nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2012‒10‒06
ten papers chosen by
Erik Jonasson
Lund University

  1. Wage Growth and Job Mobility in the Early Career : Testing a Statistical Discrimination Model of the Gender Wage Gap By Philippe Belley; Nathalie Havet; Guy Lacroix
  2. Human Capital Externalities and Employment Differences across Metropolitan Areas of the U.S. By Winters, John V.
  3. The Gender Wage Gap in the Post-apartheid South African Labour Market By Haroon Bhorat; Sumayya Goga
  4. Promotion and Wages in Mid-Career: Gender, Unionism, and Sector By Addison, John T.; Ozturk, Orgul Demet; Wang, Si
  5. Wage and Productivity differentials in Japan. The Role of Labor Market Mechanisms. By Kalantzis, Y.; Kambayashi, R.; Lechevalier, S.
  6. Rent Sharing as a Driver of the Glass Ceiling Effect By Matano, Alessia; Naticchioni, Paolo
  7. Human Capital Quality and the Immigrant Wage Gap By Serge Coulombe; Gilles Grenier; Serge Nadeau
  8. Can the United States Expand Apprenticeship? Lessons from Experience By Lerman, Robert I.
  9. Is labor flexibility a substitute to offshoring? Evidence from Italian manafacturing By Andrea F. Presbitero; Matteo G. Richiardi; Alessia Amighini
  10. Does team telecommuting affect productivity? An experiment By E. Glenn Dutcher; Krista Jabs Saral

  1. By: Philippe Belley (Department of Economics, Kansas State University); Nathalie Havet (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France); Guy Lacroix (Department of Economics, Kansas State University)
    Abstract: The paper focuses on the early career patterns of young male and female workers. It investigates potential dynamic links between statistical discrimination, mobility, tenure and wage profiles. The model assumes that it is more costly for an employer to assess female workers’ productivity and that the noise/signal ratio tapers off more rapidly for male workers. These two assumptions yield numerous theoretical predictions pertaining to gender wage gaps. These predictions are tested using data from the 1979 cohort of the National Longitudinal Survey of Youth. As predicted by our statistical discrimination model, we find that men and women have the same wage at the start of their career, but that female wages grow at a slower rate, creating a gender wage gap. Also consistent with our model, we find that mean wages are higher for workers who keep their job, while wage growth is stronger for workers who change job.
    Keywords: Gender wage gap, job transitions, tenure, returns to mobility, experience
    JEL: J16 J71 J41
    Date: 2012
  2. By: Winters, John V. (University of Cincinnati)
    Abstract: It has been well documented that employment outcomes often differ considerably across areas. This paper examines the extent to which the local human capital level, measured as the share of prime age adults with a college degree, has positive external effects on labor force participation and employment for U.S. metropolitan area residents. The empirical results suggest that the local human capital level has positive externalities on the probability of labor force participation and employment for both women and men. We also find that less educated workers generally receive the largest external benefits.
    Keywords: employment, labor force participation, human capital externalities, agglomeration
    JEL: J21 J24 R23
    Date: 2012–09
  3. By: Haroon Bhorat; Sumayya Goga (Development Policy Research Unit; Director and Professor)
    Abstract: We estimate the gender wage gap for Africans in post-apartheid South Africa over the 2001 to 2007 period. Separate male and female earnings equations yields no significant decline in the conditional wage gap, regardless of whether we correct for selection into the labour force and employment or not. Notwithstanding this, the data appear to reveal a decline in the “explained” proportion of the gap with no significant change in the “unexplained” proportion of the gap. Nevertheless, the “unexplained” proportion or discrimination accounted for 71 percent of the gap in 2007 when using the uncorrected estimates (and the male wage structure as the non-discriminatory norm) thus highlighting the presence, arguably, of substantial discrimination against African women in the post-apartheid South African labour market. We note though that the assumption that the “unexplained” component accounts for discrimination has been criticized for a number of reasons, including the fact that women may self-select into certain types of jobs, the impact of gender-based pre-labour market factors as well as omitted variable bias. Finally, we find that using the either the male or pooled wage structure as the non-discriminatory wage structure provides similar results when undertaking the decomposition. In turn, using the female wage structure results in the harshest results as far as gender discrimination is concerned. Acknowledgements: The authors would like to thank Dorrit Posel for comments on earlier versions of this study.
