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on Labor Markets - Supply, Demand, and Wages |
| By: | João Pereira (University of Évora, Department of Economics and CEFAGEUE); Aurora Galego (University of Évora, Department of Economics and CEFAGEUE) |
| Abstract: | TTypically, studies on regional wage differentials are based on OLS estimates and use Blinder (1973) and Oaxaca (1973) decomposition. Quantile regression is an alternative approach which allows for studying these differences across the whole wage distribution. In this study, the quantile regression framework is considered for the analysis of regional wage differences in Portugal. Our findings reveal significant differences in wage equations coefficients between regions for the various quantiles. Furthermore, we conclude that the regional wage differentials and the components explained by differences in endowments and differences in returns increase across the whole wage distribution. |
| Keywords: | Regions; Wage differentials; Quantile regression; Quantile-based decompositions. |
| JEL: | J31 J38 C21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cfe:wpcefa:2011_25&r=lma |
| By: | Stephan K. S. Kampelmann; François Rycx |
| 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 productivity; wages; occupations; production function; matched employer-employ |
| JEL: | J31 J51 J52 J53 |
| Date: | 2011–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:2013/98327&r=lma |
| By: | BALDWIN Marjorie L.; CHOE Chung |
| Abstract: | We provide the first-ever estimates of wage discrimination against workers with sensory (hearing, speech, vision) disabilities. Workers with sensory disabilities have lower probabilities of employment and lower wages, on average, than nondisabled workers. Their poor labor market outcomes are explained, at least in part, by the negative productivity effects of sensory limitations in jobs that require good communication skills, but disabilityrelated discrimination may also be a contributing factor. To separate productivity vs. discrimination effects, we decompose the wage differential between workers with and without sensory disabilities into an „explained? part attributed to differences in productivity-related characteristics, and an „unexplained? part attributed to discrimination. The decomposition is based on human capital wage equations with controls for job-specific demands related to sensory abilities, and interactions between job demands and sensory limitations. The interactions are interpreted as measures of the extent to which a worker?s sensory limitations affect important job functions. The results indicate approximately 1/3 (1/10) of the disability-related wage differential for men (women) is attributed to discrimination. The estimates are quite different from estimates of discrimination against workers with physical disabilities obtained by the same methods, underscoring the importance of accounting for heterogeneity of the disabled population in discrimination studies. |
| Keywords: | Job demand; Sensory disability; Wage discrimination |
| JEL: | I10 J71 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-61&r=lma |
| By: | Oberhofer, Harald; Stöckl, Matthias; Winner, Hannes |
| Abstract: | We provide evidence on the impact of globalization on labor market outcomes analyzing pay differences between foreign-acquired and domestically-owned firms. For this purpose, we use firm level data from 16 European countries over the time period 1999-2006. Applying propensity score matching techniques we estimate positive wage premia of cross-boarder merger and acquisitions (M&As), suggesting that foreign acquired firms exhibit higher short-run (post-acquisition) wages than their domestic counterparts. The observed wage disparities are most pronounced for low paying firms (with average wages below the median). Finally, we find systematic wage premia in Western European countries, but not so in Eastern Europe. -- |
| Keywords: | Globalization,mergers and acquisitions,wage effects,propensity score matching |
| JEL: | C21 F15 G34 J31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20126&r=lma |
| By: | CHOE, Chung; BALDWIN, Marjorie |
| Abstract: | We provide the first-ever estimates of wage discrimination against workers with sensory (hearing, speech, vision) disabilities. Workers with sensory disabilities have lower probabilities of employment and lower wages, on average, than nondisabled workers. Their poor labor market outcomes are explained, at least in part, by the negative productivity effects of sensory limitations in jobs that require good communication skills, but disability-related discrimination may also be a contributing factor. To separate productivity vs. discrimination effects, we decompose the wage differential between workers with and without sensory disabilities into an ‘explained’ part attributed to differences in productivity-related characteristics, and an ‘unexplained’ part attributed to discrimination. The decomposition is based on human capital wage equations with controls for job-specific demands related to sensory abilities, and interactions between job demands and sensory limitations. The interactions are interpreted as measures of the extent to which a worker’s sensory limitations affect important job functions. The results indicate approximately 1/3 (1/10) of the disability-related wage differential for men (women) is attributed to discrimination. The estimates are quite different from estimates of discrimination against workers with physical disabilities obtained by the same methods, underscoring the importance of accounting for heterogeneity of the disabled population in discrimination studies. |
