nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2015‒02‒28
fifteen papers chosen by
Joseph Marchand
University of Alberta

  1. Analyzing the Labor Market Outcomes of Occupational Licensing By Maury Gittleman ; Mark A. Klee ; Morris M. Kleiner
  2. The Feminization of Occupations and Change in Wages: A Panel Analysis of Britain, Germany and Switzerland By Emily Murphy ; Daniel Oesch
  3. Big and Tall: Is there a Height Premium or Obesity Penalty in the Labor Market? By Wang-Sheng Lee
  4. The Impact of Immigration on the Local Labor Market Outcomes of Blue Collar Workers: Panel Data Evidence By Javier Ortega ; Gregory Verdugo
  5. The Great Recession, Retirement and Related Outcomes By Alan L. Gustman ; Thomas L. Steinmeier ; Nahid Tabatabai
  6. Behavioral Economics of Education: Progress and Possibilities By Lavecchia, Adam M. ; Liu, Heidi ; Oreopoulos, Philip
  7. Do Negative Native-Place Stereotypes Lead to Discriminatory Wage Penalties in China's Migrant Labor Markets? By Maurer-Fazio, Margaret ; Connelly, Rachel ; Thi Tran, Ngoc-Han
  8. How Many Educated Workers for Your Economy? European Targets, Optimal Public Spending, and Labor Market Impact By Lebon, Isabelle ; Rebiere, Therese
  9. Educational Mismatch and Firm Productivity: Do Skills, Technology and Uncertainty Matter? By Benoît Mahy ; François Rycx ; Guillaume Vermeylen
  10. Language Barriers and Immigrant Health Production By Clarke, Andrew ; Isphording, Ingo E.
  11. Mapping the occupational segregation of white women in the U.S.: Differences across metropolitan areas By Olga Alonso-Villar ; Coral del Rio
  12. Estimating the Production Function for Human Capital: Results from a Randomized Control Trial in Colombia By Attanasio, Orazio ; Cattan, Sarah ; Fitzsimons, Emla ; Meghir, Costas ; Rubio-Codina, Marta
  13. Teachers and Performance Pay in 2014: First Results of a Survey By David Marsden
  14. The Pros and Cons of Sick Pay Schemes: A Method to Test for Contagious Presenteeism and Shirking Behavior By Pichler, Stefan ; Ziebarth, Nicolas R.
  15. International Trade and Labor Market Discrimination By Richard Chisik ; Julian Emami Namini ;

  1. By: Maury Gittleman ; Mark A. Klee ; Morris M. Kleiner
    Abstract: Recent assessments of occupational licensing have shown varying effects of the institution on labor market outcomes. This study revisits the relationship between occupational licensing and labor market outcomes by analyzing a new topical module to the Survey of Income and Program Participation (SIPP). Relative to previously available data, the topical module offers more detailed information on occupational licensing from government, with larger sample sizes and access to richer sets of person-level characteristics. We exploit this larger and more detailed data set to examine the labor market outcomes of occupational licensing and how workers obtain these licenses from government. More specifically, we analyze whether there is evidence of a licensing wage premium, and how this premium varies with aspects of the regulatory regime such as the requirements to obtain a license or certification and the level of government oversight. After controlling for observable heterogeneity, including occupational status, we find that those with a license earn higher pay, are more likely to be employed, and have a higher probability of retirement and pension plan offers.
    JEL: J30 J38 J4 J44 J48 K23 L5 L51 L88
    Date: 2015–02
  2. By: Emily Murphy ; Daniel Oesch
    Abstract: In the last four decades, women have made major inroads into occupations previously dominated by men. This paper examines whether occupational feminization is accompanied by a decline in wages: Do workers suffer a wage penalty if they remain in, or move into, feminizing occupations? We analzye this question over the 1990s and 2000s in Britain, Germany and Switzerland, using longitudinal panel data to estimate individual fixed effects for men and women. Moving from an entirely male to an entirely female occupation entails a loss in individual earnings of twelve percent in Britain, six percent in Switzerland and three percent in Germany. The impact of occupational feminization on wages is not linear, but sets apart occupations holding less than 50 percent of women from those with more than 60 percent of women. Only moving into the latter incurs a wage penalty. Contrary to the prevailing idea in economics, differences in productivity – human capital, job-specific skill requirements and time investment – do not fully explain the wage gap between male and female occupations. Moreover, the wage penalty associated with working in a female occupation is much larger where employer discretion is large -the private sector – than where wage setting is guided by formal rules – the public sector. These findings suggests that wage disparities across male and female occupations are due to gender devaluation.
