nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2011‒11‒01
29 papers chosen by
Erik Jonasson
Lund University

  1. Minimum Wage Increases Under Straightened Circumstances By Addison, John T.; Blackburn, McKinley L.; Cotti, Chad
  2. Immigration and Distribution of Wages in Austria By Gerard Thomas Horvath
  3. Higher wages, lower pay : public vs. private sector compensation in Peru By Coppola, Andrea; Calvo-Gonzalez, Oscar
  4. The Type of Contract and Starting Wage and Wage Growth: The Evidence from New Graduates from Post-Secondary Schools in the Netherlands By Takuya Hasebe
  5. Downward wage rigidity in Hungary By Gábor Kátay
  6. Does Institutional Diversity Account for Pay Rules in Germany and Belgium? By Kampelmann, Stephan; Rycx, Francois
  7. The Impact of Immigration on the Wage Distribution in Switzerland By Sandro Favre
  8. Why Ex(Im)porters Pay More: Evidence from Matched Firm-Worker Panels By Martins, Pedro S.; Opromolla, Luca David
  9. Does time-to-degree matter? The effect of delayed graduation on employment and wages. By Giorgia Casalone; Carmen Aina
  10. Firm-Worker Matching in Industrial Clusters By Figueiredo, Octávio; Guimaraes, Paulo; Woodward, Douglas
  11. The Gender Wage Gap among recent European Graduates By Moris Triventi
  12. The labor supply and retirement behavior of China's older workers and elderly in comparative perspective By Giles, John; Wang, Dewen; Cai, Wei
  13. Do Women Prefer a Co-operative Work Environment? By Peter Kuhn; Marie-Claire Villeval
  14. Education and Earnings Differentials: The Role of Family Background Across European Countries By Rosalia Castellano; Gennaro Punzo
  15. Severance Packages By Postel-Vinay, Fabien; Turon, Hélène
  16. Culture, Intermarriage, and Differentials in Second-Generation Immigrant Women's Labor Supply By Gevrek, Z. Eylem; Gevrek, Deniz; Gupta, Sonam
  17. The Trend over Time of the Gender Wage Gap in Italy By Chiara MUSSIDA; Matteo PICCHIO
  18. What Do Participation Fluctuations Tell Us About Labor Supply Elasticities? By Haefke, Christian; Reiter, Michael
  19. Higher Education Expansion, Human Capital Externalities and Wages: Italian Evidence within Occupation By Giulio Bosio; Chiara Noè
  20. Changes in the Gender Wage Gap in Urban China, 1995-2007 By Shi Li; Jin Song
  21. Estimating the Return to College in Britain Using Regression and Propensity Score Matching By Wen Fan
  22. Lost in Transition? The returns to education acquired under communism 15 years after the fall of the Berlin Wall By Lorenzo Rocco; Giorgio Brunello; Elena Crivellaro
  23. Understanding the Determinants of Female Labor Force Participation in the Middle East and North Africa Region: The Role of Education and Social Norms in Amman By Nadereh Chamlou; Silvia Muzi; Hanane Ahmed
  24. Earnings Dynamics of Men and Women in Finland: Permanent Inequality versus Earnings Instability By Kässi, Otto
  25. Overeducation and Local Labour Markets in Spain By Ramos, Raul; Sanromá, Esteban
  26. Employment growth patterns in South Asia : some evidence from interim enterprise survey data By Friesenbichler, Klaus
  27. Do Employees in the Public Sector Still Enjoy Earnings Advantages? By Juan Yang; Sylvie Demurger; Shi Li
  28. Occupational Mobility, Occupation Distance and Specific Human Capital By Chris Robinson
  29. Labor Demand During the Crisis: What Happened in Germany? By Olga Bohachova; Bernhard Boockmann; Claudia M. Buch

  1. By: Addison, John T. (University of South Carolina); Blackburn, McKinley L. (University of South Carolina); Cotti, Chad (University of Wisconsin, Oshkosh)
    Abstract: Do apparently large minimum wage increases in an environment of recession produce clearer evidence of disemployment effects than is typically observed in the new minimum wage literature? This paper augments the sparse literature on the most recent increases in the U.S. minimum wage, using three different data sets and the two main estimation strategies for handling geographically-disparate trends. The evidence is generally unsupportive of negative employment effects, still less of a 'recessionary multiplier.' Minimum wage workers seem to be concentrated in sectors of the economy for which the labor demand response to wage mandates is minimal.
