nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2017‒02‒19
fifteen papers chosen by
Joseph Marchand
University of Alberta

  1. The Performance of Immigrants in the German Labor Market By Robert C.M. Beyer
  2. The Relative Returns to Education, Experience, and Attractiveness for Young Workers By Beam, Emily A.; Hyman, Joshua; Theoharides, Caroline
  3. Upward Nominal Wage Rigidity By Guimaraes, Paulo; Martins, Fernando; Portugal, Pedro
  4. Labour market effects of wage inequality and skill-biased technical change in Germany By Hutter, Christian; Weber, Enzo
  5. Parental Sleep and Employment: Evidence from a British Cohort Study By Joan Costa-Font; Sarah Flèche
  6. Recent changes in British wage inequality: Evidence from firms and occupations By Schaefer, Daniel; Singleton, Carl
  7. The effect of statutory sick-pay on workers' labor supply and subsequent health By Martin Halla; Susanne Pech; Martina Zweimüller
  8. Social Ties and Favoritism in Chinese Science By Raymond Fisman; Jing Shi; Yongxiang Wang; Rong Xu
  9. How do Quasi-Random Option Grants Affect CEO Risk-Taking? By Kelly Shue; Richard Townsend
  10. The sexual divison of labour within couples in France according to their marital status a study based on time-use surveys from 1985-1986, 1998-1999 and 2009-2010 By Lamia Kandil; Hélène Perivier
  11. Native-Migrant Differences in Trading Off Wages and Workplace Safety By D’Ambrosio, Anna; Leombruni, Roberto; Razzolini, Tiziano
  12. Immigrant Labor Market Integration across Admission Classes By Bratsberg, Bernt; Raaum, Oddbjørn; Røed, Knut
  13. Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion By Clemens, Michael A.; Lewis, Ethan Gatewood; Postel, Hannah M.
  14. Gender differences in competitive positions: Experimental evidence on job promotion By Peterlé, Emmanuel; Rau, Holger A.
  15. Fire in the Belly? Employee Motives and Innovative Performance in Startups versus Established Firms By Henry Sauermann

  1. By: Robert C.M. Beyer
    Abstract: This paper uses a large survey (SOEP) to update and deepen our knowledge about the labor market performance of immigrants in Germany. It documents that immigrant workers initially earn on average 20 percent less than native workers with otherwise identical characteristics. The gap is smaller for immigrants from advanced countries, with good German language skills, and with a German degree, and larger for others. The gap declines gradually over time but at a decreasing rate and much stronger for more recent cohorts. Less success in obtaining jobs with higher occupational autonomy explains half of the wage gap. Immigrants are initially less likely to participate in the labor market and more likely to be unemployed. While participation fully converges after 20 years, immigrants always remain more likely to be unemployed than the native labor force.
    Keywords: migration, Germany, labor market, wages, unemployment, participation
    JEL: E24 F22 J15 J22 J31 J61
    Date: 2017
  2. By: Beam, Emily A. (University of Vermont); Hyman, Joshua (University of Connecticut); Theoharides, Caroline (Amherst College)
    Abstract: Understanding employer preferences for characteristics of young workers is crucial to designing effective policies to reduce youth unemployment in developing countries. We conduct a randomized resume audit study, simultaneously examining the returns to education, experience, and physical attractiveness among young workers applying for entry-level jobs in a developing country context. Employers do not value college experience without a degree. Postsecondary vocational training increases the likelihood of a callback, but only for blue-collar occupations typically offered only to male workers. Work experience is valued across most occupations; however, among service-sector jobs with in-person customer interactions, attractive applicants receive 23 percent more callbacks, swamping the returns to experience. Our results can guide policymakers in the design of labor market programs to reduce youth unemployment as well as help young workers make optimal choices to ease their school-to-work transition.
