nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2008‒08‒14
six papers chosen by
Maximo Rossi
University of the Republic

  1. The Impact of Social Comparisons on Reciprocity By Simon Gaechter; Daniele Nosenzo; Martin Sefton
  2. The Causal Effect of Parent’s Schooling on Children’s Schooling: A Comparison of Estimation Methods By Holmlund, Helena; Lindahl, Mikael; Plug, Erik
  3. How important is pro-social behaviour in the delivery of public services? By Paul Gregg; Paul A. Grout; Anita Ratcliffe; Sarah Smith; Frank Windmeijer
  4. Response bias in job satisfaction surveys: English general practitioners By H Gravelle; AR Hole, I Hussein
  5. Labour-Market Reforms and the Beveridge Curve: Some Macro Evidence for Italy By Sergio Destefanis; Raquel Fonseca
  6. Phillips Curves and Unemployment Dynamics: A Critique and a Holistic Perspective By Marika Karanassou; Hector Sala; Dennis Snower

  1. By: Simon Gaechter (University of Nottingham); Daniele Nosenzo (University of Nottingham); Martin Sefton (University of Nottingham)
    Abstract: We investigate the effects of pay comparison information (i.e. information about what coworkers earn) and effort comparison information (information about how co-workers perform) in experimental firms composed of one employer and two employees. Exposure to pay comparison information in isolation from effort comparison information does not appear to affect reciprocity toward employers: in this case own wage is a powerful determinant of own effort, but co-worker wages have no effect. By contrast, we find that exposure to both pieces of social information systematically influences employees’ reciprocity. A generous wage offer is virtually ineffective if an employee is matched with a lazy co-worker who is also paid generously: in such circumstances the employee tends to expend low effort irrespective of her own wage. Reciprocity is more pronounced when the co-worker is hard-working, as effort is strongly and positively related to own wage in this case. Reciprocity is also pronounced when the employer pays unequal wages to the employees: in this case the co-worker’s effort decision is disregarded and effort decisions are again strongly and positively related to own wage. On average exposure to social information weakens reciprocity, though we find substantial heterogeneity in responses across individuals, and find that sometimes social information has beneficial effects. We suggest that group composition may be an important tool for harnessing the positive effects of social comparison processes.
    Keywords: Reciprocity, gift-exchange, social information, social comparisons, pay comparisons, peer effects
    JEL: A13 C92 J31
    Date: 2008–08
  2. By: Holmlund, Helena (CEP, London School of Economics); Lindahl, Mikael (Uppsala University); Plug, Erik (University of Amsterdam)
    Abstract: Recent studies that aim to estimate the causal link between the education of parents and their children provide evidence that is far from conclusive. This paper explores why. There are a number of possible explanations. One is that these studies rely on different data sources, gathered in different countries at different times. Another one is that these studies use different identification strategies. Three identification strategies that are currently in use rely on: identical twins; adoptees; and instrumental variables. In this paper we apply each of these three strategies to one particular Swedish data set. The purpose is threefold: (i) explain the disparate evidence in the recent literature; (ii) learn more about the quality of each identification procedure; and (iii) get at better perspective about intergenerational effects of education. We find that the three identification strategies all produce intergenerational schooling estimates that are lower than the corresponding OLS estimates, indicating the importance of accounting for ability bias. But interestingly, when applying the three methods to the same data set, we are able to fully replicate the discrepancies across methods found in the previous literature. Our findings therefore indicate that the estimated impact of parental education on that of their child in Sweden does depend on identification, which suggests that country and cohort differences do not lie behind the observed disparities. Finally, we conclude that income is a mechanism linking parent’s and children’s schooling, that can partly explain the diverging results across methods.
    Keywords: intergenerational mobility, education, causation, selection, identification
    JEL: I20 J30 J62
    Date: 2008–08
  3. By: Paul Gregg; Paul A. Grout; Anita Ratcliffe; Sarah Smith; Frank Windmeijer
    Abstract: A number of papers have posited that there is a relationship between institutional structure and pro-social behaviour, in particular donated labour, in the delivery of public services, such as health, social care and education. However, there has been very little empirical research that attempts to measure whether such a relationship exists in practice. This is the aim of this paper. Including a robust set of individual and job-specific controls, we find that individuals in the non-profit sector are significantly more likely to donate their labour, measured by unpaid overtime, than those in the for-profit sector. We can reject that this difference is simply due to implicit contracts or social norms. We find some evidence that individuals differentially select into the non-profit and for-profit sectors according to whether they donate their labour.
    Keywords: pro-social behaviour; public services; donated labour; motivation
    JEL: H11 J32 J45 L31 L32
    Date: 2008–05
  4. By: H Gravelle; AR Hole, I Hussein
    Abstract: Job satisfaction affects propensity to quit, actual quits, and job performance. Hence it is of interest to survey workers to investigate their satisfaction and the factors affecting satisfaction. But survey respondents may be untypical of the workforce in unobservable respects which are correlated with satisfaction. In particular satisfaction may affect the propensity to respond to job satisfaction surveys, so that estimates of average satisfaction and the effects of determinants of satisfaction may be biased. We examine response bias using data from a postal job satisfaction survey of family doctors. We link all the sampled doctors to an administrative database and so have information on the characteristics of responders and non-responders. Thus we can control for both selection on observables and on unobservables. Allowing for selection increases the estimate of mean job satisfaction in 2005 by between 0.4 to 1.0 from uncorrected sample mean of 5.27 (on a 1 to 7 scale). Correction for response bias also increase the estimated change in mean job satisfaction between 2004 and 2005 from 0.60 to 1.03. Estimates of the determinants of job satisfaction are insensitive to response bias.
    Keywords: Job satisfaction. Response bias. Sample selection. Family practitioners.
    JEL: J28 J44 I18
    Date: 2008–07
  5. By: Sergio Destefanis; Raquel Fonseca
    Abstract: A matching theory approach is utilised to assess the impact on the Italian labour market of the 1997 legge Treu, which considerably eased the regulation of temporary work and favoured its growth in Italy. The authors re-parameterise the matching function as a Beveridge Curve and estimate it as a production frontier, finding huge differences in matching efficiency between the South and the rest of the country. The legge Treu appears to have improved matching efficiency in the North of the country, particularly for skilled workers, but also to have strengthened competition among skilled and unskilled workers, especially in the South.
    Keywords: temporary contracts, matching efficiency, regional disparities
    JEL: J64 J69 C24
    Date: 2006–10
  6. By: Marika Karanassou; Hector Sala; Dennis Snower
    Abstract: The conventional wisdom that inflation and unemployment are unrelated in the long-run implies the compartmentalisation of macroeconomics. While one branch of the literature models inflation dynamics and estimates the unemployment rate compatible with inflation stability, another one determines the real economic factors that drive the natural rate of unemployment. In the context of the new Phillips curve (NPC), we show that frictional growth, i.e. the interplay between lags and growth, generates an inflation-unemployment tradeoff in the long-run. We thus argue that a holistic framework, like the chain reaction theory (CRT), should be used to jointly explain the evolution of inflation and unemployment. A further attraction of the CRT approach is that it provides a synthesis of the traditional structural macroeconometric models and the (structural) vector autoregressions (VARs)
    Keywords: Natural rate of unemployment, new Phillips Curve, frictional growth, inflationunemployment, tradeoff, inflation dynamics, unemployment dynamics, impulse response function
    JEL: E24 E31
    Date: 2008–07

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