nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2014‒09‒25
seven papers chosen by
Joseph Marchand
University of Alberta

  1. Labor Force Participation: Recent Developments and Future Prospects By Aaronson, Stephanie; Cajner, Tomaz; Fallick, Bruce C.; Galbis-Reig, Felix; Smith, Christopher; Wascher, William L.
  2. Spatial Wage Inequality and Technological Change By Charlotte Senftleben-Koenig; Hanna Wielandt; ;
  3. Does It Pay To Be a Woman?: Labour Demand Effects of Maternity-Related Job Protection and Replacement Incomes By Beatrice Scheubel
  4. Employment and earnings effects of awarding training vouchers in Germany By Doerr, Annabelle; Fitzenberger, Bernd; Kruppe, Thomas; Paul, Marie; Strittmatter, Anthony
  5. Reciprocity in the labour market: experimental evidence By Annarita COLASANTE; Alberto RUSSO
  6. Mental Retirement and Non-Contributory Pensions for the Elderly Poor in Peru By Rafael Novella; Javier Olivera
  7. SOC(HE)-Italy: a classification for graduate occupations By L. Cattani; K. Purcell; P. Elias

  1. By: Aaronson, Stephanie (Board of Governors of the Federal Reserve System (U.S.)); Cajner, Tomaz (Board of Governors of the Federal Reserve System (U.S.)); Fallick, Bruce C. (Federal Reserve Bank of Cleveland); Galbis-Reig, Felix (Board of Governors of the Federal Reserve System (U.S.)); Smith, Christopher (Board of Governors of the Federal Reserve System (U.S.)); Wascher, William L. (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: Since 2007, the labor force participation rate has fallen from about 66 percent to about 63 percent. The sources of this decline have been widely debated among academics and policymakers, with some arguing that the participation rate is depressed due to weak labor demand while others argue that the decline was inevitable due to structural forces such as the aging of the population. In this paper, we use a variety of approaches to assess reasons for the decline in participation. Although these approaches yield somewhat different estimates of the extent to which the recent decline in participation reflects cyclical weakness rather than structural factors, our overall assessment is that much - but not all - of the decline in the labor force participation rate since 2007 is structural in nature. As a result, while we see some of the current low level of the participation rate as indicative of labor market slack, we do not expect the participation rate to show a substantial increase from current levels as labor market conditions continue to improve.
    Keywords: Labor force participation; retirement behavior; disability insurance; implications of an aging population; youth employment; labor market slack; labor market fluctuations and the business cycle
    Date: 2014–09–01
  2. By: Charlotte Senftleben-Koenig; Hanna Wielandt; ;
    Abstract: During the last decades, wage inequality in Germany has considerably increased both within and across regions. Building on concepts of the task-based approach, this paper studies whether and to what extent these developments are driven by technological change. We present novel evidence that technological change is positively related to intra-regional wage inequality. This is driven by increases in the compensation for non-routine cognitive tasks that are prevalent at upper percentiles of the wage distribution combined with decreases in the compensation for non-routine manual tasks, which are located at lower percentiles. Because there exists substantial variation in the degree of technology exposure across German regions, technological change can also explain part of the rise in inter-regional wage inequality.
    Keywords: Spatial Changes, Wage Inequality, Job Tasks, Technological Change
    JEL: J31 O33 R23
    Date: 2014–08
  3. By: Beatrice Scheubel
    Abstract: In countries with strong employment protection laws it is often considered to be unwise to hire a woman in childbearing age because she might get pregnant. However, such labour demand e ects of job protection measures related to maternity leave are often rather anecdotal. To provide analytical evidence, this paper studies the impact of changes in maternity-related job protection in Germany on employment opportunities for women in childbearing age without children for whom the observed e ects should be largely demand-related. Exogenous, discrete policy changes in the German labour market of the 1980s and 1990s constitute the setting for a difference-in-differences analysis of the transition into employment as well as wages. The data for this study are taken from the German Socio-Economic Panel and from the German Microcensus. Doubling the job-protected leave period from 6 months to 12 months between 1986 and 1988 led to an approximately 6% lower probability of being hired for women in childbearing age without a university degree.In addition, I nd a 5-10% increase in wages for women in childbearing age associated with the latter reform. Since this effect disappears when controlling for having a child in the future, this may indicate an increased need to signal commitment by increased effort after the reform.
