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on Labour Economics |
| By: | Lewandowski, Piotr (Institute for Structural Research (IBS)); Góra, Marek (Warsaw School of Economics); Lis, Maciej (Institute for Structural Research (IBS)) |
| Abstract: | Between 2002 and 2015, temporary employment in Poland more than doubled. Poland became the country with the highest share of temporary jobs in the EU. In this paper, we study how this process affected job quality and job quantity. We analyse the gaps between temporary and permanent workers in six dimensions of jobs quality, adopting measures proposed by the OECD and Eurofound. Of these gaps, the differences in earnings quality, job security, and work scheduling quality were the most pronounced. Job quality has improved for both groups of workers, but the gaps have not closed completely. Firms in Poland prefer to employ temporary rather than permanent workers because of the lower firing costs, tax wedges, and wages associated with temporary contracts. We use a stylised labour demand model to quantify the upper bound of a potential job creation effect due to lower labour costs incurred through the use of temporary contracts. We find that this effect did not exceed 4% of dependent employment in 2015. We cannot rule out the possibility that the net employment effect was zero. Our findings show that even if the availability of less-costly temporary contracts caused some additional jobs to be created, temporary workers suffered from lower job quality in several dimensions. |
| Keywords: | job quality, temporary employment, segmentation |
| JEL: | J41 J28 J81 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11012&r=lab |
| By: | Vincent Aidan O'Sullivan; Robert Wright; Irene Mosca |
| Abstract: | This paper empirically investigates the relationship between maternal employment and child outcomes using micro-data collected in the third wave of The Irish Longitudinal Study on Ageing. A novel source of exogenous variation in the employment decisions of women is used to investigate this relationship. Between the 1920s and the 1970s, women working in certain sectors or in certain jobs were required to leave paid employment upon getting married in Ireland. The majority of women affected by this “Marriage Bar†then became mothers and never returned to work, or returned only after several years. Regression analysis is used to compare the educational attainment of the children of mothers who were required to leave employment on marriage because of the Marriage Bar to the educational attainment of the children of mothers who were not required to do so. It is found that the children of mothers affected by the Marriage Bar have a much higher probability of completing university education than the children of mothers who were not. The difference is around seven percentage points. This is a sizeable effect when compared to the observation that about 40% of the children in the sample completed university education. This effect is found to be robust to alternative specifications that include variables aimed at controlling for differences in maternal occupation and personality traits and differences in paternal education. |
| Keywords: | marriage, mother, employment, child, education |
| JEL: | J12 J16 J20 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:194217569&r=lab |
| By: | Konon, Alexander (DIW Berlin); Kritikos, Alexander S. (DIW Berlin) |
| Abstract: | We address the question of whether media influences occupational choices. To theoretically examine media effects, we construct a dynamic Bayesian occupational choice model with sequential decisions under ambiguity due to imperfect information. We show that sufficiently intensive positive media articles and reports about entrepreneurship increase the probability of self-employment and decrease the probability of wage work. To test our model, we use an instrumental variable approach to identify causal media effects using US micro data and a country-level macro panel with two different media variables. We find that an increase in positive media articles and reports about entrepreneurs generates effects on choice probabilities that are consistent with our model. |
| Keywords: | media, occupational choice, Bayesian learning, ambiguity aversion |
| JEL: | D81 D83 J62 L26 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11015&r=lab |
| By: | Sauer, Robert M. (Royal Holloway, University of London); Taber, Christopher (University of Wisconsin-Madison) |
| Abstract: | This paper has two main parts. In the first, we describe a method that smooths the objective function in a general class of indirect inference models. Our smoothing procedure makes use of importance sampling weights in estimation of the auxiliary model on simulated data. The importance sampling weights are constructed from likelihood contributions implied by the structural model. Since this approach does not require transformations of endogenous variables in the structural model, we avoid the potential approximation errors that may arise in other smoothing approaches for indirect inference. We show that our alternative smoothing method yields consistent estimates. The second part of the paper applies the method to estimating the effect of women's fertility on their human capital accumulation. We find that the curvature in the wage profile is determined primarily by curvature in the human capital accumulation function as a function of previous human capital, as opposed to being driven primarily by age. We also find a modest effect of fertility induced nonemployment spells on human capital accumulation. We estimate that the difference in wages among prime age women would be approximately 3% higher if the relationship between fertility and working were eliminated. |
