nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2017‒02‒05
24 papers chosen by
Joseph Marchand
University of Alberta

  1. Taxation and Labor Supply of Married Couples across Countries: A Macroeconomic Analysis By Bick, Alexander; Fuchs-Schündeln, Nicola
  2. Fiscal Policy and Occupational Employment Dynamics By Bredemeier, Christian; Juessen, Falko; Winkler, Roland
  3. Employee Profit Sharing and Labor Extraction in a Classical Model of Distribution and Growth By Jaylson Jair da Silveira; Gilberto Tadeu Lima
  4. Estimating the Employment Effects of Recent Minimum Wage Changes: Early Evidence, an Interpretative Framework, and a Pre-Commitment to Future Analysis By Jeffrey Clemens; Michael R. Strain
  5. Diversity in Innovation By Paul A. Gompers; Sophie Q. Wang
  6. Racial/Ethnic Differences in Non-Work at Work By Hamermesh, Daniel S.; Genadek, Katie R.; Burda, Michael C.
  7. Does Job Support Make Workers Happy? By Böckerman, Petri; Bryson, Alex; Kauhanen, Antti; Kangasniemi, Mari
  8. Regional population structure and young workers’ wages. By Alfred Garloff; Duncan Roth
  9. Job and worker flows: New stylized facts for Germany By Bachmann, Rüdiger; Bayer, Christian; Merkl, Christian; Seth, Stefan; Stüber, Heiko; Wellschmied, Felix
  10. Wage Shocks and the Technological Substitution of Low-Wage Job By Aaronson, Daniel; Phelan, Brian J.
  11. Brothers in Arms: Spillovers from a Draft Lottery By Bingley, Paul; Lundborg, Petter; Vincent Lyk-Jensen, Stéphanie
  12. Wage Profiles in the Japanese Dual Labor Market By Hiroshi Teruyama; Hiroyuki Toda
  13. Boosting productivity in Malaysia By Hidekatsu Asada; Stewart Nixon; Vincent Koen
  14. Does federal contracting spur development? Federal contracts, income, output, and jobs in US cities By Michiel Gerritse; AndrŽs Rodr’guez-Pose
  15. Evaluating Willingness to Pay as a Measure of the Impact of Dyslexia in Adults By Herrera, Daniel; Shaywitz, Bennett; Holahan, John; Marchione, Karen; Michaels, Reissa; Shaywitz, Sally; Hammitt, James
  16. Complex-Task Biased Technological Change and the Labor Market By Colin Caines; Florian Hoffmann; Gueorgui Kambourov
  17. Trends in productivity and sources of productivity growth in Slovenia By Urban Sila; Hermes Morgavi; Jeanne Dall'Orso
  18. Early termination of vocational training: dropout or stopout? By Wydra-Somaggio, Gabriele
  19. The Labor of Division: Returns to Compulsory High School Math Coursework By Joshua Goodman
  20. Do Vocational High School Graduates Have Better Employment Outcomes than General High School Graduates? By Torun, Huzeyfe; Tumen, Semih
  21. Technological Progress and (Un)employment Development By Blien, Uwe; Ludewig, Oliver
  22. Quantile Selection Models with an Application to Understanding Changes in Wage Inequality By Manuel Arellano; Stéphane Bonhomme
  23. The geography of wage inequality in British cities By Neil Lee; Paul Sissons; Katy Jones
  24. Segregation of women into low-paying occupations in the US By Carlos Gradín

  1. By: Bick, Alexander (Arizona State University); Fuchs-Schündeln, Nicola (Goethe University Frankfurt)
    Abstract: We document contemporaneous differences in the aggregate labor supply of married couples across 17 European countries and the US. Based on a model of joint household decision making, we quantify the contribution of international differences in non-linear labor income taxes and consumption taxes to the international differences in hours worked in the data. Through the lens of the model, taxes, together with wages and the educational composition, account for a significant part of the small differences in married men's and the large differences in married women's hours worked in the data. Taking the full nonlinearities of labor income tax codes, including the tax treatment of married couples, into account is crucial for generating the low cross-country correlation between married men's and women's hours worked in the data, and for explaining the variation of married women's hours worked across European countries.
