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on Labour Economics |
| By: | Böckerman, Petri; Skedinger, Per; Uusitalo, Roope |
| Abstract: | We construct a multi-country employer-employee data to examine the consequences of employment protection. We identify the effects by comparing worker exit rates between units of the same firm that operate in two countries that have different seniority rules. The results show that last-in-first-out rules reduce dismissals of older, more senior workers, especially in shrinking multinational firms, and increase their bargaining power, resulting in a steeper seniority-wage profile. |
| Keywords: | Multi-country linked employer-employee data, Employment protection legislation, Seniority rules |
| JEL: | J08 J63 K31 K32 L50 |
| Date: | 2015–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68581&r=lab |
| By: | Mullen, Kathleen (RAND); Staubli, Stefan (University of Calgary) |
| Abstract: | A key component for estimating the optimal size and structure of disability insurance (DI) programs is the elasticity of DI claiming with respect to benefit generosity. Yet, in many countries, including the United States, all workers face identical benefit schedules, which are a function of one's labor market history, making it difficult to separate the effect of the benefit level from the effect of unobserved preferences for work on individuals' claiming decisions. To circumvent this problem, we exploit exogenous variation in DI benefits in Austria arising from several reforms to its DI and old age pension system in the 1990s and 2000s. We use comprehensive administrative social security records data on the universe of Austrian workers to compute benefit levels under six different regimes, allowing us to identify and precisely estimate the elasticity of DI claiming with respect to benefit generosity. We find that, over this time period, a one percent increase in potential DI benefits was associated with a 1.2 percent increase in DI claiming. |
| Keywords: | disability insurance, benefit generosity, labor force withdrawal, claiming elasticity |
| JEL: | H55 J14 J22 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9549&r=lab |
| By: | Bellmann, Lutz (Institute for Employment Research (IAB), Nuremberg); Hübler, Olaf (Leibniz University of Hannover) |
| Abstract: | This contribution investigates whether working time accounts are beneficial for the performance of German establishments. Based on the representative German Establishment Panel of the Institute for Employment Research during the period 2008-2013, effects on productivity, wages, sales, firm size, investments, further training, labor mobility, working hours, operating surplus and profits as performance indicators are estimated. Heterogeneity and robustness are investigated by a subgroup analysis where we distinguished between establishments with a high and a low share of qualified workers, between firms with strong and weak sales fluctuations. Additionally, different lengths of the agreed compensation period and reasons for longer time out periods of the employees are considered. Unobserved firm effects as well as interdependencies between important performance indicators and working time accounts are analyzed. OLS estimates, Lewbel's instrumental estimator and IV panel approaches are applied. As major results we find that productivity and investments are positively correlated with working time accounts. No significant effects of working time accounts can be detected on wages, the number of employees and operating surplus of IV panel estimates. However, on average, we find a tendency towards negative effects on profits. This result is less likely in establishments with a high share of skilled workers. Under strong sales fluctuations we find positively significant on the operating surplus. These mixed results hint to a conflict between the employers and employees interests concerning working time accounts that result in compromise solutions. |
| Keywords: | flexible working time, working time accounts, establishments, productivity, wages, labor mobility, operating surplus, profits, share of qualified workers, sales fluctuations, compensation period |
| JEL: | C22 D21 J21 J22 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9583&r=lab |
| By: | Baert, Stijn (Ghent University) |
| Abstract: | We investigate whether the publicly available information on Facebook about job applicants affects employers' hiring decisions. To this end, we conduct a field experiment in which fictitious job applications are sent to real job openings in Belgium. The only characteristic in which these candidates differ is the unique Facebook profile that can be found online with their name. Candidates with the most beneficial Facebook picture obtain approximately 39% more job interview invitations compared to candidates with the least beneficial picture. In addition, we find suggestive evidence for a higher effect of Facebook profile picture appearance on hiring chances when candidates are highly educated and when recruiters are female. |
| Keywords: | hiring, screening, Facebook, Internet, personality, attractiveness |
| JEL: | C93 D83 J24 J79 L86 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9584&r=lab |
| By: | Ernesto Reuben; Paola Sapienza; Luigi Zingales |
| Abstract: | Using an incentivized measure of test for competition, this paper investigates whether this taste explains subsequent gender differences in earnings and industry choice in a sample of high-ability MBA graduates. We find that “competitive” individuals earn 9% more than their less competitive counterparts do. Moreover, gender differences in taste for competition explain around 10% of the overall gender gap. We also find that competitive individuals are more likely to work in high-paying industries nine years later, which suggests that the relation between taste for competition and earnings persists in the long run. Lastly, we find that the effect of taste for competition emerges over time when MBAs and firms interact with each other. |
