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on Labour Economics |
| By: | Centeno, Mario (Banco de Portugal); Duarte, Claudia (Banco de Portugal); Novo, Alvaro A. (Banco de Portugal) |
| Abstract: | We explore increases in the nominal minimum wage in a difference-in-differences setting to estimate match survival wage elasticity. The elasticity is negative and larger than one for matches directly affected by minimum wage increases, those with paying below the new minimum wage. The impact of the minimum wage is stronger for young workers and the manufacturing sector, groups with a large and increasing share of low-wage workers. Given the low-wage mobility in the Portuguese labor market and the large share of workers directly affected by the minimum wage increase (reaching almost 18%), these results call for a careful analysis of the set of policies that interfere with low-wage employment. |
| Keywords: | minimum wage, employment and match elasticities, spillover |
| JEL: | J23 J38 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8703&r=lab |
| By: | Drydakis, Nick (Anglia Ruskin University) |
| Abstract: | Deviations from heteronormativity affect labour market dynamics. Hierarchies of sexual orientation can result in job dismissals, wage discrimination, and the failure to promote gay and lesbian individuals to top ranks. In this paper, I report on a field experiment (144 job-seekers and their correspondence with 5,549 firms) that tested the extent to which sexual orientation affects the labour market outcomes of gay and lesbian job-seekers in the United Kingdom. Their minority sexual orientations, as indicated by job-seekers' participation in gay and lesbian university student unions, negatively affected their workplace prospects. The probability of gay (lesbian) applicants receiving an invitation for an interview was 5.0% (5.1%) lower than that for heterosexual male (female) applicants. In addition, gays (lesbians) received invitations for interviews by firms that paid salaries that were 1.9% (1.2%) lower than those paid by firms that invited heterosexual male (female) applicants for interviews. In addition, in male- (female-) dominated occupations, gay men (lesbians) received fewer invitations for interviews than their non-gay (non-lesbian) counterparts. Furthermore, gay men (lesbians) also received fewer invitations to interview for positions in which masculine (feminine) personality traits were highlighted in job applications and at firms that did not provide written equal opportunity standards, suggesting that the level of discrimination depends partly on the personality traits that employers seek and on organisation-level hiring policies. I conclude that heteronormative discourse continues to reproduce and negatively affect the labour market prospects of gay men and lesbians. |
| Keywords: | field experiment, heteronormativity, interviews, selection, sexual orientation, wage offers |
| JEL: | C93 J7 J82 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8741&r=lab |
| By: | Elena Dalla Chiara (University of Verona, Italy); Eleonora Matteazzi (University of Trento, Italy); Ilaria Petrarca (University of Verona, Italy) |
| Abstract: | Using 2009 EU-SILC data for France, Italy, the Netherlands and the United Kingdom, we decompose the gender wage gap for prime age workers. We adopt an age group approach to identify when and how the glass door and the glass ceiling effects arise and their persistency over time. The empirical results verify that the raw gender wage gap increases with age. In all considered countries, the glass ceiling effect is completely realized by the age of 30 and increases over time. French, Italian and British women have also to cope with the glass door as they enter the labor market. |
| Keywords: | Gender wage gap, labor force participation, wage decomposition, glass ceiling, glass door. |
| JEL: | C31 C49 J21 J24 J31 J71 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2014-347&r=lab |
| By: | Fries, Jan |
| Abstract: | This study analyses the 2004 Eastern Enlargement to the European Union to obtain evidence on the employment effects of an increase in trade liberalisation. The Enlargement is thought to generate a trade-induced demand shock with no (or only limited) supply effects. Besides the variation over time induced by the Enlargement, identification of the effects is based on a Melitz (2003) type productivity term to differentiate firms by the extent of exposure to the demand shock. The idea is that the effects of the demand shock should be driven by differences in firm-level productivity from the period before the new member countries actually entered the EU. German linked employer-employee data allow to observe the relation of initial establishment productivity with employment changes over a long panel from 1995 to 2009. The estimates show that the Enlargement had a negative effect on establishment-level employment growth, which is driven by increased worker separations and increased job destruction. Besides the overall employment effect, the study focuses on effect heterogeneity across age and skill groups of the workforce. These estimates point to a skill bias in the effect of the Enlargement that disadvantages low- and medium-skilled workers in terms of higher worker separation and job destruction. In addition, lowskilled workers suffer fewer accessions by firms, where against medium-skilled workers enjoy increased accessions and creation of new jobs. Besides this indication for a skill bias, there are no clear indications that point to an age bias in the employment effect of the Eastern Enlargement. |
| Keywords: | market integration,productivity,worker flows,job flows,skills,age |
| JEL: | J21 J63 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14113&r=lab |
| By: | de Brauw, Alan; Russell, Joseph R. D |
