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on Labor Markets - Supply, Demand, and Wages |
| By: | Gustavsson, Magnus (Uppsala Center for Labor Studies) |
| Abstract: | This paper disentangles the effect of inequality in permanent and transitory wages on hours worked by, first, estimating the two components for Swedish industries and, second, using the resulting estimates as explanatory variables in an hours-worked equation. Consistent with Bell and Freeman’s (2001) inequality-hours hypothesis, permanent wage differentials are found to have a positive effect on individuals’ hours of work while transitory wage differentials have no effect. However, the analysis also shows that, in estimated hours-worked equations, inequality in observed wages is potentially a good approximation for inequality in permanent wages. |
| Keywords: | labor supply; wage dispersion; wage dynamics |
| JEL: | J22 J31 |
| Date: | 2013–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uulswp:2013_012&r=lma |
| By: | Paul Sullivan, (U.S. Bureau of Labor Statistics); Ted To (U.S. Bureau of Labor Statistics) |
| Abstract: | The empirical literature on compensating wage differentials has a mixed history. While there have been some successes, much of this literature finds weak support for the theory of equalizing differences. We argue that it is dispersion in total job values or "job dispersion" that leads to biased compensating wage differential estimates. We begin by demonstrating how job dispersion can lead to biased hedonic estimates. Then we take a partial equilibrium on-the-job search model with utility from non-wage job characteristics, structurally estimate it and then simulate a dataset. Using our simulated dataset, we conduct a detailed analysis of the sources of bias in hedonic wage estimates. While worker heterogeneity and job dynamics are important sources of job dispersion, a significant proportion of the variation in jobs can only be explained by the inherent randomness of job offers. |
| Keywords: | compensating wage differential, theory of equalizing differences, revealed preference, on-the-job search |
| JEL: | J3 J42 J64 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec130100&r=lma |
| By: | Di Paolo, Antonio; Tansel, Aysit |
| Abstract: | Foreign language skills represent a form of human capital that can be rewarded in the labor market. Drawing on data from the Adult Education Survey of 2007, this is the first study estimating returns to foreign language skills in Turkey. We contribute to the literature on the economic value of language knowledge, with a special focus on a country characterized by fast economic and social development. Although English is the most widely spoken foreign language in Turkey, we initially consider the economic value of different foreign languages among the employed males aged 25 to 65. We find positive and significant returns to proficiency in English and Russian, which increase with the level of competence. Knowledge of French and German also appears to be positively rewarded in the Turkish labor market, although their economic value seems mostly linked to an increased likelihood to hold specific occupations rather than increased earnings within occupations. Focusing on English, we also explore the heterogeneity in returns to different levels of proficiency by frequency of English use at work, birth-cohort, education, occupation and rural/urban location. The results are also robust to the endogenous specification of English language skills. |
| Keywords: | : Foreign Languages, Returns to Skills, Heterogeneity, Turkey |
| JEL: | I2 I21 J3 J31 |
| Date: | 2013–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:51237&r=lma |
| By: | Anthony Edo (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | This paper investigates the immigration impact on native outcomes using micro-level data for France. I find that immigration does not affect the wages of competing natives, but induces adverse employment effects. This finding is consistent with a wage structure that is much less flexible in France. The quality of the data allows to dig more deeply into the interpretation of the immigration impact. First, I show that immigrants displace native workers because they are more willing to have bad employment conditions. Second, I find that natives on short-term contracts, who are less subject to wage rigidities, do experience wage losses due to immigration. |
| Keywords: | Immigration; wage rigidities; employment; naturalization |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00881131&r=lma |
| By: | Anthony Edo (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Nicolas Jacquemet (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université de Strasbourg - Université Nancy II); Constantine Yannelis (Stanford University - Department of Economics - Department of Economics) |
| Abstract: | This paper investigates the importance of ethnic homophily in the hiring discrimination process, and provides a novel test for statistical discrimination. Our evidence comes from a correspondence test performed in France, in which we use three different kinds of ethnic identification: French sounding names, North African sounding names, and "foreign" sounding names with no clear ethnic association. Within both male and female groups, we show that all non-French applicants are equally discriminated against when compared to French applicants. This indicates that racial discrimination in employment is directed against members of non-majority ethnic groups, and highlights the importance of favoritism for in-group members. Moreover we find direct evidence of homophily: recruiters with European names are more likely to call back French named applicants and female recruiters are more likely to call back women. The paper also directly tests for statistical discrimination by adding a signal related to language skill ability in all resumes sent to half the job offers. Although the signal inclusion significantly impacts the discrimination experienced by non-French females, it is much weaker for male minorities. |
| Keywords: | Correspondence testing; gender discrimination; racial discrimination; ethnic homophily; language skills |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00877458&r=lma |
| By: | Marios Karabarbounis |
| Abstract: | Standard public finance principles imply that workers with more elastic labor supply should face smaller tax distortions. This paper quantitatively tests the potential of such an idea within a life-cycle model with heterogeneous two-member households. I find that younger and older-wealthier households have a larger labor supply elasticity than middle-aged households. The same is true for household members who are not the sole financial provider in the unit relative to primary breadwinners. To decrease inefficient distortions I study a tax system that uses information on the age, assets, and number of working members inside the household. The optimal tax code decreases tax rates on 1) younger and older workers, 2) wealthier households that are closer to retirement, and 3) two-earner households. The tax system raises revenues by targeting middle-aged households with a single earner. As a result, total supply of labor increases by 3.18 percent and consumption by 4.47 percent, which translates into welfare gains of 0.91 percent in terms of annual consumption. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:13-13&r=lma |
| By: | Cain Polidano (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Domenico Tabasso (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Institute for the Study of Labor (IZA)) |
| Abstract: | In OECD countries, ‘real world’ upper-secondary vocational education and training (VET) programs are used to engage less academically oriented youth in learning, while helping to prepare them for post-school work and/or further training. In general terms, VET programs with high employer involvement, such as apprenticeship schemes, are considered to be superior to classroom-based VET programs that are typically found in many English-speaking countries. In this study, we examine outcomes from a potential ‘third way’: classroom-based VET with a short-term structured workplace learning component. Using propensity score matching and PISA data linked to information from the Longitudinal Survey of Australian Youth, we find this model is associated with higher school completion rates and better employment transitions. |
| Keywords: | Educational economics, vocational education and training, workplace learning |
| JEL: | I20 J01 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2013n31&r=lma |