nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2012‒03‒08
fourteen papers chosen by
Erik Jonasson
Lund University

  1. Pay Dispersion and Work Performance By Alessandro Bucciol; Marco Piovesan
  2. Minimum Wage, Fringe Benefits, Overtime Payments and the Gender Wage Gap By Cerejeira, João; Kızılca, Kemal; Portela, Miguel; Sá, Carla
  3. Total Work and Gender: Facts and Possible Explanations By Michael Burda; Daniel S. Hamermesh; Philippe Weil
  4. Unemployment risk and wage differentials By Pinheiro, Roberto B.; Visschers, Ludo
  5. Crowding out Dad? The Effect of a Cash-for-Care Subsidy on Family time Allocation By Drange, Nina
  6. Educational Segregation and the Gender Wage Gap for Recent College Graduates in Colombia By Cepeda Emiliani, Laura; Barón, Juan D.
  7. What Are Over-the-Road Truckers Paid For? Evidence from an Exogenous Regulatory Change on the Role of Social Comparisons and Work Organization in Wage Determination By Burks, Stephen V.; Guy, Frederick
  8. The Polarization of Employment in German Local Labor Markets By Charlotte Senftleben; Hanna Wielandt
  10. Health-insurance Coverage for Low-wage Workers, 1979-2010 and Beyond By John Schmitt
  11. Taxation and Labor Force Participation: The Case of Italy By Stefania Marcassa; Fabrizio Colonna
  12. Are Remote Rural Workers Trapped in Low-Remunerated Non-Agricultural Jobs? Evidence from China By Chloe DUVIVIER; Mary-Françoise RENARD; Shi LI
  13. Retirement intentions of older migrant workers: Does health matter? By Nicolas Gérard Vaillant; François-Charles Wolff
  14. The impact of health events on individual labor market histories : the message from difference in differences with exact matching By Emmanuel Duguet; Christine Le Clainche

  1. By: Alessandro Bucciol (University of Verona); Marco Piovesan (Harvard Business School)
    Abstract: The effect of intra-firm pay dispersion on work performance is controversial and the empirical evidence is mixed. High pay dispersion may act as an extra incentive for employees' effort or it may reduce motivation and team cohesiveness. These effects can also coexist and the prevalence of one effect over the other may depend on the use of different definitions of what constitutes a "team." For this paper we collected a unique dataset from the men's major soccer league in Italy. For each match we computed the exact pay dispersion of each work team and estimated its effect on team performance. Our results show that when the work team is considered to consist of only the players who contribute to the result, high pay dispersion has a detrimental impact on team performance. Several robustness checks confirm this result. In addition, we show that enlarging the definition of work team causes this effect to disappear or even become positive. Finally, we find that the detrimental effect of pay dispersion is due to worst individual performance, rather than a reduction of team cooperation.
    Keywords: Team productivity, Incentives, Pay dispersion.
    JEL: J31 J33 J44
    Date: 2012–02
  2. By: Cerejeira, João (University of Minho); Kızılca, Kemal (Ankara University); Portela, Miguel (University of Minho); Sá, Carla (University of Minho)
    Abstract: Using linked employer-employee data for Portugal, we explore an amendment to the minimum wage law which increased from 75% to 100% of the full minimum wage applied to employees younger than 18. Our results show a widening of the gender wage gap following the amendment: the wage gap for minors increased 2.7 percentage points more than for other groups. This change was mainly determined by a redistribution of fringe benefits and overtime payments. We discuss three possible sources of redistribution: (i) a change in the skill composition of the working males and females after the increase in the minimum wage, (ii) industrial differences in response to the changes in the wage floor, and (iii) discrimination. Estimations support the second channel as the main contributing factor, while possible discrimination effects cannot be eliminated.
