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on Labour Economics |
| By: | Curtis, Mark (Wake Forest University); Hirsch, Barry (Georgia State University); Schroeder, Mary C. (University of Iowa) |
| Abstract: | Employer mandates and other labor demand/supply shocks typically have small effects on wages and employment. These effects should be more discernible using data on employment transitions and wages among new hires rather than incumbents. The Quarterly Workforce Indicators (QWI) dataset provides county by quarter by demographic group data on the number and earnings of new hires, separations, and recalls (i.e., extended leaves). We use the QWI to examine the labor market effects of California's paid family leave (CPFL) policy. Implemented in July 2004, it was the first such policy mandated in the U.S. The analysis compares outcomes for young women in California to those for other workers in California and to workers throughout the U.S. Relative earnings for young female new hires were largely unaffected by CPFL. We find strong evidence that separations (of at least three months) and hiring of young women increased substantively. Many young women who separated later returned to the same firm. CPFL appears to have led not only to increased time with children, but also to a decline in job lock, enhanced mobility, and increased worker flows following universal paid family leave. |
| Keywords: | policy evaluation, paid family leave, new hires, wages, employment, turnover |
| JEL: | J32 J38 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8449&r=lab |
| By: | Sonja C. Kassenboehmer; Sonja G. Schatz |
| Abstract: | Using a nationally representative panel dataset, this study investigates the extent and impact of systematic misconceptions of the currently unemployed concerning their statistical re-employment probability, affecting their labor market behavior in a sub-optimal way. Specifically, people with unemployment experience of 3 to 5 years significantly underestimate their objective re-employment probabilities as determined by the econometrician's all-seeing `Eye of Providence'. Simply having information concerning the individuals' previous unemployment experience is sufficient to make more accurate predictions than the individuals themselves. People who underestimate their re-employment probability are less likely to search actively for a job and indeed more likely to exit the labor force. If re-employed, they are more likely to accept lower wages, work fewer hours, work part-time and experience lower levels of job satisfaction. This information can be used by employment agency case workers to counsel clients better and prevent client adverse behavior and outcomes. |
| Keywords: | Job Insecurity, Re-employment Expectations, Prediction Errors |
| JEL: | J64 J01 D84 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp697&r=lab |
| By: | Auray, Stéphane (CREST); Danthine, Samuel (University of Québec at Montréal); Poschke, Markus (McGill University) |
| Abstract: | While most of the literature on employment protection has focused on government-mandated severance pay, it has recently been documented that a substantial share of severance payments derives from private contracts or collective agreements. This paper studies the determination of these payments. We analyze the problem of joint bargaining over wages and severance payments and examine the impact of unions on these choices. To do so, we use a search and matching model with risk averse workers, in which we assume that workers may be unionized and that bargaining is over wages and severance pay. Bargaining results in levels of severance pay providing full insurance, which depend on the generosity of unemployment benefits and on the job finding rate. Unions opt for higher levels of severance pay given that their higher wage demands imply reduced job creation. Calibrated to 8 European economies, the model predicts bargained levels of severance pay which are close to those found in reality. |
| Keywords: | severance pay, unions, bargaining, Diamond-Mortensen-Pissarides models |
| JEL: | E24 J32 J33 J64 J65 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8422&r=lab |
| By: | Sachs, Andreas; Smolny, Werner |
| Abstract: | This paper analyzes the role of labor market institutions for youth unemployment, as contrasted to total unemployment. The empirical results are basically consistent with an insider view of labor market institutions. Labor market institutions tend to protect (older) employees but might harm (young) entrants. Remarkable is especially the significant and very high effect of employment protection for regular jobs on youth unemployment. In addition, the combined effects of powerful unions and a coordinated wage bargaining system are beneficial for older people and detrimental to youth. Finally, the paper establishes significant labor supply effects and effects of the education system on youth and total unemployment. |
| Keywords: | Youth unemployment,labor market institutions,age-specific unemployment |
| JEL: | E02 E24 J21 J68 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14080&r=lab |
| By: | Aysit Tansel (Department of Economics, Middle East Technical University, Institute for the Study of Labor (IZA) Bonn, Germany and Economic Research Forum (ERF) Cairo, Egypt); Basak Dalgic (Department of Public Finance Hacettepe University); Aytekin Guven (Department of Economics Abant İzzet Baysal University) |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:1419&r=lab |
| By: | Bryson, Alex (National Institute of Economic and Social Research (NIESR)); Freeman, Richard B. (Harvard University) |
