nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2014‒05‒09
seven papers chosen by
Joseph Marchand
University of Alberta

  1. Has the Canadian Labour Market Polarized? By Green, David A.; Sand, Benjamin
  2. Labor Market Conditions, Skill Requirements and Education Mismatch By Summerfield, Fraser
  3. Reassessing the Trends in the Relative Supply of College-Equivalent Workers in the U.S. : A Selection-Correction Approach By Zeynep Elitas; Hakan Ercan; Semih Tumen
  4. Husband’s Unemployment and Wife’s Labor Supply – The Added Worker Effect across Europe By Julia Bredtmann; Sebastian Otten; Christian Rulff
  5. Looking back in anger? Retirement and unemployment scarring By Hetschko, Clemens; Knabe, Andreas; Schöb, Ronnie
  6. Job insecurity, employability, and health: An analysis for Germany across generations By Otterbach, Steffen; Sousa-Poza, Alfonso
  7. Explaining Differentials in Employment and Wages Between Young Adults with and Without Disabilities. By David R. Mann; David C. Wittenburg

  1. By: Green, David A.; Sand, Benjamin
    Abstract: We use Census and Labour Force Survey (LFS) data for the period from 1971 to 2012 to investigate whether the Canadian wage and employment structures have polarized, that is, whether wages and employment have grown more in high and low than in middle paying occupations. We find that there has been faster growth in employment in both high and low paying occupations than those in the middle since 1981. However, up to 2005, the wage pattern reflects a simple increase in inequality with greater growth in high paid than middle paid occupations and greater growth in middle than low paid occupations. Since 2005, there has been some polarization but this is present only in some parts of the country and seems to be related more to the resource boom than technological change. We present results for the US to provide a benchmark. The Canadian patterns fit with those in the US and other countries apart from the 1990s when the US undergoes wage polarization not seen elsewhere. We argue that the Canadian data do not fit with the standard technological change model of polarization developed for the U.S.
    Keywords: polarization, inequality, wage structure
    JEL: J31 J20
    Date: 2014–04–28
  2. By: Summerfield, Fraser
    Abstract: This paper shows that changes in the skill requirements of jobs are one way by which economic downturns affect job match quality. In doing so this paper makes two contributions to the literature. The first contribution is to document a stylized fact about the cyclicality of skill requirements (tasks) for newly formed jobs. Relating local unemployment rates in Canadian data, to skill requirements generated from the Occupational Information Network (O*NET) database, I show that the demand for manual skill requirements is countercyclical. This stylized fact shown to be consistent with the predictions of a job search models with heterogeneous workers and vacancies. In this framework, firms increase the share manual job vacancies during downturns because they are less costly to post and fill. The second contribution is to show that the cyclicality of skill requirements, rather than economic conditions themselves, contribute to the incidence of overqualification. Estimates using various measures of overqualification confirm that changes in the skill requirements of newly formed jobs can account for much of the relationship between labor market conditions and job match quality. This empirical finding is also consistent with the model, where the share of overqualified workers varies with economic conditions partially because of corresponding changes in the type of job vacancies.
    Keywords: Mismatch, Job Search, Overeducation, Skill Demand, Business Cycles
    JEL: E24 E32 J24 J63 J64
    Date: 2014–04–28
  3. By: Zeynep Elitas; Hakan Ercan; Semih Tumen
    Abstract: Among better-educated employed men, the fraction of full-time full-year (FTFY) workers is quite high and stable|around 90 percent|over time in the U.S. Among those with lower education levels, however, this fraction is much lower and considerably more volatile, moving within the range of 62{82 percent for high school dropouts and 75{88 percent for high school graduates. These observations suggest that the composition of unobserved skills may be subject to sharp movements within low-educated employed workers, while the scale of these movements is potentially much smaller within high-educated ones. The standard college-premium framework accounts for the observed shifts between education categories, but it cannot account for unobserved compositional changes within education categories. Our paper uses Heckman's two-step estimator on repeated Current Population Survey cross sections to calculate a relative supply series that corrects for unobserved compositional shifts due to selection into and out of the FTFY status. We find that the well-documented deceleration in the growth rate of relative supply of college- equivalent workers after mid-1980s becomes even more pronounced once we correct for selectivity. This casts further doubt on the relevance of the plain skill-biased technical change (SBTC) hypothesis. We conclude that what happens to the within-group unobserved skill composition for low-educated groups is critical for fully understanding the trends in the relative supply of college workers in the United States. We provide several interpretations to our selection-corrected estimates.
    Keywords: Wage inequality; self selection; relative supply index; college premium; SBTC; FTFY
    JEL: J23 J24 J31 I24 O33
    Date: 2014
  4. By: Julia Bredtmann (Department of Economics and Business, Aarhus University, Denmark); Sebastian Otten (Ruhr University Bochum); Christian Rulff (RWI Essen)
    Abstract: This paper investigates the responsiveness of women’s labor supply to their husband’s loss of employment – the so-called added worker effect. While previous empirical literature on this topic mainly concentrates on a single country, we take an explicit internationally comparative perspective and analyze whether the added worker effect varies across the European countries. In doing so, we use longitudinal data from the European Union Statistics on Income and Living Conditions (EU-SILC) covering the period 2004 to 2011. For our pooled sample of 28 European countries, we find evidence for the existence of an added worker effect, both at the extensive and at the intensive margin of labor supply. Women whose husbands become unemployed have a higher probability of entering the labor market and changing from part-time to full-time employment than women whose husbands remain employed. However, our results further reveal that the added worker effect varies over both the business cycle and the different welfare regimes within Europe.
    Keywords: added worker effect, labor supply, unemployment, cross-country analysis
    JEL: J22 J64 J82
    Date: 2014–05–08
  5. By: Hetschko, Clemens; Knabe, Andreas; Schöb, Ronnie
    Abstract: Previous studies find that past unemployment reduces life satisfaction even after reemployment for non-monetary reasons (unemployment scarring). It is not clear, however, whether this scarring is only caused by employment-related factors, such as worsened working conditions, or increased future uncertainty as regards income and employment. Using German panel data, we identify non-employment-related scarring by examining the transition of unemployed people to retirement as a life event after which employment-related scarring does not matter anymore. We find evidence for non-employment-related non-monetary unemployment scarring for people who were unemployed for the first time in their life directly prior to retirement, but not for people with earlier unemployment experiences. --
    Keywords: unemployment scarring,life satisfaction,retirement
    JEL: I31 J26
    Date: 2014
  6. By: Otterbach, Steffen; Sousa-Poza, Alfonso
    Abstract: In this paper, we use 12 waves of the German Socio-Economic Panel to examine the relationship between job insecurity, employability and health-related well-being. Our results indicate that being unemployed has a strong negative effect on life satisfaction and health. They also, however, highlight the fact that this effect is most prominent among individuals over the age of 40. A second observation is that job insecurity is also associated with lower levels of life satisfaction and health, and this association is quite strong. This negative effect of job insecurity is, in many cases, exacerbated by poor employability. --
    Keywords: job insecurity,employment,employability,well-being,health,Germany
    JEL: J21 J22
    Date: 2014
  7. By: David R. Mann; David C. Wittenburg
    Keywords: Employment, Wages, Young Adults, Disabilities, Labor, Working
    JEL: I J
    Date: 2014–04–30

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