    Keywords: returns to education, school-to-work transition, audit study, labor demand, returns to experience, attractiveness
    JEL: J23 J24 J70 C93
    Date: 2017–01
  3. By: Guimaraes, Paulo (Banco de Portugal); Martins, Fernando (Banco de Portugal); Portugal, Pedro (Banco de Portugal)
    Abstract: In Portugal, as in many other countries in continental Europe, the collective wage agreements between trade unions and employer associations that define wage floors for specific job titles are systematically extended to the whole industry. This means that many firms are obliged to increase the wages of their workforce in order to comply with the newly-agreed bargained wages. With some trepidation, we call this phenomenon upward nominal wage rigidity, in close symmetry with the Keynesian notion of downward nominal wage rigidity. In this paper we provide evidence that firms that are more heavily affected by the change in the bargained wage floors decrease their hiring rates and, more importantly, significantly increase their separation rates. As a complement to our analysis, we suggest the estimation of a measure that attempts to disentangle the strength of internal and external wage conditions. Based on this measure we show that firms whose wages are more influenced by external wages exhibit much lower net job creation rates.
    Keywords: wage rigidity, worker flows, collective bargaining, newly-hired workers
    JEL: J31 J52 J23
    Date: 2017–01
  4. By: Hutter, Christian (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Weber, Enzo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper analyses the relationship between wage inequality and labour market development. Relevant economic theories are ambiguous, just as public debates. We measure the effects of wage inequality, skill-biased and skill-neutral technology on hours worked, productivity and wages in a novel structural vector error correction framework identified by non-recursive long-run restrictions. Results show that skill-biased technology shocks reduce hours worked but increase inequality, productivity and wages. Structural inequality shocks also have a negative impact on hours worked, but additionally reduce productivity. We find relevant effects of inequality both above and below the median wage." (Author's abstract, IAB-Doku) ((en))
    JEL: C32 I24 J24 J31
    Date: 2017–02–08
  5. By: Joan Costa-Font; Sarah Flèche
    Abstract: We show that sleep deprivation exerts a strong negative effect on labour market performance. We exploit variations in child sleep quality to instrument for parental sleep quality. A one-hour reduction in sleep duration significantly decreases labour force participation, the number of hours worked and household income. In addition, we find that low-skilled mothers are more likely to opt out of the labour market and work less hours than high-skilled mothers when exposed to sleep deprivation. We argue that sleep is a major determinant of employment outcomes that needs more attention in designing economic models of time allocation and employment policies.
    Keywords: child sleep, sleep, maternal employment, working hours, job satisfaction, ALSPAC
    JEL: J13 J22 I18 J28
    Date: 2017–02
  6. By: Schaefer, Daniel; Singleton, Carl
    Abstract: Using a dataset covering a large sample of employees and their mostly very large employers, we study the dynamics of British wage inequality over the past two decades. Contrary to other studies, we find little evidence that recent increases in inequality have been driven by differences in the average wages paid by firms. Instead greater dispersion within firms can account for the majority of changes to the wage distribution. After controlling for the changing occupational content of employee wages, the role of average firm residual differences is approximately zero; the modestly increasing trend in between-firm wage inequality is explained by a combination of changes in between-occupation inequality and the occupational specialisation of firms. It is possible that previous studies, which assign some of the importance of changes in the between-firm component to industry, have misrepresented a significant role for occupations. These results are robust across measures of hourly, weekly and annual wages.
    Keywords: wage inequality, within-firm inequality, occupational wage premiums
    JEL: E24 J31
    Date: 2017–01
  7. By: Martin Halla; Susanne Pech; Martina Zweimüller
    Abstract: Social insurance programs typically comprise sick-leave insurance. An important policy parameter is how the costs of lost productivity due to sick leave are shared between workers, firms, and the social security system. We show that this sharing rule affects not only absence behavior but also workers' subsequent health. To inform our empirical analysis, we propose a model in which workers' absence decisions are conditional on the sharing rule, health, and a dismissal probability. Our empirical analysis is based on high-quality administrative data sources from Austria. Identification is based on idiosyncratic variation in the sharing rule caused by different policy reforms and sharp discontinuities at certain job tenure levels and firm sizes. An increase in either the workers' or the firms' cost share, both at public expense, decreases the number of sick-leave days. Policy-induced variation in sick leave has a significant effect on subsequent healthcare costs. The average worker in our sample is in the domain of presenteeism, that is, an increase in sick leave due to reductions in workers' or firms' cost share would reduce healthcare costs and the incidence of workplace accidents.
