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on Labour Economics |
| By: | Addison, John T. (University of South Carolina); Portugal, Pedro (Banco de Portugal); Vilares, Hugo (Banco de Portugal) |
| Abstract: | This paper provides estimates of the union wage gap in Portugal, a nation until recently lacking independent data on union density at firm level. Having estimated nonlinear and linear estimates of the effect of union density on the wage gap, the next stage of the analysis seeks to account for the influence of worker, firm, and job-title permanent heterogeneity, using a three high dimensional fixed effects strategy. Gelbach's decomposition is used to determine the role of each as sources of the union wage gap. A generalization of this technique is applied for the nonlinear case. We find evidence of a substantial union wage gap in circumstances where the majority of the workforce is organized. There is also some clear indication of substitution effects among different types of compensation that favor of wage supplements (likely reflecting tax considerations) as bargaining power increases. The principal result of the decomposition exercise at the most aggregate level is that the union wage gap is mainly manifested through a firm fixed effect, suggesting that unions may force firms to reposition themselves as far as their wage compensation policies are concerned. A subsidiary result is that matching plays almost no role. More importantly, however, are the results obtained when a distinction is drawn between the (estimated) bargained wage and total earnings. Rising union density has a much greater influence upon the former and is negatively related to the difference between the two. This result is consistent with a wider literature indicating that firms have a 'wage cushion' enabling them to avoid some of the strictures of unionism bargaining power. |
| Keywords: | union density, union wage gap, total compensation, bargained wages, wage cushion, wage supplements, worker/firm/job title fixed effects, Gelbach decomposition |
| JEL: | J31 J33 J41 J51 J52 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9221&r=lab |
| By: | Pedro S. Martins |
| Abstract: | In most countries, the unemployed are entitled to unemployment benefits only if they have previously worked a minimum period of time. This institutional feature creates a sharp change at eligibility in the disutility from unemployment and may distort the duration of jobs. In this paper, we show that this effect can be evaluated using a regression discontinuity approach. Our evidence is based on longitudinal social security data from Portugal, where the unemployed are required to work a relatively long period to collect benefits. We find that monthly transitions from employment to unemployment increase by 10\% as soon as the eligibility condition is met. This result is driven entirely by transitions to subsidised unemployment, which increase by 20\%, as non-subsidised unemployment is not affected. The effects are even larger for the unemployed with high replacement ratios or those who meet the eligibility condition from multiple employment spells. |
| Keywords: | Unemployment insurance, Moral hazard, Employment duration, Big data |
| JEL: | J65 J63 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:cgs:wpaper:61&r=lab |
| By: | Pestel, Nico |
| Abstract: | This paper examines to what extent marital sorting affects cross-sectional earnings inequality in Germany over the past three decades, while explicitly taking into account labor supply choices. Using rich micro data, the observed distribution of couples' earnings is compared to a counterfactual of randomly matched spouses. Hypothetical earnings are predicted based on a structural model of household labor supply. For West Germany, a positive effect of marital sorting on inequality is found after adjusting for labor supply behavior, while the effect is limited when earnings are taken as given. This means that there is positive sorting in earnings potential which is veiled by relatively low female labor force participation. In East Germany, the impact of marital sorting on inequality is highly disequalizing irrespective of adjusting for labor supply choices. This is mainly due to the fact that East German women are much more attached to the labor market. |
| Keywords: | earnings inequality,marital sorting,labor supply,Germany |
| JEL: | D31 D63 J12 J22 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:15047&r=lab |
| By: | Charlotte Bartels; Nico Pestel |
| Abstract: | Generous income support programs as provided by European welfare states have often been blamed to hamper employment. This paper investigates the importance of incentives inherent in the tax-benefit system for the individual decision to take up work. Using German microdata over the period 1993-2010 we find that recent reforms in Germany increased work incentives at the extensive margin measured by the Participation Tax Rate (PTR), particularly for low income individuals. Work incentives are even higher if the time horizon is extended to more than one year, pointing at an overestimation of the disincentives by standard measures. Regression analysis reveals that a decrease in the PTR increases the likelihood of taking up work significantly. |
| Keywords: | Labor force participation, work incentives, welfare, unemployment insurance, income taxation |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp777&r=lab |
