nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2014‒03‒01
thirteen papers chosen by
Joseph Marchand
University of Alberta

  1. The Own-Wage Elasticity of Labor Demand: A Meta-Regression Analysis By Lichter, Andreas; Peichl, Andreas; Siegloch, Sebastian
  2. Demand for Low-Skilled Labor and Parental Investment in Children's Education: Evidence from Mexico By Majlesi, Kaveh
  3. Employment polarization and the role of the apprenticeship system By Michelle Rendall; Franziska J. Weiss
  4. Do Green Innovations stimulate Employment? – Firm-level Evidence From Germany By Georg Licht; Bettina Peters
  5. The Rate Of Substitution Between Low Pay Workers and The National Minimum Wage By Lanot, Gauthier; Sousounis , Panos
  6. Driving to Opportunity: Local Rents, Wages, Commuting Costs and Sub-Metropolitan Quality of Life By David Albouy; Bert Lue
  7. Dividing the Pie: the Determinants of Labor’s Share of Income on the Firm Level By Michael Siegenthaler; Tobias Stucki
  8. Relaxing Occupational Licensing Requirements: Analyzing Wages and Prices for a Medical Service By Morris M. Kleiner; Allison Marier; Kyoung Won Park; Coady Wing
  10. Adjustment of the Vietnamese Labour Market in Time of Economic fluctuations and Structural Changes By Xavier Oudin; Laure Pasquier-Doumer; Thai Pham Minh; Laure Pasquier-Doumer; Dat Vu Hoang
  11. Social Attitudes on Gender Equality and Firms' Discriminatory Pay-Setting By Janssen, Simon; Tuor Sartore, Simone N.; Backes-Gellner, Uschi
  12. Making dough or baking dough? Spousal housework responsibilities in Germany, 1992-2011 By Vivien Procher; Nolan Ritter; Colin Vance
  13. The IZA Evaluation Dataset Survey: A Scientific Use File By Arni, Patrick; Caliendo, Marco; Künn, Steffen; Zimmermann, Klaus F.

  1. By: Lichter, Andreas (IZA); Peichl, Andreas (ZEW Mannheim); Siegloch, Sebastian (IZA)
    Abstract: Firms' labor demand responses to wage changes are of key interest in empirical research and policy analysis. However, despite extensive research, estimates of labor demand elasticities remain subject to considerable heterogeneity. In this paper, we conduct a comprehensive meta-regression analysis to re-assess the empirical literature on labor demand elasticities. Building on 942 elasticity estimates from 105 different studies, we identify sources of variation in the absolute value of this elasticity. Heterogeneity due to the theoretical and empirical specification of the labor demand model, different datasets used or sectors and countries considered explains more than 80% of the variation in the estimates. We further find substantial evidence for the presence of publication selection bias, as estimates of the own-wage elasticity of labor demand are upwardly inflated.
    Keywords: labor demand, wage elasticity, meta-analysis
    JEL: J23 C10 C83
    Date: 2014–02
  2. By: Majlesi, Kaveh (Department of Economics, Lund University)
    Abstract: Previous research has shown that school enrollment in developing countries responds to the changes in demand for low-skilled and high-skilled labor in the market. Using data from Mexico, I show that the negative effects of increases in relative demand for low-skilled labor are not limited to lower rates of school enrollment. Parents respond to the increases in labor market opportunities for low-skilled labor in the manufacturing sector by spending less time helping children with their studies and spending less on children's education while they are enrolled at school. This suggests that households respond along the intensive margin as well as on the extensive margin.
    Keywords: Low-skilled labor; Parental investment; Children’s education; Human capital
    JEL: I21 I25 J23 J24 O54
    Date: 2014–02–17
  3. By: Michelle Rendall; Franziska J. Weiss
    Abstract: This paper studies the effects of the apprenticeship system on innovation and labor market polarization. A stylized model with two key features is developed: (1) apprentices are more productive due to industry-specific training, but (2) from the firm’s perspective, when training apprentices, technological innovation is costly since training becomes obsolete. Thus, apprentices correlate with slower adoption of skillreplacing technologies, but also less employment polarization. We test this hypothesis on German regions given local variation in apprenticeship systems until 1976. The results shows no employment polarization related to apprentices, but similar displacement of non-apprentices as in the US.
