nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2016‒05‒28
25 papers chosen by
Joseph Marchand
University of Alberta

  1. How Credit Constraints Impact Job Finding Rates, Sorting & Aggregate Output By Kyle Herkenhoff; Gordon Phillips; Ethan Cohen-Cole
  2. Preference for the Workplace, Human Capital, and Gender By Matthew Wiswall; Basit Zafar
  3. Head Start and the Distribution of Long Term Education and Labor Market Outcomes By de Haan, Monique; Leuven, Edwin
  4. Worker-level consequences of import shocks By Katariina Nilsson Hakkala; Huttunen; Kristiina
  5. Heterogeneity in the Gender Wage Gap in Canada By Luiza Antonie; Miana Plesca; Jennifer Teng
  6. Politics in the Family Nepotism and the Hiring Decisions of Italian Firms By Gagliarducci, Stefano; Manacorda, Marco
  7. Equal but Inequitable: Who Benefits from Gender-Neutral Tenure Clock Stopping Policies? By Antecol, Heather; Bedard, Kelly; Stearns, Jenna
  8. Why has the cyclicality of productivity changed? What does it mean? By Fernald, John G.; Wang, J. Christina
  9. Do Field Experiments on Labor and Housing Markets Overstate Discrimination? Re-examination of the Evidence By David Neumark; Judith Rich
  10. Incentivizing creativity: A large-scale experiment with tournaments and gifts By Bradler, Christiane; Neckermann, Susanne; Warnke, Arne Jonas
  11. Relative Wealth Concerns, Executive Compensation, and Systemic Risk-Taking By Liu, Qi; Sun, Bo
  12. Getting tired of work, or re-tiring in absence of decent job opportunities? Some insights from an estimated Random Utility/Random Opportunity model on Belgian data By Capéau, Bart; Decoster, André
  13. Does the gender composition in Couples matter for the division of labor after childbirth? By Moberg, Ylva
  14. Arab Spring Protests and Women's Labor Market Outcomes: Evidence from the Egyptian Revolution By Nelly El-Mallakh; Mathilde Maurel; Biagio Speciale
  15. The Evolution of Human Capital in Africa, 1730 -1970: A Colonial Legacy? By Baten, Jörg; Cappelli, Gabriele
  16. The effect of means-tested social transfers on labour supply: heads versus spouses - An empirical analysis of work disincentives in the Kyrgyz Republic By Gassmann, Franziska; Zardo Trindade, Lorena
  17. Labor Supply in the Past, Present, and Future: a Balanced-Growth Perspective By Timo Boppart; Per Krusell
  18. The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment By Daron Acemoglu; Pascual Restrepo
  19. Career Implications of Having a Female-Friendly Supervisor By Bednar, Steven; Gicheva, Dora
  20. The Effect of Weight on Labor Market Outcomes: An Application of Genetic Instrumental Variables By Böckerman, Petri; Cawley, John; Viinikainen, Jutta; Lehtimäki, Terho; Rovio, Suvi; Seppälä, Ilkka; Pehkonen, Jaakko; Raitakari, Olli
  21. The Division of Labor in Teams: A Conceptual Framework and Application to Collaborations in Science By Carolin Haeussler; Henry Sauermann
  22. Informal Labour Markets in Pakistan By Muhammad Ali Choudhary; Saima Naeem; Gylfi Zoega
  23. “Sometimes you don't make enough to buy food†- an analysis of South African street waste pickers’ income By Viljoen JMM, Blaauw PF & Schenck CJ
  24. Disability policies: Reform strategies in a comparative perspective By René Böheim; Thomas Leoni
  25. Measuring Segregation on Small Units: A Partial Identification Analysis By Xavier D'Haultfoeuille; Roland Rathelot

  1. By: Kyle Herkenhoff; Gordon Phillips; Ethan Cohen-Cole
    Abstract: We empirically and theoretically examine how consumer credit access affects displaced workers. Empirically, we link administrative employment histories to credit reports. We show that an increase in credit limits worth 10% of prior annual earnings allows individuals to take .15 to 3 weeks longer to find a job. Conditional on finding a job, they earn more and work at more productive firms. We develop a labor sorting model with credit to provide structural estimates of the impact of credit on employment outcomes, which we find are similar to our empirical estimates. We use the model to understand the impact of consumer credit on the macroeconomy. We find that if credit limits tighten during a downturn, employment recovers quicker, but output and productivity remain depressed. This is because when limits tighten, low-asset, low-productivity job losers cannot self-insure. Therefore, they search less thoroughly and take more accessible jobs at less productive firms.