    Keywords: Maternity leave legislation, gender pay gap, education, unemployment, difference-in-differences with group-correlated errors, quasi-natural experiment
    JEL: J64 J18 J16 J31 K31
    Date: 2014
  4. By: Doerr, Annabelle; Fitzenberger, Bernd; Kruppe, Thomas (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Paul, Marie; Strittmatter, Anthony
    Abstract: In 2003, Germany moved from a system in which participants in training programs for the unemployed are assigned by caseworkers to an allocation system using vouchers. Based on the rich administrative data for all vouchers and on actual program participation, we provide inverse probability weighting and ordinary least squares estimates of the employment and earnings effects of a voucher award. Our results imply that after the award, voucher recipients experience long periods of lower labor market success. On average, there are only small positive employment effects and no gains in earnings even four years after the voucher award. However, we do find significantly positive effects both for lowskilled individuals and for degree courses. The strong positive selection effects implied by our estimates are consistent with sizeable cream-skimming effects.
    JEL: J68 H43 C21
    Date: 2014–09–15
  5. By: Annarita COLASANTE (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Alberto RUSSO (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)
    Abstract: In this paper we focus on the impact of involuntary unemployment on wage formation using experimental evidence. We use the well-known Gift Exchange Game to analyze players' interaction in a simplified job market. The aim of this paper is twofold: on the one hand, we are interested in analyzing the relation between involuntary unemployment and wages; on the other hand, we aim at understanding whether the interaction between employers and employees could be affected by reciprocity. Our results show that unemployment has a negative impact on wages. Moreover, there is a positive correlation between wage and effort.
    Keywords: Gift Exchange, Reciprocity, Unemployment
    JEL: C91 E24 J28 J30
    Date: 2014–08
  6. By: Rafael Novella (Inter-American Development Bank); Javier Olivera (University of Luxembourg)
    Abstract: This paper analyses the effects of retirement on cognitive abilities for the elderly poor on the basis of the “mental retirement” effect that accompanies retirement. Given the recent emergence and expansion of non-contributory pension programs to alleviate poverty in old-age across low and middle income countries, attention should be given to the potential acceleration of cognitive decline when individuals retire, i.e. when there is a decrease in their engagement of cognitive demanding activities. We use a unique and recent survey of the elderly poor in Peru (ESBAM), which includes a cognitive test and serves as the baseline for a non-contributory pension program. We find a significant negative effect of retirement on cognitive ability after controlling for a number of demographics and objective health measures and even after dealing with the potential endogeneity of retirement.
    Keywords: cognitive abilities, old-age poverty, retirement, non-contributory pensions, Peru
    JEL: H55 J14 J24 J26
    Date: 2014–08
  7. By: L. Cattani; K. Purcell; P. Elias
    Abstract: This paper presents an application to the Italian labour force of the British SOC(HE)2010 classification for graduate occupations, thereby creating a statistical tool for exploration of the Italian graduate labour market. In order to achieve this goal, the classification is replicated, using methodology that differs slightly to take account of differences in existing Italian data, to construct SOC(HE)-Italy. This classification allocates each of the official 800 Italian occupational categories to four groups distinguishing between ‘graduate’ and ‘non-graduate’ groups on the basis of their relative levels of knowledge and skills requirements. It is then validated using the Rilevazione Continua sulle Forze di Lavoro (RCFL ISTAT) data and the AlmaLaurea (AL) data and used to analyze changes in the Italian occupational structure that occurred before and after the financial crisis that took place in 2008. We also compare the Italian structural trends in the graduate labour market with similar trends in Britain. This analysis reveals that the decrease in the utilization of highly qualified labour in the Italian labour market started before the beginning of the ongoing recession, which contradicts the findings of analyses reported in earlier literature.
    JEL: I2 J2
    Date: 2014–09

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