| Keywords: | Job demand ; Sensory disability ; Wage discrimination |
| JEL: | J71 I10 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36242&r=lma |
| By: | Kaplanis, Ioannis |
| Abstract: | This paper examines the impact of local human capital on individuals’ wages through external effects. Employing wage regressions, it is found that changes in individuals’ wages are positively associated with changes in the shares of high-paid occupation workers in the British travel-to-work-areas for the late 1990s. I examine this positive association for different occupational groups (defined by pay) in order to disentangle between production function and consumer demand driven theoretical explanations. The wage effect is found to be stronger and significant for the bottom-paid occupational quintile compared to the middle-paid ones, and using also sectoral controls the paper argues to provide evidence for the existence of consumer demand effects. |
| Keywords: | Mercat de treball, Salaris, Recursos humans, 331 - Treball. Relacions laborals. Ocupació. Organització del treball, |
| Date: | 2011–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/179614&r=lma |
| By: | Darrell J. Glaser (United States Naval Academy); Ahmed S. Rahman (United States Naval Academy) |
| Abstract: | We analyze the job matching process for skilled labor using an extensive panel dataset of naval officer careers during the Second Industrial Revolution. We find strong separation effects for officers with accumulated skills in technology-focused work and/or those with formal training as engineers. In particular, technology-based human capital increases the probability of a job switch quite substantially, even after controlling for wage differences and seniority. In addition to providing tests of matching-models, our results have important implications for policy makers evaluating incentives for retaining technologically trained human capital. This is applicable to help understand effects of wage differences in labor markets experiencing rapid technological change. Estimates also indicate that a ceteris paribus increase in the distribution of external wage offers increases the probability of job separation. Controlling for seniority and the effects from accumulated human capital, a 1% increase in the wage gap of internal wage offers relative to wages in external labor markets decreases the hazard for job separations by 0.8%. |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:usn:usnawp:37&r=lma |
| By: | DOORLEY Karina; SIERMINSKA Eva |
| Abstract: | We apply an innovative technique to allow for differential effects of physical appearance across the wage distribution, as traditional methods confound opposing effects. Counterfactual wage distributions constructed using distribution regression,show that unattractive women are more likely to earn less than the median wage, particularly in professions where physical appearance is important. We also find a premium for well-paid attractive men in these professions. A comparison with results from traditional models shows that the characteristics of people in different physical appearance classes contributes to the effects identified using the latter and only a small portion could be discrimination. |
| Keywords: | Wages; Distribution; Physical Appearance; Discrimination |
| JEL: | D31 J24 J30 J70 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-62&r=lma |
| By: | Hammermann, Andrea (RWTH Aachen University); Mohnen, Alwine (Munich University of Technology) |
| Abstract: | Although a broad field of literature on incentive theory exists, employer-provided tangible goods (hereafter called benefits) have so far been neglected by economic research. A remarkable exception is an empirical study by Oyer (2008). In our study, we test some of his findings by drawing on a German data set. We use two waves of the GSOEP data (2006, 2008) to analyze the occurrence of benefits and their effects on employees' satisfaction. Our results provide evidence for economic as well as psychological explanations. Looking at differences in firms' and employees' characteristics we find that cost efficiency concerns, the purpose to signal good working conditions and the aim to ease employees' effort costs are evident reasons to provide benefits. Furthermore, analyzing the impact of tangible and monetary incentives on satisfaction and employees' feeling of being acknowledged by employers, we find different motivational effects. Our results support the psychological explanation that benefits are evaluated separately from other monetary wage components and are more likely to express employers' concern for their employees and recognition of their performance. |
| Keywords: | nonmonetary incentives, benefits, work motivation |
| JEL: | C83 J32 M52 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6284&r=lma |
| By: | Koettl, Johannes (World Bank); Weber, Michael (World Bank) |
