nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2014‒03‒15
thirteen papers chosen by
Joseph Marchand
University of Alberta

  1. The Economics of Work Schedules under the New Hours and Employment Taxes By Casey B. Mulligan
  2. The Magic of the New: How Job Changes Affect Job Satisfaction By Adrian Chadi; Clemens Hetschko
  3. Self-Managed Working Time and Employee Effort: Microeconometric Evidence By Michael Beckmann; Thomas Cornelissen
  4. Home Computers and Married Women's Labor Supply By Alexander C. Lembcke
  5. From giving birth to paid labor: the effects of adult education for prime-aged mothers By Bergemann, Annette; van den Berg, Gerard J.
  6. Circumstantial risk: Impact of future tax evasion and labor supply opportunities on risk exposure By Doerrenberg, Philipp; Duncan, Denvil; Zeppenfeld, Christopher
  7. Aggregate Costs of Gender Gaps in the Labor Market: A Quantitative Estimate By Marc Teignier; David Cuberes
  8. Job Search and the Age-Inequality Profile By Petra Marotzke
  9. Heterogeneous Paths Through College: Detailed Patterns and Relationships with Graduation and Earnings By Rodney Andrews; Jing Li; Michael F. Lovenheim
  10. Does it pay to be a doctor in France? By Samson, Anne-Laure; Dormont, Brigitte
  11. The Impact of Mandatory Entitlement to Paid Leave on Employment in the UK By Alexander C. Lembcke
  12. Particulate Pollution and the Productivity of Pear Packers By Tom Chang; Joshua Graff Zivin; Tal Gross; Matthew Neidell
  13. Equalizing Superstars: The Internet and the Democratization of Education By Daron Acemoglu; David Laibson; John A. List

  1. By: Casey B. Mulligan
    Abstract: Hours, employment, and earnings taxes are economically distinct, and all three are either introduced or expanded by the Affordable Care Act beginning in 2014. The tax wedges push some workers to work more hours per week (for the weeks that they are on a payroll), and others to work less, with an average weekly hours effect that tends to be small and may be in either direction. A conservative estimate of the law’s average employment rate impact is negative two or three percent. The ACA’s tax wedges and ultimately its behavioral effects vary substantially across groups, with the elderly experiencing hardly any new disincentive and unmarried household heads experiencing tax wedges that are about twice the average. My estimates suggest that 3-4 percent of the workforce will work less than the legislated 30-hour threshold solely to avoid the implicit and explicit full-time employment taxes.
    JEL: E24 I13 J22
    Date: 2014–02
  2. By: Adrian Chadi (Institute for Labour Law and Industrial Relations in the EU, University of Trier); Clemens Hetschko (School of Business and Economics, Freie Universitaet Berlin)
    Abstract: We investigate a crucial event for job satisfaction: changing the workplace. For representative German panel data, we show that the reason why the previous employment ended is strongly linked to the satisfaction with the new job. When workers initiate a change of employer, they experience relatively high job satisfaction, though only in the short-term. To test causality, we exploit plant closure as exogenous trigger of job switching and find no causal effect of job changes on job satisfaction. Our findings concern research on workers' well-being as well as labor market and human resource policies.
    Keywords: job satisfaction, job changes, new job, honeymoon-hangover effect, plant closure
    JEL: I31 J28 J63 M50
    Date: 2014–05
  3. By: Michael Beckmann; Thomas Cornelissen
    Abstract: Based on German individual-level panel data, this paper empirically examines the impact of self-managed working time (SMWT) on employee effort. Theoretically, workers may respond positively or negatively to having control over their own working hours, depending on whether SMWT increases work morale, induces reciprocal work intensification, or encourages employee shirking. We find that SMWT employees exert higher effort levels than employees with fixed working hours, but after accounting for observed and unobserved characteristics and for endogeneity, there remains only a modest positive effect. This effect is mainly driven by employees who have a strong work ethic, suggesting that intrinsic motivation is complementary to SMWT. Moreover, reciprocal work intensification does not seem to be an important channel of providing extra effort. Finally, we find no SMWT effect among women with children in need of parental care indicating that these workers primarily choose SMWT to accommodate family obligations.
