nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2018‒09‒17
fourteen papers chosen by
Joseph Marchand
University of Alberta

  1. Adjusting to Robots: Worker-Level Evidence By Dauth, Wolfgang; Findeisen, Sebastian; Suedekum, Jens; Woessner, Nicole
  2. Efficient Labor Supply for Latin Families: Is the Intra-Household Bargaining Power Relevant? By Campaña, Juan Carlos; Gimenez-Nadal, J. Ignacio; Molina, José Alberto
  3. Macroeconomic Conditions and Child Schooling in Turkey By Güneş, Pinar Mine; Ural Marchand, Beyza
  4. Labor-Market Returns to Higher Vocational Schooling By Petri Böckerman; Mika Haapanen; Christopher Jepsen
  5. The Effect of Children's Time in School on Mothers' Labor Supply: Evidence from Mexico's Full-Time Schools Program By María Padilla-Romo; Francisco Cabrera-Hernández
  6. The effect of self-employment on health: Instrumental variables analysis of longitudinal social security data By Gonçalves, Judite; Martins, Pedro S.
  7. Patterns of overeducation in Europe: The role of field of study By Boll, Christina; Rossen, Anja; Wolf, Andre
  8. The Determinants of Faculty Pay in Russian Universities: Incentive Contracts By Ilya Prakhov; Victor Rudakov
  9. The Cyclical Behavior of Labor Force Participation By Tuzemen, Didem; Van Zandweghe, Willem
  10. Market access, agricultural productivity and selection into trade: evidence from Colombia By Margarita Gafaro; Heitor S. Pellegrina
  11. Which Ladder to Climb? Wages of Workers by Job, Plant, and Education By Bayer, Christian; Kuhn, Moritz
  12. Is Additional Schooling Worthless? Revising Zero Returns to Compulsory Schooling in Germany By Kamila Cygan-Rehm
  13. Foreign Competition and Executive Compensation in the Manufacturing Industry: A Comparison between Germany and the U.S. By Dyballa, Katharina; Kraft, Kornelius
  14. The scope of the external return to higher education By Paul Verstraten

  1. By: Dauth, Wolfgang (University of Würzburg); Findeisen, Sebastian (Federal Reserve Bank of Minneapolis); Suedekum, Jens (DICE Heinrich-Heine-Universität Düsseldorf); Woessner, Nicole (DICE Heinrich-Heine-Universität Düsseldorf)
    Abstract: We estimate the effect of industrial robots on employment, wages, and the composition of jobs in German labor markets between 1994 and 2014. We find that the adoption of industrial robots had no effect on total employment in local labor markets specializing in industries with high robot usage. Robot adoption led to job losses in manufacturing that were offset by gains in the business service sector. We analyze the impact on individual workers and find that robot adoption has not increased the risk of displacement for incumbent manufacturing workers. They stay with their original employer, and many workers adjust by switching occupations at their original workplace. The loss of manufacturing jobs is solely driven by fewer new jobs for young labor market entrants. Moreover, we find that, in regions with higher exposure to automation, labor productivity increases while the labor share in total income declines.
    Keywords: Automation; Labor market institutions; Inequality
    JEL: F16 J24 O33 R11
    Date: 2018–08–21
  2. By: Campaña, Juan Carlos (University of Zaragoza); Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza)
    Abstract: This paper analyzes the efficient labor supply of male and female workers in Latin American countries employing the collective model framework (Chiappori et al.,2002). Using data from Time Use Surveys for Mexico (2009) and Colombia (2012), we find evidence of Pareto-efficient labor supply decisions within households, as the collective rationality is not rejected in the two countries. We find that higher female wages are related to more labor market hours of female workers, and male workers show an altruistic behavior towards females with the increase of their labor income. Sex ratio are related to transfers of additional income from male to female workers in Colombia, which sheds light on the relevance of distribution factors in the internal decision process of the couple. Our results suggest that the distribution of bargaining power within the household is an important factor that should be considered when analyzing household decisions.