    Keywords: taxation, two-earner households, hours worked
    JEL: E60 H20 H31 J12 J22
    Date: 2017–01
  2. By: Bredemeier, Christian (University of Cologne); Juessen, Falko (University of Wuppertal); Winkler, Roland (TU Dortmund)
    Abstract: We document substantial heterogeneity in occupational employment dynamics in response to government spending shocks. Employment rises most strongly in service, sales, and office ("pink-collar") occupations. By contrast, employment in blue-collar occupations is hardly affected by fiscal stimulus which is striking in light of its strong exposure to the cycle and its long-run decline due to technical change and globalization. We provide evidence that occupation-specific changes in labor demand are key to understand these findings and develop a business-cycle model that explains the heterogeneous occupational employment dynamics as a consequence of differences in the short-run substitutability between labor and capital services across occupations.
    Keywords: fiscal policy, composition of employment, occupations, industries, heterogeneity
    JEL: E62 E24 J21 J23
    Date: 2017–01
  3. By: Jaylson Jair da Silveira; Gilberto Tadeu Lima
    Abstract: This paper sets forth a classical model of economic growth in which the distribution of income features the possibility of profit sharing with workers, as firms choose periodically between two labor-extraction compensation strategies. Firms choose to compensate workers with either solely a conventional wage or a share of profits on top of this conventional wage. In accordance with considerable empirical evidence, labor productivity in profit-sharing firms is higher than labor productivity in non-sharing firms. The frequency distribution of labor-extraction compensation strategies and labor productivity across firms is evolutionarily time-varying as driven by satisficing imitation dynamics. We derive two main results which carry relevant implications. First, heterogeneity in labor-extraction compensation strategies across firms can be a stable long-run equilibrium configuration. Second, though the convergence to a long-run, evolutionary equilibrium may occur with either a falling or increasing proportion of profit-sharing firms, the net share of profits in aggregate income and the rates of net profit, capital accumulation and economic growth, all nonetheless converge to their highest possible long-run equilibrium values
    Keywords: Profit sharing; income distribution; economic growth; evolutionary dynamics
    JEL: E11 E25 J33 O41
    Date: 2017–01–25
  4. By: Jeffrey Clemens; Michael R. Strain
    Abstract: This paper presents early evidence on the employment effects of state minimum wage increases enacted between January 2013 and January 2015, and offers an interpretative framework to understand why it is of interest to study recent changes in isolation. Given the ongoing transitions of many states’ minimum wage rates, we also set the stage for a pre-committed analysis of the minimum wage changes scheduled for coming years. Through 2015, we estimate that employment among young adults and young individuals with less than a completed high school education expanded modestly less quickly in states that enacted one-time or multi-phase statutory minimum wage increases than in states that enacted no minimum wage increases. Across the specifications we implement and the samples we analyze, many of our estimates are statistically indistinguishable from zero. Data on the longer-run effects of this period’s minimum wage changes will be essential for more fully assessing these changes’ effects and for drawing strong conclusions regarding how minimum wage increases affect employment in this decade’s institutional and economic environment. As data become available for the full 2016 through 2019 calendar years, we will execute and report the results of analyses that follow the road map this paper develops.
    JEL: H11 J08 J23 J38
    Date: 2017–01
  5. By: Paul A. Gompers; Sophie Q. Wang
    Abstract: In this paper we document the patterns of labor market participation by women and ethnic minorities in venture capital firms and as founders of venture capital-backed startups. We show that from 1990-2016 women have been less than 10% of the entrepreneurial and venture capital labor pool, Hispanics have been around 2%, and African Americans have been less than 1%. This is despite the fact that all three groups have much higher representation in education programs that lead to careers in these sectors as well as having higher representation in other highly-compensated professions. Asians, on the other hand, have much higher representation in the venture capital and entrepreneurial sector than their overall percentages in the labor force. We explore potential supply side explanations including both education attainment as well as relevant prior job experience. We also explore the correlation between diversity and state-level variations. Finally, we discuss how these patterns are consistent with homophily-based hiring and homophily-induced information flows about career choices. We end the paper by discussing areas for future research.
    JEL: G2 G24 G3 J01 J11 J16 J24 J7 O15 O3
    Date: 2017–01
  6. By: Hamermesh, Daniel S. (Royal Holloway, University of London); Genadek, Katie R. (University of Minnesota); Burda, Michael C. (Humboldt University Berlin)
    Abstract: Evidence from the American Time Use Survey 2003-12 suggests the existence of small but statistically significant racial/ethnic differences in time spent not working at the workplace. Minorities, especially men, spend a greater fraction of their workdays not working than do white non-Hispanics. These differences are robust to the inclusion of large numbers of demographic, industry, occupation, time and geographic controls. They do not vary by union status, public-private sector attachment, pay method or age; nor do they arise from the effects of equal-employment enforcement or geographic differences in racial/ethnic representation. The findings imply that measures of the adjusted wage disadvantages of minority employees are overstated by about 10 percent.
