nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2018‒04‒30
thirty-one papers chosen by
Joseph Marchand
University of Alberta

  1. Beauty, Job Tasks, and Wages: A New Conclusion about Employer Taste-Based Discrimination By Todd R. Stinebrickner; Ralph Stinebrickner; Paul J. Sullivan
  2. Using a Kinked Policy Rule to Estimate the Effect of Experience Rating on Disability Inflow By Kyyrä, Tomi; Paukkeri, Tuuli
  3. A Tale of Two Academic Tracks By Asali, Muhammad
  4. Intergenerational Earnings Persistence and Economic Inequality in the Long-Run: Evidence from French Cohorts, 1931-1975 By Lefranc, Arnaud
  5. Concentration in US Labor Markets: Evidence from Online Vacancy Data By Azar, José; Marinescu, Ioana E.; Steinbaum, Marshall; Taska, Bledi
  6. Workers, Firms and Life-Cycle Wage Dynamics By Bingley, Paul; Cappellari, Lorenzo
  7. Career Risk and Market Discipline in Asset Management By Ellul, Andrew; Pagano, Marco; Scognamiglio, Annalisa
  8. Estimating a Model of Qualitative and Quantitative Education Choices in France By Belzil, Christian; Poinas, François
  9. The Sensitivity of Structural Labor Supply Estimations to Modeling Assumptions By Loeffler, Max; Peichl, Andreas; Siegloch, Sebastian
  10. Teacher Performance Pay in the United States: Incidence and Adult Outcomes By Bond, Timothy N.; Mumford, Kevin J.
  11. Reducing Public-Private Sector Pay Differentials: The Single Spine Pay Policy as a Natural Experiment in Ghana By Akwasi Ampofo; Firmin Doko Tchatoka
  12. Minimum Wage Analysis Using a Pre-Committed Research Design: Evidence through 2016 By Clemens, Jeffrey; Strain, Michael R.
  13. On Barriers to Technology Adoption, Appropriate Technology and Deep Integration (with implications for the European Union) By Jean Mercenier; Ebru Voyvoda
  14. The Fall in German Unemployment: A Flow Analysis By Carrillo-Tudela, Carlos; Launov, Andrey; Robin, Jean-Marc
  15. Local policy effects at a time of economic crisis By Cerqua, Augusto; Pellegrini, Guido
  16. Understanding employment decentralization by estimating the spatial scope of agglomeration economies By Paul Verstraten; Gerard Verweij; Peter Zwaneveld
  17. Leadership Experiences, Labor Market Entry, and Early Career Trajectories By Lundin, Martin; Nordström Skans, Oskar; Zetterberg, Pär
  18. Demographic Change and the European Income Distribution By Dolls, Mathias; Doorley, Karina; Paulus, Alari; Schneider, Hilmar; Sommer, Eric
  19. The Impact of Postdoctoral Fellowships on a Future Independent Career in Federally Funded Biomedical Research By Misty L. Heggeness; Donna K. Ginther; Maria I. Larenas; Frances D. Carter-Johnson
