nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2012‒11‒17
thirteen papers chosen by
Erik Jonasson
Lund University

  1. "Why Does the Gender Earnings Gap Vary Across U.S. States? Fixed Effect Models of Male and Female Earnings" By Saul D. Hoffman
  2. The U.S. Employment-Population Reversal in the 2000s: Facts and Explanations By Robert A. Moffitt
  3. Do reservation wages react to regional unemployment? By Blien, Uwe; Messmann, Susanne; Trappmann, Mark
  4. Are dangerous jobs paid better? European evidence By Nikolaos Georgantzis; Efi Vasileiou
  5. Labour supply effects of early retirement provision By Ola Lotherington Vestad
  6. Do literacy and numeracy pay off? On the relationship between basic skills and earnings By Antoni, Manfred; Heineck, Guido
  7. Gender Gaps in Spain: Family Issues and the Career Development of College Educated Men and Women By González de San Román, Ainara; de la Rica, Sara
  8. Unfair tournaments: gender stereotyping and wage discrimination among Italian graduates By Carolina Castagnetti; Luisa Rosti
  9. Employers' selection behavior during short-time work By Scholz, Theresa
  10. Asymmetric information and overeducation By Mendolicchio, Concetta; Paolini, Dimitri; Pietra, Tito
  11. Firm Exporting and Employee Benefits: First Evidence from Vietnam Manufacturing SMEs By Huong Vu; Steven Lim; Mark Holmes; Tinh Doan
  12. Optimal Taxation, Child Care and Models of the Household By Patricia Apps; Ray Rees
  13. International Migration as Occupational Mobility By Dean R. Lillard; Anna Manzoni

  1. By: Saul D. Hoffman (Department of Economics,University of Delaware)
    Abstract: : A recent Census Bureau report shows that the gender earnings ratio for year-round full-time workers varies substantially across states, with a range of 24 percentage points. In this paper, I examine this variation by estimating state-fixed effect models of earnings for men and women, using data from the 2008 and 2009 CPS. I find that state fixed effects affecting men’s and women’s earnings are persistent, even after control for other variables. Louisiana has the lowest unadjusted and regression-adjusted gender earnings ratio, while DC and Maine have the highest unadjusted and adjusted earnings ratios, respectively. States with particularly low overall gender earnings ratios have low ratios even within detailed education and occupation categories.
    Keywords: Gender Gap, Women’s Earnings, Fixed Effects
    JEL: J16 J30 J31 J70 J71
    Date: 2012
  2. By: Robert A. Moffitt
    Abstract: The decline in the employment-population ratios for men and women over the period 2000-2007 prior to the Great Recession represents an historic turnaround in the evolution of U.S. employment. The decline is disproportionately concentrated among the less educated and younger groups within the male and female populations and, for women, disproportionately concentrated among the unmarried and those without children. About half of men’s decline can be explained by declines in wage rates and by changes in nonlabor income and family structure influences, but the decline among women is more difficult to explain and requires distinguishing between married and unmarried women and those with and without children, who have each experienced quite different wage and employment trends. Neither taxes nor transfers appear likely to explain the employment declines, with the possible exception of the Supplemental Nutrition Assistance Program. Other influences such as the minimum wage or health factors do not appear to play a role, but increases in incarceration could have contributed to the decline among men.
    JEL: J2 J22
    Date: 2012–11
  3. By: Blien, Uwe (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Messmann, Susanne; Trappmann, Mark (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Reservation wages indicate the wage threshold for which individual workers are inclined to supply their working capacity. In important theoretical approaches it is assumed that this threshold depends on the unemployment rate. If this is true, the variation of reservation wages might be an important force behind the regional 'wage curve', which has been estimated in many empirical studies. Up to now, the connection of regional unemployment with reservation wages has not been tested, since research possibilities depend on survey data which were not available. With the 'Labour Market and Social Security' study (PASS), a new large panel survey in Germany, information on regional reservation wages is available. The empirical analysis with this data opens up the 'black box' of the wage generation process and delivers insights about its determining factors. The analysis is based on job matching and efficiency wage theory which are used to derive a relationship between unemployment and reservation wages." (Author's abstract, IAB-Doku) ((en))
    Keywords: Einkommenserwartung, Arbeitslosigkeit, regionale Verteilung, IAB-Haushaltspanel, Lohnkurve, Lohnfindung, regionaler Arbeitsmarkt, Effizienzlohntheorie
    JEL: J64 J31 R23
    Date: 2012–09–20
  4. By: Nikolaos Georgantzis (GLOBE & Economics Department, University of Granada, Spain; LEE & Economics Department, Universitat Jaume I, Castellón-Spain); Efi Vasileiou (University of Panthéon-Assas (Paris-2), France; LEE, Universitat Jaume I, Castellón-Spain)
    Abstract: This article tests whether workers are indifferent between risky and safe jobs provided that, in labour market equilibrium, wages should serve as a utility equalizing device. Workers’ preferences are elicited through a partial measure of overall job satisfaction: satisfaction with job-related risk. Given that selectivity turns out to be important, we use selectivity corrected models. Results show that wage differentials do not exclusively compensate workers for being in dangerous jobs. However, as job characteristics are substitutable in workers’ utility, they could feel satisfied, even if they were not fully compensated financially for working in dangerous jobs.