    JEL: E13 E2 E24 E32 J01 J21 J24 J31 J6 J63 J64 J65
    Date: 2016–05
  2. By: Matthew Wiswall; Basit Zafar
    Abstract: In this paper, we use a hypothetical choice methodology to robustly estimate preferences for workplace attributes and quantify how much these preferences influence pre-labor market human capital investments. Undergraduate students are presented with sets of job offers that vary in their attributes (such as earnings and job hours flexibility) and asked to state their probabilistic choices. We show that this method robustly identifies preferences for various job attributes, free from omitted variable bias and free from considering the equilibrium matching of workers to jobs. While there is substantial heterogeneity in preferences, we find that women on average have a higher willingness to pay for jobs with greater work flexibility (lower hours, and part-time option availability) and job stability (lower risk of job loss), and men have a higher willingness to pay for jobs with higher earnings growth. Using a follow-up survey several years after the experiment, we find a systematic relationship between the respondents' job preferences as revealed during college and the actual workplace characteristics of the jobs these individuals are currently working at after college. In the second part of the paper, we relate these job attribute preferences to major choice. Using data on students' perceptions about the demand side of the labor market--beliefs about expected attributes of jobs students anticipate being offered if they were to complete particular majors--we find that students perceive jobs offered to Humanities majors to have fewer hours, more work-time flexibility, and higher stability than jobs offered to Economics/Business majors. These job attributes are found to play a role in major choice, with women exhibiting greater sensitivity to non-pecuniary job attributes in major choice.
    JEL: J16 J24
    Date: 2016–04
  3. By: de Haan, Monique (University of Oslo); Leuven, Edwin (University of Oslo)
    Abstract: In this paper we investigate the effect of Head Start on long term education and labor market outcomes using data from the NLSY79. The contributions to the existing literature on the effectiveness of Head Start are threefold: (1) we are the first to examine distributional effects of Head Start on long term outcomes (2) we do not rely on quasi-experimental variation in Head Start participation but instead perform a nonparametric bounds analysis that relies on weak stochastic dominance assumptions and (3) we consider education and labor market outcomes observed for individuals in their early 30s. The results show that Head Start has a statistically significant positive effect on years of education, in particular for women, blacks and Hispanics. For wage income we also find evidence that Head Start has beneficial impacts, with effects located at the lower end of the distribution.
    Keywords: Head Start, early intervention, long term outcomes, partial identification
    JEL: H52 I21 J13 J24 J31
    Date: 2016–04
  4. By: Katariina Nilsson Hakkala; Huttunen; Kristiina
    Abstract: We analyse the effects of imports on employment and earnings by distinguishing between import competition in final products and firms? use of imports in production (offshoring). We use Finnish worker-firm data merged with product -level trade data. We focus on Chinese imports and instrument them by changes in China?s share of world exports. Both types of importing increase the job loss risk for all workers and, in particular, for workers in production occupations. An increase in import competition has larger negative effects than an increase in offshoring. Production workers suffer the largest earnings losses, while for high -skilled workers the wage-effect is positive.
