nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2019‒09‒30
twelve papers chosen by
Joseph Marchand
University of Alberta

  1. Does Automatic Enrollment Increase Contributions to Supplement Retirement Programs by K-12 and University Employees? By Robert L. Clark; Denis Pelletier
  2. Transfer Program Enforcement and Children's Time Allocation By Rodrigo Ceni; Gonzalo Salas
  3. The China Shock and Employment in Portuguese Firms By Lee G. Branstetter; Brian K. Kovak; Jacqueline Mauro; Ana Venancio
  4. Do Workers Benefit from Resource Booms in Their Home State? Evidence from the Fracking Era By Winters, John V.; Cai, Zhengyu; Maguire, Karen; Sengupta, Shruti
  5. Does Employing Older Workers Affect Workplace Performance? By Bryson, Alex; Forth, John; Gray, Helen; Stokes, Lucy
  6. Catching up Is Hard to Do: Undergraduate Prestige, Elite Graduate Programs, and the Earnings Premium By Hersch, Joni
  7. Wage Fairness in a Subcontracted Labor Market By Basu, Arnab K.; Chau, Nancy H.; Soundararajan, Vidhya
  8. The Arab Inequality Puzzle: The Role of Income Sources in Egypt and Tunisia By Krafft, Caroline; Davis, Elizabeth E.
  9. Is the future of work childless? Self-employment and fertility By Gonçalves, Judite; Martins, Pedro S.
  10. Work after Retirement: Worklife Transitions of Career Public Employess By Robert L. Clark; Robert G. Hammond; Siyan Liu
  11. Delayed graduation and university dropout: A review of theoretical approaches By Aina, Carmen; Baici, Eliana; Casalone, Giorgia; Pastore, Francesco
  12. Teacher Performance Pay and Student Learning: Evidence from a Nationwide Program in Peru By Bellés Obrero, Cristina; Lombardi, María

  1. By: Robert L. Clark; Denis Pelletier
    Abstract: This study examines the impact of the adoption of automatic enrollment provisions by schools and universities in the state of South Dakota for its supplemental retirement saving plan (SRP). In South Dakota, educational personnel are also covered by a defined benefit pension plan and by Social Security. Thus, career public employees in South Dakota can expect a life time annuity from these two programs of around 75 percent of their final salary. Prior to the introduction of automatic enrollment, the proportion of newly hired educators who were contributing to the SRP was less than two percent in their first year of employment. After the introduction of automatic enrollment, over 90 percent of newly hired workers who were auto enrolled were participating in the plan. Thus, auto enrollment is shown to have the same powerful impact on contributions to a retirement saving plan for educational employees even when they also can expect life annuities from a defined benefit pension plan.
    JEL: J14 J26 J45
    Date: 2019–09
  2. By: Rodrigo Ceni (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a); Gonzalo Salas (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a)
    Abstract: We estimate the enforcement level of conditionalities of two transfer programs and how they affect teenagers' time use, in particular, their school attendance, labor supply, and home production. We develop a structural discrete choice model in which young individuals and their parents decide how to allocate their time, including the decision of whether to attend school. They also choose how many hours to work in the market, time in home production, and leisure. To estimate the model, we use household panel data which combines administrative records and surveys covering the period of 2005-2012 in Uruguay, during which two consecutive CCT programs were introduced with different designs. Our model captures not only the share of individuals who are in fact in studies, working and those who neither study nor work, but also the share and the number of hours in market work and home production, and the GPA distribution. The policy experiments performed indicate that school attendance can be increased by raising thelevel of enforcement and by changing who in the household receives the cash transfer from the parents to the teenagers
    Keywords: time use, enforcement, Discrete Choice Models, conditional cash transfer
    JEL: H53 I38 J22
    Date: 2019–07
  3. By: Lee G. Branstetter; Brian K. Kovak; Jacqueline Mauro; Ana Venancio
    Abstract: This paper considers the effects of Chinese import competition on firm-level labor market outcomes in Portugal. We examine direct competition in the Portuguese market and indirect competition Portugal's largest export markets in Western Europe. Using rich employer-employee data matched to firm-level trade transactions, we measure the degree to which different Portuguese firms faced Chinese import competition, based on firm product mix and distribution of sales across countries. We find economically and statistically significant employment declines in firms with more exposure to Chinese competition in European export markets, but minimal effects of direct competition in Portugal. Our findings also suggest a centrally important role for Portugal's stringent labor market regulations in limiting firms' ability to adjust to competitive shocks. In our earlier sample period (1995-2000), firms have limited ability to adjust employment, hours, or wages, and the primary adjustment margin is firm exit. In the later period (2000-2007), when more flexible temporary contracts comprise a larger share of employment, we find employment reductions among more exposed firms. Those employment reductions are entirely accounted for by changes in temporary employment, with no effect on permanent employment. We expect these findings to be informative for other peripheral European countries that had specialized in labor-intensive manufacturing industries operating under inflexible labor market regimes.