| Abstract: | The debate over the wage effects of immigration for native workers is an old one. One side of the debate claims that immigration has little if any negative impact on wages among natives, whereas others suggest that immigration has large, negative effects on native wages. On the latter side of the debate, many point to the work of Borjas (2003), who takes a national view of the US economy and estimates a wage elasticity of -0.4 with respect to immigration. In this paper, we replicate and update Borjas with the 2010 US census data, and use the method to study an even larger, concurrent labor supply shock, namely the entry of women into the labor force. We both find a much lower wage elasticity than Borjas to immigration (-0.2) and estimate a positive, statistically significant relationship between men’s wages and women’s entry into education-experience cells when wages are annualized. We take this evidence to suggest that the Borjas model is misspecified as it inadequately specifies substitution between immigrants and natives, and inadequately controls for structural change in the US economy. |
| Keywords: | Migration, Labor market, Gender, Women, Wages, Macroeconomics, Immigration, labor force, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1402&r=lab |
| By: | Robert Jump |
| Abstract: | This paper proposes an explanation for observed differences in the business cycle volatility of employment and unemployment across a sample of OECD countries. Using an incomplete markets variant of the fair wage real business cycle model, increases in the gross replacement rate of public unemployment insurance are shown to increase the volatility of employment, and decrease the volatility of real wages, ceteris paribus. For a sample of 14 OECD countries over the period 1985-2005, the gross replacement rate is found to be positively correlated with the business cycle volatility of hours worked, lending support to the argument. A secondary contribution, which may be of some use in the incomplete markets literature, is the simple manner in which unemployment is endogenised in the model. |
| Keywords: | Fair Wages; Unemployment; Incomplete Markets |
| JEL: | E24 E32 J64 J65 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1413&r=lab |
| By: | Kunze, Astrid (Norwegian School of Economics); Miller, Amalia (University of Virginia) |
| Abstract: | This paper studies gender spillovers in career advancement using 11 years of employer-employee matched data on the population of white-collar workers at over 4,000 private-sector establishments in Norway. Our data include unusually detailed job information for each worker, which enables us to define seven hierarchical ranks that are consistent across establishments and over time in order to measure promotions (defined as year-to-year rank increases) even for individuals who change employers. We first find that women have significantly lower promotion rates than men across all ranks of the corporate hierarchy, even after controlling for a range of individual characteristics (age, education, tenure, experience) and including fixed effects for current rank, year, industry, and even work establishment. In measuring the effects of female coworkers, we find positive gender spillovers across ranks (flowing from higher-ranking to lower-ranking women) but negative spillovers within ranks. The finding that greater female representation at higher ranks narrows the gender gap in promotion rates at lower ranks suggests that policies that increase female representation in corporate leadership can have spillover benefits to women in lowers ranks. |
| Keywords: | gender differences in promotions, women in leadership, workplace gender spillovers |
| JEL: | J6 J7 M5 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8725&r=lab |
| By: | Gimpelson, Vladimir (CLMS, Higher School of Economics, Moscow); Kapeliushnikov, Rostislav (CLMS, Higher School of Economics, Moscow) |
| Abstract: | This paper discusses the structural change in the Russian employment and explores whether the evolution of employment over 2000-2012 followed the scenario of progressive upgrading in job quality or brought about the polarization of jobs in terms of their quality. Jobs are defined here as occupation-industry cells and their quality is measured through relative earnings and education levels. Using detailed micro-data from a few complementary large scale surveys, we rank all jobs according to the earnings and educational criteria and divide these distributions into 5 quintiles. At the next stage, we explore dynamic changes in job quality and socio-demographic characteristics of workers in different quintiles. The paper rejects the polarization scenario and confirms the upgrading hypothesis. |
| Keywords: | job polarization, job upgrading, job quality, employment restructuring, Russia |
| JEL: | J31 J62 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8688&r=lab |
| By: | Razzak, Weshah |
| Abstract: | We confront microeconomic theory with macroeconomic data. Unemployment results from two main micro-level decisions of workers and firms. Most of the efficiency wage and bargaining theories predict that over the business cycle, unemployment falls below its natural rate when the worker’s real wage exceeds the reservation wage. However, these theories have weak empirical support. Firm’s decision predicts that when the worker’s real wage exceeds the marginal product of labor, unemployment increases above its natural rate. Accounting for this microeconomic decision helps explain almost all the fluctuations of U.S. unemployment. |
| Keywords: | Wage, productivity and unemployment |
| JEL: | D21 E24 |
| Date: | 2014–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61105&r=lab |
| By: | Hryshko, Dmytro (University of Alberta); Juhn, Chinhui (University of Houston); McCue, Kristin (U.S. Census Bureau) |
