nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2013‒02‒16
twenty-one papers chosen by
Erik Jonasson
National Institute of Economic Research

  1. The US Labour Market Recovery Following the Great Recession By Wendy Dunn
  2. The "Task Approach" to Labor Markets: An Overview By Autor, David
  3. Attracting Talent: Location Choices of Foreign-Born PhDs in the US By Jeffrey Grogger; Gordon H. Hanson
  4. The Dutch Labour Market: Preparing for the Future By Mathijs Gerritsen; Jens Høj
  5. Enhancing the Inclusiveness of the Labour Market in Belgium By Jens Høj
  6. Is the Persistent Gender Gap in Income and Wages Due to Unequal Family Responsibilities? By Angelov, Nikolay; Johansson, Per; Lindahl, Erica
  7. Gender Differences in German Wage Mobility By Aretz, Bodo
  8. Self-Employment in China: Are Rural Migrant Workers and Urban Residents Alike? By Cui, Yuling; Nahm, Daehoon; Tani, Massimiliano
  9. Persistence Bias and the Wage-Schooling Model By Andini, Corrado
  10. Gender Wage-Productivity Differentials and Global Integration in China By Dammert, Ana C.; Ural Marchand, Beyza; Wan, Chi
  11. Gender Wage Gaps, 'Sticky Floors' and 'Glass Ceilings' in Europe By Louis N. Christofides; Alexandros Polycarpou; Konstantinos Vrachimis
  12. SOCIAL NORMS AND FIRMS’ DISCRIMINATORY PAY-SETTING By Simon Janssen; Simone N. Tuor Sartore; Uschi Backes-Gellner
  13. The effects of technology and offshoring on changes in employment and task-content of occupations By Semih Akcomak; Suzanne Kok; Hugo Rojas-Romagosa
  14. The Decline of the Self-Employment Rate in Australia By Atalay, Kadir; Kim, Woo-Yung; Whelan, Stephen
  15. Analysis of the Determinants of Income and Income Gap between Urban and Rural China By Su, Biwei; Heshmati, Almas
  16. Why Do Russian Firms Use Fixed-Term and Agency Work Contracts? By Smirnykh, Larisa; Wörgötter, Andreas
  17. Estimating the Impact of the Québec’s Work Incentive Program on Labour Supply: An Ex Post Microsimulation Analysis By Fanny Moffette; Dorothée Boccanfuso; Patrick Richard; Luc Savard
  18. Performance, Career Dynamics, and Span of Control By Valerie Smeets; Michael Waldman; Frederic Warzynski
  19. Quasi-Experimental Impact Estimates of Immigrant Labor Supply Shocks: The Role of Treatment and Comparison Group Matching and Relative Skill Composition By Aydemir, Abdurrahman; Kirdar, Murat G.
  20. Job Creation and Destruction in South Africa By Andrew Kerr; Martin Wittenberg; Jairo Arrow
  21. Returns to education in India By Scott Fulford

  1. By: Wendy Dunn
    Abstract: Although job creation has improved, since the end of the 2007-08 recession, the effects of the recession on the labour market remain severe. Unemployment duration is still extremely high, and many have withdrawn from the labour market altogether. Because the weakness is largely cyclical in nature, policy makers should place a high priority on supporting aggregate demand in the short term. Even so, policies are needed to help individuals return to work, as there is a risk that high long-term unemployment and weak labour market participation could evolve into structural problems. Greater emphasis should be put on activation measures that help individuals search for jobs more effectively or find adequate training programmes. In the longer run, education and training are key to raising the skills and wages of the workforce. In this regard, educational reforms are needed to increase student achievement at all levels. High-quality vocational training can also be used to advance the skills of high-school graduates. College completion rates could be improved by reducing financial and other barriers to education, and enhancing the community college system would be a cost-effective way to provide more individuals with an affordable way to obtain tertiary education. Disability insurance reforms are needed to reduce dependency on these programmes and encourage participation in the workforce. This Working Paper relates to the 2012 OECD Economic Survey of the United States ( States).