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on Labor Markets - Supply, Demand, and Wages |
| By: | Katja Görlitz; Barbara S. Grave |
| Abstract: | Using data on German university graduates, this paper analyzes wage differentials by field of study at labor market entry and five to six years later. At both points in time, graduates from Arts and Humanities have lower average monthly wages compared to other fields of study. Blinder-Oaxaca decompositions show that these wage differentials are generated largely by different job and firm characteristics of graduates rather than individual or study-related characteristics. We also find evidence that the less favorable job and firm characteristics of Arts and Humanities graduates at labor market entry persist for (at least) the next five to six years. |
| Keywords: | Wage decomposition; university graduates; field of study |
| JEL: | I23 J24 J31 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0316&r=lma |
| By: | Laura Cepeda Emiliani; Juan D. Barón |
| 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. |
| Date: | 2012–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:col:000094:009382&r=lma |
| By: | Hernæs, Erik (Frisch Centre for Economic Research); Jia, Zhiyang (Statistics Norway,) |
| Abstract: | Norwegian administrative data are used to evaluate the impact of a doubling of the threshold in the retirement earnings test. We find almost no impact on the extensive margin, but a positive effect on the intensive margin. This positive effect is uneven over the earnings distribution, and concentrated on workers around the threshold, increasing with exposure to the reform and leading to a decrease in earnings inequality. Individuals who remain active until retirement age respond more to the reform. Conditional on pre-reform earnings, we find little evidence that individual characteristics such as working histories influence the responsiveness to the reform |
| Keywords: | retirement earnings test; benefit entitlement; labour supply behaviour; heterogeneity |
| JEL: | H55 J14 |
| Date: | 2012–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2012_001&r=lma |
| By: | Mussida, C.; Picchio, M. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: This paper studies the gender wage gap by educational attainment in Italy using the 1994–2001 ECHP data. We estimate wage distributions in the presence of covariates and sample selection separately for highly and low educated men and women. Then, we decompose the gender wage gap across all the wage distribution and isolate the part due to gender differences in the remunerations of the similar characteristics. We find that women are penalized especially if low educated. When we control for sample selection induced by unobservables, the penalties for low educated women become even larger, above all at the bottom of the wage distribution. |
| Keywords: | gender wage gap;education;counterfactual distributions;decompositions;hazard function. |
| JEL: | C21 C41 J16 J31 J71 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2012021&r=lma |
| By: | Dostie, Benoit (HEC Montreal); Kromann, Lene (CEBR, Copenhagen) |
| Abstract: | In this paper, we estimate income- and substitution- labour supply and participation elasticities for Canadian married women using data from the Survey of Labour and Income Dynamics 1996-2005. We use the Canadian Tax and Credit Simulator (CTaCS) and detailed information on the structure of income at the household level to compute the marginal tax rates faced by each individual. We then use these marginal tax rates to compute net own-wage, spouse-wage, and non-labour income. We show how the magnitude of the estimated elasticities varies depending on whether net or gross wages and income are used in the estimation procedure, and quantify biases caused by using average instead of marginal tax rates. Finally, because marginal tax rates vary significantly over the sample, we use quantile regressions to compare elasticities at different points of the hours distribution. Overall, our results show that public policies now have, on average, less scope for influencing hours of work than 10 years ago. However, the quantile results show that wives working fewer hours per week are more sensitive to changes in their own or spouses' wages. |
| Keywords: | labour supply, elasticities, labour force participation, taxes, Canada |
| JEL: | C25 H31 J22 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6392&r=lma |
| By: | Klasen, Stephan (University of Göttingen); Pieters, Janneke (IZA) |
| Abstract: | In the past twenty years, India's economy has grown at increasing rates and now belongs to the fastest-growing economies in the world. This paper examines drivers of female labor force participation in urban India between 1987 and 2004, showing a much more nuanced picture of female labor force participation than one might expect. Recent trends in employment and earnings suggest that at lower levels of education, female labor force participation is driven by necessity rather than economic opportunities. Unit level estimation results confirm that participation of poorly educated women is mainly determined by economic push factors and social status effects. Only at the highest education levels do we see evidence of pull factors drawing women into the labor force at attractive employment and pay conditions. This affects, by 2004, only a small minority of India's women. So despite India's economic boom, it appears that for all but the very well educated, labor market conditions for women have not improved. |
| Keywords: | female labor force participation, education, India |
| JEL: | J21 J22 O12 O15 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6395&r=lma |
| By: | Catherine Pollak (IRDES institut for research and information in health economics) |
| Abstract: | European countries with high senior employment rates have the highest levels of job satisfaction despite an older and more physically limited workforce. In this paper, we argue that this paradox can be explained by heterogeneous levels of job quality: better working conditions may enable older workers with disabilities to remain satisfied and employed. Using panel data from the Survey of Health, Ageing and Retirement in Europe, we find that health status, job satisfaction, but also working conditions, are major individual determinants of early labour market exits. We also show that high intrinsic and extrinsic rewards can mitigate the selective effects of disability. Finally,the comparative analysis reveals that older workers with disabilities are more likely to be employed in countries where they receive higher rewards. The findings therefore indicate that improved job quality is a major factor of successful active ageing strategies. |
