nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2013‒01‒12
twelve papers chosen by
Erik Jonasson
Lund University

  1. What makes Single Mothers expand or reduce employment? By Hartmann, Bastian; Hancioglu, Mine
  2. Uncertainty and Heterogeneity in Returns to Education: Evidence from Finland By Kässi, Otto
  3. Gender Discrimination in Hiring: Evidence from 19,130 Resumes in China By Zhou, Xiangyi; Zhang, Jie; Song, Xuetao
  4. Is there monopsonistic discrimination against immigrants? First evidence from linked employer employee data By Jahn, Elke; Hirsch, Boris
  5. The aims of lifelong learning: Age-related effects of training on wages and job security By Lang, Julia
  6. The Evolution of Wage Mobility in the German Low-Wage Sector - Is There Evidence for Increasing State Dependence? By Aretz, Bodo; Gürtzgen, Nicole
  7. Estimating the employment effects of a minimum wage from a cross-sectional wage distribution. A semi-parametric approach By Müller, Kai-Uwe
  8. Estimating Heterogeneous Returns to Education in Germany via Conditional Second Moments By Saniter, Nils
  9. The Effects of Minimum Wages in the German Construction Sector - Reconsidering the Evidence By Möller, Joachim; König, Marion
  10. Do literacy and numeracy pay off? On the relationship between basic skills and earnings By Antoni, Manfred; Heineck, Guido
  11. (Endogenous) occupational choices and job satisfaction among recent PhD recipients: evidence from Catalonia By Antonio Di Paolo
  12. Cognitive skills, tasks and job mobility By Warnke, Arne Jonas; Ederer, Peer; Schuller, Philipp

  1. By: Hartmann, Bastian; Hancioglu, Mine
    Abstract: To explore single mothers labor market participation we analyze specific circumstances and dynamics in their life courses. We focus on the question which individual and institutional factors determine both professional advancement and professional descent. Due to dynamics in women s life course identifying and analyzing restrictions and interruptions of employment requires a longitudinal research design. The German Socio-Economic Panel (1984-2009) provides all necessary information identifying episodes of single motherhood and employment during life courses. Since family statuses of single mothers are partially endogenous and can end in multiple ways, we use semi-parametric survival models. Competing risks estimations offer a detailed view by analyzing single mothers transition from non-employment to full-time or part-time work and vice versa simultaneously. Estimates show that occupational careers of single mothers are influenced by both individual factors and institutional circumstances. Whereas specific problems occur shortly after becoming a single mother, these problems seem to be dealt with over time. Enhancing labor market participation or maintaining full-time employment as a single mother can be achieved when certain challenges are met such as appointed and reliable working hours. Single mothers that do not have to rely on public childcare arrangements, but are capable of finding individual solutions are more likely to balance work and family life. Among institutional determinants welfare benefits have a negative effect on the market labor participation of women in low-paid jobs. --
    JEL: C23 C14 J22
    Date: 2012
  2. By: Kässi, Otto
    Abstract: This paper studies the causal effect of education on income uncertainty using a broad measure of income which encompasses unemployment risk. To accomplish this, the variance of residuals from a Mincer-type income regression is decomposed into unobserved heterogeneity (known to the individual when making their educational choices) and uncertainty (unknown to the individual). The estimation is done using Finnish registry data. The marginal effect of having a secondary or a lower tertiary level education decreases income uncertainty. University level education is found to have a small positive marginal effect on income uncertainty. The effect of education on income uncertainty is roughly similar for men in comparison to women, but income uncertainty is larger for men than for women regardless of education. Contrary to some results from the U.S., the role of unobserved heterogeneity is found to be very small.
    Keywords: earnings uncertainty; unobserved heterogeneity; permanent earnings uncertainty; transitory shocks
    JEL: J31 C35
    Date: 2012–12
  3. By: Zhou, Xiangyi; Zhang, Jie; Song, Xuetao
    Abstract: We study gender discrimination in hiring markets by sending 19,130 fictitious matched resumes in response to professional employment advertisements posted on major Internet employment boards in China for positions such as engineers, accountants, secretaries, and marketing professionals in Beijing, Shanghai, Guangzhou, Shenzhen, Wuhan, and Chengdu. Our results show that, in general, state-owned firms tend to prefer male applicants. Foreign and private firms tend to prefer female applicants. On one hand, this evidence supports the hypothesis that economic reform and the market economy may mitigate gender discrimination. On the other hand, this evidence is consistent with statistics that describe discrimination based on gender segregation and information asymmetry that originated with higher ratios of female workers in foreign and private firms. With respect to regional income disparity, we find that the differences in gender discrimination between first- and second-tier cities are not significant. This result indicates that economic reform exerts limited mitigation effect on discrimination. We also find no evidence of taste discrimination based on traditional son preference in China.