    Keywords: minimum wages, disemployment, earnings, low-wage sectors, geographically-disparate employment trends, recession
    JEL: J2 J3 J4 J8
    Date: 2011–10
  2. By: Gerard Thomas Horvath
    Abstract: Using detailed micro data on earnings and employment, I analyze the effects of immigration on the wage distribution of native male workers in Austria. I find that immigration has heterogeneous effects on wages, differing by type of work as well as the wage level. While there are small , but insignificant, negative effects for blue collar workers at the lower end of the wage distribution there are positive effects on wages at higher percentiles. For white collar workers positive effects occur at most percentiles. The estimated effects of immigration are relatively small in size and not significant for most workers. Overall it seems that most of potentially adverse effects of immigration on natives' wages are offset by complementarities stemming from immigration of workers with different skill levels.
    Keywords: Immigration, Labor market, Wage distribution
    JEL: J31 J61
    Date: 2011–09
  3. By: Coppola, Andrea; Calvo-Gonzalez, Oscar
    Abstract: Do public sector employees earn less than their counterparts in the private sector? This paper addresses this question in the case of Peru, a country where civil service reform is being debated yet the only available empirical studies on wage differentials date back to the late 1980s. Using data from the 2009 national household survey, the authors perform a multiple step analysis. First, they estimate a single equation with a public sector dummy, which is found to be statistically significant and positive when only monetary wages are taken into account. However, when in-kind payments and bonuses are included to measure compensation, the analysis finds a private sector premium. Second, they estimate for public and formal private employees two distinct wage functions, including the inverse Mills ratio. This takes into account the selection bias resulting from workers self-selecting into the public or private sector. Third, these results are used to decompose wage differentials using the standard Oaxaca-Blinder approach. The results show that the compensation differentials are not significant except for the sub-sample of employees that achieved a postgraduate degree.
    Keywords: Labor Markets,Public Sector Economics,Inequality,Public Sector Management and Reform,Education and Digital Divide
    Date: 2011–10–01
  4. By: Takuya Hasebe (The Graduate Center, The City University of New York)
    Abstract: This paper examines the impact of a type of employment contract on starting wage and short-term wage growth. I estimate the differences in starting wage and wage growth patterns between temporary and permanent workers by using a dataset from the Netherlands. The data contain new graduates from post-secondary schools in the Netherlands. As in the continental European countries, the use of temporary employment is common in the Netherlands, especially among young workers. Those who just graduate from school have less experience in the labor market. It is rather difficult for an employer to find a qualified worker. Because of high firing costs for a permanent worker, an employer has to bear more costs if employing an under-qualified worker. To avoid this, an employer engages in a more intensive search processes when hiring a worker on a permanent worker, which increase search costs. If such costs are passed on to a permanent worker, the starting wage is expected to be lower for a permanent worker than a temporary worker. The empirical comparisons of the starting wage shows evidence of a lower starting wage, but this is not robust to differences in estimation structure. The comparison of the wage growth between the two types of contract shows that wage growth is more suppressed for a temporary worker than for a permanent worker. Since the observations are those who have little job experience, training upon employment is important. As a matter of fact, almost all relevant observations receive training at the beginning, regardless of type of contract. Employers could recoup the costs of training by suppressing the wage growth relative to underlying productivity growth. An employer suppresses wage growth more for a temporary worker than a permanent worker as the shorter employment period of a temporary worker leaves the employer with less time to recoup the costs. The empirical results confirm this hypothesis, and these findings are robust. The empirical strategy in this paper takes into consideration the fact that the type of contract is presumably determined endogenously even after controlling for observable individual characteristics. The empirical results indeed indicate that this selectivity issue is necessary to be considered.
