nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2011‒12‒13
33 papers chosen by
Erik Jonasson
Lund University

  1. Ethnic Disparities in the Graduate Labour Market By Zorlu, Aslan
  2. Wage Dispersion and Decentralization of Wage Bargaining By Dahl, Christian M.; le Maire, Daniel; Munch, Jakob R.
  3. Emigration and Wages: The EU Enlargement Experiment By Elsner, Benjamin
  4. Are Low Skill Public Sector Workers Really Overpaid? A Quasi-Differenced Panel Data Analysis By Peter Siminski
  5. Minimum Wage Channels of Adjustment By Hirsch, Barry T.; Kaufman, Bruce E.; Zelenska, Tetyana
  6. Do Gender Differences in Risk Preferences Explain Gender Differences in Labor Supply, Earnings or Occupational Choice? By Cho, In Soo
  7. Evidence on the impact of minimum wage laws in an informal sector: Domestic workers in South Africa By Dinkelman, Taryn; Ranchhod, Vimal
  8. Worktime regulations and spousal labor supply By Goux, Dominique; Maurin, Eric; Petrongolo, Barbara
  9. How Does Education Affect the Earnings Distribution in Urban China? By Wang, Le
  10. Early Retirement and Financial Incentives: Differences Between High and Low Wage Earners By Rob Euwals
  11. It's the Opportunity Cost, Stupid! How Self-Employment Responds to Financial Incentives of Return, Risk and Skew By Berkhout, Peter; Hartog, Joop; van Praag, Mirjam
  12. Job Preferences as Revealed by Employee Initiated Job Changes By Grund, Christian
  13. Occupational Adjustment of Immigrants By Zorlu, Aslan
  14. Work Hours Constraints and Health By Bell, David N.F.; Otterbach, Steffen; Sousa-Poza, Alfonso
  15. Are the Self-Employed Really Jacks-of-All-Trades? Testing the Assumptions and Implications of Lazear's Theory of Entrepreneurship with German Data By Lechmann, Daniel S. J.; Schnabel, Claus
  16. Are homosexuals discriminated against in the hiring process? By Ahmed, Ali; Andersson, Lina; Hammarstedt, Mats
  17. Cohort Size and Youth Earnings: Evidence from a Quasi-Experiment By Morin, Louis-Philippe
  18. Vignette Equivalence and Response Consistency: The Case of Job Satisfaction By Ferrer-i-Carbonell, Ada; van Praag, Bernard M. S.; Theodossiou, Ioannis
  19. Skilled labor supply, IT-based technical change and job instability By Luc Behaghel; Julie Moschion
  20. The effect of housework on wages in Germany: No impact at all By Hirsch, Boris; Konietzko, Thorsten
  21. The Role of Peers in Estimating Tenure-Performance Profiles: Evidence from Personnel Data By de Grip, Andries; Sauermann, Jan; Sieben, Inge
  22. The Use of Flexible Measures to Cope with Economic Crises in Germany and Brazil By Eichhorst, Werner; Marx, Paul; Pastore, José
  23. The Implications of Cultural Background on Labour Market Choices: The Case of Religion and Entrepreneurship By Nunziata, Luca; Rocco, Lorenzo
  24. Long Shadows of History: Persecution in Central Europe and Its Labor Market Consequences By Myck, Michal; Bohacek, Radim
  25. Work hours constraints and health By Bell, David; Otterbach, Steffen; Sousa-Poza, Alfonso
  26. Rubble Women: The Long-Term Effects of Postwar Reconstruction on Female Labor Market Outcomes By Akbulut-Yuksel, Mevlude; Khamis, Melanie; Yuksel, Mutlu
  27. Socioeconomic Heterogeneity in the Effect of Health Shocks on Earnings: Evidence from Population-Wide Data on Swedish Workers By Lundborg, Petter; Nilsson, Martin; Vikström, Johan
  28. How Local Are Labor Markets? Evidence from a Spatial Job Search Model By Manning, Alan; Petrongolo, Barbara
  29. The Mom Effect: Family Proximity and the Labour Force Status of Women in Canada By admin, clsrn
  30. Profit Sharing and Training By Kraft, Kornelius; Lang, Julia
  31. Average and Marginal Returns to Upper Secondary Schooling in Indonesia By Carneiro, Pedro; Lokshin, Michael; Ridao-Cano, Cristobal; Umapathi, Nithin
  32. Satisfaction with creativity: a study of organisational characteristics and individual motivations By Silvia Sacchetti; Ermanno C. Tortia
  33. Aggregation, the skill premium, and the two-level production function By Miguel A. León-Ledesma; Peter McAdam; Alpo Willman

  1. By: Zorlu, Aslan (University of Amsterdam)
    Abstract: This paper examines ethnic wage differentials for the entire population of students enrolled in 1996 using unique administrative panel data for the period 1996 to 2005 from the Dutch tertiary education system. The study decomposes wage differentials into two components: a component which can be explained by the observed characteristics and unexplained component. The analysis provides novel evidence for the magnitude and the origin of ethnic wage differentials by gender. In general, ethnic wage gap is larger for migrant women than migrant men and larger for Western and Caribbean migrants than Mediterranean migrants. Ethnic minority students appear to have large wage surplus which is almost entirely explained from their favourable observed characteristics. Most notably, Mediterranean female graduates have significant positive wage discrimination while Western female graduates seem to face a small wage penalty.