    Keywords: minimum wage, overtime payments, fringe benefits, gender wage gap, minors
    JEL: J31 J32 J71
    Date: 2012–02
  3. By: Michael Burda; Daniel S. Hamermesh; Philippe Weil
    Abstract: Time-diary data from 27 countries show a negative relationship between real GDP per capita and female-male differences in total work time—work for pay and work at home. In rich non-Catholic countries on four continents men and women do about the same average amount of total work. Survey results demonstrate, however, that labor economists, macroeconomists, sociologists and the general public believe that women work more. The widespread average equality does not arise from gender differences in the price of time, from intra-family bargaining or from spousal complementarity. Several theories, including ones based on social norms, might explain these findings and are consistent with cross-national evidence from the World Values Surveys and sets of microeconomic data from Australia and Germany.
    Keywords: time use, gender differences, household production, paid work
    JEL: J22 J16 D13
    Date: 2012–02
  4. By: Pinheiro, Roberto B.; Visschers, Ludo
    Abstract: Workers in less secure jobs are often paid less than identical-looking workers in more secure jobs. We show that this lack of compensating differentials for unemployment risk can arise in equilibrium when all workers are identical, and firms differ, but do so only in offered job security (the probability that the worker is not sent into unemployment). In a setting where workers search on and off the job, wages paid increase with job security for at least all firms in the risky tail of the distribution of firm-level unemployment risk. As a result, unemployment spells become persistent for low-wage and unemployed workers, a seeming pattern of ‘unemployment scarring’, that is created entirely by firm heterogeneity alone. Higher in the wage distribution, workers can take wage cuts to move to more stable employment.
    Keywords: Unemployment risk; Wage Differentials; Unemployment Scarring
    JEL: J63 J31 J64
    Date: 2012–01
  5. By: Drange, Nina (UiS)
    Abstract: This paper expands our understanding of possible specialization effects of extended parental leave policies. Identification is based on the introduction of the Cash-for-Care program in Norway in 1998, which increased mothers’ incentives to withdraw from the labor market when their child was one and two years old. I estimate difference-in-differences models exploiting differences in individuals' exposures to the program among families with similar structures. Consistent with Schøne (2004) I find that the cash-for-care program decreased mothers’ labor force participation by about four percentage points. Notably, however, I find no evidence that the fathers work more to compensate for the mothers declined labor supply.
    Keywords: .
    JEL: J13 J22 J24
    Date: 2012–03–02
  6. By: Cepeda Emiliani, Laura (Banco de la República de Colombia); Barón, Juan D. (Banco de la República de Colombia)
    Abstract: In this paper we show the importance of subject of degree in explaining the gender wage gap in Colombia. In order to minimize the influence of gender differences in experience, promotions, and job changes on the wage gap, we focus on college graduates who have a formal job and who have been in the labor market at most one year. Using unique, administrative datasets with detailed subjects of degree, we find that the wage gap against women is on average 11% and that 40% of it can be explained by differences in subject of degree. Using a distributional decomposition, we find an increasing gender wage gap across the distribution of wages (from 2% at the bottom to 15% at the top), although subject of degree explains a lower 30% of the gap at the top. Policies designed to reduce the gender wage gap need to address the differing gender educational choices and the factors that influence them. These policies would be more effective in reducing the gap for median wage earners.
    Keywords: gender wage gap, subject of degree, decomposition
    JEL: J24 J31 J71
    Date: 2012–02
  7. By: Burks, Stephen V. (University of Minnesota, Morris); Guy, Frederick (Birkbeck College, University of London)
    Abstract: Using evidence from recent work on truckers and disaggregated older data prior researchers did not have, we revisit a classic topic and find some new answers. We focus on differentials in average annual earnings at the firm level among mileage-paid over-the-road tractor-trailer drivers ("road drivers") employed by US for-hire trucking companies, before and after economic deregulation. Road driver output is individualized, and pay is on the basis of a piece rate (mileage). However, road drivers work under two distinct logistical systems – less-than-truckload [LTL], and truckload [TL] – associated with two different forms of work organization. We find that – contrary to the predictions of Rose (1987) – not only are road drivers for LTL companies paid more than those for TL companies, but in LTL the union earnings premium was maintained following deregulation and union coverage fell slowly, while in TL both the union differential and union coverage fell sharply. We review relevant theoretical explanations: payment for cognitive abilities or non-pecuniary disamenities; standard efficiency wage models based on independent utilities; sharing of product market rents; equity concerns resulting from social comparisons between employee groups; and differences in work organization as a source of union rents or quasi-rents. Only equity concerns, for the LTL earnings differential, and quasi rents (but not a union threat effect, contrary to Henrickson and Wilson (2008)), for union coverage and premium in LTL, are consistent with our empirical results. Both earnings differentials are based on differences in work organization, rather than differences in the workers or the work itself.
