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on Labor Markets - Supply, Demand, and Wages |
| By: | Francine D. Blau; Lawrence M. Kahn |
| Abstract: | In 1990, the US had the sixth highest female labor participation rate among 22 OECD countries. By 2010, its rank had fallen to 17th. We find that the expansion of “family-friendly” policies including parental leave and part-time work entitlements in other OECD countries explains 28-29% of the decrease in US women’s labor force participation relative to these other countries. However, these policies also appear to encourage part-time work and employment in lower level positions: US women are more likely than women in other countries to have full time jobs and to work as managers or professionals. |
| JEL: | J16 J22 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18702&r=lma |
| By: | François Rycx; Stephan Kampelmann |
| Abstract: | This paper aims to provide a comprehensive, evidence-based, and up-to-date assessment of minimum wages in a range of European countries. A first step towards a better understanding of where Europe stands today on this issue requires to grasp the diversity of European minimum wage systems, a key objective of the paper at hand. The second objective is to document international differences in the so-called "bite" of the minimum wage. This leads to questions such as "how do national minimum wages compare to the overall wage distribution?" and "how many people earn minimum wages in each country?" that are assessed for a set of nine countries from Western, Central and Eastern Europe: Belgium, Bulgaria, Germany, Hungary, Ireland, Poland, Romania, Spain, and the United Kingdom. This sample was designed to include countries for which recent evidence has been missing prior to this paper. What is more, the study also overcomes the narrow focus of extant overviews that have typically focussed only on full-time employment. Crucially, the study improves on existing work by looking beyond aggregate numbers; it provides a detailed panorama of the population of minimum wage earners in each country under investigation, notably by describing their composition in terms of a range of socio-demographic characteristics. |
| Keywords: | Minimum wage systems; Europe; Socio-economic consequences |
| JEL: | J51 J58 J83 |
| Date: | 2013–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:2013/137078&r=lma |
| By: | Claudia Goldin; Claudia Olivetti |
| Abstract: | The most prominent feature of the female labor force across the past hundred years is its enormous growth. But many believe that the increase was discontinuous. Our purpose is to identify the short- and long-run impacts of WWII on the labor supply of women who were currently married in 1950 and 1960. We use mobilization rates for various groups of men (by age, race, fatherhood) to see whether there was a wartime impact. We find that an aggregate mobilization rate produces the largest and most robust impacts on both weeks worked and the labor force participation of married white (non-farm) women. The impact, moreover, was experienced primarily by women in the top half of the education distribution. Women who were married but without children during WWII were the group most impacted by the mobilization rate in 1950, although by 1960 WWII still influenced the labor supply decisions of them as well as those with children during WWII. We end the paper with a resolution between the watershed and revisionist views of the role of WWII on female labor supply. |
| JEL: | J16 J2 N3 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18676&r=lma |
| By: | Nuno Crespo; Nádia Simões; José Castro Pinto |
| Abstract: | We analyze the determinants of job quality in Europe based on an individual level approach. Using data from the Fourth European Working Conditions Survey, covering 31 countries, we propose a multidimensional indicator of job quality based on eight objective and three subjective dimensions and evaluate the influence of worker and firm characteristics on the overall job quality level as well as on each of its constituent dimensions. Our results confirm the influence of worker and firm characteristics on the quality of jobs. Among worker characteristics, the factors that most strongly influence job quality are education and whether the worker is self-employed or a wage earner. The economic sector is the most important firm-related characteristic. |
| Keywords: | Job quality, Europe, determinant factors, twice-censored Tobit model dimensional analysis. |
| JEL: | J01 J21 J81 |
| Date: | 2013–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:isc:iscwp2:bruwp1301&r=lma |
| By: | David Neumark; J.M. Ian Salas; William Wascher |
| Abstract: | We revisit the minimum wage-employment debate, which is as old as the Department of Labor. In particular, we assess new studies claiming that the standard panel data approach used in much of the “new minimum wage research” is flawed because it fails to account for spatial heterogeneity. These new studies use research designs intended to control for this heterogeneity and conclude that minimum wages in the United States have not reduced employment. We explore the ability of these research designs to isolate reliable identifying information and test the untested assumptions in this new research about the construction of better control groups. Our evidence points to serious problems with these research designs. We conclude that the evidence still shows that minimum wages pose a tradeoff of higher wages for some against job losses for others, and that policymakers need to bear this tradeoff in mind when making decisions about increasing the minimum wage. |
