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on Labor Markets - Supply, Demand, and Wages |
| By: | Domenico Depalo (Bank of Italy); Raffaela Giordano (Bank of Italy); Evangelia Papapetrou (Bank of Greece) |
| Abstract: | We evaluate the public-private wage differential in ten euro area countries for men in the period 2004-2007. Using the most recent methodologies on a Mincerian equation, we assess how much of the pay differential between public and private sector workers depends on differences in endowments and how much on differences in the remuneration of such skills. For the first time, we look at the contribution of specific covariates at different quantiles of the wage distribution and decompose the variance into an explained and an unexplained component. We find that the pay gap is often decreasing over the distribution, and it is mostly determined by higher endowments in the upper tail of the wage distribution and by higher returns of such endowments at the low tail, with considerable heterogeneity across countries. We further find that the wage distribution in the public sector is more compressed than in the private sector in some countries but not in all countries. This is the results, for all countries, of more dispersed distributions of endowments in the public sector and of returns in the private sector. |
| Keywords: | public employment, wage differentials, wage determination. |
| JEL: | H50 J31 J45 J50 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_907_13&r=lma |
| By: | Teresa M. Greaney (Department of Economics University of Hawaii); Yao Li (School of Management and Economics University of Electronic Science and Technology of China) |
| Abstract: | We apply insights from the heterogeneous firms’ literature to an empirical investigation of wage inequality in China, focusing on the potential influences of FDI and trade. Using firm-level data, we examine intra-sectoral wage inequality in a major industrial region with firms identified according to five firm ownership types and three exporter status types. We find large ownership-type wage premiums separate from other observable influences on wages, including a firm’s exporter status. Our results indicate that ownership type matters more than exporter status as a determinant in explaining intra-sectoral wage inequality in China’s Yangtze River Delta. We also find evidence of asymmetric wage effects of firm type by exporter status and by other wage determinants. |
| Keywords: | Exporter, pure exporter, foreign direct investment, wage premium, manufacturing, China |
| JEL: | F16 F23 J31 L60 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201306&r=lma |
| By: | Richard Blundell (University College London); Monica Costa Dias (Institute for Fiscal Studies and CEF-UP at the University of Porto); Costas Meghir (Cowles Foundation, Yale University); Jonathan Shaw (Institute for Fiscal Studies and University College London) |
| Abstract: | We consider the impact of Tax credits and income support programs on female education choice, employment, hours and human capital accumulation over the life-cycle. We thus analyze both the short run incentive effects and the longer run implications of such programs. By allowing for risk aversion and savings we are also able to quantify the insurance value of alternative programs. We find important incentive effects on education choice, and labor supply, with single mothers having the most elastic labor supply. Returns to labour market experience are found to be substantial but only for full-time employment, and especially for women with more than basic formal education. For those with lower education the welfare programs are shown to have substantial insurance value. Based on the model marginal increases to tax credits are preferred to equally costly increases in income support and to tax cuts, except by those in the highest education group. |
| Keywords: | Female labor supply, Welfare reform, Tax credits, Education choice, Dynamic discrete choice models, Life cycle models |
| JEL: | H2 H3 J22 J24 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1892&r=lma |
| By: | Peng, Fei; Kang, Lili |
| Abstract: | This paper analyses wage flexibility in Chinese labor market using the China Health and Nutrition Survey (CHNS) for the period 1989-2009. China has highly coordinated wage-setting institutions which might contribute to higher wage sensitivity of the coordinated workers, but lower sensitivity in the workers with coordination failures. Using micro-data matched to local unemployment rates, we find the reaction of wages to local unemployment varies significantly across different employee groups, suggesting disparate wage setting institutions within China. The highly coordinated big firms and public sector show more significant wage flexibility than the lagging small/medium firms and private sector. Workers with characteristics of weak bargaining power also have less flexible wages. The major wage flexibility occurred in the 1990s when the labor market moved from a centrally-planned system to a market-oriented system. After the public sector retrenchment, the labor market seems recover the rigidity in the 2000s. Moreover, sensitivity test using Heckman selection model really shows significant selectivity effects, but the Heckman adjusted results would not change our basic conclusions. |
| Keywords: | Wage flexibility; Local unemployment; Panel data |
| JEL: | C33 E32 J31 J64 |
| Date: | 2013–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:46651&r=lma |
