nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2013‒12‒20
thirteen papers chosen by
Joseph Marchand
University of Alberta

  1. Has job polarisation squeezed the American middle class? By Michael Boehm
  2. The Costs of Recruiting Apprentices: Evidence from German Firm-Level Data By Samuel Muehlemann; Harald Pfeifer; Felix Wenzelmann
  3. Replacing churches and mason lodges? Tax exemptions and rural development By Behaghel, Luc; Lorenceau, Adrien; Quantin, Simon
  4. Childcare Availability and Female Labor Force Participation: An Empirical Examination of the Chile Crece Contigo Program By James Manley; Felipe Vasquez
  5. Labour Market Developments and Social Welfare By Hermine Vidovic
  6. Entrepreneurs and Output: Theory and Empirical Evidence with Spanish Data By Vicente Salas-Fumas; J. Javier Sanchez-Asin; David Storey
  7. Wage growth and productivity growth: the myth and reality of 'decoupling' By Joao Paulo Pessoa; John Van Reenen
  8. How selective are real wage cuts? A micro-analysis using linked employer-employee data By Hirsch, Boris; Zwick, Thomas
  9. Selection upon Wage Posting By Silvio Sticher
  10. Reference Points, Performance and Ability: A Real Effort Experiment on Framed Incentive Schemes By Katharina Hilken; Stephanie Rosenkranz; Kris De Jaegher; Marc Jegers
  11. Child and Youth Labour in the Spanish Mining Sector: 1860-1940 By Miguel Á. Pérez de Perceval Verde; Ángel Pascual Martínez Soto; Andrés Sánchez Picón
  12. Financing retirement with real estate assets: an analysis of Mexico By Carmen Hoyo; David Tuesta
  13. Effets de quartier, effet de département : discrimination liée au lieu de résidence et accès à l’emploi By Petit, Pascale; Bunel, Mathieu; Ene, Emilia; L’Horty, Yannick

  1. By: Michael Boehm
    Abstract: Job polarisation has had strong effects on US workers' relative wages, according to research by Michael Boehm. His study examines whether the decline in manufacturing and clerical jobs has been responsible for the lagging wages of middle-skill workers in the United States. Comparing the occupational choices and earnings of survey respondents in the 1980s and today, he shows that labour market returns to middle-skill jobs have declined relative to high- and low-skill jobs.
    Keywords: Job polarization, wage inequality, talent allocation, Roy model
    JEL: J21 J23 J24 J31
    Date: 2013–12
  2. By: Samuel Muehlemann (University of Bern & IZA Bonn); Harald Pfeifer (Federal Institute for Vocational Education and Training (BIBB) Bonn & Research Centre for Education and the Labour Market (ROA) Maastricht); Felix Wenzelmann (Federal Institute for Vocational Education and Training (BIBB) Bonn)
    Abstract: In this paper, we use firm-level data to analyse a firmÕs costs of recruiting apprentices in Germany. We find that recruitment costs amount on average to 600 Euros per hire (approximately one month of apprentice pay), but costs are heterogenous across firms and vary strongly with the training occupation. Our results suggest that shortages in the local supply of apprentices and a high degree of competition among training firms in the region increase recruitment costs. Furthermore, we find that firms with a works council or an investment-oriented training strategy incur higher recruitment costs. Finally, marginal recruitment costs first increase but eventually decrease for firms hiring a large number of apprentices. Our results are important in light of the increasing firm competition for talented school leavers induced by demographic change.
    Keywords: Recruitment costs, apprenticeship training, human capital investment, local labour markets, local training markets, demographic change
    JEL: J24 J32 J63 M53
    Date: 2013–12
  3. By: Behaghel, Luc; Lorenceau, Adrien; Quantin, Simon
    Abstract: This paper uses regression discontinuity design to provide quasi-experimental estimates of the impact of a tax credit program targeted at rural areas in France, including corporate and payroll tax exemptions. We find no impact of the program on total employment or the number of businesses, and no impact of the different program components on targeted subsets of firms. Comparison with a contemporaneous urban scheme suggests ways the incentives of the rural program could be targeted more effectively.
    Keywords: tax exemptions; rural development; enterprise zones
    JEL: J23 J32 H32
    Date: 2013–12
  4. By: James Manley (Department of Economics, Towson University); Felipe Vasquez (School of Business and Economics, Universidad del Desarrollo)
    Abstract: Few works have examined the relationship between maternal participation in the labor force and the availability of child care in developing countries. Existing papers also tend to rely on relatively simplistic, correlative analysis of the data rather than modeling the joint decision to invest in formal childcare and to choose a level of labor supply. This paper takes advantage of a policy-induced positive shock in the provision of child care to apply instrumental variables in a simultaneous equations context, resulting in estimates that are more rigorous than any currently available in a developing country context. Policymakers are able to optimize their policy choices if they have better information on the elasticity of labor supply with respect to the cost of child care, and we find no evidence that the program is associated with an increase in women's labor supply.