    Keywords: college, university, wages, qualifications, dropout
    JEL: J15 J24 J31
    Date: 2011–11
  2. By: Dahl, Christian M. (University of Southern Denmark); le Maire, Daniel (University of Copenhagen); Munch, Jakob R. (University of Copenhagen)
    Abstract: This paper studies how decentralization of wage bargaining from sector to firm-level influences wage levels and wage dispersion. We use detailed panel data covering a period of decentralization in the Danish labor market. The decentralization process provides variation in the individual worker's wage-setting system that facilitates identification of the effects of decentralization. We find a wage premium associated with firm-level bargaining relative to sector-level bargaining, and that the return to skills is higher under the more decentralized wage-setting systems. Using quantile regression, we also find that wages are more dispersed under firm-level bargaining compared to more centralized wage-setting systems.
    Keywords: wage bargaining, decentralization, wage dispersion
    JEL: J31 J51 C23
    Date: 2011–11
  3. By: Elsner, Benjamin (Trinity College Dublin)
    Abstract: The enlargement of the European Union provides a unique opportunity to study the impact of the lifting of migration restrictions on the migrant sending countries. With EU enlargement in 2004, 1.2 million workers from Eastern Europe emigrated to the UK and Ireland. I use this emigration wave to show that emigration significantly changed the wage distribution in the sending country, in particular between young and old workers. Using a novel dataset from Lithuania, the UK and Ireland for the calibration of a structural model of labor demand, I find that over the period of five years emigration increased the wages of young workers by 6%, while it had no effect on the wages of old workers. Contrary to the immigration literature, there is no significant effect of emigration on the wage distribution between high-skilled and low-skilled workers.
    Keywords: emigration, EU enlargement, European integration, wage distribution
    JEL: F22 J31 O15 R23
    Date: 2011–11
  4. By: Peter Siminski (University of Wollongong)
    Abstract: Public-private sectoral wage differentials have been studied extensively using quantile regression techniques. These typically find large public sector premiums at the bottom of the wage distribution. This may imply that low skill workers are ‘overpaid’, prompting concerns over efficiency. We note several other potential explanations for this result and explicitly test whether the premium varies with skill, using Australian data. We use a quasi-differenced GMM panel data model which has not been previously applied to this topic, internationally. Unlike other available methods, this technique identifies sectoral differences in returns to unobserved skill. It also facilitates a decomposition of the wage gap into components explained by differences in returns to all (observed and unobserved) skills and by differences in their stock. We find no evidence to suggest that the premium varies with skill. One interpretation is that the compressed wage profile of the public sector induces the best workers (on unobserved skills) to join the public sector in low wage occupations, vice versa in high wage occupations. We also estimate the average public sector premium to be 6% for women and statistically insignificant (4%) for men.
    Keywords: public sector, wages, quasi-differenced panel data, GMM, Australia
    JEL: J45 J31 J38
    Date: 2011
  5. By: Hirsch, Barry T. (Georgia State University); Kaufman, Bruce E. (Georgia State University); Zelenska, Tetyana (Innovations for Poverty Action)
    Abstract: The economic impact of the 2007-2009 increases in the federal minimum wage (MW) is analyzed using a sample of quick-service restaurants in Georgia and Alabama. Store-level biweekly payroll records for individual employees are used, allowing us to precisely measure the MW compliance cost for each restaurant. We examine a broad range of adjustment channels in addition to employment, including hours, prices, turnover, training, performance standards, and non-labor costs. Exploiting variation in the cost impact of the MW across restaurants, we find no significant effect of the MW increases on employment or hours over the three years. Cost increases were instead absorbed through other channels of adjustment, including higher prices, lower profit margins, wage compression, reduced turnover, and higher performance standards. These findings are compared with MW predictions from competitive, monopsony, and institutional/behavioral models; the latter appears to fit best in the short run.