    Keywords: time use, wage discrimination, wage differentials
    JEL: J22 J15 J31
    Date: 2017–01
  7. By: Böckerman, Petri (Labour Institute for Economic Research); Bryson, Alex (University College London); Kauhanen, Antti (ETLA - The Research Institute of the Finnish Economy); Kangasniemi, Mari (Labour Institute for Economic Research)
    Abstract: Using linked employer-employee data for Finland we examine associations between job design and ten measures of worker wellbeing. In accordance with Karasek's (1979) model we find positive correlations between many aspects of worker wellbeing and job control. However, contrary to the model, job demands have no adverse effects on worker wellbeing. We find a strong positive correlation between job support and all aspects of worker wellbeing that is independent of job controls and job demands, a finding that has not been emphasized in the literature. The effects are most pronounced in relation to supervisor support. We also find evidence of unemployment scarring effects: substantial experience of unemployment has long-term consequences for the wellbeing workers experience in their current jobs, even controlling for the quality of those jobs.
    Keywords: worker wellbeing, job control, job demands, job support, job design, supervisors, job satisfaction, stress, HRM, unemployment, scarring effects
    JEL: J28 J8 L23 M54
    Date: 2017–01
  8. By: Alfred Garloff (institute for Employment Research (IAB)); Duncan Roth (institute for Employment Research (IAB))
    Abstract: This paper estimates the effect that changes in the size of the youth population have on the wages of young workers. Assuming that differently aged workers are only imperfectly substitutable, economic theory predicts that individuals in larger age groups earn lower wages. We test this hypothesis for a sample of young, male, full-time employees in Western Germany during the period 1999-2010. In contrast to other studies, functional rather than administrative spatial entities are used as they provide a more accurate measure of the youth population in an actual labour market. Based on instrumental variables estimation, we show that an increase in the youth share by one percentage point is predicted to decrease a young worker’s wages by 3%. Our results also suggest that a substantial part of this effect is due to members of larger age groups being more likely to be employed in lower-paying occupations.
    Keywords: Population structure, wages, youth share, labour-market regions, instrumental variables, occupational selection
    JEL: J21 J31 R23
    Date: 2017
  9. By: Bachmann, Rüdiger; Bayer, Christian; Merkl, Christian; Seth, Stefan; Stüber, Heiko; Wellschmied, Felix
    Abstract: We study the relationship between cyclical job and worker flows at the establishment level using the new German AWFP dataset spanning from 1975-2014. We find that worker turnover moves more procyclical than job turnover. This procyclical worker churn takes place along the entire employment growth distribution of establishments. We show that these procyclical conditional worker flows result almost exclusively from job-tojob transitions. Growing establishments fuel their employment growth by poaching workers from other establishments as the boom matures. At the same time, non-growing establishments replace these workers by hiring from other establishments and non-employment.
    Keywords: job flows,worker flows,aggregate fluctuations
    JEL: E32 J23 J63
    Date: 2017
  10. By: Aaronson, Daniel (Federal Reserve Bank of Chicago); Phelan, Brian J. (DePaul University)
    Abstract: We extend the task-based empirical framework used in the job polarization literature to analyze the susceptibility of low-wage employment to technological substitution. We find that increases in the cost of low-wage labor, via minimum wage hikes, lead to relative employment declines at cognitively routine occupations but not manually-routine or non-routine low-wage occupations. This suggests that low-wage routine cognitive tasks are susceptible to technological substitution. While the short-run employment consequence of this reshuffling on individual workers is economically small, due to concurrent employment growth in other low-wage jobs, workers previously employed in cognitively routine jobs experience relative wage losses.
