nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2013‒03‒09
ten papers chosen by
Erik Jonasson
National Institute of Economic Research

  1. Changes in Returns to Task-Specific Skills and Gender Wage Gap By Shintaro Yamaguchi
  2. My Wage is Unfair! Just a Feeling or Comparison with Peers? By Schneck, Stefan
  3. In-Work Benefits and the Nordic Model By Kolm, Ann-Sofie; Tonin, Mirco
  4. Employer moral hazard, wage rigidity and worker cooperatives: A theoretical appraisal. By Navarra, Cecilia; Tortia, Ermanno
  5. Wage Effects of Immigration in a Bargaining Economy By Lundborg, Per
  6. Does Working from Home Work? Evidence from a Chinese Experiment By Nicholas Bloom; James Liang; John Roberts; Zhichun Jenny Ying
  7. Estimating labour supply elasticities based on cross-country micro data: A bridge between micro and macro estimates? By Jäntti, Markus; Pirttilä, Jukka; Selin, Håkan
  8. A test of the Becker-Tomes model of human capital transmission using microdata on four generations By Lindahl, Mikael; Palme, Mårten; Sandgren Massih, Sofia; Sjögren, Anna
  9. The labor market impact of refugee immigration in Sweden 1999–2007 By Ruist, Joakim
  10. The Rise in Female Participation in Colombia: Fertility, Marital Status or Education? By Diego Amador; Raquel Bernal; Ximena Peña

