nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2014‒07‒28
thirteen papers chosen by
Joseph Marchand
University of Alberta

  1. Do Large Modern Retailers Pay Premium Wages? By Brianna Cardiff-Hicks; Francine Lafontaine; Kathryn Shaw
  2. Do Hiring Credits Work in Recessions? Evidence from France By Cahuc, Pierre; Carcillo, Stéphane; Le Barbanchon, Thomas
  3. The Career Prospects of Overeducated Americans By Clark, Brian; Joubert, Clement; Maurel, Arnaud
  4. The Impact of Place-Based Employment Tax Credits on Local Labor: Evidence from Tax Data By Tong, Patricia; Zhou, Li
  5. Workplace Health Promotion and Labour Market Performance of Employees By Huber, Martin; Lechner, Michael; Wunsch, Conny
  6. Childcare Availability, Household Structure, and Maternal Employment By Asai, Yukiko; Kambayashi, Ryo; Tanaka, Atsuko; Yamaguchi, Shintaro
  7. Flexible Working and Couples' Coordination of Time Schedules By Bryan, Mark L.; Sevilla, Almudena
  8. The Wage Returns to On-the-Job Training: Evidence from Matched Employer-Employee Data By Almeida, Rita K.; de Faria, Marta Lince
  9. The Public Sector Wage Premium in Spain: Evidence from Longitudinal Administrative Data By Hospido, Laura; Moral-Benito, Enrique
  10. Life Cycle Earnings, Education Premiums and Internal Rates of Return By Bhuller, Manudeep; Mogstad, Magne; Salvanes, Kjell G.
  11. The Costs of Occupational Mobility: An Aggregate Analysis By Guido Matias Cortes; Giovanni Gallipoli
  12. The Gender Wage Gap: Does a Gender Gap in Reservation Wages Play a Part? By Caliendo, Marco; Lee, Wang-Sheng; Mahlstedt, Robert
  13. Migration, Education and the Gender Gap in Labour Force Participation By Ira N. Gang

  1. By: Brianna Cardiff-Hicks; Francine Lafontaine; Kathryn Shaw
    Abstract: With malls, franchise strips and big-box retailers increasingly dotting the landscape, there is concern that middle-class jobs in manufacturing in the U.S. are being replaced by minimum wage jobs in retail. Retail jobs have spread, while manufacturing jobs have shrunk in number. In this paper, we characterize the wages that have accompanied the growth in retail. We show that wage rates in the retail sector rise markedly with firm size and with establishment size. These increases are halved when we control for worker fixed effects, suggesting that there is sorting of better workers into larger firms. Also, higher ability workers get promoted to the position of manager, which is associated with higher pay. We conclude that the growth in modern retail, characterized by larger chains of larger establishments with more levels of hierarchy, is raising wage rates relative to traditional mom-and-pop retail stores.
    JEL: J00 J24 J3 L25 L81
    Date: 2014–07
  2. By: Cahuc, Pierre (Ecole Polytechnique, Paris); Carcillo, Stéphane (OECD); Le Barbanchon, Thomas (CREST)
    Abstract: This paper evaluates the impact of an unexpected temporary hiring credit targeted at workers paid below 1.6 times the minimum wage in firms with less than 10 employees in France from December 2008 to December 2009. Using rich administrative data covering all French firms, we find that the program has had a strong and rapid impact on employment. The net cost per job created for the government was around zero. The employment effect was stronger in areas where recruitment was easier. Although the hiring credit was not conditional on net job creation, it did not increase churning of workers. Nevertheless, we estimate that a credit conditional on net job creation above the employment growth threshold of -1%; would have maximized job creation, and created 1.8 times more jobs, at constant budget, provided that take-up had remained the same.
    Keywords: hiring credit, labor demand
    JEL: C31 C93 J6
    Date: 2014–07
  3. By: Clark, Brian (Duke University); Joubert, Clement (University of North Carolina, Chapel Hill); Maurel, Arnaud (Duke University)
    Abstract: In this paper we analyze career dynamics for the large share of U.S. workers who have more schooling than their peers in the same occupation. We use data from the NLSY79 combined with the CPS to analyze transitions into and out of overeducated employment, together with the corresponding effects on wages. Overeducation is a fairly persistent phenomenon at the aggregate and individual levels, with 66% of workers remaining overeducated after one year. Overeducation is not only more common, but also more persistent among blacks and low-AFQT individuals. Further, the hazard rate out of overeducation drops by about 60% during the first 5 years spent overeducated. However, the estimation of a mixed proportional hazard model suggests that this is attributable to selection on unobservables rather than true duration dependence. Finally, overeducation is associated with lower current as well as future wages, which points to the existence of scarring effects.