    Keywords: minimum wages, employment, labor market adjustments, labor market theories
    JEL: J20 J30
    Date: 2011–11
  6. By: Cho, In Soo
    Abstract: This paper examines the extent to which differences in risk preferences between men and women explain why women have a lower entrepreneurship rate, earn less, and work fewer hours than men.  Data from the NLSY79 confirms previous findings that women are more risk averse than men.  However, while less risk averse men tend to become self-employed and more risk averse men are likely to choose paid-employment, there is no significant effect of risk preferences on women’s entrepreneurship decisions.  Similarly, more risk aversion is associated with higher earnings for male entrepreneurs, but it has no effect on female entrepreneurial earnings. Rising rates of risk aversion lower earnings for women, consistent with theoretical effects of risk preferences on labor earnings, but the effects are of modest magnitude.  Risk preferences do not explain variation in hours of work for either men or women.  These findings suggest that widely reported differences in risk preferences across genders play only a trivial role in explaining differences in labor market outcomes between men and women.
    Keywords: risk aversion; earnings; labor supply; gender gap; self-employment; Blinder-Oaxaca decomposition
    JEL: J16 J22 J24 J31
    Date: 2011–12–02
  7. By: Dinkelman, Taryn; Ranchhod, Vimal
    Abstract: What happens when a previously uncovered labour market is regulated? We exploit the introduction of a minimum wage in South Africa and variation in the intensity of this law to identify increases in wages for domestic workers and find no statistically significant effects on the intensive or extensive margins of work. These large, partial responses to the law are somewhat surprising, given the lack of monitoring and enforcement in this informal sector. We interpret these changes as evidence that strong external sanctions are not necessary for new labour legislation to have a significant impact on informal sectors of developing countries, at least in the short-run.
    Keywords: africa; domestic workers; informal sector; minimum wage
    JEL: J08 J23 J38
    Date: 2011–12
  8. By: Goux, Dominique; Maurin, Eric; Petrongolo, Barbara
    Abstract: We investigate cross-hour effects in spousal labor supply exploiting independent variation in hours worked generated by the introduction of the short workweek in France in the late 1990s. We find that female and male employees treated by the shorter legal workweek reduce their weekly labor supply by about 2 hours, and do not experience any reduction in their monthly earnings. While wives of treated men do not seem to adjust their working time at either the intensive or extensive margins, husbands of treated wives respond by cutting their labor supply by about half an hour to one hour per week, according to specifications and samples. Further tests reveal that husbands’ labor supply response did not entail the renegotiation of usual hours with employers or changes in earnings, but involved instead a reduction in (unpaid) work involvement, whether within a given day, or through an increase in the take-up rate of paid vacation and/or sick leave. These margins of adjustment are shown to have no detrimental impact on men’s (current) earnings. The estimated cross-hour effects are consistent with the presence of spousal leisure complementarity for husbands, though not for wives.
    Keywords: cross-hour effects; spousal labour supply; workweek reduction
    JEL: J12 J22 J48
    Date: 2011–11
  9. By: Wang, Le (University of New Hampshire)
    Abstract: China's phenomenal growth is accompanied by both relatively low level of standards of living and high inequality. It is widely believe that investing in education could be an effective strategy to promote higher standards of living as well as to reduce inequality. However, little is known about whether this belief is empirically supported. To this end, we employ a recently developed distributional approach to estimate returns to education across the whole earnings distribution in urban China during economic transition. We find that returns to education are generally more pronounced for individuals in the lower tail of the earnings distribution than for those in the upper tail, in stark contrast to the results found in developed countries. Our result implies that education indeed reduces earnings inequality while increasing individuals' earnings. We also find that the returns to education are uniformly larger for women than for men across the distribution. The results suggest the presence of added effects of education on earnings, as opposed to productivity-enhancing effects, for disadvantaged groups. Finally, we find that rates of educational return increased over time for all parts of the earnings distribution.