| By: | Bachmann, Ronald (RWI); Bechara, Peggy (RWI); Kramer, Anica (RWI); Rzepka, Sylvi (RWI) |
| Abstract: | Using harmonized micro data, this paper investigates the effects of the early phase (2008-10) of the recent economic crisis on transitions between labour market states in Europe. Our analysis focuses on individual heterogeneity, on the type of employment contract, and on cross-country differences. Our analysis shows that specific worker groups, such as men and young persons, were particularly strongly hit by the crisis. Furthermore, more transitions from employment, and especially temporary employment to unemployment, were the main factor behind the rise in unemployment; while reduced unemployment outflows did not contribute substantially to the increase in unemployment during the early phase of the crisis. |
| Keywords: | recession, labour market transitions, Markov transition matrices, worker heterogeneity |
| JEL: | J6 E24 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9233&r=lab |
| By: | Sabien Dobbelaere; Rodolfo Lauterbach; Jacques Mairesse |
| Abstract: | Institutions, social norms and the nature of industrial relations vary greatly between Latin American and Western European countries. Such institutional and organizational differences might shape firms operational environment in general and the type of competition in product and labor markets in particular. Contributing to the literature on estimating simultaneously product and labor market imperfections, this paper quantifies industry differences in both types of imperfections using firm-level data in Chile, a non-OECD member under the considered time period, and France. We rely on two extensions of Hall’s econometric framework for estimating price-cost margins by nesting three labor market settings (perfect competition or right-to-manage bargaining, efficient bargaining and monopsony). Using an unbalanced panel of 1,737 firms over the period 1996-2003 in Chile containing unique data on firm-level output price indices and 14,270 firms over the period 1994-2001 in France, we first classify 20 comparable manufacturing industries in 6 distinct regimes that differ in the type of competition prevailing in product and labor markets. We then investigate industry differences in the estimated product and labor market imperfections. Consistent with differences in institutions and in the industrial relations system in the two countries, we find important regime differences across the two countries. In addition, we observe cross-country differences in the levels of product and labor market imperfections within regimes. |
| JEL: | C23 D21 J51 L13 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21416&r=lab |
| By: | Bublitz, Elisabeth |
| Abstract: | Research since Gary Becker equated specific human capital with firm-specific human capital. This paper divides firm human capital into a specific and a general component to investigate the relationships between firm- and occupation-specific human capital and job switches. Applying the task-based approach, the results show that the degree to which firm knowledge is portable depends on tasks similarities between the firms. In the case of switches, less experienced workers travel longer tasks distances between firms than more experienced workers. Firm- and occupation-specific knowledge are negatively related to wages in a new job but achieving a good occupational, instead of firm, match is most important for employees. The amount of specific knowledge on the firm level, called occupational intensity, decreases with experience and leads to higher wages for higher qualification levels. In addition, the positive effect of occupational intensity on wages can outweigh the negative consequences of covering long tasks distances. |
| Keywords: | skill-weights,task-based approach,specific human capital,labor mobility |
| JEL: | J24 J62 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hwwirp:165&r=lab |
| By: | Marco de Pinto (Institute for Labour Law and Industrial Relations in the EU, University of Trier) |
| Abstract: | What are the effects of firm- and sector-level trade unions on unemployment and aggregate output if individuals have rent-sharing motives? To answer this question, we extend a Melitz-type model to unionized labor markets. Because individual rent-sharing motives are only taken into account and asserted by firm-level unions which capture a higher fraction of firms' rents via firm-specific wages, average profits are higher under sector-level trade unions. As a consequence, firm-selection increases (relative to firm-level unions), which causes average marginal costs to decline. At the general equilibrium, labor demand then, ceteris paribus, increases and unemployment falls. This new mechanism interacts with the negative employment effect due to higher wage markups of sector-level trade unions, as shown e.g. by Calmfors et al. (1988). Simulating our model indicates that the unemployment damping effect of rent-sharing motives mitigates but does not compensate for the unemployment increase caused by higher wage markups, while aggregate output is higher under sector-level agreements. |
| Keywords: | Trade Unions, Rent-sharing Motives, Bargaining Level, Heterogeneous Firms, Unemployment |
| JEL: | J3 J51 J6 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201508&r=lab |
