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on Labor Markets - Supply, Demand, and Wages |
| By: | Bossler, Mario (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Gerner, Hans-Dieter (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "In Germany a new statutory minimum wage of EURO 8.50 per hour of work was introduced on 1 January 2015. We identify employment effects using variation in the establishment-level affectedness. The data allow us to address anticipatory wage adjustments as well as spillover effects within and across workplaces. Difference-indifferences estimation reveals an increase in average wages by 4.8 percent and an employment reduction by about 1.9 percent in affected establishments. These estimates imply an employment elasticity with respect to wages of about -0.3. Looking at the associated labor flows, the employment effect seems mostly driven by a reduction in hires but also by a small increase in separations. Moreover, the employment neutral turnover rate decreases. When analyzing alternative adjustment margins, we observe a reduction in the typical contracted working hours but no effects on freelance employment." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Mindestlohn, Beschäftigungseffekte, IAB-Betriebspanel, Beschäftigerverhalten, Lohnhöhe, Beschäftigungsform, Personalanpassung, Arbeitszeit, Selbständige |
| JEL: | C23 J23 J38 |
| Date: | 2016–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201610&r=lma |
| By: | Cheti Nicoletti; Kjell G. Salvanes; Emma Tominey |
| Abstract: | The well documented rise in female labour force participation in the last century has flattened in recent decades, but the proportion of mothers working full-time has been steadily increasing. In this paper we provide the first empirical evidence that the increase in mothers' working hours can be amplified through the effect on her labour decisions from the decisions of her family peers. Using Norwegian administrative data covering the full population on women, we study a long-run influence of the family network on mothers' labour decisions up to seven years post birth by regressing the mothers' working hours on the average working hours across her sister and female cousins. To identify the casual peer effect, we exploit the partially overlapping peer group approach by considering for each mother both her family and her neighbourhood networks, therefore assuming that the mother interacts with her neighbours and family but she does not interact meaningfully with her family's neighbours. Moreover, we provide some empirical evidence on the potential mechanisms such as the importance of information transmission versus imitation in explaining the peer effect. |
| Keywords: | Peer effects, Family network, Sibling spillover effects, Cousins spillover effects, Instrumental variable estimation |
| JEL: | D85 C21 C26 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:16/04&r=lma |
| By: | Boll, Christina; Bublitz, Elisabeth |
| Abstract: | Regarding gender differences, theory suggests that in a partnership the individual with the lower working hours and earnings position should exhibit lower training participation rates. Since women are more likely to match this description, we investigate whether systematic group differences explain gender variation. Across all countries, male workers are not affected by their earnings position. For female workers in Germany, but not Italy or the Netherlands, working part-time instead of full-time corresponds with a decrease in course length by 5.5 hours. Also, regarding German parttime employed women, single earners train 5.6 hours more than secondary earners. The findings of our study hold at the extensive and the intensive margin, suggesting that Germany faces particular household-related obstacles regarding gender differences in job-related training. |
| Keywords: | further education and training,gender differences,country comparisons |
| JEL: | J16 J24 M53 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hwwirp:172&r=lma |
| By: | James Harrigan; Ariell Reshef; Farid Toubal |
| Abstract: | Using administrative employee-firm-level data on the entire private sector from 1994 to 2007, we show that the labor market in France has polarized: employment shares of high and low wage occupations have grown, while middle wage occupations have shrunk. During the same period, the share of hours worked in technology-related occupations ("techies") grew substantially, as did imports and exports, and we explore the causal links between these trends. Our paper is among the first to analyze polarization in any country using firm-level data, and we show how polarization occured within firms, but mostly due to changes in the composition of firms (between firms). Motivated by the fact that technology adoption is mediated by technically qualified managers and technicians, we