<P>La reprise du marché du travail aux États-Unis après la grande récession<BR>Bien que la création d'emplois ait repris, les effets de la récession se font toujours sentir sur le marché du travail. La durée du chômage reste très élevée et beaucoup ont cessé de chercher un emploi. Compte tenu du caractère largement conjoncturel de cette situation difficile, les autorités devraient donner à court terme la priorité au soutien de la demande. Mais il faut également prendre des mesures pour faciliter le retour à l'emploi, car le risque existe que le niveau élevé du chômage de longue durée et la faiblesse du taux d’activité deviennent des problèmes structurels. Il convient de mettre davantage l’accent sur les mesures d’incitation à la reprise d’un travail afin d’aider les chômeurs à rechercher un emploi ou à trouver des programmes de formation adéquats. À plus long terme, l’éducation et la formation vont jouer un rôle-clé dans l’amélioration des compétences et des salaires de la main-d’oeuvre. C'est pourquoi des réformes du système éducatif s'imposent pour améliorer le taux de réussite à tous les niveaux d'études. Une formation professionnelle de qualité peut aussi permettre de développer les compétences des diplômés de l'enseignement secondaire. Réduire les obstacles financiers et autres qui empêchent l’accès à l’éducation serait un moyen d’augmenter les taux de réussite dans l'enseignement supérieur, et améliorer le système des community colleges permettrait, à un coût raisonnable, d’offrir à davantage de personnes la possibilité de suivre des études supérieures dans des conditions financièrement accessibles. Enfin, des réformes de l'assurance invalidité sont nécessaires pour diminuer la dépendance à l'égard de ce régime et encourager le retour sur le marché du travail. Ce Document de travail se rapporte à l'Étude économique de l'OCDE des États Unis 2012 ( Unis).
    Keywords: human capital, disability, vocational training, labour market participation, activation policies, structural unemployment, long-term unemployment, Unemployment duration, job creation, hiring subsidies, capital humain, invalidité, formation professionnelle, participation au marché du travail, politiques d'activation, chômage structurel, chômage de longue durée, durée de chômage, création de l'emploi, subventions à l'embauche
    JEL: J2 J6
    Date: 2013–01–28
  2. By: Autor, David (MIT)
    Abstract: An emerging literature argues that changes in the allocation of workplace "tasks" between capital and labor, and between domestic and foreign workers, has altered the structure of labor demand in industrialized countries and fostered employment polarization – that is, rising employment in the highest and lowest paid occupations. Analyzing this phenomenon within the canonical production function framework is challenging, however, because the assignment of tasks to labor and capital in the canonical model is essentially static. This essay sketches an alternative model of the assignment of skills to tasks based upon comparative advantage, reviews key conceptual and practical challenges that researchers face in bringing the "task approach" to the data, and cautions against two common pitfalls that pervade the growing task literature. I conclude with a cautiously optimistic forecast for the potential of the task approach to illuminate the interactions among skill supplies, technological capabilities, and trade and offshoring opportunities, in shaping the aggregate demand for skills, the assignment of skills to tasks, and the evolution of wages.
    Keywords: skill demands, technological change, job tasks, Roy model, human capital, occupational choice
    JEL: J23 J24 J30 J31 O31 O33
    Date: 2013–01
  3. By: Jeffrey Grogger; Gordon H. Hanson
    Abstract: We use data from the NSF Survey of Earned Doctorates to examine the post-degree location choices of foreign-born students receiving PhDs from US universities in science and engineering. Over the period 1960 to 2008, 77% of foreign-born S&E PhDs state that they plan to stay in the United States. The foreign students more likely to stay in the US are those with stronger academic ability, measured in terms of parental educational attainment and the student’s success in obtaining graduate fellowships. Foreign students staying in the United States thus appear to be positively selected in terms of academic ability. We also find that foreign students are more likely to stay in the United States if in recent years the US economy has had strong GDP growth or the birth country of the foreign student has had weak GDP growth. Foreign students are less likely to remain in the US if they are from countries with higher average income levels or that have recently democratized. Education and innovation may therefore be part of a virtuous cycle in which education enhances prospects for innovation in low-income countries and innovation makes residing in these countries more attractive for scientists and engineers.