  20. The Long-Term Spillover Effects of Changes in the Return to Schooling By Ran Abramitzky; Victor Lavy; Santiago Pérez
  21. Inward Greenfield FDI and Patterns of Job Polarisation By Sara Amoroso; Pietro Moncada-Paterno-Castello
  22. The Lack of Wage Growth and the Falling NAIRU By David N F Bell; David G Blanchflower
  23. Is Personality Endogenous? Evidence from Ireland By Mosca, Irene; Wright, Robert E.
  24. Rain, rain, go away: Weather and children’s time allocation By Nguyen, Ha Trong; Le, Huong Thu; Connelly, Luke B.
  25. How Do Households Adjust to Trade Liberalization? Evidence from China's WTO Accession By Dai, Mi; Huang, Wei; Zhang, Yifan
  26. Further Training and Affective Commitment By Grund, Christian; Titz, Krystina
  27. Duration of Parental Leave and Women's Employment By Kim, Jungho
  28. Amateurs Crowds & Professional Entrepreneurs as Platform Complementors By Kevin J. Boudreau
  29. Bi-Demographic Changes and Current Account using SVAR Modeling: Evidence from Saudi Economy By Hassan Ghassan; Hassan Al-Hajhoj; Faruk Balli
  30. Education mismatch in Europe at the turn of the century: Measurement, intensity and evolution By Muñoz de Bustillo, Rafael; Sarkar, Sudipa; Sebastián, Raquel; Antón, José-Ignacio
  31. School or Work? The Role of Weather Shocks in Madagascar By Marchetta, Francesca; Sahn, David E.; Tiberti, Luca

  1. By: Todd R. Stinebrickner; Ralph Stinebrickner; Paul J. Sullivan
    Abstract: We use novel data from the Berea Panel Study to reexamine the labor market mechanisms generating the beauty wage premium. We find that the beauty premium varies widely across jobs with different task requirements. Specifically, in jobs where existing research such as Hamermesh and Biddle (1994) has posited that attractiveness is plausibly a productivity enhancing attribute—those that require substantial amounts of interpersonal interaction—a large beauty premium exists. In contrast, in jobs where attractiveness seems unlikely to truly enhance productivity—jobs that require working with information and data—there is no beauty premium. This stark variation in the beauty premium across jobs is inconsistent with the employer-based discrimination explanation for the beauty premium, because this theory predicts that all jobs will favor attractive workers. Our approach is made possible by unique longitudinal task data, which was collected to address the concern that measurement error in variables describing the importance of interpersonal tasks would tend to bias results towards finding a primary role for employer taste-based discrimination. As such, it is perhaps not surprising that our conclusions about the importance of employer taste-based discrimination are in stark contrast to all previous research that has utilized a similar conceptual approach.
    JEL: J24 J7
    Date: 2018–04
  2. By: Kyyrä, Tomi (VATT, Helsinki); Paukkeri, Tuuli (VATT, Helsinki)
    Abstract: We study whether the experience rating of employers' disability insurance premiums affects the inflow to disability benefits in Finland. To identify the causal effect of experience rating, we exploit "kinks" in the rule that specifies the degree of experience rating as a function of firm size. Using comprehensive matched employer-employee panel data, we estimate the effects of experience rating on the inflow to sickness and disability benefits. Our results suggest that experience rating has reduced the disability inflow among men under age 50. For other groups we find no significant effects, yet we cannot rule out relatively small effects.
    Keywords: experience rating, disability insurance, early retirement
    JEL: J14 J26 H32
    Date: 2018–03
  3. By: Asali, Muhammad (ISET, Tbilisi State University)
    Abstract: Given asymmetric information, this paper explores the need for non-tenure-track jobs in academia alongside the usual tenure-track positions. It also explains the coexistence of these two types of jobs in research universities as an equilibrium phenomenon. The increased effort needed to produce research, accompanied by imprecisions in the academic editorial process, explains the recent increasing trend in the share of non-tenure-track jobs in academia as well as the widening wage gap between tenure-track and non-tenure-track academics.
    Keywords: efficiency wages, tenure-track, coexistence of two contracts in equilibrium
    JEL: J21 J11 J24 J31 J41 J44 I23
    Date: 2018–03
  4. By: Lefranc, Arnaud (University of Cergy-Pontoise)
    Abstract: This paper analyzes long-term trends in intergenerational earnings persistence in France for male cohorts born between 1931 and 1975. This time period has witnessed important changes in the French labor market and educational system, in particular an important compression of earnings differentials as well as a large expansion in access to secondary and higher education. Using a two-sample instrumental variables approach, I estimate two measures of intergenerational economic persistence: the intergenerational earnings elasticity (IGE) and the intergenerational correlation (IGC). Over the period, the IGE exhibits a V-shaped pattern. It falls from a high of value of .6 for cohorts born in the 1930s to around .4 for those born in the 1950s, but subsequently rises to a level close to the beginning of the period. In contrast, the IGC remains relatively stable over the period. This suggests that changes in the IGE are partly driven by transitory responses to changes in cross-sectional inequality rather than long-term changes in the degree of intergenerational persistence.
    Keywords: intergenerational mobility, intergenerational persistence, earnings, inequality, trends, elasticity, corre-lation, education, France
    JEL: D1 D3 J3
    Date: 2018–03
  5. By: Azar, José (IESE Business School); Marinescu, Ioana E. (University of Pennsylvania); Steinbaum, Marshall (Roosevelt Institute); Taska, Bledi (Burning Glass Technologies)
    Abstract: Using data on the near-universe of online US job vacancies collected by Burning Glass Technologies in 2016, we calculate labor market concentration using the Herfindahl-Hirschman index (HHI) for each commuting zone by 6-digit SOC occupation. The average market has an HHI of 3,953, or the equivalent of 2.5 recruiting employers. 54% of labor markets are highly concentrated (above 2,500 HHI) according to the DOJ/FTC guidelines. Highly concentrated markets account for 17% of employment. All plausible alternative market definitions show that more than 33% of markets are highly concentrated, suggesting that employers have market power in many US labor markets.