    Keywords: returns to education, inequality, gender gap, economic transition, instrumental variable quantile regression
    JEL: J24 J61 J31 J7 J15 C31
    Date: 2011–11
  10. By: Rob Euwals
    Abstract: <p>This paper investigates the impact of financial incentives on early-retirement behaviour for high and low wage earners. </p><p>Using a stylized life-cycle model, we derive hypotheses on the behaviour of the two types. We use administrative data and employ two identification strategies to test the predictions. First, we exploit exogenous variation in the replacement rate over birth cohorts of workers who are eligible to a transitional early retirement scheme. Second, we employ a regression discontinuity design by comparing workers who are eligible and non-eligible to the transitional scheme. The empirical results show that low wage earners are, as predicted by the model, more sensitive to financial incentives. The results imply that low wage earners will experience a stronger incentive to continue working in an optimal early retirement scheme.</p>
    JEL: J16 J22 J61
    Date: 2011–11
  11. By: Berkhout, Peter (RIGO Research Institute); Hartog, Joop (University of Amsterdam); van Praag, Mirjam (University of Amsterdam)
    Abstract: There is no robust empirical support for the effect of financial incentives on the decision to work in self-employment rather than as a wage earner. In the literature, this is seen as a puzzle. We offer a focus on the opportunity cost, i.e. the wages given up as an employee. Information on income from self-employment is of inferior quality and this is not just a problem for the outside researcher, it is an imminent problem of the individual considering self-employment. We also argue that it is not only the location of an income distribution that matters and that dispersion and (a)symmetry should not be ignored. We predict that higher mean, lower variance and higher skew in the wage distribution in a particular employment segment reduce the inclination to prefer self-employment above employee status. Using a sample of 56,000 recent graduates from a Dutch college or university, grouped in approximately 120 labor market segments, we find significant support for these propositions. The results survive various robustness checks on specifications and assumptions.
    Keywords: entrepreneurship, self-employment, wage-employment, income distribution, income risk, income skew, income variance, occupational choice, labor market entry, labor market segments, opportunity cost
    JEL: J24 L26
    Date: 2011–11
  12. By: Grund, Christian (University of Duisburg-Essen)
    Abstract: Many previous studies try to discover job preferences by directly asking individuals. Since it is not sure, whether answers to these surveys are relevant for actual behaviour, this empirical examination offers a new approach based on representative German data. Employees who quit their job and find a new one, compare the two jobs with respect to eight job characteristics: type of work, pay, chances of promotion, work load, commuting time, work hour regulations, fringe benefits and security against loss of job. It is argued that the observation of many improvements (and few declines) for a certain attribute indicates a particular relevance and high preference for this attribute. It turns out that pay and type of work are most important for employees in this sense. Differences across subgroups of employees with respect to individual characteristics such as sex and age are explored. Those between East- and West-Germany diminish over time.
    Keywords: job characteristics, job changes, job preferences, quits
    JEL: M5 J28 J63
    Date: 2011–11
  13. By: Zorlu, Aslan (University of Amsterdam)
    Abstract: This paper examines the speed of the occupational adjustment of immigrants using Labour Force Surveys 2004 and 2005 from Statistics Netherlands. The analysis provides new evidence that immigrants start with jobs at the lower levels of skill distribution. Their occupational achievement improves significantly with the duration of residence. The extent of this initial disadvantage and the rate of adjustment vary across immigrant groups according to the transferability of skills associated with their cultural and linguistic distance from Dutch society as predicted by the theory of immigrant occupational mobility. Most notably, Turks and Moroccans face the greatest initial dip and achieve the highest rate of adjustment while the opposite holds for Caribbean and Western immigrants. Our results are robust to three alternative measures of occupational status.
    Keywords: ethnic minorities, quality of jobs
    JEL: J15 J24
    Date: 2011–11
  14. By: Bell, David N.F. (University of Stirling); Otterbach, Steffen (University of Hohenheim); Sousa-Poza, Alfonso (University of Hohenheim)
    Abstract: The issue of whether employees who work more hours than they want to suffer adverse health consequences is important not only at the individual level but also for governmental formation of work time policy. Our study investigates this question by analyzing the impact of the discrepancy between actual and desired work hours on self-perceived health outcomes in Germany and the United Kingdom. Based on nationally representative longitudinal data, our results show that work-hour mismatches (i.e., differences between actual and desired hours) have negative effects on workers’ health. In particular, we show that “overemployment” – working more hours than desired – has negative effects on different measures of self-perceived health.
    Keywords: work time, hours constraints, health, Germany, United Kingdom
    JEL: I10 J21 J22
    Date: 2011–11
  15. By: Lechmann, Daniel S. J. (University of Erlangen-Nuremberg); Schnabel, Claus (University of Erlangen-Nuremberg)
    Abstract: Using a large representative German data set and various concepts of self-employment, this paper tests the "jack-of-all-trades" view of entrepreneurship by Lazear (AER 2004). Consistent with its theoretical assumptions we find that self-employed individuals perform more tasks and that their work requires more skills than that of paid employees. In contrast to Lazear's assumptions, however, self-employed individuals do not just need more basic but also more expert skills than employees. Our results also provide only very limited support for the idea that human capital investment patterns differ between those who become self-employed and those ending up in paid employment.
