nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2012‒04‒10
nine papers chosen by
Erik Jonasson
Lund University

  1. Minimum wage hikes and the wage growth of low-wage workers By Joanna K Swaffield
  2. Work and Wage Dynamics around Childbirth. By Ejrnæs, Mette; Kunze, Astrid
  3. What Drives the Urban Wage Premium? Evidence along the Wage Distribution By Alessia Matano; Paolo Naticchioni
  4. The wage impact of undocumented workers By Julie L. Hotchkiss; Myriam Quispe-Agnoli; Fernando Rios-Avila
  5. Taxing Childcare: Effects on Family Labor Supply and Children By Gathmann, Christina; Sass, Björn
  6. Labour market institutions and unemployment: An international comparison By Rottmann, Horst; Flaig, Gebhard
  7. Mechanization, task assignment, and inequality By Yuki, Kazuhiro
  8. Wages and earnings of marginalized social and religious groups in India: Data sources, scope, limitations and suggestions By Abraham, Vinoj
  9. GINI DP 26: Endogenous Skill Biased Technical Change: Testing for Demand Pull Effect By Francesco Bogliacino; Lucchese, M.

  1. By: Joanna K Swaffield
    Abstract: This paper presents difference-in-differences estimates of the impact of the British minimum wage on the wage growth of low-wage employees. Estimates of the probability of low-wage employees receiving positive wage growth have been significantly increased by the minimum wage upratings or hikes. However, whether the actual wage growth of these workers has been significantly raised or not depends crucially on the magnitude of the minimum wage hike considered. Findings are consistent with employers complying with the legally binding minimum wage but holding down or offsetting the wage growth that they might have awarded in periods of relatively low minimum wage hikes.
    Keywords: Minimum wages, wage growth, difference-in-differences estimator, measurement error
    JEL: J31 J38
    Date: 2012–04
  2. By: Ejrnæs, Mette (University of Copenhagen); Kunze, Astrid (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: This study investigates how the first childbirth affects the wage processes of women who are well-established in the labour market. We estimate a flexible …fixed-effects wage regression model extended by post-childbirth…fixed effects. We use register data on West Germany and exploit the expansionary family policy during the late 1980s and 1990s for identification. On their return to work after childbirth, mothers’wages drop by 3 to 5.7 per cent per year of leave. We find negative selection back to full-time work after childbirth. We discuss policy implications regarding statistical discrimination and results concerning the family gap.
    Keywords: Wages; parental leave; human capital; control function.
    JEL: C23 J24 J31
    Date: 2012–02–29
  3. By: Alessia Matano; Paolo Naticchioni (Sapienza University of Rome Italy.)
    Abstract: This paper aims at disentangling the role played by different theoretical explanations in accounting for the urban wage premium along the wage distribution. We analyze the wage dynamics of migrants from low-to-high-density areas in Italy, using quantile regression and individual panel data to control for the sorting of workers. The results show that skilled workers enjoy a higher wage premium when they migrate (wage level effect), in line with the agglomeration externalities explanation, while unskilled workers benefit more from a wage premium accruing over time (wage growth effect). Further, investigating the determinants of the wage growth effect in greater depth, we find that for unskilled workers the wage growth is mainly due to human capital accumulation over time, consistently with the “learning” hypothesis, while for skilled workers it is the “coordination” hypothesis that matters.
    Keywords: Urban Wage Premium, Human Capital, Spatial Sorting, Wage Distribution, Quantile Fixed Effects
    JEL: J31 J61 R23
    Date: 2012
  4. By: Julie L. Hotchkiss; Myriam Quispe-Agnoli; Fernando Rios-Avila
    Abstract: Using administrative, individual-level, longitudinal data from the state of Georgia, this paper finds that a documented worker employed by a firm that hires undocumented workers can expect to earn 0.15 percent less than if employed by a firm that does not hire undocumented workers. However, in sectors where there are opportunities for task specialization and benefits from communication skills, documented workers can expect to earn a wage premium of less than 1 percent from being employed at a firm that also hires undocumented workers.
    Date: 2012
  5. By: Gathmann, Christina (University of Heidelberg); Sass, Björn (University of Mannheim)