| Keywords: | Job satisfaction, Working conditions, Occupational health, Ageing labour supply. |
| JEL: | J28 J22 I19 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:irh:wpaper:dt45&r=lma |
| By: | Benoit Dostie (IEA, HEC Montréal) |
| Abstract: | In this paper, we estimate income- and substitution- labour supply and participation elasticities for Canadian married women using data from the Survey of Labour and Income Dynamics 1996-2005. We use the Canadian Tax and Credit Simulator (CTaCS) and detailed information on the structure of income at the household level to compute the marginal tax rates faced by each individual. We then use these marginal tax rates to compute net own-wage, spouse-wage, and non-labour income. We show how the magnitude of the estimated elasticities varies depending on whether net or gross wages and income are used in the estimation procedure, and quantify biases caused by using average instead of marginal tax rates. Finally, because marginal tax rates vary significantly over the sample, we use quantile regressions to compare elasticities at different points of the hours distribution. Overall, our results show that public policies now have, on average, less scope for influencing hours of work than 10 years ago. However, the quantile results show that wives working fewer hours per week are more sensitive to changes in their own or spouses’ wages. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iea:carech:1202&r=lma |
| By: | Jaison R. Abel; Todd M. Gabe; Kevin Stolarick |
| Abstract: | This paper examines differences in the skill content of work throughout the United States, ranging from densely populated city centers to isolated and sparsely populated rural areas. To do so, we classify detailed geographic areas into categories along the entire urban-rural hierarchy. An occupation-based cluster analysis is then used to measure the types of skills available in the regional workforce, which allows for a broader measure of human capital than is captured by conventional measures. We find that the occupation clusters most prevalent in urban areas—scientists, engineers, and executives—are characterized by high levels of social and resource-management skills, as well as the ability to generate ideas and solve complex problems. By contrast, the occupation clusters that are most prevalent in rural areas—machinists, makers, and laborers—are among the lowest in terms of required skills. These differences in the skill content of work shed light on the pattern of earnings observed across the urban-rural hierarchy. |
| Keywords: | Demography ; Labor supply ; Population ; Human capital ; Wages ; Rural areas ; Urban economics |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:552&r=lma |
| By: | Fletcher, Jason M (Yale University) |
| Abstract: | While large literatures have shown that cognitive ability and schooling increases employment and wages, an emerging literature examines the importance of so-called "non-cognitive skills" in producing labor market outcomes. However, this smaller literature has not typically used causal methods in estimating the results. One source of heterogeneity that may play an important role in producing both personality and other non-cognitive skills and labor market outcomes is family background, including genetic endowments. This paper is the first to use sibling differences to estimate the effects of personality on employment and wages and is also able to control for many other sources of heterogeneity, including attractiveness, cognitive ability, schooling, occupation, and other factors. Overall, the findings suggest that personality measures are important determinants of labor market outcomes in adulthood and that the results vary considerably by demographic group. The findings also highlight the potential role of extraversion in leading to favorable labor market outcomes, which has not been documented in many other studies. |
| Keywords: | personality, wages, sibling fixed effects |
| JEL: | J24 J31 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6391&r=lma |
| By: | Posadas, Josefina (World Bank); Vidal-Fernández, Marian (University of New South Wales) |
| Abstract: | In the U.S., grandparents look after one in five preschool children of employed women. Does this source of informal childcare increase female labor force participation and if so, up to what extent? The main challenge to answer this question is that a positive relationship between grandparents’ childcare and female labor force participation might not be causal. We use the maternal grandmother’s death as an instrument of grandparents’ childcare to measure the effect of grandparents’ childcare on maternal labor force participation (MLFP). We compare OLS and IV estimates and find that grandparents’ childcare increases MLFP by 15 percentage points on average. We argue that most of the effect is driven by families from socio-economically disadvantaged backgrounds. |
| Keywords: | maternal labor force participation, grandparents, childcare, NLSY |
| JEL: | J2 I3 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6398&r=lma |
| By: | J. David Brown; Julie L. Hotchkiss; Myriam Quispe-Agnoli |
| Abstract: | Using administrative data from the state of Georgia, this paper finds that on average, among all firms, employing undocumented workers reduces a firm's hazard of exit by 19 percent. However, the impact varies greatly across sectors. In addition, a firm is at a distinct disadvantage if it does not employ undocumented workers but its rivals do. The advantage to employing undocumented workers increases as more firms in the industry do so. In addition, the advantage to a firm from employing undocumented workers decreases with the skill level of the firm's workers, increases with the breadth of a firm's market, and increases with the labor intensity of the firm's production process. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2012-02&r=lma |
