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on Labour Economics |
| By: | Brown, Sarah (University of Sheffield); Taylor, Karl (University of Sheffield) |
| Abstract: | We investigate the relationship between an individuals' reservation wage, i.e. the lowest wage acceptable in order to enter into employment, and unemployment in the local area district. Largely unexplored in the literature this adds to the work which has examined the association between employee wages and unemployment – the 'wage curve'. |
| Keywords: | wage curve, reservation wages, unemployment |
| JEL: | J64 J31 R23 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8519&r=lab |
| By: | Böckerman, Petri (Labour Institute for Economic Research); Ilmakunnas, Pekka (Aalto University); Vainiomäki, Jari (University of Tampere) |
| Abstract: | We use data on twins matched to register-based information on earnings to examine the long-standing puzzle of non-existent compensating wage differentials. The use of twin data allows us to remove otherwise unobserved productivity differences that were the prominent reason for estimation bias in the earlier studies. Using twin differences we find evidence for positive compensation of adverse working conditions in the labor market. |
| Keywords: | compensating differentials, earnings, unobserved ability, productivity |
| JEL: | J28 J31 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8557&r=lab |
| By: | Autor, David (MIT); Dorn, David (University of Zurich); Hanson, Gordon H. (University of California, San Diego); Song, Jae (U.S. Social Security Administration) |
| Abstract: | We analyze the effect of exposure to international trade on earnings and employment of U.S. workers from 1992 through 2007 by exploiting industry shocks to import competition stemming from China's spectacular rise as a manufacturing exporter paired with longitudinal data on individual earnings by employer spanning close to two decades. Individuals who in 1991 worked in manufacturing industries that experienced high subsequent import growth garner lower cumulative earnings, face elevated risk of obtaining public disability benefits, and spend less time working for their initial employers, less time in their initial two-digit manufacturing industries, and more time working elsewhere in manufacturing and outside of manufacturing. Earnings losses are larger for individuals with low initial wages, low initial tenure, and low attachment to the labor force. Low-wage workers churn primarily among manufacturing sectors, where they are repeatedly exposed to subsequent trade shocks. High-wage workers are better able to move across employers with minimal earnings losses, and are more likely to move out of manufacturing conditional on separation. These findings reveal that import shocks impose substantial labor adjustment costs that are highly unevenly distributed across workers according to their skill levels and conditions of employment in the pre-shock period. |
| Keywords: | trade flows, labor demand, earnings, job mobility, social security programs |
| JEL: | F16 H55 J23 J31 J63 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8514&r=lab |
| By: | Baert, Stijn (Ghent University); De Pauw, Ann-Sophie (IÉSEG School of Management); Deschacht, Nick (K.U.Leuven) |
| Abstract: | We investigate the importance of employer preferences in explaining Sticky Floors, the pattern that women are, compared to men, less likely to start to climb the job ladder. To this end we perform a randomised field experiment in the Belgian labour market and test whether hiring discrimination based on gender is heterogeneous by the promotion characteristics of the selected jobs. We find that women get 33% less interview invitations when they apply for jobs implying a first promotion in functional level. On the other hand, their hiring chances are not significantly affected by the job authority level of the job. |
| Keywords: | sticky floors, gender discrimination, hiring discrimination, labour market transitions, European labour markets |
| JEL: | J16 J71 M51 J41 C93 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8447&r=lab |
| By: | Steven J. Davis; John Haltiwanger |
| Abstract: | U.S. labor markets became much less fluid in recent decades. Job reallocation rates fell more than a quarter after 1990, and worker reallocation rates fell more than a quarter after 2000. The declines cut across states, industries and demographic groups defined by age, gender and education. Younger and less educated workers had especially large declines, as did the retail sector. A shift to older businesses, an aging workforce, and policy developments that suppress reallocation all contributed to fluidity declines. Drawing on previous work, we argue that reduced fluidity has harmful consequences for productivity, real wages and employment. To quantify the effects of reallocation intensity on employment, we estimate regression models that exploit low frequency variation over time within states, using state-level changes in population composition and other variables as instruments. We find large positive effects of worker reallocation rates on employment, especially for men, young workers, and the less educated. Similar estimates obtain when dropping data from the Great Recession and its aftermath. These results suggest the U.S. economy faced serious impediments to high employment rates well before the Great Recession, and that sustained high employment is unlikely to return without restoring labor market fluidity. |
