|
on Labor Markets - Supply, Demand, and Wages |
| By: | Buetikofer, Aline (Dept. of Economics, Norwegian School of Economics and Business Administration); Cronin, Christopher (Department of Economics, University of Notre Dame); Skira, Meghan (Department of Economics, University of Georgia) |
| Abstract: | Public policies aimed at improving health may have indirect effects on outcomes such as education and employment. We study the labor market effects of a 2007 regulatory action by the US Food and Drug Administration, in which they expanded the black box warning on antidepressants. Using nationally representative data from the National Survey on Drug Use and Health and a difference-in-differences strategy, we find that employment among women aged 35-49 with a history of depression decreased by 6.1 percent (4.4 percentage points) in response to the warning. We explore potential mechanisms generating these employment effects and find that both antidepressant and psychotherapy use among women aged 35-49 decreased after the warning. Our estimates suggest these same women did not substitute towards non-medical alternatives such as marijuana or alcohol. We find no employment or mental health treatment response among men or among women younger than 35. Overall, our analysis suggests that the 2007 expanded black box warning reduced US labor force participation by 0.23 percentage points and led to roughly $13 billion in lost wages. |
| Keywords: | Mental Health; Employment; Antidepressants; Black Box Warnings |
| JEL: | D83 I18 J22 |
| Date: | 2019–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2019_001&r=all |
| By: | Kurmann, André (School of Economics); McEntarfer, Erika (U.S. Bureau of the Census) |
| Abstract: | This paper examines the extent and consequences of Downward Nominal Wage Rigidity (DNWR) using administrative worker-firm linked data from the Longitudinal Employer Household Dynamics (LEHD) program for a large representative U.S. state. Prior to the Great Recession, only 7-8% of job stayers are paid the same nominal hourly wage rate as one year earlier - substantially less than previously found in survey-based data - and about 20% of job stayers experience a wage cut. During the Great Recession, the incidence of wage cuts increases to 30%, followed by a large rise in the proportion of wage freezes to 16% as the economy recovers. Total earnings of job stayers exhibit even fewer zero changes and a larger incidence of reductions than hourly wage rates, due to systematic variations in hours worked. The results are consistent with concurrent findings in the literature that reductions in base pay are exceedingly rare but that firms use different forms of non-base pay and variations in hours worked to flexibilize labor cost. We then exploit the worker-firm link of the LEHD and find that during the Great Recession, firms with indicators of DNWR reduced employment by about 1.2% more per year. This negative effect is driven by significantly lower hiring rates and persists into the recovery. Our results suggest that despite the relatively large incidence of wage cuts in the aggregate, DNWR has sizable allocative consequences. |
| Keywords: | Downward Nominal Wage Rigidity; Administrative Worker-Firm Linked Data; Labor Cost and Employment; Great Recession |
| JEL: | E24 E30 J30 |
| Date: | 2018–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:drxlwp:2019_001&r=all |
| By: | Grove, Wayne A. (Le Moyne College); Jetter, Michael (University of Western Australia); Papps, Kerry L. (University of Bath) |
| Abstract: | Are people prone to selecting occupations with highly skewed income distributions despite minuscule chances of success? Assembling a comprehensive pool of potential teenage entrants into professional tennis (a typical winner-take-all market), we construct objective measures of relative ability and earnings projections. We find that prospective tennis professionals are attracted to right-skewed earnings distributions, independent of mean and variance. If skewness in prize money fell to zero, males would be 23% and females 5% less likely to continue pursuing a professional career, on average. Thus, winner-take-all labor markets appear to systematically encourage those with modest talents to pursue long-shot careers. |
| Keywords: | winner-take-all markets, superstar markets, labor supply, human capital, gender differences, skewness preferences |
| JEL: | J22 J24 J31 J44 L83 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12012&r=all |
| By: | David Card; Dean R. Hyslop |
| Abstract: | Although women make up nearly half the U.S. workforce, most studies of earnings inequality focus on men. This is at least in part because of the complexity of modeling both the decision to work (i.e., the extensive margin) and the level of earnings conditional on work (the intensive margin). In this paper we document a series of descriptive facts about female earnings inequality using data for three cohorts in the PSID. We show that inequality in annual earnings of women fell sharply between the late 1960s and the mid-1990s, with a particularly large decline in the extensive margin component. We then fit earnings-generating models that incorporate both intensive- and extensive-margin dynamics to data for the three cohorts. Our models suggest that over 80% of the decline in female earnings inequality can be attributed to a weakening of the link between family-based factors (including the number of children of different ages and the presence and incomes of partners) and the intensive and extensive margins of earnings determination. |