    Keywords: monopsony, oligopsony, labor markets, competition policy
    JEL: J21 J23 J42 K21 L11
    Date: 2018–03
  6. By: Bingley, Paul (VIVE - The Danish Centre for Applied Social Science); Cappellari, Lorenzo (Università Cattolica del Sacro Cuore)
    Abstract: Studies of individual wage dynamics typically ignore firm heterogeneity, whereas decompositions of earnings into worker and firm effects abstract from life-cycle considerations. We study firm effects in individual wage dynamics using administrative data on the population of Italian employers and employees. We propose a novel identification strategy for firm-related wage components exploiting the informative content of the wage covariance structure of coworkers. Wage inequality increases three-fold over the working life; firm effects are predominant while young, but sorting of workers into firms becomes increasingly important, explaining the largest share of lifetime inequality. Static models that do not allow for life-cycle dynamics underestimate the importance of sorting and overstate match and firm effects.
    Keywords: wage inequality, wage dynamics, co-workers' covariance
    JEL: J24 J31
    Date: 2018–03
  7. By: Ellul, Andrew; Pagano, Marco; Scognamiglio, Annalisa
    Abstract: We establish that the labor market helps discipline asset managers via the impact of fund liquidations on their careers. Using hand-collected data on 1,948 professionals, we find that top managers working for funds liquidated after persistently poor relative performance suffer demotion entailing a yearly average compensation loss of $664,000. Scarring effects are absent when liquidations are preceded by normal performance or involve mid-level employees. Based on a model with moral hazard and adverse selection, we find that these results can be ascribed to reputation loss rather than bad luck. The findings suggest that performance-induced liquidations supplement compensation-based incentives.
    Keywords: asset managers; careers; Hedge Funds; market discipline; scarring effects
    JEL: G20 G23 J24 J62 J63
    Date: 2018–04
  8. By: Belzil, Christian (Ecole Polytechnique, Paris); Poinas, François (Toulouse School of Economics)
    Abstract: We estimate a structural model of education choices in which individuals choose between a professional (or technical) and a general track at both high school and university levels using French panel data (Génération 98). The average per-period utility of attending general high school (about 10,000 euros per year) is 20% higher than that of professional high school (about 8000 euros per year). About 64% of total higher education enrollments are explained by this differential. At the same time, professional high school graduates would earn 5% to 6% more than general high school graduates if they both entered the labor market around age 18. The return to post-high school general education is highly convex (as in the US) and is reaped mostly toward the end of the higher education curriculum. Public policies targeting an increase in professional high school enrollments of 10 percentage points would require a subsidy of 300 euros per year of professional high school.
    Keywords: education choices, returns to schooling, professional education, structural model
    JEL: C51 I23 J24
    Date: 2018–03
  9. By: Loeffler, Max (University of Cologne); Peichl, Andreas (Ifo Institute for Economic Research); Siegloch, Sebastian (University of Mannheim)
    Abstract: There is still considerable dispute about the magnitude of labor supply elasticities. While differences in estimates especially between micro and macro models are recently attributed to frictions and adjustment costs, we show that the variation in elasticities derived from structural labor supply models can also be explained by modeling assumptions. Specifically, we estimate 3,456 different models on the same data each representing a plausible combination of frequently made choices. While many modeling assumptions do not systematically affect labor supply elasticities, our controlled meta-analysis shows that results are very sensitive to the treatment of hourly wages in the estimation. For example, different (sensible) choices concerning the modeling of the underlying wage distribution and especially the imputation of (missing) wages lead to point estimates of elasticities between 0.2 and 0.65. We hence conclude that researchers should pay more attention to the robustness of their estimations with respect to the wage treatment.
    Keywords: labor supply, elasticity, random utility models, wages
    JEL: C25 C52 H31 J22
    Date: 2018–03
  10. By: Bond, Timothy N. (Purdue University); Mumford, Kevin J. (Purdue University)
    Abstract: This paper estimates the effect of exposure to teacher pay-for-performance programs on adult outcomes. We construct a comprehensive data set of schools which have implemented teacher performance pay programs across the United States since 1986, and use our data to calculate the fraction of students by race in each grade and in each state who are affected by a teacher performance pay program in a given year. We then calculate the expected years of exposure for each race-specific birth state-grade cohort in the American Community Survey. Cohorts with more exposure are more likely to graduate from high school and earn higher wages as adults. The positive effect is concentrated in grades 1-3 and on programs that targeted schools with a higher fraction of students who are eligible for free and reduced lunch.