| Abstract: | Many large listed firms offer workers the opportunity to buy shares in the firm at discounted rates through employee stock purchase plans (ESPP). The discounted rate creates a gift exchange, where the firm hopes that workers who accept the gift reciprocate with greater loyalty and effort. But ESPPs diverge from standard gift exchange or efficiency wage models. Employees have to invest some of their own money by purchasing shares at the discounted rate to accept the gift. A sizeable number choose to reject the gift. In addition, the value of the ESPP gift varies with the share price and thus with the performance of the firm and the effort of workers in total. For workers who buy subsidized shares, an ESPP sets up a group incentive pay system analogous to profit sharing, all-employee stock options, or an employment ownership scheme that makes part of workers' compensation depend on company performance. Using data from the UK establishments of a multinational firm that places its ESPP at the heart of its employee compensation system, we compare the workplace behaviour of employees who join the ESPP with that of observationally equivalent workers who do not join the plan. We find that workers who purchase shares at subsidized prices work harder for longer hours and have lower quit and absence rates than workers who do not join the plan, but are no more involved in co-monitoring the performance of fellow employees than non-Plan members. We also find perceptions of peers' Plan participation influences workers' behaviour. ESPP joiners socialise more with colleagues outside work: this greater sense of social identity with colleagues, predicted under some gift exchange models, lowers their costs of work effort and may explain why they are more productive than those who do not join the ESPP. These findings highlight the distinct place of subsidized share purchase schemes in the spectrum of gift exchange and group incentive pay systems. |
| Keywords: | share ownership, job search, quits, sickness absence, effort, gift exchange, incentives |
| JEL: | J24 J33 J54 J63 M52 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8537&r=lab |
| By: | Monica Galizzi; Roberto Leombruni; Lia Pacelli; Antonella Bena |
| Abstract: | This is the first analysis of determinants of the return to work of injured workers in an institutional setting where workers earnings are fully compensated during the disability spell. Employers carry the costs associated to the time off work; hence they could face an incentive to put pressure on workers to shorten their leave. We use a matched employer-employees panel data merged with Italian workers compensation records. We find that even when we control for measures of commitment and job security, workers with high wages and high relative wages (who are more costly for the employer) return to work sooner. |
| Keywords: | Return to Work; Injury; Workers’ Compensation; Relative wages; Commitment; Hazard models |
| JEL: | J22 J28 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:139&r=lab |
| By: | Martins, Pedro S. (Queen Mary, University of London); Pessoa e Costa, Sofia (Catholic University Louvain) |
| Abstract: | Although activation services such as monitoring, training, or job subsidies have been shown to increase exits from unemployment, there is little comprehensive evidence about the effects of activation during recessions. Here we evaluate a large activation programme introduced in Portugal in 2012, a time of very high unemployment. This programme required specific unemployment benefit recipients to meet jobcentre caseworkers and then participate in active labour market policies. Our analysis draws on rich longitudinal data, the programme's focus on those unemployed for at least six months, and fuzzy regression discontinuity methods. We find that, despite the weak labour market, the programme is very successful as it doubles the monthly reemployment probability. The results are robust to a number of checks, including a falsification exercise based on pre-programme data and an analysis of non-employment and income effects. Moreover, in a novel IV approach using information on all unemployed, we find no evidence of substitution effects such as decreased transitions to employment amongst non-eligible individuals. |
| Keywords: | public employment services, job search, public policy evaluation |
| JEL: | J64 J68 J22 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8600&r=lab |
| By: | Pestel, Nico (IZA) |
| Abstract: | This paper examines to what extent non-random sorting of spouses affects earnings inequality while explicitly disentangling effects from increasing assortativeness in couple formation from changing patterns of couples' labor supply behavior. Using German micro data, earnings distributions of observed and randomly matched couples are compared to each other. Earnings of hypothetical couples are adjusted for changes in hours worked given the differences in the household context using predictions based on a structural model of labor supply. The main finding is that the impact of marital sorting on earnings inequality has been underestimated in previous approaches. Predicting hours worked for hypothetical couples reveals a strong disequalizing impact of nonrandom sorting on inequality which is stable since the 1980s. Taking labor supply choices as given would suggest a smaller effect. This suggests that increasing earnings correlation among couples is to a considerable extent driven by changing patterns of labor market behavior rather than changes in the assortativeness in couple formation. |
| Keywords: | earnings inequality, sorting, labor supply, Germany |
| JEL: | D31 D63 J12 J22 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8482&r=lab |
| By: | Fouarge D.; Kriechel B.; Dohmen T.J. (ROA) |
