nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2014‒05‒17
thirteen papers chosen by
Joseph Marchand
University of Alberta

  1. The Effect of Public Insurance Coverage for Childless Adults on Labor Supply By Laura Dague; Thomas DeLeire; Lindsey Leininger
  2. Job Displacement and the Duration of Joblessness: The Role of Spatial Mismatch By Fredrik Andersson; John C. Haltiwanger; Mark J. Kutzbach; Henry O. Pollakowski; Daniel H. Weinberg
  3. Understanding Earnings Dynamics: Identifying and Estimating the Changing Roles of Unobserved Ability, Permanent and Transitory Shocks By Lance Lochner; Youngki Shin
  4. The Role of Publication Selection Bias in Estimates of the Value of a Statistical Life By W. Kip Viscusi
  5. Atypical Employment and Health: A Meta-Analysis By Alice Sanwald; Engelbert Theurl
  6. The hidden winners of renewable energy promotion : insights into sector-specific wage differentials By Antoni, Manfred; Janser, Markus; Lehmer, Florian
  7. Minimum wages and firm employment: evidence from China By Huang, Yi; Loungani, Prakash; Wang, Gewei
  8. Firms and the Economics of Skilled Immigration By Sari Pekkala Kerr; William R. Kerr; William F. Lincoln
  9. Growth of the urban shadow, spatial distribution of economic activities and commuting by workers in rural and Urban India By Ajay Sharma; S Chandrasekhar
  10. Skill Mismatch and Migration in Egypt and Tunisia By Anda David; Christophe Nordman
  11. Discrimination and the Effects of Drug Testing on Black Employment By Abigail K. Wozniak
  12. The Price of Prejudice By Morten Hedegaard; Jean-Robert Tyran
  13. Stereotypes By Pedro Bordalo; Nicola Gennaioli; Andrei Shleifer

  1. By: Laura Dague; Thomas DeLeire; Lindsey Leininger
    Abstract: This study provides plausibly causal estimates of the effect of public insurance coverage on the employment of non-elderly, non-disabled adults without dependent children (“childless adults”). We use regression discontinuity and propensity score matching difference-in-differences methods to take advantage of the sudden imposition of an enrollment cap, comparing the labor supply of enrollees to eligible applicants on a waitlist. We find enrollment into public insurance leads to sizable and statistically meaningful reductions in employment up to at least 9 quarters later, with an estimated size of from 2 to 10 percentage points depending upon the model used.
    JEL: I13 J22
    Date: 2014–05
  2. By: Fredrik Andersson; John C. Haltiwanger; Mark J. Kutzbach; Henry O. Pollakowski; Daniel H. Weinberg
    Abstract: This paper presents a new approach to the measurement of the effects of spatial mismatch that takes advantage of matched employer-employee administrative data integrated with a person-specific job accessibility measure, as well as demographic and neighborhood characteristics. The basic hypothesis is that if spatial mismatch is present, then improved accessibility to appropriate jobs should shorten the duration of unemployment. We focus on lower-income workers with strong labor force attachment searching for employment after being subject to a mass layoff – thereby focusing on a group of job searchers that are plausibly searching for exogenous reasons. We construct person-specific measures of job accessibility based upon an empirical model of transport modal choice and network travel-time data, giving variation both across neighborhoods in nine metropolitan areas, as well as across neighbors. Our results support the spatial mismatch hypothesis. We find that better job accessibility significantly decreases the duration of joblessness among lower-paid displaced workers. Blacks, females, and older workers are more sensitive to job accessibility than other subpopulations.
