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on Labour Economics |
| By: | Liina Malk |
| Abstract: | This paper provides an empirical analysis of the individual and macroeconomic determinants of reservation wages with a particular focus on the influence of unemployment duration. Data from the Estonian Labour Force Survey 2011–2013 and instrumental variable regression analysis are used for estimating the determinants of reservation wages. The findings indicate that personal characteristics, the household’s income level and the regional unemployment rate are important factors that affect reservation wage setting. In addition, it appears that unemployment duration has a significant negative influence on the reservation wage, which is mainly driven by men and older individuals |
| Keywords: | unemployment, reservation wage, unemployment duration, instrumental variable regression |
| JEL: | J31 J64 |
| Date: | 2015–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:eea:boewps:wp2014-8&r=lab |
| By: | Guvenen, Fatih; Karahan, Fatih (Federal Reserve Bank of New York); Ozkan, Serdar; Song, Jae (Federal Reserve Bank of New York) |
| Abstract: | We study the evolution of individual labor earnings over the life cycle, using a large panel data set of earnings histories drawn from U.S. administrative records. Using fully nonparametric methods, our analysis reaches two broad conclusions. First, earnings shocks display substantial deviations from lognormality—the standard assumption in the literature on incomplete markets. In particular, earnings shocks display strong negative skewness and extremely high kurtosis—as high as 30 compared with 3 for a Gaussian distribution. The high kurtosis implies that, in a given year, most individuals experience very small earnings shocks, and a small but non-negligible number experience very large shocks. Second, these statistical properties vary significantly both over the life cycle and with the earnings level of individuals. We also estimate impulse response functions of earnings shocks and find important asymmetries: Positive shocks to high-income individuals are quite transitory, whereas negative shocks are very persistent; the opposite is true for low-income individuals. Finally, we use these rich sets of moments to estimate econometric processes with increasing generality to capture these salient features of earnings dynamics. |
| Keywords: | earnings dynamics; life-cycle earnings risk; nonparametric estimation; kurtosis; skewness; non-Gaussian shocks; normal mixture |
| JEL: | E24 J24 J31 |
| Date: | 2015–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:710&r=lab |
| By: | Felix Koenig; Alan Manning; Barbara Petrongolo |
| Abstract: | Wages are only mildly cyclical, implying that shocks to labour demand have a larger short-run impact on unemployment rather than wages, at odds with the quantitative predictions of the canonical search and matching model. This paper provides an alternative perspective on the wage flexibility puzzle, explaining why the canonical model can only match the observed cyclicality of wages if the replacement ratio is implausibly high. We show that this failure remains even if wages are only occasionally renegotiated, unless the persistence in unemployment is implausibly low. We then provide some evidence that part of the problem comes from the implicit model for the determination of reservation wages. Estimates for the UK and West Germany provide evidence that reservation wages are much less cyclical than predicted even conditional on the observed level of wage cyclicality. We present evidence that elements of perceived “fairness” or “reference points” in reservation wages may address this model failure. |
| Keywords: | Reservation wages; wage cyclicality; reference points. |
| JEL: | E24 J31 J64 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60613&r=lab |
| By: | Vallizadeh, Ehsan; Muysken, Joan; Ziesemer, Thomas |
| Abstract: | We examine the effects of endogenous offshoring on cost-efficiency, wages and unemployment in a task- assignment model with skill heterogeneity. Exact conditions for the following insights are derived. The distributional effect of offshoring (high-) low-skill-intensive tasks is similar to (unskilled-) skill-biased technology changes, while offshoring medium-skill-intensive tasks induces wage polarization. Offshoring improves cost-efficiency through international task reallocation and puts a downward pressure on all wages through domestic skill-task reallocation. If elasticities of task substitution are low (high), the downward pressure on wages in neighboring skill segments is low (high) with a net effect of higher (lower) wages and employment. |
| Keywords: | Task Assignment, Offshoring, Skills, Cost-efficiency Effect, Equilibrium Unemployment |
| JEL: | F16 J21 J24 J64 |
| Date: | 2015–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61861&r=lab |
| By: | Christopher Stanton; Catherine Thomas |
