nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2013‒09‒06
ten papers chosen by
Erik Jonasson
National Institute of Economic Research

  1. Overtime Working and Contract Efficiency By Hart, Robert A.; Ma, Yue
  2. Inequality-adjusted gender wage differentials in Germany By Ekaterina Selezneva; Philippe Van Kerm
  3. Minimum Wage and Job Mobility By Céspedes, Nikita; Sánchez, Alan
  4. Is there a Double-Negative Effect? Gender and Ethnic Wage Differentials. By Piazzalunga, Daniela
  5. Channels of Labour Supply Responses of Lone Parents to Changed Work Incentives By Gong, Xiaodong; Breunig, Robert
  6. Job Contact Networks and Wages of Rural-Urban Migrants in China By Long, Wenjin; Appleton, Simon; Song, Lina
  7. Efficiency of College Education in the Labor Market of the United States By William T. Alpert; Alexander Vaninsky
  8. Industry restructuring in the ICT sector – What does labor mobility tell us about skill relatedness and knowledge spillovers? By Nikulainen, Tuomo; Pajarinen, Mika
  9. Searching for a job is a beauty contest By Busetta, Giovanni; Fiorillo, Fabio; Visalli, Emanuela
  10. International Trade and Labour Demand Elasticities: Is there Any Empirical Evidence from South Africa? By Abdulkader Cassim Mahomedy

