nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2012‒05‒15
seventeen papers chosen by
Erik Jonasson
Lund University

  1. The Gender Wage Gap by Education in Italy By Chiara MUSSIDA; Matteo PICCHIO
  2. Occupational Sex Segregation and Management-Level Wages in Germany: What Role Does Firm Size Play? By Anne Busch; Elke Holst
  3. Minimum Wage Shocks, Employment Flows and Labor Market Frictions By Dube, Arindrajit; Lester, T. William; Reich, Michael
  4. The impact of the occupations and economic activities on the gender wage gap using a counterfactual framework By Dusan Paredes
  5. Recent labor market performance in Vietnam through a gender lens By Pierre, Gaelle
  6. Offshoring and Labour Markets By Neil Foster
  7. Backward-bending of labor supply function and free riders By Yoshino, Hisao
  8. Female wages in the apparel industry post-MFA : the cases of Cambodia and Sri Lanka By Savchenko, Yevgeniya; Acevedo, Gladys Lopez
  9. Books are forever: Early life conditions, education and lifetime earnings in Europe By Giorgio Brunello; Guglielmo Weber; Christoph Weiss
  10. Education, cognitive skills and earnings of males and females By Büchner Charlotte; Smits Wendy; Velden Rolf van der
  11. Cross-Border Mergers and Domestic Wages: Integrating Positive 'Spillover' Effects and Negative 'Bargaining' Effects By Joseph A. Clougherty; Klaus Gugler; Lars Sørgard
  12. Sick Leave Before, During and After Pregnancy By Rieck, Karsten Marshall E.; Telle, Kjetil
  13. Matching Firms, Managers, and Incentives By Oriana Bandiera; Luigi Guiso; Andrea Prat; Raffaella Sadun
  14. Social Globalization and Child Labor By Congdon Fors, Heather
  15. Entrepreneurial School Dropouts: A Model on Signalling, Education and Entrepreneurship By Baumgarten Skogstrøm, Jens Fredrik
  16. The Allocation of Talent over the Business Cycle and its Effect on Sectoral Productivity By Michael Boehm; Martin Watzinger
  17. Ambition, Human Capital Acquisition and the Metropolitan Escalator By Ian Gordon

  1. By: Chiara MUSSIDA (Department of Economics and Social Sciences, Università Cattolica del Sacro Cuore, Piacenza, Italy); Matteo PICCHIO (Research Foundation - Flanders (FWO); Sherppa, Ghent University; Department of Economics, CentER,Tilburg University; IZA, Bonn)
    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: 2012–04–24
  2. By: Anne Busch; Elke Holst
    Abstract: The paper analyzes the gender pay gap in private-sector management positions based on German panel data and using fixed-effects models. It deals with the effect of occupational sex segregation on wages, and the extent to which wage penalties for managers in predominantly female occupations are moderated by firm size. Drawing on economic and organizational approaches and the devaluation of women's work, we find wage penalties for female occupations in management only in large firms. This indicates a pronounced devaluation of female occupations, which might be due to the longer existence, stronger formalization, or more established "old-boy networks" of large firms.
    Keywords: Gender pay gap, managerial positions, occupational sex segregation, gendered organization, firm size
    JEL: B54 J16 J24 J31 J71 L2 M51
    Date: 2012
  3. By: Dube, Arindrajit; Lester, T. William; Reich, Michael
    Abstract: We provide the first estimates of the effects of minimum wages on employment flows in the U.S. labor market, identifying the impact using policy discontinuities at state borders. We find that minimum wages have a sizable negative effect on employment flows but not stocks: separations and accessions fall among affected workers. We interpret our findings using a job-ladder model, in which minimum wage increases can reduce job-to-job transitions. We find that a standard calibration of the model generates predicted relative magnitudes of the employment stock and flow elasticities that are very close to our reduced-form estimates.
    Keywords: Economics, Applied Economics, Minimum Wage, Labor Market Flows, Job Turnover, Search Frictions, Monopsony
    Date: 2012–04–06
  4. By: Dusan Paredes (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)
    Abstract: This paper presents a methodology to estimate the individual gender wage gap as the difference between wages of the women and their counterfactuals defined by Coarsened Exact Matching. If the women show a higher wage than comparable men, then it is called positive gap. Using eight surveys between 1992 and 2009 for Chile, a stable average of 44% of women show positive gap. This group is considered interesting from the policy perspective because they can provide lessons to decrease the negative discrimination observed on women. Additional analysis shows that the occupations such as Managers, Professionals and Technicians and Associated Professionals always increase the positive gap. Finally, the most successful economic activity to increase the positive gap is Finance and Insurance Activities.
    Keywords: Gender earnings gap, statistical discrimination, occupational sorting
    JEL: J01 J20 J31
    Date: 2012–04
  5. By: Pierre, Gaelle
    Abstract: This paper provides an overview of the recent performance of the labor market in Vietnam during the Great Recession. The analysis uses data from the Labor Force Survey and the Vietnam Household Living Standard Survey. The author finds that, notwithstanding the global crisis and domestic volatility, job creation has been sustained in Vietnam, especially in the formal sector, but that the overall quality of employment has suffered. Gender differentials are found to affect older women especially, while educated women benefit from a skills wage premium. Reassuringly given the large youth share of the total workforce, the youth labor market is dynamic and outcomes for youths have improved. Meanwhile, participation in poverty alleviation programs and labor market programs has not changed, and few workers use the newly created employment services and unemployment benefits.
