nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2015‒11‒01
six papers chosen by
Joseph Marchand
University of Alberta

  1. Childhood and Adulthood Skill Acquisition - Importance for Labor Market Outcomes By Karl Fritjof Krassel; Kenneth Lykke Sørensen
  2. Individual Poverty Paths and the Stability of Control-Perception By Hendrik Thiel; Stephan L. Thomsen
  3. Prejudice and Racial Matches in Employment By Bond, Timothy N.; Lehmann, Jee-Yeon K.
  4. The Dynamics of Earnings in Germany: Evidence from Social Security Records By Timm Bönke; Matthias Giesecke; Holger Lüthen
  5. Do Female Executives Make a Difference? The Impact of Female Leadership on Gender Gaps and Firm Performance By Luca Flabbi; Mario Macis; Andrea Moro; Fabiano Schivardi
  6. Collective Labour Supply, Taxes, and Intrahousehold Allocation: An Empirical Approach By Hans Bloemen

  1. By: Karl Fritjof Krassel (KORA, Danish Institute for Local and Regional Government Research); Kenneth Lykke Sørensen (Department of Economics and Business, Aarhus University, Denmark; School of Information, University of Michigan, USA)
    Abstract: Using matched PISA and PIAAC data from Denmark, we investigate the return to cognitive and non-cognitive skills with respect to labor market outcomes. We measure cognitive and non-cognitive skills at childhood and when the respondents have entered the labor market. Hence, we are able to split up the analysis contingent on cognitive and non-cognitive skills measured before entering the labor market. In this way we can measure both whether cognitive and/or non-cognitive skills relate to earnings and employment rate as well as how important the timing of acquiring skills are for outcomes on the labor market. Overall we find that cognitive skills are important for both earnings and employment rate but that the timing of the acquisition of the skills is of less importance. On the contrary, non-cognitive skills are important for earnings independent on whether the worker had high or low cognitive skills at childhood, but only important for employment rate for workers with high cognitive and low non-cognitive childhood skills. Overall our findings suggest that both cognitive and non-cognitive skills are important but that the dynamics differ.
    Keywords: Cognitive skills, non-cognitive skills, earnings, employment, PIAAC, PISA
    JEL: J21 J24
    Date: 2015–10–27
  2. By: Hendrik Thiel; Stephan L. Thomsen
    Abstract: This paper investigates whether individual control-perception affects the probability of becoming poor, and vice versa, whether poverty experiences can be detrimental to these traits later on. The former relation is intuitive as control related traits underly many idiosyncratic determinants of poverty. Though traits like control-perception are known to stabilize towards adulthood, the latter association may be plausible when some plasticity is maintained in case of more vigorous environmental influences like poverty. Such deterioration of control-perception would lead to poor people being literally "trapped". Yet, it is unclear what the underlying mediation paths are and whether control-perception or other potential factors are involved. Our empirical results suggest that poverty experiences affect individual control-perception to some extent. Despite rather modest magnitudes, the findings indicate that no invariance of control-perception is given in adulthood.
    Keywords: personality traits, control-perception, poverty constitution, poverty experience
    JEL: C33 C35 J21 J24 J30
    Date: 2015
  3. By: Bond, Timothy N.; Lehmann, Jee-Yeon K.
    Abstract: We develop a search model in which some employers hold unobservable racial prejudice towards black workers. Prejudiced employers may refuse to hire and may terminate black workers based on their prejudice. Workers do not observe employer prejudice, but they observe the race of their potential supervisor at the firm, which serves as a signal of the employer's prejudice. Jobs in firms with black supervisors hold higher option value for black workers, because they are less likely to face prejudice-based termination. Hence, black workers are willing to accept employment with lower expected match quality from firms with black supervisors. We derive theoretical predictions on differences in observed wages and job stability across supervisor race and prejudice levels. We find empirical support for our predictions using a unique longitudinal dataset with information on the worker's supervisor race matched with state-level measures of prejudice.
    Keywords: prejudice; discrimination; supervisor race
    JEL: J64 J7 J71
    Date: 2015–10–28
  4. By: Timm Bönke; Matthias Giesecke; Holger Lüthen
    Abstract: This paper uncovers ongoing trends in idiosyncratic earnings volatility across generations by decomposing residual earnings auto-covariances into a permanent and a transitory component. We employ data on complete earnings life cycles forprime age men born 1935 through 1974 that covers earnings between 1960 and 2009. Over this period, the German labor market undergoes a heavy transformation and experiences strong deregulation, deunionization and a shift in employment from the industrial to the service sector. Our findings of increases in both components reflect the distinct phases of this transformation process. In magnitude, the transitory component increases most strongly in the early 1970s and the 1990s for young workers, whereas the permanent component displays the strongest increases for older workers in the early 1980 and the 2000s. Thus, the changes complicate the labor market entry for young workers while widening wage differences for established workers.
    Keywords: Earnings dynamics, Life cycle, Earnings distribution, Inequality, Earnings volatility
    Date: 2015
  5. By: Luca Flabbi (Inter-American Development Bank); Mario Macis (Johns Hopkins University); Andrea Moro (Università Ca’ Foscari di Venezia); Fabiano Schivardi (Bocconi University)
    Abstract: We analyze a matched employer-employee panel data set and find that female leadership has a positive effect on female wages at the top of the distribution, and a negative one at the bottom. Moreover, performance in firms with female leadership increases with the share of female workers. This evidence is consistent with a model where female executives are better equipped at interpreting signals of productivity from female workers. This suggests substantial costs of under-representation of women at the top: for example, if women became CEOs of firms with at least 20% female employment, sales per worker would increase 6.7%.
    Keywords: executives’ gender, gender gap, firm performance, glass ceiling, statistical discrimination
    JEL: M5 M12 J7 J16
    Date: 2015
  6. By: Hans Bloemen (VU University Amsterdam, the Netherlands)
    Abstract: Most empirical studies of the impact of labour income taxation on the labour supply behaviour of households use a unitary modelling approach. In this paper we empirically analyze income taxation and the choice of working hours by combining the collective approach for household behaviour and the discrete hours choice framework with fixed costs of work. We identify the sharing rule parameters with data on working hours of both the husband and the wife within a couple. Parameter estimates are used to evaluate various model outcomes, like the wage elasticities of labour supply and the impacts of wage changes on the intrahousehold allocation of income. We also simulate the consequences of a policy change in the tax system. We find that the collective model has different empirical outcomes of income sharing than a restricted model that imposes income pooling. In particular, a specification with income pooling fails to capture asymmetries in the income sharing across spouses. These differences in outcomes have consequences for the evaluation of policy changes in the tax system and shed light on the effectiveness of certain policies.
    Keywords: Labour supply; Household behaviour and Family Economics; Intrahousehold allocation; Taxation; Model construction and estimation
    JEL: C51 D1 D13 H24 J22
    Date: 2015–10–27

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