| JEL: | J22 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25387&r=all |
| By: | Elizabeth L. Doran; Ann P. Bartel; Jane Waldfogel |
| Abstract: | Although the gender wage gap in the U.S. has narrowed, women’s career trajectories diverge from men’s after the birth of children, suggesting a potential role for family-friendly policies. We provide new evidence on employer provision of these policies. Using the American Time Use Survey, we find that women are less likely than men to have access to any employer-provided paid leave and this differential is entirely explained by part-time status. Using the NLSY97, we find that young women are more likely to have access to specifically designated paid parental leave, even in part-time jobs. Both datasets show insignificant gender differentials in access to employer-subsidized child care and access to scheduling flexibility. We conclude with a discussion of policy implications |
| JEL: | J32 J38 J71 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25378&r=all |
| By: | Carroll, David (UNSW Canberra); Parasnis, Jaai (Monash University); Tani, Massimiliano (University of New South Wales) |
| Abstract: | The concentration of women in the teaching profession is widely noted and generally attributed to gender differences in preferences and social roles. Further, gender segregation exists within this profession – women make up almost all of the primary and pre-primary teaching cohorts, while men who choose to become teachers tend to specialise in secondary schooling and administrative roles. To what extent is this gender structure in teaching a response to economic incentives from the labour market? Our research addresses this question by studying the effects of wage structure on the decision to become a teacher. In particular, we ask what the most attractive choice is for a graduate given the wage structure of the previous graduate cohort. We show that the labour market, especially the relative returns to education across occupations for men and women, can explain these vocational choices in the Australian context. Women with bachelor qualifications receive higher returns as teachers, while men with bachelor qualifications receive higher returns in other occupations. In contrast, while both men and women with postgraduate qualifications earn higher returns in other occupations, the difference is consistently smaller for women than men. Women face a lower opportunity cost for becoming a teacher compared to men. A more balanced gender representation among teachers seems unlikely given the existing structure of returns to education, by gender, across professions. |
| Keywords: | occupational segregation, teachers, opportunity cost, decomposition |
| JEL: | J16 J24 J31 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12027&r=all |
| By: | Jens Ruhose; Stephan L. Thomsen; Insa Weilage |
| Abstract: | We propose a regression-adjusted matched difference-in-differences framework to estimate non-pecuniary returns to adult education. This approach combines kernel matching with entropy balancing to account for selection bias and sorting on gains. Using data from the German SOEP,we evaluate the effect of work-related training, which represents the largest portion of adult education in OECD countries, on individual social capital. Training increases participation in civic, political, and cultural activities while not crowding out social participation. Results are robust against a variety of potentially confounding explanations. These findings imply positive externalities from work-related training over and above the well-documented labor market effects. |
| Keywords: | non-pecuniary returns, social capital, work-related training, matched difference-in-differences approach, entropy balancing |
| JEL: | J24 I21 M53 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1004&r=all |
| By: | Görg, Holger (Kiel Institute for the World Economy); Hornok, Cecília (Kiel Institute for the World Economy); Montagna, Catia (University of Aberdeen); Onwordi, George E. (University of Aberdeen) |
| Abstract: | How do labour market policies influence employment's responsiveness to output fluctuations (employment-output elasticity)? We revisit this question on a panel of OECD countries, which also incorporates the period of the Great Recession. We distinguish between passive and active labour market policies and allow for their interactions, i.e. the policy mix, to play a role. We find that the effects of any single policy change are shaped by the broader existing policy-mix within which it takes place. Finally, we evaluate the effect of a move to 'flexicurity' on the employment-output elasticity in each country. |
| Keywords: | employment-output elasticity, labour market policy, welfare state, flexicurity |
| JEL: | E24 E32 J21 J65 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12004&r=all |
| By: | Heléne Berg |