| Abstract: | We relate risk attitudes and patience of young graduates from high-school, collegeand university, measured around the time that they start their labor market career in a large representative survey, to the riskiness and timing of earnings in the occupations they choose to work in. We find a systematic positive and significant relation between willingness to take risks and measures of occupational earnings risks and employment risk that we derive from a large administrative data set. Patient individuals are significantly more likely to choose for occupations with a steep earnings profile. Individuals whose economic preferences are not well aligned with the riskiness and timing of earnings in their initial occupation are more likely to change to an occupation that better matches their economic preferences. |
| Keywords: | Microeconomic Behavior: Underlying Principles; Human Capital; Skills; Occupational Choice; Labor Productivity; Wage Level and Structure; Wage Differentials; |
| JEL: | J24 J31 D01 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umaror:2014009&r=lab |
| By: | Peter Arcidiacono; V. Joseph Hotz; Arnaud Maurel; Teresa Romano |
| Abstract: | We show that data on subjective expectations, especially on outcomes from counterfactual choices and choice probabilities, are a powerful tool in recovering ex ante treatment effects as well as preferences for different treatments. In this paper we focus on the choice of occupation, and use elicited beliefs from a sample of male undergraduates at Duke University. By asking individuals about potential earnings associated with counterfactual choices of college majors and occupations, we can recover the distribution of the ex ante monetary returns to particular occupations, and how these returns vary across majors. We then propose a model of occupational choice which allows us to link subjective data on earnings and choice probabilities with the non-pecuniary preferences for each occupation. We find large differences in expected earnings across occupations, and substantial heterogeneity across individuals in the corresponding ex ante returns. However, while sorting across occupations is partly driven by the ex ante monetary returns, non-monetary factors play a key role in this decision. Finally, our results point to the existence of sizable complementarities between college major and occupations, both in terms of earnings and non-monetary benefits. |
| JEL: | C31 I23 J24 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20626&r=lab |
| By: | Alma Espino (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Fernando Isabella (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Martin Leites (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Alina Machado (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | Women behaviors regarding the labor market have changed substantially in recent decades, accompanied by changes in gender roles. These changes, however, were not identical for all women with some groups entering sooner and showing trajectories more similar to those of men. This paper aims to characterize the evolution of female labor supply in Uruguay in the long run and analyze the existence of heterogeneous behaviors for different wage profiles. In order to do so, we estimate women intertemporal and uncompensated labor supply elasticities, both at the intensive and extensive margins and by educational groups and generations. The results show that regardless of the educational level of women's groups, the participation of younger cohorts in the labor market has increased. The estimates confirm that the intertemporal elasticity is positive and greater than the uncompensated both intensive and extensive margins: women adjust their work behavior according to their salary in the lifecycle. This is particularly true for less-educated women, representing evidence contrary to the logic of the "added worker". Positive substitution effect is confirmed, with different magnitudes according to educational level. In particular, the labor supply of women with tertiary education is more sensitive to wages at the extensive than the intensive margin. Finally, intergenerational changes in marginal utility of wealth are found. |
| Keywords: | female labor supply, intertemporal elasticity, uncompensated elasticity |
| JEL: | J16 J22 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-11-14&r=lab |
| By: | Possenriede, Daniel (Utrecht School of Economics); Plantenga, Janneke (Utrecht University) |
| Abstract: | In this paper we analyse the effects of arrangements that provide temporal and locational flexibility of work (TLF), namely flexi-time, telehomework, and part-time work, on employees' satisfaction with the fit between working time and private life and their overall job satisfaction. TLF arrangements provide employees with more control over their working life and therefore are likely to improve on the match between paid work and private life. Based on Dutch household panel data, the results show that TLF arrangements, flexi-time in particular, are generally associated with sizeable increases in satisfaction with working-time fit and overall job satisfaction. Somewhat surprisingly, the effects hardly differ between male and female employees and between employees with and without children. Temporal and locational flexibility apparently appeals not only to employees with family responsibilities but more general to all employees. |
| Keywords: | flexi-time, job satisfaction, locational flexibility, part-time work, telehomework, temporal flexibility, working-time fit |
| JEL: | J22 J28 M52 M54 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8436&r=lab |
| By: | Groh, Matthew (World Bank); McKenzie, David (World Bank); Shammout, Nour (University of Michigan); Vishwanath, Tara (World Bank) |