    Keywords: Discrimination; Audit Study; Gender; Employment
    JEL: J71 O12
    Date: 2013–01–03
  4. By: Jahn, Elke; Hirsch, Boris
    Abstract: This paper investigates immigrants and natives labour supply to the firm within a semi-structural approach based on a dynamic monopsony framework. Applying duration models to a large administrative employer employee data set for Germany, we find that once accounting for unobserved worker heterogeneity immigrants supply labour less elastically to firms than natives. Under monopsonistic wage setting the estimated elasticity differential predicts a 4.6 log points wage penalty for immigrants thereby accounting for almost the entire unexplained native immigrant wage differential of 2.9 5.9 log points. Our results imply that discriminating against immigrants is profitable rather than costly. --
    JEL: J42 J61 J71
    Date: 2012
  5. By: Lang, Julia
    Abstract: This paper reports the effects of training participation on wages and perceived job security for employees of different ages. Based on data from the German Socio-Economic Panel, results indicate that only younger workers benefit from training by an increase in wages, whereas older employees worries about losing their job are reduced. This observation can also be explained by the fact that goals of training courses are related to the age of participants. Moreover, I differentiate between workers who permanently and only occasionally participate in training. The results indicate that there seem to be decreasing marginal returns to training with respect to job security. --
    JEL: J24 J28 J31
    Date: 2012
  6. By: Aretz, Bodo; Gürtzgen, Nicole
    Abstract: In this paper, we study how wage mobility in the low-wage sector has changed in Western Germany between 1984 and 2004. Using German individual register data, we document a clear upward trend in the persistence of low-wage employment for both men and women. To explore whether the observed rise in persistence is accounted for by an increase in "genuine" state dependence or by compositional shifts of the low-wage sector, we model low-pay transitions by estimating a series of multivariate probit models. To address the initial conditions problem and the endogeneity of earnings attrition, our estimation approach accounts for the selection into low-wage employment and earnings retention. Using the estimates from the transition model, we determine the evolution of genuine state dependence which is defi ned as the average diff erence in low-pay transition probabilities conditional on being initially low and high paid, respectively. For men, our findings strongly argue against an upward trend of genuine state dependence, as the latter exhibits a fairly stationary development. This contrasts with women, whose evolution of genuine state dependence displays a slight upward trend. --
    JEL: C23 J31 L13
    Date: 2012
  7. By: Müller, Kai-Uwe
    Abstract: On the basis of a structural labor demand model employment effects of a minimum wage are estimated from a single cross-sectional wage distribution. The main contribution of the paper is to relax restrictive functional form assumptions of earlier papers by introducing more flexible semi-parametric censored quantile regressions to this framework. We apply the model to the sectoral minimum wage in the German construction sector. It can be shown that the semi-parametric estimates are within a plausible range: employment levels would be 4-5% higher without the minimum wage in the East where the minimum was binding. The effect for West Germany is markedly smaller, since the minimum wage level was lower in relation to the wage distribution. This semi-parametrically estimated structural approach can be a useful alternative to more popular panel data or difference-in-difference models when the necessary institutional variation or data base is either not available, or the necessary assumptions are problematic. --
    JEL: J23 J31 J38
    Date: 2012
  8. By: Saniter, Nils
    Abstract: In this paper I investigate the causal returns to education for different educational groups in Germany. I circumvent potential drawbacks of IV by employing a new method by Klein and Vella (2010). In this approach identification is not based on instruments but on the presence of heteroskedasticity. Using data from the German Socio-Economic Panel Study (SOEP) I find that the causal return to education is 8.5% for the entire sample, 2% for graduates from the basic school track and 11% for graduates from a higher school track. Across these groups the endogeneity bias in simple OLS regressions varies significantly. This confirms recent evidence in the literature on Germany. Various robustness checks support my findings. --
    JEL: C30 I21 J31
    Date: 2012
  9. By: Möller, Joachim; König, Marion
