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on Labor Markets - Supply, Demand, and Wages |
| By: | Leah Platt Boustan; William J. Collins |
| Abstract: | Black women were more likely than white women to participate in the labor force from 1870 until at least 1980 and to hold jobs in agriculture or manufacturing. Differences in observables cannot account for most of this racial gap in labor force participation for the 100 years after Emancipation. The unexplained racial gap may be due to racial differences in stigma associated with women’s work, which Goldin (1977) suggested could be traced to cultural norms rooted in slavery. In both nineteenth and twentieth century data, we find evidence of inter-generation transmission of labor force participation from mother to daughter, which is consistent with the role of cultural norms. |
| JEL: | J22 N11 N12 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19040&r=lma |
| By: | Montizaan R.M.; Fouarge D.; Grip A. de (GSBE) |
| Abstract: | This paper investigates the causal effects of the announcement of an increase in the statutory pension age on employee retirement expectations. In June 2010, the Dutch government signed a new pension agreement with the employer and employee organizations that entailed an increase in the statutory pension age from 65 currently to 66 in 2020 for all inhabitants born after 1954. Given the expected increase in average life expectancy, it was also decided that in 2025 the pension age would be further increased to 67 for those born after 1959. This new pension agreement received huge media coverage. Using representative matched administrative and survey data of public sector employees, we find that the proposed policy reform increased the expected retirement age by 3.6 months for employees born between 1954 and 1959 and by 10.8 months for those born after 1959. This increase is reflected in a clear shift in the retirement peak from age 65 to ages 66 and 67 for the respective treated cohorts. Men respond less strongly to the policy reform than women, but within couples we find no evidence that the retirement expectations of one spouse are affected by an increase in the statutory pension age of the other. Furthermore, we show that treatment effects are largely driven by highly educated individuals but are lower for employees whose job involves physically demanding tasks or managerial and supervisory tasks. |
| Keywords: | Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination; |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013020&r=lma |
| By: | Fuest, Clemens (ZEW Mannheim); Peichl, Andreas (IZA); Siegloch, Sebastian (IZA) |
| Abstract: | Because of endogeneity problems very few studies have been able to identify the incidence of corporate taxes on wages. We circumvent these problems by using an 11-year panel of data on 11,441 German municipalities' tax rates, 8 percent of which change each year, linked to administrative matched employer-employee data. Consistent with our theoretical model, we find a negative effect of corporate taxation on wages: a 1 euro increase in tax liabilities yields a 77 cent decrease in the wage bill. The direct wage effect, arising in a collective bargaining context, dominates, while the conventional indirect wage effect through reduced investment is empirically small due to regional labor mobility. High and medium-skilled workers, who arguably extract higher rents in collective agreements, bear a larger share of the corporate tax burden. |
| Keywords: | business tax, wage incidence, administrative data, local taxation |
| JEL: | H2 H7 J3 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7390&r=lma |
| By: | John Morgan (University of California, Berkeley); Dana Sisak (Erasmus University Rotterdam); Felix Vardy (University of California, Berkeley and IMF) |
| Abstract: | We study career choice when competition for promotion is a contest. A more meritocratic profession always succeeds in attracting the highest ability types, whereas a profession with superior promotion benefits attracts high types only if the hazard rate of the noise in performance evaluation is strictly increasing. Raising promotion opportunities produces no systematic effect on the talent distribution, while a higher base wage attracts talent only if total promotion opportunities are sufficiently plentiful. |
| Keywords: | career choice, promotion competition, selection, meritocracy |
| JEL: | J45 J24 M52 |
| Date: | 2012–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012077&r=lma |
| By: | Joop Hartog (University of Amsterdam); Michael Sattinger (University at Albany) |
| Abstract: | The paper provides a theoretical foundation for the empirical regularities observed in estimations of wage consequences of overeducation and undereducation. Workers with more education than required for their jobs are observed to suffer wage penalties relative to workers with the same education in jobs that only require their educational level. Similarly, workers with less education than required for their jobs earn wage rewards. These departures from the Mincer human capital earnings function can be explained by Nash bargaining between workers and employers. Under fairly mild assumptions, Nash bargaining predicts a wage penalty for overeducation and a wage reward for undereducation, and further predicts that the wage penalty will exceed the wage reward. This paper reviews the established empirical regularities and then provides Nash bargaining results that explain these regularities. |
| Keywords: | Overeducation, Undereducation, Nash bargaining, Qualitative mismatches, Mincer earnings function, Wages |
| JEL: | J31 J24 C78 C51 |
| Date: | 2012–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012129&r=lma |
| By: | Devereux, Paul J. (University College Dublin); Hart, Robert A. (University of Stirling); Roberts, J. Elizabeth (University of Stirling) |
| Abstract: | We show that the distinction between job spells and employer spells matters for returns to tenure. Employer spells encompass between-job wage movements linked to promotions or demotions while job spells don't. Using a 1% sample of the British workforce over the period 1975-2010, we find that a significant proportion of the return to employer tenure arises due to job changes within employer spells. Conditional on tenure with employer, the return to job tenure is negative. This suggests that any positive effects of job-specific human capital on wage growth within jobs are outweighed by the effects of job changes within firms. |