    Keywords: Apprentices, educational system, employment polarization, technology adoption
    JEL: E24 I24 J24 J62 O33
    Date: 2014–02
  4. By: Georg Licht; Bettina Peters
    Abstract: This paper studies the impact of environmental innovation on employment growth in the period 2006-2008 using firm-level data for German manufacturing and services. It extends the model by Harrison et al (2008) in order to distinguish between employment effects of environmental and non-environmental product as well as process innovation. As a robustness check patent data on green technologies are employed. The results demonstrate that both environmental and non-environmental product innovations stimulate employment growth. We find a similar gross employment effect of both types of product innovations. That is, one-percent increases in sales stemming from new environmental and non-environmental products increase gross employment by one percent each. Thus, we do not find evidence that that new products with environmental benefits for consumers are produced with higher or lower efficiency than old products. Yet, the net employment contribution of non-green product innovations is 4 to 5 times larger than the net contribution of green product innovations. This is the result of differences in the average innovation engagement and innovation success of both types of new products. In contrast, environmental and non-environmental process innovation plays only a little role for employment growth. In particular, we do not identify a significant trade-off between more environmental-friendly production technologies and employment growth. This holds for both cleaner production technologies and end-of pipe technologies.
    Keywords: Employment growth, environmental innovation, green patents
    JEL: O33 J23 L80 C21 C23
    Date: 2014–02
  5. By: Lanot, Gauthier (Department of Economics, Umeå School of Business and Economics); Sousounis , Panos (Keele Management School, Economics)
    Abstract: We study the effect of the National Minimum Wage (NMW) on the workforce composition, in terms of distinct age groups with similar qualifcations, within the low paying sectors of the economy. Our interest is in the degree of substitutability between labour inputs (young and old employees) in the production process. We find evidence that both the introduction and regu- lar uprating of the NMW have a signifcant effect on determining observed changes in average wages for age groups older than 16-17 years of age. However, our results show that the effects of the NMW and its uprating on the sectoral cost of labour are rather weak and we conclude that, if any, the influence of the NMW has to be small and limited to the very young (16-17 year olds) or the 18-20 year olds. We estimate the elasticity of substitution, between 18-20 year olds and old workers, to be around 0.2-0.5, which would imply signifcant complementarity (or at least argue against perfect substitution) between younger and old employees.
    Keywords: labour substitution; minimum wage
    JEL: J21 J31
    Date: 2014–02–20
  6. By: David Albouy; Bert Lue
    Abstract: In an equilibrium model of residential and workplace choice, we estimate local willingness-to-pay measures for 2071 areas covering the United States. These measures are based on how high residential housing and commuting costs are relative to workplace wages; they index quality of life when preferences are sufficiently homogeneous. Wage levels vary little within metropolitan areas relative to across them, while individual characteristics that predict wages vary more within, suggesting patterns about sorting. Quality of life varies as much within metros as across them, and is typically high in areas that are dense, suburban, mild, safe, entertaining, and have higher school-funding.
    JEL: H73 Q51 R21 R23 R41
    Date: 2014–02
  7. By: Michael Siegenthaler (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: This paper is the first to study the factors determining labor’s share of income on the level of the individual firm, employing an unusually informative panel data set. The empirical examination is concerned with Switzerland which stands out as one of the very few developed countries with a stable labor share. Broadly confirming results from previous cross-country and industry-level studies, we find that the main factor decreasing the labor share in the estimation period is the increase in the share of workers using ICT in the firm. The main reasons why Switzerland’s labor share remained almost constant are its relatively slow-rate of technological progress and shifts towards industries with above-average labor shares.