| JEL: | E24 J63 L23 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20479&r=lab |
| By: | Blumkin, Tomer (Ben Gurion University); Danziger, Leif (Ben Gurion University) |
| Abstract: | This paper provides a novel justification for using a minimum wage to supplement an optimal tax-and-transfer system. We demonstrate that if labor supply decisions are concentrated along the intensive margin and employment is efficiently rationed, a minimum wage can be socially beneficial by serving as a screening device that targets benefits to the deserving poor. We also show that with a minimum wage in place, a negative marginal tax rate may not be optimal. |
| Keywords: | deserving poor, minimum wage, redistribution, efficient rationing, negative marginal tax rate |
| JEL: | D6 H2 H5 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8418&r=lab |
| By: | Krause, Annabelle (IZA) |
| Abstract: | The relationship between happiness and work is subject to an ever growing empirical literature in economics. The analyses are mostly based on large-scale survey data to measure subjective well-being. Whereas one large strand of research investigates the effect of job loss and becoming unemployed, another field of study focuses on the determinants of job satisfaction evolving around employment conditions, self-employment, and potential public sector satisfaction premiums. A smaller part of the literature investigates potential driving effects of happiness on labor market outcomes. This article will give an overview about the most significant subareas of research and the empirical literature in economics to date. |
| Keywords: | life satisfaction, happiness, anticipation and adaptation effects, employment conditions, self-employment, unemployment, work, job satisfaction, subjective well-being |
| JEL: | I31 J28 J60 J64 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8435&r=lab |
| By: | Flabbi, Luca (Inter-American Development Bank); Macis, Mario (Johns Hopkins University); Moro, Andrea (Vanderbilt University); Schivardi, Fabiano (Bocconi University) |
| Abstract: | We analyze a matched employer-employee panel data set and find that female leadership has a positive effect on female wages at the top of the distribution, and a negative one at the bottom. Moreover, performance in firms with female leadership increases with the share of female workers. This evidence is consistent with a model where female executives are better equipped at interpreting signals of productivity from female workers. This suggests substantial costs of under-representation of women at the top: for example, if women became CEOs of firms with at least 20% female employment, sales per worker would increase 6.7%. |
| Keywords: | executives' gender, gender gap, firm performance, glass ceiling, statistical discrimination |
| JEL: | M5 M12 J7 J16 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8602&r=lab |
| By: | Farber, Henry (Princeton University) |
| 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. Using the model of expectations-based reference points of Koszegi and Rabin (2006), I distinguish between anticipated and unanticipated daily wage variation and present evidence that only a small fraction of wage variation (about 1/8) is unanticipated so that reference dependence (which is relevant only in response to unanticipated variation) can, at best, play a limited role in determining labor supply. 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). |
| Keywords: | labor supply, reference dependent preferences |
| JEL: | J22 D01 D03 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8562&r=lab |
| By: | Saint-Paul, Gilles (University of Toulouse I) |
| Abstract: | We study active labor market policies (ALMP) in a matching model. ALMPs are modelled as a subsidy to job search. Workers differ in their productivity, and search takes place along an extensive margin. An additional job seeker affects the quality of unemployed workers. As a result, the Hosios conditions are no longer valid. To replicate the optimum the worker share in bargaining must exceed the Hosios level, and one must impose a tax on job search activity. The coalition in favor of ALMP is also studied. |
| Keywords: | active labor market policy, matching models |
| JEL: | E24 J6 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8551&r=lab |
| By: | Caponi, Vincenzo (Ryerson University) |
| Abstract: | This paper contributes to the existing literature on public employment showing that the wage setting policy of the public sector can be an important determinant of private employment and unemployment. I look at the case of geographically homogeneous wages across regions with different private sector productivity, and show that public employment generates a crowding out effect against private employment. This effect is larger the larger is the public sector share of total employment. I present a two region two sector model based on Pissarides (2000) heterogeneous search and matching model where vacancies are posted by the private and the public sector as in Quadrini and Trigari (2007) and Gomes (2014). I calibrate the model to the Italian labor market and show that the uniform wage setting policy adopted by the central government, in the presence of productivity unbalance across regions, is responsible for up to 40% of the unemployment gap between the North and South. Policy experiments suggest that reducing the size of public employment reduces unemployment in lower productive regions while allowing for regional wage setting in the public sector almost eliminates the unemployment differential. |
