nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2012‒09‒03
ten papers chosen by
Erik Jonasson
Lund University

  1. Explaining the Gender Wage Gap: Estimates from a Dynamic Model of Job Changes and Hours Changes. By Liu, Kai
  2. Time Is Money: The Influence of Parenthood Timing on Wages By Michael Kind; Jan Kleibrink
  3. Impact of Working Hours on Work-Life Balance By Sarah Holly; Alwine Mohnen
  4. The Labor Market Returns to a For-Profit College Education By Stephanie Riegg Cellini; Latika Chaudhary
  5. Are Migrants in Large Cities Underpaid? Evidence from Vietnam By Nguyen, Viet Cuong; Pham, Minh Thai
  6. Offshoring and the Skill Structure of Labour Demand By Gaaitzen De Vries; Neil Foster; Robert Stehrer
  7. The Returns to Education for Opportunity Entrepreneurs, Necessity Entrepreneurs, and Paid Employees By Frank M. Fossen; Tobias J.M. Büttner
  8. Heterogeneous returns to education in the labor market By Fasih, Tazeen; Kingdon, Geeta; Patrinos, Harry Anthony; Sakellariou, Chris; Soderbom, Mans
  9. Basic Income and Labor Supply: The German Case By B. Michael Gilroy; Mark Schopf; Anastasia Semenova
  10. Family and Labor Market Choices: Requirements to Guide Effective Evidence-Based Policy By Anna Kurowska; Michal Myck; Katharina Wrohlich