| Abstract: | The analysis presented in this paper defines three different synthetic measurements of disincentives for formal work: two standard measurements, namely the tax wedge and the marginal effective tax rate (METR); and a new, innovative measurement called formalization tax rate (FTR). The novelty of the latter is that it measures disincentives stemming not only from labor taxation, but also from benefit withdrawal due to formalization. A descriptive analysis across a large number of OECD and Eastern European countries reveals that the disincentives for formal work – when measured through the FTR – are especially high for low-wage earners. This suggests that formal work might not pay in this segment of the labor market, in particular for the so-called mini-jobs and midi-jobs (low paying part-time work). Another novelty of the paper is its empirical approach. Using EU-SILC 2008 data and OECD Tax and Benefit data for six Eastern European countries (Bulgaria, Czech Republic, Estonia, Latvia, Poland, and Slovakia), we match disincentives for formal work to individual observations in a large data set. Applying a probit regression, the analysis finds a significant positive correlation between FTR or METR and the incidence of being informal. In other words, controlling for individual and job characteristics, the higher the FTR or the METR that individuals are facing is, the more likely they are to work informally. The tax wedge, on the other hand, yields a negative correlation. This indicates that the tax wedge is not sufficiently capturing disincentives for formal work. We also conclude that in cross-country analysis, it might be more useful to use the tax wedge that applies to low wage earners as opposed to average wage earners. |
| Keywords: | tax evasion, non-wage labor costs and benefits, informal employment, measurement of work disincentives, formalization tax rate |
| JEL: | H26 J32 O17 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6313&r=lma |
| By: | Nicodemo, Catia (Universitat Autònoma de Barcelona); Nicolini, Rosella (Universitat Autònoma de Barcelona) |
| Abstract: | This study investigates the existence of hiring criteria associated with the degree of social connections between skill and low-skill workers. We provide evidence about to what extent managers rely on their social connections in recruiting low-skill workers rather than on random matching. As one unique feature we follow an approach for a posted wage setting that reflects the main features of the Spanish labor market. By working with sub-samples of high and low-skill workers we are able to assess that the recruitment of low-skill immigrants quite often follows a referral strategy and we identify interesting irregularities across the ethnic groups. As a common feature, referral hiring is usually influences by the ethnicity of the manager and the relative proportion of immigrants within the firm. Under these perspectives, our study outlines new insights to evaluate the future perspectives of the Spanish labor market. |
| Keywords: | ethnicity, hiring strategies, social networks |
| JEL: | J15 J21 J24 J61 J71 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6312&r=lma |
| By: | Francesca Bastagli; Kitty Stewart |
| Abstract: | This paper uses panel data from the British Families and Children Study to analyse the employment patterns of women with children and the ways in which part-time work and interruptions in paid employment influence the wages of working mothers. It pays particular attention to how the relationship between employment trajectory and wage progression compares for higher-skilled and lower-skilled mothers and for mothers of younger and older children. We find that mothers follow a wide variety of employment pathways, the majority working part-time, moving between full-time and part-time employment or moving in and out of work as they combine motherhood with paid employment. In support of results from existing research on the "part-time" wage penalty and the "motherhood gap", we find that there are wage penalties associated with unstable work trajectories. Our analysis also shows that such wage penalties are significantly smaller for lower-skilled than higher-skilled women and are experienced by mothers of children of all ages, although the impact appears larger for mothers of younger children. In the final sections, the paper discusses the policy implications that arise from these findings with reference to recent debates on maternal employment, wage progression and poverty reduction. |
| Keywords: | maternal employment, wages, mothers, employment trajectories |
| JEL: | J22 J24 J31 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:case157&r=lma |
| By: | Tjaden, Volker (University of Bonn); Wellschmied, Felix (University of Bonn) |
| Abstract: | Standard search models are unreliable for structural inference of the underlying sources of wage inequality because they are inconsistent with observed residual wage dispersion. We address this issue by modeling skill development and duration dependence in unemployment benefits in a random on the job search model featuring two-sided heterogeneity. General human capital and search on the job are the main drivers behind our model's empirical success in replicating wage dispersion (residual and overall). A realistic quantitative appraisal of search efficiencies needs to account for one third of job to job transitions resulting in wage losses. Controlling for them has important implications for the inferred sources of wage inequality. We find that the search friction accounts for around 18 percent of observed wage inequality. |
| Keywords: | frictional wage dispersion, search model, heterogeneity |
| JEL: | J24 J31 J64 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6299&r=lma |
| By: | Gibbs, Michael (University of Chicago) |