| Keywords: | Italy, European unemployment, regional unemployment, public employment |
| JEL: | E24 J60 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8511&r=lab |
| By: | Antonio di Paolo (Department of Econometrics. University of Barcelona); Ferran Mañé (Universitat Rovira i Virgili & CREIP) |
| Abstract: | Drawing on a very rich data set from a recent cohort of PhD graduates, we examine the correlates and consequences of qualification and skills mismatch. We show that job characteristics such as the economic sector and the main activity at work play a fundamental direct role in explaining the probability of being well matched. However, the effect of academic attributes seems to be mainly indirect, since it disappears once we control for the full set of work characteristics. We detected a significant earnings penalty for those who are both overqualified and overskilled and also showed that being mismatched reduces job satisfaction, especially for those whose skills are underutilized. Overall, the problem of mismatch among PhD graduates is closely related to demand-side constraints of the labor market. Increasing the supply of adequate jobs and broadening the skills PhD students acquire during training should be explored as possible responses. |
| Keywords: | Overskilling, overqualification, doctors, earnings, job satisfaction JEL classification: I20, J24, J28, J31 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:aqr:wpaper:201414&r=lab |
| By: | Hairault, Jean-Olivier (University of Paris 1 Panthéon-Sorbonne); Zhutova, Anastasia (University of Paris 1 Panthéon-Sorbonne, PSE) |
| Abstract: | In this paper, we aim to provide a comprehensive view of the unemployment dynamics generated by different structural shocks. We show that the relative contribution of the job finding and separation rates to the unemployment dynamics depends on a type of structural shocks. Identified using a sign restrictions approach, the shocks of our Bayesian Structural VAR model capture the possible shifts in the three conditions determining labor market equilibrium in any matching models, namely: the Beveridge curve, the job creation condition, and the job destruction condition. Using US data we then identify a shock to the profitability of a match (the aggregate shock), a shock specific to the existing jobs (job-specific shock) and a shock to the efficiency of the matching process (search shock). The two former shocks generate a quite balanced contribution of the two transition rates to the volatility of unemployment, whereas the search shock implies a disproportionate importance of the job finding rate. We find the same result for French data, which assesses the robustness of the pattern generated by these structural shocks. The difference between the two countries lies more in the relative importance of the shocks. The search shock appears more significant in France, which in the end reinforces the predominant role of the job finding rate in this country. |
| Keywords: | unemployment variability, job separation, job finding, Bayesian Var |
| JEL: | E24 J6 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8558&r=lab |
| By: | Dinlersoz, Emin (U.S. Census Bureau); Greenwood, Jeremy (University of Pennsylvania); Hyatt, Henry R. (U.S. Census Bureau) |
| Abstract: | What type of businesses do unions target for organizing? A dynamic model of the union organizing process is constructed to answer this question. A union monitors establishments in an industry to learn about their productivity and decides which ones to organize and when. An establishment becomes unionized if the union targets it for organizing and wins the union certification election. The model predicts two main selection effects: unions secure elections in larger and more productive establishments early in their life-cycles, and among the establishments that experience an election, unions are more likely to win in smaller and less productive ones. These predictions find support in union certification election data for 1977-2007 matched with data on establishment characteristics. Other empirical regularities pertaining to union organizing are also documented. |
| Keywords: | unionization, union organizing, union certification election, diffusion of unionization, Bayesian learning, productivity |
| JEL: | J5 J50 J51 L11 L23 L25 L6 D24 D21 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8416&r=lab |
| By: | Fakih, Ali (Lebanese American University) |
| 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. |
| Keywords: | paid vacation leave, used vacation leave, work hours, wages, linked employer-employee data |
| JEL: | J22 M52 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8469&r=lab |
| By: | Nico Pestel |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp698&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:diwwpp:dp1421&r=lab |
| By: | Jales, Hugo |