    Keywords: teacher performance pay, adult outcomes
    JEL: I24 J24
    Date: 2018–03
  11. By: Akwasi Ampofo (School of Economics, University of Adelaide); Firmin Doko Tchatoka (School of Economics, University of Adelaide)
    Abstract: Empirical studies have documented the existence of the public-private pay differentials in both developed and developing countries. The implementation of policies aiming to reduce this gap has however been mitigated or inconclusive. This paper exploits the Single Spine Pay Policy (SSPP) in Ghana as a natural experiment to examine the effectiveness of wage policies in developing countries. The SSPP was implemented in 2010 by the Government of Ghana to address the public-private sector wage gap and improve productivity in the public sector. Using a quantile treatment effect approach based on a Difference-In-Difference (DID) estimation, we show that the SSPP has yet to reduce the wage gap between the public and private sectors across the entire distribution of earnings in Ghana. The improvement observed is only at the lower tail of the distribution of earnings. However, the SSPP has a larger effect on the earnings of female workers than that of males in the education and health services sector, suggesting that the policy was successful in reducing the gender-wage gap in that sector. Moreover, the SSPP has decreased the productivity of workers across the distribution of earnings, mainly due to a decrease in the effort of female public sector workers. Nevertheless, the SSPP has had some successes and could be improved by putting in place a good managerial quality in the government' agencies. In addition, it is important that the Government pays much attention to various macroeconomic factors that have challenged the success of the SSPP.
    Keywords: Public sector; Efficiency wage theory; Quantile treatment effect model; DID estimation
    JEL: C31 G15 J24 J31 J45
    Date: 2018–03
  12. By: Clemens, Jeffrey (University of California, San Diego); Strain, Michael R. (American Enterprise Institute for Public Policy Research)
    Abstract: This paper presents results from the first year of a multi-year, pre-committed research design for analyzing recent state-level minimum wage changes. Through 2015 and 2016, we estimate that relatively large statutory minimum wage increases have reduced employment among low-skilled population groups by just under 1.5 percentage points. Our estimates of the effects of smaller minimum wage increases are more variable and include both moderately large positive values and modest negative values. Our estimates of the effects of increases linked to inflation-indexing provisions are also quite variable, taking a small positive value on average across specifications. Results including 2016 diverge nontrivially when we compare estimates using the American Community Survey (ACS) to estimates using the Current Population Survey (CPS), with estimates tending to be more negative in the ACS. Analysis of future data will be needed to determine whether this difference across surveys is most appropriately attributed to sampling variations or to some other cause.
    Keywords: minimum wages, employment, pre-commitment
    JEL: J08 J23 J38
    Date: 2018–03
  13. By: Jean Mercenier (Department of Economics, Université Panthéon-Assas, and CIRED, Paris, France); Ebru Voyvoda (Department of Economics, Middle East Technical University, Ankara, Turkey)
    Abstract: Based on two strands of research, namely 'barriers to technology adoption' and 'appropriate technology', we propose a formal reappraisal of 'deep integration', a broad concept often used in trade policy discussions. We then evaluate the 2004-7 EU enlargement wave utilizing this operational reappraisal. More specifically, we first estimate, using 2007 data, total labor productivity (TLP) in the 27 EU member states, and show that in all but a few sectors, new member states clearly stand below the lower envelope technology frontier of the older members in their use of skilled and unskilled labor. We interpret this as being the result of past barriers to technology adoption that are likely to be removed by the integration process into the EU, with these new counties' TLP shifting to the incumbent members' lower envelope. We then explore the potential effects on all 27 EU member states of this 'deep integration' experiment using a calibrated intertemporal multisectoral general equilibrium model. Our main finding is that, for most parameter configurations, workers' welfare in incumbent member countries is not negatively impacted despite the rather drastic improvement in competitiveness experienced by new members.
    Keywords: Barriers to technology adoption, appropriate technology, technological upgrading, deep integration, European integration, calibrated general equilibrium
    JEL: D58 E23 F12 J31 O14 R13
    Date: 2018–04
  14. By: Carrillo-Tudela, Carlos (University of Essex); Launov, Andrey (University of Kent); Robin, Jean-Marc (Sciences Po, Paris)
    Abstract: In this paper we investigate the recent fall in unemployment, and the rise in part-time work, labour market participation, inequality and welfare in Germany. Unemployment fell because the Hartz IV reform induced a large fraction of the long-term unemployed to deregister as jobseekers and appear as non-participants. Yet, labour force participation increased because many unregistered-unemployed workers ended up accepting low-paid part-time work that was offered in quantity in absence of a universal minimum wage. A large part of the rise in part-time work was also due to the tax benefits Hartz II introduced to take up a mini-job as secondary employment. This has provided an easy way to top-up labour income staggering under the pressure of wage moderation. The rise in part-time work led to an increase in inequality at the lower end of income distribution. Overall we find that Germany increased welfare as unemployment fell.
