|
on Labor Markets - Supply, Demand, and Wages |
| By: | Addison, John T. (University of South Carolina); Teixeira, Paulino (University of Coimbra); Stephani, Jens (Institute for Employment Research (IAB), Nuremberg); Bellmann, Lutz (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | Using linked employer-employee data, this paper estimates the effect of collective bargaining coverage on wages over an interval of continuing decline in unionism. Unobserved firm and worker heterogeneity is dealt with using two establishment sub-samples, comprising collective bargaining joiners and never members on the one hand and collective bargaining leavers and always members on the other, each in combination with subsets of worker job stayers. The counterfactuals are then reversed for robustness checks. Joining a sectoral agreement is found always to produce higher wages, while exiting a sectoral agreement no longer produces wage losses if the transition is to a firm agreement. Leaving a firm agreement to non-coverage also leads to wage reductions, while joining one from non-coverage seems decreasingly favourable. The reverse counterfactuals yield correspondingly smaller estimates (in absolute value) of wage development than reported for the initial counterfactuals. Finally, although small, the union wage gap persists. |
| Keywords: | Germany, sectoral collective bargaining, firm-level agreements, wages, spell fixed-effects |
| JEL: | J31 J51 J53 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8257&r=lma |
| By: | Brown, Sarah (University of Sheffield); Gray, Daniel (University of Sheffield); McHardy, Jolian (University of Sheffield); Taylor, Karl (University of Sheffield) |
| Abstract: | We explore the relationship between employee trust of managers and workplace performance. We present a theoretical framework which serves to establish a link between employee trust and firm performance as well as to identify possible mechanisms through which the relationship may operate. We then analyse matched workplace and employee data in order to ascertain whether the average level of employee trust within the workplace influences workplace performance. We exploit the 2004 and 2011 Work Place and Employee Relations Surveys (WERS) to analyse the role of employee trust in influencing workplace performance in both pre and post recessionary periods. Our empirical findings support a positive relationship between three measures of workplace performance (financial performance, labour productivity and product or service quality) and employee trust at both points in time. We then exploit employee level data from the WERS to ascertain the determinants of employee trust as well as how trust is influenced by measures taken by employers to deal with the recent recession. Our findings suggest that restricting paid overtime and access to training potentially erode employee trust. In addition, we find that job or work reorganisation experienced at either the employee or organisation level are associated with lower employee trust. |
| Keywords: | employee trust, financial performance, labour productivity, product quality |
| JEL: | J20 J50 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8284&r=lma |
| By: | Kuhn, Peter J. (University of California, Santa Barbara); Shen, Kailing (Xiamen University) |
| Abstract: | We study urban Chinese employers' preferences between workers with and without a local residence permit (hukou) using callback information from an Internet job board serving private sector employers. We find that employers prefer migrant workers to locals who are identically matched to the job's requirements; these preferences are especially strong at low skill levels. We argue that migrants' higher work hours and effort help to account for employers' preferences, and present evidence that efficiency wage and intertemporal labor substitution effects might explain these hours/effort gaps. |
| Keywords: | temporary migration, China, hukou, undocumented migrants |
| JEL: | O15 R23 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8289&r=lma |
| By: | Huber, Martin; Lechner, Michael; Wunsch, Conny |
| Abstract: | This paper investigates the average effects of (firm-provided) workplace health promotion measures in form of the analysis of sickness absenteeism and health circles/courses on labour market outcomes of the firms’ employees. Exploiting linked employer-employee panel data that consist of rich survey-based and administrative information on firms, workers and regions, we apply a flexible propensity score matching approach that controls for selection on observables as well as on time-constant unobserved factors. While the effects of analysing sickness absenteeism appear to be rather limited, our results suggest that health circles/courses increase tenure and decrease the number of job changes across various age groups. A key finding is that health circles/courses strengthen the labour force attachment of elderly employees (51-60), implying potential cost savings for public transfer schemes such as unemployment or early retirement benefits. |
| Keywords: | Firm health policies, health circles, health courses, analysis of sickness absenteeism, matching |
| JEL: | I10 I19 J32 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2014:17&r=lma |
| By: | Löffler, Max; Peichl, Andreas; Siegloch, Sebastian |