| Abstract: | This paper proposes a new framework to empirically assess the effects of the minimum wage in a developing country. This approach allows us to jointly estimate the effects of the minimum wage on unemployment, average wages, sector mobility, wage inequality, the size of the informal sector and on labor tax revenues. I show that under reasonable assumptions, cross-sectional data on the worker's wage and sector status can identify the joint distribution of the latent counterparts of these variables; that is, the sector status and wage that would prevail in the absence of the minimum wage. I also identify parameters that govern how the minimum wage affects the economy. My identification strategy, building on Doyle (2006), specifies a parametric form for the conditional distribution of sector status, given wage. I show how the discontinuity of the wage distribution around the minimum wage identifies the extent of non-compliance with the minimum wage policy, and how the conditional probability of sector status given wage recovers the relationship between latent sector status and wages. I apply the method in the “PNADâ€, a nationwide representative Brazilian cross-sectional dataset from years 2001 to 2009. I show on the application that the assumptions used are not violated in the context of the Brazilian labor market. The results show that the size of the informal sector is increased by around 46% when compared to the scenario in the absence of the minimum wage. This result is driven by both two sources: (i) unemployment effects on the formal sector, (ii) movements of workers from the formal to the informal sector as a unintended consequence of the policy. In addition, the minimum wage legislation strongly affects wage inequality, reducing up to 20% the standard deviation of log-wages, and reduces revenues from labor taxes up to 15%. |
| Keywords: | Minimum Wage, Informality, Unemployment, Density Discontinuity, Design, Wage Inequality, Labor Tax Revenues, Formal Sector |
| JEL: | J60 J31 J30 |
| Date: | 2014–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2014-45&r=lab |
| By: | John M. Abowd; Francis Kramarz; Sébastien Pérez-Duarte; Ian M. Schmutte |
| 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. |
| JEL: | C1 E24 J24 J31 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20472&r=lab |
| By: | John Bound; Murat Demirci; Gaurav Khanna; Sarah Turner |
| Abstract: | The rising importance of Information Technology (IT) occupations in the U.S. economy has been accompanied by an expansion in the representation of high-skill foreign-born IT workers. To illustrate, the share of foreign born in IT occupations increased from about 15.5% to about 31.5% between 1993 and 2010, with this increased representation particularly marked among those younger than 45. This analysis focuses on understanding the role that U.S. higher education and immigration policy play in this transformation. A degree from a U.S. college/university is an important pathway to participation in the U.S. IT labor market, and the foreign-born who obtain U.S. degree credentials are particularly likely to remain in the U.S. Many workers from abroad, including countries like India and China where wages in IT fields lag those in the U.S., receive a substantial return to finding employment in the U.S., even as temporary work visa policies may limit their entry. Limits on temporary work visas, which are particularly binding for those educated abroad, likely increase the attractiveness of degree attainment from U.S. colleges and universities as a pathway to explore opportunities in the U.S labor market in IT. |
| JEL: | I23 J24 J61 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20505&r=lab |
| By: | Aldy, Joseph E. (Resources for the Future) |
| Abstract: | In 2010, the Gulf Coast experienced the largest oil spill, the greatest mobilization of spill response resources, and the first Gulf-wide deepwater drilling moratorium in US history. Taking advantage of the unexpected nature of the spill and drilling moratorium, I estimate the net effects of these events on Gulf Coast employment and wages. Despite predictions of major job losses in Louisiana – resulting from the spill and the drilling moratorium – I find that Louisiana coastal parishes, and oil-intensive parishes in particular, experienced a net increase in employment and wages. In contrast, Gulf Coast Florida counties, especially those south of the Panhandle, experienced a decline in employment. Analysis of accommodation industry employment and wage, business establishment count, sales tax, and commercial air arrival data likewise show positive economic activity impacts in the oil-intensive coastal parishes of Louisiana and reduced economic activity along the Non-Panhandle Florida Gulf Coast. |
| Keywords: | oil spill, employment, wages, ecenomic shocks |
| JEL: | J30 J64 Q40 |
| Date: | 2014–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-27&r=lab |
| By: | Casey B. Mulligan |
| Abstract: | The Affordable Care Act introduces or expands taxes on incomes and full-time employment, beginning in 2014. The purpose of this paper is to characterize the new full-time employment taxes from the perspective of a household budget constraint, measure their magnitude, and assess their likely consequences for employee work schedules. When the ACA is fully implemented, full-time employment taxes will be prevalent and often as large as what workers can earn in five hours of work per week, 52 weeks per year. The economic significance of the ACA's full-time employment taxes varies by demographic group: they are non-monotonic in age, increasing with family size, and negatively correlated with schooling. |
