nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2016‒06‒25
seventeen papers chosen by
Joseph Marchand
University of Alberta

  1. Ban the Box: The Effects of Criminal Background Information on Labor Market Outcomes By Ashley Hirashima
  2. The Effects of Wage Contracts on Workplace Misbehaviors: Evidence from a Call Center Natural Field Experiment By Jeffrey A. Flory; Andreas Leibbrandt; John A. List
  3. Insurance Between Firms: The Role of Internal Labor Markets By Cestone, Giacinta; Fumagalli, Chiara; Kramarz, Francis; Pica, Giovanni
  4. Quality Leisure Time and Youth Development By Fuchs, Benjamin; Osikominu, Aderonke
  5. The Choice of Valuation Techniques in Practice: Education versus Profession By Mukhlynina, Lilia; Nyborg, Kjell G
  6. Industrial Segregation and Wage Gaps between Migrants and Local Urban Residents in China:2002-2013 By Ma, Xinxin; Li, Shi
  7. Remoteness equals backwardness? Human capital and market access in the European regions: insights from the long run. By Claude Diebolt; Ralph Hippe
  8. Does 'Being Chosen' to Lead Induce Non-Selfish Behavior? Experimental Evidence on Reciprocity By Drazen, Allan; Ozbay, Erkut
  9. The Benefits of Alternatives to Conventional College: Labor-Market Returns to Proprietary Schooling By Christopher Jepsen; Peter Mueser; Kyung-Seong Jeon
  10. The Long Run Impacts of Merit Aid: Evidence from California’s Cal Grant By Eric Bettinger; Oded Gurantz; Laura Kawano; Bruce Sacerdote
  11. Impact Evaluation of the Job Youth Training Program Projoven By Juan José Díaz; David Rosas Shady
  12. Child Labor in China By Tang, Can; Zhao, Liqiu; Zhao, Zhong
  13. Has Uber Made It Easier to Get a Ride in the Rain? By Brodeur, Abel; Nield, Kerry
  15. Income Instability and Fiscal Progression By Garcia-Medina Cecilia; Jean-Francois Wen
  16. Employment Status and Support for Wartime Violence: Evidence from the Iraq War By Andrew C. Shaver
  17. Increasing Graduation and Calling for More Autonomy in Higher Education: Is It a Good Thing? A Theoretical Model By Stefano STAFFOLANI; Maria Cristina RECCHIONI

  1. By: Ashley Hirashima (University of Hawaii Economic Research Organization (UHERO) and Department of Economics)
    Abstract: This paper seeks to investigate the effects of Ban-the-Box laws across the United States. Ban-the-Box laws make it illegal to ask whether an applicant has been convicted of a crime on a job application. The effects are consistent with that of statistical discrimination where the policy is having adverse effects on individuals labor market outcomes. I find that without perfect information about an individual's criminal history, firms base their perceived productivity of a potential applicant on an expected relationship between race and criminality. This results in negative effects on labor market outcomes for all individuals, especially for black males, who are particularly vulnerable.
    Keywords: Labor discrimination; Public Policy; Labor Demand
    JEL: J23 J38 J71 J78
  2. By: Jeffrey A. Flory; Andreas Leibbrandt; John A. List
    Abstract: Workplace misbehaviors are often governed by explicit monitoring and strict punishment. Such enforcement activities can serve to lessen worker productivity and harm worker morale. We take a different approach to curbing worker misbehavior—bonuses. Examining more than 6500 donor phone calls across more than 80 workers, we use a natural field experiment to investigate how different wage contracts influence workers’ propensity to cheat and sabotage one another. Our findings show that even though standard relative performance pay contracts, relative to a fixed wage scheme, increase productivity, they have a dark side: they cause considerable cheating and sabotage of co-workers. Yet, even in such environments, by including an unexpected bonus, the employer can substantially curb worker misbehavior. In this manner, our findings reveal how employers can effectively leverage bonuses to eliminate undesired behaviors induced by performance pay contracts.
    JEL: C9 C93 J3 J41
    Date: 2016–06
  3. By: Cestone, Giacinta; Fumagalli, Chiara; Kramarz, Francis; Pica, Giovanni
    Abstract: We investigate how Internal Labor Markets (ILMs) allow organizations to accommodate shocks calling for costly labor adjustments. Using data on workers' mobility within French business groups, we find that adverse shocks affecting affiliated firms boost the proportion of workers redeployed to other group units rather than external firms. This effect is stronger when labor regulations are stricter and destination-firms are more efficient or enjoy better growth opportunities. Affiliated firms hit by positive shocks rely on the ILM for new hires, especially high-skilled workers. Overall, ILMs emerge as a co-insurance mechanism within organizations, providing job stability to employees as a by-product.