    JEL: J24 J61
    Date: 2013–02
  4. By: Mathijs Gerritsen; Jens Høj
    Abstract: The well performing labour market has delivered low unemployment and relatively stable wage developments. However, it is divided into a small flexible segment and a large more rigid segment, where the adjustment burden of external shocks falls disproportionally on the first group. At the same time, labour utilisation is relatively low, despite a relatively high overall participation rate, due to a high frequency of part-time employment, a low effective retirement age and a high use of disability benefits. Looking ahead, it is unlikely that the organisation of the labour market will allow the economy to continue reaping fully the benefits of globalisation. That would require a labour market that facilitates the allocation of increasingly scarce labour resources to their best use and mobilises underutilised labour resources to counter the ageing related contraction of the labour force.). This Working Paper relates to the 2012 OECD Economic Survey of the Netherlands (<P>Le marché du travail néerlandais : Préparer l'avenir<BR>Le bon fonctionnement du marché du travail a permis de maintenir un faible niveau de chômage et des évolutions salariales relativement stables. Cependant, ce marché est divisé en un grand segment assez rigide et un petit segment flexible, sur lequel pèse de façon disproportionnée la charge de l'ajustement en cas de chocs extérieurs. En outre, l'utilisation de la main-d'oeuvre est faible, malgré un taux d'activité global relativement élevé, en raison de la grande fréquence de l'emploi à temps partiel, d'un faible âge effectif de départ à la retraite et d'un recours important aux prestations d'invalidité. À terme, il est peu probable que l'organisation du marché du travail permettra à l'économie de continuer à tirer pleinement parti de la mondialisation. Il faudrait pour cela un marché du travail qui facilite la réallocation des ressources de main-d'oeuvre de plus en plus rares vers leur meilleure utilisation et mobilise les ressources de main-d'oeuvre sous-utilisées pour contrer la contraction de la population active liée au vieillissement. Ce document de travail se rapporte à l'Étude économique des Pays-Bas de 2012 (
    Keywords: globalisation, labour market policies, severance pay, labour market, wage formation, allocation of the labour supply, marché du travail, politique du marché du travail, mondialisation, formation des salaires, répartition de l'offre de travail, indemnités de départ
    JEL: J08 J3 J62 J65
    Date: 2013–01–14
  5. By: Jens Høj
    Abstract: The global crisis led to a smaller increase in the unemployment rate than in most other OECD countries as employment has been sustained through intensive use of reduced working time schemes. These schemes have mostly benefited workers with permanent contracts while the higher unemployment mostly affected workers with weaker labour market attachment. A main challenge for policy makers is therefore to avoid that the increase in labour market segmentation between insiders and outsiders that would hurt the most vulnerable. Over the medium term, labour market policies need to respond to the ageing of the labour force, which implies that an increasing number of workers with permanent contracts will retire. Thus, policies must focus on enabling the current labour market outsiders to get a stronger foothold on the labour market as well as to mobilize under-utilised labour resources. The wage determination system has allowed wages to increase faster than the main competitors and faster than productivity, leading to a gradual loss of cost competitiveness. Minimum wages are high by international standards, hampering entry to the labour market for many low-skilled workers. Unemployment benefits are relatively generous, and particularly for long-term unemployed. A complicated tax-benefit system has created high effective marginal tax rates and numerous labour market traps. This Working Paper relates to the 2011 OECD Economic Survey of Belgium (<P>Pour un marché du travail plus inclusif en Belgique<BR>La crise mondiale a entraîné une progression du chômage moindre que dans la plupart des autres pays de l’OCDE car l’emploi est resté soutenu du fait du recours intensif à des dispositifs de réduction du temps de travail. Ces dispositifs ont bénéficié essentiellement aux travailleurs titulaires de contrats permanents tandis que la hausse du chômage a principalement touché les travailleurs dont les liens avec le marché du travail étaient plus distendus. L’un des principaux défis pour les responsables des politiques publiques est donc d’éviter que la segmentation accrue du marché du travail entre travailleurs intégrés et travailleurs exclus frappe les plus vulnérables. A moyen terme, les politiques du marché du travail doivent s’adapter au problème du vieillissement de la main d’oeuvre qui impliquera le départ à la retraite d’un nombre croissant de travailleurs titulaires de contrats permanents. Les politiques publiques doivent donc s’attacher à permettre aux travailleurs aujourd’hui exclus du marché du travail de s’y implanter plus fermement mais aussi à mobiliser les ressources en main d’oeuvre sous-utilisées. Le mécanisme de fixation des salaires leur a permis d’augmenter plus vite que ceux des principaux concurrents et plus vite que la productivité, ce qui a abouti à une perte progressive de compétitivité-coûts. Les salaires minimums sont élevés comparés aux standards internationaux, ce qui est un frein à l’entrée sur le marché du travail d’un grand nombre de travailleurs peu qualifiés. L’indemnisation du chômage est relativement généreuse, en particulier pour les chômeurs de longue durée. Une fiscalité et un régime de prestations complexes ont généré des taux d’imposition effectifs marginaux élevés et de nombreux pièges sur le marché du travail. Ce Document de travail se rapporte à l'Étude économique de l'OCDE de la Belgique 2011 (
    Keywords: labour supply and demand, unemployment benefits, wage formation, ageing of the labour force, labour market traps, formation des salaires, vieillissement de la main-d'oeuvre, allocations de chômage, pièges du marché du travail, offre de travail et demande
    JEL: J11 J2 J31 J64 J65
    Date: 2013–01–15
  6. By: Angelov, Nikolay (IFAU); Johansson, Per (IFAU); Lindahl, Erica (IFAU)
    Abstract: We compare the income and wage trajectories of women in relation to their male partners before and after parenthood. Focusing on the within-couple gap allows us to control for both observed and unobserved attributes of the spouse and to estimate both short- and long-term effects of entering parenthood. Our main finding is that 15 years after the first child was born, the male-female gender gaps in income and wages have increased with 35 and 10 percentage points, respectively. In line with a collective labor supply model, the magnitude of these effects depends on relative incomes or wages within the family.