| By: | Jatta, Sylvester |
| Abstract: | Abstract Using national data from 14 representative developing countries, this paper explores rural wage employment and its potential as a mechanism for improving the living standards of the rural poor. The analysis suggests that the sector of employment (agricultural or non-agricultural) and the overall household livelihood strategy appear to be of limited importance in determining whether a household uses wage employment as a pathway out of poverty. Rather, high-productivity wage employment appears to be linked to the underlying assets of the household and its individual members. In particular, the evidence points to educational and infrastructure investment as critical for providing opportunities in the labour market that lead to higher wages. The analysis also suggests that gender is very important for participation in labour markets as well as wages earned in those markets, indicating that special attention be given to the gender consequences of any labour policy. |
| Keywords: | Key words: rural labour market, mechanism,assets, educational and infrastructure investment, labour markets, gender, pathway out of poverty, livelihood strategies, non-agricultural employment. |
| JEL: | R00 |
| Date: | 2013–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:46543&r=lma |
| By: | Shota Araki |
| Abstract: | This study aims to estimate parameters of the youth labor force participation model and the responsiveness of the extensive margin of labor supply to wage. The formulation of our model includes a simultaneously on household income and labor force participation. The contribution of this study is obtaining the parameter estimates free from the bias arising from the endogeneity of the household income. The main findings in this study are following. First, under the assumption that the household income is exogenous, the effect of the wage estimate is upward biased. Second, the wage elasticity of extensive margin of youth labor force participation is 0.06. Third the extensive margin of female is higher than male. Fourth, the lower educated parsons' extensive margin is higher. |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd12-294&r=lma |
| By: | Angelov, Nikolay (IFAU - Institute for Evaluation of Labour Market and Education Policy); Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy); Lindahl, Erica (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | This study investigates possible reasons for the gender difference in sickness absence. We estimate both short- and long-term effects of parenthood in a within-couple analysis based on the timing of parenthood. We find that after entering parenthood, women increase their sickness absence by between 0.5 days per month (during the child's third year) and 0.85 days per month (during year 17) more than their spouse. By investigating possible explanations for the observed effect, we conclude that the effect mainly stems from higher home commitment, which reduces women's labour market attachment and, in turn, increases female sickness absence. |
| Keywords: | Double burden; health investment; household work; labour market work; moral hazard; parenthood; sickness insurance; work absence |
| JEL: | C23 D13 I19 J22 |
| Date: | 2013–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2013_009&r=lma |
| By: | Fatih Guvenen; Burhanettin Kuruscu; Serdar Ozkan |
| Abstract: | Wage inequality has been significantly higher in the United States than in continental European countries (CEU) since the 1970s. Moreover, this inequality gap has further widened during this period as the US has experienced a large increase in wage inequality, whereas the CEU has seen only modest changes. This paper studies the role of labor income tax policies for understanding these facts, focusing on male workers. We construct a life cycle model in which individuals decide each period whether to go to school, work, or stay non-employed. Individuals can accumulate skills either in school or while working. Wage inequality arises from differences across individuals in their ability to learn new skills as well as from idiosyncratic shocks. Progressive taxation compresses the (after-tax) wage structure, thereby distorting the incentives to accumulate human capital, in turn reducing the cross-sectional dispersion of (before-tax) wages. Consistent with the model, we empirically document that countries with more progressive labor income tax schedules have (i) significantly lower before-tax wage inequality at different points in time and (ii) experienced a smaller rise in wage inequality since the early 1980s. We then study the calibrated model and find that these policies can account for half of the difference between the US and the CEU in overall wage inequality and 84% of the difference in inequality at the upper end (log 90-50 differential). In a two-country comparison between the US and Germany, the combination of skill-biased technical change and changing progressivity of tax schedules explains all the difference between the evolution of inequality in these two countries since the early 1980s. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2013-20&r=lma |
| By: | Laun, Tobias (Department of Economics, Uppsala University); Wallenius, Johanna (Dept. of Economics, Stockholm School of Economics) |