    Abstract: Previous studies report a wide range of estimates for how female labor supply responds to childcare prices. We shed new light on this question using a reform that raised the prices of public daycare. Parents respond by reducing public daycare and increasing childcare at home. Parents also reduce informal childcare indicating that public daycare and informal childcare are complements. Female labor force participation declines and the response is strongest for single parents and low-income households. The short-run effects on cognitive and non-cognitive skills are mixed, but negative for girls. Spillover effects on older siblings suggest that the policy affects the whole household, not just targeted family members.
    Keywords: childcare, labor supply, cognitive skills, family policy, Germany
    JEL: J13 J22 J18
    Date: 2012–03
  6. By: Rottmann, Horst; Flaig, Gebhard
    Abstract: This paper deals with the effects of labour market institutions on unemployment in a panel of 19 OECD countries for the period 1960 to 2000. In contrast to many other studies, we use long time series and analyze cyclically adjusted trend values of the unemployment rate. Our novel contribution is the estimation of panel models where we allow for heterogeneous effects of institutions on unemployment. Our main results are that on the average a tighter employment protection, a higher tax burden on labour income and a more generous unemployment insurance system increase, whereas a higher centralization of wage negotiations decreases unemployment. The strength of the effects differs considerably between countries. --
    Keywords: Employment protection,labour market institutions,unemployment,international comparison
    JEL: J23 E24 J50
    Date: 2011
  7. By: Yuki, Kazuhiro
    Abstract: Mechanization− the replacement by machines of humans engaged in production tasks− is a continuing process since the Industrial Revolution. As a result, humans have shifted to tasks machines cannot perform efficiently. The general trend until about the 1960s is the shift from manual tasks to analytical (cognitive) tasks, while, since the 1970s, because of the advancement of IT technologies, humans have shifted away from routine analytical tasks (such as simple information processing tasks) as well as routine manual tasks toward non-routine manual tasks in services as well as non-routine analytical tasks. Mechanization also has affected relative demands for workers of different skill levels and thus earnings levels and earnings inequality. The rising inequality has been the norm in economies with light labor market regulations, although the inequality fell in periods when the relative supply of skilled workers grew rapidly. This paper develops a task assignment model and examines how improvements of productivities of machines and an increase in the relative supply of skilled workers affect task assignment (which factors perform which tasks), earnings, earnings inequality, and aggregate output in order to understand the aforementioned long-run trend.
    Keywords: mechanization; task assignment; earnings inequality; technical change
    JEL: J31 O33 J24
    Date: 2012–03–30
  8. By: Abraham, Vinoj
    Abstract: This paper provides the major sources of data for understanding wages and earnings of Social and Religious Groups in India. It also discusses the limitations of the data sets,and issues for further research but are limited by the availability of data for such research. It also provides suggestions for new data and ways to improve the existing statistical data.
    Keywords: social groups; caste; religion; wages; India; data sources
    JEL: J31 C80
    Date: 2012–02–19
  9. By: Francesco Bogliacino (Amsterdam Insitute for Advanced Labour Studies (AIAS), Universiteit van Amsterdam); Lucchese, M.
    Abstract: In this article we use the unification of Germany in 1990 to test the hypothesis that an increase in the supply of a production factor generates skill biased technical change. We test for this mechanism in the context of the model presented by Acemoglu and Autor (2011) that allows endogenous assignment of skills to tasks in the economy. We use cohorts of workers from comparable countries as a control group. After discussing the possible confounding factors, we conclude that this effect is absent. The differential pattern among the countries seems to be determined by labor market flexibilization and tax reform.
    Keywords: Skill Biased Technological Change, Polarization, Natural Experiment JEL codes: J31, O33, O52
    Date: 2011–12

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