nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2011‒08‒22
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Continuous Training, Job Satisfaction and Gender: An Empirical Analysis Using German Panel Data By Claudia Burgard; Katja Görlitz
  2. How strong is the evidence for the existence of poverty traps? A multi country assessment By Andy McKay; Emilie Perge
  3. Equilibrium Wage and Employment Dynamics in a Model of Wage Posting without Commitment By Coles, Melvyn; Mortensen, Dale T.
  4. Enforcement of Labor Regulation and Informality By Almeida, Rita K.; Carneiro, Pedro
  5. Labor Markets and Labor Market Institutions in Transition Economies By Lehmann, Hartmut; Muravyev, Alexander
  6. Two classes of generalized deprivation indexes By Paolo Verme
  7. What Explains the German Labor Market Miracle in the Great Recession? By Burda, Michael C; Hunt, Jennifer

  1. By: Claudia Burgard; Katja Görlitz
    Abstract: Using data from the German Socio-Economic Panel (SOEP), this paper analyzes the relationship between training and job satisfaction focusing in particular on gender differences. Controlling for a variety of socio-demographic, job and firm characteristics, we find a difference between males and females in the correlation of training with job satisfaction which is positive for males but insignificant for females. This difference becomes even more pronounced when applying individual fixed effects. To gain insights into the reasons for this difference, we further investigate training characteristics by gender. We find that financial support and career-orientation of courses only seems to matter for the job satisfaction of men but not of women.
    Keywords: Training, job satisfaction, gender differences, fixed effects
    JEL: I29 J24 J28 M53
    Date: 2011
  2. By: Andy McKay (Department of Economics, University of Sussex); Emilie Perge
    Abstract: In this paper, we focus on the role of assets in relation to chronic poverty. In particular, we consider the issue of whether it is not just low levels of assets which identify and explain chronic poverty, but also whether the asset accumulation process displays non-linearities and non-convexities that could explain why some households experience persistent poverty. We use parametric and nonparametric methods to test for evidence of the existence of an asset-based poverty trap mechanism across seven panel data sets, in five countries from Africa, Asia and Latin America, and in so doing add substantially to the existing evidence base on this issue.
    Keywords: poverty traps, assets, chronic poverty, parametric and non-parametric tests
    JEL: I32 O12
    Date: 2011–08
  3. By: Coles, Melvyn (University of Essex); Mortensen, Dale T. (Northwestern University)
    Abstract: A rich but tractable variant of the Burdett-Mortensen model of wage setting behavior is formulated and a dynamic market equilibrium solution to the model is defined and characterized. In the model, firms cannot commit to wage contracts. Instead, the Markov perfect equilibrium to the wage setting game, characterized by Coles (2001), is assumed. In addition, firm recruiting decisions, firm entry and exit, and transitory firm productivity shocks are incorporated into the model. Given that the cost of recruiting workers is proportional to firm employment, we establish the existence of an equilibrium solution to the model in which wages are not contingent on firm size but more productive employers always pay higher wages. Although the state space, the distribution of workers over firms, is large in the general case, it reduces to a scalar that can be interpreted as the unemployment rate in the special case of homogenous firms. Furthermore, the equilibrium is unique. As the dimension of the state space is equal to the number of firms types in general, an (approximate) equilibrium is computable.
    Keywords: wage dispersion, wage setting, rank-preserving equilibrium
    JEL: D21 D49 E23 J42 J64
    Date: 2011–08
  4. By: Almeida, Rita K. (World Bank); Carneiro, Pedro (University College London)
    Abstract: Enforcement of labor regulations in the formal sector may drive workers to informality because they increase the costs of formal labor. But better compliance with mandated benefits makes it attractive to be a formal employee. We show that, in locations with frequent inspections workers pay for mandated benefits by receiving lower wages. Wage rigidity prevents downward adjustment at the bottom of the wage distribution. As a result, lower paid formal sector jobs become attractive to some informal workers, inducing them to want to move to the formal sector.
    Keywords: informality, labor regulation
    JEL: J2 J3
    Date: 2011–08
  5. By: Lehmann, Hartmut (University of Bologna); Muravyev, Alexander (IZA)
    Abstract: This paper summarizes the evolution of labor markets and labor market institutions and policies in the countries of Central and Eastern Europe as well as of Central Asia over the last two decades. The main focus is on the evolution of labor market institutions, which are among candidate explanations for the very diverse trajectories of labor markets in the region. We consider recent contributions that attempt to assess the effect of labor market institutions on labor market performance of TEs, including the policy-relevant issue of complementarity of institutions.
    Keywords: transition economies, unemployment, labor market institutions, labor markets
    JEL: J21 P20
    Date: 2011–08
  6. By: Paolo Verme (The World Bank and University of Torino)
    Abstract: The paper uses two particular formulations of the Gini index to derive two different relative deprivation measures. We then generalize the formulation of these measures following Donaldson and Weymark (1980) and Berrebi and Silber (1985) and show how these generalizations can be considered as two different classes of indexes. An example illustrates how the use of the two classes of indexes can lead to different results in empirical applications.
    Keywords: Relative deprivation, inequality.
    JEL: D6 I3
    Date: 2011
  7. By: Burda, Michael C; Hunt, Jennifer
    Abstract: Germany experienced an even deeper fall in GDP in the Great Recession than the United States, with little employment loss. Employers’ reticence to hire in the preceding expansion, associated in part with a lack of confidence it would last, contributed to an employment shortfall equivalent to 40 percent of the missing employment decline in the recession. Another 20 percent may be explained by wage moderation. A third important element was the widespread adoption of working time accounts, which permit employers to avoid overtime pay if hours per worker average to standard hours over a window of time. We find that this provided disincentives for employers to lay off workers in the downturn. Although the overall cuts in hours per worker were consistent with the severity of the Great Recession, reduction of working time account balances substituted for traditional government-sponsored short-time work.
    Keywords: extensive vs intensive employment margin; Germany; Great Recession; Hartz reforms; short time work; unemployment; working time accounts
    JEL: E24 E32 J6
    Date: 2011–08

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