| Abstract: | We examine changes in inequality and instability of the combined earnings of married couples over the 1980-2009 period using two U.S. panel data sets: Social Security earnings data matched to Survey of Income and Program Participation panels (SIPP-SSA) and the Panel Study of Income Dynamics. Relative to male earnings inequality, the inequality of couples' earnings is both lower in levels and rises by a smaller amount. We also find that couples' earnings instability is lower in levels compared to male earnings instability and actually declines in the SIPP-SSA data. While wives' earnings played an important role in dampening the rise in inequality and year-to-year variation in resources at the family level, we find that marital sorting and coordination of labor supply decisions at the family level played a minor role. Comparing actual couples to randomly paired simulated couples, we find very similar trends in earnings inequality and instability. |
| Keywords: | inequality, instability, matching |
| JEL: | J1 J2 J3 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8729&r=lab |
| By: | Agnieszka Ch³oñ-Domiñczak |
| Abstract: | The European countries’ policies related to female participation in the labour market as well as approach to retirement ages have evolved in the course of the past two decades.This is the response to demographic, social and economic developments in Europe. After many decades of low and falling age of transition to retirement, women engage more in the labour market activity, and they also retire later. In this paper we look at the past and future evolution of transition from work to retirement of women. We also look at the current developments at the labour market as well as directions of changes in pension systems, from the gender equality perspective. Based on the set of labour market and pension system indicators, we propose a Pension Rights Gap Index that measures the distance to full pension rights scenario, taking into account wage levels and duration of employment as well as generosity and income redistribution mechanisms within pension systems. |
| Keywords: | gender, labour market, retirement |
| JEL: | J0 J2 J88 I3 H8 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:wpaper:wp022013&r=lab |
| By: | Centeno, Mario (Banco de Portugal); Novo, Alvaro A. (Banco de Portugal) |
| Abstract: | In a segmented labor market, theory predicts that employment protection has an asymmetric impact on entry and incumbent wages. We explore a reform that increased the protection of open-ended contracts for a well-defined subset of firms, while leaving it unchanged for other firms. The causal evidence points to a reduction in wages for new open-ended and fixed-term contracts and no impact for more tenured workers. The reductions estimated for entrants oscillate between -0.9 and -0.5 p.p., covering a significant part of the expected increase in firing costs. Firms with larger shares of fixed-term contracts shifted the burden to these workers. |
| Keywords: | wages, two-tier systems, quasi-experiment, employment protection |
| JEL: | J31 J32 J63 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8702&r=lab |
| By: | Valeri Sorolla |
| Abstract: | In this paper we analyze the long run effect of exogenous technological growth on the employment rate in a labor market with matching frictions when there is either individual or collective wage setting and different timing for setting wages, labor and capital. We obtain that the effect depends on the timing of setting wages with respect to capital and labor and on the way the unemployment benefit is financed. The type of wage negotiation (individual or collective) does not change really much the effect. The result that appears in most cases is that growth has a negative effect on the long run rate of employment meaning that, in general, growth is bad for employment. |
| Keywords: | :Matching Frictions Unemployment, Growth, Wage Setting Systems. |
| JEL: | E24 O41 |
| Date: | 2014–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:949.14&r=lab |
| By: | Katsuya Takii (Osaka School of International Public Policy (OSIPP), Osaka University) |
| Abstract: | We analyze equilibrium wage contracts in a competitive search model where a firm motivates workers to invest in a match-specific skill. If skill is not critical for production, the contract is first best. If critical, the contract coincides with an efficiency wage contract and cannot attain even second best. Unlike standard efficiency wage models, the wage plays a dual role, advertisement and motivation, which induces a novel source of inefficiency: the competition to attract workers forces a wage to be chosen that increases the ex ante utility of workers at the expense of ex post utility. |
| Keywords: | Search Theory, Incentive, Advertisement, Specific Skill |
| JEL: | E24 J64 M50 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:osp:wpaper:14e009&r=lab |
| By: | Wapler, Rüdiger (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Werner, Daniel (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolf, Katja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Active labour-market policy (ALMP) not only affects the labour-market success of participants. Due to indirect effects, they might also affect the job perspectives of non-participants. Hence, even if ALMP programmes have a positive effect for the participants, this does not mean that ALMP improves the labour-market situation as a whole. Therefore, this paper deals with the question whether ALMP improves the matching-process between job-seekers and vacancies and thus increases the total number of outflows from unemployment into employment at the regional level. To answer this question, we use data for local employment offices of the German Federal Employment Agency for the time period 2006 to 2010 and focus on job-seekers subject to unemployment insurance. As microeconometric