    Date: 2011–09
  5. By: Gábor Kátay (Magyar Nemzeti Bank (central bank of Hungary))
    Abstract: Following the approach recently developed for the International Wage Flexibility Project (IWFP), the paper presents new estimates of downward real and nominal wage rigidity for Hungary. Results suggest that nominal rigidity is more prominent in Hungary than real rigidity. When compared to other countries participating in the IWFP, Hungary ranks among the countries with the lowest degree of downward real rigidity. The estimated downward nominal rigidity for Hungary is higher, the measure is close to but still below the overall cross-country average. Using the same methodology, the paper also confirms the widespread view that the wage growth bargained at the national level has little compulsory power in Hungary. On the other hand, the minimum wage remains an important source of potential downward wage rigidity in Hungary.
    Keywords: downward nominal and real wage rigidity, wage change distributions, wage flexibility
    JEL: C23 E24 J3 J5
    Date: 2011
  6. By: Kampelmann, Stephan (University of Lille 1); Rycx, Francois (Free University of Brussels)
    Abstract: This paper examines the relationship between institutions and the remuneration of different jobs by comparing the German and Belgian labour markets with respect to a typology of institutions (social representations, norms, conventions, legislation, and organisations). The observed institutional differences between the two countries lead to the hypotheses of (I) higher overall pay inequality in Germany; (II) higher pay inequalities between employees and workers in Belgium; and (III) higher (lower) impact of educational credentials (work-post tenure) on earnings in Germany. We provide survey-based empirical evidence supporting hypotheses I and III, but find no evidence for hypothesis II. These results underline the importance of institutional details: although Germany and Belgium belong to the same "variety of capitalism", we provide evidence that small institutional disparities within Continental-European capitalism account for distinct structures of pay.
    Keywords: labour market institutions, wage inequality, rules, collective bargaining
    JEL: J31 J51 J52 J53
    Date: 2011–10
  7. By: Sandro Favre
    Abstract: Recent immigrants in Switzerland are overrepresented at the top of the wage distribution in high and at the bottom in low skill occupations. Basic economic theory thus suggests that immigration has led to a compression of the wage distribution in the former group and to an expansion in the latter. The data confirm this proposition for high skill occupations, but reveal effects close to zero for low skill occupations. While the estimated wage effects are of considerable magnitude at the tails of the wage distribution in high skill occupations, the effects on overall inequality are shown to be negligible.
    Keywords: Immigration, Wage Distribution, Occupation Groups, Inequality
    JEL: F22 J31 J61
    Date: 2011–08
  8. By: Martins, Pedro S. (Queen Mary, University of London); Opromolla, Luca David (Banco de Portugal)
    Abstract: We investigate the relationship between exporting, importing, and wage premia using a rich matched employer-employee data set. We improve on the previous literature (i) by using a new methodology to quantify the contribution of an extensive set of worker- and firm-level observable and unobservable characteristics to the wage gap, and (ii) by controlling for the import as well as the export activity of the firm. These two innovations allow us to avoid large biases that characterized the previous literature. A robust result is that the hiring policy of exporters is quite different than the one of importers. While firm size and sales are, to different extents, important components of the wage gap both for exporters and importers, importers hire workers that are overwhelmingly more able than the average. Workers at exporting firms, on the contrary, are no different in terms of unobserved time-invariant characteristics. Our analysis provides a useful guidance for recent theories that aim at explaining participation both in export and import markets and at including non-neoclassical labor market features into trade models.
