nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2015‒12‒20
twelve papers chosen by
Joseph Marchand
University of Alberta

  1. Where Are the Returns to Lifelong Learning? By Michael Coelli; Domenico Tabasso
  2. Who are the top 1% earners in Europe? By Oliver Denk
  3. How costly is corporate bankruptcy for the CEO? By Eckbo, B Espen; Thorburn, Karin S; Wang, Wei
  4. Did Gender-Bias Matter in the Quantity- Quality Trade-off in the 19th Century France ? By Claude Diebolt; Tapas Mishra; Faustine Perrin
  5. Loss of Skill during Unemployment and TFP Differences across Countries By Victor Ortego-Marti
  6. TFP, Labor Productivity and the (Un)observed Labor Input: Temporary Agency Work By Alexander Schiersch
  7. Does CEO fitness matter? By Limbach, Peter; Sonnenburg, Florian
  8. Firms’ adjustment during 2010–13: evidence from the Wage Dynamics Survey By Millard, Stephen; Tatomir, Srdan
  9. Transition to clean technology By Acemoglu, Daron; Akcigit , Ufuk; Hanley, Douglas; Kerr, William R.
  10. Escaping the Holocaust: Human and health capital of refugees to the United States, 1940-42 By Blum, Matthias; Rei, Claudia
  11. Bad Company: Reconciling Negative Peer Effects in College Achievement By Brady, Ryan; Insler, Michael; Rahman, Ahmed
  12. Women at the Top in Developing Countries: Evidence from Firm-Level Data By Khalid Sekkat; Ariane Szafarz; Ilan Tojerow

  1. By: Michael Coelli (Department of Economics, The University of Melbourne); Domenico Tabasso (Geneva School of Economics and Management, University of Geneva; Swiss National Centre for Competence in Research LIVES (NCCR LIVES); and Institute for the Study of Labor (IZA))
    Abstract: We investigate the labour market determinants and outcomes of adult participation in formal education (lifelong learning) in Australia, a country with high levels of adult education. Employing longitudinal data and mixed effects methods allows identification of effects on outcomes free of ability bias. Different trends in outcomes across groups are also allowed for. The impacts of adult education differ by gender and level of study, with small or zero labour market returns in many cases. Wage rates only increase for males undertaking university studies. For men, vocational education and training (VET) leads to higher job satisfaction and fewer weekly hours. For women, VET is linked to higher levels of satisfaction with employment opportunities and higher employment probabilities. Classification-J24, J28, I23, I28
    Keywords: Adult education, lifelong learning, vocational studies, returns to education
    Date: 2015–11
  2. By: Oliver Denk
    Abstract: Top earners have become the subject of intense public and scholarly debate. This is the first paper that comprehensively documents the profiles of the 1% highest paid employees across 18 European countries. The data come from the largest harmonised source available, an employer-based survey that covers the labour income of 10 million employees, excluding the self-employed. The patterns that emerge are broadly common across countries. Workers in the top 1% tend to be 40 to 60 years old, be men, have tertiary education, work in finance or manufacturing, and be senior managers. The analysis also uncovers several cross-country differences. For example, top earners are younger in Eastern Europe, and they include more women in countries with higher overall female employment. The new estimates in this paper are similar to related ones based on administrative records in the few countries for which such studies exist, indicating that the sample is broadly representative of the characteristics of top earners.<P>Qui sont les 1 % des salariés les mieux payés en Europe ?<BR>Les très hauts revenus sont aujourd’hui au coeur du débat public et des travaux universitaires. Ce document est le premier qui procède à une analyse complète du profil des 1 % des salariés les mieux payés dans 18 pays européens. Les données proviennent de la plus grande source harmonisée qui existe, une enquête auprès des employeurs qui porte sur le revenu du travail de 10 millions de salariés, hors travailleurs indépendants. Les caractéristiques mises en évidence sont globalement similaires d’un pays à l’autre. Les employés qui font partie des 1 % les mieux rémunérés se trouvent principalement parmi les personnes âgées de 40 à 60 ans, de sexe masculin, ayant fait des études supérieures, travaillant dans la finance ou l’industrie, et occupant un poste de haut dirigeant. L’analyse révèle également plusieurs différences entre pays. Par exemple, les employés à très hauts revenus sont plus jeunes en Europe de l’Est, et les femmes sont davantage représentées dans cette catégorie dans les pays où le taux d’emploi des femmes est plus élevé. Les nouvelles estimations que cette étude fournit recoupent celles basées sur des registres administratifs dans les quelques pays où de telles études existent, ce qui révèle que l’échantillon est globalement représentatif des caractéristiques des bénéficiaires de hauts revenus.