| By: | Black, Sandra E. (University of Texas at Austin); Devereux, Paul J. (University College Dublin); Lundborg, Petter (Lund University); Majlesi, Kaveh (Lund University) |
| Abstract: | Wealth is highly correlated between parents and their children; however, little is known about the extent to which these relationships are genetic or determined by environmental factors. We use administrative data on the net wealth of a large sample of Swedish adoptees merged with similar information for their biological and adoptive parents. Comparing the relationship between the wealth of adopted and biological parents and that of the adopted child, we find that, even prior to any inheritance, there is a substantial role for environment and a much smaller role for genetics. We also examine the role played by bequests and find that, when they are taken into account, the role of adoptive parental wealth becomes much stronger. Our findings suggest that wealth transmission is not primarily because children from wealthier families are inherently more talented or more able but that, even in relatively egalitarian Sweden, wealth begets wealth. |
| Keywords: | intergenerational mobility, nature versus nurture, portfolio allocation |
| JEL: | G11 J01 J13 J62 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9227&r=lab |
| By: | Cochard, François; Couprie, Hélène; Hopfensitz, Astrid |
| Abstract: | Female specialization on household work and male specialization on labor-market work is a widely observed phenomenon across time and countries. Gender differences regarding characteristics (preferences, productivity) and context (wage rates, social norms) are generally recognized to explain this fact. We experimentally investigate work division by true co-habiting couples participating in a newly developed specialization task. Efficiency in this task comes at the cost of inequality, giving higher earnings to the “advantaged” player. We compare behavior when men (or women) are in the advantaged position, which correspond to the traditional (or power) couple case where he (or she) earns more. We show that women do not contribute more than men to the household public good whatever the situation. This result allows us to rule-out some of the standard explanations of the work division puzzle. |
| Keywords: | Experiment on couples, Time allocation, Work division |
| JEL: | C99 D13 J16 |
| Date: | 2015–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:29564&r=lab |
| By: | Tuccio, Michele (University of Southampton); Wahba, Jackline (University of Southampton) |
| Abstract: | Does international return migration transfer gender norms? Focusing on Jordan, an Arab country where discrimination against women and emigration rates are high, this paper exploits unique data in which detailed information on female empowerment allows us to construct several measures of discriminatory social norms in Jordan on the role of women, female freedom of mobility, and female decision-making power. Controlling for both emigration and return migration selections, we find that women with a returnee family member are more likely to have internalized discriminatory gender norms than women in households with no migration experience. Further analysis shows that results are driven by returnees from conservative Arab countries, suggesting a transfer of negative norms from highly discriminatory destinations. We also show the implications of our results beyond perceptions for several economic and development outcomes, such as female labour force participation, education and fertility. |
| Keywords: | international return migration, gender inequality, transfer of norms |
| JEL: | F22 J16 O15 O53 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9216&r=lab |
| By: | Matthew S. Rutledge; Christopher M. Gillis; Anthony Webb |
| Abstract: | Using Health and Retirement Study (HRS) data, this paper examines how changes in individual workers’ past and present pension coverage, retirement incentives in Social Security, and retiree health insurance have contributed to retirement decisions for the 1931-1953 birth cohorts. It then uses these findings to project retirement behavior for the 1955-1987 cohorts in the Survey of Income and Program Participation (SIPP). A key assumption is that younger cohorts will have no defined benefit (DB) pensions or retiree health coverage in their future jobs. A key limitation is the assumption of a stable relationship in each successive cohort between each factor and labor market decisions. The paper found that: - The decrease in DB pension coverage from previous jobs and the decline in retiree health coverage between the HRS and SIPP cohorts each push the retirement age up by approximately one year, all else equal. - The one-year increase in Social Security’s Full Retirement Age is associated with a 0.3-year increase in the retirement age, all else equal. - After accounting for other differences between the HRS and SIPP cohorts, the average retirement age is projected to rise by one year over the next three decades, from age 61.8 to 62.8. The policy implications of the findings are: - We anticipate that changes in pensions, retiree health benefits, and Social Security that are already in motion will continue to increase, albeit slightly, the average retirement age. - Nonetheless, policies aimed at extending retirement ages may still be necessary, given that a one-year retirement age increase is likely to be insufficient to permit future cohorts to achieve a sufficient standard of living. |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2015-16&r=lab |