| Abstract: | Unemployment rates for tertiary-educated youth in Jordan are high, as is the duration of unemployment. Two randomized experiments in Jordan were used to test different theories that may explain this phenomenon. The first experiment tests the role of search and matching frictions by providing firms and job candidates with an intensive screening and matching service based on educational backgrounds and psychometric assessments. Although over 1,000 matches were made, youth rejected the opportunity to even have an interview in 28 percent of cases, and when a job offer was received, rejected this offer or quickly quit the job 83 percent of the time. A second experiment builds on the first by examining the willingness of educated, unemployed, youth to apply for jobs of varying levels of prestige. We find youth apply to only a small proportion of the job openings they are told about, with application rates higher for higher prestige jobs than lower prestige. Youth fail to show up for the majority of interviews scheduled for low prestige jobs. The results suggest that reservation prestige is an important factor underlying the unemployment of educated Jordanian youth. |
| Keywords: | psychometrics, labor market matching, reservation prestige, youth unemployment, Jordan, randomized experiment |
| JEL: | O12 O15 J64 J08 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8518&r=lab |
| By: | ESTRIN, Saul; STEPHAN, Ute; VUJIC, Suncica |
| Abstract: | Based upon unique survey data collected using respondent driven sampling methods, we investigate whether there is a gender pay gap among social entrepreneurs in the UK. We find that women as social entrepreneurs earn 29% less than their male colleagues, above the average UK gender pay gap of 19%. We estimate the adjusted pay gap to be about 23% after controlling for a range of demographic, human capital and job characteristics, as well as personal preferences and values. These differences are hard to explain by discrimination since these CEOs set their own pay. Income may not be the only aim in an entrepreneurial career, so we also look at job satisfaction to proxy for non-monetary returns. We find female social entrepreneurs to be more satisfied with their job as a CEO of a social enterprise than their male counterparts. This result holds even when we control for the salary generated through the social enterprise. Our results extend research in labour economics on the gender pay gap as well as entrepreneurship research on women’s entrepreneurship to the novel context of social enterprise. It provides the first evidence for a “contented female social entrepreneur” paradox. |
| Keywords: | Social entrepreneur, Gender pay gap, Social enterprise, Earnings, Job satisfaction |
| JEL: | J28 J31 J71 L32 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ant:wpaper:2014027&r=lab |
| By: | Böheim, René (University of Linz); Horvath, Thomas (WIFO - Austrian Institute of Economic Research); Mayr, Karin (University of Vienna) |
| Abstract: | We determine workforce composition and wages in firms in the presence of productivity spill-overs between co-workers. In equilibrium, workers' wages depend on the production structure of firms, own group size, and aggregate workforce composition in the firm. We estimate the wage effects of workforce diversity and own group size by birthplace and the implied production structure in Austrian firms using a comprehensive matched employer-employee data set. In our data, we identify a positive effect of workforce diversity and a negative effect of own group size on wages, which suggest that workers of different birthplaces are complements in production on average. |
| Keywords: | workforce composition, productivity spill-overs, worker group size |
| JEL: | D21 D22 F22 J31 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8463&r=lab |
| By: | Gaddis, Isis; Pieters, Janneke |
| Abstract: | This paper investigates gender differences in the impact of Brazil's trade liberalization on labor market outcomes. To identify the causal effect of trade reforms, the paper uses difference-in-difference estimation exploiting variation across microregions in pre-liberalization industry composition. The analysis finds that trade liberalization reduced male and female labor force participation and employment rates, but the effects on men were significantly larger. Thereby, tariff reductions contributed to gender convergence in labor force participation and employment rates. Gender differences are concentrated among the low-skilled population and in the tradable sector, where male and female workers are most likely to be imperfect substitutes. |
| Keywords: | Labor Markets,Labor Policies,Free Trade,Gender and Development,Trade Policy |
| Date: | 2014–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7095&r=lab |
| By: | Joseph G. Altonji; Lisa B. Kahn; Jamin D. Speer |
| Abstract: | We analyze the early labor market outcomes of U.S. college graduates from the classes of 1974 to 2011, as a function of the economic conditions into which they graduated. We have three main findings. First, poor labor market conditions substantially disrupt early careers. A large recession at time of graduation reduces earnings by roughly 10% in the first year, for the average graduate. The losses are driven partially by a reduced ability to find employment and full-time work and partially by a roughly 4% reduction in hourly wage rates. Second, these effects differ by field of study. Those in majors with typically higher earnings experience significantly smaller declines in most labor market outcomes measured. As a result, the initial earnings and wage gaps across college majors widen by almost a third and a sixth, respectively, for those graduating into a large recession. Most of these effects fade out over the first 7 years. Those in higher paying majors are also slightly less likely to obtain an advanced degree when graduating into a recession, consistent with their relative increase in opportunity cost. Our third set of results focuses on a recent period that includes the Great Recession. Early impacts on earnings are much larger than what we would have expected given past patterns and the size of the recession, in part because of a large increase in the cyclical sensitivity of demand for college graduates. The effects also differ much less by field of study than those of prior recessions. |