use a new measure of the propensity of a firm to adopt new technology: its employment share of techies. Using the subsample of firms that are active over the whole period, we show that firms with more techies in 2002 saw greater polarization, and grew faster, from 2002 to 2007. Offshoring reduced employment growth. Among blue-collar workers in manufacturing, importing caused skill upgrading while exporting caused skill downgrading. To control for the endogeneity of firm-level techies and trade in 2002, we use values of techies and trade from 1994 to 1998 as instruments. We conclude that technological change, mediated through techies, is an important cause of polarization in France. Firm-level trade had important effects in manufacturing. |
| JEL: | D3 F1 F16 J2 O3 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22110&r=lma |
| By: | de la Croix, David; Doepke, Matthias; Mokyr, Joel |
| Abstract: | In the centuries leading up to the Industrial Revolution, Western Europe gradually pulled ahead of other world regions in terms of technological creativity, population growth, and income per capita. We argue that superior institutions for the creation and dissemination of productive knowledge help explain the European advantage. We build a model of technological progress in a pre-industrial economy that emphasizes the person-to-person transmission of tacit knowledge. The young learn as apprentices from the old. Institutions such as the family, the clan, the guild, and the market organize who learns from whom. We argue that medieval European institutions such as guilds, and specific features such as journeymanship, can explain the rise of Europe relative to regions that relied on the transmission of knowledge within extended families or clans |
| Keywords: | Apprenticeship; Clans; Dissemination of Knowledge; Guilds |
| JEL: | E02 J24 N10 N30 O33 O43 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11199&r=lma |
| By: | Card, David (University of California, Berkeley); Cardoso, Ana Rute (IAE Barcelona (CSIC)); Heining, Jörg (Institute for Employment Research (IAB), Nuremberg); Kline, Patrick (University of California, Berkeley) |
| Abstract: | We review the literature on firm-level drivers of labor market inequality. There is strong evidence from a variety of fields that standard measures of productivity – like output per worker or total factor productivity – vary substantially across firms, even within narrowly-defined industries. Several recent studies note that rising trends in the dispersion of productivity across firms mirror the trends in the wage inequality across workers. Two distinct literatures have searched for a more direct link between these two phenomena. The first examines how wages are affected by differences in employer productivity. Studies that focus on firm-specific productivity shocks and control for the non-random sorting of workers to more and less productive firms typically find that a 10% increase in value-added per worker leads to somewhere between a 0.5% and 1.5% increase in wages. A second literature focuses on firm-specific wage premiums, using the wage outcomes of job changers. This literature also concludes that firm pay setting is important for wage inequality, with many studies finding that firm wage effects contribute approximately 20% of the overall variance of wages. To interpret these findings, we develop a model where workplace environments are viewed as imperfect substitutes by workers, and firms set wages with some degree of market power. We show that simple versions of this model can readily match the stylized empirical findings in the literature regarding rent-sharing elasticities and the structure of firm-specific pay premiums. |
| Keywords: | wage distribution, rent sharing, monopsony, job mobility, linked employer-employee data |
| JEL: | D22 J31 J42 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9850&r=lma |
| By: | Barlevy, Gadi (Federal Reserve Bank of Chicago); Neal, Derek (University of Chicago) |
| Abstract: | In many professional service firms, new associates work long hours while competing in up-or-out promotion contests. Our model explores why these firms require young professionals to take on heavy work loads while simultaneously facing significant risks of dismissal. We argue that the productivity of skilled partners in professional service firms (e.g. law, consulting, investment banking, and public accounting) is quite large relative to the productivity of their peers who are competent and experienced but not well-suited to the partner role. Therefore, these firms adopt personnel policies that facilitate the identification of new partners. In our model, both heavy work loads and up- or-out rules serve this purpose. Firms are able to identify more professionals who can function effectively as partners when they require new associates to perform more tasks. Further, when firms replace experienced associates with new less productive workers, they gain the opportunity to identify talented professionals who will have long careers as partners. Both of these personnel practices are costly. However, when the gains from increasing the number of talented partners exceed these costs, firms employ both practices in tandem. We present evidence on life-cycle patterns of hours and earnings among lawyers that support our claim that both heavy work loads and up-or-out rules are screening mechanisms. |
