nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2016‒10‒30
eleven papers chosen by
Joseph Marchand
University of Alberta

  1. The Career Costs of Children By Adda, Jerome; Dustmann, Christian; Stevens, Katrien
  2. Overeducation - New evidence for 25 European countries By Boll, Christina; Leppin, Julian; Rossen, Anja; Wolf, André
  3. Do Recessions Accelerate Routine-Biased Technological Change? Evidence from Vacancy Postings By Brad Hershbein; Lisa B. Kahn
  4. Can Online Delivery Increase Access to Education? By Joshua Goodman; Julia Melkers; Amanda Pallais
  5. Determinants of Regional Differences in Rates of Overeducation in Europe By Davia, Maria A.; McGuinness, Seamus; O'Connell, Philip J.
  6. The Impact of a Negative Labor Demand Shock on Fertility - Evidence from the Fall of the Berlin Wall By Hannah Liepmann; ;
  7. The Origins and Long-Run Consequences of the Division of Labor By Depetris-Chauvin, Emilio; Özak, Ömer
  8. Valuing Inputs Under Supply Uncertainty : The Bayesian Shapley Value By Pongou, Roland; Tondji, Jean-Baptiste
  9. Student earnings expectations: Heterogeneity or noise? By Díaz Serrano, Lluís; Hartog, Joop; Nilsson, William; Ophem, Hans van; Yang, Po
  10. Flexible and Secure Labour Market Transitions: Towards Institutional Capacity Building in the Digital Economy By Schmid, Günther
  11. The role of Fairtrade certification for wages and job satisfaction of plantation workers By Krumbiegel, Katharina; Maertens, Miet; Wollni, Meike

  1. By: Adda, Jerome; Dustmann, Christian; Stevens, Katrien
    Abstract: We estimate a dynamic life-cycle model of labor supply, fertility and savings, incorporating occupational choices, with specific wage paths and skill atrophy that vary over the career. This allows us to understand the trade-o between occupational choice and desired fertility, as well as the sorting both into the labor market and across occupations. We quantify the life-cycle career costs associated with children, how they decompose into loss of skills during interruptions, lost earnings opportunities and selection into more child-friendly occupations. We analyze the long-run effects of policies that encourage fertility and show that they are considerably smaller than short-run effects.
    Keywords: dynamic structural model; Fertility; gender wage gap; Labor Supply; occupation
    JEL: C15 C33 J13 J22 J24 J31
    Date: 2016–10
  2. By: Boll, Christina; Leppin, Julian; Rossen, Anja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolf, André
    Abstract: "This study investigates the incidence of overeducation among workers in the EU and its underlying factors based on the most recent wave of the European Labor Force Survey (EU-LFS 2013). Its main purpose is to shed light on the interplay of so far neglected explanatory factors such as household characteristics and field of study as well as to reveal country differences in the impact of these factors. Therefore, our innovative features are the large number of determinants as well as the considerable amount of European countries simultaneously analyzed. Moreover, we differentiate in our analysis between high- and medium-skilled workers. Our findings point to a considerable variation in the potential determinants of overeducation across countries as well as across skill levels. This variation is not restricted to jobrelated characteristics, but interestingly also concerns household variables. Among those determinants showing a largely uniform influence are nationality, job tenure, temporary employment and presence of unemployed household members." (Author's abstract, IAB-Doku) ((en))
    Keywords: Überqualifikation - internationaler Vergleich, unterwertige Beschäftigung, mismatch, Hochqualifizierte, mittlere Qualifikation, sozioökonomische Faktoren, sektorale Verteilung, Berufsgruppe, Europäische Union, Belgien, Bulgarien, Dänemark, Bundesrepublik Deutschland, Estland, Finnland, Frankreich, Griechenland, Irland, Italien, Lettland, Litauen, Luxemburg, Niederlande, Österreich, Portugal, Rumänien, Schweden, Slowakei, Spanien, Tschechische Republik, Ungarn, Großbritannien, Zypern, Kroatien
    JEL: J24 J21 J22
    Date: 2016–10–19
  3. By: Brad Hershbein; Lisa B. Kahn
    Abstract: We show that skill requirements in job vacancy postings differentially increased in MSAs that were hit hard by the Great Recession, relative to less hard-hit areas, and that these differences across MSAs persist through the end of 2015. The increases are prevalent within occupations, more pronounced in the non-traded sector, driven by both within-firm upskilling and substitution from older to newer firms, accompanied by increases in capital stock, and are evident in realized employment. We argue that this evidence reflects the restructuring of production toward more-skilled workers and routine-labor saving technologies, and that the Great Recession accelerated this process.