    JEL: J64 R23 R41
    Date: 2014–04
  3. By: Lance Lochner; Youngki Shin
    Abstract: We consider a general framework to study the evolution of wage and earnings residuals that incorporates features highlighted by two influential but distinct literatures in economics: (i) unobserved skills with changing non-linear pricing functions and (ii) idiosyncratic shocks with both permanent and transitory components. We first provide nonparametric identification conditions for the distribution of unobserved skills, all unobserved skill pricing functions, and (nearly) all distributions for both permanent and MA(q) transitory shocks. We then discuss identification and estimation using a moment-based approach, restricting unobserved skill pricing functions to be polynomials. Using data on log earnings for men ages 30-59 in the PSID, we estimate the evolution of unobserved skill pricing functions and the distributions of unobserved skills, transitory, and permanent shocks from 1970 to 2008. We highlight five main findings: (i) The returns to unobserved skill rose over the 1970s and early 1980s, fell over the late 1980s and early 1990s, and then remained quite stable through the end of our sample period. Since the mid-1990s, we observe some evidence of polarization: the returns to unobserved skill declined at the bottom of the distribution while they remained relatively constant over the top half. (ii) The variance of unobserved skill changed very little across most cohorts in our sample (those born between 1925 and 1955). (iii) The variance of transitory shocks jumped up considerably in the early 1980s but shows little long-run trend otherwise over the more than thirty year period we study. (iv) The variance of permanent shocks declined very slightly over the 1970s, then rose systematically through the end of our sample by 15 to 20 log points. The increase in this variance over the 1980s and 1990s was strongest for workers with low unobserved ability. (v) In most years, the distribution of unobserved skill pricing is positively skewed, while the distributions of permanent and (especially) transitory shocks are negatively skewed.
    JEL: C14 C23 J31
    Date: 2014–04
  4. By: W. Kip Viscusi
    Abstract: Meta-regression estimates of the value of a statistical life (VSL) controlling for publication selection bias yield bias-corrected estimates of VSL that are higher for labor market studies using the more recent Census of Fatal Occupational Injuries (CFOI) data. These results are borne out by the findings for four meta-analysis data sets and different formulations of the variable used to capture publication bias effects. Meta-regression estimates for a large sample of VSL estimates consisting only of results of labor market studies using the CFOI fatality data indicate publication selection bias effects that are not statistically significant in either fixed effects or random effects models with clustered standard errors. The confidence intervals of the publication bias-corrected estimates of the value of a statistical life sometimes include the sample mean estimates and always include the values that are currently used by government agencies.
    JEL: I18 J17 J31 K32
    Date: 2014–05
  5. By: Alice Sanwald; Engelbert Theurl
    Abstract: In this meta-analysis we provide new quantitative evidence on the relationship between the characteristics of working contracts and worker's health. We examine 52 studies covering 26 countries in the time period 1984 - 2010 with a combined sample size of 192. We apply a random effects model using odds ratios and their 95\% confidence intervals as measures for the effect size. We distinguish between six types of employment contracts with decreasing security levels (fixed-term, temporary, casual, on-call, daily, no formal contract) and classify the health outcomes into five subgroups (sickness absence, occupational injuries, health-related behavior, mental health and physical health). Furthermore, we control for selected dimensions of the socioeconomic environment of the studies, e.g. the unemployment rate and GDP growth rate. Summary findings show a higher risk of occupational injuries for atypical employees compared to the reference group. Atypical employment increases complaints about mental and physical health and has a negative impact on health-related behavior. Sickness absence works in the opposite direction and permanent employees are more likely to be absent from work. The heterogeneity of the effect sizes between different contracts of atypical employment is low. Effect sizes are country specific and depend on the health outcome indicators. The macroeconomic surrounding - unemployment rate and GDP growth rate - don't cause variation in study results. The 'healthy worker effect' may lead to an overestimation of the impact of workers' atypical employment contract on the health status. More research work which explicitly focuses on the problems of endogeneity, reverse causality and the selection bias is necessary. Furthermore, additional control groups and the employment biography of workers have to be taken into account.
