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on Labor Markets - Supply, Demand, and Wages |
| By: | Lin, Dajun (University of Virginia); Lutter, Randall (University of Virginia); Ruhm, Christopher J. (University of Virginia) |
| Abstract: | We use information from the National Longitudinal Survey of Youth 1979 (NLSY79) and supplementary data sources to examine how cognitive performance, measured at approximately the end of secondary schooling, is related to the labor market outcomes of 20 through 50 year olds. Our estimates control for a wide array of individual and family background characteristics, a limited set of non-cognitive attributes, survey year dummy variables and, sometimes, geographic place effects. The analysis reveals five main findings. First, cognitive performance is positively associated with future labor market outcomes at all ages. The relationship is attenuated but not eliminated by the addition of controls for non-cognitive characteristics, while the inclusion of place effects does not change the estimated associations. Second, the returns to cognitive skill increase with age. Third, the effect on total incomes reflects a combination of positive impacts of cognitive performance for both hourly wages and annual work hours. Fourth, the returns to cognitive skill are greater for women than men and for blacks and Hispanics than for non-Hispanic whites, with differential effects on work hours being more important than corresponding changes in hourly wages. Fifth, the average gains in lifetime incomes predicted to result from greater levels of cognitive performance are only slightly above those reported in prior studies but the effects are heterogeneous, with larger relative and absolute increases, in most models, for nonwhites or Hispanics than for non-Hispanic whites, and higher relative but not absolute returns for women than men. |
| Keywords: | cognitive performance, cognitive skill, labor market outcomes, labor income, earnings, work hours |
| JEL: | J23 J24 J31 J38 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Kawaguchi, Daiji (University of Tokyo); Kondo, Ayako (University of Tokyo); Saito, Keiji |
| Abstract: | Based on a unique time-use survey of academic researchers in Japan, this study finds that research time decreases over the life cycle. The decrease in total hours worked and the increase in time spent on administrative tasks explain the decrease in research time. We also show that the decrease of research time partly explains why the research output of older researchers' decreases. The results suggest that proper incentives and job designs for senior researchers may increase their research output. |
| Keywords: | researchers' time use, research output, academic researchers, academic administration, education, multi-tasking |
| JEL: | J22 J24 J44 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Goraus-Tanska, Karolina (University of Warsaw); Lewandowski, Piotr (Institute for Structural Research (IBS)) |
| 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 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 average 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: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | F. Barigozzi; N. Burani |
| Abstract: | We study optimal non-linear contracts offered by two firms competing for the exclusive services of workers, who are privately informed about their ability and motivation. Firms differ in their organizational form, and motivated workers are keen to be hired by the non-profit firm because they adhere to its mission. If the for-profit firm has a competitive advantage over the non-profit firm, the latter attracts fewer high-ability workers with respect to the former. Moreover, workers exert more effort at the for-profit than at the non-profit firm despite the latter distorts effort levels upwards. Finally, a wage penalty emerges for non-profit workers which is partly due to compensating effects (labor donations by motivated workers) and partly due to the negative selection of ability into the non-profit firm. The opposite results hold when it is the non-profit firm that has a competitive advantage. |
| JEL: | D82 D86 J24 J31 M55 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Bergoña Álvarez (Universidad de Vigo); Fernando Ramos Palencia (Universidad Pablo de Olavide) |
| Abstract: | Using the Ensenada Cadastre, a unique database on Castilian households circa 1750, we measure the effect of human capital on the structure of male labor earnings. Human capital is proxied by individual indicators of basic skills (literacy and numeracy) and of occupational skills. We employ a Mincerian regression approach and find that, on average, workers with greater skills earned more than otherwise similar workers with lesser skills. This finding is robust to the inclusion of additional controls for age, household composition, job characteristics, and place of residence. Estimated returns were larger for urban than for rural workers and were strongly heterogeneous across activity sectors. The richness of our data set reveals that higher-skilled workers not only reaped positive rewards in their main jobs but also were more likely to diversify and increase their earnings through “by-employment”. However, not all workers benefited to the same degree from increased human capital. Quantile regression analysis shows that earnings disparities between workers with different skills were much smaller at the lower than at the upper end of the earnings distribution. This evidence indicates that, in pre-industrial Castile, human capital contributed to earnings (and income) inequality. |