| Abstract: | Online markets for remote labor services allow workers and firms to contract with each other directly. Despite this, intermediaries - called outsourcing agencies - have emerged in these markets. This paper shows that agencies signal to employers that inexperienced workers are high quality. Workers affiliated with an agency have substantially higher job-finding probabilities and wages at the beginning of their careers compared to similar workers without an agency affiliation. This advantage declines after high-quality non-affiliated workers receive good public feedback scores. The results indicate that intermediaries have arisen endogenously to permit a more efficient allocation of workers to jobs. |
| Keywords: | Labor market intermediation; Offshoring; Incomplete information |
| JEL: | D02 F16 J30 O30 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60609&r=lab |
| By: | Holger M. Mueller; Paige P. Ouimet; Elena Simintzi |
| Abstract: | We examine how within-firm skill premia–wage differentials associated with jobs involving different skill requirements–vary both across firms and over time. Our firm-level results mirror patterns found in aggregate wage trends, except that we find them with regard to increases in firm size. In particular, we find that wage differentials between high- and either medium- or low-skill jobs increase with firm size, while those between medium- and low-skill jobs are either invariant to firm size or, if anything, slightly decreasing. We find the same pattern within firms over time, suggesting that rising wage inequality–even nuanced patterns, such as divergent trends in upper- and lower-tail inequality–may be related to firm growth. We explore two possible channels: i) wages associated with “routine” job tasks are relatively lower in larger firms due to a higher degree of automation in these firms, and ii) larger firms pay relatively lower entry-level managerial wages in return for providing better career opportunities. Lastly, we document a strong and positive relation between within-country variation in firm growth and rising wage inequality for a broad set of developed countries. In fact, our results suggest that part of what may be perceived as a global trend toward more wage inequality may be driven by an increase in employment by the largest firms in the economy. |
| JEL: | J24 J31 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20876&r=lab |
| By: | Michail Veliziotis; Manos Matsaganis; Alexandros Karakitsios |
| Abstract: | Part-time employment in Europe has continued to grow faster than overall employment during the Great Recession and its aftermath. But as part-time work becomes more prevalent, so does involuntary part-time – at least in most countries. In this paper we focus on Greece and the UK, two European labour markets characterised by different institutions, but also a common trend of rising involuntary part-time (from different levels). We attempt to detect determinants and/or correlates of involuntary part-time, and changes over time. We analyse Labour Force Survey data for 2008 and 2013. We find that the UK labour market appears to be more successful in aligning workers’ preferences with employers’ demand for part-time work. However, as the economic downturn has made full-time jobs scarcer, involuntary part-time work has risen. Moreover, significant gaps in pay and job quality between voluntary and involuntary part-timers persist. In the case of Greece, involuntary part-time was already very high in 2008, in spite of the fact that pay differentials were relatively small, which suggests that part-time jobs were widely viewed by workers as sub-optimal. Under the impact of the recession and the austerity, the Greek labour market has become more flexible but also more insecure. As pay differentials have risen, and non-standard work has been made more precarious, part-time jobs have become even less attractive, so involuntary part-time has grown further still. We conclude that while the structure of the economy and the business cycle explain some of the differences between the two countries and over time, institutional factors and the quality of part-time jobs on offer are of great importance in shaping workers’ attitudes. We suggest that future research should focus on the interaction between shocks and institutions. |
| Keywords: | Part-time work, involuntary part-time, job quality, Greece, UK, economic crisis |
| JEL: | J21 J41 J80 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:hdl:improv:1502&r=lab |
| By: | Pedro S. Martins; Sofia Pessoa e Costa |
| Abstract: | Although activation services such as monitoring, training, or job subsidies have been shown to increase exits from unemployment, there is little comprehensive evidence about the effects of activation during recessions. Here we evaluate a large activation programme introduced in Portugal in 2012, a time of very high unemployment. This programme required specific unemployment benefit recipients to meet jobcentre caseworkers and then participate in active labour market policies. Our analysis draws on rich longitudinal data, the programme's focus on those unemployed for at least six months, and fuzzy regression discontinuity methods. We find that, despite the weak labour market, the programme is very successful as it doubles the monthly reemployment probability. The results are robust to a number of checks, including a falsification exercise based on pre-programme data and an analysis of non-employment and income effects. Moreover, in a novel IV approach using information on all unemployed, we find no evidence of substitution effects such as decreased transitions to employment amongst non-eligible individuals. JEL codes: J64, J68, J22 |