    Keywords: household, collective models, labour supply, Latin America countries
    JEL: D10 J22
    Date: 2018–07
  3. By: Güneş, Pinar Mine (University of Alberta); Ural Marchand, Beyza (University of Alberta)
    Abstract: This paper examines the effects of macroeconomic shocks on child schooling in Turkey using household labor force surveys from 2005-2013. We use variation in local labor demand as an instrumental variable, particularly regional industry composition and national industry employment growth rates. The results demonstrate that child schooling is pro-cyclical in Turkey, with the most acute effects among children with less educated parents and living in rural areas. Finally, as hypothesized, we find asymmetric effects on child schooling based on skill composition of economic growth. Higher unemployment among unskilled workers increases schooling, whereas higher unemployment among skilled workers decreases schooling.
    Keywords: schooling, unemployment, business cycles, Turkey
    JEL: J13 J24 O15
    Date: 2018–07
  4. By: Petri Böckerman; Mika Haapanen; Christopher Jepsen
    Abstract: This paper examines the labor-market returns to a new form of postsecondary vocational education, vocational master’s degrees. We use individual fixed effects models on the matched sample of students and non-students from Finland to capture any time-invariant differences across individuals. Attendance in vocational master’s programs leads to higher earnings of eight percent five years after entry even if selection on unobservables is twice as strong as selection on observables. Earnings gains are similar by gender and age, but they are marginally higher for health than for business or technology and trades.
    Keywords: vocational education, master’s degrees, labor-market returns
    JEL: J24
    Date: 2018
  5. By: María Padilla-Romo (Department of Economics, University of Tennessee); Francisco Cabrera-Hernández (Centro de Cooperación Regional para la Educación de Adultos en América Latina y el Caribe (CREFAL))
    Abstract: This paper examines the effect of the time children spend in school on female labor supply. In particular, we investigate the degree to which extending the school day by three and a half hours, in elementary schools, affects labor force participation, the number of weekly hours worked, and the monthly earnings of females with elementary-school-age children. To do so, we exploit within-individual variation in access to full-time schools and a rotating panel of households that contains individual-level data on labor outcomes and sociodemographic characteristics. Results from long-difference models show that extending the school day increases mothers' labor supply, increasing mothers' labor force participation by 5.5 percentage points and the number of weekly hours worked by 1.8.
    Keywords: Female labor; Education; Childcare; Childrearing
    JEL: I25 J13 J22
    Date: 2018–09
  6. By: Gonçalves, Judite; Martins, Pedro S.
    Abstract: The growth of novel flexible work formats raises a number of questions about their effects upon health and the potential public policy implications. However, answering these questions is hampered by data and identification constraints. This is the first paper that draws on comprehensive longitudinal administrative data to examine the impact of self-employment in terms of health. In addition to variation in work status of each individual over time, we also consider variation driven by a number of novel instrumental variables. We also focus on an objective health outcome |hospital admissions| that is not subject to recall or other biases that may affect previous studies. Our findings, based on a representative sample of over 100,000 individuals followed monthly from 2005 to 2011 in Portugal, indicate that self-employment tends to reduce the likelihood of hospital admission by at least half.