  1. By: Liu, Kai (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: I address the causes of the gender wage gap with a new dynamic model of wage, hours, and job changes that permits me to decompose the gap into a portion due to gender differences in preferences for part-time work and in onstraints. The dynamic model allows the differences in constraints to reflect possible gender differences in job arrival rates, job destruction rates, the mean and variance of the wage offer distribution, and the full-time/part-time wage premium. I find that the differences in preferences explain no more than 5% of the gender gap in hourly wages and 7-20% of the gender gap in weekly wages. The differences in constraints, mainly in the form of differences in the mean offered wages, explain the remaining gender wage gap. Most of the gender differences in employment, hours of work and job turnover can be attributed to the differences in preferences.
    Keywords: Gender differences; employment;
    JEL: J16 J31 J63
    Date: 2012–06–22
  2. By: Michael Kind; Jan Kleibrink
    Abstract: This paper studies the effect of parenthood timing on future wages. Using data from the German Socio-Economic Panel (SOEP), we employ an instrumental variable approach to identify the causal effect of delaying parenthood on wages of mothers and fathers. Consistent with previous studies, we provide evidence for a positive delaying effect on wages. We further study the underlying mechanisms of the wage premium, paying particular attention to the relationship between career stage and fertility timing. We find that delaying parenthood by one additional year during the career implies a wage premium of 7%.
    Keywords: Fertility; Wage Differentials; Career Path
    JEL: J13 J24 J31
    Date: 2012
  3. By: Sarah Holly; Alwine Mohnen
    Abstract: To examine the influence of working hours on employees’ satisfaction, this article uses a large, representative set of panel data from German households (GSOEP). The results show that high working hours and overtime in general do not lead to decreased satisfaction. Rather, increasing working hours and overtime have positive effects on life and job satisfaction, whereas the desire to reduce working hours has a negative impact on satisfaction. In 2009, nearly 60% of employees wanted to reduce their working hours. The overall number of hours by which employees want to reduce their working time is driven mainly by overtime compensation.
    Keywords: Satisfaction, overtime, work–life balance, working hours, working time arrangements
    JEL: J22 J28 J81 M12
    Date: 2012
  4. By: Stephanie Riegg Cellini; Latika Chaudhary
    Abstract: A lengthy literature estimating the returns to education has largely ignored the for-profit sector. In this paper, we offer some of the first causal estimates of the earnings gains to for-profit colleges. We rely on restricted-use data from the 1997 National Longitudinal Survey of Youth (NLSY97) to implement an individual fixed effects estimation strategy that allows us to control for time-invariant unobservable characteristics of students. We find that students who enroll in associate’s degree programs in for-profit colleges experience earnings gains between 6 and 8 percent, although a 95 percent confidence interval suggests a range from -2.7 to 17.6 percent. These gains cannot be shown to be different from those of students in public community colleges. Students who complete associate’s degrees in for-profit institutions earn around 22 percent, or 11 percent per year, and we find some evidence that this figure is higher than the returns experienced by public sector graduates. Our findings suggest that degree completion is an important determinant of for-profit quality and student success.
    JEL: I2 I20 I21 I23
    Date: 2012–08
  5. By: Nguyen, Viet Cuong; Pham, Minh Thai
    Abstract: This paper examine the difference in wages between migrants and non-migrants (native workers) in large cities in Vietnam. It is found that migrants receive substantially lower wages than non-migrants. The wage gap tends to be larger for older migrants. However, once observed demographic characteristics of workers are controlled, there is no difference in wages between migrants and non-migrants. The main difference in observed wages between migrants and non-migrants is explained by differences in age and education between migrants and non-migrants.
    Keywords: Migration; underpaid; decomposition; household survey; Vietnam
    JEL: E24 O15
    Date: 2012–05–16
  6. By: Gaaitzen De Vries; Neil Foster (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: In this paper we examine the link between international outsourcing – or offshoring – and the skill structure of labour demand for a sample of 40 countries over the period 1995 2009. The paper uses data from the recently compiled World-Input-Output-Database (WIOD) to estimate a system of variable factor demand equations. These data allow us to exploit both a cross-country and cross-industry dimension and split employment into three skill categories. Our results indicate that while offshoring has impacted negatively upon all skill levels, the largest impacts have been observed for medium-skilled (and to a lesser extent high-skilled) workers. Such results are consistent with recent evidence indicating that medium-skilled workers have suffered to a greater extent than other skill types in recent years.
    Keywords: offshoring, trade, wages, labour demand
    JEL: F14 J31
    Date: 2012–06
  7. By: Frank M. Fossen; Tobias J.M. Büttner
    Abstract: We assess the relevance of formal education for the productivity of the self-employed and distinguish between opportunity entrepreneurs, who voluntarily pursue a business opportunity, and necessity entrepreneurs, who lack alternative employment options. We expect differences in the returns to education between these groups because of different levels of control. We use the German Socio-economic Panel and account for the endogeneity of education and non-random selection. The results indicate that the returns to a year of education for opportunity entrepreneurs are 3.5 percentage points higher than the paid employees' rate of 8.1%, but 6.5 percentage points lower for necessity entrepreneurs.
    Keywords: returns to education, opportunity, necessity, entrepreneurship
    JEL: J23 J24 J31 I20 L26
    Date: 2012
  8. By: Fasih, Tazeen; Kingdon, Geeta; Patrinos, Harry Anthony; Sakellariou, Chris; Soderbom, Mans
    Abstract: Since the development of human capital theory, countless estimates of the economic benefits of investing in education for the individual have been published. While it is a universal fact that in all countries of the world the more education one has the higher his or her earnings, it is nevertheless important to know the empirical returns to schooling. However, simply knowing average returns is not useful in a world of heterogeneity. This paper finds increasing returns going from the lower to the higher end of the earnings distribution, but with some important differences across regions. The returns increase by quantile for Latin America. The returns decrease by quantile for most East Asian countries, producing an overall equalizing effect. India and Pakistan demonstrate opposite results. In Ghana, the returns across the distribution are flat, while for Kenya and Tanzania education is dis-equalizing.
    Keywords: Education For All,Access&Equity in Basic Education,Primary Education,Teaching and Learning,Debt Markets
    Date: 2012–08–01
  9. By: B. Michael Gilroy (University of Paderborn); Mark Schopf (University of Paderborn); Anastasia Semenova (University of Paderborn)
    Abstract: This paper deals with the effects of implementing a basic income on the labor supply side. The German welfare as well as tax and social contributions system are investigated. The results clarify that the abolishment of the so-called unemployment trap due to a basic income policy is a decisive advantage of this approach. In order to demonstrate possible labor supply side reactions to a basic income policy, we use the neoclassical labor supply model and adapt it for our purposes. We compare the effects of implementing a basic income on different types of employees concerning their consumption preferences. We show that, even in the neoclassical labor supply model without intrinsic work motivation, the basic income increases the participation rate in the labor market. Furthermore, current employees are partially incited to increase their labor supply. Therefore, a basic income would not only reduce unemployment but could also expand the magnitude of employment.
    Keywords: Basic Income, Neoclassical Labor Supply, Unemployment Trap
    JEL: J2 J6
    Date: 2012–08
  10. By: Anna Kurowska; Michal Myck; Katharina Wrohlich
    Abstract: Microsimulation methods and models of labor market decisions have attracted a lot of attention as an approach to the assessment of consequences of family related policies in the area of labor market and fertility. We set these models in the context of relevant demographic theories and present them from the point of view of their potential as tool to guide effective policy making with the aim to reconcile the objectives of increasing female participation and fertility and reducing poverty levels among families with children.
    Keywords: microsimulation, labor supply, fertility, evidence-based policy
    JEL: J22 J13 J18
    Date: 2012

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