| Keywords: | human capital, pre-industrial Spain, skill premia, earnings inequality, quantile regression |
| JEL: | N33 J24 C21 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Fan Yang (New York University Shanghai); Ron Harstad (Economics Department, University of Missouri) |
| Abstract: | How low might be the resource costliness of making signals credible? Using a job market as an example, We build a signaling model to determine the extent to which a transfer from an applicant might replace a resource cost as an equilibrium method of achieving signal credibility. As long as a firm’s claim to be hiring for an open position is credible, and profitability of the hiring process per se is limited to an application fee, the firm has an incentive to use the properly calibrated fee to implement a separating equilibrium. Applicant risk aversion does not necessarily discourage a monopsonist potential employer from using an application fee, but a firm hiring in a competitive labor market with risk-averse applicants may prefer a pooling equilibrium, hiring all applicants at their average productivity. Partial extension to a model with third-party assistance (a headhunter or a job board) is possible. |
| Keywords: | costly, signaling, asymmetric information |
| JEL: | D82 J24 C72 J31 |
| Date: | 2016–07–26 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Haile, Getinet Astatike (University of Nottingham) |
| Abstract: | The paper investigates if there is a link between workplace disability (WD) and job satisfaction (JS) in Britain using nationally representative linked data from WESR2011 and alternative empirical analyses. The results obtained indicate that in the private sector, workplaces with respondents with disabilities have significantly lower JS vis-à-vis workplaces without such respondents. JS is also found to decline with the percentage of respondents with disabilities in private sector workplaces with a mix of respondents with and without disabilities. Notably; the decline in JS found for private sector workplaces is specific to co-workers without disabilities therein. These, coupled with the significant positive (negative) relationship found between workplace JS and disability policies and practices for respondents with (without) disabilities in private sector workplaces, suggest that the sector may have to go some way towards dealing with issues of workplace disability more efficiently. |
| Keywords: | workplace disability, job satisfaction, linked data, Britain |
| JEL: | J14 J82 J7 I31 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Nancy Colombé |
| Abstract: | Despite the extensive literature investigating the impact of minimum wage legislation on employment, only a few studies have been carried out in developing countries. Furthermore, there exists only a few studies on the impact of the minimum wage on the human capital investment decisions of teenagers, and as far as I am aware there is no evidence from a developing country context. Given the importance of human capital accumulation for long run economic development, an analysis of the poverty reduction potential of introducing a minimum wage must take into account its impact on investment in human capital. Therefore, I address the question of how minimum wage legislation can impact the human capital investment decision of households in a developing country. Using data from 1990-2000 I use a multinomial logit model to estimate the impact of the minimum wage on the occupational choice of teenagers in Indonesia at the province level. It is found that between 1990 and 2000 the sharp increase in the real minimum wage reduced the proportion of teenagers enrolled in Senior Secondary education, whereas in the following decade the minimum wage had a positive impact on the enrolment rate. The effect of the minimum wage on the occupational choice of teenagers does not differ according to gender. |
| Keywords: | Education, Minimum Wage Legislation, Human Capital |
| JEL: | I25 J38 O15 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Rocha, Vera (Copenhagen Business School); van Praag, Mirjam C. (Copenhagen Business School) |
| Abstract: | Both organizational and sociological approaches in entrepreneurship research highlight the importance of social context in shaping individual preferences for entrepreneurship. An influential contextual factor that has not been studied in entrepreneurship research is one's boss at work. Do entrepreneurial bosses contribute to their employees' decisions to become entrepreneurs themselves? Using Danish register data of newly founded firms and their entrepreneurs and employees between 2003 and 2012, and employing methods that allow causal inferences, we show that entrepreneurial bosses indeed affect their employees' future entrepreneurship choices, especially if both boss and employee are female. We investigate two alternative underlying mechanisms that may shape the (female) boss' influence on (female) workers' entrepreneurship decisions. Our results consistently suggest that entrepreneurial bosses may act as role models for the entrepreneurship activities of their employees, especially between pairs of female bosses and female employees. We do not find any evidence on female bosses acting as "queen bees" at the workplace. Female entrepreneurial bosses may, thus, act as a lever to reducing the gender gaps in entrepreneurship rates. |
| Keywords: | entrepreneurship, role models, gender gaps, female leadership |