    Keywords: entrepreneurship, self-employed, Germany
    JEL: J23 J24
    Date: 2011–11
  16. By: Ahmed, Ali (Linnaeus University); Andersson, Lina (Linnaeus University); Hammarstedt, Mats (Linnaeus University)
    Abstract: This paper presents the first field experiment on sexual orientation discrimination in the hiring process in the Swedish labor market. Job applications were sent to about 4,000 employers in 10 different occupations in Sweden. Gender and sexual orientation were randomly assigned to applications. The results show that sexual orientation discrimi-nation exists in the Swedish labor market. The discrimination against gays and lesbian varies across different occupations and appears only in the private sector. The results also seem to suggest a new dimension of traditional gender roles; the gay applicant was discriminated against in typical male-dominated occupations whereas the lesbian applicant was discriminated against in typical female-dominated occupations. Thus, the results suggest that gays to some extent face the same obstacles on the labor market as heterosexual women.
    Keywords: Labor market discrimination; sexual orientation; field experiment
    JEL: C93 J15 J71
    Date: 2011–11–28
  17. By: Morin, Louis-Philippe
    Abstract: In this paper, I use data from the Canadian Labour Force Surveys (LFS), and the 2001 and 2006 Canadian Censuses to estimate the impact of an important labor supply shock on the earnings of young high-school graduates. The abolition of Ontario’s Grade 13 generated a ‘double’ cohort of high-school graduates that simultaneously entered the Ontario labor market, generating a large and sudden increase in the labor supply. This provides a rare occasion to measure the impact of cohort size on earnings without the supply shock being possibly confounded with unobserved trends—a recurring problem in the literature. The Census findings suggest that the effect of the supply shock is statistically and economically important, depressing weekly earnings by 5 to 9 percent. The findings from Census are supported by the LFS results which suggest that the immediate impact of the supply shock—measured about six months after high-school graduation—is also important.
    Keywords: Labor Supply Shock, Youth
    JEL: J10 J20 J21
    Date: 2011–11–28
  18. By: Ferrer-i-Carbonell, Ada (IAE Barcelona (CSIC)); van Praag, Bernard M. S. (University of Amsterdam); Theodossiou, Ioannis (University of Aberdeen)
    Abstract: We compare reported job satisfaction with vignette evaluations of hypothetical jobs by using a British, Greek and Dutch data set, containing 95 randomly assigned vignettes. In order to test comparability of international data sets recently the method of anchoring vignettes has been introduced by King et al. (2004). This intuitively and attractive idea requires the properties of vignette equivalence and response consistency. In our data set both job satisfaction and vignettes are numerically evaluated on a 0-10-scale. This fact allows us to interpret the evaluations as cardinal satisfaction values and to estimate satisfaction functions for vignettes and for the own job situation. We find that both functions differ significantly: vignette evaluations appear to depend on the own job situation and other individual characteristics. Hence, without correction for those differences in background characteristics, vignette evaluations are not comparable between individuals. Similar conclusions are reached for response consistency.
    Keywords: vignettes, vignette equivalence, response consistency, job satisfaction, subjective well-being
    JEL: J28 D6 J24 C25
    Date: 2011–11
  19. By: Luc Behaghel (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique); Julie Moschion (Melbourne Institute of Applied Economic and Social Research - Melbourne Institute of Applied Economic and Social Research)
    Abstract: In this paper, we provide empirical evidence on the impact of IT diffusion on the stability of employment relationships. We document the evolution of the different components of job instability over a panel of 350 local labor markets in France, from the mid 1970s to the early 2000s. Although workers in more educated local labor markets adopt IT faster, they do not experience any increase in job instability. More specifically, we find no evidence that the faster diffusion of IT is associated with any change in job-to-job transitions, and we find that it is associated with relatively less frequent transitions through unemployment. Overall, the evidence goes against the view that the diffusion of IT has spurred job instability. Combining the local labor market variations with firm data, we argue that these findings can be explained by French firms' strong reliance on training and internal promotion strategies in order to meet the new skills requirement associated with IT diffusion.
