nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2012‒09‒16
six papers chosen by
Erik Jonasson
Lund University

  1. Bad Jobs on the Rise By John Schmitt; Janelle Jones
  2. Sloppy Work, Lies and Theft: A Novel Experimental Design to Study Counterproductive Behaviour By Michèle Belot; Marina Schröder
  3. Working Time Preferences, Hours Mismatch and Well-Being of Couples: Are There Spillovers? By Christoph Wunder; Guido Heineck
  4. The returns to occupation-specific human capital - Evidence from mobility after training By Barbara Mueller; Juerg Schweri
  5. The effect of market access on the labor market: Evidence from German reunification By Ulrich Zierahn
  6. Is there a producer quality wage premium similar to the exporter wage premium? By Hernández, Pedro

  1. By: John Schmitt; Janelle Jones
    Abstract: The decline in the economy’s ability to create good jobs is related to deterioration in the bargaining power of workers, especially those at the middle and the bottom of the pay scale. The restructuring of the U.S. labor market – including the decline in the inflation-adjusted value of the minimum wage, the fall in unionization, privatization, deregulation, pro-corporate trade agreements, a dysfunctional immigration system, and macroeconomic policy that has with few exceptions kept unemployment well above the full employment level – has substantially reduced the bargaining power of U.S. workers, effectively pulling the bottom out of the labor market and increasing the share of bad jobs in the economy. In this paper, we define a bad job as one that pays less than $37,000 per year (in inflation-adjusted 2010 dollars); lacks employer-provided health insurance; and has no employer-sponsored retirement plan. By our calculations, about 24 percent of U.S. workers were in a bad job in 2010 (the most recently available data). The share of bad jobs in the economy is substantially higher than it was in 1979, when 18 percent of workers were in a bad job by the same definition. The problems we identify here are long-term and largely unrelated to the Great Recession. Most of the increase in bad jobs – to 22 percent in 2007 – occurred before the recession and subsequent weak recovery.
    Keywords: good jobs, bad jobs, retirement, pensions, health insurance, wages, labor, education
    JEL: J J3 J31 J32 J38 J5 J1 J11 J15 I I2 I24 I25
    Date: 2012–09
  2. By: Michèle Belot (School of Management, University of Edinburgh); Marina Schröder (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)
    Abstract: We propose a novel experimental design to study counterproductive behaviour in a principal agent setting. The design allows us to study and derive clean measures of different forms of counterproductive behaviour in a controlled but non obtrusive manner. We ask participants to complete a specific task (identify euro coins) and report their output. Participants can engage in various forms of counterproductive behaviour, none of them being offered to them explicitly. They can make mistakes in the identification task, lie in their report or even steal coins. We present an application of the design to study the effects of different pay schemes (competition, fixed pay and piece rate) on counterproductive behaviour. On average counterproductive behaviour amounts to 10 percent of the average productivity, almost all arising through mistakes and overreporting of output. We find essentially no evidence of theft. Moreover, we find that both productive and counterproductive behaviour are significantly higher under competition than under the two other pay schemes.
    Keywords: counterproductive behaviour, compensation, experiment, competition, piece rate, ?fixed pay
    JEL: C91 J24 J30 M52
    Date: 2012–08
  3. By: Christoph Wunder; Guido Heineck
    Abstract: We analyze how well-being is related to working time preferences and hours mismatch. Selfreported measures of life satisfaction are used as an empirical approximation of true wellbeing. Our results indicate that well-being is generally lower among workers with working time mismatch. Particularly underemployment is detrimental for well-being. We further provide first evidence on spillovers from the partner’s working time mismatch. However, the spillover becomes insignificant once we control for the partner’s well-being. This suggests that well-being is contagious, and the spillover is due to interdependent utilities. Females experience the highest well-being when their partner is working full-time hours. Male wellbeing is unaffected over a wide interval of the partner’s working hours.
    Keywords: Subjective well-being, life satisfaction, working time preferences, working time mismatch, spillovers, utility interdependence
    JEL: I31 J21 J22
    Date: 2012
  4. By: Barbara Mueller (Swiss Federal Institute for Vocational Education and Training (SFIVET)); Juerg Schweri (Swiss Federal Institute for Vocational Education and Training (SFIVET))
    Abstract: Using a longitudinal dataset based on the PISA 2000 survey, we analyze the effect of inter-firm and occupational mobility on post-training wages in Switzerland to assess the transferability of the human capital acquired in training. We show that OLS provides a lower bound estimate of the wage effects of inter-firm and occupational mobility. Inter-firm mobility has no significant wage effect in OLS regressions. However, those who stay in their occupational field earn about 5 percent more than their colleagues who change occupation. We find no evidence for adverse selection when accounting only for apprentices’ level of ability. Accounting for the endogeneity of mobility tends to increase the estimated wage differential between occupation stayers and changers, but not between firm stayers and movers. We conclude that occupation-specific human capital is an important component of apprenticeship training and accounts for a part of the returns to training.
    Keywords: apprenticeship; endogenous treatment; human capital; mobility; PISA; occupation; school-to-work transition; training
    JEL: C25 J24 J31 J62
    Date: 2012–08
  5. By: Ulrich Zierahn (University of Kassel/ HWWI)
    Abstract: The New Economic Geography predicts a positive effect of market access on wages, as represented by the wage equation. Several studies provide empirical evidence in favor of the wage equation. However, a key problem is the endogeneity of market access: it is challenging to identify the causal effects of market access on wages, since market access itself depends on wages. Whereas most approaches rely on instrumental variables and strong assumptions on exogeneity, the present analysis relies on German reunification as an exogenous variation of market access in order to identify the effects. Since the market access shock due to reunfication was accompanied by a labor supply shock due to migrants and commuters from eastern Germany, the effects on wages, employment and unemployment are analyzed. The results provide evidence in favor of a labor demand shock due to the increase in market access and a labor supply shock due to migrants and commuters from eastern Germany.
    Keywords: New Economic Geography, wage equation, market access, natural experiment, differences-in-differences
    JEL: F15 R12 R23
    Date: 2012
  6. By: Hernández, Pedro
    Abstract: Exporter wage premium has been widely studied in the literature on international trade. The aim of this paper is analyze whether there is also a producer quality wage premium at firm level, and if so, analyze whether its origin is similar to the exporter wage premium. In other words, I test whether firms that increase their product quality become more productive and pay higher wages (as with the learning by exporting hypothesis, we can speak of learning by producing quality), or, in contrast, more-productive firms with higher wages opt to increase product quality because their higher productivity means these kinds of decisions and investments can be taken with more guarantees (self-selection hypothesis).
    Keywords: Wage differentials; International trade; Exports; Product quality
    JEL: F16 J31 J24
    Date: 2012–09–06

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