    Keywords: statutory sick-pay, sick leave, presenteeism, absenteeism, moral hazard, healthcare cost
    JEL: I18 J22 J38
    Date: 2017–02
  8. By: Raymond Fisman; Jing Shi; Yongxiang Wang; Rong Xu
    Abstract: We study favoritism via hometown ties, a common source of favor exchange in China, in fellow selection of the Chinese Academies of Sciences and Engineering. Hometown ties to fellow selection committee members increase candidates' election probability by 39 percent, coming entirely from the selection stage involving an in-person meeting. Elected hometown-connected candidates are half as likely to have a high-impact publication as elected fellows without connections. CAS/CAE membership increases the probability of university leadership appointments and is associated with a US$9.5 million increase in annual funding for fellows' institutions, indicating that hometown favoritism has potentially large effects on resource allocation.
    JEL: J71 O3 P16
    Date: 2017–02
  9. By: Kelly Shue; Richard Townsend
    Abstract: We examine how an increase in stock option grants affects CEO risk-taking. The overall net effect of option grants is theoretically ambiguous for risk-averse CEOs. To overcome the endogeneity of option grants, we exploit institutional features of multi-year compensation plans, which generate two distinct types of variation in the timing of when large increases in new at-the-money options are granted. We find that, given average grant levels during our sample period, a 10 percent increase in new options granted leads to a 2.8–4.2 percent increase in equity volatility. This increase in risk is driven largely by increased leverage.
    JEL: G3 J3 M12 M52
    Date: 2017–01
  10. By: Lamia Kandil (OFCE-Sciences PO); Hélène Perivier (OFCE-Sciences PO)
    Abstract: The purpose of this article is to analyse the division of domestic tasks within the couple according to their marital status as well as how this has changed since the 1980s based on three INSEE time-use surveys (1985-86, 1998-99 and 2009-10). The ordinary least squares (OLS) method is complemented by the matching method, which is used to account for the self-selection of the couples in terms of their observable characteristics in different forms of union (marriage, cohabitation and civil partnerships for 2009-10). In 1985-86 and in 1998-99, the degree of the sexual division of labour was higher for married couples than for cohabiting couples. For 1985-1986, this difference is explained by differences in the characteristics of the couples who were cohabiting. However, by the late 1990s cohabiting couples had opted for an organization that was less unequal than that of married couples, all else being equal. For 2009-10, the average amount of domestic work performed by women was about the same whether they were cohabiting or married (72% and 73.5%), but the level was significantly lower for women in civil partnerships (65.1%). These differences are not due to differences in the observable characteristics of the couples based on the type of union. The article shows that this difference is due to a process of the couples’ self-selection based on their values: in 2009-10, civil partnerships attracted more “egalitarian” couples who, prior to the introduction of civil partnerships, had opted to cohabit.
    Keywords: Sexual division of labour, marital status, family economics, time-use survey, matching method
    JEL: J12 J22
    Date: 2017–02
  11. By: D’Ambrosio, Anna (University of Turin); Leombruni, Roberto (University of Turin); Razzolini, Tiziano (University of Siena)
    Abstract: Applying propensity score reweighting to Italian administrative data covering the period 1994-2012, we study the conditional distributions of injuries by wage of native and foreign workers and distinguish between the component that is explained by observable characteristics and the component that is instead attributable to the immigrant status. Our analyses highlight some stylized facts. Besides a substantial gap in wage and injury risk that cannot be attributed to differences in the characteristics, foreign workers face higher levels of risk by the same level of wages. The gap is significantly above the level predicted by their observable characteristics by remunerations that are close to the minimum wage level set by collective bargaining. After this threshold, injury rates decline, but less steeply for foreign workers than their observable characteristics would predict. We show that the hedonic wage model could explain the first result as a corner solution whereby workers with low wage potential are forced to accept higher levels of risk due to the lower bounds on minimum wage. The second results could simply be explained by assuming different utility functions for natives and foreigners. We also show that the hedonic wage model is compatible with the marked reduction in injury rates and in the gap that we observe in the recession years.