    Keywords: Labor share, factor income distribution, firm-level analysis
    JEL: D33 E25 J24 O30
    Date: 2014–02
  8. By: Morris M. Kleiner; Allison Marier; Kyoung Won Park; Coady Wing
    Abstract: Occupational licensing laws have been relaxed in a large number of U.S. states to give nurse practitioners the ability to perform more tasks without the supervision of medical doctors. We investigate how these regulations may affect wages, employment, costs, and quality of providing certain types of medical services. We find that when only physicians are allowed to prescribe controlled substances that this is associated with a reduction in nurse practitioner wages, and increases in physician wages suggesting some substitution among these occupations. Furthermore, our estimates show that prescription restrictions lead to a reduction in hours worked by nurse practitioners and are associated with increases in physician hours worked. Our analysis of insurance claims data shows that the more rigid regulations increase the price of a well-child medical exam by 3 to 16 %. However, our analysis finds no evidence that the changes in regulatory policy are reflected in outcomes such as infant mortality rates or malpractice premiums. Overall, our results suggest that these more restrictive state licensing practices are associated with changes in wages and employment patterns, and also increase the costs of routine medical care, but do not seem to influence health care quality.
    JEL: D02 D42 H7 I1 I12 I18 I28 J0 J18
    Date: 2014–02
  9. By: Lin Ma
    Abstract: How does globalization affect the income gaps between the rich and the poor? This paper presents a new piece of empirical evidence showing that access to the global market, either through exporting or through multinational production, is associated with a higher executive-to-worker pay ratio within the firm. It then builds a model with heterogeneous firms, occupational choice, and executive compensation to model analytically and assess quantitatively the impact of globalization on the income gaps between the rich and the poor. The key mechanism is that the “gains from trade” are not distributed evenly within the same firm. The compensation of an executive is positively linked to the size of the firm, while the wage paid to the workers is determined in a country- wide labor market. Any extra profit earned in the foreign markets benefits the executives more than the average worker. Counterfactual exercises suggest that this new channel is quantitatively important for the observed surge in top income shares in the data. Using the changes in the volume of trade and multinational firm sales, the model can explain around 33 percent of the surge in top income shares over the past two decades in the United States.
    Keywords: E25 F12 F62 J33
    Date: 2014–02
  10. By: Xavier Oudin (IRD, UMR DIAL, PSL, Université Paris-Dauphine); Laure Pasquier-Doumer (IRD, UMR DIAL, PSL, Université Paris-Dauphine); Thai Pham Minh (VASS-CAF); Laure Pasquier-Doumer (DIAL, IRD, Paris); Dat Vu Hoang (VASS-CAF)
    Abstract: In this paper, we consider how labour market adjusts to economic fluctuations, considering structural transformation at work as well as short term changes. We utilise series calculated from population censuses and data published in the statistical yearbooks of GSO for long term series, and Labour Force Surveys from 2007 to 2012 for short term data. The paper highlights the deep transformation of the labour market in the last decades. The labour force has doubled in 25 years and the share of agriculture has declined below 50%. Labour supply absorption was thus one of the main challenges for the Vietnamese economy. The household sector has been the main job provider over the years, in agriculture as well as in non-farm activities. The labour market has adjusted to the recent economic slowdown through different channels. If unemployment does not rise, some people withdraw from the labour force and the number of non-active people has grown. The quantity of labour is also affected by a significant reduction of hours worked. While the non-farm sector generates more jobs for skilled workers, there is a shift of unskilled labour towards agriculture. Due to demographic factors, labour supply absorption and creation of new jobs become a less acute problem. As Vietnam benefits of the demographic dividend, the situation on the labour market should be favourable during the present decade to implement structural policies. _________________________________ Dans cet article, nous examinons les ajustements du marché du travail aux fluctuations économiques, compte tenu des transformations structurelles en cours ainsi que des changements à court terme. Nous utilisons pour cela des données des recensements de la population ou publiées dans les annuaires statistiques de l’Office Général de la Statistique pour les séries à long terme, et les enquêtes emploi conduites entre 2007 à 2012 pour les données à court terme. Cet article souligne la profonde transformation du marché du travail au cours des dernières décennies. La population active a doublé en 25 ans et la part de l'agriculture est passée en dessous du seuil de 50 %. L’absorption de l'offre de travail a donc été l'un des principaux défis pour l'économie vietnamienne sur cette période. Le secteur des entreprises familiales agricoles et non-agricoles a été le principal pourvoyeur d'emplois au cours de ces années. Le marché du travail s'est adapté au récent ralentissement économique à travers différents canaux. Le chômage est resté stable mais le nombre de personnes inactives a augmenté. La quantité de travail a également été affectée par une réduction significative du nombre d'heures travaillées. Alors que le secteur non agricole a généré plus d'emplois pour les travailleurs qualifiés, un flux de travailleurs non-qualifiés vers l’agriculture a été observé. En raison de facteurs démographiques, l'absorption de l'offre de travail et la création de nouveaux emplois ne sont plus le principal problème. En revanche, l’évolution récente du marché du travail appelle à la mise en oeuvre de politiques structurelles en vue d’améliorer les conditions de travail, la période étant particulièrement favorable pour mener ces politiques puisque le Vietnam profite actuellement du dividende démographique.