| Keywords: | job spells, employer spells, wage-tenure profiles |
| JEL: | J31 J24 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7384&r=lma |
| By: | Mehmet Ivrendi (Department of Economics, Pamukkale University); Bulent Guloglu (Department of Economics, Pamukkale University); Ý. Hakan Yetkiner (Department of Economics, Izmir University of Economics) |
| Abstract: | This paper presents empirical evidence that the neoclassical explanation of real wage has a high explanatory power at macro level. The factor endowments explanation of wage is surprisingly rare in the literature, at least at empirical level. In this paper, using panel data from 26 OECD countries, we show that technology and factor endowments (physical capital and labor stocks) have a significant explanatory power on the determination of real wage. Based on our results, we speculate that the supply-side rather than demand-side variables may be the major source of wage differences across countries. |
| Keywords: | wage, factor endowment, inter-country wage differences, panel data |
| JEL: | J31 C23 E23 E24 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:izm:wpaper:1304&r=lma |
| By: | Böckerman, Petri (Labour Institute for Economic Research); Maliranta, Mika (ETLA - The Research Institute of the Finnish Economy) |
| Abstract: | This paper examines the relationship between outsourcing and various aspects of employee well-being by devoting special attention to the role of occupational restructuring as a conveying mechanism. Using linked employer-employee data, we find that offshoring involves job destruction, especially when the destination is a low-wage country. In such circumstances, staying employees' job satisfaction is reduced. However, the relationship between outsourcing and employee well-being is not entirely negative. Our evidence also shows that offshoring to high-wage countries stimulates the vertical mobility of employees in affected firms in a manner that improves perceived well-being, particularly in terms of better prospects for promotion. |
| Keywords: | globalization, outsourcing, offshoring, downsizing, working conditions, subjective well-being, job satisfaction |
| JEL: | J28 F23 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7399&r=lma |
| By: | Ott Toomet (Tartu University); Marco van der Leij (University of Amsterdam); Meredith Rolfe (London School of Economics) |
| Abstract: | This paper analyzes the relationship between unexplained racial/ethnic wage differentials on the one hand and social network segregation, as measured by inbreeding homophily, on the other hand. Our analysis is based on both U.S. and Estonian surveys, supplemented with Estonian telephone communication data. In case of Estonia we consider the regional variation in economic performance of the Russian minority, and in the U.S. case we consider the regional variation in black-white differentials. Our analysis finds a strong relationship between the size of the differential and network segregation: regions with more segregated social networks exhibit larger unexplained wage gaps. |
| Keywords: | social networks, wage differential, homophily, segregation, race, minorities |
| JEL: | J71 J31 Z13 |
| Date: | 2012–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012120&r=lma |
| By: | Liangshu Qi; Xiao-Yuan Dong |
| Abstract: | This paper provides the first estimates of the effects of housework burdens on the earnings of men and women in China, using data from the country’s time use survey in 2008. The analysis shows that working women in China not only spend many more hours on housework than their male co-workers but are also more likely to experience interference with their market work by housework activities. Three indicators are introduced to measure the degree to which market work is intertwined with housework. The estimates show that both housework time and its interference with market work have negative effects on the earnings of men and women. Quantitatively, the gender differences in housework-related indicators account for 27 to 28 percent of the gender earnings gap. This result supports the feminist contention that gender inequality at home is a major contributor to the weaker position of women in the labor market. |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:win:winwop:2013-01&r=lma |
| By: | Feld, Jan (Maastricht University); Salamanca, Nicolas (Maastricht University); Hamermesh, Daniel S. (University of Texas at Austin, Royal Holloway) |
| Abstract: | The immense literature on discrimination treats outcomes as relative: One group suffers compared to another. But does a difference arise because agents discriminate against others – are exophobic – or because they favor their own kind – are endophilic? This difference matters, as the relative importance of the types of discrimination and their inter-relation affect market outcomes. Using a field experiment in which graders at one university were randomly assigned students' exams that did or did not contain the students' names, on average we find favoritism but no discrimination by nationality, and neither favoritism nor discrimination by gender, findings that are robust to a wide variety of potential concerns. We observe heterogeneity in both discrimination and favoritism by nationality and by gender in the distributions of graders' preferences. We show that a changing correlation between endophilia and exophobia can generate perverse predictions for observed market discrimination. |
| Keywords: | favoritism, discrimination, field experiment, wage differentials, economics of education |
| JEL: | J71 I24 B40 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7380&r=lma |
| By: | Jousten, Alain (University of Liège); Lefèbvre, Mathieu (CREPP, Université de Liège) |
| Abstract: | The paper studies retirement behavior of wage‐earners in Belgium – for the first time using rich survey data to explore retirement incentives as faced by individuals. Specifically, we use SHARE data to estimate a model à la Stock and Wise (1990). Exploring the longitudinal nature of SHARELIFE, we construct measures of financial and non‐financial incentive. Our analysis explicitly takes into account the different take‐up rates of the various early retirement exit paths across time and ages. The results show that financial incentives play a strong role. Health and education also matter, as does regional variation – though the latter in an unexpected way. A set of policy simulations illustrate the scope and also the limits associated with selective parametric reforms. |