evaluation studies show, the search effectiveness of programme participants is low during participation due to the lock-in effect, but ideally increases at the end of the programme. In contrast to previous studies on aggregate effects of ALMP, we take this into account and explicitly differentiate current and former programme participants. The result from our augmented matching function shows that the lock-in effect is also present on the regional level. However, a higher search effectiveness after completion of the programme is not outweighed by potential indirect effects on non-participants. A higher share of former programme participants among the job-seekers in a region leads to an increase of the regional matches. This findings show that the application of ALMP improves the regional matching process. However, this effect varies largely between different types of programmes. Positive effects occur for long-term vocational training and wage subsidies as well as for in-firm training measures. Further, our results show that the effect of the different programme types depends to some extent on the regional labour-market situation." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Arbeitsmarktpolitik - Auswirkungen, Arbeitsuche, Arbeitsuchende, Arbeitslose, matching, offene Stellen, berufliche Reintegration, Teilnehmer, arbeitsmarktpolitische Maßnahme, regionaler Arbeitsmarkt, Integrierte Erwerbsbiografien |
| JEL: | C23 H43 J64 J68 |
| Date: | 2014–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201428&r=lab |
| By: | Michele Belloni (Department of Economics, University Of Venice Cà Foscari); Claudia Villosio (LABORatorio R. Revelli-Collegio Carlo Alberto) |
| Abstract: | The financial deficits of many social security systems caused by ageing populations and stagnating economies are forcing workers to retire later from the labour market. An extended working life combined with rapid technological progress in many sectors, is likely making older workers’ skills obtained in school obsolete. In this context, lifelong investment in training is widely recognized among the international research and policy community as a key element to increase or at least limit the decline in productivity of older workers. This paper investigates the relationship between training undertaken by European older workers and their wages, relying on the Survey of Health, Ageing and Retirement in Europe. Undertaking training activities is associated with 6.3% higher wages. This premium is sizeable and is similar to that of attaining an upper or post-secondary degree instead of a primary or lower-secondary degree. Training wage premiums are highly heterogeneous across countries: they are highest in Austria, Germany, Greece, and Italy and are about half that in France and Spain. No premium is found for Denmark, Sweden, Belgium, the Netherlands, and Switzerland. Training premiums of the first group of countries can be overestimated due to training endogeneity and sample selection bias. |
| Keywords: | Older workers, Training, Wages, Cognitive abilities, Sample selection bias, Attrition |
| JEL: | J14 J24 J31 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2014:27&r=lab |
| By: | Steffen Otterbach; Alfonso Sousa-Poza |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp720&r=lab |
| By: | Jakob Egholt Søgaard (University of Copenhagen) |
| Abstract: | In this paper I investigate the nature of optimization frictions by studying the labor market of Danish students. This particular labor market is an interesting case study as it features a range of special institutional settings that affect students’ incentive to earn income and comparing outcomes across these setting effectively allow you to distinguish between different types of frictions. I find that the considered labor market is significantly affected by optimizations frictions, which masks the bunching at kink points normally associated with a positive labor supply elasticity under standard theory. More concretely I find the dominate optimization friction to be individuals’ inattention about their earnings during the year, while real adjustment cost and gradual learning appears to be of less importance. |
| Keywords: | Optimization frictions, labor supply, bunching, inattention, student labor market |
| JEL: | H21 H24 J22 |
| Date: | 2014–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:kud:epruwp:14-02&r=lab |
| By: | Jan Kleibrink |
| Abstract: | In an empirical study based on data from the German Socio-Economic Panel, the effect of job quality on individual health is analyzed. Extending previous studies methodologically to estimate unbiased effects of job satisfaction on individual health, it can be shown that low job satisfaction affects individual health negatively. In a second step, the underlying forces of this broad effect are disentangled. The analysis shows that the effects of job satisfaction on health run over the channels of job security and working hours above the individual limit. Job quality not only has a strong impact on mental health but physical health is affected as well. At the same time, health-damaging behavior including smoking and being overweight is not affected. |
| Keywords: | Individual Health; Job Satisfaction |
| JEL: | I14 J24 J28 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp718&r=lab |
| By: | Lars Kirkebøen; Edwin Leuven; Magne Mogstad |