| By: | Jenifer Ruiz-Valenzuela |
| Abstract: | This paper studies the effect of parental job loss on children's school performance during the Great Recession in Spain, using an original panel dataset for students observed since the beginning of the crisis in a school in the province of Barcelona. By using fixed effects, this paper is more likely to deal with the problem of selection into troubled firms which is prevalent in the literature. Fixed effect estimates show that students experience a negative and significant decrease on average grades of about 13% of a standard deviation after father's job loss. The impact of paternal job loss is not homogeneous across students, but it is largely concentrated among children whose fathers suffer long unemployment spells after job loss and students in already disadvantaged families in terms of the father's education level. These results suggest that paternal job loss is a mechanism through which further inequalities might develop during and after a deep economic crisis. |
| Keywords: | Parental job loss, school performance, Great Recession |
| JEL: | I20 I24 J63 J65 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1364&r=lab |
| By: | Ohinata, Asako (University of Leicester); Picchio, Matteo (Università Politecnica delle Marche, Ancona) |
| Abstract: | We analyse how the financial support for long-term elderly care affects the level of household savings. Using a difference-in-differences estimator, we investigate the 2002 Scottish reform, which introduced free formal personal care for all the elderly aged 65 and above residing in Scotland. Our semiparametric estimation technique allows the policy effects to be flexibly estimated across age groups. We find that the Scottish policy reduced the average household saving by about £7,200. Moreover, the estimated effects are heterogeneous across age groups of the head of household: these effects are particularly strong among those aged between 40 and 60. The largest effect is observed at age 49 with the reduction in the average household saving by £12,764. |
| Keywords: | long-term elderly care, ageing, means tested financial support, saving, wealth, difference-in-differences |
| JEL: | C21 D14 I18 J14 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9237&r=lab |
| By: | Emran, M. Shahe; Greene, William H; Shilpi, Forhad |
| Abstract: | Potential biases from coresident sample selection have been a major stumbling block for research on intergenerational mobility in developing countries. We use two rich data sets from Bangladesh and India to provide evidence on the extent of coresidency bias in standard measures of intergenerational mobility: intergenerational regression coefficient (IGRC) and intergenerational correlation (IGC). Estimates for all children, father-son, and mother-daughter persistence in schooling show that the IGRC estimates are severely biased downward (average 30 percent). In contrast, the bias in IGC estimates is much lower (average less than 10 percent, in many cases less than 5 percent). Truncation due to coresidency criterion in a survey biases the IGRC estimate downward, but it also biases upward the estimate of the ratio of the standard deviations of parental to children's schooling. The IGC estimate suffers from lower bias because the upward bias in the estimate of the ratio of standard deviations partly cancels out the downward bias in the IGRC estimate. The evidence suggests that the available household surveys in developing countries can be fruitfully used to understand intergenerational mobility if one focuses on IGC. The findings have important implications for cross-country comparison of intergenerational economic mobility. |
| Keywords: | Coresidency, Sample Selection Bias, Intergenerational Mobility, Intergenerational Regression Coefficient (IGRC), Intergenerational Correlation (IGC), Bangladesh, India |
| JEL: | I3 J6 O1 |
| Date: | 2015–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65920&r=lab |
| By: | Farré, Lídia (University of Barcelona); Ortega, Francesc (Queens College, CUNY); Tanaka, Ryuichi (University of Tokyo) |
| Abstract: | This paper empirically analyzes the effects of immigration on the schooling decisions of natives. We employ household-level data for Spain for years 2000-2012, a period characterized by a large immigration wave and a severe recession. Our estimates reveal that Spanish households responded to immigration by increasing their educational expenditures. This result was mainly driven by an important native flight from tuition-free schools toward private ones. We also find strong evidence of cream-skimming: only the more educated native households switched to private schools in response to immigration. Finally, our simulations suggest that the reduction in household income due to the Great Recession mitigated the flight toward private schools triggered by immigration but was not enough to offset it. We argue that these findings are driven by several factors: school assignment rules, concerns over negative peer effects, and political economy forces. |
| Keywords: | education, public school, recession, immigration |
