nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2005‒12‒20
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Worker Absenteeism in Search Equilibrium By Per Engström; Bertil Holmlund
  2. Do benefit hikes damage job finding? Evidence from Swedish unemployment insurance reforms By Bennmarker, Helge; Carling, Kenneth; Holmlund, Bertil
  3. Do Former College Athletes Earn More at Work? A Nonparametric Assessment By Daniel J. Henderson; Alexandre Olbrecht; Solomon Polachek

  1. By: Per Engström; Bertil Holmlund
    Abstract: The paper presents a tractable general equilibrium model of search unemployment that incorporates absence from work as a distinct labor force state. Absenteeism is driven by random shocks to the value of leisure that are private information to the workers. Firms offer wages, and possibly sick pay, so as to maximize expected profits, recognizing that the compensation package affects the queue of job applicants and possibly the absence rate as well. Shocks to the value of leisure among nonemployed individuals interact with their search decisions and trigger movements into and out of the labor force. The analysis provides a number of results concerning the impact of social insurance benefits and other determinants of workers’ and firms’ behavior. For example, higher nonemployment benefits are shown to increase absenteeism among employed workers. The normative anlysis identifies externalities associated with firm-provided sick pay and examines the welfare implications of alternative policies. Conditions are given under which welfare equivalence holds between publicly provided and firm-provided sick pay. Benefit differentiation across states of non-work are found to be associated with non-trivial welfare gains.
    Keywords: absenteeism, search, unemployment, social insurance
    JEL: J21 J64 J65
    Date: 2005
  2. By: Bennmarker, Helge (IFAU - Institute for Labour Market Policy Evaluation); Carling, Kenneth (IFAU - Institute for Labour Market Policy Evaluation); Holmlund, Bertil (Department of Economics, Uppsala University)
    Abstract: In 2001 and 2002, Sweden introduced several unemployment insurance reforms. A major innovation in the first reform was the introduction of a two-tiered benefit structure for some unemployed individuals. This system involved supplementary compensation during the first 20 weeks of unemployment. The 2002 reform retained the two-tiered benefit structure but involved also substantial benefit hikes for spells exceeding 20 weeks. This paper examines how these reforms affected transitions from unemployment to employment. We take advantage of the fact that the reforms had quasi-experimental features where the “treatments” differed considerably among unemployed individuals. We find that the reforms had strikingly different effects on job finding among men and women. The two reforms in conjunction are estimated to have increased the expected duration of unemployment among men but to have decreased the duration of unemployment among women. The overall effect on the duration of unemployment is not statistically different from zero. However, the reforms reduced job finding among males who remained unemployed for more than 20 weeks.
    Keywords: Unemployment duration; unemployment benefits
    JEL: J64 J65
    Date: 2005–11–28
  3. By: Daniel J. Henderson (State University of New York at Binghamton); Alexandre Olbrecht (Ramapo College of New Jersey at Mahwah); Solomon Polachek (State University of New York at Binghamton and IZA Bonn)
    Abstract: This paper investigates how students’ collegiate athletic participation affects their subsequent labor market success. It uses newly developed distributional tests to establish that the wage distribution of former college athletes is significantly different from non-athletes and that athletic participation is a significant determinant of wages. Additionally, by using newly developed techniques in nonparametric regression, it shows that on average former college athletes earn a wage premium. However, the premium is not uniform, but skewed so that more than half the athletes actually earn less than non-athletes. Further, the premium is not uniform across occupations. Athletes earn more in the fields of business, military, and manual labor, but surprisingly, athletes are more likely to become high school teachers, which pays a relatively lower wage to athletes. We conclude that nonpecuniary factors play an important role in occupational choice, at least for many former collegiate athletes.
    Keywords: nonparametric, generalized Kernel estimation, wage determination, earnings, sports economics, athletics
    JEL: C14 J10 J30 J40 L83
    Date: 2005–12

This nep-ltv issue is ©2005 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.