| Keywords: | indirect inference, simulation estimation, wage growth, women |
| JEL: | C51 J16 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11004&r=lab |
| By: | Dehejia, Rajeev (Federal Reserve Bank of Chicago); Dehejia, Rajeev (New York University); Jordan, Andrew (University of Chicago); Pop-Eleches, Cristian (Columbia University); Samii, Cyrus (New York University); Schulze, Karl (Federal Reserve Bank of Chicago) |
| Abstract: | This paper documents the evolving impact of childbearing on the work activity of mothers. Based on a compiled dataset of 441 censuses and surveys between 1787 and 2015, representing 103 countries and 48.4 million mothers, we document three main findings: (1) the effect of fertility on labor supply is small and typically indistinguishable from zero at low levels of development and economically large and negative at higher levels of development; (2) this negative gradient is remarkably consistent across histories of currently developed countries and contemporary cross-sections of countries; and (3) the results are strikingly robust to identification strategies, model specification, data construction, and rescaling. We explain our results within a standard labor-leisure model and attribute the negative labor supply gradient to changes in the sectoral and occupational structure of female jobs as countries develop. |
| Keywords: | Twins; instrumental variables; development; economic history; fertility; labor supply |
| JEL: | J00 J13 N00 |
| Date: | 2017–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-2017-14&r=lab |
| By: | John V. Winters (Oklahoma State University) |
| Abstract: | This paper examines the effects of college graduates educated in STEM fields on patenting intensity in U.S. metropolitan areas. Some prior research suggests a positive effect on urban innovation from foreign-born STEM workers, but little is known about the effects of native STEM graduates on innovation. My preferred results use time-differenced 2SLS regressions, and I introduce a novel approach to instrumenting for the growth in native STEM graduates. I find positive effects of foreign STEM on innovation, roughly consistent with previous literature. However, my preferred approach yields a negative coefficient estimate for native STEM graduates on innovation that is not statistically significant but suggests that a meaningfully large positive effect is unlikely during the 2009-2015 time-period. I discuss possible explanations and implications. |
| Keywords: | STEM; innovation; patents; human capital; higher education |
| JEL: | I25 J24 J61 O31 R12 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:okl:wpaper:1714&r=lab |
| By: | Yassin, Shaimaa (University of Lausanne); Langot, François (University of Le Mans) |
| Abstract: | This paper proposes an equilibrium matching model for developing countries' labor markets where the interaction between public, formal private and informal private sectors are taken into account. Theoretical analysis shows that gains from reforms aiming at liberalizing formal labor markets can be annulled by shifts in the public sector employment and wage policies. Since the public sector accounts for a substantial share of employment in developing countries, this approach is crucial to understand the main labor market outcomes of such economies. Wages offered by the public sector increase the outside option value of the workers during the bargaining processes in the formal and informal sectors. It becomes more profitable for workers to search on-the-job, in order to move to these more attractive and more stable types of jobs. The public sector therefore acts as an additional tax for the formal private firms. Using data on workers' flows from Egypt, we show empirically and theoretically that the liberalization of labor markets plays against informal employment by increasing the profitability, and hence job creations, of formal jobs. The latter effect is however dampened or even sometimes nullified by the increase of the offered wages in the public sector observed at the same time. |
| Keywords: | job search, informality, public sector, Egypt, unemployment, wages, policy interventions |
| JEL: | E24 E26 J60 J64 O17 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11014&r=lab |
| By: | Stephan E. Maurer (Department of Economics, University of Konstanz and Centre for Economic Performance); Andrei V. Potlogea (University of Edinburgh) |
| Abstract: | Do male-biased demand shocks affect women’s labor force participation? To study this question, we examine large oil field discoveries in the US South from 1900-1940. We find that oil wealth has a zero net effect on female labor force participation due to two opposing channels. Oil discoveries increase demand for male labor in oil mining and manufacturing and consequentially raise male wages. This leads to an increased marriage rate of young women, which could have depressed female labor force participation. But at the same time, oil wealth also increases demand for women in services, which counterbalances the marriage effect and leaves women’s overall labor force participation rate unchanged. Our findings demonstrate that when the nontradable sector is open to women, male-biased de-mand shocks in the tradable sector need not reduce female labor force participation. |