    Keywords: gender gap, quantile regression, income, wages
    JEL: J21 D13 C21
    Date: 2013–01
  7. By: Aretz, Bodo (ZEW Mannheim)
    Abstract: This paper analyzes the evolution of wage inequality and wage mobility separately for men and women in West and East Germany over the last four decades. Using a large administrative data set which covers the years 1975 to 2008, I find that wage inequality increased and wage mobility decreased for male and female workers in East and West Germany. Women faced a higher level of wage inequality and a lower level of wage mobility than men in both parts of the country throughout the entire observation period. The mobility decline was sharper in East Germany so that the level of wage mobility has fallen below that of West Germany over time. Looking at long-term mobility, a slowly closing gap between men and women is observed.
    Keywords: wage mobility, wage inequality, administrative data
    JEL: J31 D63
    Date: 2013–01
  8. By: Cui, Yuling (Macquarie University, Sydney); Nahm, Daehoon (Macquarie University, Sydney); Tani, Massimiliano (Macquarie University, Sydney)
    Abstract: This paper studies differences in the motivation to be self-employed between rural migrants and urban residents in modern China. Estimates of the wage differential between self-employment and paid-employment obtained through a three-stage methodology using the 2002 China Household Income Project (CHIP), reveal that rural migrants become self-employed to avoid low-pay city jobs, enhancing their odds of economic assimilation. Conversely, urban residents become entrepreneurs to move out of unemployment. The empirical analysis confirms that self-employment also attracts married individuals and those in good health, while it negatively relates to high educational attainment. The decomposition of hourly wage differences between pairs (by type of employment and residence status) shows that higher hourly wages of paid and self-employed urbanites over migrants predominantly arise through differences in coefficients (i.e. "discrimination") while those between self- and paid employment among urbanites are mostly due to differences in individual characteristics. Discrimination overwhelmingly accounts for hourly wage differences between self- and paid employment among rural immigrants. We interpret the relevant effect of discrimination in 2002 in urban labour markets as a sign of the institutional barriers associated with the Hukou system.
    Keywords: rural migrant workers, wage differentials, self-employment, urban residents
    JEL: C36 J61 J31 J21 J24
    Date: 2013–01
  9. By: Andini, Corrado (University of Madeira)
    Abstract: This paper provides an expression for the bias of the OLS estimator of the schooling coefficient in a simple static wage-schooling model where earnings persistence is not accounted for. It is argued that the OLS estimator of the schooling coefficient is biased upward, and the bias is increasing with potential labor-market experience and the degree of earnings persistence. In addition, NLSY data are used to show that the magnitude of the persistence bias is non-negligible, and the bias cannot be cured by increasing the control set. Further, it is shown that disregarding earnings persistence is still problematic for the estimation of the schooling coefficient even if individual unobserved heterogeneity and endogeneity are taken into account. Overall, the findings support the dynamic approach to the estimation of wage-schooling models recently suggested by Andini (2012; 2013).