    Keywords: Satisfaction with Job Risk; Compensating Wage Differentials; Dangerous Job
    JEL: C23 J31
    Date: 2012
  5. By: Ola Lotherington Vestad (Statistics Norway)
    Abstract: The main objective of this paper is to estimate labour supply effects of an early retirement programme in Norway. Detailed administrative data are employed in order to characterize full paths towards retirement and account for substitution from other exit routes, such as unemployment and disability insurance. By exploiting a reduction in the lower age limit for early retirement as a source of exogenous variation in individual eligibility I obtain robust difference-in-differences and triple differences estimates indicating that more than two out of three pensioners would still be working at the age of 63 had the age limit been 64 rather than 62. Hence, although successful in creating a more dignified exit route for early leavers, the programme also generated substantial costs in terms of inducing others to retire earlier.
    Keywords: Induced retirement; Pension reform; Matched employer-employee register data; Difference-in-differences.
    JEL: H55 I38 J26
    Date: 2012–11
  6. By: Antoni, Manfred; Heineck, Guido
    Abstract: Is there a reward for basic skills in the German labor market? To answer this question, we examine the relationship between literacy, numeracy and monthly gross earnings of full-time employed workers. We use data from the ALWA survey, augmented by test scores on basic cognitive skills as well as administrative earnings data. Our results indicate that earnings are positively related to both types of skills. There furthermore is no evidence for non-linearity in this relationship and only little heterogeneity when differentiating by sub-groups. --
    Keywords: literacy,numeracy,earnings,administrative data,Germany,ALWA
    JEL: I21 J31
    Date: 2012
  7. By: González de San Román, Ainara (University of the Basque Country); de la Rica, Sara (University of the Basque Country)
    Abstract: Our goal in this paper is to focus on highly educated men and women and try to explore the trade‐offs between family and working career in Spain, where changes in female behavior with respect to the labor market have been relatively recent but rather important. We compare male and female behavior with respect to labor supply and labor performance along their life cycle for different birth cohorts to explore the connection between family and work over time. Our results indicate that family plays a crucial role as a source of gender differences in the labor market in Spain. By 2008, children are the main determinant of the observed gap in labor supply between college men and women. Furthermore, with respect to hours worked, children are also an important determinant for the decision of college‐educated mothers to choose to work part‐time. However, children do not seem to contribute to explain the observed gender wage gap (5%) between college men and women.
    Keywords: gender gaps, career development, family and work, Spain
    JEL: J12 J2 J3
    Date: 2012–10
  8. By: Carolina Castagnetti (Department of Economics and Management, University of Pavia); Luisa Rosti (Department of Economics and Management, University of Pavia)
    Abstract: This paper addresses the gender pay gap among Italian university graduates on entry to the labor market, and stresses the importance of gender stereotypes on subjective assessment of individual productivity. We build upon previous research about gender and wage inequality introducing tournament theory as a convenient framework for the gender pay gap analysis. We hypothesize that the effects of gender stereotypes make occupational tournaments unfair. As a consequence, male workers have higher probabilities of winning the wage competition. Our data show that in contexts where the stereotype is most likely to occur, making tournaments less fair, the unexplained component of the gender pay gap is higher.