    Keywords: globalization, export, import, wage differentials
    JEL: F16 J31 F15
    Date: 2011–10
  9. By: Giorgia Casalone (University of Piemonte Orientale A. Avogadro); Carmen Aina (University of Piemonte Orientale A. Avogadro)
    Abstract: We use a sample of Italian graduates drawn from the Consorzio AlmaLaurea to study whether the time taken to attain a degree matters for employment and earnings after one, three and five years from graduation. The relevance of this topic arises from the observation that Italian tertiary education system is characterized by an average time to undergraduate degree that is longer than the prescribed period. In addition, this issue is important also because delay in college completion entails a waste of resources both at individual and at collective level, and deprives the economics system of new and up-to-date competencies, as graduates enter the labour market with partially obsolete skills. Our estimates highlight that the probability of finding a job is negatively related to the time taken to graduate only if such delay is greater than three years. Graduates with previous work experiences, then, take on average two months less to be employed and receive higher wages. We also find evidence that students who obtain a degree beyond the minimum period suffer a wage penalty not while entering the labour market, but in the subsequent years (especially 5 years after graduation). This finding suggests that time-to-degree along with work experiences are good proxies for employers to discriminate between the ability of graduates.
    Keywords: time-to-degree, tertiary education, wage differentials
    JEL: I20 J24 J31
    Date: 2011–09
  10. By: Figueiredo, Octávio (University of Porto); Guimaraes, Paulo (University of South Carolina); Woodward, Douglas (University of South Carolina)
    Abstract: In this paper we use a novel approach and a large Portuguese employer-employee panel data set to study the hypothesis that industrial agglomeration improves the quality of the firm-worker matching process. Our method makes use of recent developments in the estimation and analysis of models with high-dimensional fixed effects. Using wage regressions with controls for multiple sources of observed and unobserved heterogeneity we find little evidence that the quality of matching increases with firm’s clustering within the same industry. This result supports Freedman’s (2008) analysis using U.S. data.
    Keywords: agglomeration, matching, fixed-effects
    JEL: R12 R39 J31
    Date: 2011–10
  11. By: Moris Triventi (Department of Sociology and social research University of Milano-Bicocca)
    Abstract: The aim of this paper is to examine whether there is a gender gap in monthly wage among recent graduates in eleven European countries and which variables can explain it. In the first part of the paper previous literature is presented and some limitations of existing studies are discussed. In the theoretical framework the gender wage gap is conceived as a function of five main factors: human capital, employment characteristics, working hours, work-family conciliation aspects and residual discrimination. Different types of decomposition after OLS linear regression and Heckman selection models are applied; data comes from REFLEX survey on tertiary graduates in 2000. The main results indicate that the raw gender gap is higher in Austria and Germany, while it is lower in Belgium and United Kingdom, with Southern and Nordic countries placed in the middle. There is great variability in the unexplained part of the gender gap, which is mainly imputable to residual discrimination. This is low in Nordic countries, followed by Continental and Southern Europe. Overall the most important factors accounting for the gender gap are employment characteristics, followed by working hours. Human capital, work-family conciliation issues and individuals’ preferences matter in most countries, but their role is not prominent. There is also evidence of a correlation between several macro-institutional indicators (type of wage-setting institutions and welfare policies) and the extent of the gender gap, suggesting that wage determination is deeply rooted into institutional contexts.
    Date: 2011–09
  12. By: Giles, John; Wang, Dewen; Cai, Wei
    Abstract: This paper highlights the employment patterns of China's over-45 population and, for perspective, places them in the context of work and retirement patterns in Indonesia, Korea, the United States, and the United Kingdom. As is common in many developing countries, China can be characterized as having two retirement systems: a formal system, under which urban employees receive generous pensions and face mandatory retirement by age 60, and an informal system, under which rural residents and individuals in the informal sector rely on family support in old age and have much longer working lives. Gender differences in age of exit from work are shown to be much greater in urban China than in rural areas, and also greater than observed in Korea and Indonesia. Descriptive evidence is presented suggesting that pension eligible workers are far more likely to cease productive activity at a relatively young age. A strong relationship between health status and labor supply in rural areas is observed, indicating the potential role that improvements in access to health care may play in extending working lives and also providing some basis for a common perception that older rural residents tend to work as long as they are physically capable. The paper concludes with a discussion of measures that may facilitate longer working lives as China's population ages.