    Keywords: Self-managed working time, employee effort, reciprocity, work ethic, intrinsic motivation, family obligations, complementarity
    JEL: J24 J81 M50
    Date: 2014
  4. By: Alexander C. Lembcke
    Abstract: I consider how the availability of a personal computer at home changed employment for married women. I develop a theoretical model that motivates the empirical specifications. Using data from the U.S. CPS from 1984 to 2003, I find that employment is 1.5 to 7 percentage points higher for women in households with a computer. The model predicts that the increase in employment is driven by higher wages. I find having a computer at home is associated with higher wages, and employment in more computer intensive occupations, which is consistent with the model. Decomposing the changes by educational attainment shows that both women with low levels of education (high school diploma or less) and women with the highest levels of education (Master's degree or more) have high returns from home computers
    Keywords: Married womens labor supply, computer skills and labor supply, US CPS
    JEL: J24 J22
    Date: 2014–03
  5. By: Bergemann, Annette (Department of Economics, Mannheim University); van den Berg, Gerard J. (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: Women without work after childbirth are at risk of losing their connection to the labor market. However, they may participate in adult education programs. We analyze the effect of this on the duration to work and on the wage rate, by applying conditional difference-in-differences approaches. We use Swedish matched longitudinal register data sets covering the full population. The Swedish adult education program is unprecedented in its size, and enrollment is universally available at virtually no cost. We focus on low-skilled women who have recently given birth. We take account of program accessibility, selection issues, course heterogeneity, the income received during adult education, parental leave, and child care fees. Adult education shows positive effects for the unemployed with respect to both the employment probability and wages. To explain the actual program participation rate, we model the enrollment decision from the mothers´ point of view, using the estimates to calibrate a job search model. We conclude that non-pecuniary factors cause mothers non to enter adult education.
    Keywords: Evaluation of adult education; job search model; female labor supply; wages; participation; unemployment; schooling; conditional difference-in-differences
    JEL: C14 H43 J24 J64 J68
    Date: 2014–02–25
  6. By: Doerrenberg, Philipp; Duncan, Denvil; Zeppenfeld, Christopher
    Abstract: This paper examines whether risk-taking in a lottery depends on the opportunity to respond to the lottery outcome through additional labor effort and/or tax evasion. Previous empirical attempts to answer this question face identification issues due to self selection into jobs that facilitate tax evasion and labor effort exibility. We address these identification issues using a laboratory experiment (N = 180). Subjects have the opportunity to invest earned income in a lottery and, depending on randomly assigned treatment states, have the opportunity to respond to the lottery outcome through evasion and/or extra labor effort. We find strong evidence that ex-post access to labor opportunities reduces ex-ante risk willingness while access to tax evasion has no effect on risk behavior. We discuss possible explanations for this result based on the existing literature. --
    Keywords: Tax Evasion,Labor Supply,Risk Behavior,Lab Experiment
    JEL: G11 H21 H24 H26 J22
    Date: 2014
  7. By: Marc Teignier (Facultat d'Economia i Empresa; Universitat de Barcelona (UB)); David Cuberes (University of Sheffield)
    Abstract: This paper examines the quantitative effects of gender gaps in entrepreneurship and labor force participation on aggregate productivity and income per capita. We simulate an occupational choice model with heterogeneous agents in entrepreneurial ability, where agents choose to be workers, self-employed or employers. The model assumes that men and women have the same talent distribution, but we impose several frictions on women's opportunities and pay in the labor market. In particular, we restrict the fraction of women participating in the labor market. Moreover, we limit the number of women who can work as employers or as self-employed and, finally, women who become workers receive a lower wage. Our model shows that gender gaps in entrepreneurship and in female workers' pay affect aggregate productivity negatively, while gender gaps in labor force participation reduce income per capita. Specifically, if all women are excluded from entrepreneurship, average output per worker drops by almost 12% because the average talent of entrepreneurs falls down, while if all women are excluded from the labor force income per capita is reduced by almost 40%. In the cross-country analysis, we find that gender gaps and their implied income losses differ importantly across geographical regions, with a total income loss of 27% in Middle East and North Africa and a 10% loss in Europe.
    Keywords: Span of control, Aggregate productivity, Entrepreneurship talent, Gender inequality
    JEL: E2 J21 J24 O40
    Date: 2014
  8. By: Petra Marotzke (Department of Economics, University of Konstanz, Germany)
    Abstract: In line with earlier literature, I document a U-shaped relationship between age and wage dispersion in the U.S.. To explain this outcome, I consider a life-cycle model of labor market search with strategic wage bargaining, heterogeneous firm-worker matches, and endogenous search effort. Three factors shape the age-inequality profile of wages in the model economy: the time until retirement, match heterogeneity, and the workers’ bargaining power. Young workers switch employers often and are gradually matched to better jobs, which leads to the initial reduction in the variance of log wages. Middle-aged and older workers switch employers less frequently and have a longer search history. As workers are differently successful in the labor market, the variance of match productivities rises in the second half of the working life. The calibrated model captures the U-shape of the age-inequality profile of wages in conjunction with the hump-shaped age profile of average wages, as well as employment-to-employment transitions that decrease with age.