| Abstract: | This paper estimate causal effects of being elected in a local election on monetary returns. The claim for causality can be made thanks to a research design where the income of some candidate who just barely won a seat is compared to that of some other candidate who was close to winning a seat for the same party, but ultimately did not. The design is made possible thanks to comprehensive data covering all political candidates in the period 1991{2006. I establish that monetary returns are absent both in the short and long run. Instead, politicians seem to be motivated by non-monetary returns, and I show that being elected locally once can be an effective starting point for enjoying such payoffs. |
| Keywords: | returns to politics, incumbency effects, regression discontinuity design |
| JEL: | C23 D72 J44 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7406&r=all |
| By: | East, Chloe N. (University of Colorado Denver); Velasquez, Andrea (University of Colorado Denver) |
| Abstract: | Recent decades have seen a surge in local interior immigration enforcement. In this paper we examine a little discussed, but potentially important, spillover effect of enforcement policies: changes in high-skilled citizen women's labor supply due to changes in the cost of outsourcing household production. Undocumented immigrants disproportionately supply household services - e.g. as maids, cooks, child care workers, and gardeners - so the price of outsourcing these services is expected to rise in response to enforcement. Combining data on the timing and location of these enforcement policies, with data on labor supply from the American Community Survey over 2005-2012, we implement a difference-in-difference approach with location and year fixed effects to take advantage of the staggered implementation of these policies. We find that an increase in intensity of immigration enforcement in a local area reduced the labor supply of citizen college- educated women with children. Several results suggest that changes in the price of outsourcing are driving these results: 1) we see an increase in time spent on household production tasks among mothers in the American Time Use Survey, 2) we confirm that there is an increase in the wages of household workers, and 3) we see no similar effects for high-skilled men or women without children. This indicates there are important unintended consequences of enforcement policies on high-skilled citizen mothers' ability to work. |
| Keywords: | immigration, labor supply, gender |
| JEL: | F22 J2 J16 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12029&r=all |
| By: | Bia, Michela (LISER); Flores-Lagunes, Alfonso (Syracuse University); Mercatanti, Andrea (LISER) |
| Abstract: | In a world increasingly globalized, multiple language skills can create more employment opportunities. Several countries include language training programs in active labor market programs for the unemployed. We analyze the effects of a language training program on the re-employment probability and hourly wages of the unemployed simultaneously, using high-quality administrative data from Luxembourg. We address selection into training by exploiting the rich administrative information available, and account for the complication that wages are "truncated" by unemployment by adopting a principal stratification framework. Estimation is undertaken with a mixture model likelihood-based approach. To improve inference, we use the individual's hours worked as a secondary outcome and a stochastic dominance assumption. These two features considerably ameliorate the multimodality problem commonly encountered in mixture models. We also conduct sensitivity analysis to assess the unconfoundedness assumption employed. Our results strongly suggest a positive effect (of up to 12.7 percent) of the language training programs on the re-employment probability, but no effects on wages for those who are observed employed regardless of training participation. It appears that, in the context of an open and multilingual economy, language training improve employability but the language skills acquired are not sufficiently rewarded to be reflected in higher wages. |
| Keywords: | language training programs, policy evaluation, principal stratification, unconfoundedness, sensitivity analysis |
| JEL: | C21 I38 J38 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11973&r=all |
| By: | Cristina Barceló (Banco de España); Ernesto Villanueva (Banco de España) |
| Abstract: | Recent cohorts in various developed countries take a longer time to form their own household and display lower rates of home ownership than older cohorts. Previous literature has linked these developments to higher job instability, especially among youths. We exploit the large differences in firing costs across contract types in the Spanish labor market to identify the causal link between sharp changes in the risk of job loss and the timing of different forms of household formation among youths. Our identification strategy uses variation in regional incentives for firms to promote high firing cost contracts between 1997 and 2009. Using data from the 2002-2014 waves of the Spanish Survey of Household Finances, we document that an increase of 1% in the stock of workers with an open-ended contract increases the probability of forming a new household by a similar magnitude (especially through renting new accommodation). The results are consistent with the predictions of precautionary saving models, whereby individuals exposed to the risk of job loss postpone their consumption of housing services. |
| Keywords: | job insecurity, household formation, housing investments |