| JEL: | H24 I13 J22 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20580&r=lab |
| By: | David Autor |
| Abstract: | In 1966, the philosopher Michael Polanyi observed, "We can know more than we can tell... The skill of a driver cannot be replaced by a thorough schooling in the theory of the motorcar; the knowledge I have of my own body differs altogether from the knowledge of its physiology." Polanyi's observation largely predates the computer era, but the paradox he identified--that our tacit knowledge of how the world works often exceeds our explicit understanding--foretells much of the history of computerization over the past five decades. This paper offers a conceptual and empirical overview of this evolution. I begin by sketching the historical thinking about machine displacement of human labor, and then consider the contemporary incarnation of this displacement--labor market polarization, meaning the simultaneous growth of high-education, high-wage and low-education, low-wages jobs--a manifestation of Polanyi's paradox. I discuss both the explanatory power of the polarization phenomenon and some key puzzles that confront it. I then reflect on how recent advances in artificial intelligence and robotics should shape our thinking about the likely trajectory of occupational change and employment growth. A key observation of the paper is that journalists and expert commentators overstate the extent of machine substitution for human labor and ignore the strong complementarities. The challenges to substituting machines for workers in tasks requiring adaptability, common sense, and creativity remain immense. Contemporary computer science seeks to overcome Polanyi's paradox by building machines that learn from human examples, thus inferring the rules that we tacitly apply but do not explicitly understand. |
| JEL: | J23 J24 J31 O3 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20485&r=lab |
| By: | Lee, Wang-Sheng (Deakin University) |
| Abstract: | Previous studies have shown that both height and weight are associated with wages. However, by focusing on interpreting the partial effects of either height or weight on wages while holding all else constant, some gaps in our understanding of the complex relationship between body size and wages remain. Utilizing a semi-parametric spline approach, we first establish that a flexible analysis of height and weight provides a useful and meaningful proxy for beauty. A similar flexible analysis of height, weight and wages reveals that some combinations of anthropometric measurements attract higher wage premiums than others and that the optimal combination varies over the life cycle. A main contribution of the paper is in suggesting a novel and practical way of examining the returns to looks in the labor market based on objective anthropometric measurements. |
| Keywords: | height, P-spline, semi-parametric, wages, weight |
| JEL: | J31 J71 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8606&r=lab |
| By: | Rottmann, Horst |
| Abstract: | We examine the economic and social determinants of suicide mortality in a panel of 25 OECD countries over the period 1970 - 2011 and explicitly analyze the effects of unemployment and labor market institutions on suicide rates. In line with a large body of literature, our results suggest that unemployment and social factors are important determinants of suicide mortality. The results also indicate that unemployment benefits decrease suicides of males, while relatively strict employment protection regulations increase suicide mortality. These findings indicate that labor market institutions may influence job satisfaction and the quality of life in industrial countries. We suggest taking into account the role of labor market institutions when analyzing the effects of institutional and economic determinants on health. |
| Keywords: | Panel Data,Suicide,Employment Protection,Unemployment Benefits |
| JEL: | C23 E24 I10 J65 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hawdps:42&r=lab |
| By: | Maurer-Fazio, Margaret (Bates College); Lei, Lei (Liberty Mutual Insurance) |
| Abstract: | This study explores how both gender and facial attractiveness affect job candidates' chances of obtaining interviews in China's dynamic Internet job board labor market. It examines how discrimination based on these attributes varies over occupation, location, and firms' ownership type and size. We employ a resume (correspondence) audit methodology. We establish the facial attractiveness of candidate photos via an online survey. 24,192 applications are submitted to 12,096 job postings across four occupations in 6 Chinese cities. We find sizable differences in the interview callback rates of attractive and unattractive job candidates. Job candidates with unattractive faces need to put in 33% more applications than their attractive counterparts to obtain the same number of interview callbacks. Women are preferred to men in three of our four occupations. Women on average need to put in only 91% as many applications as men to obtain the same number of interview callbacks. |