| JEL: | J23 J38 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18681&r=lma |
| By: | Bingley, Paul (SFI - Danish National Centre for Social Research); Cappellari, Lorenzo (Università Cattolica del Sacro Cuore); Westergård-Nielsen, Niels C. (Aarhus University) |
| Abstract: | We investigate the relationship between life cycle wages and individual membership of unemployment insurance schemes in Denmark. We separate permanent from transitory wages and characterise them using membership of unemployment insurance funds. We find that unemployment insurance is associated with lower wage growth heterogeneity over the life cycle and greater wage instability, changing the nature of wage inequality from permanent to transitory. While we are in general unable to formally test for moral hazard against adverse selection into unemployment insurance, robustness checks suggest that moral hazard is the relevant interpretation. |
| Keywords: | unemployment insurance, wage dynamics, wage inequality, wage instability |
| JEL: | J31 J65 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7128&r=lma |
| By: | Olivier Bargain; Kristian Orsini; Andreas Peichl |
| Abstract: | We suggest the first large-scale international comparison of labor supply elasticities for 17 European countries and the US, separately by gender and marital status. Measurement differences are netted out by using a harmonized empirical approach and comparable data sources. We find that own-wage elasticities are relatively small and much more uniform across countries than previously thought. Differences exist nonetheless and are found not to arise from different tax-benefit systems or demographic compositions across countries. Thus, we cannot reject that countries have genuinely different preferences. Three other results, important for welfare analysis, are consistent over all countries: the extensive (participation) margin dominates the intensive (hours) margin; for singles, this leads to larger labor supply responses in low-income groups; income elasticities are extremely small everywhere. Finally, the results for cross-wage elasticities in couples are opposed between regions, consistent with complementarity in spouses’ leisure in the US versus substitution in spouses’ household production in Europe. |
| Keywords: | household labor supply, elasticity, taxation, Europe, US |
| JEL: | C25 C52 H31 J22 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp525&r=lma |
| By: | Iñaki Iriondo (Complutense University of Madrid and Queen Mary, University of London); Teodosio Pérez-Amaral (Complutense University of Madrid) |
| Abstract: | This paper analyzes the effect of educational mismatch on wages, using a rich panel dataset of workers in the major euro area countries from 2006 to 2009, drawn from the <i>European Union Statistics on Income and Living Conditions</i> (Eurostat). We use a consistent estimator to address the two econometric problems faced by the empirical literature: the omitted variable bias and measurement error. In principle, our fixed effect estimates confirm that overeducated workers suffer a wage penalty of similar magnitude to the return on each year of schooling attained. Interestingly, when we split the sample by age, we find that the wages of people aged under 35 basically depend on the level of education attained, while those of workers aged over 35 depend on job educational requirements. These results are interpreted taking into account the impact of the depreciation of skills on human capital. The main policy implication of the paper is that overeducation constitutes a waste of resources. Therefore public authorities should seek to reduce the negative impact of overeducation on the labor market. |
| Keywords: | Overeducation, Educational mismatch, Wages, Ability bias, Measurement error, Panel data |
| JEL: | I21 J24 J31 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp700&r=lma |
| By: | Michael Bognanno (Department of Economics, Temple University); Eduardo Melero (Department of Business Administration, Universidad Carlos III de Madrid) |
| Abstract: | This paper examines whether more informative job promotions carry larger wage increases. In job assignment models with asymmetric information, unexpected promotions send a signal to the external labor market to revise upward their assessment of a worker’s ability. The employing firm must then increase wages to prevent the worker from being bid away. Less educated workers are assumed to come from a group with lower average ability. Their promotion is hypothesized to signal a larger positive assessment of their ability than for more highly educated workers for whom promotion is expected. Promotions for younger workers, with less known about their abilities, should also result in strong signaling effects. We find results in accordance with our hypotheses regarding the effect of both age and education on the gains to promotion. However, the statistical significance of the estimates hinges on the promotion definition. Younger workers receive statistically significantly higher wage increases upon promotion only when promotion is defined by the attainment of managerial responsibilities not previously held. Less educated workers obtain statistically significantly larger wage increases upon promotion at a weak level of significance (10%) across definitions of promotion but at a high level of significance (5%) only when the subjective definition of promotion is used. We interpret the sensitivity to the definition of promotion to suggest that promotions may be heterogeneous in the information they reveal about the employee in way that depends on the characteristics of the employee. |