    Keywords: Technological substitution; Routine tasks; Minimum wage
    JEL: J24 J38
    Date: 2017–01–15
  11. By: Bingley, Paul (Danish National Centre for Social Research (SFI)); Lundborg, Petter (Lund University); Vincent Lyk-Jensen, Stéphanie (Danish National Centre for Social Research (SFI))
    Abstract: Family members tend to have similar labor market outcomes, but measuring the contribution of behavioral spillovers is difficult. To identify spillovers between brothers, we exploit Denmark's largest random assignment – of young men to 8 months of military service – where service status of brothers is correlated but draft lottery numbers are not. We find average spillovers of elder brother service on younger brother service of 7 percent, and as high as 55 percent for closely spaced brothers without sisters. Elder brother military service affects his own occupational choice and his younger brother's service through private information, thereby encouraging volunteering.
    Keywords: peer effect, social interactions, family networks, military service, draft lottery
    JEL: J24 J38 I38 H56
    Date: 2017–01
  12. By: Hiroshi Teruyama (Institute of Economic Research, Kyoto University); Hiroyuki Toda (Institute of Economic Research, Kyoto University, Institute of Social and Economic Research, Osaka University)
    Abstract: This study examines the dual structure of wage formation in regular and non-regular employment sectors in Japan. By using data from a series of surveys conducted in the Tokyo metropolitan area during 2002--2014, two sectoral wage functions and an employment status determination function are estimated simultaneously. The estimated results reveal several facts regarding the new era of the Japanese dual labor market. While the wages of regular workers rise with years of tenure and external experience, those of non-regular workers increase only with the latter. The wage increases owing to experience are of a similar magnitude between employment statuses (except for female regular workers), and the firm-size and educational-background premiums exist only in the regular employees' wages. The study also shows that the slopes of regular workers' wage-tenure profiles have been rather stable for more than 10 years since the early 2000s.
    Keywords: dual labor market, wage profiles, non-regular workers, Japanese labor market, switching regression model
    JEL: J31 J42 J70 C34
    Date: 2017–01
  13. By: Hidekatsu Asada (OECD); Stewart Nixon (OECD); Vincent Koen
    Abstract: Productivity growth is essential to providing sustainable increases in living standards. Malaysia has reached a development stage where growth needs to be driven more by productivity gains than the sheer accumulation of capital and labour inputs. The 11th Malaysia Plan (2016-20) sets an ambitious labour productivity growth target of 3.7% per year, well above the 2% average growth recorded from 2011 to 2015. Co-ordinated structural reforms will be necessary to achieve the productivity improvements needed to attain high-income country status. Areas where reforms would deliver the greatest boost to productivity include increasing the quality of education and skills training, spurring innovation, adopting information technology more widely, fostering a well-functioning competition policy framework, improving the functioning of the labour market and the regulatory framework for small and medium-sized enterprises, fostering regional integration and raising public sector productivity. Renforcer la productivité en Malaisie Une amélioration soutenue du niveau de vie de la population n’est pas possible sans croissance de la productivité. Au stade de développement actuel de la Malaisie, la croissance doit reposer davantage sur des gains de productivité que sur l'accumulation des facteurs de production. Le 11ème Plan Malaisie (2016-2020) a fixé un objectif ambitieux de croissance de la productivité de 3,7% par an, bien au-dessus du taux de 2% enregistré entre 2011 et 2015. Des réformes structurelles coordonnées seront nécessaires pour réaliser les gains de productivité requis pour accéder au statut de pays à revenu élevé. Les réformes qui auraient le plus d’impact à cet égard touchent à la qualité de l’éducation et de la formation, à l’innovation, à un recours plus large aux technologies de l’information, à la politique de concurrence, au fonctionnement du marché du travail, au cadre réglementaire pour les petites et moyennes entreprises, à l’intégration régionale et à la productivité dans le secteur public.