| Abstract: | Why do individuals choose different types of post-secondary education, and what are the labor market consequences of those choices? We show that answering these questions is difficult because individuals choose between several unordered alternatives. Even with a valid instrument for every type of education, instrumental variables estimation of the payoffs require information about individuals’ ranking of education types or strong additional assumptions, like constant effects or restrictive preferences. These identification results motivate and guide our empirical analysis of the choice of and payoff to field of study. Our context is Norway’s post-secondary education system where a centralized admission process covers almost all universities and colleges. This process creates credible instruments from discontinuities which effectively randomize applicants near unpredictable admission cutoffs into different fields of study. At the same time, it provides us with strategy-proof measures of individuals’ ranking of fields. Taken together, this allows us to estimate the payoffs to different fields while correcting for selection bias and keeping the next-best alternatives as measured at the time of application fixed. We find that different fields have widely different payoffs, even after accounting for institutional differences and quality of peer groups. For many fields the payoffs rival the college wage premiums, suggesting the choice of field is potentially as important as the decision to enroll in college. The estimated payoffs are consistent with individuals choosing fields in which they have comparative advantage. We also test and reject assumptions of constant effects or restrictive preferences, suggesting that information on next-best alternatives is essential to identify payoffs to field of study. |
| JEL: | C31 J24 J31 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20816&r=lab |
| By: | Marek Antosiewicz; Piotr Lewandowski |
| Abstract: | In this paper we utilize an open economy DSGE model to analyse factors behind the Great Recession and its transmission into labour markets of selected Southern European countries. We introduce a number of shocks which form potential sources of macroeconomic disturbances, in particular: foreign demand, productivity, bargaining power, labour demand, labour supply, government spending, and job destruction shocks. Using quarterly data for the 1995-2013 period, we estimate the model for Germany, Greece, Italy, Portugal and Spain. We identify shocks determining macroeconomic and labour market fluctuations in each of the countries studied. We also conduct experiments allowing us to assess to what extent differences between countries with regard to macroeconomic and labour market fluctuations resulted from different shocks affecting them, and to what extent from different resilience of particular economies. |
| Keywords: | Unemployment, Rigidities, Great Recession, DSGE |
| JEL: | E32 J20 J60 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:wpaper:wp012014&r=lab |
| By: | Mellander, Charlotta (Jönköping International Business School, Martin Prosperity Institute, Rotman School of Management, University of Toronto & Centre of Excellence for Science and Innovation Studies (CESIS)); Stolarick, Kevin (Urban Studies, University of Toronto); Lobo, José (School of Sustainability, Arizona State University) |
| Abstract: | We investigate the effects on individuals’ productivity (captured through their wage income) of two social networks in which individuals are embedded: their residential neighborhood and their workplace. We avail ourselves of Swedish micro-level data which makes it possible to identify individual workers, and who they live next to and work with. We vary the spatial extent of the non-workplace social networkfrom block group to the whole of a metropolitan areato examine which social community most affects an individual’s productivity. We distinguish between individuals engaged in “creative” and “non creative” occupations so as to starkly control for differences in education, training and skills. Our results suggest that residential neighborhoods do matter for individuals’ productivity, although the effect is stronger for noncreatives. For both creatives and noncreatives their workplace group has the greatest effect on income. |
| Keywords: | network effects; neighborhood; productivity; workplace; creative occupations |
| JEL: | J10 R20 R23 |
| Date: | 2014–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0386&r=lab |
| By: | Lederman, Daniel; Rojas, Diego |
| Abstract: | This paper builds on previous studies to uncover evidence suggesting that cyclical fluctuations in returns to schooling are determined by fluctuations in foreign demand, which tend to be positively correlated with returns to schooling. The effect of export fluctuations (driven by changes in foreign demand) seems to be attenuated by labor market rigidities, such as constraints on employers to hire temporary workers on an hourly basis. This evidence suggests that countries that have flexible labor markets and experience volatility in their external demand might also experience volatility in returns to schooling. The paper discusses why this might be a concern for developing countries. |
| Keywords: | Labor Markets,Economic Theory&Research,Labor Policies,Emerging Markets,Debt Markets |
| Date: | 2014–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7144&r=lab |
| By: | Miriam Rinawi (Department of Business Administration, University of Zurich); Uschi Backes-Gellner (Department of Business Administration, University of Zurich) |
| Abstract: | A firm’s willingness to provide and pay for general training in the form of apprenticeship training crucially depends on whether it is able to recoup the training costs. A successful strategy is to retain the most productive apprentices after graduation. This article explores whether training firms can use performance pay plans as a successful retention mechanism. Economic theory predicts that inherently more productive workers self-select into performance pay jobs because of higher expected returns. Using representative data from a large employer-employee survey, we test whether a similar relationship exists in the apprenticeship-training context. Using a panel IV method, we find that both the magnitude and the likelihood of performance pay have a significantly positive effect on a firm’s share of internal apprenticeship graduates. Because of their higher retention success, performance pay firms are in turn better positioned to finance general training. |