| Abstract: | There is still considerable dispute about the magnitude of labor supply elasticities. While differences in micro and macro estimates are recently attributed to frictions and adjustment costs, we show that relatively low labor supply elasticities derived from microeconometric models can also be explained by modeling assumptions with respect to wages. Specifically, we estimate 3,456 structural labor supply models each representing a plausible combination of frequently made choices. While most model assumptions do not systematically affect labor supply elasticities, our analysis shows that the results are very sensitive to the treatment of wages. In particular, the often-made but highly restrictive independence assumption between preferences and wages is key. To overcome this restriction, we propose a flexible estimation strategy that nests commonly used models. We show that loosening the exogeneity assumption leads to labor supply elasticities that are much higher. -- |
| Keywords: | labor supply,elasticity,random utility models,wages |
| JEL: | C25 C52 H31 J22 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14040&r=lma |
| By: | Gindling, T. H. (University of Maryland, Baltimore County); Mossaad, Nadwa (University of Maryland, Baltimore County); Trejos, Juan Diego (University of Costa Rica) |
| Abstract: | In August 2010 the Costa Rican government implemented a comprehensive program to increase compliance with legal minimum wages, the Campaign for Minimum Wages. To evaluate the impact of the Campaign, we use a regression discontinuity approach, which compares what happened to workers who before the campaign had been earning below the minimum wage to those who before the Campaign had been earning above the minimum wage. We analyze a panel data set with information on workers from before the Campaign began (July 2010) and after the Campaign had been in operation for some time (July 2011). We find evidence that the Campaign led to an increase in compliance with minimum wage laws in Costa Rica; the mean earnings of those earning less than the minimum wage in 2010 increased by approximately 10% more than the earnings of those who had been earning more than the minimum wage. The Campaign led to the largest increases in the wages of women, younger workers and less-educated workers. We find no evidence that the Campaign had a negative impact on the employment of full-time workers whose wages were increased. We find some weak evidence that the Campaign had a negative impact on the employment of part-time private sector employees. Although increased inspections were mainly targeting minimum wage violations, we also observe an increase in compliance with a broader set of labor standards and a positive spillover effect relative to other violations of labor laws. |
| Keywords: | Latin America, labor code enforcement, minimum wages, employment, wages |
| JEL: | J3 J33 J38 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8253&r=lma |
| By: | Olivier Bargain (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS); Jinan Zeidan (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS) |
| Abstract: | We investigate the effect of height on earnings, occupational choices and a subjective measure of well-being among Indonesian men. We explore the extent to which height captures the effects of human capital endowments set before entry on the labor market. Cognitive skills, co-determined with stature early in life, do not explain much of the height earnings premium directly. Yet, human capital more broadly, including cognition, educational attainment and other factors related to parental investments and background characteristics, explains around half of the height premium and does so through occupational sorting. Indeed, taller workers tend to have more education, and educated workers tend to work in more lucrative occupations that require brain and social skills, not brawn. The unexplained share of the height earnings premium reflects other labor market advantages of taller workers, including psycho-social dimensions. We also find a height premium in happiness, half of which simply accounts for the educational and earnings advantages of taller workers. |
| Keywords: | height, cognitive skills, physical skills, childhood conditions, earnings, occupation, happiness |
| Date: | 2014–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1429&r=lma |
| By: | Gimpelson, Vladimir (CLMS, Higher School of Economics, Moscow); Kapeliushnikov, Rostislav (CLMS, Higher School of Economics, Moscow) |
| Abstract: | Economic growth in Russia in the first decade of this century almost doubled the country's GDP but was accompanied by substantial reallocation of labor to the unregulated sector while formal employment was on gradual decline. The paper overviews evolution of the Russian labour market during the period of 2000-10 and discusses most general implications of informality to employment and earnings as well as the associated political economy challenges and consequences. |
| Keywords: | informal labour market, employment, Russia |
| JEL: | J31 J40 P2 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8279&r=lma |
| By: | Bi, Sheng (Paris School of Economics); Langot, François (University of Le Mans) |