| JEL: | J24 J31 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20531&r=lab |
| By: | Baert, Stijn (Ghent University); Omey, Eddy (Ghent University) |
| Abstract: | We study the causal impact of revealing pro-unionism during the recruitment stage on hiring chances. To this end, we conduct a randomised field experiment in the Belgian labour market. When matched with employer and sector data, the experimentally gathered data enable us to test the heterogeneity of discrimination against pro-union applicants by the union density in the sector and the size of the firm. We find that disclosure of pro-unionism affects hiring chances in a negative way and that – in line with our expectations based on the literature – this negative impact is stronger in highly unionised sectors. |
| Keywords: | hiring discrimination, union density, trade unions, randomised field experiments |
| JEL: | J53 J71 C93 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8516&r=lab |
| By: | Braun, Helge (University of Cologne); Brügemann, Björn (VU University Amsterdam) |
| Abstract: | We study welfare effects of public short-time compensation (STC) in a model in which firms respond to idiosyncratic profitability shocks by adjusting employment and hours per worker. Introducing STC substantially improves welfare by mitigating distortions caused by public unemployment insurance (UI), but only if firms have access to private insurance. Otherwise firms respond to low profitability by combining layoffs with long hours for remaining workers, rather than by taking up STC. Optimal STC is substantially less generous than UI even when firms have access to private insurance, and equally generous STC is worse than not offering STC at all. |
| Keywords: | short-time compensation, unemployment insurance, welfare |
| JEL: | J65 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8597&r=lab |
| By: | Auspurg, Katrin (Goethe University Frankfurt); Iacovou, Maria (University of Cambridge); Nicoletti, Cheti (University of York) |
| Abstract: | Using an experimental design, we investigate the reasons behind the gendered division of housework within couples. In particular, we assess whether the fact that women do more housework may be explained by differences in preferences deriving from differences in gender identity between men and women. We find little evidence of any systematic gender differences in the preference for housework, suggesting that the reasons for the gendered division of housework lie elsewhere. |
| Keywords: | gender, housework, unpaid work, division of labor, experiment |
| JEL: | J16 J22 C35 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8569&r=lab |
| By: | Paul Beaudry; David A. Green; Benjamin M. Sand |
| Abstract: | We propose and estimate a novel specification of the labor demand curve incorporating search frictions and the role of entrepreneurs in new firm creation. Using city-industry variation over four decades, we estimate the employment - wage elasticity to be -1 at the industry-city level and -0.3 at the city level. We show that the difference between these estimates likely reflects the congestion externalities predicted by the search literature. Also, holding wages constant, an increase in the local population is associated with a proportional increase in employment. These results provide indirect information about the elasticity of job creation to changes in profits. |
| JEL: | J23 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20568&r=lab |
| By: | Raimond Maurer; Olivia S. Mitchell; Ralph Rogalla; Tatjana Schimetschek |
| Abstract: | This paper investigates whether exchanging the Social Security delayed retirement credit (currently paid as an increase in lifetime annuity benefits) for a lump sum would induce later claiming and additional work. We show that people would voluntarily claim about half a year later if the lump sum were paid for claiming any time after the Early Retirement Age, and about two-thirds of a year later if the lump sum were paid only for those claiming after their Full Retirement Age. Overall, people will work one-third to one-half of the additional months, compared to the status quo. Those who would currently claim at the youngest ages are likely to be most responsive to the offer of a lump sum benefit. |
| JEL: | D04 D1 D12 D14 G22 H55 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20614&r=lab |
| By: | Otterbach, Steffen (University of Hohenheim); Sousa-Poza, Alfonso (University of Hohenheim) |
| Abstract: | In this paper, we use 12 waves of the German Socio-Economic Panel to examine the relationship between job insecurity, employability and health-related well-being. Our results indicate that being unemployed has a strong negative effect on life satisfaction and health. They also, however, highlight the fact that this effect is most prominent among individuals over the age of 40. A second observation is that job insecurity is also associated with lower levels of life satisfaction and health, and this association is quite strong. This negative effect of job insecurity is, in many cases, exacerbated by poor employability. |
| Keywords: | job insecurity, employment, employability, well-being, health, Germany |
| JEL: | J21 J22 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8438&r=lab |
| By: | Möller, Joachim (Institute for Employment Research (IAB), Nuremberg); Zierer, Marcus (University of Regensburg) |
| Abstract: | This paper analyzes the impact of the German autobahn net on the economic performance of German regions. To address endogeneity and reverse causation problems, we use historical instrument variables, i.e. a plan of the railroad net in 1890 and a plan of the autobahn net in 1937. We find a statistically and economically significant causal effect of transport infrastructure investments as measured by changes in the length of the autobahn net of West German NUTS 3 areas on regional employment and the wage bill. |