    Keywords: Technical change; labor turnover; Skill bias; Job security; Internal labor markets
    Date: 2011–11
  20. By: Hirsch, Boris; Konietzko, Thorsten
    Abstract: This paper presents evidence on the impact of hours spent on housework activities on individuals' wages for Germany using data from both the German Socio-Economic Panel and the German Time Use Survey. In contrast to most of the international literature, we find no negative effect of housework on wages. This holds for men and women, for married and single individuals, and for part-time and full-time workers both in West and East Germany. Our insights do not change when we distinguish different types of housework activities or address the endogeneity of housework in our wage regressions by using instrumental variables estimators. -- Auf Grundlage zweier deutscher Datensätze, des Sozio-oekonomischen Panels und der Zeitbudgeterhebung, untersucht dieser Beitrag den Einfluss der für Hausarbeit aufgewandten Zeit auf die Löhne. Im Gegensatz zum Gros der internationalen Forschungsliteratur findet sich kein negativer Effekt der Hausarbeit auf die Löhne. Dieses Ergebnis zeigt sich in West- wie Ostdeutschland sowohl für Frauen und Männer, für verheiratete Individuen und Singles als auch für Teilzeit- und Vollzeitbeschäftigte. Unsere Ergebnisse ändern sich zudem nicht, wenn wir verschiedene Formen von Hausarbeit unterscheiden oder die Endogenität der geleisteten Hausarbeit in den Lohnregressionen mithilfe von Instrumentvariablenschätzungen berücksichtigen.
    Keywords: housework,time use,gender pay gap,Germany
    JEL: J16 J31 J22
    Date: 2011
  21. By: de Grip, Andries (ROA, Maastricht University); Sauermann, Jan (ROA, Maastricht University); Sieben, Inge (Tilburg University)
    Abstract: In this paper, we estimate tenure-performance profiles using unique panel data that contain detailed information on individual workers' performance. We find that a 10 per cent increase in tenure leads to an increase in performance of 5.5 per cent of a standard deviation. This translates to an average performance increase of about 75 per cent within the first year of the employment relationship. Furthermore, we show that there are peer effects in learning on-the-job: Workers placed in teams with more experienced and thus more productive peers perform significantly better than those placed in teams with less experienced peers. An increase in the average team tenure by one standard deviation leads to an increase of 11 to 14 per cent of a standard deviation in performance.
    Keywords: tenure-performance profiles, experience, learning on-the-job, peer effects, productivity, call centres
    JEL: J24 D24 L89
    Date: 2011–11
  22. By: Eichhorst, Werner (IZA); Marx, Paul (University of Southern Denmark); Pastore, José (University of Sao Paulo)
    Abstract: This study gives a comparative overview of labor market dynamics and institutional arrangements in Germany and Brazil with particular emphasis on industrial relations, wage setting, unemployment benefits, employment protection and vocational training. The paper shows that institutions determine the mode of adjustment to changing economic conditions and the role of standard vs. non-standard contracts. Whereas internal flexibility via shorter working time was a dominant mode of adjustment during the 2008-09 crisis in the German manufacturing sector, in Brazil such plant-level flexibility to avoid dismissals was less prominent.
    Keywords: labor market flexibility, Germany, Brazil, working time, dismissal protection
    JEL: J21 J42 J52
    Date: 2011–11
  23. By: Nunziata, Luca (University of Padova); Rocco, Lorenzo (University of Padova)
    Abstract: We suggest a methodology for identifying the implications of alternative cultural and social norms embodied by religious denomination on labour market outcomes, by estimating the differential impact of Protestantism versus Catholicism on the propensity to be an entrepreneur, on the basis of the diverse minority status of both confessions across European regions. Our quasi-experimental research design exploits the stronger degree of attachment to religious ethic of religious minorities and the exogenous historical determination of the geographical distribution of religious minorities in Europe. Our analysis of European Social Survey data collected in four waves between 2002 and 2008 in 22 European countries, indicates that cultural background has a significant effect on the individual propensity to become an entrepreneur, with Protestantism increasing the chances to be an entrepreneur by around 3% with respect to Catholicism. Our findings, stable across a number of robustness checks, provide further evidence on the need to take cultural elements into consideration when analysing economic behaviour.
    Keywords: entrepreneurship, self-employment, religion, culture, Protestantism, Catholicism
    JEL: J24 J21 Z12 Z13
    Date: 2011–11
  24. By: Myck, Michal (Centre for Economic Analysis, CenEA); Bohacek, Radim (CERGE-EI)
    Abstract: We analyze the extent and effects of job-related persecution under communist regimes in the Czech Republic and Poland using a representative sample of individuals aged 50+ from the Survey of Health, Ageing and Retirement in Europe. Retrospective information collected in the SHARELIFE interview offers a unique chance to relate past and current labor market outcomes to experiences of persecution reflecting the historical developments in Central Europe in the 20th century. Individual level data with details on labor market histories is matched with information on the experiences of state oppression. On-the-job persecution is found to have significant effect on job quality assessment and is strongly related to reporting of distinct periods of stress in both countries. Consequences of on-the-job persecution seem to have been much more severe and longer lasting in the Czech Republic, with significant financial effects of job loss or discrimination. This is explained by the greater degree of state control over the labour market in the former Czechoslovakia compared to Poland and different characteristics of the dissident groups in both countries.