| JEL: | C93 D81 D84 I21 J16 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21695&r=lab |
| By: | Kosfeld, Reinhold (University of Kassel); Dreger, Christian (DIW Berlin) |
| Abstract: | The wage curve introduced by Blanchflower and Oswald (1990, 1994) postulates a negative correlation between wages and unemployment. Empirical results focus on particular theoretical channels establishing the relationship. Panel models mostly draw on unionized bargaining or the efficiency wage hypothesis. Spatial econometric approaches can be rationalized by monopsonistic competition. However, the approaches either ignore the issue of nonstationarity or treat the data as if it were nonspatial. In this paper, we adopt a global cointegration approach recently proposed by Bienstock and Felsenstein (2010) to account for nonstationarity of regional data. By specifying a spatial error correction model (SpECM), equilibrium adjustments are considered in both space and time. Applying the methodology for West German labour markets, we find strong evidence for the existence of a long-run wage curve with spatial effects. |
| Keywords: | wage curve, regional labour markets, spatial panel models, global cointegration analysis |
| JEL: | J30 J60 C33 R15 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9577&r=lab |
| By: | Vodopivec, Matija (International School for Social and Business Studies, Celje, Slovenia); Laporsek, Suzana (University of Primorska); Dolenc, Primož (University of Primorska); Vodopivec, Milan (International School for Social and Business Studies, Celje, Slovenia) |
| Abstract: | The paper analyses the effects of a 2011 increase in the unemployment benefit replacement rate on the job-finding rate of Slovenian benefit recipients. Using registry data on the universe of Slovenian unemployment benefit recipients, we exploit legislative changes that selectively increased the replacement rates for certain groups of workers while leaving them unchanged for others. Applying this quasi-experimental approach, we find that increasing the replacement rate significantly decreased the hazard rate of the transition from unemployment to employment, with an implied elasticity of the hazard rate with respect to benefit replacement rate being 0.7 to 0.9. The results also show that the increase of the unemployment benefit replacement rate does not affect the job-finding probability of jobseekers whose reason for unemployment is employer exit, and that the effects of the increase of replacement rate are present only upon exit to employment and not to inactivity. |
| Keywords: | unemployment insurance, unemployment benefit replacement rate, job-finding rate |
| JEL: | J64 J65 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9548&r=lab |
| By: | Wiczer, David (Federal Reserve Bank of St. Louis) |
| Abstract: | In this paper, I quantify the contribution of occupation-specific shocks and skills to unemployment duration and its cyclical dynamics. I quantify specific skills using microdata on wages, estimating occupational switching cost as a function of the occupations' difference in skills. The productivity shocks are consistent with job finding rates by occupation. For the period 1995-2013, the model captures 69.5% of long-term unemployment in the data, while a uniform finding rate delivers only 47.2%. In the Great Recession, the model predicts 72.9% of the long-term unemployment that existed in the data whereas a uniform finding rate would predict 57.8%. |
| Keywords: | Occupational Choice; Human Capital; Unemployment Duration |
| JEL: | E24 E32 J24 J64 |
| Date: | 2015–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2015-042&r=lab |
| By: | Tumen, Semih (Central Bank of Turkey) |
| Abstract: | Estimates on the effect of job contact method – i.e., informal versus formal search – on wage offers vary considerably across studies, with some of them finding a positive correlation between getting help from informal connections and obtaining high-paying jobs, while others finding a negative one. In this paper, I theoretically investigate the sources of discrepancies in these empirical results. Using a formal job search framework, I derive an equilibrium wage distribution which reveals that the informal search yields for some groups higher and for some others lower wages than formal search. The key result is the existence of nonmonotonicities in wage offers. Two potential sources of these nonmonotonicities exist: (i) peer effects and (ii) unobserved worker heterogeneity in terms of the inherent cost of maintaining connections within a productive informal network. The model predicts that a greater degree of unobserved heterogeneity tilts the estimates toward producing a positive correlation between informal search and higher wages, whereas stronger peer influences tend to yield a negative correlation. This conclusion informs the empirical research in the sense that identification of the true correlation between job contact methods and wage offers requires a careful assessment of the unobserved heterogeneity and peer influences in the relevant sample. |
| Keywords: | heterogeneity, peer effects, informal networks, job search, nonmonotonicities |
| JEL: | D85 J31 J64 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9573&r=lab |
| By: | Schmidl, Ricarda (University of Mannheim) |