    Keywords: Labor Markets,Labor Policies,Population Policies,Pensions&Retirement Systems,Work&Working Conditions
    Date: 2011–10–01
  13. By: Peter Kuhn (Department of Economics, University of California - University of California, Santa Barbara); Marie-Claire Villeval (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon)
    Abstract: Are women disproportionately attracted to work environments where cooperation rather than competition is rewarded? This paper reports the results of a real-effort experiment in which participants choose between an individual compensation scheme and a team-based payment scheme. We find that women are more likely than men to select team-based compensation in our baseline treatment, but women and men join teams with equal frequency when we add an efficiency advantage to team production. Using a simple structural discrete choice framework to reconcile these facts, we show that three elements can account for the observed patterns in the team-entry gender gap: (1) a gender gap in confidence in others (i.e. women are less pessimistic about their prospective teammates' relative ability), (2) a greater responsiveness among men to instrumental reasons for joining teams, and (3) a greater "pure" preference for working in a team environment among women.
    Keywords: Gender; cooperation; self-selection; confidence; experiment
    Date: 2011
  14. By: Rosalia Castellano (Department of Statistics and Mathematics for Economic Research, University of Naples Parthenope); Gennaro Punzo (Department of Statistics and Mathematics for Economic Research, University of Naples Parthenope)
    Abstract: The crucial aim of this paper is to investigate, in a generational perspective, the effects of specific dimensions of human capital on individuals earnings and earnings differentials across a selected set of six developed economies of Western Europe with structural differences in their formal education systems and, more generally, in their institutional frameworks. In a cross-country comparison, we intend to inspect how formal education and work experience stand for critical predictors of inequality between and within earner-groups and/or educational groups. In this light, the role of family background on individuals’ earnings in relation to the two main occupational status (i.e., wage-employment rather than self-employment) and, in particular, the impact of parental education and abilities on children’s human capital are argued as well. In order to look into the critical determinants of intergenerational im-mobility, in terms of educational and employment decision-making process, and to what extent they vary across countries, two-stage structural probit models with quantile regressions in the second stage are estimated. As we expect that individual earnings also depend on a range of personal and structural factors and on the family background as well, a set of human capital earnings equations, based on extensions of Mincer models, are estimated by the main employment status. Microdata come from EU-SILC survey, the main new reference source for comparative statistics at European level, which also detects a set of retrospective parental information allowing to account for potential generational changes over time. Briefly, empirical results are interesting, taken as a whole. Although not a few determinants appear to be relatively similar across countries, wider national-specific differentials are drawn. Most of all, it emerges how each component of human capital differently affects individuals’ earnings and earnings inequality across European countries and, most importantly, how this impact differs along the whole earnings distributions. Also, quite dissimilar patterns of influence of family-specific background on children’s outcomes across countries is sketched.
    Date: 2011–09
  15. By: Postel-Vinay, Fabien (University of Bristol); Turon, Hélène (University of Bristol)
    Abstract: Job-to-job turnover provides a way for employers to escape statutory firing costs, as unprofitable workers may willfully quit their job on receiving an outside offer, thus sparing their incumbent employer the firing costs. Furthermore, employers can induce their unprofitable workers to accept outside job offers that they would otherwise reject by offering voluntary severance packages, which are less costly than the full statutory firing cost. We formalize those mechanisms within an extension of the Diamond-Mortensen-Pissarides (DMP) matching model that allows for employed job search and negotiation over severance packages. We find that, while essentially preserving most standard qualitative predictions of the DMP model without employed job search, our model explains why higher firing costs intensify job-to-job turnover at the expense of transitions out of unemployment. We further find that allowing for on-the-job search markedly changes the quantitative predictions of the DMP model regarding the impact of firing costs on unemployment and employment flows: ignoring on-the-job search leads one to strongly underestimate the negative impact of firing costs on unemployment.
