nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2019‒05‒20
thirteen papers chosen by
Joseph Marchand
University of Alberta

  1. Wage and labor mobility between public, formal private and informal private sectors in Egypt By Mostafa Shahen; Koji Kotani; Makoto Kakinaka
  2. Pay Transparency and the Gender Gap By Michael Baker; Yosh Halberstam; Kory Kroft; Alexandre Mas; Derek Messacar
  3. Individual labor market effects of local public expenditures on sports By Pawlowski, Tim; Steckenleiter, Carina; Wallrafen, Tim; Lechner, Michael
  4. Do Income Contingent Student Loan Programs Distort Earnings? Evidence from the UK By Jack W. Britton; Jonathan Gruber
  5. Job automation risk, economic structure and trade: a European perspective By Foster-McGregor, Neil; Nomaler, Önder; Verspagen, Bart
  6. The Impact of CEOs in the Public Sector: Evidence from the English NHS By Janke, Katharina; Propper, Carol; Sadun, Raffaella
  7. Is India’s Employment Guarantee Program Successfully Challenging Her Historical Inequalities? By Kartik Misra
  8. Like it or not? The impact of online platforms on the productivity of incumbent service By Alberto Bailin Rivares; Peter Gal; Valentine Millot; Stéphane Sorbe
  9. Assessing recent reforms and policy directions in France: Implementing the OECD Jobs Strategy By Stéphane Carcillo; Antoine Goujard; Alexander Hijzen; Stefan Thewissen
  10. Gig economy platforms: Boon or Bane? By Cyrille Schwellnus; Assaf Geva; Mathilde Pak; Rafael Veiel
  11. Measuring the effect of competitive teacher recruitment on student achievement: Evidence from Ecuador By Araujo P., Maria Daniela
  12. Measuring Commuting in the American Time Use Survey By Kimbrough, Gray
  13. Errors in the Dependent Variable of Quantile Regression Models By Jerry A. Hausman; Haoyang Liu; Ye Luo; Christopher Palmer

  1. By: Mostafa Shahen (School of Economics and Management, Kochi University of Technology); Koji Kotani (School of Economics and Management, Kochi University of Technology); Makoto Kakinaka (Hiroshima University)
    Abstract: Wage and labor between public and private sectors are main factors in economies. In developing countries, the private sector is divided into formal and informal private sectors. Little research has addressed temporal changes in wage and labor among public, formal private and informal private sectors within a single framework. We study the temporal wage gap, labor mobility and the impact of changing employment sectors on wages by Oaxaca-Blinder decomposition and difference-in-difference (DID) methods with the Egyptian Labor Market Panel Survey data from 1998 to 2012. The decomposition shows that the wage gap between public and formal (informal) private sectors has remained strong where education, age and working experience are driving forces. The DID method shows that the percentages and wage losses of movers to the informal private sector from the formal private sector are much higher and more significant than that from the public sector. In summary, Egyptian private sector employees face a high risk to unwillingly fall into and stay in the informal private sector, while the highly educated ones are attracted only to and stay long in the public sector. These results can be considered the obstacles for further economic growth and stability of Egyptian economy, which shall be the case in other developing and Arab countries with a sizable public sector. In this case, the government may need to restructure wage systems, employment practices and cultures, considering a balance with private sectors as well as providing people with incentive schemes and education to nurture (formalize) the formal (informal) private sectors.
    Keywords: Wage gap, public sector, formal private sector, informal private sector, Oaxaca- Blinder method
    JEL: J21 J23 J24 J31 O17
    Date: 2019–05
  2. By: Michael Baker; Yosh Halberstam; Kory Kroft; Alexandre Mas; Derek Messacar
    Abstract: We examine the impact of public sector salary disclosure laws on university faculty salaries in Canada. The laws, which enable public access to the salaries of individual faculty if they exceed specified thresholds, were introduced in different provinces at different points in time. Using detailed administrative data covering the universe of faculty in Canada and an event-study research design, we document three key findings. First, the disclosure laws reduced salaries on average. Second, the laws reduced the gender pay gap between men and women. Third, the closure of the gender gap is primarily in universities where faculty are unionized.
    JEL: J0 J3 J31
    Date: 2019–05
  3. By: Pawlowski, Tim; Steckenleiter, Carina; Wallrafen, Tim; Lechner, Michael
    Abstract: By merging administrative data on public finances of all municipalities in Germany with individual data from the German Socio-Economic Panel, we explore whether local public expenditures on sports facilities influences individual labor market outcomes. Our identification strategy follows a selection-on-observables approach and exploits the panel structure of the data covering 12 years between 2001 and 2012. The results of our matching estimations suggest that both women and men living in municipalities with high expenditure levels benefit, exhibiting approximately 7 percent of additional household net income on average. However, this income effect is fully captured by earning gains for men rather than women living in the household. Additional analysis suggests, that these gender differences, which can also be observed in terms of working time, hourly wage and employment status, appear plausible since women in the age cohort under consideration are less likely than men to engage in sports in general and in any of the publicly funded sports facilities in particular. Moreover, improved well-being and health are possible mechanisms that determine how the positive labor market effects for men may unfold.