    Keywords: Self-employment,hospitalization,sick leave,mortality,instrumental variables
    JEL: C26 I18 J24 J31
    Date: 2018
  7. By: Boll, Christina; Rossen, Anja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolf, Andre
    Abstract: "This study investigates the incidence of overeducation among graduate workers in 21 EU countries and its underlying factors based on the European Labor Force Survey 2016 (EU-LFS). Although controlling for a wide range of covariates, the particular interest lies in the role of fields of study for vertical educational mismatch. The study reveals country and gender differences in the impact of these factors. Compared to Social Sciences, male graduates from e.g. Education, Health and Welfare, Engineering, and ICT are less and those from e.g. Services and Natural Sciences are more at risk in a clear majority of countries. These findings hold for the majority of countries and are robust against a change of the standard education. However, countries show different gendered patterns of field-specific risks. We suggest that occupational closure, productivity signals and gender stereotypes answer for these cross-field and cross-country differentials. Moreover, country fixed effects point to relevant structural differences between national labour markets and between educational systems." (Author's abstract, IAB-Doku) ((en))
    Keywords: Überqualifikation, Hochqualifizierte, unterwertige Beschäftigung - Determinanten, Studienfach, geschlechtsspezifische Faktoren, Europäische Union, Bundesrepublik Deutschland
    JEL: J24 J21 J22
    Date: 2018–09–10
  8. By: Ilya Prakhov (National Research University Higher School of Economics); Victor Rudakov (National Research University Higher School of Economics)
    Abstract: This paper evaluates the design of current contractual incentive mechanisms in Russian universities depending on the type of higher education institution after recent significant contractual reforms in the national academic sector. We employ the theoretical framework of incentive contracts in order to identify and assess performance measures of university faculty determining the total income received from teaching, research and administrative duties. We estimate returns from academic productivity in Russia to be reflected in the academic salary by an evaluation of empirical models of the determinants of faculty pay depending on their productivity, current academic and administrative position, gender and seniority. We show that for the entire sample, faculty salary is positively associated with publication activity. Teaching is significant only for the entire sample, but not significant for subsamples. Administrative duties (expressed in the position held) are positively related to faculty pay: the largest effect is for rectors and vice-rectors, but for deans and heads of departments or laboratories the effect is also strong. Heads of universities and structural units receive a significant bonus for their administrative position. For research-oriented universities the largest effect in publication activity is for the number of papers in high ranking journals. In universities with no research status we discovered a significant gender gap: the male faculty earn more than their female colleagues. There is a positive linear relationship between salary and seniority for the entire sample and in universities with no special status, which corresponds to human capital theory. Salaries in universities requiring higher entrance exam scores are higher than in less selective higher education institutions. The salary in Moscow universities is higher than in the regional higher education institutions.
    Keywords: academic contracts, faculty pay, merit pay, incentive contract, international rankings, competitiveness of higher education.
    JEL: I21 I23 J31
    Date: 2018
  9. By: Tuzemen, Didem (Federal Reserve Bank of Kansas City); Van Zandweghe, Willem (Federal Reserve Bank of Kansas City)
    Abstract: We document that labor force participation declines in the short run following a positive technology shock. The countercyclical response of labor force participation to a technology shock contrasts with the well documented mild procyclical behavior of labor force participation in the business cycle. In a search model of the labor market that incorporates a participation choice, we show that a positive technology shock reduces labor force participation in the short run under a reasonable calibration. In the calibrated model, discount factor shocks induce a procyclical response of labor force participation. As a result, the model can generate both the countercyclical response to technology shocks and the procyclical behavior, consistent with the evidence. Our results indicate an important role of nontechnology shocks for explaining labor market fluctuations.
    Keywords: Labor Force Participation; Unemployment; Technology Shocks; Discount Factor Shocks
    JEL: E24 E32 J22 J64
    Date: 2018–08–01
  10. By: Margarita Gafaro (Banco de la República de Colombia); Heitor S. Pellegrina (NYU Abu Dhabi)
    Abstract: We study the impact of the selection of farmers into trade on agricultural productivity using new data on the universe of farms in Colombia. To guide our analysis, we formulate a spatial economy model where better market access induces high skill farmers to switch from subsistence to cash crops that are traded in urban centers. We estimate reduced form effects of market access using distance to historical settlements as an instrument and calibrate our model according to these effects. Structural estimates indicate that the selection of farmers into trade have a large effect on agricultural productivity. **** RESUMEN: En este documento estudiamos la elección que hacen los agricultores entre la producción de cultivos comerciales con altos costos fijos y la producción de cultivos de subsistencia con menores costos de producción. Formulamos un modelo de economía espacial en el que un mejor acceso al mercado induce a agricultores de mayor habilidad a pasar de la producción de cultivos de subsistencia a la producción de cultivos que se comercializan en los centros urbanos. Probamos las predicciones del modelo utilizando datos para Colombia que provienen del Tercer Censo Nacional Agropecuario. Explotamos la variación exógena en la ubicación de los asentamientos indígenas en el siglo XVI para estimar efectos de forma reducida del acceso al mercado sobre la decisión de producir cultivos comerciales. Utilizamos los resultados de estas estimaciones para calcular los efectos sobre la productividad agrícola de la existencia de altos costos fijos en la producción de cultivos comerciales. Los restados sugieren que las barreras a la entrada que imponen estos costos fijos en la producción de cultivos comerciales tienen un efecto importante sobre la productividad del sector agrícola en Colombia.