    Keywords: Business Groups; Co-Insurance; Internal Labor Markets
    JEL: G30 J08 J40 L22
    Date: 2016–06
  4. By: Fuchs, Benjamin; Osikominu, Aderonke
    Abstract: This paper first develops a simple model to clarify the links between leisure time use and skill formation. It then explores empirically how youths allocate their time. We focus on sports as a popular activity and estimate its effect on behavioral and economic outcomes. We exploit data from the German Socio-Economic Panel that offers the unique advantage of both a large, representative sample and high quality behavioral measures. We employ a flexible strategy combining propensity score matching and regression to account for self selection. Our results suggest that structured leisure activities like sports contribute to the development of nonacademic skills.
    Keywords: Human Capital; leisure activities; nonacademic skills; sports; treatment effect; youth development
    JEL: I21 J13 J24
    Date: 2016–06
  5. By: Mukhlynina, Lilia; Nyborg, Kjell G
    Abstract: We use a survey approach to learn about valuation professionals' choices and implementations of valuation techniques in practice. The survey design allows us to control for a respondent's professional subgroup (e.g., consulting), education, experience, and valuation purpose characteristics. We find support for the 'sociological hypothesis' that profession matters more than education; different professions have different valuation cultures. Other factors are less important. There are also many commonalities across respondents. Most use both multiples and DCF, but implement DCF in a way that almost turns it into a multiples exercise. Confusion reigns with respect to interest tax shields and the WACC. Higher educational levels do not reduce the confusion. Our overall findings matter because valuation professionals function as intermediaries in the capital allocation process. The relative unimportance of education raises questions about the role and benefit of higher level finance education.
    Keywords: DCF; finance education; multiples; sociological hypothesis; Valuation; valuation cultures
    JEL: A11 A14 A20 G02 G24 G31 G32
    Date: 2016–05
  6. By: Ma, Xinxin; Li, Shi
    Abstract: This paper explores industrial segregation and its impact on the wage gaps between rural-to-urban migrants and local urban residents in China. Using the Chinese Household Income Project (CHIP) 2002 and 2013 surveys, we analyzed the probabilities of entry to various industries for both migrant and local urban resident groups; using the model of Brown et al. (1980), we then undertook a decomposition analysis of the wage gaps. Several major conclusions emerge. First, although inter-industry differentials and intra-industry differentials both affect the wage gap between migrants and local urban residents, the effect of intra-industrial differentials is greater in both 2002 and 2013. Second, in considering the effect of intra-industry differentials, while the influence of explained differentials is greater than that of unexplained differentials in both 2002 and 2013, the influence of the unexplained component of the intra-industrial differentials rises steeply from 19.4% (2002) to 68.0% (2013). The results show that when other factors are held constant, the problem of discrimination against migrants in a given industry is becoming more serious. In addition, the influence of the explained component of the intra-industry differentials rises from 61.2% (2002) to 77.7% (2013).
    Keywords: industrial segregation, wage gaps, migrants, local urban residents, urban China
    JEL: J16 J24 J42 J71
    Date: 2016–05
  7. By: Claude Diebolt; Ralph Hippe
    Abstract: In a recent contribution, Redding and Schott (2003) add human capital to a two sector NEG model, highlighting that remoteness represents a penalty that gives disincentives to invest in human capital. But is this hypothesis consistent with long-term evidence? We test the persistence of this effect at the regional level in an historical setting. The results show that market access has a significant positive influence on human capital in OLS, Tobit and IV regression models. Thus, the paper confirms the ‘penalty of remoteness’ hypothesis for Europe in the long run.
    Keywords: Human Capital, New Economic Geography, Regional Development, Market Access.
    JEL: I21 N33 N93 R11
    Date: 2016
  8. By: Drazen, Allan; Ozbay, Erkut
    Abstract: We present experimental evidence that policies chosen by leaders depend on whether they were elected or appointed. Consistent with previous studies of the "dictator game" , we find that unitary policymakers do not always act selfishly, that is, choose a policy that maximizes their own payoffs. However, the way in which one became the leader matters. Leaders who are elected are significantly more likely to choose a policy not equal to their "type" than leaders who are appointed. Elected leaders who act non-selfishly will favor the voter rather than the losing candidate, while appointed leaders show no tendency to favor the voter over the losing candidate. Our results provide support for the view that non-selfish behavior of leaders reflects a reciprocity motive. They also show that candidates do not simply implement their own preferences once in office, as suggested by the basic citizen-candidate model.