| JEL: | L26 J24 J16 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Eriksen, Tine Louise Mundbjerg (Aarhus University); Hogh, Annie (University of Copenhagen); Hansen, Åse Marie (University of Copenhagen) |
| Abstract: | Bullying in workplaces is a problem thought to harm individual productivity. This paper investigates whether being exposed to bullying in the workplace increases long-term sickness absence. We analyze employees from a selection of workplaces from The Bullying Cohort Study conducted in Denmark in 2006. The Negative Acts Questionnaire-Revised was used to avoid bias related to self-labeling as being bullied. We account for important confounders, such as historical information on sickness absence and mental health, obtained through rich registry data. Our results show that gender does not significantly explain exposure to bullying and that exposure to bullying is associated with negative immediate self-reported health for both genders. We also find, however, that only bullied females have higher, persistent increases in long-term sickness absence and adverse long-term health. This suggests that men and women have different coping strategies. We investigate plausible explanations for this and find that the differences cannot be explained by, for example, turnover or lack of employment. Although insignificant, our results nonetheless indicate that men are twice as likely to leave the labor force immediately after exposure to bullying. |
| Keywords: | working environment, harassment, absenteeism, health, gender |
| JEL: | J15 J24 J81 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Pischke, Jörn-Steffen (London School of Economics) |
| Abstract: | Many economists suspect that downward nominal wage rigidities in ongoing labor contracts are an important source of employment fluctuations over the business cycle but there is little direct empirical evidence on this conjecture. This paper compares three occupations in the housing sector with very different wage setting institutions, real estate agents, architects, and construction workers. I study the wage and employment responses of these occupations to the housing cycle, a proxy for labor demand shocks to the industry. The employment of real estate agents, whose pay is far more flexible than the other occupations, indeed reacts less to the cycle than employment in the other occupations. However, unless labor demand elasticities are large, the estimates do not suggest that the level of wage flexibility enjoyed by real estate agents would buffer employment fluctuations in response to demand shocks by more than 10 to 20 percent compared to completely rigid wages. |
| Keywords: | wage setting, wage rigidity, commissions, real estate agents, architects, construction workers |
| JEL: | E24 J20 J44 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Pencavel, John (Stanford University) |
| Abstract: | Observations on munition workers are organized to examine the relationship between their output each week, their working hours and days each week, and their working hours and days in adjacent weeks. The hypothesis is that workers need to recover from work and a long working week results in greater fatigue and stress and yet provides insufficient time for recuperation before the next week's work opens. Workers require time off the job to restore their physical, mental, and emotional capacities and, if a long working week provides inadequate time to repair, their subsequent work performance suffers. |
| Keywords: | working hours, output, productivity, recovery |
| JEL: | J24 J22 N34 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Singh, Prakarsh (Amherst College); Mitra, Sandip (Indian Statistical Institute) |
| Abstract: | We carry out a randomized controlled experiment in West Bengal, India to test three separate performance pay treatments in the public health sector. Performance is judged on improvements in child malnutrition. We exogenously change wages of government employed child care workers through either absolute or relative incentives. We also test for the impact of high and low absolute incentives. Results show that high absolute incentives reduce severe malnutrition by 6.3 percentage points over three months. Result is consistent with a reported increase in protein-rich diet at home in the high absolute treatment. There are no significant effects on health outcomes of other incentive arms. Results remain robust to propensity score matching, reversion- to-mean and a placebo check. |
| Keywords: | performance pay, child malnutrition, absolute and relative incentives |
| JEL: | M52 I12 I38 J38 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Borissov, Kirill (European University of St. Petersburg); Bosi, Stefano (University of Evry); Ha-Huy, Thai (University of Evry); Modesto, Leonor (Universidade Catolica Portuguesa, Lisbon) |
| Abstract: | We extend the Lucas' 1988 model introducing two classes of agents with heterogeneous skills, discount factors and initial human capital endowments. We consider two regimes according to the planner's political constraints. In the first regime, that we call meritocracy, the planner faces individual constraints. In the second regime the planner faces an aggregate constraint, redistributing. We find that heterogeneity matters, particularly with redistribution. In the meritocracy regime, the optimal solution coincides with the BGP found by Lucas (1988) for the representative agent's case. In contrast, in the redistribution case, the solution for time devoted to capital accumulation is never interior for both agents. Either the less talented agents do not accumulate human capital or the more skilled agents do not work. Moreover, social welfare under the redistribution regime is always higher than under meritocracy and it is optimal to exploit existing differences. Finally, we find that inequality in human capital distribution increases in time and that, in the long run, inequality always promotes growth. |