    Keywords: unemployment, part-time work, mini-jobs, non-participation, multiple job holding, income inequality, Germany, Hartz reforms
    JEL: J21 J31 J63 J64
    Date: 2018–03
  15. By: Cerqua, Augusto; Pellegrini, Guido
    Abstract: Regional inequalities are large and have widened during the Great Recession. As they prompt people and economic activities to migrate from lagging regions, central governments around the world transfer large amounts of resources in order to prevent these phenomena from occurring. In this paper, we evaluate the effectiveness of the most extensive and long-lived experiment of income redistribution across regions and countries, i.e., the EU regional policy, at a time of economic crisis. Exploiting geographic discontinuities in funds eligibility and using a spatial regression discontinuity design, we analyze comprehensive data on all publicly funded Italian projects at the municipality level. We find a positive and significant impact on employment and number of plants in the least developed regions. However, the impact turns largely negligible when the gap between more and less intensively treated areas is relatively small. Moreover, the EU regional policy appears not to have had any effect on local average income.
    Keywords: EU regional policy, spatial regression discontinuity design, recession, municipalities
    JEL: C21 H25 R11
    Date: 2018–04–01
  16. By: Paul Verstraten (CPB Netherlands Bureau for Economic Policy Analysis); Gerard Verweij (CPB Netherlands Bureau for Economic Policy Analysis); Peter Zwaneveld (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: This paper argues that the spatial decay function of agglomeration economies is much more complex than is often assumed in the agglomeration literature. We provide insight into this issue by analyzing a nationwide and spatially rich wage panel. The key finding is that wages and urbanization are not significantly related on short distances ( This article is revised on February 28th 2018. The revised version (Discussion Paper 376) can be found here . This positive effect attenuates across geographic space and becomes insignificant after 40-80km. This non-monotone relation between wages and distance to economic mass is in line with recently observed trend towards employment decentralization, because it suggests that agglomeration economies on short distances, i.e. in city centers, are offset by congestion externalities. Additionally, this paper finds no evidence that foreign economic mass affects wages in the Netherlands, which suggests that national borders are still a substantial barrier for economic interaction.
    JEL: R12 J31
    Date: 2017–02
  17. By: Lundin, Martin (Uppsala University); Nordström Skans, Oskar (Uppsala University); Zetterberg, Pär (Uppsala University)
    Abstract: Matching archive data on election discontinuities to register data on labor market trajectories we estimate the causal effects of being elected into Swedish student union councils on subsequent labor market careers. Marginally elected students are much more likely to have a rapid transition into employment. Effects are not confined to establishments, organizations or industries where previous candidates are employed, suggesting that the benefits are general in nature. Elected representatives have higher labor earnings within three years, but not thereafter. Overall, leadership experiences before labor market entry boost individuals' early careers, whereas mid-term outcomes are unaffected.
    Keywords: extracurricular activities, earnings, higher education
    JEL: I23 J24
    Date: 2018–03
  18. By: Dolls, Mathias (Ifo Institute for Economic Research); Doorley, Karina (Economic and Social Research Institute, Dublin); Paulus, Alari (ISER, University of Essex); Schneider, Hilmar (IZA); Sommer, Eric (IZA)
    Abstract: This paper assesses the effect of key demographic changes (population ageing and upskilling) that are expected by 2030 on the income distribution in the EU-27 and examines the potential of tax-benefit systems to counterbalance negative developments. Theory predicts that population ageing should increase income inequality, while the effect of up-skilling is more ambiguous. Tax-benefit systems may stabilize these expected changes though this is largely an empirical question given their typically complex nature. We use a decomposition technique to isolate the effect of projected demographic change on income inequality and poverty from the reaction of the labor market to this demographic change through wage adjustments. Our results show that demographic change is likely to lead to increasing inequality while related wage adjustments work mainly in the opposite direction. Changes to projected relative poverty are minimal for most countries. With a few exceptions, EU tax-benefit systems are able to absorb most of projected increase in market income inequality.