  1. By: Hart, Robert A. (University of Stirling); Ma, Yue (City University of Hong Kong)
    Abstract: We present a wage-hours contract designed to minimize costly job turnover given investments in on the job training combined with firm and worker information asymmetries. It may be optimal for the parties to work 'long hours' remunerated at premium rates for guaranteed overtime hours. Based on British plant and machine operatives, we test three predictions. First, trained workers with longer job tenure are more likely to work overtime. Second, hourly overtime pay exceeds the value of marginal product while the basic hourly wage is less than the value of marginal product. Third, the basic hourly wage is negatively related to the overtime premium.
    Keywords: paid overtime, wage-hours contract, plant and machine operatives
    JEL: J41 J33
    Date: 2013–08
  2. By: Ekaterina Selezneva (IOS Regensburg); Philippe Van Kerm
    Abstract: This paper exploits data from the German Socio-Economic Panel (SOEP) to re-examine the gender wage gap in Germany on the basis of inequality-adjusted measures of wage differentials which fully account for gender differences in pay distributions. The inequality-adjusted gender pay gap measures are significantly larger than suggested by standard indicators, especially in East Germany. Women appear penalized twice, with both lower mean wages and greater wage inequality. A hypothetical risky investment question collected in 2004 in the SOEP is used to estimate individual risk aversion parameters and benchmark the ranges of inequality-adjusted wage differentials measures.
    Keywords: gender gap, wage differentials, wage inequality, expected utility, risk aversion, East and West Germany, SOEP, Singh-Maddala distribution, copula-based selection model
    JEL: D63 J31 J70
    Date: 2013–08
  3. By: Céspedes, Nikita (Banco Central de Reserva del Perú; PUCP); Sánchez, Alan (GRADE)
    Abstract: We study the effects of the minimum wage in over employment and income by considering a monthly database that captures seven minimum wage changes registered between 2002 and 2011. We estimate that about 1 million workers have an income by main occupation in the neighbourhood of the minimum wage. We found that the minimum wage-income elasticity is statistically significant; the evidence also suggests that those who receive low incomes and those working in small businesses are the most affected by increases in the minimum wage. Employment effects are monotonically decreasing in absolute terms by firm size: moderate in big firms and higher in small firms. Results are robust when assessing the job-to-job transitions. Finally, we present evidence that supports the hypothesis that the minimum wage in Peru is correlated with income. The movement of income distribution in the context of changes in the minimum wage as well as the results provided by a model that captures the drivers of income justify this result.
    Keywords: Minimum wage, Labor mobility, Income dynamics, Informality
    JEL: E24 E26 J20 J21 J61
    Date: 2013–08
  4. By: Piazzalunga, Daniela (University of Turin)
    Abstract: This paper investigates the gender and ethnic wage differentials for female Immigrants, applying the Oaxaca ecomposition to estimate the level of discrimination. The gender pay gap is quite small (7.42%), but it's not explained by observable differences, whilst the ethnic wage gap is larger (27.11%), but the explained components account for about 30%. Ultimately, we will evaluate how the multiple levels of discrimination (due to being a woman and a foreigner at the same time) intersect, following the decomposition suggested by Shamsuddin (1998). The double - negative effect is estimated to be 56 - 62%.
    Date: 2013–07
  5. By: Gong, Xiaodong (NATSEM, University of Canberra); Breunig, Robert (Australian National University)
    Abstract: In this paper, we investigate the response of female lone parents to two reforms to the welfare system in Australia. We look at changes to both hours and participation and focus on the channels of adjustment, in particular the role of job changes for adjustment in hours. We highlight the relationship between policy design and heterogeneous outcomes. Workers/non-workers and mothers with high/low education respond differently to different policies. We find evidence of within job rigidities as the adjustment of working hours happens primarily through changing jobs. Our findings also provide support for the importance of accounting for fixed costs of working.
    Keywords: channel of labour supply adjustment, lone mothers, job changes, difference-in-differences
    JEL: C23 H31 I38 J13 J22
    Date: 2013–08
  6. By: Long, Wenjin (University of Nottingham); Appleton, Simon (University of Nottingham); Song, Lina (University of Nottingham)
    Abstract: In nationally representative household data from the 2008 wave of the Rural to Urban Migration in China survey, nearly two thirds of rural-urban migrants found their employment through family members, relatives, friends or acquaintances. This paper investigates why the use of social network to find jobs is so prevalent among rural-urban migrants in China, and whether migrants face a wage penalty as a result of adopting this job search method. We find evidence of positive selection effects of the use of networks on wages. Users of networks tend to be older, to have migrated longer ago and to be less educated. In addition, married workers and those from villages with more out-migrant are more likely to use networks, while those without local residential registration status are less likely. Controlling for selectivity, we find a large negative impact of network use on wages. Using job contacts brings open access to urban employment, but at the cost of markedly lower wages.
    Keywords: social network, job contact, wage, rural-urban migrants, switching regression, China
    JEL: J24 J31 O15
    Date: 2013–08
  7. By: William T. Alpert (University of Connecticut); Alexander Vaninsky (Hostos Community College)
    Abstract: The paper discusses the worthiness of the resources allocated for college education from the point of view of their value in the labor market. We use Data Envelopment Analysis (DEA) to weigh the share of GDP spent on a college education and weighted time of labor force college study against productivity, employment rate, and labor force participation. Based on the data of the United States labor market for the period of 1980 - 2010, we received that the efficiency of a college education had no statistically significant tendency to increase or decrease over the period of the research but was closely related to the business cycles with a lag of one year. JEL Classification:
    Keywords: College education; Efficiency; Labor force productivity; Employment rate; Labor force participation; Data Envelopment Analysis
    Date: 2013–08
  8. By: Nikulainen, Tuomo; Pajarinen, Mika
    Abstract: Industries go through different phases of evolution where old skills become obsolete and new skills arecrucial for the industrial renewal process. Industry evolution is usually addressed from the perspectives of production and exports, leaving one factor largely unexplored: human capital. Industry restructuring isa dynamic process where skills developed in one industry move to other industries as individuals change employers. We argue that the labor flows between industries reveal skill relatedness because individuals move to industries that value their existing skills. We also argue that the labor flows differ between highand low-skill labor. By examining these flows, we can identify spillover effects between industries during restructuring. To address this argument, we analyze all individual-level labor flows originating from the Finnish ICT sector for 1989-2010. This industry sector-level study focuses on three ICT industries (manufacturing, services and software), and we address the differences in labor mobility between the individuals with different professional skill levels. We find several differences in the labor market dynamics over time for each ICT industry and for the different skill levels.
    Keywords: labor mobility, skill relatedness, ICT sector, knowledge spillovers
    JEL: J24 J21 J62
    Date: 2013–08–28
  9. By: Busetta, Giovanni; Fiorillo, Fabio; Visalli, Emanuela
    Abstract: The paper deals with the impact of beauty on employability of people, stressing the first stage of the hiring process. In particular, we studied if there exists a preference for attractive candidates and if it does whether it depends on sex, physical features and racial characteristics. We monitored all relevant agencies offering jobs in Italy from August 2011 to September 2012 sending 11008 CVs to 1542 advertised job openings. To do so, we construct fake CVs and we sent the same CV 8 times, changing only name and surname, address, and the photo included. In particular, we sent 4 CVs with photo of an attractive and unattractive man and women, and 4 CVs without photo of an Italian and a foreign men and women to each job opening. Callbacks rates are statistically significant higher for attractive women and men than unattractive ones. Racial discrimination appears to be statistically relevant, but less than discrimination based on the physical features, especially for women.
    Keywords: beauty premium, racial discrimination, experimental economics.
    JEL: C93 J71
    Date: 2013–08–30
  10. By: Abdulkader Cassim Mahomedy
    Abstract: There are various pathways through which the impact of trade openness may be transmitted to the labour market. This study explores a relatively new linkage identified by the literature: the impact on labour demand elasticities via a substitution effect through increased factor substitutability and/or via a scale effect brought about by an increase in product market elasticities. More elastic factor demands have adverse implications for labourers vis-à-vis employers. Using an industry-level panel dataset covering the South African manufacturing sector spanning a period of over three decades, I empirically test for this relationship focusing primarily on the substitution effect. I am able to find, at best, only limited empirical support for my hypothesis of a positive and significant impact of trade liberalisation on labour demand elasticities. Whilst demand for labour appears to have become more elastic for manufacturing overall and in one of ten sectors within manufacturing, this result fails to hold for any of the other industries examined.
    Keywords: International trade, labour demand, elasticities, empirical evidence, South Africa
    Date: 2013

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