    Keywords: earnings, income inequality, Europe, inégalité des revenus, revenus, Europe centrale
    JEL: D31 D63 J21 J31
    Date: 2015–12–14
  3. By: Eckbo, B Espen; Thorburn, Karin S; Wang, Wei
    Abstract: We examine CEO career and compensation changes for firms filing for Chapter 11. One-third of the incumbent CEOs maintain executive employment, and these CEOs experience a median compensation change of zero. However, incumbent CEOs leaving the executive labor market suffer a compensation loss with a median present value until age 65 of $7 million (five times pre-departure compensation). The likelihood of leaving decreases with profitability and CEO share ownership. Furthermore, creditor control rights during bankruptcy (through debtor-in-possession financing and large trade credits) appear to effect CEO career change. Despite large equity losses (median $11 million for incumbents who stay until filing), the median incumbent does not reduce his stock ownership as the firm approaches bankruptcy.
    Keywords: career change; CEO compensation; labor market capital; personal bankruptcy costs; turnover; wealth loss
    JEL: G33 G34 M12
    Date: 2015–12
  4. By: Claude Diebolt; Tapas Mishra; Faustine Perrin
    Abstract: Recent theoretical developments of growth models, especially on unified theories of growth, suggest that the child quantity-quality trade-off has been a central element of the transition from Malthusian stagnation to sustained growth. Using an original censusbased dataset, this paper explores the role of gender on the trade-off between education and fertility across 86 French counties during the nineteenth century, as an empirical extension of Diebolt-Perrin (2013). We first test the existence of the child quantity-quality trade-off in 1851. Second, we explore the long-run effect of education on fertility from a gendered approach. Two important results emerge: (i) significant and negative association between education and fertility is found, and (ii) such a relationship is non-unique over the distribution of education/fertility. While our results suggest the existence of a negative and significant effect of the female endowments in human capital on the fertility transition, the effects of negative endowment almost disappear at low level of fertility.
    Keywords: Cliometrics, Education, Fertility, Demographic Transition, Unified growth theory, Nineteenth century France.
    JEL: C22 C26 C32 C36 C81 C82 I20 J13 N01 N33
    Date: 2015
  5. By: Victor Ortego-Marti (Department of Economics, University of California Riverside)
    Abstract: In an economy with search and matching frictions in which workers lose human capital during unemployment, TFP becomes endogenous and depends on workers’ unemployment history. Using available estimates of labor market flows for a sample of OECD countries, this paper quantifies the amount of TFP differences due to skill losses during unemployment. Continental European countries, with their low job finding rates, exhibit the lowest TFPs. Nordic countries and Japan display the highest levels of TFP due to their high job finding rate relative to the separation rate. TFP in Anglo-Saxon countries stands in-between the two groups. The paper further studies the effect of hiring subsidies on the labor market and TFP.
    Date: 2015–12
  6. By: Alexander Schiersch
    Abstract: The study focuses on the question of whether productivity estimates are biased due to the emergence of a new input that is usually omitted: temporary agency worker (TAW). The study analyzes labor productivity and TFP by means of a structural approach using a representative dataset of German manufacturing firms. The empirical results show, once TAW is taken into account, that: i) labor productivity in most manufacturing sectors is significantly lower; ii) average TFP differs significantly in most sectors; but iii) the coefficients for regular labor are not significantly different between estimations with and without TAW.
    Keywords: Temporary agency work, total factor productivity, labor productivity, omitted variable bias, structural productivity estimation
    JEL: D24 J24 L24 L60
    Date: 2015
  7. By: Limbach, Peter; Sonnenburg, Florian
    Abstract: This study provides evidence suggesting that CEOs' physical fitness has a positive impact on firm value, consistent with the beneficial effects of fitness on, e.g., cognitive functions, stress coping and job performance. For each of the years 2001 to 2011, we define S&P 1500 CEOs as fit if they finish a marathon. CEO fitness is also associated with higher firm profitability and higher M&A announcement returns. Our identification strategy includes CEO-firm fixed effects, instrumental variables, permutation tests, random effects, and time-varying CEO, firm and industry effects. An additional analysis of sudden CEO deaths, based on a fitness measure not limited to running, confirms our results.