    Keywords: labor discrimination, persecution, job satisfaction, life histories, history of Central Europe
    JEL: J71 J28 N44 I19
    Date: 2011–11
  25. By: Bell, David; Otterbach, Steffen; Sousa-Poza, Alfonso
    Abstract: The issue of whether employees who work more hours than they want to suffer adverse health consequences is important not only at the individual level but also for governmental formation of work time policy. Our study investigates this question by analyzing the impact of the discrepancy between actual and desired work hours on self-perceived health outcomes in Germany and the United Kingdom. Based on nationally representative longitudinal data, our results show that work-hour mismatches (i.e., differences between actual and desired hours) have negative effects on workers' health. In particular, we show that overemployment - working more hours than desired - has negative effects on different measures of self-perceived health. --
    Keywords: work time,hours constraints,health, Germany,United Kingdom
    JEL: I10 J21 J22
    Date: 2011
  26. By: Akbulut-Yuksel, Mevlude (Dalhousie University); Khamis, Melanie (Wesleyan University); Yuksel, Mutlu (Dalhousie University)
    Abstract: During World War II, more than one-half million tons of bombs were dropped in aerial raids on German cities, destroying about forty percent of the total housing stock nationwide. With a large fraction of the male population gone, the reconstruction process had mainly fallen on women in postwar Germany. This paper provides causal evidence on long-term legacies of postwar reconstruction and mandatory employment on women's labor market outcomes. We combine a unique dataset on city-level destruction in Germany caused by the Allied Air Forces bombing during WWII with individual survey data from the German Microcensus. Using difference-in-difference and instrumental-variable strategies, we find that postwar mandatory employment reduced female labor force participation and hours worked in the long-run. However, our results show that participating in postwar reconstruction efforts increased the female presence in medium-skill and female-dominated occupations. These results survive after accounting for labor supply side factors such as wealth and savings loss during WWII, war relief payments and change in the composition of population and labor demand side factors such as female share in industry, construction, service and public sectors.
    Keywords: postwar reconstruction, female labor force participation, occupational choice
    JEL: I21 I12 J24 N34
    Date: 2011–11
  27. By: Lundborg, Petter (Lund University); Nilsson, Martin (Uppsala University); Vikström, Johan (Uppsala University)
    Abstract: In this paper, we estimate socioeconomic heterogeneity in the effect of unexpected health shocks on labor market outcomes, using register-based data on the entire population of Swedish workers. We effectively exploit a Difference-in-Difference-in-Differences design, in which we compare the change in labor earnings across treated and control groups with high and low education levels. If the anticipation effects are similar for individuals with high and low education, any difference in the estimates across socioeconomic groups could plausibly be given a causal interpretation. Our results suggest a large amount of heterogeneity in the effects, in which individuals with a low education level suffer relatively more from a given health shock. These results hold across a wide range of different types of health shocks and become more pronounced with age. Our results suggest that socioeconomic heterogeneity in the effect of health shocks offers one explanation for how the socioeconomic gradient in health arises.
    Keywords: health, health shocks, socioeconomic status, life-cycle
    JEL: I10 I12 I14
    Date: 2011–11
  28. By: Manning, Alan (London School of Economics); Petrongolo, Barbara (London School of Economics)
    Abstract: This paper uses data on very small UK geographies to investigate the effective size of local labor markets. Our approach treats geographic space as continuous, as opposed to a collection of non-overlapping administrative units, thus avoiding problems of mismeasurement of local labor markets encountered in previous work. We develop a theory of job search across space that allows us to estimate a matching process with a very large number of areas. Estimates of this model show that the cost of distance is relatively high – the utility of being offered a job decays at exponential rate around 0.3 with distance (in km) to the job – so that labor markets are indeed quite 'local'. Also, workers are discouraged from applying to jobs in areas where they expect relatively strong competition from other jobseekers. The estimated model replicates fairly accurately actual commuting patterns across neighbourhoods, although it tends to underpredict the proportion of individuals who live and work in the same ward. Finally, we find that, despite the fact that labor markets are relatively 'local', local development policies are fairly ineffective in raising the local unemployment outflow, because labor markets overlap, and the associated ripple effects in applications largely dilute the impact of local stimulus across space.