    Keywords: competition, education, innovation, insolvency, performance review, productivity, public sector, regional integration, regulatory reform, skills, SMEs, structural reform, trade
    JEL: E20 F1 G3 H11 I0 O1 O40 P48
    Date: 2017–01–31
  14. By: Michiel Gerritse; AndrŽs Rodr’guez-Pose
    Abstract: Government contracts are frequently courted by firms and governments alike as a solution to generate more jobs, income, and economic growth. However, the development impact of government contracts remains controversial. This paper uses georeferenced data on United States (US) federal contracts, distinguishing between the location of the recipient and the location of performance, for the years 2005-2014 in order to assess the extent to which federal government contracting has contributed to job and wealth generation and economic growth in metropolitan areas of the US. The results of the analysis show that individuals living in cities with a higher share of contract spending per capita witnessed improvements in employment. Aggregate GDP per capita also rose in cities hosting the companies receiving the contracts. However, the effects Ð once reverse causality and spurious trends are controlled for using a fine-scale fixed effect strategy and instrumentation Ð are very small, raising reasonable questions about the viability of federal contracting as a vehicle for economic development.Ê Length:
    Keywords: Federal contracting, government spending, jobs, wages, economic growth, urban development
    JEL: R11 R38 O23 E62 R58
    Date: 2017–01
  15. By: Herrera, Daniel; Shaywitz, Bennett; Holahan, John; Marchione, Karen; Michaels, Reissa; Shaywitz, Sally; Hammitt, James
    Abstract: While much is known about dyslexia in school-age children and adolescents, less is known about its effects on quality of life in adults. Using data from the Connecticut Longitudinal Study we provide the first estimates of the monetary value of improving reading, speaking, and cognitive skills to dyslexic and non-dyslexic adults. Using a stated-preference survey, we find that dyslexic and non-dyslexic individuals value improvements in their skills in reading speed, reading aloud, pronunciation, memory, and information retrieval at about the same rate. Because dyslexics have lower self-reported levels on these skills, their total willingness to pay to achieve a high level of skill is substantially greater than for non-dyslexics. However, dyslexic individuals’ willingness to pay (averaging $3000 for an improvement in all skills simultaneously) is small compared with the difference in earnings between dyslexic and non-dyslexic adults. We estimate that dyslexic individuals earn 15 percent less per year (about $8000) than non-dyslexic individuals. Although improvements in reading, speaking and cognitive skills in adulthood are unlikely to eliminate the earnings difference that reflects differences in educational attainment and other factors, stated-preference estimates of the value of cognitive skills may substantially underestimate the value derived from effects on lifetime earnings and health.
    Keywords: Dyslexia, contingent valuation, willingness to pay, reading
    JEL: D03 D12 L13 L22 L81
    Date: 2017–01
  16. By: Colin Caines; Florian Hoffmann; Gueorgui Kambourov
    Abstract: In this paper we study the relationship between task complexity and the occupational wage- and employment structure. Complex tasks are defined as those requiring higher-order skills, such as the ability to abstract, solve problems, make decisions, or communicate effectively. We measure the task complexity of an occupation by performing Principal Component Analysis on a broad set of occupational descriptors in the Occupational Information Network (O*NET) data. We establish four main empirical facts for the U.S. over the 1980-2005 time period that are robust to the inclusion of a detailed set of controls, subsamples, and levels of aggregation: (1) There is a positive relationship across occupations between task complexity and wages and wage growth; (2) Conditional on task complexity, routine-intensity of an occupation is not a significant predictor of wage growth and wage levels; (3) Labor has reallocated from less complex to more complex occupations over time; (4) Within groups of occupations with similar task complexity labor has reallocated to non-routine occupations over time. We then formulate a model of Complex-Task Biased Technological Change with heterogeneous skills and show analytically that it can rationalize these facts. We conclude that workers in non-routine occupations with low ability of solving complex tasks are not shielded from the labor market effects of automatization.
    Keywords: Occupational Task Content; Complex Tasks; Wage Polarization; Skills
    JEL: E24 J21 J23 J24 J31
    Date: 2017–01–28
  17. By: Urban Sila; Hermes Morgavi; Jeanne Dall'Orso (OECD)
    Abstract: Slovenia’s living standards measured in GDP per capita are currently some 20% below the EU15 average and have not yet reached their pre-crisis level. Given that most of this gap comes from differences in labour productivity, the paper looks at productivity trends and sources of productivity growth over past two decades. The largest labour productivity lags are in agriculture and mining and utilities, but lags are also present in services sectors such as information and communication activities, financial and insurance activities and professional services. The importance of the high and medium high technology manufacturing has risen in the last two decades, and their share in total manufacturing value added is relatively high in Slovenia. Growth accounting shows that total factor productivity (TFP) and physical capital were the main sources of economic growth before the crisis in Slovenia, while the contribution of human capital was low. With the crisis, however, the GDP growth turned highly negative due to large drops in TFP and the labour input contribution. The contribution from physical capital was also reduced, reflecting subdued investment activity. Slovenia has a high level