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on Labor Markets - Supply, Demand, and Wages |
| By: | Fabián Slonimczyk (Higher School of Economics, Moscow); Peter Skott (University of Massachusetts Amherst) |
| Abstract: | This paper analyzes the effects of the minimum wage on wage inequality, relative employment and over-education. We show that over-education can be generated endogenously and that an increase in the minimum wage can raise both total and low-skill employment, and produce a fall in inequality. Evidence from the US suggests that these theoretical results are empirically relevant. The over-education rate has been increasing and our regression analysis suggests that the decrease in the minimum wage may have led to a deterioration of the employment and relative wage of low-skill workers. JEL Categories: J31, J41, J42 |
| Keywords: | Minimum wage, earnings inequality,monopsony, effeciency wage, over-education |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2012-5&r=lma |
| By: | Lia Pacelli; Silvia Pasqua; Claudia Villosio |
| Abstract: | A key issue in increasing women’s participation in productive activities is the possibility of achieving a high work-life balance, both in terms of personal wellbeing and in terms of fair career prospects. The crucial event that challenges any level of work-life balance working women achieve is motherhood. We analyse how motherhood affects women's working career, both in terms of participation and in terms of wages, compared to “non-mothers”. The country chosen for the analysis is Italy, a paradigmatic example of low participation rate, scant childcare, high wage inequality and a cultural environment that considers childcare a predominantly “female affair”. While most of the literature focuses either on wages or on participation, we consider both dimensions in a country where female participation is low, thus contributing to filling the gap in the literature of studies of this kind referred to southern European countries. We confirm that the probability of leaving employment significantly increases for new mothers (career-break job penalty); however, this is mitigated by higher job quality and human capital endowment, and by childcare accessibility. Crucially, the availability of part-time jobs reduces the probability of mothers moving out of the labour force. Furthermore, women not leaving employment after becoming mothers face a decrease in wage levels and growth compared to non-mothers, and there are no signs of this gap closing five years after childbirth (family wage gap). Again, part-time employment plays a crucial role, as the family wage gap penalty emerges only among women working full-time both before and after childbirth; a part-time job over the whole period or even only after childbirth prevents any wage gap from opening up between such working mothers and non-mothers. A decisive fact in this context is that in Italy part-time jobs are (scant but) well paid and protected, unlike most other countries. |
| Keywords: | motherhood, part-time jobs, wage penalty, working career, reconciliation policies |
| JEL: | J13 J31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:121&r=lma |
| By: | Leonardo Gasparini (CEDLAS - UNLP); Sebastián Galiani (Washington University in St. Louis); Guillermo Cruces (CEDLAS-UNLP and CONICET); Pablo Acosta (World Bank, Human Development, Latin America and Caribbean Region) |
| Abstract: | It has been argued that a factor behind the decline in income inequality in Latin America in the 2000s was the educational upgrading of its labor force. Between 1990 and 2010, the proportion of the labor force in the region with at least secondary education increased from 40 to 60 percent. Concurrently, returns to secondary education completion fell throughout the past two decades, while the 2000s saw a reversal in the increase in the returns to tertiary education experienced in the 1990s. This paper studies the evolution of wage differentials and the trends in the supply of workers by educational level for 16 Latin American countries between 1990 and 2000. The analysis estimates the relative contribution of supply and demand factors behind recent trends in skill premia for tertiary and secondary educated workers. Supplyside factors seem to have limited explanatory power relative to demandside factors, and are only relevant to explain part of the fall in wage premia for highschool graduates. Although there is significant heterogeneity in individual country experiences, on average the trend reversal in labor demand in the 2000s can be partially attributed to the recent boom in commodity prices that could favor the unskilled (nontertiary educated) workforce, although employment patterns by sector suggest that other withinsector forces are also at play, such as technological diffusion or skill mismatches that may reduce the labor productivity of highlyeducated workers. |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0127&r=lma |
| By: | Olivier Bargain (Aix-Marseille School of Economics); Eliane El Badaoui (EconomiX - University Paris 10); Prudence Kwenda (University College Dublin); Eric Strobl (Ecole Polytechnique Paris); Frank Walsh (University College Dublin) |
| Abstract: | We develop a model where workers may enter self-employment or search for jobs as employees and where there is heterogeneity across workers’ managerial ability. Workers with higher skills will manage larger firms while workers with low managerial ability will run smaller firms and will be in self-employment only when they cannot find a salaried job. For these workers self-employment is a secondary/informal form of employment. The Burdett and Mortensen (1998) equilibrium search model is used for illustration as a special case of our more general framework. Empirical evidence from Mexico is provided and demonstrates that firm size wage effects for employees and selfemployed workers are broadly consistent with the model. |
| Keywords: | Self-employment, Managerial ability, Informal sector |
| Date: | 2012–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201207&r=lma |