    Keywords: Meta-Analysis, Atypical Employment, Health Outcomes, Employment Contracts
    JEL: I1 J3 J5
    Date: 2014–05
  6. By: Antoni, Manfred (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Janser, Markus (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Lehmer, Florian (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "In light of Germany´s transition approaches towards a sustainable energy system this paper examines differences of employment structure and wage differentials between renewable energy establishments and their sector peers. To do so, we have developed a novel data set by linking company-level information from the German Renewable Energy Federation with establishment-level data of the IAB Establishment History Panel. According to our descriptive evidence, there are significant differences in wages and in several other characteristics. Looking at the top-four renewable energy sectors, our estimates show that human capital and other establishment- level characteristics mostly explain the wage differential among manufacturers and energy providers. However, we find a persistent 'renewable energy wage premium' of more than ten percent in the construction installation activities and the architectural and engineering services. We interpret this premium as a positive indirect effect of the promotion of renewable energies for the benefit of employees in renewable energy establishments within these two sectors." (Author's abstract, IAB-Doku) ((en))
    JEL: J31 P48 Q42 Q52 C81
    Date: 2014–05–05
  7. By: Huang, Yi (The Graduate Institute, Geneva); Loungani, Prakash (International Monetary Fund); Wang, Gewei (The Chinese University of Hong Kong)
    Abstract: This paper studies how minimum wage policies affect firm employment in China using a unique county level minimum wage data set matched to disaggregated firm survey data. We investigate both the effect of imposing a minimum wage, and the effect of the policies that tightened enforcement in 2004. We find that the average effect of minimum wage changes is modest and positive, and that there is a detectable effect after enforcement reform. Firms have heterogeneous responses to minimum wage changes which can be accounted for by differences in their wage levels and profit margins: firms with high wages or large profit margin increase employment, while those with low wages or small profit margin downsize. The increase in enforcement of China’s minimum wage in 2004 has since amplified this heterogeneity, which implies that labor regulation may reduce the monopsony rent of firms. Our results provide evidence for the theoretical predictions of the positive minimum wage employment relationship in a monopolistic labor market.
    Keywords: human capital; labor; manufacturing; industry; trade; wages
    JEL: F10 F14 J24 J31 O14 O14
    Date: 2014–04–01
  8. By: Sari Pekkala Kerr; William R. Kerr; William F. Lincoln
    Abstract: Firms play a central role in the selection, sponsorship, and employment of skilled immigrants entering the United States for work through programs like the H-1B visa. This role has not been widely recognized in the literature, and the data to better understand it have only recently become available. This chapter discusses the evidence that has been assembled to date in understanding the impact of high skilled immigration from the perspective of the firm and the open areas that call for more research. Since much of the U.S. immigration process for skilled workers rests in the hands of employer firms, a stronger understanding of these implications is essential for future policy analysis, particularly for issues relating to fostering innovation.
    JEL: F15 F22 F23 J15 J31 J44 L14 L26 O31 O32 O33
    Date: 2014–04
  9. By: Ajay Sharma (Indira Gandhi Institute of Development Research); S Chandrasekhar (Indira Gandhi Institute of Development Research)
    Abstract: Unlike migration, scant attention has been paid to the phenomenon of commuting by workers in developing countries. This paper fills this gap by using a nationally representative data set from India to analyze factors that affect the decision of workers to commute across rural and urban areas daily. Our results suggest that regions with large peripheral urban areas or concentration of secondary sector jobs are more likely to have commuting workers. Regional rural and urban unemployment rates and rural-urban wage differentials are important push and pull factors in the decision to commute.