    Keywords: Female Labor Supply, Child Care, Labor Force, Chile, CASEN, JUNJI.
    JEL: J13 J22 O12 H42
    Date: 2013–12
  5. By: Hermine Vidovic (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Summary Employment and activity rates in the new EU Member States (NMS) declined significantly up to the early 2000s and started to increase along with strong GDP growth thereafter. Job losses following the outbreak of the economic and financial crisis varied substantially across countries and have not been offset yet. Overall, the low-educated and the young people are very disadvantaged on the NMS labour markets. With the exception of Poland and Slovenia, non-standard types of employment are uncommon in the NMS, following the pattern of Southern EU countries. Employment protection legislation has been adjusted to ‘European standards’ in the entire region. Union density and consequently the impact of trade unions on wage setting and employment in the NMS fell dramatically. In all NMS unemployment insurance schemes as well as minimum wage regulations were introduced at the beginning of the 1990s, but are less generous than in the EU-15.
    Keywords: labour market, labour market institutions
    JEL: J21 J52 J60 J64 J65 K31
    Date: 2013–11
  6. By: Vicente Salas-Fumas (Faculty of Economics, University of Zaragota, Spain); J. Javier Sanchez-Asin (Faculty of Economics, University of Zaragota, Spain); David Storey (School of Business Management and Economics, University of Sussex, UK)
    Keywords: Occupational choice, Self-employment, entrepreneurship, entrepreneural skills, Spanish economy
    JEL: J24 L26 D24
    Date: 2013–12
  7. By: Joao Paulo Pessoa; John Van Reenen
    Abstract: Employees in the UK are not being denied their fair share of economic growth, according to research by João Paulo Pessoa and John Van Reenen. Their investigation of claims that wage growth has become 'decoupled' from productivity growth finds that decoupling has been overstated and cannot be used to justify redressing the balance between wages and profits. They show that the share of UK income going to labour is basically the same now as it was 40 years ago. The real problem is inequality among employees: wage inequality has risen massively since the late 1970s. Improving skills in the bottom half of the education distribution will boost productivity and real wages.
    Keywords: Decoupling, Wages, Productivity, Compensation, Labour Income Share
    JEL: E24 J20 J30
    Date: 2013–12
  8. By: Hirsch, Boris; Zwick, Thomas
    Abstract: Using linked employer-employee panel data for Germany, this paper investigates whether firms implement real wage reductions in a selective manner. In line with insider-outsider and several strands of efficiency wage theory, we find strong evidence for selective wage cuts with high-productivity workers being spared even when controlling for permanent differences in firms' wage policies. In contrast to some recent contributions stressing fairness considerations, we also find that wage cuts increase wage dispersion among peers rather than narrowing it. Notably, the same selectivity pattern shows up when restricting our analysis to firms covered by collective agreements or having a works council. -- Unter Verwendung verknüpfter Arbeitgeber-Arbeitnehmer-Paneldaten für Deutschland untersucht diese Studie, ob Reallohnkürzungen selektiv vorgenommen werden. Im Einklang mit der Insider-Outsider-Theorie und mehreren Varianten der Effizienzlohntheorie finden wir deutliche Hinweise auf selektive Lohnreduktionen zugunsten hochproduktiver Arbeitnehmer, selbst wenn für unbeobachtete permanente Unterschiede in den Lohnpolitiken der Firmen kontrolliert wird. Im Widerspruch zu jüngeren Arbeiten, die Fairnessüberlegungen ins Zentrum stellen, finden wir zudem, dass selektive Lohnkürzungen die Lohndispersion innerhalb von Peergruppen erhöhen. Bemerkenswerterweise zeigen sich die gleichen Selektivitätsmuster auch für die Subgruppen tarifgebundener Firmen und solcher mit einem Betriebsrat.
    Keywords: real wage rigidity,real wage cuts,selectivity,Germany
    JEL: J30 J31
    Date: 2013
  9. By: Silvio Sticher
    Abstract: We discuss a model of a job market where firms announce salaries. Thereupon, they decide through the evaluation of a productivity test whether to hire applicants. Candidates for a job are locked in once they have applied at a given employer. Hence, such a market exhibits a specific form of the bargain-then-ripoff principle. With a single firm, the outcome is efficient. Under competition, what might be called "positive selection" leads to market failure. Thus our model provides a rationale for very small employment probabilities in some sectors.