| Keywords: | up-or-out, long hours, screening |
| JEL: | J44 J22 M51 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9858&r=lma |
| By: | Daniel K. Fetter; Lee M. Lockwood |
| Abstract: | Many major government programs transfer resources to older people and implicitly or explicitly tax their labor. In this paper, we shed new light on the labor supply effects of such programs by investigating the Old Age Assistance Program (OAA), a means-tested and state-administered pension program created by the Social Security Act of 1935. Using newly available Census data on the entire US population in 1940, we exploit the large differences in OAA programs across states to estimate the labor supply effects of OAA. Our estimates imply that OAA reduced the labor force participation rate among men aged 65-74 by 5.7 percentage points, nearly half of its 1930-40 decline. Estimating a structural model of labor supply, we find that the welfare costs to recipients of the high tax rates implicit in OAA's earnings test were quite small. Predictions based on our reduced-form estimates and our estimated model both suggest that Social Security could account for at least half of the large decline in late-life work from 1940 to 1960. |
| JEL: | H53 H55 I38 J26 N32 N42 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22132&r=lma |
| By: | Simon James Greenwood; Andrea Kutinova Menclova (University of Canterbury) |
| Abstract: | This study is the first to our knowledge to document the extent and correlates of occupational regulation in New Zealand. Using data from the Census and the Survey of Working Life, we estimate that 29% of workers’ primary jobs are affected by occupational regulation. This is lower than the 35% reported for the US but close to UK estimates of 28%. Furthermore, we find that holding observable factors constant, occupational regulation is associated with a wage premium of 5%. This is lower than the 18% licensing premium found for the US but within the range of estimates for the UK. |
| Keywords: | Occupational regulation, licensing, wages, New Zealand |
| JEL: | J44 |
| Date: | 2016–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:16/06&r=lma |
| By: | Azmat, Ghazala; Bagues, Manuel; Cabrales, Antonio; Iriberri, Nagore |
| Abstract: | This paper studies the effect of providing feedback to college students on their position in the grade distribution by using a randomized control experiment. This information was updated every six months during a three-year period. In the absence of treatment, students'; underestimate their position in the grade distribution. The treatment significantly improves the students'; self-assessment. We find that treated students experience a significant decrease in their educational performance, as measured by their accumulated GPA and number of exams passed, and a significant improvement in their self-reported satisfaction, as measured by survey responses obtained after information is provided but before students take their exams. Those effects, however, are short lived, as students catch up in subsequent periods. Moreover, the negative effect on performance is driven by those students who underestimate their position in the absence of feedback. Those students who overestimate initially their position, if anything, respond positively. |
| Keywords: | randomized field experiment; ranking; Relative performance feedback; school performance. |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11201&r=lma |
| By: | Müller, Tobias; Shaikh, Mujaheed |
| Abstract: | This paper presents evidence on intra-household retirement externalities by assessing the causal effect of partner's retirement on own health behaviour in Europe. We identify partner's retirement effects by applying a fuzzy regression discontinuity (RD) framework using retirement eligibility as an exogenous instrument for partner's retirement status. Using data from the Survey of Health, Ageing and Retirement in Europe (SHARE) we find that while partner's retirement increases own physical activity, it also increases smoking by up to 7 cigarettes a day and increases alcohol intake by 1-2 drinks per day. Furthermore, we find that physical activity increases only for individuals that are themselves retired pointing toward compensated effects that arise due to husband's and wife's retirement being complements. Similarly, an increase in alcohol intake is observed only if the individuals are themselves retired and an increase in smoking is only observed if the partner is a smoker suggesting mutual positive externalities and leisure complementarities. |