    Keywords: Commuting, Peri-urban areas, Spatial distribution of economic activities, Urbanization, Rural-urban interaction, India
    JEL: R11 R23 J21
    Date: 2014–04
  10. By: Anda David (PSL, Université Paris Dauphine, LEDa, IRD, UMR DIAL); Christophe Nordman (IRD, UMR 225 DIAL, PSL, Université Paris Dauphine, LEDa)
    Abstract: (english) The objective of this paper is to shed light on the issue of skill mismatch in the context of return migration in Egypt and Tunisia. Using data on both return and potential migrants in Egypt and Tunisia, we analyze the skills that migrants acquire before and during migration and the way these skills are used upon return. We find evidence of skill mismatch, especially in Tunisia. The undereducation phenomenon is more prevalent among return migrants, indicating that they make up for their lower education using their migration experience. Finally, we estimate the determinants of skill mismatch on the Egyptian and Tunisian labour markets and find a significant negative effect of return migration on the probability of being undereducated. _________________________________ (français) L'objectif de cet article est d’apporter un éclairage sur la question de l'inadéquation des qualifications dans le cadre de la migration de retour en Egypte et en Tunisie. En utilisant à la fois des données sur les migrants de retour et sur les migrants potentiels en Egypte et en Tunisie, nous analysons les qualifications que les migrants acquièrent avant et pendant la période de migration et la façon dont ces compétences sont utilisées à leur retour. Nos résultats confirment l’existence d’un fort degré d'inadéquation des qualifications, en particulier en Tunisie. Le phénomène de la sous-éducation est plus présent pour les migrants de retour, indiquant qu'ils compensent leur faible niveau d'éducation en utilisant leur expérience migratoire. Enfin, nous examinons les déterminants de l'inadéquation des qualifications sur les marchés du travail égyptien et tunisien et trouvons en effet une corrélation négative et significative de la migration de retour sur la probabilité d'être sous-éduqué.
    Keywords: Return migration, skill mismatch, labor market, education, Tunisia and Egypt, Migration de retour, inadéquation des qualifications, marché du travail, éducation, Tunisie et Egypte.
    JEL: J24 F22 O15 I25
    Date: 2014–04
  11. By: Abigail K. Wozniak
    Abstract: Nearly half of U.S. employers test job applicants and workers for drugs. A common assumption is that the rise of drug testing must have had negative consequences for black employment. However, the rise of employer drug testing may have benefited African-Americans by enabling non-using blacks to prove their status to employers. I use variation in the timing and nature of drug testing regulation to identify the impacts of testing on black hiring. Black employment in the testing sector is suppressed in the absence of testing, a finding which is consistent with ex ante discrimination on the basis of drug use perceptions. Adoption of pro-testing legislation increases black employment in the testing sector by 7-30% and relative wages by 1.4-13.0%, with the largest shifts among low skilled black men. Results further suggest that employers substitute white women for blacks in the absence of testing.
    JEL: J24 J7 J8
    Date: 2014–05
  12. By: Morten Hedegaard (Department of Economics, Copenhagen University); Jean-Robert Tyran (Department of Economics, Copenhagen University)
    Abstract: We present a new type of field experiment to investigate ethnic prejudice in the workplace. Our design allows us to study how potential discriminators respond to changes in the cost of discrimination. We find that ethnic discrimination is common but remarkably responsive to the "price of prejudice", i.e. to the opportunity cost of choosing a less productive worker on ethnic grounds. In addition, we find that the standard theory of statistical discrimination fails to explain observed choices, and that taking ethnic prejudice into account helps to predict the incidence of discrimination.
    Keywords: Field experiment, discrimination, labor market
    JEL: C93 J71
    Date: 2014–04–01
  13. By: Pedro Bordalo; Nicola Gennaioli; Andrei Shleifer
    Abstract: We present a model of stereotypes in which a decision maker assessing a group recalls only that group’s most representative or distinctive types relative to other groups. Because stereotypes highlight differences between groups, and neglect likely common types, they are especially inaccurate when groups are similar. In this case, stereotypes consist of unlikely, extreme types. When stereotypes are inaccurate, they exhibit a form of base rate neglect. They also imply a form of confirmation bias in light of new information: beliefs over-react to information that confirms the stereotype and ignore information that contradicts it. However, stereotypes can change – or rather, be replaced – if new information changes the group’s most distinctive trait. Applied to gender stereotypes, the model provides a unified account of disparate evidence regarding the gender gap in education and in labor markets.
    JEL: D01 D03 D83 D84
    Date: 2014–05

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