| JEL: | D7 F22 H52 H75 J61 I22 I24 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9234&r=lab |
| By: | Gershenson, Seth (American University); Holt, Stephen B. (American University); Papageorge, Nicholas W. (Johns Hopkins University) |
| Abstract: | Teachers are an important source of information for traditionally disadvantaged students. However, little is known about how teachers form expectations and whether their expectations are systematically biased. We investigate whether student-teacher demographic mismatch affects high school teachers' expectations for students' educational attainment. Using a student fixed effects strategy that exploits expectations data from two teachers per student, we find that non-black teachers of black students have significantly lower expectations than do black teachers. These effects are larger for black male students and math teachers. Our findings add to a growing literature on the role of limited information in perpetuating educational attainment gaps. |
| Keywords: | educational attainment, expectations, stigmatization, mismatch |
| JEL: | I24 D84 J15 J16 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9202&r=lab |
| By: | Card, David (University of California, Berkeley); Kluve, Jochen (Humboldt University Berlin, RWI); Weber, Andrea (University of Mannheim) |
| Abstract: | We present a meta-analysis of impact estimates from over 200 recent econometric evaluations of active labor market programs from around the world. We classify estimates by program type and participant group, and distinguish between three different post-program time horizons. Using meta-analytic models for the effect size of a given estimate (for studies that model the probability of employment) and for the sign and significance of the estimate (for all the studies in our sample) we conclude that: (1) average impacts are close to zero in the short run, but become more positive 2-3 years after completion of the program; (2) the time profile of impacts varies by type of program, with larger gains for programs that emphasize human capital accumulation; (3) there is systematic heterogeneity across participant groups, with larger impacts for females and participants who enter from long term unemployment; (4) active labor market programs are more likely to show positive impacts in a recession. |
| Keywords: | active labor market policy, program evaluation, meta-analysis |
| JEL: | J00 J68 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9236&r=lab |
| By: | Laura Pagani; Gianluca Argentin; Marco Gui; Luca Stanca |
| Abstract: | Digital skills are increasingly important for labor market outcomes and social participation. Do they also matter for academic performance? This paper investigates the effects of digital literacy on educational outcomes by merging data from the Italian National Assessment in secondary schools with an original data set on performance tests of Internet skills for 10th grade students. Our identification strategy relies on a rich set of individual, family, school and classroom control variables that are not commonly available in previous studies. The findings indicate that, overall, Internet skills have a positive impact on academic achievement. This effect is stronger for students with low academic performance or low family background. It is also stronger for students in technical or vocational schools. |
| Keywords: | Human capital, Academic achievement, Digital skills, Internet skills, Digital divide |
| JEL: | I21 J13 J24 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:304&r=lab |
| By: | Diva Dhar; Tarun Jain; Seema Jayachandran |
| Abstract: | This paper examines the intergenerational transmission of gender attitudes in India, a setting where discrimination against women and girls is severe. We use survey data on gender attitudes (specifically, views about the appropriate roles and rights of women and girls) collected from adolescents attending 314 schools in the state of Haryana, and their parents. We find that when a parent holds a more discriminatory attitude, his or her child is about 15 to 20 percentage points more likely to hold the view. As a benchmark, classmates' average gender attitudes have a similar effect size. We find that mothers influence children's gender attitudes more than fathers do. Parental attitudes also affect their children's aspirations; girls with more discriminatory parents are less likely to want to continue their schooling beyond high school. |
| JEL: | J16 O1 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21429&r=lab |
| By: | Uwe Jirjahn; Cornelia Struewing |
| Abstract: | The share of single mothers is higher in East Germany than in West Germany. Using data from the Socio-Economic Panel (SOEP), we examine two transmission channels leading to single motherhood, namely out-of-partnership births and separations of couples with minor children. Women in East Germany have both a higher probability of out-of-partnership birth and a higher probability of separation. We find no evidence that availability of child care plays a role in the differences between East and West Germany. The differences in single motherhood appear to be rather driven by cultural and economic factors. |
| Keywords: | Out-of-partnership birth, separation of couples, cohabitation, child care, unemployment, culture |
| JEL: | J12 J13 P20 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:trr:wpaper:201508&r=lab |