    Keywords: Offshoring, Import Competition, Employment, Earnings
    JEL: F16 L24 J63 J31 J23
    Date: 2016–05–16
  5. By: Luiza Antonie (School of Computer Science, University of Guelph); Miana Plesca (Department of Economics and Finance, University of Guelph); Jennifer Teng (Independent Researcher)
    Abstract: There is significant heterogeneity in the male-female wage gap depending on individuals’ education, income, and labour supply choices. Using data from the Canadian Census and from the Labour Force Survey, we document to what extent the gap in hourly wages gets compounded by a gender gap in hours worked, making the annual gender pay gap much larger. Within fulltime full-year, full-time part year, and part-time jobs, we find much smaller gaps than the overall one, even conditional on detailed occupations. This suggests a different selection by gender into full-time and part-time jobs, with women of higher earnings potential selecting into part-time work. We document that men are more likely to be promoted than women, regardless of marital status, while women are more likely to select into part-time jobs or be absent from work if they have children in their care. Furthermore, the wage gap is very small for younger people and it increases with age, even for single individuals, providing suggestive evidence for statistical discrimination. The male-female wage gap decreases with education, at all quantiles of the income distribution, except for a glass ceiling effect observable for the top 10% of the university wage distribution. We look more deeply at this glass ceiling effect by assigning gender to the individuals on Ontario’s Sunshine list of public salary disclosure for top earners. We document a gender imbalance on the list, with twice more men than women making the list, but no substantive gender wage gap. Given all these findings, we contend that wage equality in the labour market can only be achieved in conjunction with gender equality in the household, and that effective policies to target the remaining wage gap should address labour supply and child rearing channels.
    Keywords: Gender wage gap, Pay equity
    JEL: J31 J16 J38
    Date: 2016
  6. By: Gagliarducci, Stefano; Manacorda, Marco
    Abstract: In this paper we investigate the effect of family connections to politicians on individuals' labor market outcomes. We combine data for Italy over almost three decades from longitudinal social security records on a random sample of around 1 million private sector employees with the universe of around 500,000 individuals ever holding political office, and we exploit information available in both datasets on a substring of each individual's last name and municipality of birth in order to identify family ties. Using a diff-in-diff analysis that follows individuals as their family members enter and leave office, and correcting for the measurement error induced by our fuzzy matching method, we estimate that the monetary return to having a politician in the family is around 3.5 percent worth of private sector earnings and that each politician is able to extract rents for his family worth between one fourth and one full private sector job per year. The effect of nepotism is long lasting, extending well beyond the period in office. Consistent with the view that this is a technology of rent appropriation on the part of politicians, the effect increases with politicians' clout and with the resources available in the administration where they serve.
    Keywords: Family connections; Nepotism; Politics; Rent appropriation
    JEL: D72 D73 H72 J24 J30 M51
    Date: 2016–05
  7. By: Antecol, Heather (Claremont McKenna College); Bedard, Kelly (University of California, Santa Barbara); Stearns, Jenna (University of California, Santa Barbara)
    Abstract: Many skilled professional occupations are characterized by an early period of intensive skill accumulation and career establishment. Examples include law firm associates, surgical residents, and untenured faculty at research-intensive universities. High female exit rates are sometimes blamed on the inability of new mothers to survive the sustained negative productivity shock associated with childbearing and early childrearing in these environments. Gender-neutral family policies have been adopted in some professions in an attempt to "level the playing field." The gender-neutral tenure clock stopping policies adopted by the majority of research-intensive universities in the United States in recent decades are an excellent example. But to date, there is no empirical evidence showing that these policies help women. Using a unique data set on the universe of assistant professor hires at top-50 economics departments from 1985-2004, we show that the adoption of gender-neutral tenure clock stopping policies substantially reduced female tenure rates while substantially increasing male tenure rates.