| Keywords: | transport infrastructure, regional labor market performance, historical instrumental variables, reverse causation, new economic geography |
| JEL: | L91 N73 N74 R11 R40 R49 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8593&r=lab |
| By: | Teresa Ghilarducci; Joelle Saad-Lessler (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | Workplace retirement plans (DC and DBs) help workers save for retirement conveniently, consistently, and automatically. But retirement account offer rates are steadily declining. Between 2001-2003 and 2010-2012, the retirement plan offer rate dropped from 63% to 55%. The drop is driven by a decline in both DB and DC plans. Using a probit model and an Oaxaca-Blinder threefold decomposition technique applied to data from the CPS for 2001-2003 and 2010-2012, and using longitudinal analysis of the SIPP 2008 panel waves 3 and 11, the authors find that the labor-contracting environment dominates individual and firm level variables among factors determining whether employers offer a retirement account to their workers. Therefore, attempts to raise retirement account offer rates must address the decline in workers’ bargaining power and the changes in norms relating to benefits provision. This study contributes to the important discussion about the trends in DB and DC coverage and the decline in retirement security. |
| Keywords: | Bargaining power, employer retirement plan offer rate |
| JEL: | J26 J32 J50 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2014-2&r=lab |
| By: | Ali Fakih |
| Abstract: | This paper provides new evidence on the determinants of vacation leave and its relationship to hours worked and hourly wages by examining the case of Canada. Previous studies from the US, using individual level data, have revealed that annual work hours fall by around 53 hours for each additional week of vacation used. Exploiting a linked employer-employee dataset that allows to control for detailed observed demographic, job, and firm characteristics, we find instead that annual hours of work fall by only 29 hours for each additional week of vacation used. Our findings support the hypothesis that pressure at work may lead employees to use more vacation days, but also causes them to work for longer hours. <P> |
| Keywords: | Paid Vacation Leave, Used Vacation Leave, Work Hours, Wages, Linked Employer-Employee Data, |
| JEL: | J22 M52 |
| Date: | 2014–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2014s-40&r=lab |
| By: | Kunze, Astrid (Norwegian School of Economics) |
| Abstract: | This study investigates whether and when during the life cycle women fall behind in terms of career progression because of children. We use 1987-1997 Norwegian panel data that contain information on individuals' position in their career hierarchy as well as a direct measure of their promotions. We measure overall promotions as increases in rank within the same establishment as well as in combination with an establishment change. Women with children are 1.6 percentage points less likely promoted than women without children; this is what we refer to as the family gap in climbing the career. We find that mothers tend to enter on lower ranks than non-mothers. 37 percent of the gap can be explained by rank fixed effects and human capital characteristics. A large part remains unexplained. Graphical analyses show that part of the difference already evolves during the early career. Part of this seems related to the relatively low starting ranks. |
| Keywords: | promotion, women, family gap, human capital, organizational hierarchy, decomposition |
| JEL: | J1 J6 M5 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8478&r=lab |
| By: | Adsera, Alicia; Ferrer, Ana |
| Abstract: | This paper contributes to the analysis of the integration of immigrants in the Canadian labour market by focusing in two relatively new dimensions. We combine the large samples of the restricted version of the Canadian Census (1991-2006) with both a novel measure of linguistic proximity of the immigrant’s mother tongue to that of the destination country and with information of the occupational skills embodied in the jobs immigrants hold. This allows us to assess the role that language plays in the labour market performance of immigrants and to better study their career progression relative to the native born. Results show that linguistic proximity shapes the evolution of job-skill content of immigrant jobs over time and in some cases affects patterns of wage assimilation of immigrants. |
| Keywords: | linguistic ability, occupational assimilation, immigration |
| JEL: | J15 J24 |
| Date: | 2014–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2014-47&r=lab |
| By: | Behaghel, Luc (Paris School of Economics); Crépon, Bruno (CREST); Le Barbanchon, Thomas (CREST) |
| Abstract: | We evaluate an experimental program in which the French public employment service anonymized resumes for firms that were hiring. Firms were free to participate or not; participating firms were then randomly assigned to receive either anonymous resumes or name-bearing ones. We find that participating firms become less likely to interview and hire minority candidates when receiving anonymous resumes. We show how these unexpected results can be explained by the self-selection of firms into the program and by the fact that anonymization prevents the attenuation of negative signals when the candidate belongs to a minority. |
| Keywords: | anonymous applications, discrimination, randomized experiment |
| JEL: | J71 J78 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8517&r=lab |
| By: | Waddell, Glen R. (University of Oregon); Lee, Logan M. (University of Oregon) |