| By: | Sebastián Galiani (Department of Economics, Washington University in St Louis); Guido Porto (Development Research Group, The World Bank) |
| Abstract: | This paper provides new evidence on the impacts of trade reforms on wages. We first introduce a model of trade that combines a non-competitive wage setting mechanism due to unions with a factor abundance hypothesis. The predictions of the model are then econometrically investigated using Argentine data. Instead of achieving identification by comparing industrial wages before and after one episode of trade liberalization, our strategy exploits the recent historical record of policy changes adopted by Argentina: from significant protection in the early 1970s, to the first episode of liberalization during the late 1970s, then back to a slowdown of reforms during the 1980s, and finally to the second episode of liberalization in the 1990s. These swings in trade policy represent broken trends in trade reforms that we can compare with observed trends in wages and wage inequality. We use unusual historical data sets of trends in tariffs, wages, and wage inequality to examine the structure of wages in Argentina and to explore how it is affected by tariff reforms. We find that i) trade liberalization, ceteris paribus, reduces wages; ii) industry tariffs reduce the industry skill premium; iii) conditional on the structure of tariffs at the industry level, the average tariff in the economy is positively associated with the aggregate skill premium. These findings suggest that the observed trends in wage inequality in Latin America can be reconciled with the Stolper-Samuelson predictions in a model with unions. |
| Keywords: | Trade liberalization, Stolper-Samuelson, Wage inequality, non-competitive wages and unions. |
| JEL: | F14 F16 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0124&r=lma |
| By: | Wedemeier, Jan |
| Abstract: | The creative sector is frequently regarded as one of the driving forces of total employment growth. Empirical studies suggest that the clustering of human capital might result in the polarization of employment growth. Since the creative sector's definition is motivated from the insights of the economics of human capital, this effect might also be relevant to the creative sector. Following these ideas, the objective of the present paper is to analyze the impact of the creative sector on total employment and on creative sector's employment growth in Western Germany's regions from 1977 to 2004. For the analysis, the definitions of the creative sector follow a technologically and culturally oriented definition and, alternatively, Florida's creative class (2002). These approaches focusing on human capital are contrasted with a skill-based approach. Using a fixed-effects panel model with time lags, I find evidence that the creative sector fosters the regional growth rate of total employment. The results show, moreover, that an initially large share of regional creative professionals pushes further the regional concentration of those professions in agglomerated regions. Driving force for the concentration of creative professionals are local amenities, measured by bohemians, and it is assumed that knowledge spillovers - possibly accelerated by the diversified composition of employment - contribute to this polarization. These results are as well confirmed for the high-skilled agents. -- |
| Keywords: | regional employment growth,creative sector,human capital,bohemians,externalities |
| JEL: | J21 J24 R11 Z1 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hwwirp:119&r=lma |
| By: | Eleanor J. Choi (U.S. Bureau of Labor Statistics); James R. Spletzer (U.S. Bureau of Labor Statistics) |
| Abstract: | The average size of establishments rose through the expansion of the 1990s, and then fell slightly during the expansion of the 2000s. In this paper, we seek to understand the change in trend in the average size of establishments during the last two decades. We begin with an exploration of the robustness of the basic empirical facts. Both Business Employment Dynamics statistics from the Bureau of Labor Statistics and Business Dynamics Statistics from the Census Bureau show that the average size of businesses – both establishments and firms – is growing slower in the 2000s than in the 1990s. The Census Bureau data also show the trends of average size in the 1990s are similar to the trends from the late 1970s and the 1980s. Our empirical analysis results in two main conclusions. First, the change in trend of the average size of establishments occurs in almost all industries, and our decomposition shows that the sizeable shifts in industry composition that occurred in the U.S. economy during the past two decades account for only about half of the downward trend during the 2000s expansion. Second, we find that the decrease in the average size of establishments during the 2000s expansion can be explained by the age of establishments. Specifically, we find that establishment births are starting smaller and staying smaller. |
| Keywords: | Establishment Size, Industry Decompoition, Establishment Births |
| JEL: | J23 L25 L26 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec120010&r=lma |
| By: | Buchner Charlotte; Smits Wendy; Velden Rolf van der (METEOR) |
| Abstract: | This paper analyzes the relationship between cognitive skills, measured at age 12, and earnings ofmales and females at the age of 35, conditional on their attained educational level. Employing alarge data set that combines a longitudinal school cohort survey with income data from Dutchnational tax files, our findings show that cognitive skills and specifically math skills arerewarded on the labor market, but more for females than for males. The main factor driving thisresult is that cognitive skills appear to be better predictors of schooling outcomes for malesthan for females. Once males have achieved the higher levels of education, they more often chooseprograms with high earning perspectives like economics and engineering, even if their level ofmath skills is relatively low. |
| Keywords: | labour economics ; |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2012010&r=lma |