| Abstract: | This paper studies the effectiveness of vacancy information from the public employment services (PES) in Germany, focussing on vacancy information obtained early in the unemployment spell. As in many other countries, the German activation practice combines information provision with monitoring to increase the willingness to apply. In case of a failed application, unemployed may participate in more intensive active labor market programs (ALMP). Exposure to monitoring or participation in ALMP is likely to confound the effect of information; our aim is to disentangle the different effects. Based on a flexible propensity score matching approach, we find that vacancy information increases the entry rate into unemployment predominantly by jobs mediated via the PES. Monitoring seems to reinforce this effect while limiting the crowding out of transitions made through other channels. In case of continued unemployment, early vacancy information reduces the participation rate in ALMP for some labor market groups. This is however not found to mediate the effect on employment transitions. We hence suggest that early vacancy information may increase the cost-effectiveness of the overall activation process even in the case of unsuccessful applications. Slight negative effects on employment quality seem to be driven by a combination of vacancy quality and monitoring. |
| Keywords: | unemployment, vacancy information, public employment services, active labor market programs |
| JEL: | J08 J64 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9575&r=lab |
| By: | Nagore García, Amparo (LISER (CEPS/INSTEAD)); van Soest, Arthur (Tilburg University) |
| Abstract: | Using administrative records data from the Spanish Social Security Administration, we analyse the nature and stability of job matches starting in two different years: during the economic boom in 2005, and during the recession in 2009. We compare the individual and job and firm characteristics in the two samples and estimate Mixed Proportional Hazard Models distinguishing job-to-job, job-to-unemployment, and other transitions. We find that job-to-job transitions are pro-cyclical, while unemployment transitions are counter-cyclical. Individuals most affected by the economic crisis tend to be young males, living in regions with high unemployment rates, with low qualifications and working in manual occupations (particularly construction), and (especially Spanish speaking) immigrants. The positive relation between job stability and firm size is stronger during the recession. |
| Keywords: | job tenure, business cycle, employment transitions, destination states, job-separation rate |
| JEL: | J64 C41 E32 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9574&r=lab |
| By: | de la Rica, Sara (University of the Basque Country); Gorjón, Lucía (University of the Basque Country) |
| Abstract: | The aim of this paper is to evaluate various aspects of a family friendly law (Act 39/99) approved in Spain in 1999, which grants parents the right to reduce their work-time schedule for childcare issues. Moreover, those who resort to that law enjoy higher protection against dismissal than other workers, which may encourage workers to use the law as a form of job protection, particularly in recession periods. We first test the direct impact of the law, i.e. whether its passing increased the use of work-time reduction for childcare issues. We find that the use of such measures did indeed increase by around 18%. Second, we test whether the passing of the law led to strategic behavior from employers, in the sense of restricting indefinite contracts to potential users of the law to limit the use of work-time reduction. We find that this is indeed the case. Finally, we test whether this law was resorted to more or less in the recent downturn than in the previous economic upturn. We find that its use decreased by around 13% in the recent downturn, which is not consistent with the view that workers would use the law more intensively during recessions for job protection reasons. |
| Keywords: | policy evaluation, family friendly policies, difference-in-difference, business cycle |
| JEL: | C23 J16 J18 J62 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9550&r=lab |
| By: | Teodora Boneva (University of Cambridge); Christopher Rauh (University of Cambridge, INET Institute) |
| Abstract: | In this paper, we study parental beliefs about the technology which maps parental investments into future child outcomes. We document that parents perceive late investments as more productive than early investments, and that they perceive investments in different time periods as substitutes. These beliefs contrast with findings in the empirical literature which suggest that early investments are more productive and are complementary to late investments. We show that parental beliefs about the returns to investments vary substantially across the population and that individual beliefs are predictive of actual investment decisions. Moreover, we document that parental beliefs about the productivity of investments differ significantly across socio-economic groups. Perceived returns to parental investments are positively related to household income, thereby potentially contributing to intergenerational earnings persistence. |
| Keywords: | parental investments, skill accumulation, human capital, Inequality |
| JEL: | I24 J13 J24 J62 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2015-019&r=lab |
| By: | Corinne Langinier (Department of Economics, University of Alberta); Stephanie Lluis (Department of Economics, University of Waterloo) |
| Abstract: | Using data from patent examiners at the U.S. Patent and Trademark Office, we ask whether, and if so how, examiners’ career outcomes relate to aspects of the patent review process. Exploiting longitudinal information about all the patents granted by a group of examiners between 1976 and 2006 and their yearly mobility outcomes (departure and promotion) between 1992 and 2006, we find consistent evidence from static, dynamic and duration models of the importance of patent characteristics, granting experience in specific technological fields, repeated interactions with the same inventor and self-citations in predicting an examiner’s departure or promotion. |
| JEL: | J60 O34 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:wat:wpaper:1506&r=lab |