    Keywords: Labor Markets,Population Policies,Labor Policies,Gender and Development,Work&Working Conditions
    Date: 2012–05–01
  6. By: Neil Foster
    Abstract: This report considers the impact of offshoring on labour markets. The report begins by surveying the empirical literature linking offshoring activities to changes in employment and the relative wage and employment of high- to low-skilled workers. The report moves on to consider recent developments in offshoring activities and in labour markets for a sample of 40 developing and developed countries. Based on these developments the report draws conclusions on the likely developments in offshoring and its impact on labour markets.
    JEL: F14 J31
    Date: 2012–04
  7. By: Yoshino, Hisao
    Abstract: It seems like that backward- bending of labor supply function can be observed in Central Asian Countries such as Uzbekistan and Kazakhstan. People’s basic needs of life are satisfied and they do not increase labor supplies even if wage increases. It is possible to find some cases in which slowdowns increase, when a manager in a firm enforces penalties for workers have slowdowns. This phenomenon occurs because a worker prefers the position of equilibrium on the labor supply function always in the upper direction. This article explains the increase of free-riders by penalties and how to avoid them.
    Keywords: Central Asia, Labor problems, Labor market, Backward- bending, Labor Supply Function, Free Riders
    JEL: C70 J20 J22
    Date: 2012–03
  8. By: Savchenko, Yevgeniya; Acevedo, Gladys Lopez
    Abstract: The end of the Multi-fiber Arrangement/Agreement on Textiles and Clothing in 2005 was a major policy change that affected the allocation of global apparel productions well as the lives of workers involved in this sector. Since the apparel industry is often the major female employer in developing countries, this policy change was expected to have major implications for women. This paper analyzes the wages and working conditions of women in the apparel sector in Cambodia and Sri Lanka following the phase-out the Multi-fibre Arrangement. In both countries, apparel is a major source of exports, and women constitute 70 to 80 percent of the workers employed in the apparel industry. The paper finds that after the removal of the Multi-fibre Arrangement, apparel prices declined as a result of the increased competition. The theoretical model suggests that a decrease in prices would lead to a decrease in apparel wage premiums relative to other industries in the short run and the widening of the male-female wage gap in the long run. The empirical findings support these theoretical predictions. Wage premiums in the apparel sector relative to other industries went down post-Multi-fibre Arrangement in Cambodia and Sri Lanka and the male-female wage gap increased. The paper finds mixed results in terms of working conditions in Cambodia and Sri Lanka.
    Keywords: Free Trade,Labor Policies,Labor Markets,Water and Industry,Work&Working Conditions
    Date: 2012–05–01
  9. By: Giorgio Brunello; Guglielmo Weber; Christoph Weiss
    Abstract: We estimate the effect of education on lifetime income 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. Among those affected, individuals with many books at home at age ten enjoyed substantially higher returns to their additional education. We argue that the long — lasting beneficial effects of having books at home are due to the cultural environment in the household and the development of cognitive skills rather than to the presence of short - term liquidity constraints.
    Date: 2012–05
  10. By: Büchner Charlotte; Smits Wendy; Velden Rolf van der (ROA rm)
    Abstract: This paper analyzes the relationship between cognitive skills, measured at age 12, andearnings of males and females at the age of 35, conditional on their attained educationallevel. Employing a large data set that combines a longitudinal school cohort survey withincome data from Dutch national tax files, our findings show that cognitive skills andspecifically math skills are rewarded on the labor market, but more for females thanfor males. The main factor driving this result is that cognitive skills appear to be betterpredictors of schooling outcomes for males than for females. Once males have achievedthe higher levels of education, they more often choose programs with high earningperspectives like economics and engineering, even if their level of math skills is relativelylow.
    Keywords: labour market entry and occupational careers;
    Date: 2012
  11. By: Joseph A. Clougherty (University of Illinois at Urbana-Champaign and CEPR-London); Klaus Gugler (Department of Economics, Vienna University of Economics and Business); Lars Sørgard (Department of Economics, Norwegian School of Economics)
    Abstract: The existing literature concerning the impact of cross-border merger activity on domestic wages can be split into two camps: 1) those focusing on positive ‘spillover’ effects; 2) those focusing on negative ‘bargaining’ effects. Motivated in part by the lack of scholarship spanning these two literatures, we provide a theoretical model that nests these two mechanisms in one conceptual framework. From our theoretical model we are able to predict that ‘spillover’ effects tend to be more dominant under low unionization rates, while ‘bargaining’ effects tend to be more dominant under high unionization rates; furthermore, ‘spillover’ effects tend to be more dominant with inward cross-border mergers, while ‘bargaining’ effects tend to be more dominant with outward cross-border mergers. We employ comprehensive panel data on wages, unionization and merger activity for US industry sectors over the 1986-2001 period in order to test the impact of cross-border merger activity on domestic wages. We find support for our propositions in that higher unionization rates make it more likely that cross-border mergers generate wage decreases, while outward cross-border mergers more likely involve wage decreases than do inward cross-border mergers.
