nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2014‒02‒08
nine papers chosen by
Joseph Marchand
University of Alberta

  1. That was then, this is now: Skills and Routinization in the 2000s By Consoli,Davide; Vona,Francesco; Rentocchini,Francesco
  2. Common Law Marriage and Male/Female Convergence in Labor Supply and Time Use By Grossbard, Shoshana; Vernon, Victoria
  3. Parental Response to Early Human Capital Shocks: Evidence from the Chernobyl Accident By Martin Halla; Martina Zweimüller
  4. Do payroll tax cuts raise youth employment? By Egebark, Johan; Kaunitz, Niklas
  5. A Balancing Act at Times of Austerity: Matching the Supply and Demand for Skills in the Greek Labour Market By Pouliakas, Konstantinos
  6. Labor Income Dynamics and the Insurance from Taxes, Transfers, and the Family By Blundell, Richard; Graber, Michael; Mogstad, Magne
  7. Performance related pay, productivity and wages in Italy: a quantile regression approach By Damiani, Mirella; Pompei, Fabrizio; Ricci, Andrea
  8. Minimum Wage: Does It Improve Welfare in Thailand? By Del Carpio, Ximena; Messina, Julián; Sanz-de-Galdeano, Anna
  9. "Are the Effects of Minimum Wage Increases Always Small? A Re-Analysis of Sabia, Burkhauser, and Hansen" By SAUL D. HOFFMAN