    Keywords: Citizen-Candidate; Dictator Game; leaders; Reciprocity
    JEL: C91 D64 D72
    Date: 2016–06
  9. By: Christopher Jepsen (University College Dublin); Peter Mueser (University of Missouri-Columbia); Kyung-Seong Jeon (University of Missouri-Columbia)
    Abstract: This paper provides novel evidence on the labor-market returns to proprietary (also called for-profit) postsecondary school attendance. Specifically, we link administrative records on proprietary school attendance with quarterly earnings data for nearly 70,000 students. Because average age at school entry is 30 years of age, and because we have earnings data for five or more years prior to attendance, we estimate a person fixed-effects model to control for time-invariant differences across individuals. By five years after entry, quarterly earnings returns are around 26 percent for men and 21-22 percent for women. Average returns are quite similar for associate’s degree programs and certificate programs, but vary substantially by field of study. Differences in return by gender are completely explained by differences in field of study.
    Keywords: postsecondary education, labor-market returns, proprietary schooling
    JEL: J24 I26
  10. By: Eric Bettinger; Oded Gurantz; Laura Kawano; Bruce Sacerdote
    Abstract: We examine the impacts of being awarded a Cal Grant, among the most generous state merit aid programs. We exploit variation in eligibility rules using GPA and family income cutoffs that are ex ante unknown to applicants. Cal Grant eligibility increases degree completion by 2 to 5 percentage points in our reduced form estimates. Cal Grant also induces modest shifts in institution choice at the income discontinuity. At ages 28-32, Cal Grant receipt increases by three percentage points the likelihood of living in California at the income discontinuity, and raises earnings by four percentage points at the GPA discontinuity.
    JEL: H2 H4 H41 H52 I2 I22 I23 I24
    Date: 2016–06
  11. By: Juan José Díaz; David Rosas Shady
    Abstract: This paper brings new evidence on the impact of The Peruvian Job Youth Training Program (Projoven). Compared with prior evaluations of the program, this one has several advantages. This is the first experimental impact evaluation of Projoven, and also the first to measure impacts over a longer period: almost three years after training. Additionally, the evaluation supplements data from a follow-up survey with administrative data from the country's Electronic Payroll (Planilla Electrónica), allowing for a more accurate measure of formal employment. It also measures whether socioemotional skills of beneficiaries improved with program participation. The evaluation finds a high long term positive impact of Projoven on formal employment. It also finds certain heterogeneity of program impacts across subpopulations. Impacts on formal employment vary depending on the beneficiaries' gender and age, with different patterns of statistical significance depending on the data source used to measure employment formality. Finally, it does not find significant impacts on socio-emotional skills.
    Keywords: Formal Employment, Labor Market Insertion, Job Training Programs, Youth Labor, Vocational Education and Training, Long-term Impacts Analysis, Labor Market Policies, Labor Market Insertion, Formal Employment
    JEL: J24 J64 O15 O17
    Date: 2016–04
  12. By: Tang, Can (Renmin University of China); Zhao, Liqiu (Renmin University of China); Zhao, Zhong (Renmin University of China)
    Abstract: We present the first systematic study on child labor in China. Child labor is not a negligible social phenomenon in China; about 7.74% of children aged from 10 to 15 were working in 2010, and they worked for 6.75 hours per day on average, and spent 6.42 hours less per day on study than other children. About 90% of child laborers were still in school and combined economic activity with schooling. Our results show that child labor participation is positively associated with school dropout rate. A child living in a rural area is more likely to work. Compared with place of residence, the gender of a child are less important. The educational level of the household head and its interaction with the gender of the household head seem to be unimportant. However, household assets per capita and household involvement in non-agricultural activities are negatively related to the incidence of child labor. A child from a household with more adults is less likely to work. The prevalence of child labor in China exhibits significant regional variations. The child labor incidence is correlated with the development level of each region: the Western region has the highest percentage of child labor, followed by the Eastern and Central region.