| Abstract: | A large, mature and robust economic literature on pay for performance now exists, which provides a useful framework for thinking about pay for performance systems. I use the lessons of the literature to discuss how to design and implement pay for performance in practice. |
| Keywords: | incentives, pay for performance, performance measurement, subjective evaluation |
| JEL: | M52 J33 M12 L81 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6322&r=lma |
| By: | Kristensen, Nicolai (AKF, Danish Institute of Governmental Research) |
| Abstract: | This paper presents results on the effect of formal life-long learning on the decision to retire early. Specifically, I estimate an Option Value model based on individual employer-employee longitudinal data including comprehensive government co-sponsored training records dating back more than 30 years. Human capital theory predicts that the amount of training and the length of working life will be positively correlated in order to recoup investment and yield a higher return. Significant upper bound effects of training in prolonging working life are found for certain types of training and certain groups of workers. However, out-of-sample simulations indicate that on average one year of training only adds up to one month to the career length. This means that training in itself is not enough to substantially prolong careers and increase the workforce. |
| Keywords: | training, retirement, option value, upper bound identification |
| JEL: | H55 I21 J26 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6301&r=lma |
| By: | Daron Acemoglu; David Autor |
| Abstract: | Goldin and Katz’s <i>The Race between Education and Technology</i> is a monumental achievement that supplies a unified framework for interpreting how the demand and supply of human capital have shaped the distribution of earnings in the U.S. labor market over the 20th century. This essay reviews the theoretical and conceptual underpinnings of this work and documents the success of Goldin and Katz’s framework in accounting for numerous broad labor market trends. The essay also considers areas where the framework falls short in explaining several key labor market puzzles of recent decades and argues that these shortcomings can potentially be overcome by relaxing the implicit equivalence drawn between workers’ skills and their job tasks in the conceptual framework on which Goldin and Katz build. The essay argues that allowing for a richer set of interactions between skills and technologies in accomplishing job tasks both augments and refines the predictions of Goldin and Katz’s approach and suggests an even more important role for human capital in economic growth than indicated by their analysis. |
| JEL: | J30 J31 O14 O31 O33 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17820&r=lma |
| By: | Lechmann, Daniel S. J.; Schnabel, Claus |
| 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. -- Unter Verwendung eines großen, repräsentativen Datensatzes für Deutschland und verschiedener Abgrenzungen der Selbständigkeit überprüft diese Arbeit die 'jack-of-all-trades'-Sicht des Unternehmertums von Lazear (AER 2004). In Übereinstimmung mit ihren theoretischen Annahmen finden wir, dass Selbständige mehr verschiedene Tätigkeiten ausüben und Kenntnisse aus mehr verschiedenen Gebieten benötigen als nicht-selbständige Arbeitnehmer. Im Gegensatz zu Lazear's Annahmen benötigen Selbständige allerdings nicht nur mehr Grundkenntnisse sondern auch mehr Fachkenntnisse als Nicht-Selbständige. Unsere Ergebnisse liefern zudem nur wenig Unterstützung für die Behauptung, dass sich die Muster der Humankapitalaneignung zwischen Selbstständigen und abhängig beschäftigten Arbeitnehmern sichtbar unterscheiden. |
| Keywords: | entrepreneurship,self-employed,Germany |
| JEL: | J23 J24 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:faulre:75&r=lma |
| By: | Han, Seungjin; Yamaguchi, Shintaro |
| Abstract: | This paper studies a stable job matching equilibrium and the implicit pricing of non-wage job characteristics. It departs from the previous literature by allowing worker heterogeneity in productivity instead of preferences, giving rise to a double transaction problem in a hedonic model. We show explicitly how wage differences across jobs can be decomposed into compensating wage differentials for non-wage job characteristics and differences in worker productivity. We also derive sufficient conditions for an assortative job matching and a stable matching condition in a model with continuous agent types. Empirical evidence from the U.S. Census and job amenity data from the Dictionary of Occupational Titles strongly supports our theory. |
| Keywords: | assortative matching, compensating wage differentials, hedonic model, stable matching equilibrium, worker productivity heterogeneity |
| JEL: | C78 J31 |
| Date: | 2012–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:pmicro:seungjin_han-2012-4&r=lma |
| By: | Marcelo Bérgolo; Guillermo Cruces |