    Keywords: income distribution, demography, labor market, decomposition
    JEL: J11 J21 J22
    Date: 2018–03
  19. By: Misty L. Heggeness; Donna K. Ginther; Maria I. Larenas; Frances D. Carter-Johnson
    Abstract: The Ruth L. Kirschstein National Research Service Award (NRSA) program is a major research training program administered by the National Institutes of Health (NIH) with funds appropriated each year by Congress. This study examines the impact of NRSA postdoctoral fellowships on subsequent research-related career outcomes using NIH administrative records on applicants who applied for a fellowship between 1996 and 2008. We find that postdoctoral fellowships increased the probability of receiving subsequent NIH research awards from 6.3 to 8.2 percentage points and of achieving an NIH-funded R01 award, an indication of an independent research career, from 4.6 to 6.1 percentage points. Our findings demonstrate that the NRSA postdoctoral fellowship awards have the potential to promote retention of scientists in NIH-funded research and in the biomedical workforce pipeline.
    JEL: J24 O3 O38
    Date: 2018–04
  20. By: Ran Abramitzky; Victor Lavy; Santiago Pérez
    Abstract: We study the short and long-term spillover effects of a pay reform that substantially increased the returns to schooling in Israeli kibbutzim. This pay reform, which induced kibbutz students to improve their academic achievements during high school, spilled over to non-kibbutz members who attended schools with these kibbutz students. In the short run, peers of kibbutz students improved their high school outcomes and shifted to courses with higher financial returns. In the medium and long run, peers completed more years of postsecondary schooling and increased their earnings. We discuss three main spillover channels: diversion of teachers’ instruction time towards peers, peer effects from improved schooling performance of kibbutz students, and the transmission of information about the returns to schooling. While each of these channels likely contributed to improving the outcomes of peers, we provide suggestive evidence that the estimates are more consistent with the effects operating mainly through transmission of information.
    JEL: J24
    Date: 2018–04
  21. By: Sara Amoroso (European Commission - JRC); Pietro Moncada-Paterno-Castello (European Commission - JRC)
    Abstract: The unprecedented growth in FDI in the last decades has caused drastic changes in the labour markets of the host countries. The major part of FDI takes place in low tech industries, where the wages and skills are low, or in high tech, where they offer a wage premium for the highly skilled workers. This mechanism may increase the polarisation of employment into high-wage and low-wage jobs, at the expenses of middle-skill jobs. This paper looks at the effects of two types of FDI inflows, namely foreign investment in high-skill and low-skill activities, on skill polarization. We match data on greenfield FDI aggregated by country and sector with data on employment by occupational skill to investigate the extent to which differ types of greenfield FDI are responsible for skill polarisation.
    Keywords: Greenfield foreign direct investment, labour market, skills
    JEL: J21 J24
    Date: 2018–04
  22. By: David N F Bell; David G Blanchflower
    Abstract: There remains a puzzle around the world over why wage growth is so benign given the unemployment rate has returned to pre-recession levels. It is our contention that a considerable part of the explanation is the rise in underemployment which rose in the Great Recession but has not returned to pre-recession levels even though the unemployment rate has. Involuntary part- time employment rose in every advanced country and remains elevated in many in 2018. In the UK we construct the Bell/Blanchflower underemployment index based on reports of whether workers, including full-timers and those who want to be part-time, who say they want to increase or decrease their hours at the going wage rate. If they want to change their hours they report by how many. Prior to 2008 our underemployment rate was below the unemployment rate. Over the period 2001-2017 we find little change in the number of hours of workers who want fewer hours, but a big rise in the numbers wanting more hours. Underemployment reduces wage pressure. We also provide evidence that the UK Phillips Curve has flattened and conclude that the UK NAIRU has shifted down. The underemployment rate likely would need to fall below 3%, compared to its current rate of 4.9% before wage growth is likely to reach pre-recession levels. The UK is a long way from full-employment.
    Keywords: underemployment, wage growth, natural rate of unemployment, Phillips curves
    JEL: J3 E1 E5
    Date: 2018–04
  23. By: Mosca, Irene (Trinity College Dublin); Wright, Robert E. (University of Strathclyde)
    Abstract: There is a growing interest in economics in the role played by personality in explaining labour market behaviour. Research to date points to the Big-5 personality traits being a possible determinant of wages and employment. However, most of this research is based on the assumption that personality is exogenous. This paper examines the potential endogeneity of personality in the context of employment behaviour amongst Irish women. A quasi-experimental design, generated by implementation and abolition of the so-called "Marriage Bar", is employed. The Marriage Bar was the legal requirement that women leave paid employment upon getting married in Ireland. Because this law was abolished only in the 1970s, many of the women affected are still alive and are among the respondents in The Irish Longitudinal Study on Ageing. The identification strategy is based on the comparison of two groups of women affected by the Marriage Bar. The comparison is between those who returned to employment after being forced to leave the labour market and those who did not. The analysis supports the view that researchers interested in the relationship between the Big-5 and labour market outcomes should not view the potential problem of "the endogeneity of personality" as a problem.