| Keywords: | Retirement Externalities, Health Behaviour, Fuzzy Regression Discontinuity Design |
| JEL: | C26 I12 J26 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70843&r=lma |
| By: | Thureson, Disa (VTI) |
| Abstract: | Chetty (2006) developed a new method of estimating the Elasticity of Marginal Utility of Consumption (EMUC) from observed work time responses to wage changes and derived an upper bound of 2 for this parameter. Here I show that the omission of household production in Chetty’s model may lead to bias, and perform a numerical sensitivity analysis of Chetty’s results in this respect. I develop a new model that includes household production from which I derive new, unbiased EMUC formulas. I offer empirical estimates based on current evidence of the included parameters, suggesting a lower bound for EMUC of about 0.9. |
| Keywords: | Elasticity of marginal utility of consumption; Household production; Labor supply; Coefficient of relative risk aversion; Consumer behavior |
| JEL: | D10 D60 J22 |
| Date: | 2016–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2016_010&r=lma |
| By: | Stefano Colonnello |
| Abstract: | I model the joint effects of debt, macroeconomic conditions, and cash flow cyclicality on risk-shifting behavior and managerial pay-for-performance sensitivity. I show that risk-shifting incentives rise during recessions and that the shareholders can eliminate such adverse incentives by reducing the equity-based compensation in managerial contracts. I also show that this reduction should be larger in highly procyclical firms. Using a sample of U.S. public firms, I provide evidence supportive of the model’s predictions. First, I find that equity-based incentives are reduced during recessions. Second, I show that the magnitude of this effect is increasing in a firm’s cash flow cyclicality. |
| Keywords: | risk-shifting, executive compensation, business cycle |
| JEL: | G32 J33 M52 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:6-16&r=lma |
| By: | Sánchez-Barrioluengo, Mabel; Consoli, Davide |
| Abstract: | This paper explores the relationship between regional human capital (HC) and the processes of knowledge creation and mobilization due to Higher Education Institutions (HEIs). Although the nexus between these dimensions emerges frequently in both the scholarly and policy discourses, no study has so far investigated explicitly how their connection works. Using occupations as a proxy for the skill content of jobs, we analyse individual (gender, schooling and age) and regional (university orientation) factors that influence HC employment structure in Spanish regions over the period 2003-2010. The main finding is that teaching university mission is a robust predictor of high-skill employment, while the impact of engagement (research and knowledge transfer) activities is more sensitive to structural characteristics of the regional socio-economic context. |
| Keywords: | Human Capital, University Orientation, Skills, Region |
| JEL: | J24 |
| Date: | 2016–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:ing:wpaper:201601&r=lma |
| By: | Audretsch, David (Indiana University); Kuratko, Donald (Indiana University); Link, Albert (University of North Carolina at Greensboro, Department of Economics) |
| Abstract: | This paper seeks to distinguish between dynamic and static entrepreneurship. We define the construct of dynamic entrepreneurship in terms of Schumpeterian innovativeness and then develop a hypothesis suggesting that human capital is conducive to such action. In contrast, a paucity of human capital is more conducive to static entrepreneurship (defined in terms of organizational or ownership status). Based on a rich data set of entrepreneurs receiving research funding through the U.S. Small Business Innovation Research (SBIR) program, our empirical evidence suggests that academic-based human capital is positively correlated with dynamic behavior, whereas as business-based human capital and prior business experience is not. |
| Keywords: | Dynamic entrepreneurship; Static entrepreneurship; Schumpeterian innovation; human capital; Small Business Innovation Research (SBIR) Program |
| JEL: | J24 L26 O38 |
| Date: | 2016–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2016_002&r=lma |
| By: | Bertoni, Marco (University of Padova); Brunello, Giorgio (University of Padova); Mazzarella, Gianluca (University of Padova) |