of state control in the economy and low foreign direct investment (FDI). Using two different panel datasets – one spanning the OECD countries and another spanning Slovenia's economic activities - we find that improving both measures could significantly raise productivity. Tendances de la productivité et les sources de croissance de la productivité en Slovénie Le niveau de vie de la Slovénie, mesuré en PIB par habitant, est actuellement inférieur d'environ 20% à la moyenne de l'UE15 et n'a pas encore atteint son niveau d'avant crise. Étant donné que la plupart de cet écart provient des différences de productivité du travail, ce document examine les tendances et les sources de croissance de la productivité au cours des deux dernières décennies. Les plus grands décalages de productivité sont présents dans l'agriculture, l’industrie minière, et les services publics. Des retards sont également présents dans certaines activités de services (information et communication, finance et assurance, et les services professionnels). L'importance de la haute et moyenne-haute technologie dans l’industrie manufacturière a augmenté au cours des deux dernières décennies, et leur part dans la valeur ajoutée manufacturière totale est relativement élevé en Slovénie. La comptabilité de la croissance montre que la productivité totale des facteurs (PTF) et le capital physique étaient les principales sources de croissance économique avant la crise en Slovénie, pendant que la contribution du capital humain était faible. Cependant avec la crise, la croissance du PIB est devenue fortement négative en raison de baisses élevées de la PTF et de la contribution du facteur travail. De même la contribution du capital physique a également été réduite, reflétant la faiblesse des investissements. La Slovénie est caractérisée par un haut niveau de contrôle de l'État dans l'économie et peu d’investissements étrangers directs (IED). À l’aide de deux ensembles de données de panel différents - l'un couvrant les pays de l'OCDE et l'autre les activités économiques de la Slovénie - nous constatons que l'amélioration des deux mesures pourrait augmenter significativement la productivité.
    Keywords: foreign direct investment, growth accounting, high technology manufacturing, productivity
    JEL: E24 J24 O47
    Date: 2017–01–31
  18. By: Wydra-Somaggio, Gabriele (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper studies the factors that influence the beginning of either a new vocational training in another occupation (stopout) or the stop of vocational training altogether after an early termination (dropout of the vocational system). One influencing factor is the amount of the human capital acquired which is determined by the duration of (early terminated) vocational training. To analyse this for the German case, we use data (Ausbildungspanel Saarland) which contains detailed information about apprenticeship careers and their labour market outcomes for all apprentices between 1999 and 2002 in Saarland (a German federal state). 72 per cent of the premature terminations analysed here are stop outs. The estimations of robust logit-models show that early premature terminations and an above-average apprenticeship wage in the training occupation are more likely to lead to an apprenticeship stopout. Stopouts who terminate their contracts early on in the apprenticeship process are more likely to change their occupation." (Author's abstract, IAB-Doku) ((en))
    Keywords: Berufsausbildung, Ausbildungsabbrecher, Berufswahl, Bildungsverlauf, Ausbildungsabbrecher, Ausbildungsabbruch, Ausbildungssituation, Ausbildungsbetrieb, Ausbildungsentscheidung, Ausbildungserfolg, Ausbildungswahl, Ausbildungswechsel, Lohn, Integrierte Erwerbsbiografien, Saarland, Bundesrepublik Deutschland
    JEL: I21 J24
    Date: 2017–01–23
  19. By: Joshua Goodman
    Abstract: Despite great focus on and public investment in STEM education, little causal evidence connects quantitative coursework to students’ economic outcomes. I show that state changes in minimum high school math requirements substantially increase black students’ completed math coursework and their later earnings. The marginal student’s return to an additional math course is 10 percent, roughly half the return to a year of high school, and is partly explained by a shift toward more cognitively skilled occupations. Whites’ coursework and earnings are unaffected. Rigorous standards for quantitative coursework can close meaningful portions of racial gaps in economic outcomes.
    JEL: I24 I26 J24 J31
    Date: 2017–01
  20. By: Torun, Huzeyfe (Central Bank of Turkey); Tumen, Semih (Central Bank of Turkey)
    Abstract: This paper estimates the causal effect of vocational high school (VHS) education on employment likeli-hood relative to general high school (GHS) education in Turkey using census data. To address non-random selection into high school types, we collect construction dates of the VHSs at the town-level and use VHS availability in the town by age 13 as an instrumental variable. The first-stage estimates suggest that the availability of VHS does not affect the overall high school graduation rates, but gener-ates a substitution from GHS to VHS. The OLS estimates yield the result that the individuals with a VHS degree are around 5 percentage points more likely to be employed compared to those with a GHS de-gree. When we use the availability of VHS as an instrumental variable, we still find positive and statisti-cally significant effect of VHS degree on employment likelihood relative to GHS degree. However, once we include town-specific socio-economic variables to control for education, employment, and business activity levels in the town, the IV estimates get much smaller and become statistically insignificant. We conclude that although the VHS construction generates a substitution from GHS to VHS education, this substitution is not transformed into increased employment rates in a statistically significant way. We also argue that location-specific controls improve the reliability of the school construction/proximity instruments.