    Keywords: gender-neutral family policies, gender gap in labor market outcomes, childcare and fertility, tenure rates
    JEL: J13 J16 J24
    Date: 2016–04
  8. By: Fernald, John G. (Federal Reserve Bank of San Francisco); Wang, J. Christina (Federal Reserve Bank of Boston)
    Abstract: U.S. labor and total factor productivity have historically been procyclical—rising in booms and falling in recessions. After the mid-1980s, however, TFP became much less procyclical with respect to hours while labor productivity turned strongly countercyclical. We find that the key empirical “fact” driving these changes is reduced variation in factor utilization—conceptually, the workweek of capital and labor effort. We discuss a range of theories that seek to explain the changes in productivity’s cyclicality. Increased flexibility, changes in the structure of the economy, and shifts in relative variances of technology and “demand” shocks appear to play key roles.
    JEL: E22 E23 E32 O47
    Date: 2016–04–01
  9. By: David Neumark; Judith Rich
    Abstract: There have been over 60 field experiments on discrimination in labor and housing markets conducted since 2000, in 16 countries. These studies nearly always find significant levels of discrimination against minority transactors in these markets. A key challenge to these findings, though, is that even in rather ideal conditions, the estimates of discrimination can be biased if there is differential variation in the unobservable determinants of productivity of majority and minority groups, conditional on the characteristics of market participants these experiments reveal to employers or landlords (Heckman, 1998). The potential bias could go in either direction, but naturally raises the question of whether this experimental literature as a whole overstates the evidence of discrimination. To assess this question, we re-assess the evidence from the nine existing studies that have sufficient information to implement a correction for this bias (Neumark, 2012). For the housing market studies, the estimated effect of discrimination is robust to this correction. For the labor market studies, in contrast, the evidence is less robust; in about half of cases covered in these studies, the estimated effect of discrimination either falls to near zero or becomes statistically insignificant.
    JEL: J71
    Date: 2016–05
  10. By: Bradler, Christiane; Neckermann, Susanne; Warnke, Arne Jonas
    Abstract: This paper reports the results from a large-scale laboratory experiment investigating the impact of tournament incentives and wage gifts on creativity. We find that tournaments substantially increase creative output, with no evidence for crowding out of intrinsic motivation. By comparison, wage gifts are ineffective. Additional treatments show that it is the uncertain mapping between effort and output that inhibits reciprocity. This uncertainty is prevalent in creative and other complex tasks. Our findings provide a rationale for the frequent use of tournaments when seeking to motivate creative output.
    Keywords: creativity,incentives,tournament,reciprocity,experiment,crowding-out
    JEL: C91 D03 J33 M52
    Date: 2016
  11. By: Liu, Qi; Sun, Bo
    Abstract: Given the recent empirical evidence on peer effects in CEO compensation, this paper theoretically examines how relative wealth concerns, in which a manager’s satisfaction with his own compensation depends on the compensation of other managers, affect the equilibrium contracting strategy and managerial risk-taking. We find that such externalities can generate pay-for-luck as an efficient compensation vehicle in equilibrium. In expectation of pay-for-luck in other firms, tying managerial pay to luck provides insurance to managers against a compensation shortfall relative to executive peers during market fluctuations. When all firms pay for luck, we show that an effort-inducing mechanism exists: managers have additional incentives to exert effort in utilizing investment opportunities, which helps them keep up with their peers during industry movements. In addition, we show that compensation arrangements involving pay-for-luck that are efficient from the shareholders’ perspective can nonetheless exacerbate aggregate fluctuations in the real economy by incentivizing excessive systemic risk-taking, especially in periods of heightened risk.
    Keywords: Relative wealth concerns ; Managerial compensation ; Pay-for-luck ; Excessive risk-taking
    JEL: D82 D86
    Date: 2016–05
  12. By: Capéau, Bart; Decoster, André
    Abstract: This paper exploits the distinction between preference and opportunity factors in a Random Utility and Random Opportunity (RURO) model of job choice (Aaberge, Dagsvik and Strøm, 1995, and Aaberge, Colombino and Strøm, 1999). We estimate the model on Belgian data (SILC 2007). To investigate to what extent lower labour market participation of elderly is due to changing preferences (executing a job might become less enjoyable with age) or to differences in opportunities (elderly getting less, or less attractive job offers), we use the estimated model to simulate two counterfactuals. In the first, we remove partly the age heterogeneity in opportunities, in the second we remove age heterogeneity in preferences. A comparison of labour market behaviour in these two counterfactuals with the baseline shows that opportunities which decline with age are at least as an important factor in explaining low participation rates for the elderly, as is increasing preference for leisure. The effect of opportunities seems to work primarily through the extensive margin, whereas the effect of preferences is more outspoken in the intensive than in the extensive margin.
