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on Labor Markets - Supply, Demand, and Wages |
| By: | Brenzel, Hanna (Institute for Employment Research (IAB), Nuremberg); Gartner, Hermann (Institute for Employment Research (IAB), Nuremberg); Schnabel, Claus (University of Erlangen-Nuremberg) |
| Abstract: | Using a representative establishment dataset, this paper is the first to analyze the incidence of wage posting and wage bargaining in the matching process from the employer's side. We show that both modes of wage determination coexist in the German labor market, with about two-thirds of hirings being characterized by wage posting. Wage posting dominates in the public sector, in larger firms, in firms covered by collective agreements, and in part-time and fixed-term contracts. Job-seekers who are unemployed, out of the labor force or just finished their apprenticeship are also less likely to get a chance of negotiating. Wage bargaining is more likely for more-educated applicants and in jobs with special requirements as well as in tight regional labor markets. |
| Keywords: | wage posting, wage bargaining, hiring, matching, Germany |
| JEL: | E24 J30 J63 M51 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7624&r=lma |
| By: | SELEZNEVA Ekaterina; VAN KERM Philippe |
| 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: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2013-18&r=lma |
| By: | Kahn, Lawrence M. (Cornell University) |
| Abstract: | Using longitudinal data on individuals from the European Community Household Panel (ECHP) for thirteen countries during 1995-2001, I investigate the wage premium for permanent jobs relative to temporary jobs. The countries are Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Spain, and the United Kingdom. I find that among men the wage premium for a permanent vs. temporary job is lower for older workers and native born workers; for women, the permanent job wage premium is lower for older workers and those with longer job tenure. Moreover, there is some evidence that among immigrant men, the permanent job premium is especially high for those who migrated from outside the European Union. These findings all suggest that the gain to promotion into permanent jobs is indeed higher for those with less experience in the domestic labor market. In contrast to the effects for the young and immigrants, the permanent job pay premium is slightly smaller on average for women than for men, even though on average women have less experience in the labor market than men do. It is possible that women even in permanent jobs are in segregated labor markets. But as noted, among women, the permanent job wage premium is higher for the young and those with less current tenure, suggesting that even in the female labor market, employers pay attention to experience differences. |
| Keywords: | wage structure, segmented labor markets, temporary jobs |
| JEL: | J31 J42 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7623&r=lma |
| By: | Yolanda F. Rebollo-Sanz (Department of Economics, Universidad Pablo de Olavide); Ainara González de San Román (Instituto de Empresa) |
| Abstract: | The main contribution of this paper is to provide researchers with a new estimation method suitable for censored models with two high dimensional fixed effects. This new estimation method is based on a sequence of least squares regressions. In practice, use of this method can result in significant savings in computing time, and it is applicable to datasets where the number of fixed effects makes standard estimation techniques unfeasible. In addition, the paper both analyses the theoretical properties of the procedure and evaluates its practical performance by means of a Monte Carlo simulation study. Finally, it describes an application to the Spanish economy using a Spanish longitudinal match employer-employee dataset which provides wage information on the working population over a 13-year period. In particular, this paper contributes to the empirical literature on wage determination by providing the first decomposition of individual wages for Spain that takes into account both worker and firm effects after adjusting for censoring. This empirical exercise shows that the biases encountered when censored issues are not taken into account can be of sufficient magnitude as to overestimate the role of firm effects in wage dispersion. In our empirical research, individual heterogeneity explains more than 60% of wage dispersion. |
| Keywords: | fixed effects, algorithm, wage decomposition, censoring, simulation, assortative matching |
| JEL: | I21 I24 J16 J31 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:13.05&r=lma |
| By: | Allegretto, Sylvia (University of California, Berkeley); Dube, Arindrajit (University of Massachusetts Amherst); Reich, Michael (University of California, Berkeley); Zipperer, Ben (University of Massachusetts Amherst) |
| Abstract: | We assess alternative research designs for minimum wage studies. States in the U.S. with larger minimum wage increases differ from others in business cycle severity, increased inequality and polarization, political economy, and regional distribution. The resulting time-varying heterogeneity biases the canonical two-way fixed effects estimator. We consider alternatives including border discontinuity designs, dynamic panel data models, and the synthetic control estimator. Results from four datasets and six approaches all suggest employment effects are small. Covariates are more similar in neighboring counties, and the synthetic control estimator assigns greater weights to nearby donors. These findings also support using local area controls. |