| JEL: | J1 J2 D91 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1849&r=all |
| By: | Lucas W. Davis; Catherine Hausman |
| Abstract: | In an influential paper, Bertrand and Mullainathan (2001) show that energy executives are rewarded for high oil prices, which they term pay-for-luck. Almost twenty years later, performance-based pay as a portion of executive compensation has nearly doubled; total executive compensation has also nearly doubled; and new disclosure laws and tax rules have changed the regulatory landscape. In this paper, we examine whether their results and their interpretation continue to hold in this changing environment. We find that executive compensation at U.S. oil and gas companies is still closely tied to oil prices, indicating that executives continue to be rewarded for luck despite the increased availability of more sophisticated compensation mechanisms. This finding is robust to including time-varying controls for the firms' scale of operations, and it holds not only for total executive compensation but also for several of the separate individuals components of compensation, including bonuses. Moreover, we show there is less pay-for-luck in better-governed companies, and that pay-for-luck is asymmetric – rising with increasing oil prices more than it falls with decreasing oil prices. These patterns are more consistent with rent extraction by executives than with maximizing shareholder value. |
| JEL: | J33 M12 M52 Q34 Q40 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25391&r=all |
| By: | Gries, Thomas (University of Paderborn); Naudé, Wim (Maastricht University) |
| Abstract: | Rapid technological progress in artificial intelligence (AI) has been predicted to lead to mass unemployment, rising inequality, and higher productivity growth through automation. In this paper we critically re-assess these predictions by (i) surveying the recent literature and (ii) incorporating AI-facilitated automation into a product variety-model, frequently used in endogenous growth theory, but modified to allow for demand-side constraints. This is a novel approach, given that endogenous growth models, and including most recent work on AI in economic growth, are largely supply-driven. Our contribution is motivated by two reasons. One is that there are still only very few theoretical models of economic growth that incorporate AI, and moreover an absence of growth models with AI that takes into consideration growth constraints due to insufficient aggregate demand. A second is that the predictions of AI causing massive job losses and faster growth in productivity and GDP are at odds with reality so far: if anything, unemployment in many advanced economies is historically low. However, wage growth and productivity is stagnating and inequality is rising. Our paper provides a theoretical explanation of this in the context of rapid progress in AI. |
| Keywords: | technology, artificial intelligence, productivity, labour demand, innovation, growth theory |
| JEL: | O47 O33 J24 E21 E25 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12005&r=all |
| By: | David Neumark |
| Abstract: | I discuss the econometrics and the economics of past research on the effects of minimum wages on employment in the United States. My intent is to try to identify key questions raised in the recent literature, and some from the earlier literature, which I think hold the most promise for understanding the conflicting evidence and arriving at a more definitive answer about the employment effects of minimum wages. My secondary goal is to discuss how we can narrow the range of uncertainty about the likely effects of the large minimum wage increases becoming more prevalent in the United States. I discuss some insights from both theory and past evidence that may be informative about the effects of high minimum wages, and try to emphasize what research can be done now and in the near future to provide useful evidence to policymakers on the results of the coming high minimum wage experiment, whether in the United States or in other countries. |
| JEL: | J38 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7386&r=all |
| By: | Bachmann, Ronald (RWI); Felder, Rahel (Ruhr University Bochum); Tamm, Marcus (RWI) |
| Abstract: | We use data from the adult cohort of the National Education Panel Study to analyse the changes in the employment histories of cohorts born after World War II and the role of atypical employment in this context. Younger cohorts are characterised by acquiring more education, by entering into employment at a higher age, and by experiencing atypical employment more often. The latter is associated with much higher employment of women for younger cohorts. A sequence analysis of employment trajectories illustrates the opportunities and risks of atypical employment: The proportion of individuals whose entry into the labour market is almost exclusively characterised by atypical employment rises significantly across the cohorts. Moreover, a substantial part of the increase in atypical employment is due to the increased participation of women, with part-time jobs or mini-jobs playing an important role in re-entering the labour market after career breaks. |
| Keywords: | atypical employment, regular employment, cohort differences, life cycle analysis, sequence analysis |
| JEL: | J21 J42 J81 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12010&r=all |