    JEL: F14 F16 J21 J31
    Date: 2019–09
  4. By: Winters, John V. (Iowa State University); Cai, Zhengyu (Southwestern University of Finance and Economics); Maguire, Karen (Oklahoma State University); Sengupta, Shruti (Oklahoma State University)
    Abstract: Fracking innovations revolutionized the United States oil and gas industry and facilitated a boom in energy production in states with oil and gas resources. This paper examines effects of oil and gas booms within a state on individual employment and earnings. To account for endogenous migration decisions, we instrument for oil and gas production in workers' state of residence via the predicted percent of oil and gas employment in their state of birth. We find statistically significant and economically meaningful positive effects. The bulk of the effects accrue to workers employed outside the oil and gas industry indicating sizable spillovers.
    Keywords: resource boom, regional economic development, employment, wages, income
    JEL: J20 J30 Q40 R10
    Date: 2019–09
  5. By: Bryson, Alex (University College London); Forth, John (Cass Business School); Gray, Helen (Institute for Employment Studies (IES)); Stokes, Lucy (National Institute of Economic and Social Research (NIESR))
    Abstract: Focusing on private sector workplaces in Britain, we investigate whether the employment of older workers has implications for workplace performance. We find no significant association between changes in the proportion of older workers employed and changes in workplace performance. We find some evidence that workplace labour productivity falls where the proportion of 'middle-aged' workers falls, either due to a rise in the proportion of older or younger workers, but this association does not carry through to financial performance. Overall, the findings suggest that any reluctance on the part of employers to employ greater numbers of older workers may be misplaced.
    Keywords: older workers, productivity, workplace employment relations survey
    JEL: J21 J23 J24 J63 L25 M51
    Date: 2019–09
  6. By: Hersch, Joni (Vanderbilt University)
    Abstract: A commonly held perception is that an elite graduate degree can "scrub" a less prestigious but less costly undergraduate degree. Using data from the National Survey of College Graduates from 2003 through 2017, this paper examines the relationship between the status of undergraduate degrees and earnings among those with elite post-baccalaureate degrees. Few graduates of nonselective institutions earn post-baccalaureate degrees from elite institutions, and even when they do, undergraduate institutional prestige continues to be positively related to earnings overall as well as among those with specific post-baccalaureate degrees including business, law, medicine, and doctoral. Among those who earn a graduate degree from an elite institution, the present value of the earnings advantage to having both an undergraduate and a graduate degree from an elite institution generally greatly exceeds any likely cost advantage from attending a less prestigious undergraduate institution.
    Keywords: returns to education, higher education, education and inequality, graduate degrees, professional labor markets, human capital, wage differentials, cost-benefit analysis, earnings benefit
    JEL: D61 I24 J24 J31 J44
    Date: 2019–09
  7. By: Basu, Arnab K. (Cornell University); Chau, Nancy H. (Cornell University); Soundararajan, Vidhya (Indian Institute of Management)
    Abstract: Labor market subcontracting is a global phenomenon. This paper presents a theory of wage fairness in a subcontracted labor market, where workers confront multi-party employment relationships and deep wage inequities between regular and subcontractor-mediated hires. We show that subcontracting derives its appeal from a downward revision of workers' fair wage demand when producers delegate employment decisions down the supply chain. Furthermore, subcontracting creates a holdup problem, resulting in wages that workers deem unfair, along with adverse worker morale consequences in equilibrium. These insights reveal the efficiency costs of subcontracting as an employer strategy to redress workers' demand for fair wages.
    Keywords: subcontracting, wage fairness
    JEL: J41 J48 O43
    Date: 2019–09
  8. By: Krafft, Caroline; Davis, Elizabeth E.
    Abstract: Egypt and Tunisia are perceived to have high levels of inequality, yet based on standard measures, inequality in these two countries is not unusually high. In this study we explore a new dimension of inequality in Egypt and Tunisia by using a more complete measure of income and decomposing inequality by income sources (factor components). We find that higher-income households have more income sources than lower-income ones. Informal wage work and earnings from household enterprises are more common in Egypt than Tunisia, while formal wage work, pensions, and social assistance are more common in Tunisia. Social assistance does little to offset income inequality in either country. Enterprise earnings (in Egypt) and agricultural earnings (in Tunisia) as well as rent and other capital income in both countries play a large role in inequality. High inequality in these non-wage income sources may help explain why inequality is perceived to be high.
