nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2015‒05‒22
thirteen papers chosen by
Joseph Marchand
University of Alberta

  1. Flexibility at a Cost: Should Governments Stimulate Tertiary Education for Adults? By Stenberg, Anders; Westerlund, Olle
  2. Skill Biased Structural Change By Francisco J. Buera; Joseph P. Kaboski; Richard Rogerson
  3. Mothers' Employment and Children's Educational Gender Gap By Xiaodong Fan; Hanming Fang; Simen Markussen
  4. Street Prostitution Zones and Crime By Bisschop, Paul; Kastoryano, Stephen; van der Klaauw, Bas
  5. The fiscal effects of work-related tax expenditures in Europe. By Salvador Barrios; Serena Fatica; Diego Martínez-López; Gilles Mourre
  6. Co-worker networks and productivity growth in regions By Balázs Lengyel; Rikard H. Eriksson
  7. Top Incomes in Canada: Evidence from the Census By Lemieux, Thomas; Riddell, W. Craig
  8. Peer working time, labour supply, and happiness for male workers By Collewet M.M.F.; Grip A. de; Koning J.d.
  9. Ill Communication: Technology, Distraction & Student Performance By Louis-Philippe Beland; Richard Murphy
  10. Peer Effects on Obesity in a Sample of European Children By Gwozdz, Wencke; Sousa-Poza, Alfonso; Reisch, Lucia A.; Bammann, Karin; Eiben, Gabriele; Kourides, Yiannis; Kovács, Eva; Lauria, Fabio; Konstabel, Kenn; Santaliestra-Pasias, Alba M.; Vyncke, Krishna; Pigeot, Iris
  11. The Impact of Female Education on Teenage Fertility: Evidence from Turkey By Gunes, Pinar
  12. On the Historical Roots of Women’s Empowerment across Italian Provinces: Religion or Family Culture? By Monica Bozzano
  13. Take-off, Persistence, and Sustainability : The Demographic Factor of Chinese Growth By Cai Fang, Lu Yang

  1. By: Stenberg, Anders (SOFI, Stockholm University); Westerlund, Olle (Umeå University)
    Abstract: Most OECD countries experience high unemployment rates and declining growth in higher educational attainment. An often suggested government policy is therefore to allocate resources towards formal schooling for adults. However, returns on such investments are uncertain and the foregone earnings are potentially large. We use Swedish population register data from 1982 to 2011 to estimate average long run earnings returns on higher education for 29- to 55-year-olds who enrolled 1992-1993. We find substantial positive estimates, but these only fully emerge after approximately ten years. Nevertheless, calculations indicate that the benefits for society exceed the costs also under fairly pessimistic assumptions.
    Keywords: adult education, human capital, earnings
    JEL: H30 H52 I20 J24 O30
    Date: 2015–05
  2. By: Francisco J. Buera; Joseph P. Kaboski; Richard Rogerson
    Abstract: We document for a broad panel of advanced economies that increases in GDP per capita are associated with a shift in the composition of value added to sectors that are intensive in high-skill labor. It follows that further development in these economies leads to an increase in the relative demand for skilled labor. We develop a two-sector model of this process and use it to assess the contribution of this process of skill-biased structural change to the rise of the skill premium in the US, and a broad panel of advanced economies, over the period 1977 to 2005. We find that these compositional demands account for between 25 and 30% of the overall increase of the skill premium due to technical change.
    JEL: E02 J2
    Date: 2015–05
  3. By: Xiaodong Fan; Hanming Fang; Simen Markussen
    Abstract: This paper analyzes the connection between two concurrent trends since 1950: the narrowing and reversal of the educational gender gap and the increased labor force participation rate (LFPR) of married women. We hypothesize that the education production for boys is more adversely affected by a decrease in the mother's time input as a result of increasing employment. Therefore, an increase in the labor force participation rate of married women may narrow and even reverse the educational gender gap in the following generation. We use micro data from the Norwegian registry to directly show that the mother's employment during her children's childhood has an asymmetric effect on the educational achievement of her own sons and daughters. We also document a positive correlation between the educational gender gap in a particular generation and the LFPR of married women in the previous generation at the U.S. state level. We then propose a model that generates a novel prediction about the implications of these asymmetric effects on the mothers' labor supply decisions and find supporting evidence in both the U.S. and Norwegian data.