    Keywords: schooling, wages, dynamic panel-data models
    JEL: C23 I21 J31
    Date: 2013–01
  10. By: Dammert, Ana C. (Carleton University); Ural Marchand, Beyza (University of Alberta); Wan, Chi (University of Massachusetts Boston)
    Abstract: In the absence of discrimination, there should be no wage-productivity differentials as relative wages should be equal to the relative marginal productivity levels of workers. This paper investigates the role of globalization on the structure and evolution of gender differentials in China by simultaneously estimating demand-side wage and productivity outcomes using nonlinear least squares. The analyses are based on a comprehensive population-wide panel survey of manufacturing firms between the years of 2004 and 2007, covering 94 percent of total industry output and providing an accurate representation of labor demand. The results suggest that more exposure to globalization through increased exports is associated with lower gender wage-productivity differentials, and more exposure through increased foreign investment leads to differentials in favor of female workers. On the other hand, gender discrimination is found to be prevalent among domestically owned and non-exporting firms.
    Keywords: China, gender wage discrimination, globalization, firm ownership
    JEL: D22 F21 J16 J31
    Date: 2013–01
  11. By: Louis N. Christofides (Department of Economics, Universities of Cyprus and of Guelph.); Alexandros Polycarpou (Department of Economics, University of Cyprus); Konstantinos Vrachimis (Department of Economics, University of Cyprus and Cooperative Central Bank of Cyprus.)
    Abstract: We consider and attempt to understand the gender wage gap across 26 European countries, using 2007 data from the European Union Statistics on Income and Living Conditions. The size of the gender wage gap varies considerably across countries, definitions of the gap, and selection-correction mechanisms. Most of the gap cannot be explained by the characteristics available in this data set. Quantile regressions show that, in a number of countries, the wage gap is wider at the top (‘glass ceilings’) and/or at the bottom of the wage distribution (‘sticky floors’). We find larger mean/median gender gaps and more evidence of glass ceilings for full-time full-year employees, suggesting more female disadvantage in ‘better’ jobs. These features may be related to country-specific policies that cannot be evaluated at the individual-country level, at a point in time. We use the cross-country variation in the unexplained wage gaps of this larger-than-usual sample of states to explore the influence of (i) country policies that reconcile work and family life and (ii) their wage-setting institutions. We find that country policies and institutions are related to features of their unexplained gender wage gaps in systematic, quantitatively important, ways.
    Keywords: Gender wage gap; selection; quantiles;work-family reconciliation; wage-setting institutions
    JEL: J16 J31 J50 C21
    Date: 2013
  12. By: Simon Janssen (Department of Business Administration (IBW), University of Zurich); Simone N. Tuor Sartore (Department of Business Administration (IBW), University of Zurich); Uschi Backes-Gellner (Department of Business Administration (IBW), University of Zurich)
    Abstract: We analyze the relationship between gender-specific social norms and firms’ pay-setting behavior. We combine information about regional voting behavior relative to gender equality laws, as a measure for gender-specific social norms, with a large data set of multi-branch firms and workers. The results show that multi-branch firms pay more discriminatory wages in branches located in regions with a higher social acceptance of gender inequality than in branches located in regions with a lower acceptance. Voter approval rates account for about 50% of the entire variation of within-firm gender pay gaps across regions. By investigating a subsample of performance pay workers for whom we are able to observe their time-based and performance pay component separately, we show that unobserved productivity differences within firms across regions cannot explain the relationship between social norms and within-firm gender pay gaps. As performance pay is more closely related to workers’ productivity than time-based pay, gender-specific productivity differences would manifest in the workers’ performance pay component. However, as the relationship between social norms and within-firm gender pay gaps manifests only for the time-based pay component but not for the performance pay component of the same workers, unobserved gender-specific productivity differences cannot explain our findings. The results support a strong relationship between social norms and the discriminatory pay-setting behavior of firms.
    JEL: J31 J33 J71 M5
    Date: 2013–01
  13. By: Semih Akcomak; Suzanne Kok; Hugo Rojas-Romagosa
    Abstract: Combining employment data with the British Skill Survey (BSS) –which has comparable within-occupation task data for three waves: 1997, 2001 and 2006– we analyse employment changes between occupations (extensive margin) and within occupations (intensive margin). First, we find that the task-content of occupations (i.e. the intensive margin) has experienced significant changes in the United Kingdom between 1997 and 2006. Second, our econometric results suggest that these intensive margin changes can be explained by technological improvements (SBTC) and unionisation levels, while offshoring has not been a factor explaining how tasks are organized within occupations. Analysing changes at the extensive margin we confirm previous findings in the literature: there has been job polarization for both the UK and the Netherlands, and this job polarization can be explained by both SBTC and offshoring, though SBTC seems to be a more influential factor.