| Abstract: | We consider a labor market where the competitive search equilibrium is inefficient due to asymmetrical information. At the time when firms commit to specific hiring costs, workers hold private information on their intention of entering into retirement before the termination of the contract. When retirement is an event which occurs exogenously and information is complete, the long term employment relationship is preferred by the risk adverse workers. This implies that firms must implement a screening process when the information is asymmetric. We show that the optimal separating contract (an ascending wage profile) distorts the allocation of the workers who will retire later (the 'good' workers) in order to prevent the workers who will retire early (the 'bad' workers) from applying for these jobs. Secondly, we endogenize the retirement decision by considering two cases: an ex ante or ex post heterogeneity. In these two cases, we show that a separating equilibrium always exists, whereby good workers accept an ascending wage profile in order to make themselves differentiate from the 'bad' workers. These asymmetries in the information lead to an excess of retirement compared to the full information economy. Finally, in the case of ex post heterogeneity, we are able to show that the employment rate is unambiguously lower. |
| Keywords: | competitive search equilibrium, separating equilibrium, retirement |
| JEL: | D82 D86 J14 J26 J64 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8288&r=lma |
| By: | Cory Koedel (Department of Economics, University of Missouri-Columbia); Rajeev Darolia; Paco Martorell; Katie Wilson; Francisco Perez-Arce |
| Abstract: | This paper reports results from a resume-based field experiment designed to examine employer preferences for job applicants who attended for-profit colleges. For-profit colleges have seen sharp increases in enrollment in recent years despite alternatives such as public community colleges being much cheaper. We sent almost 9,000 fictitious resumes of young job applicants who recently completed their schooling to online job postings in six occupational categories and tracked employer callback rates. We find no evidence that employers prefer applicants with resumes listing a for-profit college relative to those whose resumes list either a community college or no college at all. |
| Keywords: | for profit college, 2-year college, returns to education, resume field experiment, sub-baccalaureate degree |
| JEL: | J24 H52 I28 |
| Date: | 2014–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1411&r=lma |
| By: | Bratsberg, Bernt (Ragnar Frisch Centre for Economic Research); Raaum, Oddbjørn (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research) |
| Abstract: | Using longitudinal data from the date of arrival, we study long‐term labor market and social insurance outcomes for all major immigrant cohorts to Norway since 1970. Immigrants from high-income countries performed as natives, while labor migrants from low‐income source countries had declining employment rates and increasing disability program participation over the lifecycle. Refugees and family migrants assimilated during the initial period upon arrival, but labor market convergence halted after a decade and was accompanied by rising social insurance rates. For the children of labor migrants of the 1970s, we uncover evidence of intergenerational assimilation in education, earnings and fertility. |
| Keywords: | migration, assimilation, social insurance |
| JEL: | F22 H55 J22 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8292&r=lma |
| By: | Ahmed Fayez Abdelgouad (Leuphana University Lueneburg, Germany) |
| Abstract: | Based on dual labor market theory, fixed-term contracts (FTCs) as an important feature of labor market flexibility were analyzed to test the following hypothesis: Firms in the manufacturing sector in Egypt use FTCs to adjust the level of employment to the profit maximizing level in case of demand changes. The hypothesis was not supported by the results of econometric analyses with a firm-level data set from the World Bank Enterprise Surveys. Probit and Tobit models were used to estimate the probability and intensity of different kinds of numerical labor market flexibility (FTCs utilization, hiring and firing) in Egypt. Empirical results revealed that demand changes had no effects on using FTCs in the manufacturing firms in Egypt. In addition, the results indicated that there was no effect on using hiring and firing instruments. |
| Keywords: | labor market flexibility, fixed-term contracts (FTCs), dual labor market |
| JEL: | J21 J41 J42 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:301&r=lma |
| By: | Alfred Stiassny (Department of Economics, Vienna University of Economics and Business); Christina Uhl (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | Does an increase of elderly employment cause a decline in youth employment? A simplified view of a demand driven economy would give a positive answer to this question. Econometric studies based on a single equation approach deliver little support for this belief. However, these studies typically suffer from identification problems to which no attention is paid in most cases. We therefore use a general equilibrium framework when trying to quantify these effects. Using yearly and quarterly Austrian labor and gdp data, we estimate two model variants by Bayesian methods: a) a standard equilibrium model where the degree of complementarity between old, young and primary labor is crucial for the sign and strength of the relevant effects and b) a simple, solely demand driven model which always leads to a crowding out of young through an increase in employment of the old. It turned out that the demand driven model is inferior in fitting the data compared to the standard model. Further, the degree of complementarity is estimated to be strong enough to lead to a small positive effect of elderly employment on youth employment. |
| Keywords: | Labor market, pension reform, equilibrium models, Bayesian estimation |
| JEL: | A10 C11 E10 J01 J26 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp178&r=lma |