  1. By: Shintaro Yamaguchi
    Abstract: How did skilled-biased technological change affect wage inequality, particularly between men and women? To answer that question this paper constructs a task-based Roy model in which workers possess a bundle of basic skills, and occupations are characterized as a bundle of basic tasks. The model is structurally estimated using the task data from the Dictionary of Occupational Titles and the PSID. The main empirical finding is that men have more motor skills than women, but the returns to motor skills have dropped significantly, accounting for more than 40% of the narrowing gender wage gap.
    Keywords: Roy model, task-based approach, occupational choice, skill-biased technological change, soft skills
    JEL: J24 J31
    Date: 2013–01
  2. By: Schneck, Stefan
    Abstract: This paper descriptively analyzes the nexus between income comparisons and perceptions of unfair pay. A German household survey reveals that individuals who perceive their wages as unfair earn significantly lower wages than fairly paid individuals with similar characteristics. This suggests that unfairness perceptions with respect to wages are based on sound income comparisons with peers. When asked about a subjectively fair amount in Euros, individuals tend to claim much higher wages than fairly paid individuals with identical characteristics. --
    Keywords: Fairness,Wages
    JEL: J30 J31
    Date: 2013
  3. By: Kolm, Ann-Sofie (Dept. of Economics, Stockholm University); Tonin, Mirco (University of Southampton (and Central European University, Budapest; IZA, Bonn))
    Abstract: Welfare benefits in the Nordic countries are often tied to employment. We argue that this is one of the factors behind the success of the Nordic model, where a comprehensive welfare state is associated with high employment. In a general equilibrium setting, the underlining mechanism works through wage moderation and job creation. The benefits make it more important to hold a job, thus lower wages will be accepted, and more jobs created. Moreover, we show that the incentive to acquire higher education improves, further boosting employment in the long run. These positive effects help counteracting the negative impact of taxation.
    Keywords: Nordic model; in-work benefits; wage adjustment; unemployment; education; skill formation; earnings
    JEL: H24 J21 J24
    Date: 2013–01–10
  4. By: Navarra, Cecilia (University of Namur); Tortia, Ermanno (University of Trento)
    Abstract: We argue that in a capitalist enterprise the need to fix wages is crucially influenced by the asymmetric distribution of decision-making power, which can entail the use of private information and authority in favour of the strongest contractual party (the employer), and against the weaker contractual party (the employee). The capitalist entrepreneur can take decisions whose negative consequences are borne by workers in terms of lower wages and more intensive work-pace. Excessive wage reductions in the face of negative exogenous shocks, and of too risky investment decision represent the main instances of such opportunistic behaviour. Fixed wages can be thought as workers’ best response to the emerging risk of the employers’ moral hazard, but this implies a heightened risk of lay-off since wages and employment levels cannot be fixed at one and the same time. As a counterexample, we observe worker cooperatives, which depart from the framework of the interaction between a principal and an agent in the presence of contrasting interests and private information. Indeed, several empirical studies show greater employment stability and wage flexibility in worker cooperatives vis à vis capitalist firms.
    Keywords: employment contract; wage rigidity; risk aversion; moral hazard; worker cooperative
    JEL: J54 J64 J83
    Date: 2013–02–01
  5. By: Lundborg, Per (Stockholm University Linnaeus Center for Integration Studies - SULCIS)
    Abstract: Most empirical studies on wage effects of immigration disregard common labour market institutions like the requirement of job offer before entry to the host country and wage bargaining. The model presented here accounts for these institutions and finds a rationale for the empirical studies’ treatment of the migrant share as a determinant of natives’ wages. A higher migrant share is shown to lower the native’s wage but only temporarily. After assimilation the wage subsequently returns to its original level. The results suggest that empirical studies of wage effects of immigration should focus on unassimilated immigrants having low reservation wages.
    Keywords: Immigration; bargaining; institutions
    JEL: J53 J61
    Date: 2013–02–14
  6. By: Nicholas Bloom; James Liang; John Roberts; Zhichun Jenny Ying
    Abstract: About 10% of US employees now regularly work from home (WFH), but there are concerns this can lead to "shirking from home." We report the results of a WFH experiment at CTrip, a 16,000-employee, NASDAQ-listed Chinese travel agency. Call center employees who volunteered to WFH were randomly assigned to work from home or in the office for 9 months. Home working led to a 13% performance increase, of which about 9% was from working more minutes per shift (fewer breaks and sick-days) and 4% from more calls per minute (attributed to a quieter working environment). Home workers also reported improved work satisfaction and experienced less turnover, but their promotion rate conditional on performance fell. Due to the success of the experiment, CTrip rolled-out the option to WFH to the whole firm and allowed the experimental employees to re-select between the home or office. Interestingly, over half of them switched, which led to the gains from WFH almost doubling to 22%. This highlights the benefits of learning and selection effects when adopting modern management practices like WFH.
    Keywords: working from home, organization, productivity, field experiment, and China
    Date: 2013–03
  7. By: Jäntti, Markus (Swedish Institute for Social Research); Pirttilä, Jukka (School of Management); Selin, Håkan (Uppsala Center for Fiscal Studies)
    Abstract: We utilise repeated cross sections of micro data from several countries, available from the Luxembourg Income Study, LIS, to estimate labour supply elasticities, both at the intensive and extensive margin. The benefit of the data is that it spans over four decades and includes a large number of tax reform episodes, with tax rate variation arising both from cross-sectional and country-level differences. Using these data, we investigate whether micro and macro estimates differ in a systematic way. The results do not provide clear support to the view that elasticities at the macro level would be higher than corresponding micro elasticities.
    Keywords: Labour supply; earnings; taxation; cross-country comparisons
    JEL: E24 H21 J22
    Date: 2013–01–16
  8. By: Lindahl, Mikael (Uppsala University, CESifo, IFAU, IZA and UCLS); Palme, Mårten (Dept. of Economics, Stockholm University); Sandgren Massih, Sofia (Uppsala University); Sjögren, Anna (IFAU, UCLS and SOFI Stockholm University)
    Abstract: We estimate the well-known Becker-Tomes (1986) model of intergenerational transmission of human capital. A Swedish data set which links individual measures on educational attainments of four generations, enables us to use great grandparents’ education as an instrumental variable. This approach was suggested already in Becker- Tomes (1986) but, because of the lack of data, never implemented. The identifying assumption, which holds within the Becker-Tomes framework, is that great grandparents’ education is unrelated to great grandchild’s education, conditional on the education of the parent and grandparent. We test the prediction that the structural parameter for grandparents’ education enters with a negative sign in an intergenerational regression model where the education of a child is linearly related to the education of the parent and the education of the grandparent. We fail to find empirical support for the model’s predictions.
    Keywords: The Becker-Tomes model; Human capital transmission; Multigenerational effects
    JEL: D31 J62
    Date: 2013–01–16
  9. By: Ruist, Joakim (Department of Economics, University of Gothenburg)
    Abstract: This study estimates labor market effects of refugee immigration in Sweden 1999–2007. The setting is particularly suitable for using spatial variation within the country to estimate labor market effects of immigration. Bias from endogenous immigrant settlement is likely to be smaller when estimating the effect of only refugee immigration. Bias from internal migration of previous inhabitants is reduced by using data where the same individuals are identified over time. No significant effect of refugee immigration on total unemployment is found, but there is a large effect on the unemployment of previous immigrants from low- and middle-income countries, indicating that newly arrived refugee immigrants are substantially more easily substituted for this group than for natives in production.
    Keywords: unemployment; refugee immigration
    JEL: J23 J61 J64
    Date: 2013–02–14
  10. By: Diego Amador; Raquel Bernal; Ximena Peña
    Abstract: Colombia has experienced a secular increase in the labor participation of urban women, going from nearly 47% in 1984 to 65% in 2006. We decompose the evolution of participation into changes in the composition of the population and changes in the participation rates by groups (defined according to the variables that appear most relevant: educational attainment, fertility and marital status). The increase in participation is driven by the increase in the participation rate of married or cohabiting women and women with low educational attainment. Fertility status appears to be less important. Changes in the population composition by educational attainment are also relevant in explaining the increase in participation. However, changes in composition by marital status or fertility are second order effects.
    Date: 2013–02–06

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