| Keywords: | Public employment services, job search, public policy evaluation |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp590&r=lab |
| By: | van Ours, J.C. (Tilburg University, Center For Economic Research) |
| Abstract: | The Great Recession is characterized by a GDP-decline that was unprecedented in the past decades. This paper discusses the implications of the Great Recession analyzing labor market data from 20 OECD countries. Comparing the Great Recession with the 1980s recession it is concluded that there is a high cross-country correlation of the unemployment rates over the two recessions indicating that some labor markets are more vulnerable to fluctuations in<br/>economic growth than others. Young workers are the most affected by the Great Recession both in terms of unemployment rates as well as employment rates. For prime age workers employment rates were also affected but for older workers the Great Recession did not have a large impact. To analyze how economic growth and labor market institutions have affected unemployment two types of models are estimated. The main conclusion is rather straightforward and has a "one size fits all" character: to reduce unemployment and create<br/>jobs economic growth is needed. |
| Keywords: | Great Recession; unemployment; employment |
| JEL: | J64 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:b88a88a8-c20f-4145-84c2-fbfd30dfa2d5&r=lab |
| By: | Saul Estrin; Ute Stephan; Sunčica Vujić |
| Abstract: | Based upon unique survey data collected using respondent driven sampling methods, we investigate whether there is a gender pay gap among social entrepreneurs in the UK. We find that women as social entrepreneurs earn 29% less than their male colleagues, above the average UK gender pay gap of 19%. We estimate the adjusted pay gap to be about 23% after controlling for a range of demographic, human capital and job characteristics, as well as personal preferences and values. These differences are hard to explain by discrimination since these CEOs set their own pay. Income may not be the only aim in an entrepreneurial career, so we also look at job satisfaction to proxy for nonmonetary returns. We find female social entrepreneurs to be more satisfied with their job as a CEO of a social enterprise than their male counterparts. This result holds even when we control for the salary generated through the social enterprise. Our results extend research in labour economics on the gender pay gap as well as entrepreneurship research on women’s entrepreneurship to the novel context of social enterprise. It provides the first evidence for a “contented female social entrepreneur” paradox. |
| Keywords: | Social entrepreneur; gender pay gap; social enterprise; earnings; job satisfaction |
| JEL: | J28 J31 J71 L32 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60606&r=lab |
| By: | Huttunen, Kristiina (Aalto University); Moen, Jarle (Norwegian School of Economics); Salvanes, Kjell G. (Norwegian School of Economics) |
| Abstract: | It is well documented that displaced workers suffer severe earnings losses, but not why this is so. One reason may be that workers are unable or unwilling to move to regions with better employment opportunities. We study this and find that job displacement increases regional mobility but, surprisingly, we also find that displaced workers who move suffer larger income losses than displaced workers who stay in the same region. This is not a selection effect, but reflects the fact that non-economic factors such as family ties are very important for the decision to migrate. Workers are less likely to move if they have family in the region where they already live, and job loss stimulates workers to relocate with parents and siblings when they live in different regions. Looking at earnings we find that the entire post displacement income difference between displaced movers and stayers is driven by workers moving to regions where their parents live or to rural areas. Furthermore, when looking at long-run family income, we find that the difference between displaced movers and stayers is very modest. With respect to selection, we find that migrants are positively selected on average, but very heterogeneous. They seem to be drawn disproportionately both from the high and the low end of the skill distribution in the region they leave. |
| Keywords: | plant closures, downsizing, regional mobility, earnings, family ties |
| JEL: | J61 J63 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8780&r=lab |
| By: | Kamil Galuscak; Gabor Katay |