| Keywords: | human capital, heterogeneous skills |
| JEL: | J24 O15 O40 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Bendewald, Ellen; Maryns, Nicholas; Robertson, Raymond (Texas A&M University) |
| Abstract: | Using matched administrative data, this paper estimates the program effects of Minnesota's WIA Title I‐B Adult program to make two contributions to the literature. First, this paper applies a wide range of non‐experimental approaches and generates similar estimates of program effects that are consistently larger than most other evaluations. Second, comparing workers job seeking in 2007‐2008 with those job seeking in 2009‐2010 suggests that the workers job seeking in a growing job market experience more persistent program effects. |
| Keywords: | pseudo‐experimental, job training, WIA‐Adult |
| JEL: | J28 J38 J68 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Gary Jefferson (Brandeis University) |
| Abstract: | China’s surge into global middle-income status over the space of three decades has been spectacular. However, a potentially large and burdensome cost has been imposed on a generation of adolescents and young adults who abandoned the countryside, and with it access to basic education, in order to seek the anticipated advantages of jobs in the country’s burgeoning urban-industrial sector. This large swath of off-farm migrants transformed China. It propelled China to the status of the “world’s factory” and created the scale and accumulated learning-by-doing enabling China’s transition to a “knowledge economy” that no longer depends on the labor of China’s new “Lost Generation.” As the Lost Generation and its left-behind children, who suffer from a chronic lack of schooling, thicken the lower tail of China’s income distribution, it may be the rising, prosperous urban middle class that ultimately incurs the social, economic, and political challenges associated with China’s generation of off-farm migrant households once essential for launching China’s economic ascent. |
| JEL: | J21 J24 J31 O15 O33 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Manudeep, Bhuller (Department of Economics, University of Chicago; Research Department, Statistics Norway); Dahl, Gordon B. (Department of Economics, UC San Diego); Løken, Katrine V. (Department of Economics, University of Bergen); Mogstad, Magne (Department of Economics, University of Chicago; Research Department, Statistics Norway; NBER) |
| Abstract: | Understanding whether, and in what situations, time spent in prison is criminogenic or preventive has proven challenging due to data availability and correlated unobservables. This paper overcomes these challenges in the context of Norway’s criminal justice system, offering new insights into how incarceration affects subsequent crime and employment. We construct a panel dataset containing the criminal behavior and labor market outcomes of the entire population, and exploit the random assignment of criminal cases to judges who differ systematically in their stringency in sentencing defendants to prison. Using judge stringency as an instrumental variable, we find that imprisonment discourages further criminal behavior, and that the reduction extends beyond incapacitation. Incarceration decreases the probability an individual will reoffend within 5 years by 27 percentage points, and reduces the number of offenses over this same period by 10 criminal charges. In comparison, OLS shows positive associations between incarceration and subsequent criminal behavior. This sharp contrast suggests the high rates of recidivism among ex-convicts is due to selection, and not a consequence of the experience of being in prison. Exploring factors that may explain the preventive effect of incarceration, we find the decline in crime is driven by individuals who were not working prior to incarceration. Among these individuals, imprisonment increases participation in programs directed at improving employability and reducing recidivism, and ultimately, raises employment and earnings while discouraging further criminal behavior. Contrary to the widely embraced ‘nothing works’ doctrine, these findings demonstrate that time spent in prison with a focus on rehabilitation can indeed be preventive. |
| Keywords: | crime; employment; incarceration; recidivism |
| JEL: | J24 K42 |
| Date: | 2016–07–25 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Chen, Daniel L.; Halberstam, Yosh; Yu, Alan |
| Abstract: | The emphasis on “fit” as a hiring criterion has raised the spectrum of a new form of subtle discrimination (Yoshino 1998; Bertrand and Duflo 2016). Under complete markets, correlations between employee characteristics and outcomes persist only if there exists animus for the marginal employer (Becker 1957), but who is the marginal employer for mutable characteristics? Using data on 1,901 U.S. Supreme Court oral arguments between 1998 and 2012, we document that voice-based snap judgments based on lawyers’ identical introductory sentences, “Mr. Chief Justice, (and) may it please the Court?”, predict court outcomes. The connection between vocal characteristics and court outcomes is specific only to perceptions of masculinity and not other characteristics, even when judgment is based on less than three seconds of exposure to a lawyer’s speech