    Keywords: overeducation, mismatch
    JEL: J24 I21
    Date: 2014–07
  4. By: Tong, Patricia (US Department of the Treasury); Zhou, Li (University of Alberta, Department of Economics)
    Abstract: Using administrative tax data that contain information on firm credit take-up and employee residence, we examine the impact of the Empowerment Zone and Renewal Community employment tax credits on local labor. We find modest evidence that zone designation improves labor market outcomes among residents. However, when we specifically estimate the impact of the place-based employment tax credit and disentangle the impact based on where workers live and work, we find strong evidence that the employment tax credits have significant and positive impacts on both zone and non-zone residents employed at firms that claim these credits. We determine that firms claiming the employment tax credit represent a small share of the overall labor demand of zone residents. As a result, utilizing data that include information on which firms receive place-based tax incentives is crucial to evaluate how these policies impact local labor, and evaluations looking at outcomes of broader populations may not be able to identify significant improvements in outcomes if a limited fraction of the population is directly affected.
    Keywords: employment tax credits; place-based programs; business incentives; empowerment zones; renewal communities
    JEL: H25 J38 R23 R58
    Date: 2014–07–01
  5. By: Huber, Martin (University of St. Gallen); Lechner, Michael (University of St. Gallen); Wunsch, Conny (University of Basel)
    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 out-comes 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
  6. By: Asai, Yukiko; Kambayashi, Ryo; Tanaka, Atsuko; Yamaguchi, Shintaro
    Abstract: We estimate the causal effects of childcare availability on the maternal employment rate using prefecture panel data constructed from the Japanese quinquennial census 1990-2010. We depart from previous contributions by controlling for prefecture fixed effects, without which the estimates can be severely biased upward. We find that the treatment effect is heterogeneous: the employment rate of mothers in nuclear households increases with childcare availability, while that of mothers in three-generation households does not. We apply our estimates to decomposition of the growth of the maternal employment rate from 1990 to 2010. The decomposition indicates that the increase in childcare availability raised the maternal employment rate by about two percentage points. We also find that dissolution of three-generation household lowered the maternal employment rate. This negative effect is more strongly pronounced in small prefectures where the household structure changed dramatically.
    Keywords: childcare, female labor supply, maternal employment, nuclear family, three-generation family
    JEL: J13 J21 J22
    Date: 2014–07
  7. By: Bryan, Mark L. (University of Essex); Sevilla, Almudena (Queen Mary, University of London)
    Abstract: Using previously unexploited data on time scheduling in the employment and household contexts, we investigate the effect of flexible working on couples' coordination of their daily work time schedules in the UK. We consider three distinct dimensions of flexible working: flexibility of daily start and finish times (flexitime), flexibility of work times over the year (annualised hours), and generalised control of working hours. We find that in couples with flexitime there is greater spouse synchronization in daily working times by nearly one hour. The effect is driven by couples with dependent children. However, we find the effect in couples with children of any age (under 16), suggesting it does not stem from the childcare requirements of young children. Robustness checks indicate that flexitime is not endogenous, suggesting that an expansion of flexitime would increase couples' work time coordination. There is less evidence that broader control over working hours increases daily synchronous working time and no evidence that annualised hours increase synchronous time on a daily basis. The weaker relationships with daily synchronous time for these two flexibility measures are consistent with their broader scope (control over amount of hours as well as timing) and longer time span.
    Keywords: flexible work, time synchronization, time coordination
    JEL: J12 J22 J32
    Date: 2014–07
  8. By: Almeida, Rita K. (World Bank); de Faria, Marta Lince (Católica Lisbon)
    Abstract: Skills shortages and skill mismatch are a pressing concern for policymakers in several developing countries, and in East Asia specifically. Providing on-the-job training can be an effective policy tool to shape the skills of the existent workforce to the specific needs of the firms. This paper explores a unique data set of matched employer-employee data for Malaysia and Thailand to estimate the wage return to on-the-job training in these two countries. Exploring propensity score matching estimates, we show that the average wage returns to on-the-job training are 7.7% for Malaysia and 4.5% for Thailand. Furthermore, we find evidence that the wage returns to on-the-job training are higher for males than for females in Malaysia and that, for both countries, returns are higher for workers with at least secondary education.
    Keywords: matched employer-employee data, wages, on-the-job training
    JEL: J24 J30
    Date: 2014–07
  9. By: Hospido, Laura (Bank of Spain); Moral-Benito, Enrique (Bank of Spain)
    Abstract: This paper studies the public sector wage gap in Spain, by gender, skill level and type of contract, using recent administrative data from tax records. We estimate wage distributions in the presence of covariates separately for men and women in the public and in the private sectors, and we take advantage of the longitudinal structure of the data to control for selection. We find a positive public wage premium for men and women even after accounting for characteristics and endogenous selection; the observed average gap in hourly wages of 35 log points is reduced to 20 when accounting for observed characteristics, and to 10 once endogenous selection is also taken into consideration. We also find substantial variation in the public premium along the wage distribution once observed characteristics are accounted for. This variation, however, is offset by opposite patterns of selection into the public sector: while we observe positive selection into the public sector at the bottom of the wage distribution, workers at the top of the distribution select negatively into the public sector.