| Keywords: | beauty, gender, field experiments, discrimination, Chinese firms, hiring, facial attractiveness, internet job boards, resume correspondence audit study |
| JEL: | C93 J71 J23 O53 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8605&r=lab |
| By: | Andersson Joona, Pernilla (SOFI, Stockholm University) |
| Abstract: | Previous studies, mostly from Anglo-Saxon countries, find a positive correlation between the presence of young children in the household and self-employment probabilities among women. This has been seen as an indication of women with young children choosing self-employment as a way of balancing work and family commitments. This paper studies the relationship between children and female self-employment in a country with family friendly policies and a generous welfare system: Sweden. The initial hypothesis is that we will not find evidence of a positive effect of children on self-employment among Swedish women since there are other institutions in place aiming at facilitating the combination of work and family. Using Swedish register data for the period 2004-2008 we do, however, find that the presence of young children increases the probability of choosing self-employment also among Swedish women. The effect is strongest for women with very young children, 0-3 years of age. These results also hold in a panel data model that takes individual unobserved heterogeneity into account. We also analyze time-use data and find, contrary to what has been found in many other countries, that self-employed women spend more, or as much, time on market work than wage-earning women. This raises doubts about whether women in Sweden chose self-employment as a way of balancing work and family commitments. We suggest an alternative interpretation which is that women who chose self-employment while the children are young in fact are women with strong preferences for market work. |
| Keywords: | work, family, self-employment, fertility |
| JEL: | J22 L26 J13 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8486&r=lab |
| By: | Fujii, Mayu; Kambayashi, Ryo |
| Abstract: | Using data from the Japanese Longitudinal Survey on Employment and Fertility (LOSEF), we investigate the long-term effects of employment (or job) displacement on earnings in the Japanese labor market. Using a fixed-effects model, we find significant negative effects of displacement, amounting to 21.7% of monthly earnings. Further, we conclude that the earnings penalty is persistent, with the estimate of earnings losses remaining at 16.2% four years after displacement. Given that our sample includes those who experienced displacement only once in their career and were reemployed as a standard worker within a year, we consider that our estimates of the earnings reductions associated with job displacement are conservative. |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:hit:cisdps:634&r=lab |
| By: | Cristina Borra Marcos (Dpto. Economía e Historia Económica); Francisco Gómez-García (Dpto. Economía e Historia Económica) |
| Abstract: | The recent recession has generated a tremendous increase in unemployment rates in Spain. In this paper we use a very rich repeated cross-section dataset on workers’ job conditions, together with regional unemployment rates, to investigate whether peers’ unemployment affects individuals’ job satisfaction. We find that, once perceived job stability is controlled for, peers’ unemployment shows a positive effect on individuals’ wellbeing at work, larger and more precisely estimated for men and private-sector workers. The impact is highly non-linear and the largest effect is found for unemployment rates exceeding 10%. Interestingly, the results are robust to controlling for workforce selection. La recesión reciente ha generado un gran incremento de las tasas de desempleo en España. En este artículo se utiliza una fusión de cortes transversales sobre las condiciones de trabajo, lo que junto a las tasas de desempleo regionales nos permite investigar si el desempleo de los pares afecta a la satisfacción laboral de los individuos. Llegamos a que, una vez controlada la estabilidad en el empleo, el desempleo de los pares muestra un efecto positivo sobre la satisfacción laboral. Este efecto es mayor para los hombres y los trabajadores del sector privado. Además, el impacto es no lineal y el efecto mayor se encuentra para una tasa de desempleo mayor al 10%. Los resultados son robustos y no hay problemas de selección muestral. |
| Keywords: | Satisfacción laboral, tasa de desempleo, posición relativa, inseguridad laboral, España, Gran Recesión Job satisfaction, unemployment rate, relative position, job insequrity, Spain, Great Recession |
| JEL: | I31 J28 E24 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasec:2014-04&r=lab |
| By: | Bandopadhyay, Titas Kumar |