| By: | Bellou, Andriana (University of Montreal); Cardia, Emanuela (University of Montreal) |
| Abstract: | The cohorts of women born at the turn of the 20th century increased markedly their participation in the labor market when older. These are the first cohorts who worked after their childbearing years. In this paper, we document a link between their work behavior and the Great Depression. We show that the 1929 Crash attracted young women 15 to 34 years old in 1930 (whom we name D-cohort) into the labor market, possibly via an added-worker effect. Using several years of Census micro data, we further document that the same cohort remained or re-entered the labor market in the 1940s and 1950s and that its entire life cycle labor supply is tightly linked to the conditions dating back to the Great Depression. We argue that these facts are consistent with the hypothesis of a labor supply shift for this cohort triggered by the 1929 Crash. |
| Keywords: | Great Depression, added worker effect, female labor supply |
| JEL: | J21 N32 J01 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12024&r=all |
| By: | Noe Wiener (Department of Economics, University of Massachusetts, Amherst) |
| Abstract: | Competition between immigrant and native workers takes place in labor markets that are segmented along various, often unobservable dimensions. It is desirable to measure the extent to which native workers are effectively shielded from competition by immigrant workers by virtue of such patterns of segmentation. This paper proposes measures of group differences in labor market segmentation on the basis of incomplete data, such as can be obtained from the US Census. These measures are derived from a general class of models of labor competition in the Smithian tradition. The observed wage distributions of native and foreign-born workers in the United States (at the national and metropolitan level) can be approximated remarkably well with this class of model, suggesting that a parsimonious account of wage inequality is feasible. |
| Keywords: | Immigration, labor market competition, segmented labor markets, wage inequality, statistical equilibrium |
| JEL: | J15 J31 J42 J61 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1901&r=all |
| By: | Neyt, Brecht (Ghent University); Verhaest, Dieter (KU Leuven); Baert, Stijn (Ghent University) |
| Abstract: | This study examines the impact of enrolling into dual apprenticeship programs in secondary education on six early employment outcomes. Our contribution to the literature is threefold. First, we estimate – within the same, Belgian secondary education framework – the effects of two distinct types of dual programs that combine part-time school- or training centre-based instruction with an apprenticeship in a firm. Second, these effects are identified by estimating a dynamic model capturing subsequent educational and labour market outcomes to control for the dynamic selection of students into dual programs. Third, this approach enables us to distinguish between the programs' direct effects (conditional on educational achievement) and indirect effects (via educational achievement). We find evidence for short-term labour market advantages but only for the program with the most days of in-field training. With these findings we contribute to the international discussion on the optimal design of vocational programs. |
| Keywords: | vocational education, transitions in youth, dynamic selection, education, labour |
| JEL: | I21 J21 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12011&r=all |
| By: | Benson, Alan (University of Minnesota); Sojourner, Aaron (Federal Reserve Bank of Minneapolis); Umyarov, Akhmed (University of Minnesota) |
| Abstract: | Just as employers face uncertainty when hiring workers, workers also face uncertainty when accepting employment, and bad employers may opportunistically depart from expectations, norms, and laws. However, prior research in economics and information sciences has focused sharply on the employer’s problem of identifying good workers rather than vice versa. This issue is especially pronounced in markets for gig work, including online labor markets, where platforms are developing strategies to help workers identify good employers. We build a theoretical model for the value of such reputation systems and test its predictions in on Amazon Mechanical Turk, where employers may decline to pay workers while keeping their work product and workers protect themselves using third-party reputation systems, such as Turkopticon. We find that: (1) in an experiment on worker arrival, a good reputation allows employers to operate more quickly and on a larger scale without loss to quality; (2) in an experimental audit of employers, working for good-reputation employers pays 40 percent higher effective wages due to faster completion times and lower likelihoods of rejection; and (3) exploiting reputation system crashes, the reputation system is particularly important to small, good-reputation employers, which rely on the reputation system to compete for workers against more established employers. This is the first clean field evidence of the effects of employer reputation in any labor market and is suggestive of the special role that reputation-diffusing technologies can play in promoting gig work, where conventional labor and contract laws are weak. |