    Keywords: Gender; Wage Gap; Discrimination; South Africa; Earnings
    JEL: J16 J31
    Date: 2012–07
  4. By: Addison, John T. (University of South Carolina); Ozturk, Orgul Demet (University of South Carolina); Wang, Si (University of South Carolina)
    Abstract: This paper considers the role of gender in the promotion process and the impact of promotion on wages and wage growth, using data from the National Longitudinal Survey of Youth (NLSY79). Its focus is upon mid-career promotion and wages, thereby complementing extant studies of the NLSY that relate to differences between men and women at an earlier stage in their careers. The paper is further differentiated from these studies and the wider promotions literature in paying especial attention to the role of unionism and the public sector. It is reported that mid-career females are more likely than males to be promoted in the private sector (and no less likely in the public sector); that wages are increasing in promotion, and the effect is generally higher for females; and that female wage growth from contemporaneous promotion is almost as high as that for males the private sector and much higher in the public sector. These rather positive results for females represent in most cases an improvement over the early-career findings but in mid-career the mediating influence of unionism is more negative, and not just for females.
    Keywords: mid-career, early career, promotion, wages, wage growth, gender, unionism, public sector
    JEL: J16 J31 J51 J62
    Date: 2012–09
  5. By: Kalantzis, Y.; Kambayashi, R.; Lechevalier, S.
    Abstract: This paper aims at explaining two stylized facts of the Lost Decade in Japan: rising wage inequalities and increasing firm-level productivity differentials. We build a model where firms can choose between efficiency wages with endogenous effort and competitive wages, and show that it can replicate those facts. Using Japanese microeconomic data, we find support for the existence of efficiency wages in one group of firms and competitive wages in the other group. Based on those results, a simulation shows that the share of firms using efficiency wages has declined, within sectors, during the Lost Decade, as predicted by the model.
    Keywords: heterogeneity of firms, efficiency wages, job security, effort, productivity differentials, wage inequalities, matched employer-employee data.
    JEL: L23 J24 J31 J42
    Date: 2012
  6. By: Matano, Alessia (University of Barcelona); Naticchioni, Paolo (University of Cassino)
    Abstract: In this paper we show that rent sharing plays a role in explaining the glass ceiling effect. We make use of a unique employer-employee panel database for Italy from 1996 to 2003, which allows controlling for observed individual and firm heterogeneity and for collective bargaining. Moreover, by means of IV quantile fixed effects estimates we can cope with unobserved heterogeneity and endogeneity. A discussion of different explanations is provided.
    Keywords: rent sharing, gender wage gap, glass ceiling, quantile regressions
    JEL: C33 J16 J31 J41 L25
    Date: 2012–09
  7. By: Serge Coulombe (Department of Economics, University of Ottawa, 120 University St., Ottawa,Ontario); Gilles Grenier (Department of Economics, University of Ottawa, 120 University St., Ottawa,Ontario); Serge Nadeau (Department of Economics, University of Ottawa, 120 University St., Ottawa,Ontario)
    Abstract: We propose a new methodology for analyzing determinants of the wage gap between immigrants and natives. A Mincerian regression framework is extended to include GDP per capita in an immigrant’s country of birth as a proxy for the quality of education and work experience acquired in that country. In this regard, a central finding is that Canadian immigrants’ returns to schooling and work experience significantly increase with the GDP per capita of their country of birth. The contribution of quality of schooling and work experience to the immigrant wage gap is also examined. It is shown that lower human capital quality completely negates the endowment advantage that immigrants have in the areas of schooling and work experience, so that this factor is key to understanding why they earn less than Canadian natives. Since data on GDP per capita are available for most countries in the world over long periods of time, the proposed methodology can be applied to analyze immigrant wage gaps for a large set of countries for which common statistics on natives and immigrants are available.