    Keywords: CEO heterogeneity,firm value,mergers and acquisitions,physical fitness
    JEL: G32 G34 J24
    Date: 2015
  8. By: Millard, Stephen (Bank of England); Tatomir, Srdan (Bank of England)
    Abstract: This paper sets out the main lessons learnt from a survey of wage-setting in the United Kingdom, carried out as part of the European Central Bank’s Wage Dynamics Network survey covering 25 European countries. The survey covered the 2010–13 period, during which most firms experienced an increase in demand and a moderate increase in costs as the economy recovered from the Great Recession. We found the median frequency of wage-setting to be annual and that around 30% of firms directly and explicitly related changes in their base wage to inflation. There was also some evidence of downward nominal wage rigidity with around 25% of firms freezing wages in 2010, although by 2014 this had fallen to around 10%. The survey suggested that theories of wage rigidity based around the ability of workers to ‘shirk’ and/or fairness considerations explained why firms were reluctant to cut wages.
    Keywords: Wage-setting; survey evidence; labour market adjustment
    JEL: E24 J30
    Date: 2015–12–11
  9. By: Acemoglu, Daron (Massachusetts Institute of Technology and CIFAR); Akcigit , Ufuk (University of Pennsylvania); Hanley, Douglas (University of Pittsburgh); Kerr, William R. (Harvard University)
    Abstract: We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation–in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several rungs to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model’s quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy makes heavy use of research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policies.
    Keywords: carbon cycle; directed technological change; environment; innovation; optimal policy
    JEL: C65 O30 O31 O33
    Date: 2015–12–10
  10. By: Blum, Matthias; Rei, Claudia
    Abstract: The large-scale persecution of Jews during World War II generated massive refugee movements. Using data from 20,441 predominantly Jewish passengers from 19 countries traveling from Lisbon to New York between 1940 and 1942, we analyze the last wave of refugees escaping the Holocaust and verify the validity of height as a proxy for human and health capital. We further show this episode of European migration displays well-known features of migrant self-selection: early migrants were taller than late migrants; a large migrant stock reduces migrant selectivity; and economic barriers to migration apply. Our findings show that Europe experienced substantial losses in human and health capital while the US benefitted from the immigration of European refugees.
    Keywords: migration,refugees,World War II,Holocaust,Germany,New York
    JEL: N32 N34 N42 N44 F22 J24 O15
    Date: 2015
  11. By: Brady, Ryan; Insler, Michael; Rahman, Ahmed
    Abstract: Existing peer effects studies produce contradictory findings, including positive, negative, large, and small effects, despite similar contexts. We reconcile these results using U.S. Naval Academy data covering a 22-year history of the random assignment of students to peer groups. Coupled with students' limited discretion over freshman-year courses, our setting affords an opportunity to better understand peer effects in different social networks. We find negative effects at the broader "company" level (students' social and residential group) and positive effects at the narrower course-company level. We suggest that peer spillovers change direction because of differences in the underlying mechanism of peer influence.
    Keywords: Peer effects, social network formation, academic achievement, homophily
    JEL: D85 I21 I23 J24
    Date: 2015–11
  12. By: Khalid Sekkat; Ariane Szafarz; Ilan Tojerow
    Abstract: This paper uses worldwide firm-level data to scrutinize the governance factors that favor gender diversity in leadership positions. Our results reveal that the gender of the dominant shareholder is key. The chief executive of firms with a female dominant shareholder has a significantly higher probability of being a woman than in other firms. The effect is even more pronounced when the female shareholder holds a higher share of the capital and when the firm is foreignowned. Our results suggest that “old boys’ club” ownership structures are a major impediment to the empowerment of female talent in developing countries.
    Keywords: Gender; diversity; ownership; leadership; CEO; development
    JEL: O15 J71 G32 M51 D21
    Date: 2015–12–07

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