    Date: 2016–05–19
  13. By: Moberg, Ylva (Uppsala university)
    Abstract: In this paper I compare the effect of entering parenthood on the spousal income gaps in lesbian and heterosexual couples using Swedish population wide register data. Comparing couples with similar pre-childbirth income gaps, a difference-in-differences strategy is used to estimate the impact of the gender composition of the couple on the spousal income gap after childbirth. The results indicate that the gender composition of the couple does matter for the division of labor after having children. Five years after childbirth the income gap is smaller in lesbian than in heterosexual couples also when comparing couples with the same pre-parenthood income gap. Heterosexual couples’ division of labor seems to be influenced by traditional gender norms, regardless of their pre-childbirth income gap. In lesbian couples the partners’ relative earnings before parenthood and a principle about fairness may be more important, as well as the partners’ preferences for giving birth as the birth giving partner typically spends more time on parental leave.
    Keywords: economics of gender; division of labor; labor supply; same-sex couples; transition to parenthood
    JEL: D13 J13 J22
    Date: 2016–04–28
  14. By: Nelly El-Mallakh (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Mathilde Maurel (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, FERDI - Fondation pour les Etudes et Recherches sur le Développement International - FERDI); Biagio Speciale (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We analyze the effects of the 2011 Egyptian protests on the relative labor market conditions of women using panel information from the Egypt Labor Market Panel Survey (ELMPS). We construct our measure of intensity of the protests – the governorate-level number of “martyrs” (i.e., demonstrators who died during the protests) - using unique information from the Statistical Database of the Egyptian Revolution. We find that the 2011 protests have reduced the gender gap in labor force participation by increasing women’s unemployment and private sector employment. The political change has mostly affected the relative labor market outcomes of women in households at the bottom of the pre-revolution income distribution. We link these findings to the literature showing how a relevant shock to the labor division between women and men may have long run consequences on the role of women in society.
    Keywords: Egyptian protests, women’s labor market outcomes, “martyrs”.
    Date: 2016–04–29
  15. By: Baten, Jörg; Cappelli, Gabriele
    Abstract: How did colonialism interact with the development of human capital in Africa? We create an innovative panel dataset on numeracy across African countries before, during and after the Scramble for Africa (1730 -1970) by drawing on new sources and by carefully assessing potential selection bias. The econometric evidence that we provide, based on OLS, 2SLS and Propensity Score Matching, shows that colonialism had very diverse effects on human capital depending on the education policy of the colonizer. Although the average marginal impact of colonialism on the growth of numeracy was positive, the premium that we find was driven by the British educational system. Especially after 1900, the strategies chosen by the British were associated with faster human-capital accumulation, while other colonies were characterized by a negative premium on the growth of education. We connect this finding to the reliance of British education policy on mission schools, which used local languages and the human capital of local teachers to expand schooling in the colonies. We also show that this, in turn, had long-lasting effects on economic growth, which persist to the present day.