| Keywords: | Reputation; Labor; Job search; Screening; Contracts; Online ratings; Personnel; Online labor markets |
| JEL: | D82 J20 J41 K12 K42 L14 L86 M55 |
| Date: | 2018–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmoi:0016&r=all |
| By: | Vera, Celia Patricia |
| Abstract: | One out of five entering public school teachers leave the field within the first four years. Despite that the presence of a newborn child is the single most important determinant of exits of female teachers, retention policy recommendations rely on models that take children as predetermined. This article formulates and estimates a structural dynamic model that explicitly addresses the interdependence between fertility and labor force participation choices. The model with unobserved heterogeneity in preferences for children fits the data and produces reasonable forecasts of labor force attachment to the teaching sector. Structural estimates of the model are used to predict the effects that wage increases and reductions in the cost of childcare would have on female teachers' employment and fertility choices. The estimates un- pack important features of the interdependence of fertility and labor supply and contradict previous studies that did not consider the endogeneity between these two choices. |
| Keywords: | teachers' attrition, teachers' retention, structual model |
| JEL: | C61 J13 J44 J45 |
| Date: | 2018–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90657&r=all |
| By: | Zimmert, Franziska (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "This paper examines the effect of an expansion of subsidized early child care on maternal labor market outcomes. It contributes to the literature by analyzing, apart from the employment rate and agreed working hours, preferred working hours. Using the legal claim for subsidized child care introduced in Germany in August 2013 for children aged one to three years, I apply a semi-parametric difference-in-differences estimator to examine maternal labor market outcomes. Findings based on survey data from the German Micro Census show a positive effect on the employment rate, as well as on agreed and preferred working hours in districts where the child care coverage rate increases intensely in contrast to districts with a lower expansion of subsidized child care. As agreed and preferred working hours adjust in line with each other, expansion of early child care can tap labour market potentials beyond those of currently underemployed mothers." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Mütter, Erwerbsquote, Arbeitszeit, Arbeitszeitwunsch, Arbeitsvolumen, Kinderbetreuung |
| JEL: | J21 J22 |
| Date: | 2019–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201902&r=all |
| By: | Pellerano, Luca (ILO International Labour Organization); Porreca, Eleonora (Bank of Italy); Rosati, Furio C. (University of Rome Tor Vergata) |
| Abstract: | The possible non linearity of the income elasticity of child labour has been at the centre of the debate regarding both its causes and the policy instruments to address it. We contribute to this debate providing theoretical and empirical novel results. From a theoretical point of view, for any given transfer size, there is a critical level of household income below which an increase in income has no impact on child labour and education. We estimate the causal impact of an increase in income on child labour and education exploiting the random allocation of the Child Grant Programme, an unconditional cash transfer, in Lesotho. We show that the poorest households do not increase investment in children's human capital, while relatively less poor households reduce child labour and increase education. In policy terms, the results indicate that cash transfers might not be always effective to support the investment in children's human capital of the poorest households. Beside the integration with other measures, making the amount of transfer depends of the level of deprivation of the household might improve cash transfer effectiveness. |
| Keywords: | child labour, education, cash transfer, randomized experiment, Lesotho |
| JEL: | H C93 I28 J1 J24 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11983&r=all |
| By: | Francesco Macheda; Roberto Nadalini |
| Abstract: | The fall of the Icelandic economy in 2008 highlighted the destructive effects of unbridled markets. Yet, the small Nordic country has experienced an impressive recovery, so much so that in recent years its annual growth rates have been significantly higher than those of the overwhelming majority of advanced capitalist countries. Several commentators have attributed this extraordinary accomplishment to the interventionist state policies adopted by successive Icelandic governments. The aim of this article is to debunk this myth by delving into the fragile foundations that the current Icelandic economic boom rests on. We argue that the substantial growth of the real exchange rate has made the rapid absorption of unemployment compatible with price stability during the recovery period. At the same time, the boom in tourism services made the impressive appreciation of the Icelandic króna compatible with the country’s external balance. However, the laissez-faire approach shown by the Icelandic authorities towards the krona appreciation hasseverely penalized most of the tradable sector, in which the bulk of skilled labor is usually concentrated. Arguably, the heavy specialization in the tourism sector, by restricting sources of productivity growth and international competitiveness, will render the current level of unemployment and real wages inconsistent with internal and external equilibrium in Iceland in the long run. |