| Abstract: | This paper investigates the extent to which cross-country differences in aggregate participation rates can be explained by divergence in tax-benefit systems. We take the example of two countries, the Czech Republic and Hungary, which – despite a lot of similarities – differ markedly in labour force participation rates. We first replicate for Czech household-level data the labour supply estimation for Hungary presented in Benczur et al. (2014) and use the two perfectly comparable estimates to simulate how the aggregate participation rate would change in one country if the other country's tax and social welfare system were adopted. Our estimation results yield similar labour supply elasticities for both countries, suggesting that individual preferences are essentially identical. The simulation results show that about one-half of the total difference in the participation rates of the 15–74 years old population can be explained by differences in the tax-benefit systems. The highest response is obtained for married women or women of childbearing age. This is related to the more generous maternity benefit system in place in Hungary as compared to the Czech Republic. |
| Keywords: | Cross-country comparison, labour supply, microsimulation, participation rate, tax-benefit systems |
| JEL: | C63 H24 I38 J22 P50 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2014/10&r=lab |
| By: | Celeste K. Carruthers (Department of Economics, University of Tennessee); Marianne H. Wanamaker (Department of Economics, University of Tennessee) |
| Abstract: | We decompose the 1940 black-white earnings gap into that part attributable to differences in human capital and an unexplained portion that traces the upper bound of labor market discrimination. We find that differences in measurable human capital play a predominant role in determining 1940 wage and occupational status gaps. Our range of estimates for the unexplained gap, 11 to 17 log points, coincides with the higher end of the range of estimates from the post-Civil Rights era. We estimate that a counterfactual “separate but equal” school quality standard would have reduced wage inequalities by as much as 52 percent. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ten:wpaper:2015-01&r=lab |
| By: | Bonthuis, Boele (University of Amsterdam & Deutsche Bundesbank); Jarvis, Valerie (European Central Bank); Vanhala, Juuso (Bank of Finland Research) |
| Abstract: | This paper analyses euro area Beveridge curves at the euro area aggregate and country level over the past 25 years. Using an autoregressive distributed lag model we find a significant outward shift in the euro area Beveridge curve since the onset of the crisis, but considerable heterogeneity at country level. We test for factors underlying these developments using the local projections method of Jordà (2005). Skill mismatch, high shares of workers in the construction sector, as well as high pre-crisis financial slack and home ownership rates appear strong determinants of outward shifts in Beveridge curves in response to a negative shock. Higher female participation rates mitigate these effects. |
| Keywords: | Beveridge curve; crisis; mismatch; unemployment; labour shortages; vacancies |
| JEL: | E24 E32 J62 J63 |
| Date: | 2015–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2015_002&r=lab |
| By: | Fortin, Nicole M.; Lemieux, Thomas |
| Abstract: | This paper uses the Canadian Labour Force Survey to understand why the level and dispersion of wages have evolved differently across provinces from 1997 to 2013. The starker interprovincial differences are the much faster increase in the level of wages and decline in wage dispersion in Newfoundland, Saskatchewan, and Alberta. This is accounted for by the growth in the extractive resources sectors, which benefited less educated and younger workers the most. We also find that increases in minimum wages since 2005 are the main reason why wages at the very bottom grew more than in the middle of the distribution. |
| Keywords: | wage inequality, provinces, minimum wage, extractive resources industries |
| JEL: | J31 I24 |
| Date: | 2015–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2015-3&r=lab |
| By: | Stops, Michael (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "There is an ongoing discussion that centres on the German labour market reforms (2003- 2005) and the role of these reforms in boosting the German economy. Considering that one of the main objectives of the reforms was to improve the matching process on the labour market, I use rich, high-frequency, and recent administrative panel data to present new details regarding the development of job-matching performance before and after the reform years. The results show that matching productivity increased during all reform stages and slightly deteriorated in 2009 (the year of the financial crisis), even after controlling for the recession. Furthermore, increases in matching productivity have become smaller in recent years. Beyond these findings, the results show detailed differences in the changes in matching productivity on occupational labour markets." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | C23 J44 J64 |
| Date: | 2015–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201502&r=lab |
| By: | Jackline Wahba |