    Keywords: Africa; Colonialism; Education Policy; Human Capital; Numeracy
    JEL: N37 O15
    Date: 2016–05
  16. By: Gassmann, Franziska (UNU‐MERIT, Maastricht University); Zardo Trindade, Lorena (Center for Social Policy Herman Deleeck, University of Antwerp)
    Abstract: This paper empirically estimates potential work disincentives of a means-tested social transfer in the Kyrgyz Republic for adults with different household positions. Using data from the Kyrgyz Integrated Household Survey 2012, the analysis compares labour market outcomes for household heads and spouses. Binary response models and quasi-experimental methods are applied to assess the effect of the Monthly Benefit for Poor Families with Children (MBPF) on labour supply. The analysis indicates that overall beneficiaries have on average higher labour market participation rates when compared to non-beneficiaries, but they are more exposed to seasonal effects. Results differ when analysing different household members separately. Household heads in beneficiary households are less likely to be economically active than similar non-beneficiaries. Yet, spouses are more likely to be economically active. However, the effects differ depending on whether the household is located in the South or the North of the country.
    Keywords: social transfers, work disincentives, Kyrgyz Republic
    JEL: I38 J22
    Date: 2016–05–19
  17. By: Timo Boppart; Per Krusell
    Abstract: What explains how much people work? Going back in time, a main fact to address is the steady reduction in hours worked. The long-run data, for the U.S. as well as for other countries, show a striking pattern whereby hours worked fall steadily by a little below a half of a percent per year, accumulating to about a halving of labor supply over 150 years. In this paper, we argue that a stable utility function defined over consumption and leisure can account for this fact, jointly with the movements in the other macroeconomic aggregates, thus allowing us to view falling hours as part of a macroeconomy displaying balanced growth. The key feature of the utility function is an income effect (of higher wages) that slightly outweighs the substitution effect on hours. We also show that our proposed preference class is the only one consistent with the stated facts. The class can be viewed as an enlargement of the well-known “balanced-growth preferences” that dominate the macroeconomic literature and that demand constant (as opposed to falling) hours in the long run. The postwar U.S. experience, over which hours have shown no net decrease and which is the main argument for the use of “balanced-growth preferences”, is thus a striking exception more than a representative feature of modern economies.
    JEL: E21 J22 O11 O40
    Date: 2016–05
  18. By: Daron Acemoglu; Pascual Restrepo
    Abstract: The advent of automation and the simultaneous decline in the labor share and employment among advanced economies raise concerns that labor will be marginalized and made redundant by new technologies. We examine this proposition using a task-based framework in which tasks previously performed by labor can be automated and more complex versions of existing tasks, in which labor has a comparative advantage, can be created. We characterize the equilibrium in this model and establish how the available technologies and the choices of firms between producing with capital or labor determine factor prices and the allocation of factors to tasks. In a static version of our model where capital is fixed and technology is exogenous, automation reduces employment and the share of labor in national income and may even reduce wages, while the creation of more complex tasks has the opposite effects. Our full model endogenizes capital accumulation and the direction of research towards automation and the creation of new complex tasks. Under reasonable conditions, there exists a stable balanced growth path in which the two types of innovations go hand-in-hand. An increase in automation reduces the cost of producing using labor, and thus discourages further automation and encourages the faster creation of new complex tasks. The endogenous response of technology restores the labor share and employment back to their initial level. Although the economy contains powerful self correcting forces, the equilibrium generates too much automation. Finally, we extend the model to include workers of different skills. We find that inequality increases during transitions, but the self-correcting forces in our model also limit the increase in inequality over the long-run.