| Keywords: | Natural rate, Wage, Real exchange rate, Human Capital, Marxian |
| JEL: | E24 F31 J24 O33 B51 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:ast:wpaper:0038&r=all |
| By: | Bødker, Jonas Ehn (Aarhus University); Maibom, Jonas (Aarhus University); Vejlin, Rune Majlund (Aarhus University) |
| Abstract: | There is a large literature documenting that workers in exporting firms receive higher wages on average than workers in non-exporting firms. This is also the case for Denmark, where the unconditional exporter wage gap is 3 percent. However, little is known about the sources behind the gap: Is it because more productive (and/or higher paying) firms export, because more productive workers select into the export sector, or is it because matches in the export sector are more productive? In this paper we decompose the gap in wages into these different sources and assess their relative importance. We are the first to show that the presence of exporter-specific worker traits, that are unobservable to the econometrician, is the primary driver of the gap. To reach this finding, we employ a novel econometric strategy and exploit two state-of-art estimators. We start out with an AKM-style wage equation with worker, firm, and match fixed effects. We then use the model in a series of classical decompositions of the exporter wage gap. We show that allowing workers to have time-invariant traits specific to the exporting sector is very important for correctly assessing which factors drive the exporter wage gap. Our results suggest that workers in exporting firms have e.g. skills that are particularly valuable in the exporting sector, therefore generating higher wages in that sector. We also show that workers make job transitions based on these differential returns and thereby the exporter wage gap becomes a result of workers selecting into the export or non-export sector based on their comparative advantage. Finally, we show that our findings are not changed substantially if we instead perform the analysis in a non-linear framework instead of the linear AKM-style framework. |
| Keywords: | exporter wage gap, AKM decomposition, match effects |
| JEL: | F15 J31 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11998&r=all |
| By: | Nordin, Martin (Swedish Institute for Food and Agricultural Economics, Lund University, Sweden); Heckley , Gawain (Health Economics Unit, Department of Clinical Sciences, Lund University, Sweden); Gerdtham , Ulf-G. (Department of Economics, Lund University) |
| Abstract: | Although grade inflation is unfair and may imply inefficient allocation of human resources, current knowledge of grade inflation effects on individual outcomes is scarce. One explanation is probably the challenge of measuring and estimating causal grade inflation effects. This study examines the consequences of grade inflation at the upper secondary education level on enrolment in higher education and earnings for Sweden. Rigorous diagnostic testing supports our empirical approach. Grade inflation at the school level affects earnings mainly through choice of university and the chosen field of education, rather than through enrolment per se, because attending universities of higher quality and pursuing high-paying fields of education have a substantial impact on earnings. On the other hand, high-skilled students attending upper secondary schools without grade inflation and, unexpectedly, low-skilled women attending "lenient" schools are harmed by this. This causes extensive unfairness and, plausibly, detrimental welfare effects. |
| Keywords: | grade inflation; upper-secondary education; higher education; earnings |
| JEL: | I20 I21 J24 |
| Date: | 2019–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2019_001&r=all |
| By: | Checchi, Daniele (University of Milan); Kulic, Nevena (European University Institute); Cicognani, Simona (Free University of Bozen/Bolzano) |
| Abstract: | This article investigates the role of the gender composition of selection committees and the role of connections in promoting women in research activities. Exploiting a newly collected data set on recruitment processes to entry-level research positions in a leading Italian research centre operating mainly in the hard sciences, the study finds that bias against women manifests itself at non-tenured entry level and is attenuated by the presence of a woman on the selection committee. However, the most important predictor for recruitment in the study is previous connections with the research centre, a mechanism which, due the lower density of network links with the institute among female candidates, operates as a selection device discriminating against women. The results suggest that gender of the committee members, network structure and type of recruitment must all be taken into account in approaching recruitment policy and that very early stages of scientific careers are crucial for addressing gender bias in research. |
| Keywords: | connections, gender bias, gender quotas, Italy, research recruitment |
| JEL: | J70 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12021&r=all |