| Keywords: | Keywords: apprenticeship training, vocational education, retention, hiring, performance pay, human capital theory |
| JEL: | J24 J33 C23 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0104&r=lab |
| By: | Alexander Gelber; Adam Isen; Judd B. Kessler |
| Abstract: | Programs to encourage labor market activity among youth, including public employment programs and wage subsidies like the Work Opportunity Tax Credit, can be supported by three broad rationales. They may: (1) provide contemporaneous income support to participants; (2) encourage work experience that improves future employment and/or educational outcomes of participants; and/or (3) keep participants “out of trouble.” We study randomized lotteries for access to New York City's Summer Youth Employment Program (SYEP), the largest summer youth employment program in the U.S., by merging SYEP administrative data on 294,580 lottery participants to IRS data on the universe of U.S. tax records and to New York State administrative incarceration data. In assessing the three rationales, we find that: (1) SYEP participation causes average earnings and the probability of employment to increase in the year of program participation, with modest contemporaneous crowdout of other earnings and employment; (2) SYEP participation causes a moderate decrease in average earnings for three years following the program and has no impact on college enrollment; and (3) SYEP participation decreases the probability of incarceration and decreases the probability of mortality, which has important and potentially pivotal implications for analyzing the net benefits of the program. |
| JEL: | J08 J13 J18 J21 J24 J45 J48 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20810&r=lab |
| By: | Speigner, Bradley (Bank of England) |
| Abstract: | The notion that the long-term unemployed are relatively detached from the labour market and therefore exert only little downward pressure on wage inflation has regained significant traction recently. This paper investigates whether the conclusion that long-term unemployment is only weakly related to inflation depends on the assumption of linearity in the Phillips curve. Specifically, once convexity is allowed for during the estimation process, long-term unemployment appears to have a significant negative influence on wage inflation, whereas in a linear Phillips curve model it is only the short-term unemployment rate that matters for wage dynamics. The intuition is simple; by the time the long-term unemployment rate rises during a recession, the economy may have already transitioned into a relatively flat region of the Phillips curve, generating the misperception that the marginal effect of long-term unemployment on wage inflation is smaller than that of short-term unemployment. Linear models which do not capture state dependence in the slope of the Phillips curve would therefore bias downwards the estimated importance of long-term unemployment in explaining wage dynamics if the true Phillips curve is convex. |
| Keywords: | Phillips curve; convexity; natural rate of unemployment; Kalman filter; long-term unemployment; hysteresis |
| JEL: | C22 E24 E32 J64 |
| Date: | 2014–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0519&r=lab |
| By: | Ritter, Joseph A.; West, Kristine L. |
| Abstract: | Field of study specializes individuals’ human capital in ways that might be either substitutable or complementary to technological change. We study changes in the earnings distribution of the college-educated population between 1993 and 2010 using the National Survey of College Graduates. After documenting changes that increase earnings inequality, we decompose them into composition and wage-structure effects. We find that composition effects account for virtually none of the growth of inequality and, in fact, are surprisingly small, even after we incorporate field of study into the decomposition. We conclude with speculation about why large inter-field changes in earnings did not lead to comparable changes in the flow of entrants. |
| Keywords: | Consumer/Household Economics, Labor and Human Capital, |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umaemp:195683&r=lab |
| By: | Alec Brandon; John List; Steffen Andersen; Uri Gneezy |
| Abstract: | Perhaps the most powerful form of framing arises through reference dependence, wherein choices are made recognizing the starting point or a goal. In labor economics, for example, a form of reference dependence, income targeting, has been argued to represent a serious challenge to traditional economic models. We design a field experiment linked tightly to three popular economic models of labor supply-two behavioral variants and one simple neoclassical model--to deepen our understanding of the positive implications of our major theories. Consistent with neoclassical theory and reference--dependent preferences with endogenous reference points, workers (vendors in open air markets) supply more hours when presented with an expected transitory increase in hourly wages. In contrast with the prediction of behavioral models, however, when vendors earn an unexpected windfall early in the day, their labor supply does not respond. A key feature of our market in terms of parsing the theories is that vendors do not post prices rather they haggle with customers. In this way, our data also speak to the possibility of reference-dependent preferences over other dimensions. Our investigation again yields results that are in line with neoclassical theory, as bargaining patterns are unaffected by the unexpected windfall. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00392&r=lab |