    Keywords: Search Frictions, Wage Dispersion, Life Cycle, Wage Bargaining
    JEL: J31 J41 J64
    Date: 2014–03–04
  9. By: Rodney Andrews; Jing Li; Michael F. Lovenheim
    Abstract: A considerable fraction of college students and bachelor's degree recipients enroll in multiple postsecondary institutions. Despite this fact, there is scant research that examines the nature of the paths – both the number and types of institutions – that students take to obtain a bachelor's degree or through the higher education system more generally. We also know little about enrollment in multiple institutions of varying quality relates to postgraduate life outcomes. We use a unique panel data set from Texas that allows us to both examine in detail the paths that students take towards a bachelor's degree and estimate how multiple institution enrollment is related to degree completion and subsequent earnings. We show that the paths to a bachelor's degree are diverse and that earnings and BA receipt vary systematically with these paths. Our results call attention to the importance of developing a more complete understanding of why students transfer and what causal role transferring has on the returns to postsecondary educational investment.
    JEL: I21 I23 J31
    Date: 2014–02
  10. By: Samson, Anne-Laure; Dormont, Brigitte
    Abstract: This paper examines whether general practitionersí(GPsí) earnings are high enough to keep this profession attractive. We set up two samples, with longitudinal data relative to GPs and executives. Those two professions have similar abilities but GPs have chosen a longer education. To measure if they get returns that compensate for their higher investment, we study their career proÖles and construct a measure of wealth for each individual that takes into account all earnings accumulated from the age of 24 (including zero income years when they start their career after 24). The stochastic dominance analysis shows that wealth distributions do not differ significantly between male GPs and executives but that GP wealth distribution dominates executive wealth distribution at the first order for women. Hence, while there is no monetary advantage or disadvantage to be a GP for men, it is more profitable for women to be a self-employed GP than a salaried executive.
    Keywords: GPs; executive; self-employed; earning profile; longitudinal data; stochastic dominance;
    JEL: D31 J31 I11 C23
    Date: 2014–02
  11. By: Alexander C. Lembcke
    Abstract: I evaluate the impact of the UK Working Time Regulations 1998, which introduced mandatory paid holiday entitlement. The regulation gave (nearly) all workers the right to a minimum of 4 weeks of paid holiday per a year. With constant weekly pay this change amounts effectively to an increase in the real hourly wage of about 8.5% for someone going from 0 to 4 weeks paid holiday per year, which should lead to adjustments in employment. For employees I use complementary log-log regression to account for right-censoring of employment spells. I find no increase in the hazard to exit employment within a year after treatment. Adjustments in wages cannot explain this result as they are increasing for the treated groups relative to the control. I also evaluate the long run trend in aggregate employment, using the predicted treatment probabilities in a difference-in-difference framework. Here I find a small and statistically significant decrease in employment. This effect is driven by a trend reversal in employment, coinciding with the treatment.
    Keywords: UK Working Time Regulation, Employment and labour regulation, UK LFS
    JEL: J08 J23 J45
    Date: 2014–03
  12. By: Tom Chang; Joshua Graff Zivin; Tal Gross; Matthew Neidell
    Abstract: We study the effect of outdoor air pollution on the productivity of indoor workers at a pear-packing factory. We focus on fine particulate matter (PM2.5), a harmful pollutant that easily penetrates indoor settings. We find that an increase in PM2.5 outdoors leads to a statistically and economically significant decrease in packing speeds inside the factory, with effects arising at levels well below current air quality standards. In contrast, we find little effect of PM2.5 on hours worked or the decision to work, and little effect of pollutants that do not travel indoors, such as ozone. This effect of outdoor pollution on the productivity of indoor workers suggests a thus far overlooked consequence of pollution. Back-of-the-envelope calculations suggest that nationwide reductions in PM2.5 from 1999 to 2008 generated $19.5 billion in labor cost savings, which is roughly one-third of the total welfare benefits associated with this change.
    JEL: J22 J24 J43 Q51 Q53
    Date: 2014–02
  13. By: Daron Acemoglu; David Laibson; John A. List
    Abstract: Internet-based educational resources are proliferating rapidly. One concern associated with these (potentially transformative) technological changes is that they will be disequalizing – as many technologies of the last several decades have been – creating superstar teachers and a winner-take-all education system. These important concerns notwithstanding, we contend that a major impact of web-based educational technologies will be the democratization of education: educational resources will be more equally distributed, and lower-skilled teachers will benefit. At the root of our results is the observation that skilled lecturers can only exploit their comparative advantage if other teachers complement those lectures with face-to-face instruction. This complementarity will increase the quantity and quality of face-to-face teaching services, potentially increasing the marginal product and wages of lower-skill teachers.
    JEL: A20 I20 I24 O33
    Date: 2014–01

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