    Keywords: occupations, gender, wages, discrimination, sex-segregation
    JEL: J16 J21 J23 J24 J31
    Date: 2015
  3. By: Wang-Sheng Lee
    Abstract: Previous studies have shown that both height and BMI are associated with wages. However, by focusing on interpreting the partial effects of either height or BMI on wages while holding all else constant, some gaps in our understanding of the complex relationship between body size and wages remain. Utilizing a semi-parametric spline approach, we first establish that a flexible analysis of height and weight provides a useful and meaningful proxy for beauty. A similar flexible analysis of height, weight and wages reveals that some combinations of anthropometric measurements attract higher wage premiums than others and that the optimal combination varies over the life cycle. A main contribution of the paper is in suggesting a novel and practical way of examining the returns to looks in the labor market based on objective anthropometric measurements.
    Keywords: height, P-spline, semi-parametric, wages, weight
    JEL: J31 J71
    Date: 2015–02–11
  4. By: Javier Ortega ; Gregory Verdugo
    Abstract: Using a large administrative French panel data set for 1976-2007, we examine how low- educated immigration affects the wages, employment, occupations and locations of blue-collar native workers. The natives in the sample are initially in occupations heterogeneous in the presence of immigrants, which might reflect a different degree of competition with low-educated immigrants. We first show that larger immigration inflows into locations are accompanied by larger outflows of negatively selected natives from these locations. At the same time, larger immigrant inflows into occupations come with larger outflows of positively selected natives towards occupations with less routine tasks. While we find no negative impact on employment, there is substantial evidence that immigration lowers the median annual wages of natives. The estimated negative effects are also much larger in cross-section than in estimates controlling for composition effect, which is consistent with the idea that endogenous changes in occupation and location attenuate the impact of immigration on natives' wages. We also find much larger wage decreases for workers initially in non-tradable sectors and more particularly in the construction sector, which are much less likely to upgrade their occupation or change location in response to immigration inflows.
    Keywords: Immigration, wages, employment
    JEL: J15 J31
    Date: 2015–02
  5. By: Alan L. Gustman ; Thomas L. Steinmeier ; Nahid Tabatabai
    Abstract: This paper uses data from the Health and Retirement Study to examine retirement and related labor market outcomes for the Early Boomer cohort, those in their mid-fifties at the onset of the Great Recession. Outcomes are then compared with older cohorts at the same age. The Great Recession increased their probability of being laid off and the length of time it took to find other full-time employment. Differences in layoffs between those affected by the recession and members of older cohorts in turn accounted for almost the entire difference between cohorts in employment change with age. The Great Recession does not appear, however, to have depressed the wages in subsequent jobs for those who experienced a layoff. In 2010, 17 percent of the Early Boomers were Not Working and Not Retired or Partially Retired, and 6 percent were unemployed, leaving at least 9 percent who were not working and not unemployed but not retired or only partially retired. At the recession’s peak, half of those who experienced a layoff ended up in the Not Retired or Partially Retired, Not Working category. But only a quarter of those who declared themselves to be Not Retired or Partially Retired, and were Not Working, had experienced a layoff. Most of the jump in Not Retired or Partially Retired, Not Working appears to reflect a change in expectations about the potential or need for future work, a change that is not the result of an actual job loss.
    JEL: E24 E32 J11 J14 J21 J26 J4 J6 J63 J64 J82
    Date: 2015–02
  6. By: Lavecchia, Adam M. (University of Toronto ); Liu, Heidi (Harvard University ); Oreopoulos, Philip (University of Toronto )
    Abstract: Behavioral economics attempts to integrate insights from psychology, neuroscience, and sociology in order to better predict individual outcomes and develop more effective policy. While the field has been successfully applied to many areas, education has, so far, received less attention – a surprising oversight, given the field's key interest in long-run decision-making and the propensity of youth to make poor long-run decisions. In this chapter, we review the emerging literature on the behavioral economics of education. We first develop a general framework for thinking about why youth and their parents might not always take full advantage of education opportunities. We then discuss how these behavioral barriers may be preventing some students from improving their long-run welfare. We evaluate the recent but rapidly growing efforts to develop policies that mitigate these barriers, many of which have been examined in experimental settings. Finally, we discuss future prospects for research in this emerging field.