    Keywords: public sector wage gap, quantile regression, wage distribution, panel data
    JEL: C21 C23 J31 J45
    Date: 2014–07
  10. By: Bhuller, Manudeep (Statistics Norway); Mogstad, Magne (University of Chicago); Salvanes, Kjell G. (Norwegian School of Economics)
    Abstract: What do the education premiums look like over the life cycle? What is the impact of schooling on lifetime earnings? How does the internal rate of return compare with opportunity cost of funds? To what extent do progressive taxes attenuate the incentives to invest in education? This paper exploits Norwegian population panel data with nearly career long earnings histories to answer these important questions. We provide a detailed picture of the causal relationship between schooling and earnings over the life cycle, following individuals over their working lifespan. To account for endogeneity of schooling, we apply three commonly used identification strategies. Our estimates show that additional schooling gives higher lifetime earnings and steeper age-earnings profile, in line with predictions from human capital theory. These estimates imply an internal rate of return of around 10 percent, after taking into account income taxes and earnings-related pension entitlements. Under standard conditions, this finding suggests it was financially profitable to take additional schooling because the rates of return were substantially higher than the market interest rates. By comparison, Mincer regressions understate substantially the rates of return. We explore the reasons for this downward bias, finding that it is driven by Mincer's assumptions of no earnings while in school and exogenous post-schooling employment.
    Keywords: education premium, internal rate of return, life cycle earnings
    JEL: J24 J31
    Date: 2014–07
  11. By: Guido Matias Cortes (University of Manchester and RCEA); Giovanni Gallipoli (University of British Columbia)
    Abstract: We estimate the costs of occupational mobility using a novel approach that relies on aggregate flows of workers across occupations rather than on wage data. The theoretical underpinnings for this approach are derived from a model of occupation choice that delivers a gravity equation linking worker flows to occupation characteristics and to transition costs, which we proxy using task data from the Dictionary of Occupational Titles (DOT). Occupation flow data are constructed from the matched monthly Current Population Survey (CPS) between 1994 and 2012. We nd that transition costs vary widely across occupations, are increasing in task distance (the dissimilarity in the mix of tasks performed in the two occupations) and are higher for transitions across broad task categories. However, most of the transition costs are accounted for by general, task-independent entry costs, speci c to each destination occupation.
    Keywords: occupational mobility, tasks, worker flows, mobility costs, gravity model
    JEL: J62 J24
    Date: 2014–07
  12. By: Caliendo, Marco (University of Potsdam); Lee, Wang-Sheng (Deakin University); Mahlstedt, Robert (IZA)
    Abstract: This paper focuses on re-examining the gender wage gap and the potential role that reservation wages play. Based on two waves of rich data from the IZA Evaluation Dataset Survey we examine the importance of gender differences in reservation wages to explain the gender gap in realized wages for a sample of newly unemployed individuals actively searching for a full-time job in Germany. The dataset includes measures for education, socio-demographics, labor market history, psychological factors and job search characteristics allowing us to perform a decomposition analysis including these potentially influential factors. Our results suggest that the gender wage gap disappears once we control for reservation wages. We also find a close correspondence between the two gaps for certain subgroups. For example, those with low labor market experience show no gender gap in reservation wages and also no corresponding gap in observed wages. In an attempt to better understand how the initial gender gap in reservation wages arises, we also decompose the gender gap in reservation wages and draw some preliminary conclusions on the nature of the unobservable traits that reservation wages might be capturing.
    Keywords: wages, gender gap, reservation wages, discrimination
    JEL: J16 J31
    Date: 2014–07
  13. By: Ira N. Gang (Rutgers University)
    Abstract: Women who want to work often face many more hurdles than men. This is true in Tajikistan where there is a large gender gap in labour force participation. We highlight the role of two factors – international migration and education – on the labour force participation decision and its gender gap. Using probit and decomposition analysis, our investigation shows that education and migration have a significant association with the gender gap in labour force participation in Tajikistan. International emigration from Tajikistan, in which approximately 93.5% of the participants are men, reduces labour force participation by men domestically; increased female education, especially at the university and vocational level, increases female participation. Both women acquiring greater access to education and men increasing their migration abroad contribute to reducing the gender gap.
    Keywords: immigration
    JEL: F1
    Date: 2014–05–27

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