| Abstract: | In this paper we study the role of social insurance, namely old-age pensions, disability insurance and healthcare, in accounting for the differing labor supply patterns of older individuals across OECD countries. To this end, we develop a life cycle model of labor supply and health with heterogeneous agents. The key features of the framework are: (1) people choose when to stop working, and when/if to apply for disability and pension benefits, (2) the awarding of disability insurance benefits is imperfectly correlated with health, and (3) people can partially insure against health shocks by investing in health, the cost of which is dependent on health insurance coverage. We find that the incentives faced by older workers differ hugely across countries. In fact, based solely on differences in social insurance programs, the model predicts even more cross-country variation in the employment rates of people aged 55-64 than we observe in the data. |
| Keywords: | Life cycle; Retirement; Disability insurance; Health |
| JEL: | E24 J22 J26 |
| Date: | 2013–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hastef:0744&r=lma |
| By: | Raluca Prelipceanu (University of Evry and University of Paris Est Créteil) |
| Abstract: | Our paper sets forth two possible explanations for the fall in female labour force participation in Romania. The first explanation focuses on the increase in temporary labour migration rates, while the second relies on the existence of gender norms. We consider the existence of a social norm that sets the participation of women into household production. We test these assumptions on a 10 percent sample of the Romanian 2002 census. The results show the existence of important differences between women who do not work at all, those who do not move in the labour market and those who move for work, be it within the country or abroad. They also prove the importance of social norms for women who work in their residential locality and for those who temporarily migrate abroad for work. |
| Keywords: | Labour market, Household production, Social norms, Temporary international migration, Internal labour mobility |
| JEL: | D13 J16 J22 J61 R23 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:eve:wpaper:13-08&r=lma |
| By: | Bradler, Christiane; Dur, Robert; Neckermann, Susanne; Non, Arjan |
| Abstract: | This paper reports the results from a controlled field experiment designed to investigate the causal effect of public recognition on employee performance. We hired more than 300 employees to work on a three-hour data-entry task. In a random sample of work groups, workers unexpectedly received recognition after two hours of work. We find that recognition increases subsequent performance substantially, and particularly so when recognition is exclusively provided to the best performers. Remarkably, workers who did not receive recognition are mainly responsible for this performance increase. This result is consistent with workers having a preference for conformity. -- |
| Keywords: | employee motivation,recognition,reciprocity,conformity,field experiment |
| JEL: | C93 M52 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13017&r=lma |
| By: | Susana Katherine Chacón Espejo (Master in Regional Sciences - Department of Economics, Universidad Católica del Norte - Chile); Dusan Paredes Araya (IDEAR - Department of Economics, Universidad Católica del Norte - Chile) |
| Abstract: | The spatial income inequality in Latin American countries is a recent academic affair. Particularly, the case of Chile highlights around the world because it has one of the highest individual and spatial inequality rates. This article analyzes the spatial income inequality in Chile during 1992 2011 evaluating the role of the spatial labor sorting through multilevel models. The findings show that human capital doesn't allocate randomly across the space but its spatial concentration at the biggest urban centers impacts significantly the income inequality between counties. These findings motivate the discussion about spatial dimension of the inequality and suggest that policymakers should consider ways to spread human capital throughout the nation as an alternative to reduce spatial inequality. |
| Keywords: | Spatial income inequality, spatial labor sorting, human capital, multilevel regression. |
| JEL: | O15 O18 R12 R23 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cat:dtecon:dt201315&r=lma |
| By: | Nordmeier, Daniela (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Weber, Enzo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "This paper studies the patterns of unemployment dynamics in Germany. To provide a deeper insight into the margins of unemployment adjustment, we employ a structural VAR model and identify the effects of a technology shock as well as two policy shocks. We find that the worker reallocation process varies substantially with the identified shocks. The job finding rate plays a larger role following a technology shock and a monetary policy shock, while the separation rate appears as the dominant margin after a fiscal policy shock. Technology shocks are relatively important for variations in the transition rates, though they do not seem to trigger the high volatilities of German labor market variables. Considering policy shocks, our results point towards fiscal interventions as a promising instrument, but with several limitations." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Arbeitslosigkeitsentwicklung - Determinanten, Geldpolitik, technischer Wandel, Finanzpolitik |
| JEL: | J63 E24 E32 |
| Date: | 2013–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201302&r=lma |