    JEL: J21 J23 J24 O33 F16 F23
    Date: 2013–02
  14. By: Atalay, Kadir; Kim, Woo-Yung; Whelan, Stephen
    Abstract: This paper using the Australian panel data(HILDA) investigates the declining trend of self-employment rate in Australia, a pattern observed in a number of other developed countries in the 2000s. We focus on the entry into and the exit from self-employment, treating males and females separately. Our results show that the self-employment rate has declined in Australia because older workers, especially older female workers, remained longer in paid-employment. This finding indicates that although the self-employment rate of older workers is higher than that of younger workers, the gap has decreased in recent years so that the average self-employment rate has declined. In addition, we provide some evidence that industry and institutional changes, such as reforms in tax and pension systems, may have contributed to an increase in the labour force participation of older females, which may explain why the decline of self-employment has been severe for this group.
    Keywords: Retirement; Older Workers; Self Employment
    Date: 2013–02
  15. By: Su, Biwei (Korea University); Heshmati, Almas (Korea University)
    Abstract: This paper studies on the determinants of income and urban-rural income gap to shed light on the problem of urban-rural income inequality in China. OLS, conditional quantile regression and Blinder-Oaxaca decomposition methods are used to analyze four waves of the China Health and Nutrition Survey (CHNS) household data. Results show that education and occupation are essential determinants of households' income level. These two factors exert heterogeneous effects at different percentiles of the income distribution. In urban areas, education is more valued for high income earners, while for rural areas, specialized or tertiary education are more beneficial for the poorer households. Among all occupational types, farm activities show much lower returns than other types; and this is more evident for individuals at the left tail of the income distribution. We also find that for the sampled provinces, urban-rural income gap increases from the year of 2000 to 2004 but the gap decreases from 2004 to 2009. The income gap can be largely explained by the individuals' attributes, especially by level of education and type of occupation.
    Keywords: urban-rural income gap, Oaxaca-Blinder decomposition, quantile regression, CHNS household data, China
    JEL: O15 O18 D31 D63 C31
    Date: 2013–01
  16. By: Smirnykh, Larisa (Higher School of Economics, Moscow); Wörgötter, Andreas (OECD, Paris)
    Abstract: This study looks into the use of fixed term contracts and agency work in Russia during and shortly after the crisis 2009–10 with the help of an enterprise survey. The results of variance analysis show that the use of fixed-term or agency work contracts is not uniform across sectors, size and skill requirements. Probit analysis reveals that the use of fixed term contracts also increases the likelihood of using agency work, but not the other way around. The increase of temporary and agency work contracts increases the turnover on the labour market and contributes to an increase in dualisation, but may also help to prevent a larger increase in unemployment during crisis periods.
    Keywords: labour contracts, employment level, turnover, labour demand, Russia
    JEL: J41 J21 J63 J23
    Date: 2013–01
  17. By: Fanny Moffette (GREDI, University of Sherbrooke); Dorothée Boccanfuso (Département d'économique, Université de Sherbrooke); Patrick Richard (Département d'économique, Université de Sherbrooke); Luc Savard (Département d'économique, Université de Sherbrooke)
    Abstract: In 2005, a wage subsidy program was established in Québec to encourage low-income individuals, particularly recipients of social assistance, to work, by offering them fiscal relief. We analyse the effect of this program (the Prime au travail) with a microsimulation model which determines the impact on the labour supply. We estimate the variation in the labour supply at the extensive and intensive margins which allows us to grasp both the income effect and the substitution effect of the Prime au travail on individuals’ willingness to work. On the other hand, our labour supply model has the necessary characteristics to link it to a general equilibrium model and offer an integrated macro-microsimulation analysis. Nonetheless, unlike the usual microsimulation models employed in integrated macro-microsimulation analysis, we provide a number of innovations, notably the analysis at the intensive margin so that it captures both the substitution effect and the income effect. Our results show that a number of individuals entered the labour market in response to the Prime au travail, while others decided to work fewer hours, due to increased income linked to the program. Ultimately, the variation in labour supply was less in the intensive margin than in the extensive margin and it is positive for all types of households, with the exception of female single parents.