| Keywords: | oil, structural transformation, female labor force participation, gen-der pay gap |
| JEL: | R11 N50 J12 J16 |
| Date: | 2017–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1708&r=lab |
| By: | Gibbons, Steve; Overman, Henry G; Sarvimäki, Matti |
| Abstract: | We study the local economic impacts of a major regeneration programme aimed at enhancing the quality of life of local people in deprived neighbourhoods in the UK. The analysis is based on a panel of firm and area level data available at small spatial scales. Our identification strategies involve: a) exploiting the fine spatial scale of our data to study how effects vary with distance to the intervention area; and b) comparing places close to treatment in early rounds of the programme with places close to treatment in future rounds. We consider the long run impact of schemes funded between 1995 and 1997 on outcomes up to 2009. Our estimates suggest that the programme increased workplace employment in the intervention area but this had no impact on the employment rates of local residents. |
| Keywords: | employment; neighbourhoods; regeneration; Single Regeneration Budget; urban policy |
| JEL: | H50 J08 R11 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12311&r=lab |
| By: | Gottfries, Axel; Teulings, Coen N |
| Abstract: | We consider a Burdett/Mortensen style wage posting model with aggregate shocks. We analyze the equilibrium under two alternative assumptions on wage setting in ongoing jobs: either fully flexible or downwardly rigid. In the model firms optimally pay only retention premiums. The equilibrium is characterized by a Taylor expansion. The model yields two simultaneous relations for wages and quits, of which the parameters are simple functions of three empirically observable arrival rates of: (i) jobs, (ii) lay offs, and (iii) aggregate shocks. Hence, there are overidentifying restrictions, which are supported remarkably well by the data. We find strong evidence for wage downward rigidity and inefficiently low job-to-job transitions during the downturn. Furthermore, we find evidence that firms pay only retention premiums, not hiring premiums. A model with wage rigidity in ongoing jobs and OJS is therefore a useful benchmark for a wage equation in macro models. Under rigidity, job-to-job transitions are in efficiently low during the downturn. |
| Keywords: | job-to-job transitions; Nominal wage rigidity; on-the-job search |
| JEL: | J31 J63 J64 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12316&r=lab |
| By: | Frimmel, Wolfgang; Halla, Martin; Schmidpeter, Bernhard; Winter-Ebmer, Rudolf |
| Abstract: | The labor supply effects of becoming a grandmother are not well established in the empirical literature. We estimate the effect of becoming a grandmother on the labor supply decision of older workers. Under the assumption that grandmothers cannot predict the exact date of conception of their grandchild, we identify the effect of the first grandchild on employment (extensive margin). Our Timing-of-Events approach shows that having a first grandchild increases the probability of leaving prematurely the labor market. This effect is stronger when informal child care is more valuable to the mother. To estimate the effect of an additional grandchild (intensive margin), we assume that the incidence of a twin birth among the second generation is not correlated with unobserved determinants of the grandmother's labor supply (first generation). Our respective 2SLS estimation shows a significant effect of further grandchildren. Our results highlight the important in uence of the extended family on the decisions of older workers and point to mediating effects of different institutional settings. |
| Date: | 2017–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2017-11&r=lab |
| By: | Murray, Chelsea (University of Wollongong); Clark, Robert (Australian National University); Mendolia, Silvia (University of Wollongong); Siminski, Peter (University of Technology, Sydney) |
| Abstract: | We present the first Australian estimates of intergenerational mobility that draw on direct observations of income from two generations. Using panel data for three birth cohorts of young adults from the Household, Income and Labour Dynamics Australia survey, the estimated intergenerational income elasticity is 0.28. Correcting for attenuation bias raises this to 0.41. We estimate the rank correlation to be 0.27. We show that Australia has greater mobility than the US and this is not sensitive to methodological choices. We also show that spousal selection and family structure may be important determinants of income persistence across generations. |
| Keywords: | intergenerational mobility, Australia, HILDA |
| JEL: | J62 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11020&r=lab |
| By: | Boffy-Ramirez, Ernest (University of Colorado Denver); Moon, Soojae (University of Colorado Denver) |