    Keywords: fair wage, equity, compensating differential, cognitive ability, quasi-rent, rent-sharing, work organization, trucking, trucker, less-than-truckload (LTL), truckload (TL), regulation, deregulation, union premium
    JEL: J31 J42 L92
    Date: 2012–02
  8. By: Charlotte Senftleben; Hanna Wielandt
    Abstract: This paper uses the task-based view of technological change to study employment and wage polarization at the level of local labor markets in Germany between 1979 and 2007. In order to directly relate technological change to subsequent employment trends, we exploit variation in the regional task structure which reflects a region’s potential of being affected by computerization. We build a measure of regional routine intensity to test whether there has been a reallocation from routine towards non-routine labor conditional on a region’s initial computerization potential. We find that routine intensive regions have witnessed a differential reallocation towards non-routine employment and an increase in low- and medium-skilled service occupations. Our results corroborate the predictions of the task-based framework and confirm previous evidence on employment polarization in Germany in the sense that employment growth deteriorates at the middle of the skill distribution relative to the lower and the upper tail of the distribution.
    Keywords: Job Tasks, Polarization, Technological Change, Service Occupations, Regional Labor Markets
    JEL: J24 J31 J62 O33 R23
    Date: 2012–02
  9. By: Vincenzo Scoppa (Dipartimento di Economia e Statistica, Università della Calabria)
    Abstract: We use longitudinal data based on administrative archives from 1985 to 2002 to estimate the relationship between wages and firm size for Italy. Controlling for individual fixed effects we find that larger firms pay significantly higher wages, although the individual unmeasured ability component accounts for about one half of the uncovered size-wage premium. To reduce potential self-selection problems arising from endogenous job changes, we focus on a sample of workers displaced by plant closings. Using this sample, we confirm that larger firms pay higher wages in part for unmeasured workers’ abilities and in part for true size effects.
    Keywords: Firm Size, Wage Differentials, Panel Data, Exogenous Job Changes
    JEL: J41 M51 J45
    Date: 2012–01
  10. By: John Schmitt
    Abstract: This paper uses data from the Current Population Surveys for 1980 through 2011 to review trends in health-insurance coverage rates for low-wage workers (defined as workers in the bottom fifth of the wage distribution in each survey year). In 2010, over 38 percent of low-wage workers lacked health insurance from any source, up from 16 percent in 1979. The biggest reason for the decline in coverage is the erosion of employer-provided health insurance, either through a worker's own employer or as a dependent on another family member's employer-provided policy. Over the last three decades, the role of public insurance in providing coverage for low-wage workers has increased, though not nearly enough to offset the declines in private insurance. In 2010, about 10 percent of low-wage workers had coverage through Medicaid, double the share in 1979. While a great deal of uncertainty still surrounds the Affordable Care Act (ACA) and its likely impact on employers and workers, reasonable estimates based on consensus projections suggest that the ACA will have a substantial positive effect on health-insurance coverage rates for low-wage workers. Even so, the ACA will likely leave an important share of low-wage workers, especially low-wage Latino, African American, and Asian workers, as well as many immigrant workers, without coverage. At the same time, if the ACA is blocked – in the courts or in Congress – there is every indication that coverage rates for low-wage workers will continue their long, steady decline.