| By: | Filatriau Olivier; Frédéric Reynès (IVM Faculty of Earth and Life Sciences, VU University Amsterdam) |
| Abstract: | This article proposes a new approach to estimate the effect of the unemployment rate on the labor participation ratio by sex and age. OECD labor participation ratios are estimated within an unobservable component model with the Kalman filter. This allows for treating the trend of the participation rate as a stochastic time varying parameter. This improves the quality of the econometric results by allowing for a better identification of changes in the trend than the most common alternatives using determinist and logistic trends. Moreover the use of cross-section OECD circumvents the problem of the lack of long time series data. We find that OECD labor participation ratio are sensitive to the labor market situation in all sex and age categories and that the discouraged worker effect dominates the additional worker effect although the latter is clearly present for women. |
| Keywords: | labor force participation; unemployment;flexion effects; additional/discouraged worker effect; OECD; cross-section estimation; Kalman filter |
| JEL: | J21 C13 C31 C32 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1209&r=lma |
| By: | Jan Peter aus dem Moore; Alexandra Spitz-Oener |
| Abstract: | What is the impact of a local negative demand shock on local labor markets? We exploit the unique natural experiment provided by the drawdown of U.S. military forces in West Germany after the end of the Cold War to investigate this question. We find persistent negative effects of the reduction in the U.S. forces on private sector employment, with con- siderable heterogeneity in terms of age and education groups, and sectors. In addition, the U.S. forces reduction resulted in a rise in local unemployment, whereas migration patterns and wages were not affected. |
| Keywords: | Labor demand shock, Base closure, Employment, Wages |
| JEL: | J23 R23 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2012-024&r=lma |
| By: | Brunello, Giorgio (University of Padova); Weber, Guglielmo (University of Padova); Weiss, Christoph T. (University of Padova) |
| Abstract: | In this paper we estimate the effect of education on lifetime earnings in Europe, by distinguishing between individuals who lived in rural or urban areas during childhood and between individuals who had access to many or few books at age ten. We instrument years of education using reforms of compulsory education in nine different countries, and find that individuals in rural areas were most affected by the reforms while individuals with many books at home mostly benefited from education. Our main result is that books at home at age ten have had long-lasting beneficial effects on the individuals who were pushed by the reforms to increase their years of education. |
| Keywords: | education, lifetime income, early conditions, Europe |
| JEL: | J24 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6386&r=lma |
| By: | Romina Gambacorta (Bank of Italy); Maria Iannario (University of Naples Federico II) |
| Abstract: | In this paper we present two statistical approaches for discussing and modelling job satisfaction based on data collected in the Survey on Household Income and Wealth (SHIW) conducted by the Bank of Italy. In particular, we compare two different classes of model for ordinal data: the Ordinal Probit Model and the more recent CUB model. The aim is to establish common outcomes and differences in the estimated patterns of global job satisfaction, but also to stress the potential for curbing the effects of measurement errors on estimates by using CUB models, allowing us to control for the effect of uncertainty and shelter choices in the response process. |
| Keywords: | Job satisfaction, ordinal data Modelling, CUB models |
| JEL: | J28 C25 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_852_12&r=lma |
| By: | Heli Koski; Mika Pajarinen |
| Abstract: | We use data from 15 508 Finnish companies with 10 or more employees for the years 2003-2008 to explore the relationship between employment growth and three endogenously determined business subsidy types (i.e. employment subsidy, R&D subsidy and the group of other business subsidies). We find a positive contemporary relationship between all business subsidy types and employment growth. In addition, our findings suggest that R&D subsidies further contribute to the firms’ employment for one year after and employment and other subsidies for three years after the reception of subsidies. After that, the differences between the subsidized and non-subsidized firms vanish. We further find in line with previous empirical studies that both product innovation and sales growth from a firm’s old products contribute to the firm’s employment growth. Innovation policy means successfully promoting product innovation should thus produce positive employment effects. Our empirical findings suggest that a positive employment effect of R&D subsidies is rather short-term though, and not likely a result of product innovation generated in the subsidized firms’ R&D projects. |
| Keywords: | Public subsidies ; enterprise policy ; industrial policy ; technology policy ; employment ; growth ; Finland |
| JEL: | J23 L10 L53 O25 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:12-02&r=lma |
| By: | Jens Mohrenweiser (Zentrum für Europäische Wirtschaftsforschung Mannheim (ZEW) (Centre for European Economic Research)) |
| Abstract: | This paper describes the recruitment of switching apprenticeship graduates and investigates differences between training and non-training firms. Training firms are more likely to hire apprenticeship graduates trained elsewhere than non-training firms, and if they hire them, they hire a larger proportion of them. 85.5 per cent of firms that hire switching apprenticeship graduates train themselves. This result holds for all types of switching apprenticeship graduates (immediate movers, occupational changers, switchers with an unemployment spell). In total, only four per cent of apprenticeship graduates find their first job in non-training firms. |
| Keywords: | recruiting, apprenticeship, company-sponsored training, training participation |
| JEL: | J24 J62 M51 M53 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0073&r=lma |