    Keywords: International mergers, wages, unionisation
    JEL: L21 J31 F23
    Date: 2012–04
  12. By: Rieck, Karsten Marshall E. (University of Bergen, Norway); Telle, Kjetil (Statistics Norway)
    Abstract: Using registry data on every employed Norwegian woman giving birth to her first child during the period 1995–2008, we describe patterns of certified and paid sick leave before, during and after pregnancy. By following the same women over time, we can explore how observed sick leave patterns are – or are not – related to the women’s exiting (or reentering) employment. The results show that sick leave increases abruptly in the month of conception, and continues to grow throughout the term of pregnancy. Sick leave during pregnancy has been rising substantially compared with pre-pregnancy levels over the period 1995–2008, but this increase seems unrelated to women’s growing age at first birth. In line with hypotheses of women’s “double burden”, observed sick leave rates increase in the years after birth. However, when we handle some obvious selection issues – like sick leave during a succeeding pregnancy – the increase in women’s sick leave in the years after birth dissolves. Overall, we find little, if any, sign of the relevance of “double burden” hypotheses in explaining the excessive sick leave of women compared with men.
    Keywords: Sick leave; pregnancy; female employment; double burden.
    JEL: C23 H55 I18 J13 J22
    Date: 2012–05–08
  13. By: Oriana Bandiera; Luigi Guiso; Andrea Prat; Raffaella Sadun
    Abstract: We exploit a unique combination of administrative sources and survey data to study the match between firms and managers. The data includes manager characteristics, such as risk aversion and talent; firm characteristics, such as ownership; detailed measures of managerial practices relative to incentives, dismissals and promotions; and measurable outcomes, for the firm and for the manager. A parsimonious model of matching and incentive provision generates an array of implications that can be tested with our data. Our contribution is twofold. We disentangle the role of risk-aversion and talent in determining how firms select and motivate managers. In particular, risk-averse managers are matched with firms that offer low-powered contracts. We also show that empirical findings linking governance, incentives, and performance that are typically observed in isolation, can instead be interpreted within a simple unified matching framework.
    Keywords: personnel economics, hiring policy, management, performance related pay, performance incentives
    JEL: J24 L2
    Date: 2012–05
  14. By: Congdon Fors, Heather (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: In recent years, a growing number of authors have turned their focus to the question of why children work. While much of the research focuses on household level factors, macroeconomic factors have gained increasing attention. This is particularly true in the case of globalization. The purpose of this paper is to contribute to the literature on the role of globalization in child labor by examining a specific aspect of globalization: social globalization. The results of the empirical analysis indicate that social globalization does have a significant impact on the average incidence of child labor in the cross-country sample of developing countries.<p>
    Keywords: child labor; globalization; norms
    JEL: J20 O11
    Date: 2012–05–07
  15. By: Baumgarten Skogstrøm, Jens Fredrik (Ragnar Frisch Centre for Economic Research,)
    Abstract: I present a theory on the relationship between educational choice and entrepreneurship in a labour market with asymmetric information. The model shows that, in a labour market where education is used as a signalling device, an imperfect relationship between productivity in education and in the labour market can lead to an equilibrium where a fraction of the high-ability individuals choose to quit school and become entrepreneurs. Using a comprehensive set of Norwegian register data, I find that this is prediction is confirmed empirically: Individuals combining low education with high ability have the highest entrepreneurship rates in the population.
    Keywords: Entrepreneurship; self-employment; education; ability
    JEL: J24 L26 M13
    Date: 2012–04–02
  16. By: Michael Boehm; Martin Watzinger
    Abstract: It is well documented that graduates enter different occupations in recessions than in booms. In this article, we examine the impact of this reallocation for long-term productivity and output across sectors. We develop a model in which talent flows to stable sectors in recessions and to cyclical sectors in booms. We find evidence for the predicted change in productivity caused by the business cycle in a setting where output can be readily measured: economists starting or graduating from their PhD in a recession are significantly more productive over the long term than economists starting or graduating in a boom.
    Keywords: Talent allocation, sectoral productivity, business cycle, roy model, PhDeconomists
    JEL: J24 E32 I23 J22 J23
    Date: 2012–05
  17. By: Ian Gordon
    Abstract: This paper examines the relation between ambition, as a form of dynamic human capital, and the escalator role of high order metropolitan regions, as originally identified by Fielding (1989). It argues that occupational progression in such places particularly depends on concentrations both of people with more of this asset and of jobs offering preferential access to valued elements of tacit knowledge, interacting in thick, competitive labour markets. This is partially confirmed with analyses of BHPS data on long term progression showing that only the more ambitious gain from residence in the extended London region, and that they only progress faster there.
    Keywords: Escalator region, migration, urban labour market, London, social mobility, human capital
    JEL: J24 J61 J62 R23
    Date: 2012–04

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