| Abstract: | We model a hiring process in which the candidate is evaluated sequentially by two agents of the firm who each observe an independent signal of the candidate's productivity. We introduce the potential for taste-based discrimination and characterize how one agent's private valuation of the candidate influences the other agent's hiring practices. This influence is often in an offsetting direction and is partially corrective. Yet, this offsetting response can also be large enough that even a high-productivity candidate who is privately favoured by one agent, as may be the case in efforts to increase gender or racial diversity, is less likely to be hired even when the other agent has no preference over private, non-productive attributes. |
| Keywords: | hiring, race, gender, diversity, discrimination |
| JEL: | J1 J7 D8 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8445&r=lab |
| By: | Jeffrey B. Liebman; Erzo F.P. Luttmer |
| Abstract: | The degree to which the Social Security tax distorts labor supply depends on the extent to which individuals perceive the link between current earnings and future Social Security benefits. Some Social Security reform plans have been motivated by an assumption that workers fail to perceive this link and that increasing the salience of the link could result in significant efficiency gains. To measure the perceived linkage between labor supply and Social Security benefits, we administered a survey to a representative sample of Americans aged 50-70. We find that the majority of respondents believe that their Social Security benefits increase with labor supply. Indeed, respondents generally report a link between labor supply and future benefits that is somewhat greater than the actual incentive. We also surveyed people about their understanding of various other provisions in the Social Security benefit rules. We find that some of these provisions (e.g., effects of delayed benefit claiming and rules on widow benefits) are relatively well understood while others (e.g., rules on spousal benefits, provisions on which years of earnings are taken into account) are less well understood. In addition, our survey incorporated a framing experiment, which shows that how the incentives for delayed claiming are presented has an impact on hypothetical claiming decisions. In particular, the traditional "break-even" framing used by the Social Security Administration leads to earlier claiming than other presentations do. |
| JEL: | D83 H55 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20562&r=lab |
| By: | Polachek, Solomon (Binghamton University, New York); Zhang, Xu (State University of New York, Farmingdale); Zhou, Xing (Nankai University) |
| Abstract: | This paper shows how a shorter fecundity horizon for females (a biological constraint) leads to age and educational disparities between husbands and wives. Empirical support is based on data from a natural experiment commencing before and ending after China's 1980 one-child law. The results indicate that fertility in China declined by about 1.2-1.4 births per woman as a result of China's anti-natalist policies. Concomitantly spousal age and educational differences narrowed by approximately 0.5-1.0 and 1.0-1.6 years respectively. These decreases in the typical husband's age and educational advantages are important in explaining the division of labor in the home, often given as a cause for the gender wage gap. Indeed, as fertility declined, which has been the historical trend in most developed countries, husband-wife age and educational differences diminished leading to less division of labor in the home and a smaller gender wage disparity. Unlike other models of division of labor in the home which rely on innately endogenous factors, this paper's theory is based on an exogenous biological constraint. |
| Keywords: | gender wage gap, marital patterns, age at marriage, husband-wife age gap, husband-wife educational gap, homogamy, division of labor in the home, household economics |
| JEL: | J1 J2 J3 J43 J7 J8 N3 N9 O5 Y8 Z13 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8570&r=lab |
| By: | David J. Deming; Noam Yuchtman; Amira Abulafi; Claudia Goldin; Lawrence F. Katz |
| Abstract: | We study employers' perceptions of postsecondary degrees using a field experiment. We randomly assign the sector and selectivity of institution to fictitious resumes and send them to real vacancy postings on a large online job board. According to our results, a bachelor's degree in business from a for-profit "online" institution is 22 percent less likely to receive a callback than a similar degree from a non-selective public institution. Degrees from selective public institutions are relatively more likely to receive callbacks from employers posting higher-salaried jobs, suggesting that employers value college quality and the likelihood of a successful match when contacting applicants. |
| JEL: | I21 J24 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20528&r=lab |
| By: | Hogrefe, Jan; Sachs, Andreas |
| Abstract: | We ask whether sectoral shocks and the subsequent labor reallocation are responsible for unemployment within selected European economies. Our measure of sectoral labor reallocation is adjusted for aggregate influences and the remaining variation is linked to unemployment in country specific dynamic models. For Spain, the ADL-model estimation reveals a significant impact of sectoral reallocation on unemployment that goes beyond usual business cycle patterns. In Italy, there is weaker yet detectable evidence for this mechanism. In Ireland, Portugal and France, no significant influence of sector level shocks on unemployment is found. The results emphasize the potential structural supply side policies have for reducing unemployment in Spain. |
| Keywords: | unemployment,sectoral shocks,labor reallocation,Europe |
| JEL: | E24 J62 J64 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14083&r=lab |