| Abstract: | The evidence on the impact of return migration on the sending country is rather sparse, though growing. The contribution of this paper is in addressing various selectivity problems whilst quantifying the impact of return migration on wages of returnees using non-experimental data. Using Egyptian household level survey data, I estimate the wages of return migrants controlling for several selectivity biases arising from emigration choice, return migration choice, labor force participation choice and occupational choice following return. The findings provide strong evidence that overseas temporary migration results in a wage premium upon return, even after controlling for the various potential selection biases. However the estimates underscore the significance of controlling for both emigration and return migration selections. Ignoring the double selectivity in migration would overestimate the impact of return migration on the wage premium of returnees, as migrants are positively selected relative to non-migrants, but returnees are negatively selected amongst migrants. |
| Keywords: | International return migration, Wages, Developing countries |
| JEL: | F22 J24 O15 O53 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1504&r=lab |
| By: | Courtney Coile |
| Abstract: | A rising share of older workers in the U.S. make use of the Disability Insurance (DI) program in their transition to retirement, with about one in seven men and one in nine women ages 60 to 64 now enrolled in the program. This study explores how financial incentives from Social Security and DI affect retirement decisions, using an option value approach. We find that financial incentives have a significant effect on retirement, particularly for those in poor health or with low education, who may be more actively considering retirement at younger ages. Simulations suggest that increasing the stringency of the screening process for DI would increase the expected working life of DI applicants. |
| JEL: | J14 J26 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20916&r=lab |
| By: | Kalíšková, Klára |
| Abstract: | This study contributes to the female labor supply responsiveness literature by measuring the effect of tax-benefit policies on female labor supply based on a broad sample of 26 European countries in 2005-2010. The tax-benefit microsimulation model EUROMOD is used to calculate a measure of work incentives at the extensive margin-the participation tax rate, which is then used as the main explanatory variable in a female employment equation. This allows me to deal with the endogeneity of income in a new way by using a simulated instrumental variable based on a fixed EU-wide sample of women. Results suggest that a 10 percentage point increase in the participation tax rate decreases the female employment probability by 2 percentage points. The effect is higher for single mothers, for women in the middle of the skills distribution, and in countries that have lower rates of female employment. |
| Date: | 2015–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:ese:emodwp:em1-15&r=lab |
| By: | Chun-Hung Kuo (International University of Japan); Hiroaki Miyamoto (The University of Tokyo) |
| Abstract: | Focusing on both hiring and firing margins, this paper revisits effects of fiscal expansion on unemployment. We develop a DSGE model with search frictions where job separation is endogenously determined. The predictions of the model are in contrast with earlier studies that assume exogenous separation. Our model can capture the empirical pattern of responses of the job finding, separation, and unemployment rates to a government spending shock, obtained from estimating a structural VAR model with the U.S. data. However, our model fails to capture the response of vacancies and the volatility of unemployment. |
| Keywords: | Fiscal Policy, Unemployment, Labor market, Search and matching, Endogenous separation |
| JEL: | E24 E62 J64 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2015-10&r=lab |
| By: | Rafael Dix-Carneiro; Brian K. Kovak |
| Abstract: | We develop a specific-factors model of regional economies that includes two types of workers, skilled and unskilled. The model delivers a simple equation relating trade-induced local shocks to changes in local skill premia. We apply the methodology to Brazil's early 1990s trade liberalization and find statistically significant but modest effects of liberalization on the evolution of the skill premium between 1991 and 2010. The methodology uses widely available household survey data and can easily be applied to other countries and liberalization episodes. |
| JEL: | F14 F16 J31 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20912&r=lab |
| By: | Lindbeck, Assar (Research Institute of Industrial Economics (IFN)); Palme, Mårten (Department of Economics); Persson, Mats (Institute for International Economic Studies) |
| Abstract: | In many countries, sickness absence financed by generous insurance benefits is an important concern in the policy debate. There are strong variations in absence behavior among local geographical areas. Such variations are difficult to explain in terms of observable socioeconomic factors. In this paper, we investigate whether such variations are related to group effects in the form of social interaction among individuals within neighborhoods. Well-known methodological problems arise when trying to answer this question. A special feature of our efforts to deal with these problems is that we adopt several alternative approaches to identify group effects. Our study is based on a rich set of Swedish panel data, and we find indications of group effects in each of our approaches. |
