nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2019‒11‒18
nine papers chosen by
Joseph Marchand
University of Alberta

  1. Long-run effects of health shocks in a highly regulated labour market By Michele Belloni; Irene Simonetti; Francesca Zantomio
  2. Heterogeneity in the Extraction of Labor from Labor Power and Persistence of Wage Inequality By Eduardo Monte Jorge Hey Martins; Jaylson Jair da Silveira, Gilberto Tadeu Lima
  4. The impact of wind power on the Brazilian labor market By Solange Goncalves; Thiago Rodrigues, Andre Chagas
  6. Future developments in Vocational Education and Training in Europe By Jorg Markowitsch; Günter Hefler
  7. About time: The narrowing gender wage gap in Austria By René Böheim; Christine Zulehner; Marian Fink
  8. The Rising Value of Time and the Origin of Urban Gentrification By Su, Yichen
  9. What Makes an Employer? By Marco Caliendo; Frank M. Fossen; Alexander S. Kritikos

  1. By: Michele Belloni (University of Turin; NETSPAR; CeRP-Collegio Carlo Alberto); Irene Simonetti (Department of Economics, University Of Venice Cà Foscari); Francesca Zantomio (Department of Economics, University Of Venice Cà Foscari; CRIEP; Health Econometrics and Data Group (York))
    Abstract: Based on administrative data covering employment, social security and hospital record histories, we investigate the effect of acute cardiovascular health shocks resulting in unplanned hospitalisation, on blue collars’ long-term labour outcomes in Italy. The Italian institutional setting, characterised by a highly regulated labour market and high job protection, is different from that of countries – mainly Nordic and Anglo-Saxon – covered in previous studies. We apply matching and parametric regression techniques to remove possible bias arising from observable and time-invariant unobservable confounders. Results point at sizeable and persistent reductions in employment and labour income, while hours and wage adjustments appear limited. Whereas a relatively generous social insurance system might compensate the earnings loss, our findings question the appropriateness of existing labour inclusion policies.
    Keywords: Health shocks, employment, labour market institutions, administrative data
    JEL: I10 J22 J24 J31 C14
    Date: 2019
  2. By: Eduardo Monte Jorge Hey Martins; Jaylson Jair da Silveira, Gilberto Tadeu Lima
    Abstract: There is evidence that labor intensity is endogenous to wage compensation and that inter- and intra-industry wage differentials are non-negligible and persistent. We explore the implications of firms periodically choosing between alternative wage compensation strategies to extract labor from labor power more effectively. The frequency distribution of labor extraction strategies across firms is endogenously time-varying as driven by satisficing evolutionary dynamics that generate wage inequality as a stable long-run equilibrium under plausible conditions. Firms willing to extract more labor from labor power remunerate workers with a higher wage. Yet a larger proportion of firms following such strategy does not necessarily result in a lower (higher) unit labor cost (profit share) and hence in higher rates of profit and saving-determined output growth. The larger the proportion of firms that attempt to extract more labor from labor power by remunerating workers with a higher wage, the less these firms are successful. This result can be seen as characterizing another contradiction of the capitalist economy.
    Keywords: Labor power; work intensity; wage differential; evolutionary dynamics; income Distribution; output growth
    JEL: E1 O41 J31
    Date: 2019–11–12
  3. By: Tomer Blumkin (BGU); David Lagziel (BGU)
    Keywords: secrecy; wage signaling; matching friction; tacit collusion
    JEL: E24 D82 J30 J31 J71
    Date: 2019
  4. By: Solange Goncalves; Thiago Rodrigues, Andre Chagas
    Abstract: Wind power is an important source of renewable energy. Beyond the environmental dimension, the wind energy may contribute to the local development. Due to its weather conditions, Brazil emerges as one of the leading countries in the generation of wind power. This study estimates the impact of wind farms on the Brazilian labor market, through the exploration of the staggered nature of the sequential process of wind farm implantation between 2004 and 2016. We estimate the treatment effect parameters using a Difference--in--Differences (DiD) approach with: i) multiple time periods, ii) variation in treatment timing, and iii) dynamic treatment effects, through an event study design. We aggregate information from several data sources into a panel and we analyze the impact on employment and wages, by considering economic sectors, educational levels, and firm sizes. Our findings suggest that wind farms increase employment in the industry, agriculture and construction, and increase the wages in all economic sectors. Additionally, we find positive effects on the employment and wages of less--educated workers, and of small and medium--sized firms. The impact of this intervention can last for up to two years. Our results suggest that wind power may generate significant social impacts through the labor market, by contributing to local development and increasing social welfare in developing economies.