    Keywords: Income inequality,inequality decomposition,wages,Egypt,Tunisia
    JEL: D31 O15 P46
    Date: 2019
  9. By: Gonçalves, Judite; Martins, Pedro S.
    Abstract: The growth of self-employment and in particular gig work may explain part of the declining fertility rates observed in many countries. This study examines this question drawing on longitudinal data to compare women’s fertility, proxied by maternity leave uptake, when self-employed or wage workers. It considers the case of Portugal, which allows to focus on structural aspects of work types, as fertility-related social protection there does not discriminate between self-employment and wage work. Results indicate that there are no statistically significant differences in fertility between employees and self-employed women. These findings highlight the importance of social protection for the self-employed, at least as far as their fertility is concerned.
    Keywords: fertility,instrumental variables,maternity leave,self-employment
    JEL: C26 J13 J24
    Date: 2019
  10. By: Robert L. Clark; Robert G. Hammond; Siyan Liu
    Abstract: Engaging in paid employment after claiming retirement benefits may be an important avenue for individuals to work longer as life expectancies rise. After separating from one’s career employer, individuals may engage in paid work to stay active or to supplement their current level of retirement savings or both. Individuals who choose not to work after claiming may be expressing their preference to stay retired, perhaps because their retirement income is sufficient. However, the decision to work after claiming may be driven by the lack of retirement planning and insufficient savings, while the lack of post-claiming work may reflect the inability to find adequate employment opportunities. We use administrative records merged with panel data from several surveys of public employees in North Carolina to study the decision to engage in paid work after claiming retirement benefits. More than 60 percent of active workers plan to work after claiming benefits, while only around 42 percent of the same sample of individuals have engaged in post-claiming paid work in the first few years after leaving public sector employment. Despite this gap, stated work plans are strongly predictive of actual post-claiming work behavior
    JEL: J14 J26 J45
    Date: 2019–09
  11. By: Aina, Carmen; Baici, Eliana; Casalone, Giorgia; Pastore, Francesco
    Abstract: This paper surveys the theoretical approaches used in the literature to study the phenomenon of delayed graduation and university dropout. The classical human capital model does not contemplate failure, which the amended human capital model does. Delayed graduation and university dropout are two stages of the same decision repeated over the years to step aside or leave when the net returns to education expected ex ante are negative. Failure can also be taken as a signal of the real skills of individuals who do not succeed to gain a higher level of education, The job search approach underlines the role of positive/negative local labor market conditions as a factor able to explain choices of investment in human capital. Within the bargaining approach, the decision to delay graduation or dropout from university is related to bargaining within the family between parents and children: the former give their children better consumption opportunities in return for their presence at home. Although the amended human capital model is certainly the most compelling one, the other approaches help framing factors which are neglected in the human capital model, forming a well-structured body of knowledge to better understand the phenomenon under scrutiny, while also suggesting a set of policy tools to better control it.
    Keywords: elapsed time to degree,postsecondary education,ex post and ex ante returns to education,university fees,human capital,signaling,job search,bargaining
    JEL: H52 H75 I21 I23 I28 J13 J24
    Date: 2019
  12. By: Bellés Obrero, Cristina (University of Mannheim); Lombardi, María (Universidad Torcuato Di Tella)
    Abstract: We study the impact on student achievement of a nationwide teacher pay-for-performance program implemented in Peruvian public secondary schools in 2015. Schools compete in a tournament primarily based on 8th graders' performance in a standardized test, where the principal and teachers of the top 20 percent of schools receive a substantial bonus. We perform a difference-in-differences estimation comparing the internal grades of 8th and 9th graders of the same school, before and after the program. We find a precisely estimated zero effect on student achievement, and we reject impacts greater than 0.017 standard deviations, well below those previously found in the literature. We provide evidence against a series of potential explanations, and argue that this zero effect could be a consequence of teachers' uncertainty about how to improve their students' performance in the standardized test tied to the bonus.
    Keywords: education, teachers, incentives, compensation, Peru
    JEL: I21 M52 J4
    Date: 2019–09

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