    Keywords: vocational education, employment, school construction, instrumental variables
    JEL: C26 I21 J21 J24
    Date: 2017–01
  21. By: Blien, Uwe (Institute for Employment Research (IAB), Nuremberg); Ludewig, Oliver (Institute for Employment Research (IAB), Nuremberg)
    Abstract: In recent times the employment effects of technical progress raised much intention. Will recent productivity gains lead to technological unemployment or to a new prosperity? In our paper it is shown formally that under general and standard preconditions the price elasticity of demand on product markets is decisive: Technological progress leads to an expansion of employment if product demand is elastic. It is accompanied, however, by shrinkage of employment if product demand is inelastic. A transition from the elastic into the inelastic range of the demand function for the most important product(s) can already suffice to plunge a region into crisis. In our empirical analysis we use industry level time series data on output, prices, employment and national income for Germany provided by the Federal Statistical Office. We estimate Marshallian type demand functions using an instrumental variables estimator to derive the price elasticities for different industries and link this information to the regional labour market performance of the respective industries and regions.
    Keywords: labour market dynamics, productivity growth, structural change
    JEL: Q33 R11 J23
    Date: 2017–01
  22. By: Manuel Arellano (CEMFI, Centro de Estudios Monetarios y Financieros); Stéphane Bonhomme (University of Chicago)
    Abstract: We propose a method to correct for sample selection in quantile regression models. Selection is modelled via the cumulative distribution function, or copula, of the percentile error in the outcome equation and the error in the participation decision. Copula parameters are estimated by minimizing a method-of-moments criterion. Given these parameter estimates, the percentile levels of the outcome are re-adjusted to correct for selection, and quantile parameters are estimated by minimizing a rotated "check" function. We apply the method to correct wage percentiles for selection into employment, using data for the UK for the period 1978-2000. We also extend the method to account for the presence of equilibrium effects when performing counterfactual exercises.
    Keywords: Quantiles, sample selection, copula, wage inequality, gender wage gap.
    JEL: C13 J31
    Date: 2016–12
  23. By: Neil Lee; Paul Sissons; Katy Jones
    Abstract: There is widespread concern about the scale and implications of urban inequality in Great Britain, but little evidence on which cities are the most unequal and why. This paper investigates patterns of wage inequality in 60 British cities. It has two principal goals: (1) to describe which cities are most unequal and (2) to assess the important determinants of inequality. The results show a distinct geography of wage inequality, the most unequal cities tend to be affluent and located in parts of the Greater South East of England. A central determinant of these patterns is the geography of highly skilled workers. Because of this, the geography of urban wage inequality reflects the geography of affluence more generally.
    Keywords: inequality; wages; Great Britain; cities; travel-to-Work-Areas
    JEL: J3 R10 R13 R23
    Date: 2016
  24. By: Carlos Gradín (Universidade de Vigo and EQUALITAS, Spain)
    Abstract: We present an approach to measure the stratification of occupations by sex. For that, we extend the conventional framework for measuring gender segregation to take into account the quality of jobs (e.g. average earnings) predominantly held by each sex. We complement segregation curves and measures derived from them, with their associated concentration curves and indices, to determine whether women are segregated into low-paying jobs. We investigate with this approach the long-term trends of gender segregation and stratification of occupations by sex in the US using census data. Our results show that de-stratification of occupations by sex was more intense than their desegregation, and lasted longer, even after segregation had stagnated. Neither segregation nor stratification levels can be explained by the different characteristics of male and female workforces, although the profound changes in the composition of workers over time (e.g. education, marital status) did help to substantially explain their trends. Changes in the earnings structure favoring occupations held by women since 1980 additionally contributed to reduce stratification over time. Finally, changes in the conditional occupational distribution by sex only reduced segregation and stratification before 1990.
    Keywords: occupational segregation, stratification, low-paying occupations, gender.
    JEL: J16 J42 J71 J82
    Date: 2017–01

This nep-lma issue is ©2017 by Joseph Marchand. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.