| Keywords: | promotion, signaling, internal labor markets |
| JEL: | J3 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:tem:wpaper:1205&r=lma |
| By: | Thibault Darcillon (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | This article analyzes the linkages between financial liberalization, labor market institutions and wage inequality for 17 OECD countries over the 1989 to 2005 period. With the help of a fixed effect model with an interacted term, one crucial contribution of this article is to analyze the interacted impact of labor market institutions (i.e., workers' bargaining power and employment protection legislation) on the one hand and financial liberalization on the other hand on wage distribution. Our results indicate that changes in workers' bargaining power and in employment protection affect wage distribution (p9/p1 ratio). Estimates of the marginal effects show that by increasing labor markers regulation (i.e., reinforcing workers' bargaining power and increasing employment protection legislation) one also weakens the impact of financial liberalization on the increase in wage inequality. |
| Keywords: | Wage inequality; financial liberalization; corporate governance; employment protection; political economy |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00768908&r=lma |
| By: | Mainali, R. M.; Jafarey, S.; Montes-Rojas, G. |
| Abstract: | This paper examines the sources of wage differentials among caste/ethnic groups, employing national survey data from Nepal. Our study shows that, in countries such as Nepal which have imperfect labour markets, the conventional Oaxaca decomposition methodology fails to estimate precisely the source of wage differential. Using an extended model, occupational choice, firm size distribution and the interaction between these two are employed along with the conventionally used measures of human capital endowments of different groups, to estimate these effects. Our results indicate that the lack of access to better paying occupations and larger firms, rather than differences in human capital, are the main factors underlying the caste/ethnic wage differentia in Nepal. Furthermore, empirical evidence is not found in favour of government policy of "affirmative action" to contribute yet in narrowing down the caste/ethnic wage differential in the labour market. |
| Keywords: | Labour Market Discrimination; Caste; Ethnicity |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cty:dpaper:13/01&r=lma |
| By: | Alina Sorgner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | Often, a person will become an entrepreneur only after a period of dependent employment, suggesting that occupational choices precede entrepreneurial choices. We investigate the relationship between occupational choice and self-employment. The findings suggest that the occupational choice of future entrepreneurs at the time of labor market entry is partly guided by a taste for skill variety, the prospect of high earnings, and occupational earnings risk. Entrepreneurial intentions may also emerge after gaining work experience in a chosen occupation. We find that occupations characterized by high levels of unemployment and earnings risk, relatively many job opportunities, and high self-employment rates foster the founding of an own business. Also, people who fail to achieve an occupation-specific income have a tendency for self-employment. |
| Keywords: | Entrepreneurial choice, occupation-specific determinants of entrepreneurship, risk preferences, taste for variety |
| JEL: | L26 J24 D01 |
| Date: | 2013–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2013-001&r=lma |
| By: | Fang, Hai (University of CO, Denver); Eggleston, Karen N. (Walter H Shorenstein Asia-Pacific Research Center, Stanford University); Rizzo, John A. (Stony Brook University, SUNY); Zeckhauser, Richard J. (Harvard University) |
| Abstract: | Data on 2,355 married women from the 2006 China Health and Nutrition Survey are used to study how female employment affects fertility in China. China has deep concerns with both population size and female employment, so the relationship between the two should be better understood. Causality flows in both directions. A conceptual model shows how employment prospects affect fertility. Then a well-validated instrumental variable isolates this effect. Female employment reduces a married woman's preferred number of children by 0.35 on average and her actual number by 0.50. Ramifications for China's one-child policy are discussed. |
| JEL: | J13 J18 O15 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp12-054&r=lma |