    JEL: I2 J2
    Date: 2015–05
  4. By: Bisschop, Paul (SEO Economic Research); Kastoryano, Stephen (University of Mannheim); van der Klaauw, Bas (VU University Amsterdam)
    Abstract: This paper studies the effects of introducing legal street prostitution zones on both registered and perceived crime. We exploit a unique setting in the Netherlands where legal street prostitution zones were opened in nine cities under different regulation systems. We provide evidence that the opening of these zones was not in response to changes in crime. Our difference-in-difference analysis using data on the largest 25 Dutch cities between 1994 and 2011 shows that opening a legal street prostitution zone decreases registered sexual abuse and rape by about 30% to 40% in the first two years. For cities which opened a legal street prostitution zone with a licensing system we also find significant reductions in drug-related crime and long-term effects on sexual assaults. Perceived drug nuisance increases upon opening but then decreases below pre-opening levels in cities with a licensed prostitution zone. In contrast, we find permanent increases in perceived drug crime in the areas adjacent to the legal prostitution zones.
    Keywords: prostitution, registered crime, perceived crime, regulation, difference-in-difference
    JEL: J16 J47 K14 K23 K42
    Date: 2015–05
  5. By: Salvador Barrios; Serena Fatica; Diego Martínez-López; Gilles Mourre
    Abstract: The paper examines the fiscal impacts, and the associated welfare cost, of marginal reforms to work-related tax relief in five European countries. We combine a theoretical model of labour supply with micro-simulation results from an EU-wide model, which allows us to capture the interaction between the specific tax incentive and other relevant provisions of the tax-benefit system along the entire earnings distribution. We find that changes in labour supply decisions – both at the extensive (participation) and at the intensive margin (hours worked) – have significant impacts on the revenue gain from the simulated reforms. Our results suggest that at least one-fourth of the extra tax revenues collected through a reduction in work-related tax incentives is washed away following labour supply adjustment, notably due to lower participation by individuals most at risk of exclusion. In some instances, the erosion of the initial revenue gain becomes substantial. For policies strongly targeted at the bottom of the earnings distribution, the reform might even bring about a net revenue loss, depending on the calibration of the labour supply elasticities to reflect heterogeneity across types of workers. The welfare effect of contractions to these tax schemes could be far from negligible.
    Keywords: tax expenditures, labour supply, marginal welfare costs.
    JEL: H24 H31 J20
    Date: 2015–05
  6. By: Balázs Lengyel; Rikard H. Eriksson
    Abstract: This paper provides a new empirical perspective for analysing the role of social networks for regional economic growth by constructing large-scale networks from employee-employee co-occurrences in plants in the entire Swedish economy 1990-2008. We calculate the probability of employee-employee ties at plant level based on homophily-biased random network assumptions and trace the most probable relations of every employee over the full period. We argue that these personal acquaintances are important for local learning opportunities and consequently for regional growth. Indeed, the paper provides the first systematic evidence for a central claim in economic geography: social network density has positive effect on regional growth defined as productivity growth. Interestingly, the most robust effect of density on growth was found in a segment of the co-worker network in which plants have never been linked by labour mobility previously.
    Keywords: social network, random network with homophily bias, probability of tie, labour mobility, regional productivity growth, panel regression
    JEL: D85 J24 J61 R11 R23
    Date: 2015–05
  7. By: Lemieux, Thomas (University of British Columbia, Vancouver); Riddell, W. Craig (University of British Columbia, Vancouver)
    Abstract: This paper looks at the evolution of incomes at the top of the distribution in Canada. Master files of the Canadian Census are used to study the composition of top income earners between 1981 and 2011. Our main finding is that, as in the United States, executives and individuals working in the financial and business services sectors are the two most important groups driving the growth in top incomes in Canada. A finding more specific to Canada is that the oil and gas sector has also played an important role in income growth at the top, especially in more recent years. Another arguably Canadian-specific finding is that holders of medical degrees have lost ground compared to other top income earners. Finally, despite the IT revolution, scientists, engineers and even computer scientists do not account for much of the growth in top incomes in Canada.
    Keywords: income inequality, top incomes, labour's share, executive compensation, rent extraction
    JEL: D31 D33 G30 H24
    Date: 2015–05
  8. By: Collewet M.M.F.; Grip A. de; Koning J.d. (ROA)
    Abstract: This paper uncovers conspicuous work as a new form of status seeking that can explain social interactions in labour supply. We analyse how peer working time relates to both labour supply and happiness for Dutch male workers. Using a unique measure of peer weekly working time, we find that mens working time increases with that of their peers and that peer working time is negatively related to mens happiness. These findings are consistent with a conspicuous work model, in which individuals derive status from working time.
    Keywords: Externalities; General Welfare; Time Allocation and Labor Supply;
    JEL: J22 I31 D62
    Date: 2015
  9. By: Louis-Philippe Beland; Richard Murphy
    Abstract: This paper investigates the impact of schools banning mobile phones on student test scores. By surveying schools in four English cities regarding their mobile phone policies and combining it with administrative data, we find that student performance in high stakes exams significantly increases post ban. We use a difference in differences (DID) strategy, exploiting variations in schools' autonomous decisions to ban these devices, conditioning on a range of student characteristics and prior achievement. Our results indicate that these increases in performance are driven by the lowest-achieving students. This suggests that restricting mobile phone use can be a low-cost policy to reduce educational inequalities.