| Abstract: | In this paper we extend the benchmark model of Diamond-Mortensen-Pissarides in a two-sector general equilibrium framework by introducing a frictionless segment of the labour market. The two sectors are the frictionless informal sector and the frictional formal sector where match friction is the root cause of unemployment. Here,both wages are flexible. Informal wage is determined by the marginal productivity rule of the worker and the formal wage is determined by the Nash-bargaining solution. We alsoexamine the effects of trade reforms and labour market reforms on equilibrium rate of unemployment and wage inequality in our stylitzed economy. We find that both these reforms reduce equilibrium rate of unemployment. However, trade reforms raise wage inequality but labour market reforms reduce it. These results provide a strong theoretical basis for labour market reform in a small open economy characterized by frictional labour market. |
| Keywords: | Economic reforms, Frictional unemployment, Wage inequality, Jobsearching, Job-matching, General equilibrium. |
| JEL: | J6 |
| Date: | 2014–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59819&r=lab |
| By: | Jeffrey R. Brown; James Poterba; David Richardson |
| Abstract: | This paper investigates how the 2009 one-time suspension of the Required Minimum Distribution (RMD) rules associated with qualified retirement plans affected plan distributions at TIAA-CREF, a large retirement services provider. Using panel data on retirement plan participants at TIAA-CREF, we find that roughly one third of those who were affected by minimum distribution rules discontinued their distributions in 2009. The results also show relatively small differences in the suspension probability between those who had 2008 distributions equal to the RMD amount, and might be classified as facing a binding RMD constraint, and those who were taking distributions in excess of the RMD amount before the distribution holiday. The probability of suspension declines substantially with age and rises modestly with economic resources. We find that individuals taking monthly distributions are less likely to suspend distributions than those taking annual distributions, particularly at higher wealth levels. This pattern is consistent with those who choose monthly distributions being more likely to use their distributions to finance consumption. We supplement these results based on administrative record data on retirement plan participants with survey evidence on participant attitudes that affected decisions about suspending distributions. Our findings provide guidance on the revenue consequences of changing RMD rules and offer insights about the role of various behavioral considerations, such as inertia, in modeling distribution behavior. |
| JEL: | H2 J14 J26 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20464&r=lab |
| By: | Krueger, Alan B. (Princeton University); Mas, Alexandre (Princeton University); Niu, Xiaotong (Congressional Budget Office) |
| Abstract: | This paper documents that rotation group bias – the tendency for labor force statistics to vary systematically by month in sample in labor force surveys – in the Current Population Survey (CPS) has worsened considerably over time. The estimated unemployment rate for earlier rotation groups has grown sharply relative to the unemployment rate for later rotation groups; both should be nationally representative samples. The rise in rotation group bias is driven by a growing tendency for respondents to report job search in earlier rotations relative to later rotations. We investigate explanations for the change in bias. We find that rotation group bias increased discretely after the 1994 CPS redesign and that rising nonresponse is likely a significant contributor. Survey nonresponse increased after the redesign, and subsequently trended upward, mirroring the time pattern of rotation group bias. Consistent with this explanation, there is only a small increase in rotation group bias for households that responded in all eight interviews. An analysis of rotation group bias in Canada and the U.K. reveal no rotation group bias in Canada and a modest and declining bias in the U.K. There is not a “Heisenberg Principle” of rotation group bias, whereby the bias is an inherent feature of repeated interviewing. We explore alternative weightings of the unemployment rate by rotation group and find that, despite the rise in rotation group bias, the official unemployment does no worse than these other measures in predicting alternative measures of economic slack or fitting key macroeconomic relationships. |
| Keywords: | unemployment rate, measurement |
| JEL: | J01 J64 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8512&r=lab |
| By: | Berlingieri, Francesco; Zierahn, Ulrich |
| Abstract: | Graduates from Science, Technology, Engineering, and Mathematics (STEM) are usually found to have higher wages and a lower risk of overqualification. However, it is unclear whether we can interpret the effect of STEM subjects on overqualification and wages in a causal way, since individuals choosing these subjects might differ systematically in unobserved characteristics, such as ability. Using data on German male graduates we show that unobserved heterogeneity indeed matters for differences in the risk of overqualification and wages when STEM graduates are compared to the Business & Law group, while it plays only a minor role for the difference between STEM graduates and the Social Sciences & Humanities group. |
| Keywords: | qualification mismatch,wages,sorting,graduates,field of study |
| JEL: | I21 J24 J31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14076&r=lab |
| By: | Stacie Beck (Department of Economics, University of Delaware); Soodong Park |