| Keywords: | minimum wage, youth employment, border discontinuity, policy evaluation |
| JEL: | J08 J23 J38 J42 J63 J64 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7638&r=lma |
| By: | Cornelissen, Thomas (University College London); Dustmann, Christian (University College London); Schönberg, Uta (University College London) |
| Abstract: | Existing evidence on peer effects in a work environment stems from either laboratory experiments or from real-word studies referring to a specific firm or specific occupation. Yet, it is unclear to what extent these findings apply to the labor market in general. In this paper, therefore, we investigate peer effects in the workplace for a representative set of workers, firms, and occupations with a focus on peer effects in wages rather than productivity. Our estimation strategy – which links the average permanent productivity of workers' peers to their wages – circumvents the reflection problem and accounts for the endogenous sorting of workers into peer groups and firms. On average, we find only small peer effects in wages. We also find small peer effects in the type of high skilled occupations which more closely resemble those used in studies on knowledge spillover. In the type of low skilled occupations analyzed in existing studies on social pressure, in contrast, we find larger peer effects, about half the size of those identified in similar studies on productivity. |
| Keywords: | knowledge spillover, social pressure, wage structure |
| JEL: | J24 J31 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7617&r=lma |
| By: | Aurora García-Gallego (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain); Nikolaos Georgantzís (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain); Ainhoa Jaramillo-Gutiérrez (LEE-Department of Economics, Universitat Jaume I-Castellón, ERICES-University of Valencia, Spain) |
| Abstract: | We study ultimatum bargaining over the wage that should be paid in order to have a subject perform a given real task. Our results are obtained from experiments run in Greece, Spain and the UK. We find significantly higher wage offers and lower acceptance probabilities in the UK than in the other two countries. Interestingly, the combination of these two effects leads to higher wages in the British pool, without reducing market efficiency as compared to Spain and Greece. Country differences in both employer and employee behavior have a clear gender component. |
| Keywords: | ultimatum bargaining, real task, country differences |
| JEL: | C91 D03 J16 J31 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2013/13&r=lma |
| By: | Aysýt Tansel (Middle East Technical University, Turkey); Þaziye Gazioðlu (Middle East Technical University, Turkey) |
| Abstract: | This paper investigates the job satisfaction in relation to managerial attitudes towards employees and firm size using the linked employer-employee survey results in Britain.We first investigate the managementemployee relationships and the firm size using maximum likelihood probit estimation . Next various measues of job satisfaction are related to the management-employee relations via maximum likelihood ordered probit estimates. Four measures of job satisfaction that have not been used often are considered. They are satisfaction with influence over job; satisfaction with amount of pay; satisfaction with sense of achievement and satisfaction with respect from supervisors. Main findings indicate that managementemployee relationships are less satisfactory in the large firms than in the small firms. Job satisfaction levels are lower in large firms. Less satisfactory management-employee relationships in the large firms may be a major source of the observed lower level of job satisfaction in them. These results have important policy implications from the point of view of the firm management while achieving the aims of their organizations in particular in the large firms in the area of management-employee relationships. Improving the management-employee relations in large firms will increase employee satisfaction in many respects as well as increase productivity and reduce turnover. The nature of the management-employee relations with firm size and job satisfaction has not been investigated before. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:tek:wpaper:2013/5&r=lma |
| By: | Andrea Ichino; Guido Schwerdt; Rudolf Winter-Ebmer; Andrea Ichino |
| Abstract: | We study whether employment prospects of old and young workers differ after a plant closure. Using Austrian administrative data, we show that old and young workers face similar displacement costs in terms of employment in the long-run, but old workers lose considerably more initially and gain later. We interpret these findings using a search model with retirement as an absorbing state, that we calibrate to match the observed patterns. Our finding is that the dynamics of relative employment losses of old versus young workers after a displacement are mainly explained by different opportunities of transition into retirement. In contrast, differences in layoff rates and job offer arrival rates cannot explain these patterns. Our results support the idea that retirement incentives, more than weak labor demand, are responsible for the low employment rates of older workers. |