| Abstract: | Together with the rapid growth of the Chinese economy, there has been a growing divide in the earnings of urban and rural residents. In this paper we focus on China's household registration system, or "hukou", as a potential source of the earnings gap. Using multiple waves of data from the Chinese Health and Nutrition Survey from 1993 through 2011, we take advantage of variation in hukou status generated by individual-level changes over time. Unlike previous studies, we are able to control for fixed individual-specific characteristics that determine earnings and focus specifically on estimating an urban hukou "premium". For estimates that do not account for time-invariant individual characteristics, urban hukou holders earn almost 30% more than rural hukou holders. After we account for individual-level fixed characteristics, the urban hukou premium drops to 6–8%. Our empirical evidence indicates that the hukou system is a notable component of the urban-rural earnings differential, but its importance should not be overstated. Given long-standing differences in access to government funding and social services between rural and urban populations, relaxing residency restrictions may not be a panacea for curbing rising income inequality. |
| Keywords: | hukou, migration, China, urban-rural income gap, inequality, labor market frictions |
| JEL: | J30 J80 O15 R23 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11022&r=lab |
| By: | Matsuura, Tsukasa; Noda, Tomohiko |
| Abstract: | This paper analyzes differences in the effects of employee representations between family firms and non-family firms. First, managers from non-family firms have a more favorable response towards unions as organizations than managers from family firms. Managers from family firms tend to regard unions as harmful to their management, because unions may bring in outsiders, to the detriment of the management. Second, voice-oriented employee associations tend to exist more in non-family firms than in family ones. Third, these associations have a voice effect suppressing turnover rates in non-family firms, though not in family ones. |
| Keywords: | Family Firm, Employee Representation, Industrial Rotations, Exit-Voice Model |
| JEL: | J51 J53 L20 |
| Date: | 2017–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81539&r=lab |
| By: | Cools, Angela (Cornell University); Patacchini, Eleonora (Cornell University) |
| Abstract: | We examine the impact of sibling gender composition on women's adult earnings. Using data from Add Health, we find that women with any brothers earn roughly 10 percent less than women with no brothers in their late 20s and early 30s. This effect is primarily due to lower earnings within broadly defined education and occupation groups. We then explore mechanisms that may explain this result. We do not find strong evidence that differences in parental investment, cognitive ability, self-reported personality traits, or parental expectations drive our results. However, we find that more family-centered behavior (including family responsibilities, being in a committed relationship, and intention to have children) among those with brothers partially explains the result. We then confirm our results with data from the NLSY-CYA. |
| Keywords: | sibling sex composition, gender gap, gender roles, earnings |
| JEL: | J12 J13 J16 J31 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11001&r=lab |
| By: | Steven N. Kaplan; Morten Sorensen |
| Abstract: | We use a dataset of over 2,600 executive assessments to study thirty individual characteristics of candidates for top executive positions – CEO, CFO, COO and others. We classify the thirty candidate characteristics with four primary factors: general ability, execution vs. interpersonal, charisma vs. analytic, and strategic vs. managerial. CEO candidates tend to score higher on these factors; CFO candidates score lower. Conditional on being a candidate, executives with greater interpersonal skills are more likely to be hired, suggesting that such skills are important in the selection process. Scores on the four factors also predict future career progression. Non-CEO candidates who score higher on the four factors are subsequently more likely to become CEOs. The patterns are qualitatively similar for public, private equity and venture capital owned companies. We do not find economically large differences in the four factors for men and women. Women, however, are subsequently less likely to become CEOs, holding the four factors constant. |
| JEL: | G34 J16 M12 M5 M51 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23832&r=lab |
| By: | Valeria Maggian (Univ Lyon, CNRS, GATE L-SE UMR 5824, F-69130 Ecully, France); Natalia Montinari (Dipartimento di Scienze Economiche, Università degli Studi di Bologna, Piazza Scaravilli 2, 40126, Bologna, Italy); Antonio Nicolò (Dipartimento di Scienze Economiche e Manageriali, Università degli Studi di Padova, via del Santo 33, 35123 Padova, Italy; School of Social Sciences University of Manchester, M13 9PL Manchester, UK) |