| Abstract: | The tax competition hypothesis is that market integration places downward pressure on capital taxes and social expenditures. The compensation hypothesis asserts that market integration results in increased social expenditures and higher tax burdens. Using panel data over 1980-2012 from 26 OECD countries, we found evidence of their coexistence and interaction. We find that the negative effects of social spending and tax policy on labor force participation are heightened in open economies, with a stronger impact from compensative social expenditures. Increased social expenditures reduce labor force participation directly and also indirectly through a higher labor tax burden. |
| Keywords: | fiscal policy; open economy; labor force participation; tax competition; compensation hypothesis; panel VAR |
| JEL: | H20 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:dlw:wpaper:14-16&r=lab |
| By: | Serdar Kabaca |
| Abstract: | This paper contributes to the literature by documenting labour income share fluctuations in emerging-market economies and proposing an explanation for them. Time-series data indicate that emerging markets differ from developed markets in terms of changes in the labour share over the business cycle. Labour share is more volatile in emerging markets and is procyclical, especially in countries facing countercyclical interest rates. In contrast, labour share in developed markets is more stable and slightly countercyclical. A frictionless small open-economy real business cycle model cannot account for these facts. I introduce working capital into this model, which generates liquidity need for labour payments. The main result is that the behaviour of the cost of borrowing can predict the right sign of the co-movement between labour share and output in both country groups, and can partly be responsible for the volatility of labour share. I also show that imperfect financial markets in the form of credit restrictions not only amplify the results for the variability of labour share but also help better explain some of the striking business cycle regularities in emerging markets, such as highly volatile consumption, strongly procyclical investment and countercyclical net exports. |
| Keywords: | Business fluctuations and cycles, Development economics, Interest rates, International topics, Labour markets |
| JEL: | E25 F41 E44 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:14-47&r=lab |
| By: | James Buchan; Ankit Kumar; Michael Schoenstein |
| Abstract: | This paper examines wage setting mechanisms for health workers in hospitals across eight different OECD countries. It describes similarities and differences and how fixed or fluid these approaches have been in recent years through health system reforms, labour market dynamics and economic pressures. Based on a review of grey literature and expert interviews with officials from the covered countries, it finds that prior to the economic downturn, several countries had signalled a shift to more local and flexible wage setting in the hospital sector but this ambition does not seem to have been realised in full for public sector hospitals in most OECD countries. Fiscal pressures have led to some “recentralisation” of wage setting, particularly in France, Portugal and the United Kingdom. While the extent of centralisation has been a question of considerable debate, the countries covered in this paper suggest that the benefits of centralised and/ or co-ordinated wage setting generally appear to have been given more attention by policy makers. The current research base on the effectiveness of different wage setting approaches is limited. Policy-making would benefit from developing a better understanding of the impact of wage setting on improved hospital performance and quality.<BR>Ce document analyse les mécanismes de détermination des salaires des agents hospitaliers dans huit pays de l’OCDE. Il décrit les similitudes et les différences entre ces mécanismes et évalue la capacité d’adaptation dont ils ont fait preuve ces dernières années face aux réformes des systèmes de santé, à la dynamique du marché du travail et aux pressions économiques. Il ressort d’un examen de la documentation parallèle et d’entretiens menés avec des experts des pays concernés que si, avant la crise économique, plusieurs pays de l’OCDE avaient annoncé que la détermination des salaires dans le secteur hospitalier allait être plus locale et flexible, la plupart d’entre eux semblent ne pas avoir complètement atteint ces objectifs dans les hôpitaux du secteur public. Les difficultés budgétaires ont en effet contraint à une « recentralisation », notamment en France, au Portugal et au Royaume-Uni. L’intérêt de la centralisation fait l’objet d’un large débat, mais dans les pays couverts dans ce document, il semblerait que les décideurs mettent généralement en avant les avantages de la centralisation et/ou de l’harmonisation de la détermination des salaires. La base de recherches sur l’efficacité des différentes approches est actuellement limitée et le processus décisionnel gagnerait à meilleur compréhension des effets de la détermination des salaires sur l’amélioration de la performance et de la qualité des hôpitaux. |
| JEL: | I11 J45 J50 |
| Date: | 2014–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:77-en&r=lab |