| Abstract: | This paper studies the incentive effects of social security benefits on labor market informality following a policy reform in Uruguay. The reform extended health benefits to dependent children of private sector salaried workers, and thus altered the incentive structure of holding formal jobs within the household. The identification strategy of the reform¿s effects relies on a comparison between workers with children (affected by the reform) and those without children (unaffected by the reform). Difference in differences estimates indicate a substantial effect of this expansion of coverage on informality rates, which fell significantly by about 1.3 percentage points (a 5 percent change) among workers in the treatment group with respect to those in the control group. The evidence also indicates that individuals within households jointly optimized their allocation of labor to the formal and informal sector. Workers responded to the increased incentives for only one member of the household to work in the formal sector. These findings provide evidence of the relevant and substantial incentive effects of social security benefits on the allocation of employment. |
| Keywords: | Labor :: Workforce & Employment, Labor :: Social Security, Health :: Health Policy, CEDLAS |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:62318&r=lma |
| By: | Günseli Berik and Ebru Kongar |
| Abstract: | The U.S. economic crisis and recession of 2007-2009 accelerated the convergence of women’s and men’s employment rates as men experienced disproportionate job losses and women’s entry into the labor force gathered pace. Using the American Time Use Survey (ATUS) data for 2003-2010, this study examines whether the narrowing gap in paid work over this period was mirrored in unpaid work, personal care and leisure time. We find that the gender gap in unpaid work followed a U-pattern, narrowing during the recession but widening afterwards. Through segregation analysis we trace this U-pattern to the slow erosion of gender segregation in housework and through a standard decomposition analysis of time use by employment status we show that this pattern was mainly driven by movement towards gender equitable unpaid hours of women and men with the same employment status. In addition, over the business cycle gender inequality in leisure time increased. |
| Keywords: | J16, J22, J64 JEL Classification: Economics of Gender, Unemployment, Time Use, Economic Crises |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:uta:papers:2011_16&r=lma |
| By: | Michael Burda (Humboldt University); Hamermesh Daniel (University of Texas); Weil Philippe (Observatoire Francais des Conjonctures Economiques) |
| Abstract: | Time-diary data from 27 countries show a negative relationship between GDP per capita and gender differences in total workfor pay and at home. In rich non-Catholic countries men and women average about the same amount of total work. Survey results show scholars and the general public believe that women work more. Widespread average equality does not arise from gender differences in the price of time, intra-family bargaining or spousal complementarity. Several theories, including ones based on social norms, might explain these findings and are consistent with evidence from the World Values Surveys and microeconomic data from Australia and Germany. |
| Keywords: | time use, gender differences,household production |
| JEL: | J22 J16 D13 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1203&r=lma |
| By: | BARTOLINI Stefano; BILANCINI Ennio |
| Abstract: | We investigate the relationship between social participation and the hours worked in the market. Social participation is the component of social capital that measures individuals’ engagement in groups, associations and non-governmental organizations. We provide a model of consumer choice where social participation may be either a substitute or a complement to material consumption – depending on whether participation is instrumentally or non-instrumentally motivated – and where a local environment with greater social participation increases the return to individual participation. We carry out an empirical investigation of this framework using survey data on United States for the period 1972-2004. We find that non-instrumental social participation substantially decreases the hours worked, while instrumental social participation substantially increases them. Moreover, evidence is consistent with the idea that a local environment with greater social participation fosters individual social participation. |
| Keywords: | social participation; relational goods; social capital; work hours; instrumental and non-instrumental motivations |
| JEL: | A13 D62 J22 Z13 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-64&r=lma |
| By: | Audra J. Bowlus (University of Western Ontario); Alexander Huju Liu (University of Western Ontario) |
| Abstract: | This paper presents and estimates a unified model where both human capital investment and job search are endogenized. This unification enables us to quantify the relative contributions of each mechanism to life cycle earnings growth, while investigating potential interactions between human capital investment and job search. Within the unified framework, the expectation of rising rental rates of human capital through job search gives workers more incentive to invest in human capital. In addition, unemployed workers reduce their reservation rental rates and increase their search effort to leave unemployment quickly to take advantage of human capital accumulation on the job. The results show both forces are important for earnings growth and the interactions are substantial: human capital accumulation accounts for 31% of total earnings growth, job search accounts for 46%, and the remaining 23% is due to the interactions of the two. |
| Keywords: | Human Capital; Job Search; Life Cycle, Earnings Growth |
| JEL: | J24 J64 D91 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:hcuwoc:20122&r=lma |