| Keywords: | pensions, social security, disability, early retirement, unemployment, labor force participation |
| JEL: | H55 J21 J26 J14 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7387&r=lma |
| By: | Grund, Christian (RWTH Aachen University); Schmitt, Andreas (RWTH Aachen University) |
| Abstract: | We examine the relationship between works councils and two different types of employment separation: dismissals by the firm and voluntary quits by employees. Based on representative data from the German Socio-Economic Panel, we find a negative relationship between works councils and both kinds of separation. This is particularly true for skilled blue collar as well as qualified white collar workers compared to employees in other job categories. Additionally, we find first hints for a positive relation between works councils and the relevance of severance payments in the case of dismissals. |
| Keywords: | dismissal, employment separation, quit, severance pay, works council |
| JEL: | M5 J6 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7361&r=lma |
| By: | Xiaoming Cai (VU University Amsterdam); Pieter A. Gautier (VU University Amsterdam); Makoto Watanabe (VU University Amsterdam) |
| Abstract: | An advantage of collective wage agreement is that search and business-stealing externalities can be internalized. A disadvantage is that it takes more time before an optimal allocation is reached because more productive firms (for a particular worker type) can no longer signal this by posting higher wages. Specifically, we consider a search model with two sided heterogeneity and on-the-job search. We compare the most favorable case of a collective wage agreement (i.e. the wage that a planner would choose under the constraint that all firms in a sector-ocupation cell must offer the same wage) with the case without collective wage agreement. We find that collective wage agreements are never desirable if firms can commit ex ante to a wage and only desirable if firms cannot commit and the relative efficiency of on the job search to off- the job search is less than 20%. This result is hardly sensitive to the bargaining power of workers. Empirically we find both for the Netherlands and the US that this value is closer to 50%. |
| Keywords: | Collective wage agreements, on-the-job search, efficiency |
| JEL: | E24 J62 J63 J64 |
| Date: | 2012–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012086&r=lma |
| By: | Matthew Lindquist (SOFI Stockholm University); Joeri Sol (University of Amsterdam); Mirjam van Praag (University of Amsterdam) |
| Abstract: | Parental entrepreneurship is a strong, probably the strongest, determinant of own entrepreneurship. We explore the origins of this intergenerational association in entrepreneurship. In particular, we identify the separate effects of pre- and post-birth factors (nature and nurture), by using a unique dataset of Swedish adoptees. Its unique characteristic is that it not only includes data on occupational status for the adoptees and their adoptive parents, but also for their biological parents. Moreover, we use comparable data on entrepreneurship for a large, representative sample of the Swedish population. Based on the latter sample, and consistent with previous findings, we show that parental entrepreneurship increases the probability of children's entrepreneurship by about 60%. We further show that for adoptees, both biological and adoptive parents make significant contributions. These effects, however, are quite different in size. The effect of post-bir th factors (adoptive parents) is approximately twice as large as the effect of pre-birth factors (biological parents). The sum of these two effects for adopted children is almost identical to the intergenerational transmission of entrepreneurship for own-birth children. We explore several candidate explanations for this important post-birth effect and present suggestive evidence in favor of role modeling. |
| Keywords: | adoption, entrepreneurship, self-employment, intergenerational mobility, occupational choice, role model |
| JEL: | J24 J62 L26 |
| Date: | 2012–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012062&r=lma |
| By: | Burks, Stephen V. (University of Minnesota, Morris); Cowgill, Bo (University of California, Berkeley); Hoffman, Mitchell (Yale School of Management); Housman, Michael (Evolv on Demand) |
| Abstract: | Employee referrals are a very common means by which firms hire new workers. Past work suggests that workers hired via referrals often perform better than non-referred workers, but we have little understanding as to why. In this paper, we demonstrate that this is primarily because referrals allow firms to select workers better-suited for particular jobs. To test our model, we use novel and detailed productivity and survey data from nine large firms in three industries: call-centers, trucking, and high-tech (software). Referred workers are 10-30% less likely to quit and have substantially higher performance on rare "high-impact metrics" (e.g. creating patents and avoiding truck accidents), despite having similar characteristics and similar performance on non-rare metrics. To identify the source of these behavioral differences, we develop four new statistical tests, all of which indicate that firms benefit from referrals predominantly by selecting workers with a better fit for the job, as opposed to referrals selecting workers with higher overall quality; to referrals enabling monitoring or coaching; or to it being more enjoyable to work with friends. We document that workers refer others like themselves, not only in characteristics but in behavior (e.g. unsafe workers refer other unsafe workers), suggesting that firms may gain by incentivizing referrals most from their highest quality workers. Referred workers achieve substantially higher profits per worker and the difference is driven by referrals from high productivity workers. |
| Keywords: | referrals, productivity, worker selection, innovation, patents, cognitive ability, non-cognitive ability, job testing, call centers, high-tech, software, trucking, truck accidents |
| JEL: | M51 J24 O32 J63 L84 L86 L92 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7382&r=lma |