| By: | Enrico Marelli; Elena S. Vakulenko (National Research University Higher School of Economics) |
| Abstract: | Youth unemployment is a serious problem in many European countries. In the first part of the paper, we consider the aggregate trends in some EU countries and in Russia; we especially investigate the recent period after the global crisis and the Great Recession. We then consider the different types of determinants, including macroeconomic conditions, structural determinants, labour market institutions and regulations. However, the focus of our analysis is on the role played by individual and family determinants such as age, gender, education level, marital status, health, household income, housing conditions. The econometric part of the paper makes use of Eurostat micro-level data EU-SILC for Italy and RLMS-HSE data set for Russia. We use a Heckman probit model to estimate the unemployment risk of young people during the period 2004-2011. Our main research question is to explain the probability of being unemployed for young people in terms of their personal characteristics and compare these outcomes with results for the same model for adults. We take also into account some macro variables, such as living in urban areas or the regional unemployment rate. The results are of interest, since the two countries have quite different labour market institutions, besides having different levels of youth unemployment. However, most of the explanatory variables act in the same direction in both countries and it is interesting to compare the relative size of such effects, which we measure through the average partial effects. |
| Keywords: | youth unemployment, individual determinants of unemployment, regional unemployment, Heckman probit. |
| JEL: | J64 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:74/ec/2014&r=lab |
| By: | Pierre Deschamps (Département d'économie); José de Sousa (Université Panthéon-Sorbonne - Paris I) |
| Abstract: | This paper assesses the impact of labor mobility on racial discrimination. We present an equilibrium search model that reveals an inverted U-shaped relationship between labor mobility and race-based wage differentials. We explore this relationship empirically with an exogenous mobility shock on the European soccer labor market. The Bosman ruling by the European Court of Justice in 1995 lifted restrictions on soccer player mobility. Using a panel of all clubs in the English first division from 1981 to 2008, we compare the pre- and post-Bosman ruling market to identify the causal effect of intensified mobility on race-based wage differentials. Consistent with a taste-based explanation, we find evidence that increasing labor market mobility decreases racial discrimination. |
| Keywords: | Labor market; discrimination; discrimination; mobility; soccer; football; mobilité; marché du travail; equilibrium search model |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/6ftmcu468j8a49bft2hrpi6uql&r=lab |
| By: | Ozabaci, Deniz (University of Connecticut); Henderson, Daniel J. (University of Alabama) |
| Abstract: | In this paper, we employ a partially linear nonparametric additive regression estimator, with recent U.S. Current Population Survey data, to analyze returns to schooling. Similar to previous research, we find that blacks and Hispanics have higher rates of return on average. However, for married males, while non-Hispanic whites have lower returns on average, they typically possess the highest returns in the sample. For females, we are able to show that Hispanics have uniformly higher returns over non-Hispanic whites for the full sample. When we restrict our analysis to females whose highest level of education is a high-school diploma, we find average, but no longer uniformly higher returns. However, these uniformly higher returns resurface for college graduates. |
| Keywords: | additive, Mincer regressions, nonparametric, rate of return to education |
| JEL: | C14 J24 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8736&r=lab |
| By: | Mosca, Irene (Trinity College Dublin); Barrett, Alan (ESRI, Dublin) |
| Abstract: | The few studies that have attempted to identify the causal effects of retirement on mental health and well-being have provided conflicting evidence. Hence, whether retirement affects mental health positively or negatively is still unclear. Our primary objective is to investigate the impact of retirement on mental health as measured by the 20-item Center for Epidemiological Studies Depression Scale (CES-D). We use data from the first two waves of The Irish Longitudinal Study on Ageing (TILDA). This is a nationally representative sample of individuals aged 50 and over and living in Ireland. To deal with possible endogeneity problems, we use first-differenced estimation models and control for a broad range of life events occurring between the two waves. These include transition to retirement but also demographic, social, economic and physical health events. As part of the TILDA survey, reasons for retirement are asked. We exploit this information and distinguish between individuals who retired voluntarily, involuntarily or because of own ill health. We find that involuntary, or forced, retirement has a negative and statistically significant effect on mental health. In contrast, we find no effects for voluntary retirement. We also find that retirement due to ill health is negatively associated with mental health. |
| Keywords: | mental health, retirement |
| JEL: | J26 J14 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8723&r=lab |
| By: | Angana Banerji; Sergejs Saksonovs; Hannah Huidan Lin; Rodolphe Blavy |