    Keywords: firing costs, on-the-job search, mutual consent, minimum wage
    JEL: J33 J64 E24
    Date: 2011–10
  16. By: Gevrek, Z. Eylem (University of Konstanz); Gevrek, Deniz (Texas A&M University Corpus Christi); Gupta, Sonam (University of Florida)
    Abstract: We examine the impact of culture on the work behavior of second-generation immigrant women in Canada. We contribute to the current literature by analyzing the role of intermarriage in intergenerational transmission of culture and its subsequent effect on labor market outcomes. Using relative female labor force participation and total fertility rates in the country of ancestry as cultural proxies, we find that culture matters for the female labor supply. Cultural proxies are significant in explaining number of hours worked by second-generation women with immigrant parents. More importantly, we show that the impact of cultural proxies is significantly larger for women with immigrant parents who share same ethnic background than for those with intermarried parents. The fact that the effect of culture is weaker for women who were raised in intermarried families stresses the importance of intermarriage in assimilation process. Our results are robust to different specifications and estimation strategies.
    Keywords: immigrant women, labor supply, culture, intermarriage
    JEL: J12 J16 J22 J61
    Date: 2011–10
  17. By: Chiara MUSSIDA (Department of Economics and Social Sciences, Università Cattolica del Sacro Cuore, Piacenza, Italy); Matteo PICCHIO (Department of Economics, CentER, ReflecT, Tilburg University, The Netherlands and IZA, Germany)
    Abstract: We analyse gender wage inequalities in Italy in the mid-1990s and in the mid-2000s. In this period important labour market developments occurred: institutional changes have loosened the use of flexible and atypical contracts; the female employment rates and educational levels have substantially increased. We identify the time trends of different components of the gender wage gap by estimating wage distributions in the presence of covariates and sample selection and by counterfactual microsimulations. We find that women swam against the tide: whilst the trend in female qualifications slightly reduced the gender wage gap, the gender relative trends in the wage structure significantly increased it.
    Keywords: gender wage gap, counterfactual distributions, decompositions, hazard function, labour market reforms
    JEL: C21 C41 J16 J31 J71
    Date: 2011–08–17
  18. By: Haefke, Christian (IHS - Institute for Advanced Studies, Vienna); Reiter, Michael (IHS - Institute for Advanced Studies, Vienna)
    Abstract: In this paper we use information on the cyclical variation of labor market participation to learn about the aggregate labor supply elasticity. For this purpose, we extend the standard labor market matching model to allow for endogenous participation. A model that is calibrated to replicate the variability of unemployment and participation, and the negative correlation of unemployment and GDP, implies an aggregate labor supply elasticity along the extensive margin of around 0.3 for men and 0.5 for women. This is in line with recent micro-econometric estimates.
    Keywords: matching models, labor market participation, labor supply elasticity
    JEL: E24 E32 J21 J64
    Date: 2011–10
  19. By: Giulio Bosio (University of Milan); Chiara Noè (University of Cergy-Pointoise)
    Abstract: The Italian system of higher education has recently experienced a process of radical transformation. The so-called 3+2 university reform reflects a big increase in the supply of college graduates that has attracted the attention of policy makers and fostered the debate on the size of human capital externalities. Using the 2009 Italian Labour Force Survey and incorporating a measure of graduate density within each occupation, in this article, we explore whether the social returns to education exceeds the private return and less educated workers gain more than college educated workers from spillovers associated with higher college share in their relative occupation. The OLS results clearly indicate that increases in graduate density have positive effects on wages and that the effect is larger for less educated workers, also controlling for potential confounding factors. However, the concentration of college workers across occupations is such that we may have a potential endogeneity problem. In order to recover a causal interpretation and to isolate the effect of graduate density, we employ an IV strategy exploiting the lagged demographic and occupational structure and the variation in the introduction of 3+2 courses at regional level. Merely, IV estimates largely indicate that the size of spillovers is significantly increased with respect to standard OLS results. Indeed, we estimate that a 1% increase in the college share within occupation raises wages by 0.9-1.3% for male and female, respectively. The effect is further larger for less educated workers.