    Keywords: Big-5 personality traits, labour market success, endogeneity, discrimination
    JEL: J2 J4 J7
    Date: 2018–03
  24. By: Nguyen, Ha Trong; Le, Huong Thu; Connelly, Luke B.
    Abstract: This paper presents the first robust causal estimates of the effect of weather on the allocation of children’s time. It uses individual-level data from over 45,000 time-use diaries of children from two nationally representative cohorts of Australian children whose time-use diaries were surveyed biannually over 10 years to measure the time allocation of children and exploits exogenous variations in local weather conditions observed during the random diary dates. Unfavourable weather conditions, as represented by cold or hot temperature or rain, cause children to switch activities from outdoors to indoors, mainly by reducing the time allocated to active pursuits and travel and increasing the time allocated to media. The effects of weather are more pronounced on weekends and are heterogeneous across different population sub-groups. The results also provide some evidence of adaptation, as temperature tends to have greater impact not only in winter months but also in colder regions. The findings are robust to a wide range of sensitivity checks, including controlling for individual fixed effects and using alternative model specifications.
    Keywords: weather, time allocation, time-use diary, children
    JEL: J13 J22 Q54
    Date: 2018–04–05
  25. By: Dai, Mi (Beijing Normal University); Huang, Wei (National University of Singapore); Zhang, Yifan (Chinese University of Hong Kong)
    Abstract: We investigate the impacts of trade liberalization on household behaviors and outcomes in urban China, exploiting regional variation in the exposure to tariff cuts resulting from WTO entry. Regions that initially specialized in industries facing larger tariff cuts experienced relative declines in wages. Households responded to this income shock in several ways. First, household members worked more, especially in the non-tradable sector. Second, more young adults co-resided with their parents, and thus household size increased. Third, households saved less. These behaviors significantly buffered the negative wage shock induced by trade liberalization.
    Keywords: household adjustments, trade liberalization, WTO
    JEL: F14 F16 J20 R23
    Date: 2018–03
  26. By: Grund, Christian (RWTH Aachen University); Titz, Krystina (RWTH Aachen University)
    Abstract: We investigate the relation of further training and employees' affective commitment. In doing so, we distinguish between a support effect and a participation effect: On the one hand we analyze how a firm's general support for further training is associated with the affective commitment of their employees and on the other hand how individual participation in further training relates to affective commitment. Using the Linked Personnel Panel (LPP), which is a longitudinally linked employer-employee data set, we are able to control for several human resource management instruments additionally to the usual demographics and job characteristics. Moreover, the two-level structure of the data allows us to analyze the support effect from a firm's perspective and an individually perceived perspective. Results show that employees' participation in further training is positively related to affective commitment, but that a general perceived firm's support for personnel development mediates the positive relation of participation in further training and individual affective commitment. Furthermore, we find that the relation of perceived firm's interest in personnel development and affective commitment is increasing with years of schooling and decreasing with age.
    Keywords: commitment, further training, signalling, linked employer-employee data
    JEL: M53 M12 J24
    Date: 2018–03
  27. By: Kim, Jungho (Ajou University)
    Abstract: The impact of the duration of parental leave on women's employment in Korea is examined by focusing on the heterogeneous effects. The results of the extension of the maximum job-protected leave from 12 months to 15 months are as follows. First, the policy change led to more female employees taking leave more often and for longer periods. The impact of leave take-up on high wage earners is found to be smaller than that on their low wage counterparts, but that on duration is larger; this points to a fixed cost in switching between own and paid child care. Further, those in large firms tend to benefit more than those in small- or medium-sized firms. Second, the extension encouraged women to return to work 2–3 years after childbirth, but this effect diminished after 4 years. The findings suggest that the distributional effect should be considered in designing leave policy.