| Keywords: | Income insurance; Sic-pay; Social norms; Neighborhood Effects; Sickness Absence |
| JEL: | H56 I38 J22 Z13 |
| Date: | 2014–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1051&r=lab |
| By: | Giacinta Cestone (Cass Business School, CSEF and ECGI); Chiara Fumagalli (Università Bocconi, CSEF and CEPR); Francis Kramaz (Crest, ENSAE and CEPR); Giovanni Pica (Università di Salerno, CSEF, Paolo Baffi Centre and Centro Luca D’Agliano) |
| Abstract: | Exploiting matched employer-employee data merged with information on the ownership structure of business groups, we document that French groups actively operate Internal Labor Markets (ILMs). For the average group-affiliated firm, the probability to absorb a worker previously employed in its same group exceeds by 9 percentage points the probability to absorb a worker employed outside the group. This average figure hides substantial heterogeneity: ILM activity is higher in more diversified groups, in groups experiencing plant/firm closures and is highest for high-skill occupations. We also find that closure events boost the proportion of separating workers redeployed to group affiliated partners (as opposed to external labor market partners) relative to normal times, i.e. more than 4 years before closure. Those episodes of closure spur ILM activity mainly for blue collar occupations. Overall, these findings suggest that groups respond to idiosyncratic shocks disproportionately relying on ILMs because they allow to save on search costs for human capital intensive occupations, while reducing firing costs for the more unionized occupational categories. |
| Keywords: | Internal Labor Markets, Business Groups, Job-to-Job Mobility |
| Date: | 2015–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:386&r=lab |
| By: | Parsons, Donald O. (George Washington University); Tranæs, Torben (Rockwool Foundation Research Unit); Lilleør, Helene Bie (Rockwool Foundation Research Unit) |
| Abstract: | Denmark has drawn much attention for its active labor market policies, but is almost unique in offering a voluntary public unemployment insurance program requiring a significant premium payment. A safety net program – a less generous, means-tested social assistance plan – completes the system. The voluntary system emerged as one of many European "Ghent systems," essentially government subsidized trade union plans, but has since lost many key features of such plans. We assess system performance using a 10% sample of the Danish population drawn from administrative data. Coverage rates for the voluntary programs are surprisingly high, approximately 80 percent of the workforce, but the program has predictable selection effects, including adverse selection across risk classes and a substantial charity hazard (low coverage among those with generous treatment under the safety net program). The latter appears to explain the difficulty of shifting to a compulsory system; redistribution effects would be concentrated among the previously uninsured in the lowest decile of the income distribution, a problem in the Danish welfare state. |
| Keywords: | unemployment insurance, social assistance, early retirement |
| JEL: | J65 H4 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8783&r=lab |
| By: | Piotr Lewandowski (Instytut Badañ Strukturalnych); Agnieszka Kamiñska (Instytut Badañ Strukturalnych) |
| Abstract: | In this paper we analyze the evolution and the determinants of in-work poverty in Poland, according to three poverty lines: relative, absolute, and the 1998-adjusted poverty line. We find that behind moderately high in-work poverty incidence in Poland there is very high in-work poverty in agriculture and modest in-work poverty in all other sectors. Workers are much less likely to be poor than jobless individuals, especially the unemployed. In fact, the share of adults out of employment is a much stronger predictor of households’ risk of poverty than the level of wages at which they work. Moreover, the share of jobless adults or of agricultural workers has become an increasing determinant of in-work poverty over time. The risk of in-work poverty is also inversely related to the educational attainment and the stability of employment of an individual, which is especially important considering that the incidence of temporary contracts in Poland is the highest across both EU and OECD countries. Existing fiscal and benefit policies have not been sufficient to address in-work poverty and some of its underlying causes in the labor market: we propose four policy recommendations aimed at tackling in-work and total poverty, and at increasing labor market participation and employment. |
| Keywords: | in-work poverty, Poland |
| JEL: | J0 I3 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:report:inworkpoverty&r=lab |