    Date: 2011–09
  20. By: Shi Li (Beijing Normal University); Jin Song (Chinese Academy of Social Sciences)
    Abstract: Not available.
    Date: 2011
  21. By: Wen Fan (University College Dublin)
    Abstract: College graduates tend to earn more than non-graduates but it is difficult to ascertain how much of this empirical association between wages and college degree is due to the causal effect of a college degree and how much is due to unobserved factors that influence both wages and education (e.g. ability). In this paper, I use the 1970 British Cohort Study to examine the college premium for people who have a similar ability level by using a restricted sample of people who are all college eligible but some never attend. Compared to using the full sample, restricting the sample to college-eligible reduces the return to college significantly using both regression and propensity score matching (PSM) estimates. The finding suggests the importance of comparing individuals of similar ability levels when estimating the return to college.
    Keywords: return to college, regression, propensity score matching
    Date: 2011–09–30
  22. By: Lorenzo Rocco (University of Padova); Giorgio Brunello (University of Padova, Cesifo; IZA); Elena Crivellaro (University of Padova and LSE)
    Abstract: Using data for 23 economies in Eastern and Western Europe, we find evidence that having studied under communism is relatively penalized in the economies of the late 2000s. This evidence, however, is limited to males and to primary and secondary education, and holds for eight CEE economies but not for the East Germans who have studied in the former German Democratic Republic. We also find that post-secondary education acquired under communism yields higher, not lower, payoffs than similar education in Western Europe.
    Date: 2011–09
  23. By: Nadereh Chamlou (The World Bank); Silvia Muzi (The World Bank); Hanane Ahmed (The World Bank)
    Abstract: The similarities between the labor market supply of women with a Middle Eastern background living in Europe and those of women living in the Middle East is of particular interest. Indeed, empirical evidence shows that Female Labor Force Participation (FLFP) of immigrants reflects to a large extent the FLFP of country of origin, with women from more conservative societies tending to participate less in the labor market than natives or immigrants from countries with a high FLFP. This impacts the host country’s FLFP at an aggregate level. Therefore, from a European perspective, understanding the determinants of female labor supply in the conservative societies, such as countries from the Middle East and North Africa (MENA) region is of particular interest, considering the high share of this group among immigrants. Hence, this empirical research focuses on the role of education, especially higher education, and social norms in MENA on the choice of women to work outside. The region has achieved substantial progress in educating women, increasingly so at the tertiary level and across disciplines, but its FLFP remains the lowest among all regions. Our paper empirically investigates the impact of education with emphasis on higher education on FLFP and the relationship between social norms and female labor supply in a representative city in MENA, namely Amman, Jordan, as a proxy for MENA. Our analysis shows that higher education (post-secondary/university/post-university) has a positive and significant impact on FLFP, whereas secondary and below do not. In addition, there is a strong negative and statistically significant association between traditional social norms and the participation of women in the labor force. The findings pose the question of whether additional policies and actions are needed to change institutions and attitudes toward women’s work in general, as well as improve the economic opportunities of women who have secondary education which affects the bulk of working age women.
    Date: 2011–09
  24. By: Kässi, Otto
    Abstract: I decompose the variance of earnings of Finnish male and female workers to its permanent and transitory components and study their evolution between the years 1998 and 2007. I find that the increasing earnings inequality of men and women is driven by both transitory and permanent components of earnings. In addition, I find considerable differences in earnings dynamics between men and women that have been largely neglected in previous studies of earnings dynamics. The inequality among men is dominated by the permanent component. Conversely, permanent and transitory components are of comparable magnitudes to women. As a corollary, men face more stable income paths but with larger permanent earnings differences. Women, on the other hand, face more instable earnings profiles but have smaller permanent differences in earnings. The correlation between initial earnings inequality and the growth in earnings inequality is found to be positive for both sexes, implying a divergence of earnings profiles towards end of the working career. In addition, earnings instability has risen for both sexes.