    JEL: J23 J24 O14 O31 O33
    Date: 2016–05
  19. By: Bednar, Steven (Elon University); Gicheva, Dora (University of North Carolina at Greensboro, Department of Economics)
    Abstract: Supervisor attributes, such as race or gender, are thought to play an important role in employee hiring, career advancement and turnover even in the absence of discrimination. For example, supervisors may be better able to infer the true ability of a worker if they have a common attribute (Cornell and Welch 1996) or it could be that mentoring is an important determinant of employees' career trajectories and is more effective if the workers and supervisors are of the same type (Athey, Avery and Zemsky 2000). Embedded in this idea are important policy implications for alleviating the gender wage gap and other adverse career outcomes for females. In our paper we introduce a type-based mentoring model of worker productivity and turnover in which human capital production is contingent on the worker's gender and the supervisor's type. We allow for a flexible definition of "type" based on the supervisor's attitude toward working with females. Using a longitudinal data set in which workers with a high level of managerial responsibility are observed at multiple establishments over time, we construct a measure of revealed supervisor female-friendliness above and beyond the institution-specific culture by comparing changes in the gender composition of workers at lower levels of the firm. We adjust the measure to account for its potential endogeneity with respect to the outcomes that we study and use it to test empirically the predictions of a type-based mentoring model against a model of pure taste-based discrimination. We add to the literature by proposing the idea that it may be necessary to be more flexible when defining "type" in the mentoring relationship. We argue that, in addition to demographics, supervisors can be characterized by a more complexly defined inherent attitude toward working with and mentoring females, which can vary within observable supervisor characteristics, and that the existing literature has left unexplored areas by limiting its focus on leaders' observable characteristics. Implementing our definition of female-friendliness empirically requires us to use a novel data set with information on both supervisors and lower-level workers, in which high-level managerial employees are followed across establishments. We link the theoretical idea of type-based mentoring to observed career outcomes and test whether females are more likely to benefit in terms of career progression when matched with a supervisor with a more favorable attitude toward mentoring women. While our study focuses on a very specific labor market setting, described in Section 3, our findings offer strong support for the importance of type-based mentoring in the labor market and in addition should motivate researchers to use broader definitions of "type" that include harder to infer attitudes in addition to directly observable supervisor and worker attributes such as gender.
    Keywords: gender; labor market
    JEL: J31 J70
    Date: 2016–04–16
  20. By: Böckerman, Petri (Labour Institute for Economic Research); Cawley, John (Cornell University); Viinikainen, Jutta (Jyväskylä University School of Business and Economics); Lehtimäki, Terho (University of Tampere); Rovio, Suvi (University of Turku); Seppälä, Ilkka (University of Tampere); Pehkonen, Jaakko (Jyväskylä University School of Business and Economics); Raitakari, Olli (University of Turku)
    Abstract: The increase in the prevalence of obesity worldwide has led to great interest in the economic consequences of obesity, but valid and powerful instruments for obesity, which are needed to estimate its causal effects, are rare. This paper contributes to the literature by using a novel instrument: genetic risk score, which reflects the predisposition to higher body mass index across many genetic loci. We estimate IV models of the effect of BMI on labor market outcomes using Finnish data that have many strengths: genetic information, measured body mass index, and administrative earnings records that are free of the problems associated with nonresponse, self-reporting error or top-coding. The first stage of the IV models indicate that genetic risk score is a powerful instrument, and the available evidence from the genetics literature is consistent with instrument validity. The results of the IV models indicate weight reduces earnings and employment and increases social income transfers, although we caution that the results are based on small samples, and are sensitive to specification and subsample.
    Keywords: obesity, BMI, earnings, employment, genetic instruments
    JEL: I10 J23 J31
    Date: 2016–04
  21. By: Carolin Haeussler; Henry Sauermann
    Abstract: Even though teams have become the dominant mode of knowledge production, little is known regarding how they divide work among their members. Conceptualizing knowledge production as a process involving a number of functional activities, we first develop a conceptual framework to study the division of labor in teams. This framework highlights three complementary perspectives: (1) individual level (the degree to which team members specialize vs. work as generalists), (2) activity level (the degree to which activities are concentrated among few team members vs. distributed among many) and (3) the intersection between the two (e.g., which activities are performed jointly by the same individual). We then employ this framework to explore team-based knowledge production using a newly available type of data – the disclosures of author contributions on scientific papers. Using data from over 12,000 articles, we provide unique descriptive insights into patterns of division of labor, demonstrating the value of the three complementary perspectives. We also apply the framework to uncover differences in the division of labor in teams of different size, working in novel vs. established fields, and on single vs. interdisciplinary projects. Finally, we show how division of labor is related to the quality of teams’ research output. We discuss opportunities for extending and applying our framework as well as implications for scientists and policy makers.