    Keywords: job search, local labor markets, location-based policies, ripple effects
    JEL: J61 J63 J64 R12
    Date: 2011–11
  29. By: admin, clsrn
    Abstract: In this paper, we examine the effect of family co-residence and proximity on the labour force participation and working hours of Canadian women. Using Cycle 21 of the Canadian General Social Survey, we describe proximity patterns in Canada and show that the labour force attachment of women is related to the proximity of their mothers. Lower labour market attachment is found for married women without young children who co-reside with their mothers (those women most likely to care for their elderly mothers) and for married women with young children who live more than half a day away from their mothers (those women least likely to benefit from the availability of family provided childcare). On the intensive margin, both married and single women with children work fewer hours if they live far from their mothers. The results hold only for proximity to living mothers (as opposed to proximity to widowed fathers), suggesting that it is the mothers themselves, and not merely the home location, that drives the results. The results are consistent in IV estimations. To the extent that the positive effect of close proximity is related to the availability of grandchild care, policies that impact the labour force behaviour of grandmothers may also impact the labour force behaviour of their daughters. Moreover, the regional patterns in proximity suggest that national childcare and labour market policies may yield different results across the country.
    Keywords: Women’s labour supply; Family proximity; Childcare
    JEL: J11 J22 J13
    Date: 2011–11–28
  30. By: Kraft, Kornelius (TU Dortmund); Lang, Julia (TU Dortmund)
    Abstract: We analyze the impact of profit sharing on the share of workers receiving training. An effect is plausible because: 1) profit sharing is a credible commitment by firms to reward firm-specific skills acquired by formal or informal training, 2) profit sharing may reduce turnover and increase the returns to training, 3) a common payment for the whole workforce leads to peer group pressure to participate in training courses and raises incentives to help co-workers. In order to eliminate possible selectivity effects, we combine a matching approach with difference-in-differences. We identify the proportion of employees participating in profits and differentiate profit sharing according to the percentage of the workers covered by such remuneration schemes. Using German establishment data we find that profit sharing only has a significant effect on training intensity if the majority of the workforce benefits from it.
    Keywords: profit sharing, training, matching
    JEL: C14 J33 M52 J24
    Date: 2011–11
  31. By: Carneiro, Pedro (University College London); Lokshin, Michael (World Bank); Ridao-Cano, Cristobal (World Bank); Umapathi, Nithin (World Bank)
    Abstract: This paper estimates average and marginal returns to schooling in Indonesia using a non-parametric selection model. Identification of the model is given by exogenous geographic variation in access to upper secondary schools. We find that the return to upper secondary schooling varies widely across individuals: it can be as high as 50 percent per year of schooling for those very likely to enroll in upper secondary schooling, or as low as -10 percent for those very unlikely to do so. Average returns for the student at the margin are well below those for the average student attending upper secondary schooling.
    Keywords: returns to schooling, marginal return, average return, marginal treatment effect
    JEL: J31
    Date: 2011–11
  32. By: Silvia Sacchetti; Ermanno C. Tortia
    Abstract: In answering the question of what influences satisfaction for creativity in the workplace, this work takes into account the extent to which the organization supports human aspiration to creativity. The empirical model uses survey data encompassing over 4,000 workers in Italian social enterprises. Results show that satisfaction for creativity is supported, at organizational level, by teamwork-oriented action, including the quality of processes, relations and on-the job autonomy. At the individual level, satisfaction for creativity is enhanced by the strength of intrinsic and socially oriented motivations and by competence. The analysis of interaction terms shows that teamwork and workers' intrinsic motivations are complementary in enhancing the perception of creativity-enhancing work settings, while a high degree of required competences appears to substitute good relationships with superiors
    Keywords: creativity, job satisfaction, organizational processes, motivations, teamwork,autonomy, interpersonal relations
    JEL: J24 J28 J54
    Date: 2011
  33. By: Miguel A. León-Ledesma (School of Economics, University of Kent, Kent CT2 7NP, United Kingdom.); Peter McAdam (European Central Bank, Research Department, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany and visiting Professor of Economics at the University of Surrey.); Alpo Willman (European Central Bank, Research Department, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.)
    Abstract: We examine the two-level nested Constant Elasticity of Substitution production function where both capital and labor are disaggregated in two classes. We propose a normalized system estimation method to retrieve estimates of the inter- and intra-class elasticities of substitution and factoraugmenting technical progress coefficients. The system is estimated for US data for the 1963-2006 period. Our findings reveal that skilled and unskilled labor classes are gross substitutes, capital structures and equipment are gross complements, and aggregate capital and aggregate labor are gross complements with an elasticity of substitution close to 0.5. We discuss the implications of our findings and methodology for the analysis of the causes of the increase in the skill premium and, by implication, inequality in a growing economy. JEL Classification: E25, J23, J24, O40.
    Keywords: Two-level CES production function, factor-augmenting technical progress, factor substitution, aggregation, skill-premium.
    Date: 2011–11

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