    Keywords: Mobile phones, technology, student performance, productivity
    JEL: I21 I28 O33 J24
    Date: 2015–05
  10. By: Gwozdz, Wencke (Copenhagen Business School); Sousa-Poza, Alfonso (University of Hohenheim); Reisch, Lucia A. (Copenhagen Business School); Bammann, Karin (University of Bremen); Eiben, Gabriele (University of Gothenburg); Kourides, Yiannis (Research and Education Institute of Child Health, Cyprus); Kovács, Eva (University of Pecs); Lauria, Fabio (National Research Council, Italy); Konstabel, Kenn (University of Tartu); Santaliestra-Pasias, Alba M. (University of Zaragoza); Vyncke, Krishna (Ghent University); Pigeot, Iris (University of Bremen)
    Abstract: This study analyzes peer effects on childhood obesity using data from the first two waves of the IDEFICS study, which applies several anthropometric and other measures of fatness to approximately 14,000 children aged two to nine participating in both waves in 16 regions of eight European countries. Peers are defined as same-sex children in the same school and age group. The results show that peer effects do exist in this European sample but that they differ among both regions and different fatness measures. Peer effects are larger in Spain, Italy, and Cyprus – the more collectivist regions in our sample – while waist circumference generally gives rise to larger peer effects than BMI. We also provide evidence that parental misperceptions of their own children's weight goes hand in hand with fatter peer groups, supporting the notion that in making such assessments, parents compare their children's weight with that of friends and schoolmates.
    Keywords: peer effects, children, obesity, Europe
    JEL: I12 J13 J22
    Date: 2015–05
  11. By: Gunes, Pinar (University of Alberta, Department of Economics)
    Abstract: This paper explores the causal relationship between female education and teenage fertility by exploiting a change in the compulsory schooling law (CSL) in Turkey. Using variation in the exposure to the CSL across cohorts and variation across provinces by the intensity of additional classrooms constructed in the birth provinces as an instrumental variable, the results indicate that primary school completion reduces teenage fertility by 0.37 births and the incidence of teenage childbearing by around 25 percentage points. Exploring heterogeneous effects indicates that female education reduces teenage fertility more in provinces with lower population density and higher agricultural activity. Finally, the CSL postpones childbearing by delaying marriage, thereby reducing fertility.
    Keywords: Economic Development; Fertility; Female Education; Compulsory Schooling; Instrumental Variables; Turkey
    JEL: I25 J13 O10
    Date: 2015–05–01
  12. By: Monica Bozzano
    Abstract: In most developed countries the gender gap is nearly closing in the health and educational spheres while there is still sizeable gender inequality in the economic and political dimensions. Why do women’s economic decision-making and political empowerment vary so widely? What are the main potential determinants of such variations? In this paper we explore the association between two specific facets of women’s empowerment, the percentage of women holding office in local political bodies and the percentage of women in high-ranking jobs, with the cultural environment in which women make their career decisions. Our hypothesis is that culture, in particular those values embodied by religious culture, plays a central role in shaping norms and beliefs about the role and involvement of women in society. Moreover we suggest that these cultural norms are inherited from the past and therefore have a high degree of inertia. Over a cross section of Italian provincial data, both OLS and IV results indicate that our measures of women’s empowerment are strongly associated with religious culture, as proxied by religious marriages. These results are robust and consistent across specifications
    Keywords: women’s empowerment, politics, glass ceiling, religion, family culture, historical determinants
    JEL: J16 J7 N30 R1 Z10 Z12
    Date: 2015–04
  13. By: Cai Fang, Lu Yang
    Abstract: With the reduction of the working-age population and the increase of the population dependency ratio as the main characteristics of the demographic dividend having disappeared, China’s potential growth rate decreases. And our results suggest that demographic dividend contributed to nearly one forth of the economic growth in China in the past three decades, while TFP growth explains another one third with the remainder mainly due to capital accumulation, explaining nearly half. China’s potential growth rate will slow down—from nearly 10 per cent in the past 30 years to 7.5 per cent on average during 2011-2015—due to the diminished demographic dividend, but reform measures are conductive to clearing the institutional barriers to the supply of factors and productivity, thereby slowing the declining trend of potential growth rate. The aggregate reform dividend (e.g., relax family planning policy, postpone the retirement age, improvement of education and training, tax cut, and improvement of TFP) could reach to 1-2 percentage points on average during 2016-2050.
    Keywords: potential growth rate, Demographic dividend, reform dividend, total factor productivity
    JEL: O47 J21 C53
    Date: 2015–04

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