sample. Consistent with employers irrationally favoring lawyers with masculine voices, perceived masculinity is negatively correlated with winning and the negative correlation is larger in more masculine-sounding industries. The first lawyer to speak is the main driver. Among these petitioners, males below median in masculinity are 7 percentage points more likely to win in the Supreme Court. Justices appointed by Democrats, but not Republicans, vote for lessmasculine men. Female lawyers are also coached to be more masculine and women’s perceived femininity predict court outcomes. Republicans, more than Democrats, vote for more feminine-sounding females. A de-biasing strategy is tested and shown to reduce evaluators’ tendency to perceive masculine voices as more likely to win. Perceived masculinity explains 3-10% additional variance compared to the current best prediction model of Supreme Court votes. |
| Keywords: | Identity, Phonology, Judicial Decision-Making |
| JEL: | J15 J78 K41 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Barbara Ermini (Università Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Luca Papi (Università Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali, MoFiR); Francesca Scaturro (Università Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali) |
| Abstract: | The paper examines the determinants of over-education among Italian Ph.D graduates drawn from the four cohorts 2004, 2006, 2008, 2010 surveyed by the Italian National Institute of Statistics (ISTAT). We attempt to disentangle the differentiated effects of the economic crisis and the university reform that recently hit the Italian labour market. We examine over-education through the definitions of over-skilling, over-qualification and a combination of the two. The results show that socio-demographic variables do not exert a relevant influence on over-education. Conversely, job attributes such as working in academia or carrying out R&D activities reduce the likelihood of incurring into over-education. Instead, accessing the job via informal channels or working as self-employed increase the risk of over-education, with a stronger effect during the recession. Among Ph.D related features, visiting abroad is always a driver to overcome any kind of job mismatch. Generally, benefiting from financial support is a propelling factor to reduce over-education; it is effective in reducing qualification mismatch especially during the downturn. In the light of the above findings, some policy advices are proposed. |
| Keywords: | over-education, over-skilling, over-qualification, Ph.D graduates, crisis |
| JEL: | C2 I2 I23 J24 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=lma |
| By: | Corinne Luu |
| Abstract: | Canada’s productivity performance has lagged that of many other OECD countries, despite some improvement in recent years. One measure to enhance overall efficiency would be to strengthen competition on the domestic market to drive future multi-factor productivity improvements. The potential gains are large: about a half a percent per year over a fairly long horizon. This paper focuses on increasing competition in network sectors, including energy, telecommunication services and broadcasting, and transportation, which are key inputs to production in the broader economy. Improving regulatory conditions, efficiency and/or cost competitiveness could yield more productive outcomes in these sectors, as well as in downstream industries. Competition could also be increased by lowering barriers to interprovincial trade and the movement of labour, which act to fragment Canada’s already small domestic market. To this end, reforms of the Agreement on Internal Trade and measures to reduce sectoral barriers to trade are also discussed. This Working Paper relates to the 2016 OECD Economic Survey of Canada (www.oecd.org/eco/surveys/economic-survey-canada.htm) Concurrence dans les industries de réseau et renforcement du marché intérieur au Canada La productivité canadienne est inférieure à celle de nombreux pays de l’OCDE malgré quelques progrès ces dernières années. Il serait possible d’accroître l’efficience globale en renforçant la concurrence sur le marché intérieur afin de favoriser les futurs gains de productivité globale. Ces gains sont importants, de l’ordre d’un demi pour cent par an sur une période plutôt longue. Ce document porte principalement sur l’intensification de la concurrence dans les industries de réseau, comme l’énergie, les télécommunications, la diffusion audiovisuelle et les transports, qui jouent un rôle essentiel dans le processus de production de l’ensemble de l’économie. L’amélioration de la réglementation, l’augmentation de l’efficience et/ou le renforcement de la compétitivité-coût pourraient accroître la productivité dans ces secteurs, ainsi que dans les secteurs d’aval. La concurrence pourrait également être intensifiée par la réduction des obstacles aux échanges entre provinces et à la mobilité de la main-d’oeuvre, qui fragmentent un marché intérieur déjà petit. Ce document examine donc également les réformes possibles de l’Accord sur le commerce intérieur et les mesures visant à réduire les obstacles sectoriels aux échanges. Ce Document de travail se rapporte à l’Étude économique de l’OCDE du Canada 2016 (www.oecd.org/fr/eco/etudes/etude-econom ique-canada.htm) |
| Keywords: | productivity, network industries, competition, regulation, integration, productivité, concurrence, intégration, industries de réseaux, réglementation |
| JEL: | J44 L1 L3 L5 L66 L9 O43 Q18 |
| Date: | 2016–08–03 |
| URL: | http://d.repec.org/n?u=&r=lma |