    Keywords: child labor, school dropout, working hours, China
    JEL: J43 J81 O15
    Date: 2016–05
  13. By: Brodeur, Abel (University of Ottawa); Nield, Kerry (Carleton University)
    Abstract: In New York City (NYC), it has been a common complaint that it is difficult to find a taxi in the rain. Using all Uber rides in NYC from April to September 2014 and January to June 2015, we show that the number of Uber rides is significantly correlated with whether it rained. The number of Uber rides per hour is about 25 percent higher when it is raining, suggesting that surge pricing encourages an increase in supply. During the same time period, the number of taxi rides per hour increases by only 4 percent in rainy hours. We then show that the number of taxi rides per hour decreased by approximately 8 percent after Uber entered the New York market in May 2011, confirming that Uber is depressing taxi demand. Last, we test whether the total (Uber plus taxi) number of rides in rainy hours increased since May 2011. Our estimates suggest that the total number of rides increased by approximately 9 percent since Uber entered the market and that it is relatively easier to get a ride in rainy than in non-rainy hours in post-Uber years.
    Keywords: rain, Uber, taxi, dynamic pricing
    JEL: D01 D03 L92 J22
    Date: 2016–06
  14. By: Dagmara Nikulin (Gdansk University of Technology, Gdansk, Poland)
    Abstract: The main aim of this article is to point out the possible measures of how to improve the study of informal employment in developed countries. We choose the case of Poland to examine whether the existing definitions and measurement methods are suitable for indicating the prevalence of informal employment. Firstly, we present the most popular definitions of informal employment, secondly we show the existing research on informal employment in Poland, and thirdly we assess the previous estimations of informal employment in Poland with regard to the definition’s scope. Finally, we propose some improvements that would help in studying this phenomenon in Poland. Through a critical analysis of existing research on informal employment we contribute to the existing literature in two ways: (i) by constructing the definitional frames of informal employment in Poland; and (ii) by pointing out the possible extensions of surveys devoted to informal employment in developed countries.
    Keywords: informal employment, Poland, undeclared work, shadow economy
    JEL: E26 J46 O17
    Date: 2016–06
  15. By: Garcia-Medina Cecilia; Jean-Francois Wen
    Abstract: We construct the ratio of the post-fisc to the pre-fisc transitory component of the variance of family incomes in Canada from 1993 and 2008. The ratio measures how much the tax and transfer system attenuates market income instability. It is shown that the ratio of variances is equivalent theoretically to the concept of residual income progression. The fiscal system became less stabilizing beginning in the late 1990s, especially for families headed by main earners with less than high school education. The trend is attributable to personal income tax reforms and reductions in transfers for lower income families.
    Keywords: Income Instability; Progressive Taxation; Employment Insurance
    JEL: H22 H53 J38
    Date: 2016–06
  16. By: Andrew C. Shaver (Princeton University)
    Abstract: The unemployed are often inculpated in the production of violence during conflict. A simple yet common argument describes these individuals as disaffected and inclined to perpetrate affectively motivated violence. A second holds that they are drawn to violent political organizations for lack of better outside options. Yet, evidence in support of a general positive relationship between unemployment and violence during conflict is not established. Drawing from a large body of psychological research, I argue that a basic but important relationship has been overlooked: Loss of employment, rather than rendering individuals angry, increases feelings of depression, anxiety, helplessness, and belief in the power of others. Members of this segment of society are more likely than most to reject the use of violence. Drawing on previously unreleased data from a major, multi-million dollar survey effort carried out during the Iraq war, I uncover evidence that psychological findings carry to conflict settings: unemployed Iraqis were consistently less optimistic than other citizens; displayed diminished perceptions of efficacy; and were much less likely to support the use of violence against Coalition forces.
    JEL: J21 D74 F51
    Date: 2016–05
  17. By: Stefano STAFFOLANI (Università Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Maria Cristina RECCHIONI (Università Politecnica delle Marche, Dipartimento di Management)
    Abstract: This paper presents a theoretical model of enrollment decisions made by high school graduates, under the assumption that their choices are strongly influenced by the educational standard(s), roughly de ned as what students are expected to have learned by the end of the course. Higher standards reduce the probability of graduation but increase the accumulation of human capital and future earnings. The policy maker decides whether standards are set equally for all universities (centralization) or autonomously by each university (decentralization). In the centralized setting, the model establishes relationships among the standards that maximize di erent objectives: graduation, enrollment, and human capital. Speci cally, the standard that maximizes graduation is lower than the one that maximizes enrollment, which, in turn, is lower than the one that maximizes human capital. The decentralized setting may perform worse than the centralized one in terms of these three objectives if moving costs exist, while it always performs worse in terms of inter-generational mobility in education.
    Keywords: Education, University, Standards, Human Capital, Inequality, Regulation of Educational System
    JEL: J24 I21 I23
    Date: 2016–05

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