    Keywords: Agricultural Trade, Spatial Economics, Selection into trade, Comercio en agricultura, Economía espacial, selección en comercio
    JEL: F14 J43 N56 O13 Q12 Q17 R14
    Date: 2018–09
  11. By: Bayer, Christian (University of Bonn); Kuhn, Moritz (University of Bonn)
    Abstract: Wages grow but also become more unequal as workers age. Using German administrative data, we largely attribute both life-cycle facts to one driving force: some workers progress in hierarchy to jobs with more responsibility, complexity, and independence. In short, they climb the career ladder. Climbing the career ladder explains 50% of wage growth and virtually all of rising wage dispersion. The increasing gender wage gap by age parallels a rising hierarchy gap. Our findings suggest that wage dynamics are shaped by the organization of production, which itself likely depends on technology, the skill set of the workforce, and labor market institutions.
    Keywords: Human capital; Life-cycle wage growth; Wage inequality; Careers
    JEL: D33 E24 J31
    Date: 2018–09–12
  12. By: Kamila Cygan-Rehm
    Abstract: This study estimates the effect of compulsory schooling on earnings. For identification, I exploit a German reform that extended the duration of secondary schooling in the 1960s. I find that hourly wages increase by 6%-8% per additional year of schooling. This result challenges prior findings for Germany of zero returns to schooling, obtained by using the same survey data and reform. I show that the earlier estimates suffer from unconsidered institutional details. A complementary analysis using social security records confirms significant effects on earnings, but yields no effects on employment and take-up of public transfers.
    JEL: I21 J31
    Date: 2018
  13. By: Dyballa, Katharina (TU Dortmund); Kraft, Kornelius (TU Dortmund)
    Abstract: In this study we use import penetration as a proxy for foreign competition in order to empirically analyze (1) the impact of foreign competition on managerial compensation, (2) differences in the impact between Germany and the U.S and (3) whether the impact of import penetration is driven by implied efficiency effects. We use data from the manufacturing industry covering the period from 1984-2010 for Germany respectively 1992-2011 for the U.S and apply system GMM in order to solve potential endogeneity problems. It turns out that foreign competition leads to an increase of average per capita executive compensation in both countries. The impact of foreign competition on pay-performance sensitivity differs between the US and Germany. A differentiation between imported intermediates (efficient sourcing strategy) and final inputs (competition) reveals that the impact of import penetration is not biased by efficiency effects.
    Keywords: foreign competition, outsourcing, managerial incentives, international comparison, System GMM
    JEL: F16 F14 G30 J33
    Date: 2018–07
  14. By: Paul Verstraten (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: This article examines whether the productivity spillovers from a large share of highly educated workers occur within regions, sectors and/or firms. To distinguish between these possibilities, I follow a two-stage procedure to estimate a Mincerian wage equation using matched employer-employee panel data on individual earnings and educational attainment. The results indicate that the scope of higher education spillovers is very limited. Most of the identified spillovers occur within firms, being a factor of 2-3 larger than those operating outside the firm. The spillovers that take place outside the firm are restricted within the own sector and only occur on short distances from the working place. The limited scope confirms the view that higher education spillovers foster aggregate productivity through the exchange of tacit knowledge, which is heavily dependent on face-to-face contact.
    JEL: J24 J31
    Date: 2018–09

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