    Keywords: Labor market effects, public expenditures, sports, health, well-being
    JEL: H72 H75 J31
    Date: 2019–04
  4. By: Jack W. Britton; Jonathan Gruber
    Abstract: Government backed income contingent student loans are an increasingly being used to fund higher education. An income contingent repayment plan acts as an incremental marginal tax on labor earnings, which could cause individuals to distort their work effort. This paper uses an administrative dataset from the UK that links student loan borrowers between 1998 and 2008, to their official tax records between 2001/02 and 2013/14. Using a combination of techniques, including bunching and difference-in-difference methodology, our findings strongly reject the hypothesis that the UK’s income-contingent repayment plan distorts labor supply.
    JEL: H2 H52 I22
    Date: 2019–05
  5. By: Foster-McGregor, Neil (UNU-MERIT); Nomaler, Önder (UNU-MERIT); Verspagen, Bart (UNU-MERIT)
    Abstract: Recent studies report that technological developments in machine learning and artificial intelligence present a significant risk to jobs in advanced countries. We re-estimate automation risk at the job level, finding sectoral employment structure to be key in determining automation risk at the country level. At the country level, we find a negative relationship between automation risk and labour productivity. We then analyse the role of trade as a factor leading to structural changes and consider the effect of trade on aggregate automation risk by comparing automation risk between a hypothetical autarky and the actual situation. Results indicate that trade increases automation risk in Europe, although moderately so. European countries with high labour productivity see automation risk increase due to trade, with trade between European and non-European nations driving these results. This implies that the high productivity countries do not, on the balance, offshore automation risk, but rather import it.
    Keywords: Automation risk for employment, Industry 4.0, Globalisation, Global Value Chains
    JEL: F16 O33 J24
    Date: 2019–04–08
  6. By: Janke, Katharina; Propper, Carol; Sadun, Raffaella
    Abstract: We investigate whether top managers affect the performance of large and complex public sector organizations, using as a case study CEOs of English public hospitals (large, complex organizations with multi-million turnover). We study the extent to which CEOs are differentiated in terms of their pay, as well as a wide range of hospital production measures including inputs, intermediate operational outcomes and clinical outcomes. Pay differentials suggest that the market perceives CEOs to be differentiated. However, we find little evidence of CEOs' impact on hospital production. These results question the effectiveness of leadership changes to improve performance in the public sector.
    Keywords: CEOs; Hospitals; NHS; Public sector; style
    JEL: H51 I11 L32 M12
    Date: 2019–05
  7. By: Kartik Misra (Department of Economics, University of Massachusetts Amherst)
    Abstract: By providing 100 days of guaranteed employment to every rural household, the National Rural Employment Guarantee Act (NREGA) can challenge the hegemony of the landed elite as major employers in the Indian countryside and raise market wages which have long been depressed. This paper shows that the impact of NREGA is conditioned and complicated by historical inequalities in agricultural landownership which have persisted since the colonial period. I find that in the lean season of agriculture, the program is highly successful in raising wages and generating more public employment in districts that were not characterized by historically high levels of socio-economic inequality. In these districts, the increase in public employment crowds-out labor primarily from domestic work, reflected in increased women’s participation in the program. However, high inequality in landownership adversely impacts the bargaining power of workers and the enforcement of their entitlements under NREGA. This is most evident when I examine the impact of NREGA on rural wages. I find that in districts where land is concentrated in the hands of relatively few large landowners, private agricultural wages declined despite NREGA, whereas they remain largely unchanged in districts that have more equitable land distribution. These findings are consistent with the hypothesis that NREGA has not become a credible alternative to private employment in regions with high land inequality.
    Keywords: India; NREGA; historical institutions; wage bargaining; monopsonistic labor markets
    JEL: O12 I38 J42 J43 P48
    Date: 2019
  8. By: Alberto Bailin Rivares; Peter Gal; Valentine Millot; Stéphane Sorbe
    Abstract: This paper uses a novel empirical approach to assess if the development of online platforms affects the productivity of service firms. We build a proxy measure of platform use across four industries (hotels, restaurants, taxis and retail trade) and ten OECD countries using internet search data from Google Trends, which we link to firm-level data on productivity in these industries. We find that platform development supports the productivity of the average incumbent service firm and also stimulates labour reallocation towards more productive firms in these industries. This may notably reflect that platforms’ user review and rating systems reduce information asymmetries between consumers and service providers, enhancing competition between providers. The effects depend on platform type. “Aggregator” platforms that connect incumbent service providers to consumers tend to push up the productivity of incumbents, while more disruptive platforms that enable new types of providers to compete with them (e.g. home sharing, ride hailing) have on average no significant effect on it. Consistent with this, we find that different platform types affect differently the profits, mark-ups, employment and wages of incumbent service firms. Finally, the productivity gains from platforms are lower when a platform is persistently dominant on its market, suggesting that the contestability of platform markets should be promoted.