    JEL: D22 E32 J23 J24 M51 O33
    Date: 2016–10
  4. By: Joshua Goodman; Julia Melkers; Amanda Pallais
    Abstract: Though online technology has generated excitement about its potential to increase access to education, most research has focused on comparing student performance across online and in-person formats. We provide the first evidence that online education affects the number of people pursuing formal education. We study the Georgia Institute of Technology’s Online M.S. in Computer Science, the earliest model to combine the inexpensive nature of online education with a highly-ranked degree program. Regression discontinuity estimates exploiting an admissions threshold unknown to applicants show that access to this online option substantially increases overall enrollment in formal education, expanding the pool of students rather than substituting for existing educational options. Demand for the online option is driven by mid-career Americans. By satisfying large, previously unmet demand for mid-career training, this single program will boost annual production of American computer science master’s degrees by about seven percent. More generally, these results suggest that low-cost, high-quality online options may open opportunities for populations who would not otherwise pursue education.
    JEL: I20 I23 J2 J24
    Date: 2016–10
  5. By: Davia, Maria A. (Universidad de Castilla – La Mancha); McGuinness, Seamus (Economic and Social Research Institute, Dublin); O'Connell, Philip J. (ESRI, Dublin)
    Abstract: This paper examines the factors determining variations in spatial rates of overeducation. A quantile regression model has been implemented on a sample of region-yearly data drawn from the EU Survey on Income and Living Conditions (EU-SILC) and several institutional and macroeconomic features captured from other data-sets. Potential determinants of overeducation rates include factors such as labour market risk, financial aid to university students, excess labour demand and institutional factors. We find significant effects both for labour market structural imbalances and institutional factors. The research supports the findings of micro based studies which have found that overeducation is consistent with an assignment interpretation of the labour market.
    Keywords: regional variation, overeducation, mismatch
    JEL: C29 I21 J24
    Date: 2016–09
  6. By: Hannah Liepmann; ;
    Abstract: How does a negative labor demand shock impact individual-level fertility? I analyze this question in the context of the East German fertility decline after the fall of the Berlin Wall in 1989. Exploiting di erential pressure for restructuring across industries, I nd that throughout the 1990s, women more severely impacted by the demand shock had more children on average than their counterparts who were less severely impacted. I argue that in uncertain economic circumstances, women with relatively more favorable labor market outcomes postpone childbearing in order not to put their labor market situations at further risk. This mechanism is relevant for all quali cation groups, including high-skilled women. There is some evidence for an impact on completed fertility.
    JEL: J13 J23 P36
    Date: 2016–10
  7. By: Depetris-Chauvin, Emilio; Özak, Ömer
    Abstract: This research explores the deep historical roots and persistent effects of the division of labor in pre-modern societies. It advances the hypothesis, and establishes empirically that population diversity had a positive causal effect on the division of labor. Based on a novel ethnic level dataset combining geocoded ethnographic, linguistic and genetic data, this research exploits the exogenous variation in population diversity generated by historical migratory patterns to causally establish that higher levels of population diversity were conducive to economic specialization and the emergence of trade-related institutions that, in turn, translated into differences in pre-modern comparative development. Additionally, this research provides suggestive evidence that regions historically inhabited by pre-modern societies with higher levels of economic specialization have higher levels of contemporary occupational heterogeneity, economic complexity and development.
    Keywords: Economic Specialization, Division of Labor, Trade, Comparative Development, Economic Development, Human Capital, Skill-Bias, Population Diversity, Genetic Diversity, Linguistic Diversity, Cultural Diversity, Persistence, Serial Founder Effect
    JEL: D74 F10 F14 J24 N10 O10 O11 O12 O40 O43 O44 Z10 Z13
    Date: 2016–08–26
  8. By: Pongou, Roland; Tondji, Jean-Baptiste
    Abstract: We consider the problem of valuing inputs in a production environment in which input supply is uncertain. Inputs can be workers in a firm, risk factors for a disease, securities in a financial market, or nodes in a networked economy. Each input takes its values from a finite set, and uncertainty is modeled as a probability distribution over this set. First, we provide an axiomatic solution to our valuation problem, defining three intuitive axioms which we use to uniquely characterize a valuation scheme that we call the a priori Shapley value. Second, we solve the problem of valuing inputs a posteriori--that is, after observing output. This leads to the Bayesian Shapley value. Third, we consider the problem of rationalizing uncertainty when the inputs are rational workers supplying labor in a non-cooperative production game in which payoffs are given by the Shapley wage function. We find that probability distributions over labor supply that can be supported as mixed strategy Nash equilibria always exist. We also provide an intuitive condition under which we prove the existence of a pure strategy Nash equilibrium. We present several applications of our theory to real-life situations.