| Keywords: | Aging, Employability, Plant Closures, Matching |
| JEL: | J14 J65 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:jku:nrnwps:2013_09&r=lma |
| By: | Guzi, Martin (Masaryk University); de Pedraza, Pablo (Universidad de Salamanca) |
| Abstract: | This paper makes use of a large sample of individual data obtained from web surveys in the WageIndicator project. Data includes extensive information on the quality of working conditions together with different well-being indicators. The paper emphasizes the role of work-related characteristics as a specific and very important aspect of life. In our analysis, we demonstrate the role of working conditions in the following three domains: overall life-satisfaction; satisfaction with one’s job; and satisfaction with the combination of family and work. The paper also contributes to the ongoing debate on web survey data quality, reliability, and validity for scientific use. It demonstrates how social sciences can benefit from the use of web survey data in order to overcome the limits of traditional information sources. |
| Keywords: | subjective well-being, web-surveys, working conditions |
| JEL: | J28 J81 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7618&r=lma |
| By: | Kato, Takao; Kauhanen, Antti |
| Abstract: | Much of the empirical literature on PRP (Performance Related Pay) focuses on a question of whether the firm can increase firm performance in general and enterprise productivity in particular by introducing PRP and if so, how much. However, not all PRP programs are created equal and PRP programs vary significantly in a variety of attributes. This paper provides novel and rigorous evidence on the productivity effect of varying attributes of PRP and shows that the details of PRP indeed matter. In so doing we exploit the panel nature of our Finnish Linked Employer-Employee Data on the details of PRP. We first establish that the omitted variable bias is serious, makes the cross-sectional estimates on the productivity effect of the details of PRP biased upward substantially. Relying on the fixed effect estimates that account for such bias, we find: (i) group incentive PRP is more potent in boosting enterprise productivity than individual incentive PRP; (ii) group incentive PRP with profitability as a performance measure is especially powerful in raising firm productivity; (iii) when a narrow measure (such as cost reduction) is already used, adding another narrow measure (such as quality improvement) yields no additional productivity gain; and (iv) PRP with greater Power of Incentive (the share of PRP in total compensation) results in greater productivity gains yet returns to Power of Incentive diminishes very slowly. |
| JEL: | M52 J33 J24 J53 O53 |
| Date: | 2013–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:rif:wpaper:21&r=lma |
| By: | Kollo, Janos (Hungarian Academy of Sciences) |
| Abstract: | The paper looks at how the distribution of jobs by complexity and firms' willingness to hire low educated labor for jobs of different complexity contribute to unskilled employment in Norway, Italy and Hungary. In search of how unqualified workers can attend complex jobs, it compares their involvement in various forms of post-school skills formation. The countries are also compared by the weight of small firms, which are assumed to assist low skilled workers through interpersonal relationships. The data suggest that unskilled employment in Norway benefits from synergies between work in skill-intensive jobs, intense adult training, informal learning and involvement in civil activities. In Italy, workplaces requiring no literacy skills at all have the largest contribution but small businesses tend to employ low educated workers at a large scale even in highly complex jobs. In Hungary, insufficient skills (relative to Norway) and an undersized small-firm sector (relative to Italy) set limits to the inclusion of the low educated. An extreme degree of social isolation is likely to deteriorate their skills and jobs prospects further. |
| Keywords: | skills, skill requirements, unemployment, firm size |
| JEL: | J21 J24 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7632&r=lma |
| By: | Emilio Congregado; Vicente Esteve; Antonio A. Golpe |
| Abstract: | This paper provides estimates of the elasticity of substitution between operational and managerial jobs in the US economy during the years 1969- 2011. Estimating the long-term relationship between the aggregate employment/self-employment ratio and the returns from paid-employment relative to self-employment and testing for structural breaks, we report different estimates of the elasticity of substitution in each of the three regimes identified. Our results help to understand and interpret one of the most intriguing aspects in the evolution of self-employment rates in developed countries. |
| Keywords: | Elasticity of substitution; Cointegration; Self-employment; Structural Breaks |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:uae:wpaper:0913&r=lma |