    Keywords: behavioral economics of education, present-bias, student motivation
    JEL: D03 D87 I2 J24
    Date: 2015–02
  7. By: Maurer-Fazio, Margaret (Bates College ); Connelly, Rachel (Bowdoin College ); Thi Tran, Ngoc-Han (Graduate Institute of International and Development Studies, Geneva )
    Abstract: China's linguistic and geographic diversity leads many Chinese individuals to identify themselves and others not simply as Chinese, but rather by their native place and provincial origin. Negative personality traits are often attributed to people from specific areas. People from Henan, in particular, appear to be singled out as possessing a host of negative traits. Such prejudice does not necessarily lead to wage discrimination. Whether or not it does depends on the nature of the local labor markets. This chapter uses data from the 2008 and 2009 migrant surveys of the Rural-Urban Migration in China Project (RUMiC) to explore whether native-place wage discrimination affects migrant workers in China's urban labor markets. We analyze the question of wage discrimination among migrants by estimating wage equations for men and women, controlling for human capital characteristics, province of origin, and destination city. Of key interest here are the variables representing provinces of origin. We find no systemic differences by province of origin in the hourly wages of male and female migrants. However, in a few specific cases, we find that migrants from a particular province earn significantly less than those from local areas. Male migrants from Henan in Shanghai are paid much less than their fellow migrants from Anhui. In the Jiangsu cities of Nanjing and Wuxi, female migrants from nearby Anhui are paid much less than intra-provincial Jiangsu migrants.
    Keywords: migrants, discrimination, wages, China, stereotypes, native-place, labor markets
    JEL: J71 J23 J61 J31 O15 O53 P36
    Date: 2015–02
  8. By: Lebon, Isabelle (University of Caen ); Rebiere, Therese (CNAM, Paris )
    Abstract: This paper studies optimal taxation schemes for education in a search-matching model where the labor market is divided between a high-skill and a low-skill sector. Two public policy targets – maximizing the global employment level and optimizing the social surplus – are studied according to three different public taxation strategies. We calibrate our model using evidence from fourteen European countries, and compare our results with the target from the Europe 2020 Agenda for achievement in higher education. We show that, with current labor market characteristics, the target set by governments seems compatible with the social surplus maximization objective in some countries, while being too high for other countries. For all countries, maximizing employment would imply higher educational spending than that required for the social surplus to reach its maximum.
    Keywords: educational policy, job search, matching model, optimal taxation
    JEL: H21 H52 J21 J64
    Date: 2015–02
  9. By: Benoît Mahy ; François Rycx ; Guillaume Vermeylen
    Abstract: The authors provide first evidence on whether the direct relationship between educational mismatch and firm productivity varies across working environments. Using detailed Belgian linked employer-employee panel data for 1999-2010, they find the existence of a significant, positive (negative) impact of over- (under-)education on firm productivity. Moreover, their results show that the effect of over-education on productivity is stronger among firms: (i) with a higher share of high-skilled jobs, (ii) belonging to high-tech/knowledge-intensive industries, and (iii) evolving in a more uncertain economic environment. Interaction effects between under-education and working environments are less clear-cut. However, economic uncertainty is systematically found to accentuate the detrimental effect of under-education on productivity.
    Keywords: Educational mismatch; productivity; linked employer-employee panel data; working environments
    JEL: J21 J24
    Date: 2015–02–25
  10. By: Clarke, Andrew (University of Melbourne ); Isphording, Ingo E. (IZA )
    Abstract: We study the impact of language deficiency on the health production of childhood migrants to Australia. Our identification strategy relies on a quasi-experiment comparing immigrants arriving at different ages and from different linguistic origins by utilising a measure of differences along a continuous range of linguistic distances. Our main results indicate a large negative effect of English deficiency on physical health that is robust to a range of different specifications. In the presence of considerable non-classical measurement error in self-reported language proficiency, our results provide lower and upper bounds for the true effect of English deficiency on health of one half and a full standard deviation in the health score respectively. The empirical analysis is framed in terms of a Grossman model which indicates a twofold role of language skills in health production: language deficiency directly affects the efficiency of health production and indirectly affects access to health inputs. We provide some suggestive evidence on the relative importance of these distinct roles.