    Keywords: competition, digital, google trends, platforms, productivity, services, user rating
    JEL: D24 L13 L80 O33
    Date: 2019–05–21
  9. By: Stéphane Carcillo; Antoine Goujard; Alexander Hijzen; Stefan Thewissen
    Abstract: The OECD actively supports countries with the implementation of the OECD Jobs Strategy through the preparation of labour market chapters in the OECD Economic Surveys. This paper provides an overview of the analytical work carried out in the context of the 2019 Economic Survey for France. The paper consists of a preliminary assessment of the French labour market reforms since 2017 related to the tax and benefit system, employment protection, and collective bargaining. These reforms are broadly in line with the recommendations of the OECD Jobs Strategy. They are likely to contribute to enhanced employment and living standards of low-skilled workers and reduce labour market duality. However, a close monitoring will be necessary to assess whether their implementation has the desired effects and additional measures are needed.
    Keywords: collective bargaining, employment protection legislation, France, OECD Jobs Strategy, taxes and benefits
    JEL: J3 J41 J51
    Date: 2019–05–15
  10. By: Cyrille Schwellnus; Assaf Geva; Mathilde Pak; Rafael Veiel
    Abstract: The rapid emergence of gig economy platforms that use digital technologies to intermediate labour on a per-task basis has triggered an intense policy debate about the economic and social implications. This paper takes stock of the emerging evidence. The results suggest that gig economy platforms’ size remains modest (1-3 per cent of overall employment). Their growth has been most pronounced in a small number of services industries with high shares of own-account workers, suggesting that thus far they have been a substitute for traditional self-employment rather than dependent employment. New evidence provided in this paper is consistent with positive effects of platform growth on overall employment and small negative or insignificant effects on dependent employment and wages. While most empirical studies suggest that platforms are more efficient in matching workers to clients, reductions in barriers to work could offset such productivity-enhancing effects by creating employment opportunities for low-productivity workers. Fully reaping the potential benefits from gig economy platforms while protecting workers and consumers requires adapting existing policy settings in product and labour markets and applying them to traditional businesses and platforms on an equal footing.
    Keywords: gig economy, public policy
    JEL: J21 J40 J48
    Date: 2019–05–21
  11. By: Araujo P., Maria Daniela
    Abstract: In the last decade, several Latin American governments have implemented new teacher recruitment policies based on evaluations of candidates' competency and knowledge so as to raise the quality of their teachers and schools. Since 2007, the Ecuadorian government has required teacher candidates to pass national standardized tests before they can participate in merit-based selection competitions for tenure at public schools. Has this new recruitment system served as an effective screening device? Has it ultimately helped to raise student learning? To answer these questions, I analyze data from a unique Ecuadorian survey of schools in the academic year 2011-2012. I first estimate the value-added to student achievement using OLS and hierarchical linear regressions to evaluate the effect of Ecuador's new competitive recruitment policy. I then use propensity score matching to simulate a random assignment of students to teachers and estimate causal treatment effects. The evidence suggests that teachers who were granted tenure through the new competitive recruitment policy were no more effective, overall, in raising students' learning in reading or math than their peers at schools. Nonetheless, poorer children who were assigned to these teachers had significantly better scores in reading. Furthermore, test-screened teachers, regardless of their tenure status, seem to have had positive significant effects in reading, particularly for students living in poverty. This finding suggests that Ecuador's teacher recruitment policy had a positive impact on the nation's most vulnerable students.
    Keywords: teacher quality,education policy,education reform,Latin America
    JEL: I20 I21 I28 J45
    Date: 2019
  12. By: Kimbrough, Gray
    Abstract: Research into the relationships between commuting and other activities has been hampered by the lack of suitably comprehensive datasets. This paper identifies a possible source of detailed information for such studies, the American Time Use Survey (ATUS). This paper surveys approaches used by researchers to analyze commuting in the ATUS and outlines a method of measuring commuting in a clear and consistent way. This analysis details the advantages of this method over other approaches. Commuting measured in the ATUS using this methodology is shown to be consistent with commuting measures in other large, nationally representative studies. The proposed methodology makes possible a range of analyses exploiting the unique information in the ATUS.
    Keywords: commuting, time use data, travel classification, American Time Use Survey
    JEL: J22 R41
    Date: 2019–05–05
  13. By: Jerry A. Hausman; Haoyang Liu; Ye Luo; Christopher Palmer
    Abstract: The popular quantile regression estimator of Koenker and Bassett (1978) is biased if there is an additive error term. Approaching this problem as an errors-in-variables problem where the dependent variable suffers from classical measurement error, we present a sieve maximum-likelihood approach that is robust to left-hand side measurement error. After providing sufficient conditions for identification, we demonstrate that when the number of knots in the quantile grid is chosen to grow at an adequate speed, the sieve maximum-likelihood estimator is consistent and asymptotically normal, permitting inference via bootstrapping. We verify our theoretical results with Monte Carlo simulations and illustrate our estimator with an application to the returns to education highlighting changes over time in the returns to education that have previously been masked by measurement-error bias.
    JEL: C19 C21 C31 I24 J30
    Date: 2019–05

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