    Keywords: directed search; selection; wage posting
    JEL: D83 J21 J31
    Date: 2013–11
  10. By: Katharina Hilken; Stephanie Rosenkranz; Kris De Jaegher; Marc Jegers
    Abstract: The paper investigates the effect of four differently framed payment contracts on the agent's effort provision and performance in a real effort experiment. The four incentive payments are framed as a base wage and bonuses (one immediately pays bonuses, the other only after an initial performance-independent part), penalties or a combination of bonuses and penalties. The base wage that is offered, induces the reference point. The participants provide real effort and are paid for finding pairs in a customized Memory game. The bonus-only frame elicits the highest effort, whereas frames with penalties lag behind. Ability positively complements the effect of effort on performance. The combination of penalties and bonuses minimises the costs of the principal only for low levels of performance employing heterogeneous agents. For higher performance levels, framing a base wage with bonuses is cost-effective.
    Keywords: Real Effort Experiment, Optimal Payment Scheme, Principal-Agent Relationship, Ability, Bonus, Penalty
    JEL: M52 J33 C91
    Date: 2013–11
  11. By: Miguel Á. Pérez de Perceval Verde (Universidad de Murcia, Murcia, Spain); Ángel Pascual Martínez Soto (Universidad de Murcia, Murcia, Spain); Andrés Sánchez Picón (Universidad de Almería, Almería, Spain)
    Abstract: This paper analyses the employment of children in the Spanish mining sector at the highest point of its history (golden age). The main source used is Spain’s official Mining Statistics that show that child labour was widely used throughout the Spanish peninsula: an average of 14-17% of total workers between 1860 and 1920. Subsequently, the incidence of child labour reduced steadily and by 1930 had fallen to below 9%. The changes were not a direct result of the legislation that had become increasingly restrictive since 1900, but were brought about by factors related to the organisation of the different activities involved in mining. Furthermore, there was a significant territorial bias whereby south-eastern areas (particularly the provinces of Murcia and Almeria) were characterised by very high levels of child labour (an average of 30% in the second half of the nineteenth century). The paper examines the factors that determine this different distribution, analysing both the specific aspects of child labour and the reasons for using this type of workforce. In addition, the accounts of some of the mines in these two provinces have been used in order to study the evolution of child wages which provides further information to help us understand the mining organisation models. Finally, a case study from the 1870s is presented which measures the contribution that the mining children made to the family economy, with results remarkably similar to those of studies of English and American industrial districts in the nineteenth century.
    Keywords: Child labour, Spanish mining, labour legislation, mining wages
    JEL: N3 L71 J30
    Date: 2013–12
  12. By: Carmen Hoyo; David Tuesta
    Abstract: Real estate assets represent a major form of savings for families when they reach retirement age. Reverse mortgages are a financial product developed as an alternative way of generating flows of liquid income during retirement in some countries. As income during old age must be diversified from different sources, in this work we assess the potential of reverse mortgages as an alternative income stream in retirement. Our work focuses on Mexico, using projections of the replacement rate that would be received by an old-aged pensioner, only considering the pension from the Instituto Mexicano del Seguro Social (IMSS), whilst incorporating annuity income from the reverse mortgage. Using a macroeconomic-actuarial model to generate projections, we found that these rates could be increased by 45 percentage points by incorporating annuity income from real estate assets. This result reinforces the concept of establishing not only policies focused on improving formal pension schemes, but also of making private financial mechanisms available to generate other adequate income flows for old age based on alternative assets.
    Keywords: reverse mortgage, pensions, defined contribution
    JEL: G23 J32 G22 D14 G21
    Date: 2013–12
  13. By: Petit, Pascale; Bunel, Mathieu; Ene, Emilia; L’Horty, Yannick
    Abstract: L’objet de cette étude est de mesurer la discrimination à l’embauche à l’encontre des jeunes en Ile-de-France en raison du lieu de résidence en considérant plusieurs échelles spatiales de façon à distinguer l’effet de la réputation du département (Paris et la Seine-Saint-Denis), celui de la localité et celui du quartier. L’évaluation est réalisée sur données expérimentales auto-construites de testing selon un protocole permettant d’examiner les effets propres à chacune de ces trois échelles sur l’accès à l’emploi ainsi que leurs effets cumulés. On s’intéresse aux discriminations pour deux professions en tension du secteur de la restauration pour laquelle les discriminations devraient a priori être réduites, les serveurs et les cuisiniers, pour deux niveaux de qualification (CAP ou Baccalauréat professionnel). Pour chacun de ces profils, nous avons construit 6 candidatures fictives de jeunes hommes, similaires en tous points à l’exception de la caractéristique testée : le lieu de résidence. Entre octobre 2011 et février 2012, nous avons envoyé 2988 candidatures en réponse à 498 offres d’emploi localisées en Ile-de-France. L’étude consiste en une exploitation statistique et économétrique des réponses à ces envois.
    Keywords: accès à l’emploi; discrimination; testing; effets de quartier; expérimentation
    JEL: C81 C93 J15 J71
    Date: 2013–12

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