    Keywords: Labor market, Italy, Gender pay gap, Stereotypes, Tournaments
    JEL: J24 J7 J3
    Date: 2012–10
  9. By: Scholz, Theresa (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "During the recession of 2008-09 Germany experienced a huge decrease in GDP. Employment, however, remained surprisingly stable. The so-called German labor market miracle is often ascribed to the intensive usage of short-time work. Despite the resurgence of this instrument, little is known about the employees affected by it. This paper analyzes whether employers select certain individuals for short-time work, where special focus is given on the effect of human capital. The analysis is based on a unique linked-employer-employee data set on short-time workers in the district of the employment agency of Nuremberg. We use methods of event history analysis to estimate transition rates from regular employment to short-time work. Our results indicate that employers select a broad range of workers for STW, irrespective of their level of human capital. Fears that short-time work is mainly applied to a certain group of workers are not confirmed." (Author's abstract, IAB-Doku) ((en))
    Keywords: Kurzarbeit, Personalauswahl, Beschäftigtenstruktur, Entlassungen, Wirtschaftskrise, Rezession, Qualifikationsstruktur, Arbeitnehmer, IAB-Betriebs-Historik-Panel, Integrierte Erwerbsbiografien, Geschlechterverteilung, Altersstruktur, Nürnberg, Bayern, Bundesrepublik Deutschland
    JEL: J23 J24 J3
    Date: 2012–08–15
  10. By: Mendolicchio, Concetta (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Paolini, Dimitri; Pietra, Tito
    Abstract: "We consider an economy where production may use labor of two different skill levels. Workers are heterogeneous and, by investing in education, self-select into one of the two skills. Ex-ante, when firms choose their investments in physical capital, they do not know the level of human capital prevailing in the labor market they will be active in. We prove existence and constrained inefficiency of competitive equilibria, which are always characterized by overeducation. An increase in total expected surplus can be obtained by shrinking, at the margin, the set of workers investing in high skill. This can be implemented by imposing taxes on the cost of investing in high skill or by imposing a progressive labor earning tax." (Author's abstract, IAB-Doku) ((en))
    Keywords: ökonomische Theorie, Humankapital, Bildungsinvestitionen, Gleichgewichtstheorie
    JEL: J24 H2
    Date: 2012–06–14
  11. By: Huong Vu (University of Waikato); Steven Lim (University of Waikato); Mark Holmes (University of Waikato); Tinh Doan (Ministry of Business, Innovation & Employment)
    Abstract: This study examines linkages between the export participation of firms and employee benefits in terms of wages and employment quality. Based on a uniquely matched firm-worker panel dataset for 2007 and 2009, we find evidence that export participation by firms in Vietnam has a positive impact on wages when taking into account firm characteristics alone. However, the exporter wage premium falls when both firm and worker characteristics are controlled for, and it decreases further when controlling for time-invariant unobservable factors by spell fixed effect estimation. While there are many studies on the export wage premium, the role of export participation on the quality of employment remains largely unexplored. By using a firm-level balanced panel dataset for the same period, our results suggest that export participation has a negative effect on employment quality. Nevertheless, the impact of export participation on both wages and employment quality vary greatly with respect to levels of technology.
    Keywords: exporting; wages; employment; Vietnam
    JEL: J21 J31 F14 F16 F19
    Date: 2012–11–01
  12. By: Patricia Apps; Ray Rees
    Abstract: This paper presents for the .rst time the properties of optimal piece-wise linear tax systems for two-earner households, based on joint and individual incomes respectively. A key contribution is the analysis of the interaction of second earner wage di¤erences, variation in prices of bought-in inputs into household production in the form of child care, and domestic productivity differences as determinants of across-household heterogeneity in second earner labour supply. The analysis highlights the importance of the elasticity of substitution between parental and non-parental child care in determining the relationship between utility and income across households. A central result is that taking account of a richer and more realistic specification of household time use widens the set of cases in which individual taxation is welfare-superior to joint taxation.
    Keywords: Optimal taxation, time allocation, household production, child care, labour supply, inequality
    JEL: J22 H21 H24 H31 D13
    Date: 2012–11
  13. By: Dean R. Lillard; Anna Manzoni
    Abstract: We investigate whether Germans immigrants to the US work in higher-status occupations than they would have had they remained in Germany. We account for potential bias from selective migration. The probability of migration is identified using life-cycle and cohort variation in economic conditions in the US. We also explore whether occupational choices vary for Germans who migrated as children or as adults. Our results allow us to decompose observed differences in occupational status of migrants and non migrants into the part explained by selection effects and the part that is causal, extending the literature on international migration.
    JEL: J24 J61 J62
    Date: 2012

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