    Keywords: occupational injuries, propensity score reweighting, wage gap, foreign workers, Di Nardo-Fortin-Lemieux decomposition
    JEL: J28 J70
    Date: 2017–01
  12. By: Bratsberg, Bernt (Ragnar Frisch Centre for Economic Research); Raaum, Oddbjørn (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research)
    Abstract: We examine patterns of labor market integration across immigrant groups. The study draws on Norwegian longitudinal administrative data covering labor earnings and social insurance claims over a 25‐year period and presents a comprehensive picture of immigrant‐native employment and social insurance differentials by admission class and by years since entry. For refugees and family immigrants from low‐income source countries, we uncover encouraging signs of labor market integration during an initial period upon admission, but after just 5‐10 years, the integration process goes into reverse with widening immigrant-native employment differentials and rising rates of immigrant social insurance dependency. Yet, the analysis reveals substantial heterogeneity within admission class and points to an important role of host‐country schooling for successful immigrant labor market integration.
    Keywords: migration, refugees, assimilation, social insurance
    JEL: F22 H55 J22
    Date: 2017–01
  13. By: Clemens, Michael A. (Center for Global Development); Lewis, Ethan Gatewood (Dartmouth College); Postel, Hannah M. (Center for Global Development)
    Abstract: An important class of active labor market policy has received little rigorous impact evaluation: immigration barriers intended to improve the terms of employment for domestic workers by deliberately shrinking the workforce. Recent advances in the theory of endogenous technical change suggest that such policies could have limited or even perverse labor-market effects, but empirical tests are scarce. We study a natural experiment that excluded almost half a million Mexican 'bracero' seasonal agricultural workers from the United States, with the stated goal of raising wages and employment for domestic farm workers. We build a simple model to clarify how the labor-market effects of bracero exclusion depend on assumptions about production technology, and test it by collecting novel archival data on the bracero program that allow us to measure state-level exposure to exclusion for the first time. We cannot reject the hypothesis that bracero exclusion had no effect on U.S. agricultural wages or employment, and find that important mechanisms for this result include both adoption of less labor-intensive technologies and shifts in crop mix.
    Keywords: immigrant, immigration, displacement, visa, labor-market, employment, wage, farm, agriculture, natural experiment, United States, Mexico
    JEL: J08 J38 F22 J61
    Date: 2017–01
  14. By: Peterlé, Emmanuel; Rau, Holger A.
    Abstract: This paper analyzes gender differences in access to competitive positions. We implement an experiment where workers can apply for a job promotion by sending a signal to their employer. We control for gender differences in anticipation of discrimination in a treatment where a computer randomly recruits. Discriminatory behavior by the employer is isolated in a treatment where workers cannot send signals. We find that gender disparity among promoted workers is highest when workers can apply for promotion and employers recruit. Strikingly, the gender composition in competitive position is balanced in the absence of a signaling institution. When signaling is possible, we observe that female workers who do not request a promotion are discriminated against.
    Keywords: experiment,discrimination,gender differences,real effort
    JEL: C9 J24 J70
    Date: 2017
  15. By: Henry Sauermann
    Abstract: We examine whether startups attract employees with different pecuniary and non-pecuniary motives than small or large established firms. We then explore whether such differences in employee motives lead to differences in innovative performance across firm types. Using data on over 10,000 U.S. R&D employees, we find that startup employees place lower importance on job security and salary but greater importance on independence and responsibility. Startup employees have higher patent output than employees in small and large established firms, and this difference is partly mediated by employee motives – especially startup employees’ greater willingness to bear risk. We discuss implications for research as well as for managers and policy makers concerned with the supply of human capital to entrepreneurship and innovation.
    JEL: J24 O31 O32
    Date: 2017–01

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