    Keywords: Wage differentials, immigrants vs. Canadian natives, human capital quality, immigration policies, work experience, education
    JEL: J20 J24 J15 J61
    Date: 2012
  8. By: Lerman, Robert I. (Urban Institute)
    Abstract: Can expanded apprenticeship reduce the concerns about the U.S. workforce? The U.S. labor market faces a rise in unemployment rates, sharp declines in the employed share of U.S. adults, extremely high youth unemployment, high wage inequality, and low or stagnant wage growth for workers below the BA degree. Currently, the primary solution advanced by policymakers – helping more people go to college – is both expensive and of limited effectiveness. Unfortunately, the U.S. policy debate is rarely informed by international experience with systems that prepare young people for careers, especially for technical occupations. Few if any cite the experience in Germany, Switzerland, and Austria in achieving high levels of income and relatively low levels of earnings inequality without a college graduation rate above the OECD average. Americans know little about the success of apprenticeship systems abroad nor are they or their political leaders aware of the growth of apprenticeship programs in Australia, England, and other advanced economies. Given the potential for expanded apprenticeship to deal effectively with skill mismatches, wage inequality, declines in manufacturing employment, and high youth unemployment, why has the U.S. failed to mount a significant apprenticeship initiative? A number of reports, including the Organization for Economic Development and Cooperation (OECD 2009) review of youth employment, have recommended expanding apprenticeship training yet failed to stimulate significant action. Apprenticeship training would seem consistent with American values of pragmatism and extensive use of the market and public-private collaborations, and a limited role for government. The paper begins by describing the existing U.S. apprenticeship system, how the system evolved, and measures of its effectiveness. The next sections examine the multiple barriers to expanding apprenticeship in the U.S., highlighting both ideological and practical obstacles. The final section describes how best to take advantage of the opportunities for expansion.
    Keywords: apprenticeship, skills, training
    JEL: J24 J08 I28
    Date: 2012–09
  9. By: Andrea F. Presbitero; Matteo G. Richiardi; Alessia Amighini
    Abstract: We test whether labor flexibility acts as a substitute to delocalization. Using Italian survey data, we show that a higher share of temporary workers appears to reduce the likelihood of future offshoring. However, once reverse causality and spurious correlation are controlled for with IV techniques, the relationship vanishes. This finding suggests that the threat of delocalization to win support for further labor market reforms is probably misplaced.
    Keywords: offshoring, labor flexibility, temporary work, delocalization, labor market reforms,cost saving
    JEL: J21 F16 F23
    Date: 2012
  10. By: E. Glenn Dutcher; Krista Jabs Saral
    Abstract: Telecommuting policies have been increasingly adopted by employers. The benefits of telecommuting from the employer's perspective include direct cost-saving from not having to house employees in an office and indirect cost-saving through reduced turnover associated with increased employee satisfaction. The downside is the perceived opportunity for shirking outside of the traditional workplace, a problem which is potentially exacerbated if employees are placed into telecommuting teams. Using a controlled experiment which randomly assigned subjects to participate in the laboratory (non-telecommuters) or to participate online in a location of their choice (telecommuters), we directly test whether telecommuters are more likely to free ride when in teams and whether or not the locational composition of the team influences this outcome. We find no evidence of free-riding in teams for either telecommuters or non-telecommuters. We also find that variation in output when a worker is paired in a traditional team versus a telecommuting team can be attributed to the beliefs subjects have about their teammates' productivity. The last result leads directly to policy implications for managers.
    Keywords: Telecommuting, Team Production, Productivity, Virtual Teams, Economic Experiments
    JEL: J21 J24 J28 C90
    Date: 2012–09

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