| Abstract: | Women are underrepresented in leadership positions in business, politics, and in the academic and scientific community. Not taking advantage of the skills of highly qualified women constitutes a waste of talent and, consequently, a loss of economic growth potential. To design effective policy interventions that empower women to reach leadership positions, it is crucial to identify at which levels of the career ladder they should be introduced. In a laboratory experiment, we run a two-stage tournament to evaluate the impact of three different interventions on women’s willingness to compete for top positions. We find that, compared with no intervention, a gender quota introduced at the initial stage is ineffective in encouraging women to compete for the top, while quotas introduced in the final stage of competition or in both stages increase women’s willingness to compete for the top, without distorting the performance of the winners. |
| Keywords: | Gender quotas, affirmative action, gender gap, competition, multi-stage tournament, laboratory experiment |
| JEL: | C91 D91 J16 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1724&r=lab |
| By: | Corak, Miles (University of Ottawa) |
| Abstract: | Income inequality is on the rise, and everyone, from President Obama and Pope Francis to Prince Charles and Standard & Poor's, is talking about it. But these conversations about what are arguably the most significant changes in the distribution of incomes and earnings since the 1940s are leading to very different views on how public policy should respond. This is as true in Canada as it is in almost all of the other rich countries where inequality has risen. In this paper I tell two stories about inequality – one from the perspective of those who feel it is not a problem worth the worry, and the other from the perspective of those who see it as "the defining challenge of our time" – in order to clarify the issues facing Canadians, and what public policy should do about them. |
| Keywords: | inequality, poverty, middle class, top incomes, social mobility |
| JEL: | D31 I32 J62 J65 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11005&r=lab |
| By: | Juliana MESÉN VARGAS (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Bruno VAN DER LINDEN (FNRS, UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES), CESifo & IZA) |
| Abstract: | This article analyzes the behavioral effects of unemployment benefits (UB) and it characterizes their optimal level when jobless people only survive if they have access to a minimum or subsistence consumption level in each period. To survive when the level of UB is very low, they carry out a subsistence activity. Our model shows that if the level of UB is very low, increasing its level or providing liquidity to the agent can decrease the duration in unemployment; for higher levels of UB we reencounter the standard properties that increasing UB increases duration and that providing liquidity to the agent increases duration (Chetty, 2008). We also show that the optimal level of UB satisfies the Baily-Chetty formula (Baily, 1978, Chetty, 2006), but contrary to Chetty (2008), in our model the gain from insurance cannot be rewritten using sufficient statistics; we show that such decomposition requires specific modeling assumptions. |
| Keywords: | liquidity effect, scarcity, monetary costs, optimal insurance |
| JEL: | D91 H21 J64 J65 |
| Date: | 2017–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2017014&r=lab |
| By: | James M. Poterba; Steven F. Venti; David A. Wise |
| Abstract: | This paper examines inequality in end-of-life wealth and the factors that contribute to individuals reaching this life stage with few financial resources. It analyzes repeated cross-sections of the Health and Retirement Study, as well as a small longitudinal sample of individuals observed both at age 65 and shortly before death. Most of those who die with little wealth had little wealth at retirement. There is strong persistence over time in the bottom tail of the wealth distribution, but the probability of having low wealth increases slowly with age after age 65. Those with low lifetime earnings are much more likely to report low wealth at retirement, and to die with little wealth, than their higher-earning contemporaries. The onset of a major medical condition and the loss of a spouse increase in the probability of falling into the low wealth category at advanced ages, although these factors appear to contribute to wealth decline for only a small fraction of those who had modest wealth at age 65 but low wealth at the time of death. |
| JEL: | E21 H55 J14 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23839&r=lab |
| By: | Celia Melguizo (Department of Econometrics, University of Barcelona, Av. Diagonal 696; 08034 Barcelona,Spain.); Vicente Royuela (Department of Econometrics, University of Barcelona, Av. Diagonal 696; 08034 Barcelona,Spain.) |
| Abstract: | In Spain, economic disparities between regions have traditionally played a relevant role in migration. Nevertheless, during the previous high-instability period, analyses provided conflicting results about the effect of these variables. In this work, we aim to determine the role that labour market factors play in internal migration during the Great Recession, paying special attention to the migration response of the heterogeneous population groups. To do so, we resort to an extended gravity model and we consider as a territorial unit the 45 Spanish Functional Urban Areas. Our results point to real wages as having a significant influence on migration motivations. |
| Keywords: | Migration, Spanish urban areas, Labour market factors. JEL classification: C23, J61, R23. |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201717&r=lab |