| By: | Rich, Judy (University of Portsmouth) |
| Abstract: | Sixty-seven field experiments of discrimination in markets conducted since 2000 across seventeen countries were surveyed. Significant and persistent discrimination was found on all bases in all markets. High levels of discrimination were recorded against ethnic groups, older workers, men applying to female-dominated jobs and homosexuals in labour markets. Minority applicants for housing needed to make many more enquiries to view properties. Geographical steering of African-Americans in US housing remained significant. Higher prices were quoted to minority applicants buying products. More information made no significant improvement to minority applicant outcomes. Clear evidence of statistical discrimination was found only in product markets. |
| Keywords: | field experiments, discrimination, survey, meta analysis |
| JEL: | J7 C93 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8584&r=lab |
| By: | Nicolas Groshenny (School of Economics, University of Adelaide) |
| Abstract: | We investigate the macroeconomic consequences of fluctuations in the effectiveness of the labor-market matching process with a focus on the Great Recession. We conduct our analysis in the context of an estimated medium-scale DSGE model with sticky prices and equilibrium search unemployment that features a shock to the matching efficiency (or mismatch shock). We find that this shock is not important for unemployment fluctuations in normal times. However, it plays a somewhat larger role during the Great Recession when it contributes to raise the actual unemployment rate by around 1.3 percentage points and the natural rate by around 2 percentage points. The mismatch shock is the dominant driver of the natural rate of unemployment and explains part of the recent shift of the Beveridge curve. |
| Keywords: | Search and matching frictions; Unemployment; Natural rates. |
| JEL: | E32 C51 C52 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2014-07&r=lab |
| By: | Meriküll, Jaanika; Rõõm, Tairi |
| Abstract: | This paper analyses differences in employment volatility in foreign-owned and domestic companies using firm-level data from 24 European countries. The presence of foreign-owned companies may lead to higher employment volatility because subsidiaries of multinational companies react more sensitively to changes in labour demand in host countries or because they are more exposed to external shocks. We assess the conditional employment volatility of firms with foreign and domestic owners using propensity score matching and find that it is higher in foreign-owned firms in about half of the countries that our study covers. In addition, we explore how and why labour demand elasticity differs between these two groups of companies. Our estimations indicate that labour demand can be either more or less elastic in subsidiaries of foreign-owned multinationals than in domestic enterprises, depending on the institutional environments of their home and host countries. JEL Classification: F23, J23, J51 |
| Keywords: | employment volatility, European Union, foreign direct investment, labour demand, labour market institutions |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20141704&r=lab |
| By: | Westéus, Morgan (Department of Economics, Umeå School of Business and Economics); Raattamaa, Tomas (Department of Economics, Umeå School of Business and Economics) |
| Abstract: | This paper adds to the theoretical literature on the incentives of Temporary Work Agencies (TWAs). Using a principal-agent model with hidden action to analyse two main types of contracts between a TWA and a Client Firm (CF), the TWA is shown to potentially act against the best interest of the CF when helping to fill a vacant position. The results also suggest that the adverse effect of the incentive misalignment is larger when workers are leased rather than hired by the CF. However, this effect could potentially be offset by introducing a sufficient level of competition among TWAs. |
| Keywords: | Temporary work agency; client firm; incentives; matching; contracts |
| JEL: | J41 J44 J64 |
| Date: | 2014–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0896&r=lab |
| By: | Cosmin Ilut; Matthias Kehrig; Martin Schneider |
| Abstract: | This paper studies the distribution of employment growth when firms adjust asymmetrically to dispersed but correlated signals. If hiring decisions respond more to bad news than to good news, both aggregate conditional volatility ("macro-volatility") and the cross sectional dispersion of employment growth ("micro-volatility") are countercyclical, as in the data. Fluctuations in both macro and micro volatility emerge endogenously in response to news shocks and do not require exogenous changes in volatility. Establishment level Census data confirm other implications of the mechanism: in particular, employment growth (contrary to TFP shocks) is negatively skewed in both the cross section and the time series, and employment responds more to bad than to good TFP shocks. |
| JEL: | D2 D8 E20 J2 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20473&r=lab |
| By: | Maria Donovan Fitzpatrick |
| Abstract: | Public sector employees receive large fractions of their lifetime income in the form of deferred compensation. The introduction of the opportunity provided to Illinois public school employees to purchase additional pension benefits allows me to estimate employees' willingness-to-pay for benefits relative to the cost of providing them. The results show employees are willing to pay 20 cents on average for a dollar increase in the present value of expected retirement benefits. The findings suggest substantial inefficiency in compensation and cast doubt on the ability of deferred compensation schemes to attract employees. |
| JEL: | H55 H72 H75 I22 J26 J45 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20582&r=lab |