  1. By: Consoli,Davide; Vona,Francesco; Rentocchini,Francesco
    Abstract: We analyze changes in the skill content of occupations in US four-digit manufacturing industries between 1999 and 2010. Following a ‘task-based’ approach, we elaborate a measure of Non-Routine skill intensity that captures the effects of industry exposure to both technology and international trade. The paper adds to previous literature by focusing on both the determinants of demand for Non-Routine skills and their effects on industry productivity and wages. The key finding is that import competition from low-wage countries has been a strong driver of demand for Non-Routine skills during the 2000s. Both technology and imports from low-wage countries are associated with mild cross-industry convergence in skill intensity while imports from high and medium wage countries are at root of persistent heterogeneity across occupational groups. We also find that higher Non-Routine skill intensity has had at best a modest effect on productivity and wages, except for high-skill occupations.
    Keywords: Skills, Tasks, Routinization, Trade, technology
    JEL: F16 J21 J23 O33
    Date: 2014–01–23
  2. By: Grossbard, Shoshana (San Diego State University, California); Vernon, Victoria (Empire State College)
    Abstract: Does availability of common law marriage (CLM henceforth) in the U.S help explain variation in the labor force participation, hours of work and hours of household production of men and women over time and across states? As CLM offers more legal protection to household producers at the margin between single status and marriage, we expect it to discourage labor supply and encourage household production on the part of household producers who are married or cohabit. In the context of traditional gender roles this implies a negative association between availability of CLM and the labor supply of women who are either married or cohabit. Also assuming traditional gender roles, men are then expected to work more in the labor force when CLM is available. We analyze micro data from CPS-iPums for the period 1995-2011 to investigate labor outcomes and from the ATUS for the period 2003-11 to study effects on household production and total hours of work. Labor supply effects of CLM availability are almost always negative for cohabiting and married women, and sometimes also for single women. The effects of CLM on men's labor supply tend to be negative when samples include all men aged 18-35. However, for the groups that we identified as most likely to be affected by CLM availability – the youngest white men w/o college education – we find positive effects. Married non-black men and women and work less in home production under CLM.
    Keywords: labor supply, marriage, law and economics, household production
    JEL: J12 J16 J22 K36
    Date: 2014–01
  3. By: Martin Halla; Martina Zweimüller
    Abstract: Little is known about the response behavior of parents whose children are exposed to an early-life shock. In this paper we interpret the prenatal exposure of the Austrian 1986 cohort to radioactive fallout from the Chernobyl accident as a negative human capital shock and examine their parents’ response behavior. To identify causal effects we can rely on exogenous variation in the exposure to radioactive fallout (over time and) between communities due to geographic differences in precipitation at the time of the accident. We find robust empirical evidence of compensating investment behavior by parents in response to the shock. Families with low socioeconomic status reduced their family size, while families with higher socioeconomic status responded with reduced maternal labor supply. Compensating investment made by the latter group seems relatively more effective because we do not find any detrimental long-term effects for exposed children from higher socioeconomic backgrounds. In contrast, exposed children from low socioeconomic backgrounds have significantly worse labor market outcomes as young adults.
    Keywords: Fetal origins, parental response, Chernobyl, radiation, health, culling, human capital, fertility, labor supply
    JEL: I18 I20 Q48 Q53 J24
    Date: 2014–01
  4. By: Egebark, Johan (Dept. of Economics, Stockholm University); Kaunitz, Niklas (SOFI)
    Abstract: In 2007, the Swedish employer-paid payroll tax was cut on a large scale for young workers, substantially reducing labor costs for this group. Using Difference-in-Differences paired with exact matching, we estimate a small impact, both on employment and on wages, implying a labor demand elasticity for young workers at around -0.31. Since the tax reduction applied also to existing employments, the cost of the reform was sizable, and the estimated cost per created job is at more than four times that of directly hiring workers at the average wage. Hence, we conclude that payroll tax cuts are an inefficient way to boost employment for young individuals.
    Keywords: Youth unemployment; Payroll tax; Tax subsidy; Labor costs; Exact matching
    JEL: H25 H32 J23 J38 J68
    Date: 2014–01–30
  5. By: Pouliakas, Konstantinos (European Centre for the Development of Vocational Training (Cedefop))
    Abstract: This paper provides an evidence-based assessment of the current situation prevailing in the Greek market for skills and jobs. The synthesis of available skills intelligence for Greece, the country most severely affected by the global economic crisis of 2008, is crucial as it is currently faced with tough decisions regarding the allocation of limited resources in the face of economic austerity. The paper engages in a comparative overview of Greece's performance on flagship Europe 2020 indicators on education and employment in relation to the EU. An empirical analysis of the incidence and determinants of skill mismatches in the Greek and EU job markets is also undertaken, using data from several European data sources. It is argued that a stronger vocational education and training pillar may constitute a valuable option for strengthening the links between the initial educational system and the labour market in Greece. But tackling skill mismatch requires skill development and skill utilization policies in the workplace. A stronger commitment to enhancing the skill content of jobs by employers via the adoption of high performance workplace practices, investment in continuous training, less reliance on casual labour and policies to support small and medium-sized enterprises in the war for talent are necessary if Greece is to make the most of its rich skills reserves.
    Keywords: skills, skill mismatch, Greece, vocational education and training, overeducation, shortages
    JEL: C25 I29 J11 J20 J24 J69
    Date: 2014–01
  6. By: Blundell, Richard (University College London); Graber, Michael (University College London); Mogstad, Magne (University College London)
    Abstract: What do labor income dynamics look like over the life-cycle? What is the relative importance of persistent shocks, transitory shocks and heterogeneous profiles? To what extent do taxes, transfers and the family attenuate these various factors in the evolution of life-cycle inequality? In this paper, we use rich Norwegian data to answer these important questions. We let individuals with different education levels have a separate income process; and within each skill group, we allow for non-stationarity in age and time, heterogeneous experience profiles, and shocks of varying persistence. We find that the income processes differ systematically by age, skill level and their interaction. To accurately describe labor income dynamics over the life-cycle, it is necessary to allow for heterogeneity by education levels and account for non-stationarity in age and time. Our findings suggest that the progressive nature of the Norwegian tax-transfer system plays a key role in attenuating the magnitude and persistence of income shocks, especially among the low skilled. By comparison, spouse's income matters less for the dynamics of inequality over the life-cycle.
    Keywords: income dynamics, insurance, life cycle inequality
    JEL: C33 D3 D91 J31
    Date: 2014–01
  7. By: Damiani, Mirella; Pompei, Fabrizio; Ricci, Andrea
    Abstract: The authors analyzed the role of Performance Related Pay (PRP) in a sample of Italian manufacturing and service firms and presented standard quantile estimates to investigate heterogeneity in pay-performance impacts on labor productivity and wages. In a second stage, the endogeneity of PRP was taken into account by using instrumental variable quantile regression techniques. They find considerable heterogeneity across the distribution of labor productivity and wages, with the highest role of PRP obtained at the lowest and highest quantiles. However, for all quantiles, the comparison of productivity and wage estimates suggests that PRP might not only be rent-sharing devices, but also incentive schemes that substantially lead to efficiency enhancements. These findings are confirmed for firms under union governance and suggest that well designed policies, that circumvent the limited implementation of PRP practices, would guarantee productivity improvement.
    Keywords: Efficiency, Wages, Performance–related pay, unions
    JEL: D24 J31 J33 J51
    Date: 2014–01–30
  8. By: Del Carpio, Ximena (World Bank); Messina, Julián (World Bank); Sanz-de-Galdeano, Anna (Universitat Autònoma de Barcelona)
    Abstract: We study the causal impact of the minimum wage on employment and welfare in Thailand using a difference-in-difference approach that relies on exogenous policy variation in minimum wages across provinces. We find that minimum-wage increases have small disemployment effects on female, elderly, and less-educated workers and large positive effects on the wages of prime-age male workers. As such, increases in the minimum wage are associated with increases in household consumption per capita in general, but the consumption increase is greatest among those households around the median of the distribution. In fact, rises in the minimum wage increased inequality in consumption per capita within the bottom half of the distribution.
    Keywords: minimum wage, household consumption, poverty, employment, uncovered sector
    JEL: J31 D31
    Date: 2014–01
  9. By: SAUL D. HOFFMAN (Department of Economics,University of Delaware)
    Abstract: In a recent article, Sabia, Burkhauser, and Hansen report very large negative employment effects of the 2004-2006 increase in the NY state minimum wage on young, less- educated workers. I re-examine their estimates using data from the full CPS, rather than the smaller MORG files they use. I find no evidence whatsoever of a negative employment impact. When the two data sources conflict, there can be no doubt that the full CPS, which is the source of official employment data, is the more appropriate. Furthermore, when I repeat their analysis using three states and the District of Columbia that also had a substantial increase in the state minimum wage, I find evidence of a small positive employment effect.
    Keywords: Minimum Wage
    JEL: J08 J21 J38
    Date: 2014

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