    Abstract: We use a 100% sample of social security panel micro data for estimating the effects of a minimum wage in the German construction sector. In 1997, a wage floor was introduced at different rates in West and East Germany. For analysing the impact of this natural experiment we conceptually follow a difference-in-differences approach. Since there is only qualitative information on working hours in the data, we propose a probabilistic method for identifying the treatment and control group. The effect of the minimum wage is investigated for wage growth and employment, the latter both from a labor demand and a labor supply perspective. According to our results, there are signi cant positive effects of the minimum wage on wage growth in both parts of the country. Although being lower in absolute terms, the bite of the minimum wage, however, is markedly higher in the East. The employment effects of the wage floor turn out to be different in both parts of the country. The minimum wage effect on the employment retention probability is negative and statistically highly significant in the East and positive, but statistically not significant in the West. When it comes to the inflow of workers into the sector we find a positive and statistically significant effect of the minimum wage in East Germany, but an insignifcant effect for West Germany. The highly differentiated results for the two parts of the country point to nonlinearities in the impact of a minimum wage. Rather than supporting clear-cut effects as in the pure neoclassical approach, our analysis tends to corroborate the relevance of market imperfections like the existence of monopsony power in the market. --
    JEL: J08 J42 J31
    Date: 2012
  10. By: Antoni, Manfred; Heineck, Guido
    Abstract: What is the value of basic skills in the German labor market which until recently was considered to be strongly regulated but has gained flexibility in the last 15 years? To answer this question, we examine the relationship between adults' literacy, numeracy and earnings. We use data from the ALWA-ADIAB database, which is a test augmented survey linked to administrative data, making information on both skills and earnings most accurate. Preliminary results indicate that earnings are positively related to both types of skills. This relationship is more pronounced for numeracy than for literacy. Heterogenous results are found when running separate regressions for sub-groups, for instance by sex. --
    JEL: I21 J31 C83
    Date: 2012
  11. By: Antonio Di Paolo (AQR – IREA, University of Barcelona, Avda Diagonal, 690, 08034 Barcelona)
    Abstract: Drawing on data from two successive cohorts of PhD graduates, this paper analyses differences in overall job satisfaction and specific job domain satisfaction among PhDs employed in different sectors four years after completing their doctorate degrees. Covariate-adjusted job satisfaction differentials suggest that, compared to faculty members, PhD holders employed outside traditional academic and research jobs are more satisfied with the pecuniary facets of their work (principally, because of higher earnings), but significantly less satisfied with the content of their job and with how well the job matches their skills (and, in the case of public sector workers, with their prospects of promotion). The evidence regarding the overall job satisfaction of the PhD holders indicates that working in the public or private sectors is associated with less work well-being, which cannot be fully compensated by the better pecuniary facets of the job. It also appears that being employed in academia or in research centres provides almost the same perceived degree of satisfaction with the job and with its four specific domains. We also take into account the endogenous sorting of PhD holders into different occupations based on latent personal traits that might be related to job satisfaction. The selectivity-corrected job satisfaction differentials reveal the importance of self-selection based on unobservable traits, and confirm the existence of a certain penalisation for working in occupations other than academia or research, which is especially marked in the case of satisfaction with job content and job-skills match. The paper presents additional interesting evidence about the determinants of occupational choice among PhD holders, highlighting the relevance of certain academic attributes (especially PhD funding and pre-and-post-doc research mobility) in affecting the likelihood of being employed in academia, in a research centre or in other public or private sector job four years after completing their doctorate programme.
    Keywords: Job Satisfaction, Job Domain Satisfaction, Occupational Choices, Self-Selection, PhD Holders, Catalonia
    JEL: J24 J28 J45 C31 C35
    Date: 2012–12
  12. By: Warnke, Arne Jonas; Ederer, Peer; Schuller, Philipp
    Abstract: The authors investigate on the basis of primary and secondary data the relationship between individual cognitive skills and the complexity of the particular work those individuals perform. Additionally, the relationship between skills and mobility between more or less complex jobs in an highly homogenous industrial environment is analyzed. The primary data consists of a survey conducted in 2011 of anonymously tested 305 participants in selected factories of four different companies. The survey consists of a newly developed dynamic problem solving test and a standard general intelligence test. Skill measurement is supplemented by information about tasks and personal background. Results are compared to larger scale secondary data sources. Special focus is placed on different employment groups within a company: assemblers, craftsmen, technicians and engineers. Using this data, we can show that non-routine content of individual work is strongly related to cognitive skills. Also, higher cognitive skill levels predict upward occupational mobility. Finally, we demonstrate that the established task-based approach helps to explain why the occupational mobility between some occupational groups is lower than between others. These findings can be useful for the discovery of opportunities for occupational upward mobility in a homogenous environment. --
    JEL: J24 J62 J60
    Date: 2012

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