    Keywords: Wind power; staggered difference-in-differences; event study; employment; wages; labor market
    JEL: Q42 C23 R58
    Date: 2019–10–31
  5. By: Tomer Blumkin (BGU); David Lagziel (BGU)
    Keywords: secrecy; wages; relative wage; labor contracts; wage compression; wage dispersion
    JEL: E24 D82 J30 J31 J71
    Date: 2019
  6. By: Jorg Markowitsch (3s); Günter Hefler (3s)
    Abstract: Contrary to general education, vocational education and training (VET) has been an area of cooperation from the very beginning of the European Union. Over decades, however, the concept and reality of VET has changed substantially. VET as a dead-end educational pathway preparing exclusively for direct labour market entrance has practically faded out. The VET systems of the EU member states have become more open and have developed their access routes to higher and further education. Since 1995, common drivers for developments in VET across EU member states have included structural ones as shrinking birth-cohorts or changes in skill demands induced by new technologies and digitalisation as well as institutional ones, for instance, a new emphasis on learning outcomes or the introduction of qualification frameworks. However, common drivers have resulted in different trajectories taken by the various national VET systems, perpetuating the diversity of VET in Europe. The paper discusses long-term structural changes and recent trends within VET (such as vocational drift in education, hybridisation of general and vocational education, increasing permeability of educational pathways in initial VET) and how they might play out in the future. Given that the trends are expected to continue, it can be expected that by 2030 national qualification frameworks in most EU members states will be firmly established thereby organising a diversity of vocational qualifications ranging from EQF level 1 to 8 - including professional doctorates.
    Keywords: Vocational Education and Training, International Comparison, Europe, Trends, Future
    Date: 2019–10
  7. By: René Böheim; Christine Zulehner; Marian Fink
    Abstract: We examine the gender wage gap in Austria from 2005 to 2017 using data from EU-SILC. The raw wage gap declined from 18.6 log points in 2005 to 14.9 log points in 2017. We use standard decomposition techniques that correct for dierences in the distributions of human capital, and other variables, between men and women. All calculated decompositions indicate that the unexplained part of the gender wage gap decreased substantially over the last ten years. The decrease of the unexplained gender wage gap between the largest gap in this period (2006) and the most recent gap (2017) ranges from 3.7 log points to 8.5 log points depending on the decomposition approach. Using the approach developed by Neumark (1988), the corrected wage gap shrank from 8.7 (8.8) log points in 2005 (2006) to 5.1 log points in 2017. The main reason for the decline in wage dierences is the relative improvement of women's observed and unobserved characteristics.
    Keywords: gender wage dierentials, wage inequality, decomposition, EU-SILC
    JEL: J31 J71
    Date: 2019–10
  8. By: Su, Yichen (Federal Reserve Bank of Dallas)
    Abstract: In recent decades, gentrification has transformed American central city neighborhoods. I estimate a spatial equilibrium model to show that the rising value of high-skilled workers’ time contributes to the gentrification of American central cities. I show that the increasing value of time raises the cost of commuting and exogenously increases the demand for central locations by high-skilled workers. While change in the value of time has a modest direct effect on gentrification of central cities, the effect is substantially magnified by endogenous amenity improvement driven by the changes in local skill mix.
    Keywords: Gentrification; Value of time; Amenities; Central cities
    JEL: J22 J24 R13
    Date: 2019–10–31
  9. By: Marco Caliendo (University of Potsdam, IZA Bonn, DIW Berlin, IAB Nuremberg); Frank M. Fossen (University of Nevada, IZA Bonn); Alexander S. Kritikos (German Institute for Economic Research (DIW Berlin), University of Potsdam, IZA Bonn, IAB Nuremberg)
    Abstract: As the policy debate on entrepreneurship increasingly centers on firm growth in terms of job creation, it is important to better understand which variables influence the first hiring decision and which ones influence the subsequent survival as an employer. Using the German Socio-economic Panel (SOEP), we analyze what role individual characteristics of entrepreneurs play in sustainable job creation. While human and social capital variables positively influence the hiring decision and the survival as an employer in the same direction, we show that none of the personality traits affect the two outcomes in the same way. Some traits are only relevant for survival as an employer but do not influence the hiring decision, other traits even unfold a revolving door effect, in the sense that employers tend to fail due to the same characteristics that positively influenced their hiring decision.
    Keywords: employer, entrepreneurship, business venturing, recruitment, firm growth, employment growth, personality
    JEL: J22 J23 L26
    Date: 2019–11

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