    Keywords: parental leave, female labor supply, timing of childbearing, natural experiment
    JEL: J13 J18 J22
    Date: 2018–03
  28. By: Kevin J. Boudreau
    Abstract: Platforms often have “crowds” of amateurs working on them as complementors, in other cases professional entrepreneurs—or both. What can a platform owner do to implement these outcomes? I document evidence on mobile app developers showing that just small, incremental changes in platform design—related to the bare minimum costs required to build an app and factors affecting non-pecuniary payoffs—can lead the “bottom-to-fall-out” of the market to amateurs. Where the bottom-falls-out, there is a flood of lowest-quality developers who nonetheless are long-lived on the platform and engage in relatively high development activity. I find no evidence that amateurs crowd-out development activity of top developers in this context. Moreover, the bottom-falling-out is associated with the generation of significantly greater numbers of highest-quality products. I discuss several interpretations.
    JEL: D04 E26 J4 L1 L8 O3
    Date: 2018–04
  29. By: Hassan Ghassan (Umm Al-Qura University); Hassan Al-Hajhoj (King Faisal University- Saudi Arabia); Faruk Balli (Massey University at Albany)
    Abstract: The paper aims to explore the impacts of bi-demographic structure on the current account and growth. We use a Structural VAR modeling to track the dynamic impacts between the underlying variables of Saudi economy. New insights are developed in studying the relation between population growth, current account and economic growth inside the neoclassical theory of population. The long-run net impact on economic growth of the bi-source of population growth is negative due to lower skills of the immigrant labor endowment. This empirical outcome also confirmed in some previous papers as Dolado et al. (1994), Ortega and Peri (2009). Besides, the negative long-run contribution of immigrant workers to the current account growth largely exceeds that of the native population because of the increasing levels of remittance outflows. Discordantly to previous literature conducted at level country as Dustmann et al. (2005) or at panel data level as Boubtane et al. (2013), we find that a positive shock in the migration flows leads to a negative impact on native active age ratio. Thus, the immigrants appear to be more substitutes than complements for native workers.
    Keywords: J15, J23, F41, F22,JEL Class C51,Current Account Balance,SVAR Model,Growth,Bi-population,Hybrid population, Current account, Growth, Structural modeling,2
    Date: 2018–03–25
  30. By: Muñoz de Bustillo, Rafael; Sarkar, Sudipa; Sebastián, Raquel; Antón, José-Ignacio
    Abstract: Purpose. The purpose of this paper is to present the stylized facts of over-education among European graduates over time (1998-2013), paying special attention to the measurement issues. Design/methodology/approach. The authors use two different sources, the Programme for the International Assessment of Adult Competencies 2012, and the European Union Labour Force Survey 1998-2013, with two different aims. We employ the first one to make a detailed analysis of the different forms of measuring over-education and its implications in terms of the result obtained. The analysis of the second one responds to study the evolution and characteristics of over-education in Europe. Findings. In first place, the paper provides evidence of the high level of sensitivity of the level of measured over-education to the type of methodology used. Such difference is even higher when we focus on skills versus educational mismatch. The work also shows how with all their shortcomings, the measures of over-education used in the analysis point to the existence of convergence in over-education levels among the European countries of the sample (only interrupted by the crisis), in a context of reduction of over-education rates in many countries. Practical implications. Researchers should be particularly careful when estimating over-education, because of the strong implications in terms of the so different results obtained when choosing between competing methods. Originality/value. The analysis abound in the implications of the use of different methodologies of estimating over-education in terms of both size and ranking among European countries. The production of long-run and updated estimates of over-education for a large sample of countries using a homogenous database and different estimation methods. Paper type. Research paper.
    Keywords: Over-education; Europe; mismatch measurement; higher education; skills; gender; age.
    JEL: I2 J24
    Date: 2018–04
  31. By: Marchetta, Francesca (CERDI, University of Auvergne); Sahn, David E. (Cornell University); Tiberti, Luca (Partnership for Economic Policy (pep))
    Abstract: We examine the impact of rainfall variability and cyclones on schooling and work among a cohort of teens and young adults by estimating a bivariate probit model, using a panel survey conducted in 2004 and 2011 in Madagascar − a poor island nation that is frequently affected by extreme weather events. Our results show that negative rainfall deviations and cyclones reduce the current and lagged probability of attending school and encourage young men and, to a greater extent, women to enter the work force. Less wealthy households are most likely to experience this school-to-work transition in the face of rainfall shocks. The finding is consistent with poorer households having less savings and more limited access to credit and insurance, which reduces their ability to cope with negative weather shocks.
    Keywords: climate shocks, employment, schooling, Africa
    JEL: Q54 J43 I25
    Date: 2018–03

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