labor supply elasticities that grow with experience). |
| JEL: | D01 D03 J22 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20604&r=lab |
| By: | Möller, Joachim; Umkehrer, Matthias |
| Abstract: | We analyze the relationship between early-career unemployment and prime-age earnings with German administrative linked employer-employee data. The careers of more than 720,000 male apprenticeship graduates from the cohorts of 1978 to 1980 are followed over 24 years. On average, early-career unemployment has substantial negative effects on earnings accumulated later in life. An identification strategy based on plant closure of the training firm at the time of graduation suggests that the revealed correlation is not the result of unobserved heterogeneity. Scarring effects also vary considerably across the earnings distribution. Workers with a high earnings potential are able to offset adverse consequences of early-career unemployment to a large extent. Workers who are located at the bottom of the prime-age earnings distribution, in contrast, suffer substantial and persistent losses. Our findings imply that a policy with the aim of preventing early-career unemployment would have long-lasting beneficial effects on future earnings. |
| Keywords: | scarring,state dependence,youth unemployment |
| JEL: | J30 J69 C21 C26 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14089&r=lab |
| By: | Bubonya, Melisa (Melbourne Institute of Applied Economic and Social Research); Cobb-Clark, Deborah A. (University of Melbourne); Wooden, Mark (Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | This study examines the impact of involuntary job loss on the mental health of family members. Estimates from fixed-effects panel data models, using panel data for Australia, provide little evidence of any negative spillover effect on the mental health of husbands as a result of their wives' job loss. The mental well-being of wives, however, declines following their husbands' job loss, but only if that job loss results in a sustained period of non-employment or if the couple experienced financial hardship or relationship strain prior to the husband's job loss. A negative effect of parental job loss on the mental health of co-resident adolescent children is also found, but appears to be restricted to girls. |
| Keywords: | unemployment, involuntary job loss, mental health, families, spouses, adolescents, HILDA Survey |
| JEL: | I31 J10 J65 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8588&r=lab |