    Keywords: Earnings distribution; earnings dynamics; permanent inequality; transitory inequality; variance decomposition
    JEL: J62 J31
    Date: 2011–10
  25. By: Ramos, Raul (University of Barcelona); Sanromá, Esteban (University of Barcelona)
    Abstract: The objective of this paper is to analyze the influence of individual variables and some characteristics related to spatial mobility in regional labour markets on overeducation in Spain. With this aim, we use microdata from the Spanish Budget Family Survey to estimate a logit model for overeducation probability taking into account the problem of selection bias and the presence of data of different levels (individuals and territory). The obtained results permit us to conclude that the size of local labour markets and the possibility of extending the job search to other labour markets through commuting are relevant factors to explain overeducation in the Spanish labour market. In spite of the differences in terms of labour market institutions, our results are very similar to the ones obtained for other countries.
    Keywords: educational mismatch, Spain, multilevel, commuting, job mismatch, differential overeducation
    JEL: J61 J24 J31
    Date: 2011–10
  26. By: Friesenbichler, Klaus
    Abstract: This paper analyzes firm growth patterns in South Asia, using establishment level data from an Interim Enterprise Survey. The survey was conducted by the World Bank in 2009 and 2010 and covers seven countries in the region. The first finding suggests that size in the base year gains importance for employment growth and firm age is statistically insignificant for growth. This contradicts the thought that young and small firms are the bearers of growth. Second, establishments in larger localities expanded faster, confirming the observation of urban centers as growth poles. Third, establishments in areas of severe conflict performed worse than establishments in other areas. Interestingly, the distribution of growth rates shows that both firm growth and fast-growing firms exist in conflict regions.
    Keywords: Microfinance,Achieving Shared Growth,Labor Markets,Small Scale Enterprise,Economic Growth
    Date: 2011–10–01
  27. By: Juan Yang (Beijing Normal University); Sylvie Demurger (Universite de Lyon-CHRS-GATE Lyon Saint-Etienne); Shi Li (Beijing Normal University)
    Abstract: Not available.
    Date: 2011
  28. By: Chris Robinson (University of Western Ontario)
    Abstract: Measures of occupation distance based on underlying skill portfolios are constructed and used to contrast involuntary and total mobility. One component of total occupational mobility is voluntary mobility, including moves to higher job offers using the same skills, as well as promotions that may reflect augmented skills. These are not sources of specific human capital loss. By contrast, the involuntary mobility component due to plant closure involves a higher incidence of loss of specific capital. The evidence indicates that a decreasing fraction of occupation switches involve significant skill portfolio switches: the mean distance in involuntary occupational mobility declines significantly over time. Wage losses following displacement are strongly related to distance. This is reflected in a marked downward shift in the skill portfolio for involuntary occupation switchers. By contrast, the direction of the skill portfolio change in total mobility shows a neutral or modest upward pattern, suggesting limited specific human capital loss from voluntary occupational mobility.
    JEL: J24 J31
    Date: 2011
  29. By: Olga Bohachova; Bernhard Boockmann; Claudia M. Buch
    Abstract: In Germany, the employment response to the post-2007 crisis has been muted compared to other industrialized countries. Despite a large drop in output, employment has hardly changed. In this paper, we analyze the determinants of German firms’ labor demand during the crisis using a firm-level panel dataset. Our analysis proceeds in two steps. First, we estimate a dynamic labor demand function for the years 2000-2009 accounting for the degree of working time flexibility and the presence of works councils. Second, on the basis of these estimates, we use the difference between predicted and actual employment as a measure of labor hoarding as the dependent variable in a cross-sectional regression for 2009. Apart from total labor hoarding, we also look at the determinants of subsidized labor hoarding through short-time work. The structural characteristics of firms using these channels of adjustment differ. Product market competition has a negative impact on total labor hoarding but a positive effect on the use of short-time work. Firm covered by collective agreements hoard less labor overall; firms without financial frictions use short-time work less intensively.
    Keywords: Labor demand, economic crisis, short-time work, financial frictions, labor market institutions, employment adjustment
    JEL: J23 J68 G32
    Date: 2011–10

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