    Keywords: Labour Market– Long term and Short term Adjustment – Employment - Vietnam
    JEL: J11 J21 J81
    Date: 2014–02
  11. By: Janssen, Simon (University of Zurich); Tuor Sartore, Simone N. (University of Zurich); Backes-Gellner, Uschi (University of Zurich)
    Abstract: We analyze the relationship between social attitudes on gender equality and firms' pay-setting behavior by combining information about regional votes relative to gender equality laws with a large data set of multi-branch firms and workers. The results show that multi-branch firms pay more discriminatory wages in branches located in regions with a higher social acceptance of gender inequality than in branches located in regions with a lower acceptance. The results are similar for different subsamples of workers, and we cannot find evidence that regional differences in social attitudes influence how firms assign women and men to jobs and occupations. The investigation of a subsample of performance pay workers for whom we are able to observe their time-based and performance pay component separately shows that social attitudes on gender equality only influence the time-based pay component but not the performance pay component of the same workers. Because regional-specific productivity differences should influence the workers' performance pay and time-based pay, unobserved gender-specific productivity differences are not likely to explain the regional variation in within firm gender pay gaps. The results support theories and previous evidence showing that social attitudes influence gender pay gaps in the long run.
    Keywords: gender pay gaps, social attitudes, firms' pay setting
    JEL: J31 J33 J71 M5
    Date: 2014–02
  12. By: Vivien Procher (Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Jackstädt Center of Entrepreneurship and Innovation Research, University of Wuppertal); Nolan Ritter (Rheinisch-Westfälisches Institut für Wirtschaftsforschung); Colin Vance (Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Jacobs University Bremen)
    Abstract: Drawing on German household data from 1992 to 2011, this paper analyzes how couples allocate housework against the backdrop of three questions: (1) Does an individual’s contribution to household income - both in absolute and relative terms - influence his or her contribution to housework? (2) If so, does the magnitude of this influence differ by gender? and (3) How important are traditional gender roles on housework allocation? We address these issues by applying a panel quantile regression model and find that as both the share and absolute level of income increase, the amount of housework undertaken decreases, with the latter effect being roughly equal across genders. Nevertheless, traditional gender roles also appear to dictate housework allocation, which is evidenced by women increasing their housework if they earn more than their partner.
    Keywords: housework, income, gender, longitudinal study, quantile panel regression
    JEL: D13 J16 J22
    Date: 2014–02
  13. By: Arni, Patrick (IZA); Caliendo, Marco (University of Potsdam); Künn, Steffen (IZA); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: This reference paper describes the sampling and contents of the IZA Evaluation Dataset Survey and outlines its vast potential for research in labor economics. The data have been part of a unique IZA project to connect administrative data from the German Federal Employment Agency with innovative survey data to study the out-mobility of individuals to work. This study makes the survey available to the research community as a Scientific Use File by explaining the development, structure, and access to the data. Furthermore, it also summarizes previous findings with the survey data.
    Keywords: survey data, scientific use file, labor market policies, evaluation, migration, ethnicity, attitudes, behavior, skills
    JEL: C81 H43 J68
    Date: 2014–02

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