    Keywords: Input valuation, uncertainty, a priori Shapley value, Bayesian Shapley value, rationalizability
    JEL: C70 D20 D80 J30
    Date: 2016–10–25
  9. By: Díaz Serrano, Lluís; Hartog, Joop; Nilsson, William; Ophem, Hans van; Yang, Po
    Abstract: Students’ choices in education can only be based on expected outcomes. Econometric models that infer expectations based on ex post outcomes impose a rational structure of expectations on school performance and post-graduation earnings. Direct surveys suggest much ignorance and fuzziness. We use survey data on expectations in four universities in three countries and check for relations of expected probability to graduate and of expected earnings with personal abilities and attitudes. We find that most of the difference in expectations among individuals is just noise. Keywords: Student expectations; earnings; earnings dispersion; risk attitudes. JEL Codes: I21; I26; J24; D83
    Keywords: Educació -- Models matemàtics, Orientació professional, 331 - Treball. Relacions laborals. Ocupació. Organització del treball, 37 - Educació. Ensenyament. Formació. Temps lliure,
    Date: 2016
  10. By: Schmid, Günther (WZB - Social Science Research Center Berlin)
    Abstract: Industry 4.0 and robots are said to speed up productivity thereby inducing a 'quantum leap' towards the 'end of work' and calling for a complete change of social security institutions that have so far been closely linked to employment. Unconditional basic income is the cry of the day, curiously advocated in particular by, for example, employers in high-tech industries and modern financial or distributive services. In the name of freedom, liberty and flexibility they suggest a form of security without any institutional complexity. The hidden agenda in the remaining empty institutional black box, however, is the dream of freedom from any bureaucracy and painstaking negotiations between competing interests or even getting rid of any responsibility to the new risks related to the digital revolution. This paper argues that the productivity leap promise of the digital economy is far from empirical evidence and that the proper answer to the new world of work are active securities, fair risk-sharing between employees, employers and the state and 'negotiated flexicurity' calling for a higher complexity of institutions corresponding to the increasing variability of employment relationships. The paper (1) starts with stylised facts about the new world of work with a focus on non-standard forms of employment in the EU28 member states and briefly explains the main determinants of this development. It (2) then proceeds with an analytical framework of the role of institutions and (3) applies this framework to develop suggestions of new security provisions to the main forms of non-standard employment. (4) The paper concludes by reflecting on the consequences for the prospective European Pillar of Social Rights.
    Keywords: Europe, non-standard employment, inclusion, productivity, flexibility, security, labour market policy, transitional labour markets, social rights
    JEL: J21 J38 J41 J48 J68 R28
    Date: 2016–10
  11. By: Krumbiegel, Katharina; Maertens, Miet; Wollni, Meike
    Abstract: Worker welfare and employment conditions in the agri-food producing and processing sectors in the global south have become an increasing concern for consumers. Sustainability standards, such as Fairtrade, play an important role in agri-food markets of horticultural produce and may be a tool to address these concerns. However, so far the implications of Fairtrade certification for extrinsic and intrinsic employment factors of hired labor on large-scale plantations remain hardly understood. In this paper we assess its effect on workers’ hourly wages and their level of job satisfaction with primary survey data from 325 randomly sampled workers from eight different export-oriented pineapple companies in Ghana. We apply a linear, linear mixed model and instrumental variable approach to take into account the multilevel characteristics of our data and possible selection bias. Our findings show that both hourly wages and job satisfaction are indeed higher on Fairtrade certified plantations. Factors of increased job satisfaction are likely driven by higher wages, permanent employment contracts, training opportunities, company services such as medical care and paid leave as well as established labor unions on Fairtrade certified plantations.
    Keywords: Fairtrade certification, horticultural employment, worker wages, job satisfaction, Agribusiness, Farm Management, Labor and Human Capital, J28, J31, Q13,
    Date: 2016–10

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