    Keywords: Labour supply, reservation wage, public policy
    JEL: J22 J39 J68
    Date: 2013–01
  18. By: Valerie Smeets (Department of Economics and Business, Aarhus University); Michael Waldman (Johnson Graduate School of Management, Cornell University); Frederic Warzynski (Department of Economics and Business, Aarhus University)
    Abstract: There is an extensive theoretical literature based on what is called the scale-of-operations effect, i.e., the idea that the return to managerial ability is higher the more resources the manager influences with his or her decisions. This idea leads to various testable predictions including that higher ability managers should supervise more subordinates, or equivalently, have a larger span of control. And although some of this theory’s predictions have been empirically investigated, there has been little systematic investigation of the theory’s predictions concerning span of control. In this paper we first extend the theoretical literature on the scale-of-operations effect to allow firms’ beliefs concerning a manager’s ability to evolve over the manager’s career, where much of our focus is the determinants of span of control. We then empirically investigate testable predictions from this theoretical analysis using a unique single firm dataset that contains detailed information concerning the reporting relationships at the firm. Our investigation provides strong support both for the model’s predictions concerning wages, wage changes, and probability of promotion, and also for the model’s predictions concerning span of control including predictions derived from the learning component of the model. Overall, our investigation supports the notion that the scale-of-operations effect and additionally learning are important determinants of the internal organization of firms including span of control.
    Keywords: performance, career dynamics, span of control
    JEL: J31 M5
    Date: 2013–02–05
  19. By: Aydemir, Abdurrahman (Sabanci University); Kirdar, Murat G. (Middle East Technical University)
    Abstract: This paper examines the employment effects of a large burst of immigration – the politically-driven exodus of ethnic Turks from Bulgaria into Turkey in 1989. In some locations, the rise in the labor force due to this inflow of repatriates was 5 to 10 percent. A key feature of our context is the strong involvement of the Turkish state in the settlement of earlier waves of repatriates, which provides us a strong source of exogenous variation in the 1989 immigrant shock across locations and brings our study closer to an ideal natural experiment. Using a reservoir of 342 cities and towns in Turkey with variable treatment intensity, this analysis places much attention on constructing a matched sample that is well balanced in terms of covariate distributions of the treatment and comparison groups – using propensity score matching. We find a positive effect of repatriates on the unemployment of non-repatriates. In fact, a 1 percent increase in the labor force due to repatriates increases the unemployment rate of natives by 0.4 percentage points. When the analysis is done according to skill groups, we find that the impact is the strongest on the young and on non-repatriates with similar educational attainment.
    Keywords: labor force and employment, immigrant workers, quasi experiments
    JEL: J21 J61
    Date: 2013–01
  20. By: Andrew Kerr (DataFirst, University of Cape Town); Martin Wittenberg (DataFirst, University of Cape Town); Jairo Arrow
    Abstract: Analysts of the South African labour market have predominantly used household surveys to analyse the labour market. It has been more difficult to explore labour demand from the firm side, as a result of limited data from relatively small cross sectional firm surveys, mainly funded by the World Bank. We use the Quarterly Employment Survey conducted by Statistics South Africa that allows us to explore how South African enterprises create and destroy jobs, shedding light on many of the policy questions that are relevant in a high unemployment society like SouthAfrica. We find job creation and destruction rates are similar to those found in OECD countries. There is little evidence that labour legislation creates rigidities that prevent firms from hiring or firing workers.We also find that larger firms are better net creators of jobs than small firms and that net job creation rates are negative in manufacturing, consistent with work using household surveys. Our research has important policy implications - particularly for the National Planning Commission's suggestion that new jobs will come mainly from small and medium sized firms. Our research suggests this is not likely without changes to policy or legislation. This is a joint SALDRU/DataFirst Working Paper
    Date: 2013
  21. By: Scott Fulford (Boston College)
    Abstract: Despite the evidence for high returns to education at an individual level, large increases in education across the developing world have brought disappointing returns in aggregate. This paper shows that the same pattern holds in India by building aggregates from micro-data so that the comparability and quality issues that plague cross-country analyses are not a problem. In India both men and women with more education live in households with greater consumption per capita. Yet in aggregate, comparing across age cohorts and states, better educated male cohorts consume only about 4% more than less well educated ones. Better educated female cohorts do not live in households with higher consumption. This result is robust to: (1) using econometric models that account for survey measurement error, (2) different measures of household consumption and composition, (3) allowing returns to differ by state, and (4) age mismeasurement. Comparing state returns to a measure of school quality, it does not seem that poor quality is responsible for the low returns.
    Keywords: education, India, household consumption, school quality
    JEL: O15 I2
    Date: 2012–12–31

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