    Keywords: low-wage work, health insurance
    JEL: J I I1 I18
    Date: 2012–02
  11. By: Stefania Marcassa; Fabrizio Colonna (THEMA, Universite de Cergy-Pontoise; Banca d'italia, Economic Structure and Labor Market Division.)
    Abstract: Italy has the lowest labor force participation of women among OECD countries. Moreover, the participation rate of married women is positively correlated to their husbands' income. We show that a high tax schedule together with tax credits and transfers raise the burden of two-earner house- holds, generating disincentives to work. We estimate a structural labor supply model for women, and use the estimated parameters to simulate the eects of alternative revenue-neutral tax systems. We nd that joint taxation implies a drop in the participation rate. Conversely, working tax credit and gender-based taxation boost it, with the eects of the former concentrated on low educated women.
    Keywords: female labor force participation, Italian tax system, second earner tax rate, joint taxa- tion, gender-based taxation, working tax credit JEL Classication: J21, J22, H31
    Date: 2011
  12. By: Chloe DUVIVIER; Mary-Françoise RENARD (Centre d'Etudes et de Recherches sur le Développement International); Shi LI
    Abstract: This paper analyzes the effect of urban proximity on rural non-agricultural wages. Using the 2002 Chinese Household Income Project data, we study the determinants of rural non-agricultural workers' hourly wages. We find strong evidence that rural workers close to cities benefit from higher hourly wages, indicating that there is a spatial differentiation in wages across rural areas. Specifically, workers living close to cities are paid about 15% more for one hour worked. This is true even after controlling for living costs, suggesting that urban proximity leads to higher non-agricultural wages in real terms. We also find that migration enables remote workers to partially compensate for lower local wages, suggesting that restrictions on migration hurt remote workers more than other workers.
    Keywords: Remoteness, regional labor market, China Codes, wages
    JEL: R23 R10 O53 J31
    Date: 2012
  13. By: Nicolas Gérard Vaillant (LEM - Lille - Economie et Management - CNRS : UMR8179 - Université des Sciences et Technologies de Lille - Lille I - Fédération Universitaire et Polytechnique de Lille, Université Catholique de Lille - Université Catholique de Lille, ISTC - Institut des Stratégies et Techniques de Communication - Université Catholique de Lille); François-Charles Wolff (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272, INED - Institut National d'Etudes Démographiques Paris - INED)
    Abstract: This paper investigates the effect of self-assessed health on retirement plans of older migrants. As immigration is primarily associated with labor considerations, the role of economic incentives in the migration decision suggests that health could play a minor effect in immigrants' decision to retire. Using detailed data on immigrants living in France collected in 2003, we examine the role of health on early retirement intentions using simultaneous, recursive models that account for the fact that subjective health is potentially endogenous. Being in poor health increases the intention of migrant workers to retire early, but the subjective health outcomes have little influence on retirement plans.
    Keywords: Retirement intention ; self-assessed health ; immigrants ; France
    Date: 2012–02–17
  14. By: Emmanuel Duguet (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée); Christine Le Clainche (LAMETA - Laboratoire Montpellierain d'économie théorique et appliquée - CNRS : UMR5474 - INRA : UR1135 - CIHEAM - Université Montpellier I - Montpellier SupAgro)
    Abstract: We studied the effect of health events (accidents and chronic diseases) on the occupation probabilities at the individual level, while accounting for both correlated individual and time effects. Using difference-in-differences with exact matching estimators, we found that health events have a strong impact on individual labor market histories. The workers affected by a healt event have a stronger probability of entering inactivity and a lower probability of keeping their jobs. We also found that the less quali…ed workers, women, and workers with short term jobs are the most negatively affected by health events.
    Keywords: chronic illness, health, labor, difference in differences
    Date: 2012–02–01

This nep-lma issue is ©2012 by Erik Jonasson. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.