| Abstract: | By increasing the residual working horizon of employed individuals, pension reforms that raise minimum retirement age are likely to affect the returns to investments in health-promoting behaviours before retirement, with consequences for individual health. Using the exogenous variation in minimum retirement age induced by a sequence of Italian pension reforms during the 1990s and 2000s, we show that Italian males aged 40 to 49 reacted to the longer time to retirement by raising regular exercise and by reducing smoking and regular alcohol consumption. Dietary habits were also affected, with positive consequences on obesity and self-reported satisfaction with health. |
| Keywords: | retirement, working horizon, healthy behaviours, pension reforms |
| JEL: | H55 I12 J26 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9834&r=lma |
| By: | Di Pietro, Giorgio (University of Westminster) |
| Abstract: | In recent years, in Italy, a larger number of students have chosen to attend vocational hospitality and catering schools. This paper investigates the extent to which this increase may have been triggered by the growing popularity of the cooking reality show MasterChef, in which the chef profession is portrayed as exciting and glamorous. Using panel data methods and controlling for several potential confounding variables, the analysis attempts to separate the effect of MasterChef from that of other determinants of the decision to attend vocational hospitality and catering schools. The results show that an increase of one percentage point in the audience of MasterChef is associated with an increase in the proportion of final year lower secondary school students willing to enrol at vocational hospitality and catering schools of between 0.25 and 0.35 percentage points. This finding suggests that popular television programmes like MasterChef may play an important role in complementing and supplementing government measures aimed at promoting vocational training among youths. |
| Keywords: | teenage career aspirations, vocational hospitality and catering schools, panel data analysis, MasterChef |
| JEL: | I21 J44 C23 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9804&r=lma |
| By: | John S. Heywood; Uwe Jirjahn; Cornelia Struewing |
| Abstract: | This work contributes to the literature demonstrating an important role for psychological traits in labor market decisions. We show that West German workers with an internal locus of control sort into jobs with performance appraisals. Appraisals provide workers who believe they control their environment a tool to demonstrate their value and achieve their goals. We confirm that workers who are risk tolerant also sort into jobs with performance appraisals but explain why the influence of the locus of control and risk tolerance should not be additive. We demonstrate this by estimating a routinely large and significantly negative interaction in our sorting equations. We also show that important patterns of sorting are revealed only when taking into account the interaction of locus of control and risk tolerance. |
| Keywords: | Locus of control, risk attitude, performance appraisal, performance pay, sorting, extrinsic rewards, intrinsic motivation |
| JEL: | D03 J33 M52 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:trr:wpaper:201603&r=lma |
| By: | Karolina Goraus; Piotr Lewandowski |
| Abstract: | Minimum wages continue to be at the centre of the policy debates in both developed and emerging economies. Such policies can only be effective if (1) the existing regulatory system does not have gaps that allow for the payment of wages below the minimum wage, and (2) the existing minimum wage laws are not violated (too often). In this paper we analyse minimum wage violations in 10 Central and Eastern European countries that have joined the EU since 2004, and that have statutory national minimum wages. Utilising EU-SILC data, we use the methodology proposed by Bhorat et al. (2013) to analyse both the incidence of minimum wage violations, as well as the monetary depth of these violations. We find that on average in 2003-2012, the estimated incidence of violations ranged from 1.0% in Bulgaria, to 1.3% in the Czech Republic, around 3% in Romania and Slovenia, 4.7% in Poland and Hungary, 5.6% in Latvia, and 6.9% in Lithuania. The average pay shortfall ranged from 13.7% of the country-year specific minimum wage in Estonia, to 41.7% in Slovenia. In all of these countries, workers who were female, less-educated, in the service or agricultural sector, in a micro firm, or with a temporary contract were more likely than other categories of workers to earn less than the minimum wage they were entitled to. While higher minimum to median wage ratios were associated with higher levels of non-compliance, this effect was present within countries over time, but not between them. |
| Keywords: | minimum wage, violation, compliance, Central Eastern Europe |
| JEL: | J08 J31 J38 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:wpaper:wp032016&r=lma |