    Keywords: international migration, language skills, health
    JEL: F22 I12 J24 J61
    Date: 2015–02
  11. By: Olga Alonso-Villar (Universidade de Vigo, Spain ); Coral del Rio (Universidade de Vigo, Spain and EQUALITAS )
    Abstract: This paper seeks to investigate the occupational segregation of white women in the U.S. at the local labor market level, exploring whether the segregation of this group is a homogeneous phenomenon across the country or there are important disparities in the opportunities that these women meet with across American urban areas. An important contribution of this paper is that, apart from quantifying the extent of segregation it also assesses the consequences of that segregation taking into account the ''quality'' of occupations that the group tends to fill or not to fill. The analysis shows that between 20% and 40% of white women working in a metropolitan area would have to shift occupations to achieve zero segregation in that area. Differences regarding the nature of that segregation are even stronger. In some metropolitan areas, the uneven distribution of white women across occupations brings them a per capita monetary gain of about 21% of the average wage of the area while in other metropolitan areas this group has a per capita loss of nearly 11%.
    Keywords: Occupational segregation, well-being, metropolitan areas, race, gender, U.S.
    JEL: R23 J15 J16 J71 D63
    Date: 2015–01
  12. By: Attanasio, Orazio (University College London ); Cattan, Sarah (Institute for Fiscal Studies, London ); Fitzsimons, Emla (University College London ); Meghir, Costas (Yale University ); Rubio-Codina, Marta (Institute for Fiscal Studies, London )
    Abstract: We examine the channels through which a randomized early childhood intervention in Colombia led to significant gains in cognitive and socio-emotional skills among a sample of disadvantaged children. We estimate production functions for cognitive and socio-emotional skills as a function of maternal skills and child's past skills, as well as material and time investments that are treated as endogenous. The effects of the program can be fully explained by increases in parental investments, which have strong effects on outcomes and are complementary to both maternal skills and child's past skills.
    Keywords: early childhood development, human capital, poverty alleviation, nonlinear factor models
    JEL: J13 J24 I24 I25 I32 O15
    Date: 2015–02
  13. By: David Marsden
    Abstract: From the autumn of 2014, a new performance pay scheme was introduced for school teachers in England and Wales. It makes pay progression for all teachers dependent upon their performance as evaluated by their line managers by means of performance appraisals. This paper reports the results of a the first wave of a survey of teachers' views about performance pay and their beliefs about its effects on their performance and that of their schools before the first decisions about pay awards under the new scheme. Further surveys are planned to follow the scheme over time. School leaders were also surveyed. The results so far confirm a broadly negative view among teachers as to the desirability and likely motivational effects of linking pay progression to performance, but they also show a more positive view of the process of performance appraisal. The results are compared with those of a similar CEP survey carried out in 2000 just before the previous scheme was introduced.
    Keywords: Compensation packages, payment methods, public sector labor markets, compensation
    JEL: J33 J45 M52
    Date: 2015–02
  14. By: Pichler, Stefan (ETH Zurich ); Ziebarth, Nicolas R. (Cornell University )
    Abstract: This paper proposes a test for the existence and the degree of contagious presenteeism and negative externalities in sickness insurance schemes. First, we theoretically decompose moral hazard into shirking and contagious presenteeism behavior. Then we derive testable conditions for reduced shirking, increased presenteeism, and the level of overall moral hazard when benefits are cut. We implement the test empirically exploiting German sick pay reforms and administrative industry-level data on certified sick leave by diagnoses. The labor supply adjustment for contagious diseases is significantly smaller than for non-contagious diseases, providing evidence for contagious presenteeism and negative externalities which arise in form of infections.
    Keywords: sickness insurance, sick pay, presenteeism, contagious diseases, infections, negative externalities, shirking
    JEL: I12 I13 I18 J22 J28 J32
    Date: 2015–02
  15. By: Richard Chisik (Department of Economics, Ryerson University, Toronto, Canada ); Julian Emami Namini (Erasmus University );
    Abstract: We embed a competitive search model with labor market discrimination into a two-sector two-country framework in order to analyze the relationship between international trade and labor market discrimination. Discrimination reduces the matching probability, and output, in the skilled-labor differentiated-product sector so that the country with more discriminatory firms has a comparative advantage in the simple sector. As countries alter their production mix in accordance with their comparative advantage, trade liberalization can then reinforce the negative effect of discrimination on development in the more discriminatory country and reduce its effect in the country with fewer discriminatory firms. Similarly, the relative profit difference between non-discriminatory and discriminatory firms will increase in the less discriminatory country and shrink in the more discriminatory one. In this way trade can further reduce discrimination in a country where it is less prevalent and increase it where it is more firmly entrenched.
    Keywords: Discrimination, Nepotism, International Trade, Competitive Search
    JEL: F16 J71

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