| Abstract: | The SDN will assess the youth unemployment problem in advanced European countries, with a special focus on the euro area. It will document the main trends in youth and adult unemployment in 22 European countries before and after the global financial crisis. It will identify the main drivers of youth and adult unemployment, focusing in particular on the role of the business cycle and structural characteristics of the labor market. It will outline the main elements of a comprehensive strategy to address the problem. |
| Keywords: | Unemployment;Europe;Euro Area;Labor markets;Labor market characteristics;Business cycles;Labor market policy;Developed countries;Youth employment, Okun’s law, business cycle, labor market factors |
| Date: | 2014–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfsdn:14/11&r=lab |
| By: | Chaudhary, Ruchika; Verick, Sher |
| Abstract: | This paper reviews the literature on female labour force participation and women’s employment, with the aim of better understanding the drivers of labour market outcomes. This paper also attempts to explore the situation of women globally and in South Asia, through an examination of long-term trends of female employment. It goes further, explaining the reasons for the falling participation of women in the Indian labour market. In doing so, an econometric analysis has been carried out to understand the most important factors that may affect their probability of being in any of the various labour market outcomes, separately for the rural and urban labour markets in India. The findings reveal the importance of education, especially of post-secondary schooling. |
| Keywords: | labour force participation, women workers, womens empowerment, labour market segmentation, India, South Asia, taux d'activité, travailleuses, autonomisation des femmes, segmentation du marché du travail, Inde, Asie du Sud, tasa de actividad de mano de obra, trabajadoras, potenciación de las mujeres, segmentación del mercado de trabajo, India, Asia del Sur |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:486789&r=lab |
| By: | Deuchert, Eva; Huber, Martin |
| Abstract: | Many instrumental variable (IV) regressions include control variables to justify (conditional) independence of the instrument and the potential outcomes. The plausibility of conditional IV independence crucially depends on the timing when the control variables are determined. This paper systemically works through different IV models and discusses the (conditions for the) satisfaction of conditional IV independence when controlling for covariates measured (a) prior to the instrument, (b) after the treatment, or (c) both. To illustrate these identification issues, we consider an empirical application using the Vietnam War draft risk as instrument either for veteran status or education to estimate the effects of these variables on labor market and health outcomes. |
| Keywords: | Instrument, control variables, conditional independence, covariates |
| JEL: | C26 J24 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2014:39&r=lab |
| By: | Gevrek, Deniz (Texas A&M University Corpus Christi); Gevrek, Z. Eylem (University of Konstanz); Guven, Cahit (Deakin University) |
| Abstract: | Using the Children of the Immigrants Longitudinal Study (CILS), we examine the association between education at the intensive margin and twenty pecuniary and non-pecuniary adult outcomes among first- and second-generation American immigrant youth. Education at the intensive margin is measured by two widely used standardized math and reading test scores, national percentile rankings on these tests and cumulative grade point average (GPA) in both middle and high school. Our findings provide evidence that the academic achievement of immigrant children in early adolescence is an accurate predictor of later life outcomes. We also examine a novel hypothesis that relative academic performance of immigrant children in high school compared to middle school, which could be an indicator of change in adolescent aspirations and motivation as well as the degree of adaptation and assimilation to the host country, has an effect on their adult outcomes even after controlling for the levels of academic performance in middle and high school. The results suggest that an improvement in GPA from middle school to high school is associated with favorable adult outcomes. Several sensitivity tests confirm the robustness of main findings. |
| Keywords: | economics of education, human capital, immigrant well-being, immigrant academic performance, immigrant assimilation |
| JEL: | I2 J15 J24 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8697&r=lab |
| By: | Timothy M. Diette (Department of Economics, Washington and Lee University); Manu Raghav (Department of Economics and Management, DePauw University) |
| Abstract: | While students typically want to earn high grades in college, they also, and perhaps even more so, want to earn high salaries after graduating college. In this paper, we explore whether there is a relationship between average grades earned in classes and the future salaries earned by graduates with the major associated with that course. Using student level data from a selective private liberal arts college, we find an inverse relationship between grades in courses offered by different departments and the national average mid-career salaries of college graduates from these majors. This suggests students face a trade-off between current grades while in college versus higher expected earnings in the future. Furthermore, students with low Math SAT scores are likely to get much worse grades in majors with higher salaries and students with low Verbal SAT scores are likely to get higher grades in majors with higher salaries, even after controlling for whether the individual is an international student. Finally, the advantage that females have over males in average course grade diminishes significantly in majors with higher salaries. |
| Keywords: | Grades; Earnings. |
| JEL: | A22 I21 J31 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:dew:wpaper:2014-02&r=lab |