    JEL: J24 O31 O32
    Date: 2016–05
  22. By: Muhammad Ali Choudhary (State Bank of Pakistan); Saima Naeem (State Bank of Pakistan); Gylfi Zoega (University of London,)
    Abstract: This paper describes the results of a survey of informal-sector firms in Pakistan. Firms belong to the informal sector mainly because of scarce financial resources. There are significant differences in the level of wages and the flexibility of wages with the informal sector having both lower wages and greater flexibility than the formal sector. While minimum wages are less binding in the informal sector, a sort of indexation of wages to inflation is more common. In spite of these differences the reasons for not cutting wages in a recession are similar between the two sectors.
    Keywords: Informal sector, wage setting, wage rigidity.
    JEL: E24 E26 J31 J46
    Date: 2016–04
  23. By: Viljoen JMM, Blaauw PF & Schenck CJ
    Abstract: In this paper we use income data of 873 street waste pickers in South Africa to assess whether their income is sufficient to make a living and to identify the possible factors that may influence their income. The results can assist policy makers to make informed decisions in designing and implementing policies aimed at improving the street waste pickers’ income earning potential. The results of a linear and logistic regression analysis show that street waste pickers’ income is low and many of the street waste pickers in South Africa are trapped in persistent and chronic poverty. The findings further show that the only variables under the direct control of street waste pickers that may have a small positive effect on their income are the use of a trolley and the number of hours worked. Most of the variance in the daily income is explained by the prices of, access to, and the quality of recyclable waste collected over which the street waste pickers have little or no control. This leaves street waste pickers with little scope to improve their income and consequently their socio-economic conditions. Local governments can, however, create an environment and infrastructure in which higher levels of quality waste are made accessible to the street waste pickers.
    Keywords: waste pickers, income, poverty, waste management, recycling, waste, Informal economy
    JEL: E26 I30 J40
    Date: 2016
  24. By: René Böheim; Thomas Leoni
    Abstract: We analyze different disability policy strategies using policy scores developed by the OECD for the period 1990 to 2007. Applying model-based and hierarchical agglomerative clustering, we investigate the existence of distinct country clusters, characterized by particular policy combinations. In spite of common trends in policy re-orientation, our results indicate that the reforms of the last two decades led to more, not less, heterogeneity between country groups in terms of sickness and disability policy. A set of Northern and Continental European countries emerges as a distinct cluster characterized by its particular combination of strong employment-oriented policies and comparatively high protection levels. A qualitative review of policy changes in the most recent years suggests that the gap between these countries and the rest might have further increased. We embed our empirical analysis in a theoretical framework to identify the objectives and the main components of a comprehensive disability policy strategy. The objectives of such a strategy can be subsumed under three headings, representing strategy pillars: prevention and treatment; protection and insurance; and activation and re-integration. Not all these dimensions are covered equally well by the OECD policy scores and will have to be further investigated.
    JEL: H55 I18 J26
    Date: 2016–04
  25. By: Xavier D'Haultfoeuille (Centre de Recherche en Économie et Statistique (CREST)); Roland Rathelot (University of Warwick)
    Abstract: We consider the issue of measuring segregation in a population of small units, considering establishments in our application. Each establishment may have a different probability to hire an individual from the minority group. We define segregation indices as inequality indices on these unobserved, random probabilities. Because these probabilities are measured with error by proportions, standard estimators are inconsistent. We model this problem as a nonparametric binomial mixture. Under this testable assumption and conditions satisfied by standard segregation indices, such indices are partially identified and sharp bounds can be easily obtained by an optimization over a low dimensional space. We also develop bootstrap confidence intervals and a test of the binomial mixture model. Finally, we apply our method to measure the segregation of foreigners in small French firms.
    Keywords: segregation, small units, partial identification
    JEL: C13 C14 J71
    Date: 2016–05

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