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on Labour Economics |
| By: | Hugo Nopo (Inter-American Development Bank) |
| Abstract: | This paper analyzes the evolution of the gender wage gap in Chile during the period 1992 to 2003 using the decomposition approach developed in Ñopo (2004). This approach, which decomposes the wage gap into four additive elements, stresses the need for comparisons inside the common support for the distributions of observable characteristics of individuals. Also, it allows an analysis of the distribution of unexplained differences in wages (not only the averages). The results suggest that, besides the high educational attainment of females, there are noticeable gender wage gaps in Chile favoring males. These unexplained differences in wages, which move around 25 percent of average female wages, show no clear tendency during the period of analysis. The wage gaps are higher at the highest percentiles of the wage distribution, among those with higher educational attainment, among directors and among part-time workers. The technique also detects some evidence of a glass-ceiling effect in Chilean labor markets, such that for some occupations and particular combinations of observable characteristics, there are highly paid males but not females. |
| Keywords: | Matching; Non-parametric; Gender Wage Gap; Latin America |
| JEL: | C14 D31 J16 O54 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:1021&r=lab |
| By: | Marcela C. Perticara (Department of Economics, Georgetown University) |
| Abstract: | The purpose of this paper is to study the relationship between job mobility and wage mobility. One of the main points of this paper is that job mobility is not necessarily bad. Job mobility might be the quickest way in which workers can advance in their careers and move up in the wage structure. Specifically I am going to distinguish between voluntary and involuntary job changes in both the modeling of job mobility behavior and the determination of the wage gains associated with job changing activities. Using the National Longitudinal Survey of Youth data, I find that workers voluntarily leave their jobs whenever they find themselves being paid below the customary wage rate. In particular, a worker that earns 30% less than the average wage for a worker with his characteristics and labor market experience is more than one and a half times as likely to initiate a separation than a worker just earning the average wage rate. Conversely, a worker earning 30% more than the average wage for a worker with his qualifications and labor market experience faces almost a 50% higher risk of being laid-off. This result is consistent across models. Workers’ post-separation wage gains also depend on this distinction. Voluntary job changes lead, on average, to gains on the order of 7%, while layoffs imply losses of 5%. That is, voluntary separations, on average, allow workers to improve their relative position in the wage structure. Laidoff workers, however, tend to perform poorly after experiencing a separation. Fifty-percent of the laid-off workers experience wage losses, while 70% of the voluntary job changes end in wage gains. While at early stages of the career, workers experience large wage gains from quitting, these gains seem to disappear as their careers extends. Laid-off losses increase as the career extends, particularly for high-skilled workers. Classification-JEL Codes: C41, J31, J62, J63 |
| Keywords: | Mobility, Job Turnover, Wage Differentials, Duration Analysis |
| URL: | http://d.repec.org/n?u=RePEc:geo:guwopa:gueconwpa~04-04-17&r=lab |
| By: | Anne C. Gielen (Tilburg University, CentER and Institute for Labor Studies (OSA)); Jan C. van Ours (Tilburg University, CentER, CEPR and IZA Bonn) |
| Abstract: | In a dynamic labor market worker-firm matches dissolve frequently causing workers to separate and firms to look for replacements. A separation may be initiated by the worker (a quit) or the firm (a layoff), or may result from a joint decision. A dissolution of a worker-firm match may be inefficient if it can be prevented by wage renegotiation. In this paper we study worker separations in the Dutch labor market. From an analysis of matched worker-firm data we conclude that both quits and layoffs are less likely to occur in high quality matches. We also find that workers with a high propensity to quit are offered higher wages to prevent them to quit. Similarly, workers with a high layoff probability give up some of their wage to prevent them from being laid-off. Despite these wage renegotiations some inefficiency in separations remains. However, there is a clear difference between quits and layoffs. Whereas inefficient quits are rare, inefficient layoffs occur frequently. These phenomena may be related to downward wage rigidity. While it is easy to renegotiate higher wages to prevent quits, it is much more difficult to renegotiate lower wages to prevent layoffs even if that would overall be beneficial to the workers involved. |
| Keywords: | separations, quits, layoffs, matched worker-firm dataset |
| JEL: | J31 J63 M51 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2165&r=lab |
| By: | Guido W. Imbens (Harvard University and NBER); Lisa M. Lynch (Tufts University, NBER and IZA Bonn) |
| Abstract: | Using a Cox proportional hazard model that allows for a flexible time dependence in order to incorporate business cycle effects, we analyze the determinants of reemployment probabilities of young workers in the U.S. from 1978-1989. We find considerable changes in the chances of young workers finding jobs over the business cycle despite the fact that personal characteristics of those starting jobless spells do not vary much over time. Therefore, government programs that target specific demographic groups may change individuals’ positions within the queue of job seekers, but may only have a more limited impact on average re-employment probabilities. Living in an area with high local unemployment reduces re-employment chances as does being in a long spell of nonemployment. However, the damage associated with being in a long spell seems to be reduced somewhat if a worker is unemployed in an area with high overall unemployment. |
| Keywords: | unemployment, duration dependence, business cycle |
| JEL: | E24 E32 J2 J6 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2167&r=lab |
| By: | R. Kent Weaver (Center for Retirement Reseach) |
| Abstract: | Opt-out pensions pose many difficult design and implementation issues. The U.K. experience suggests several valuable lessons for U.S. policymakers. First, complex interactions between public and opt-out pensions may create confusion among workers, leading to both discontent and demands for policy change. Second, allowing recurrent opportunities to opt into and out of individual accounts increases administrative complexity, increases choice complexity for workers, and may undermine system legitimacy—but it may also be politically unavoidable. Third, the market may not, unprompted, provide personal pension vehicles that are appropriate retirement savings vehicles for low-earners, especially those who have interrupted earnings records. Fourth, price indexation of wage histories may create pressures for ad hoc policy change. Fifth, increased reliance on means-tested pensions increases administrative complexity and creates perverse incentives for savings and for types of assets held, especially where assets as well as income-tests are involved. Sixth, an option for quasi-privatized pensions leads to pressures to treat those pensions more like fully private pensions with respect to flexibility in withdrawals, inheritability, and ability to borrow against fund balances. Seventh, annuitization costs can add significantly to pension system costs and inequality across cohorts, so the state may want to take on the role of monopoly annuity provider. Eighth, scandals and failures drive policymakers and consumer responses, so it is important to get the policy design right the first time and invest heavily in public understanding of how the reform will work. A final lesson is that scandals, policy tinkering, and uncertainty over pension policy may affect workers’ propensity to opt out of state pensions in unpredictable ways—not just driving people to exit from the state system. |
| Keywords: | pensions, united kingdom, united states, retirement, |
| Date: | 2006–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2006-7&r=lab |
| By: | Sylvie Démurger (HIEBS, The University of Hong Kong and CNRS (France)); Martin Fournier (GATE, Université Lyon 2 (France))); Li Shi (School of Economics and Business, Beijing Normal University); Wei Zhong (Institute of Economics, Chinese Academy of Social Sciences (Beijing)) |
| Abstract: | The massive downsizing of the state-owned sector and the concomitant impressive growth of the private sector at the end of the 1990s have altered the nature of the Chinese labor market. By bringing in more competition and market mechanisms, they have contributed to increasing labor turnover and competitiveness in market wages. Using two urban household surveys for 1995 and 2002, this paper analyzes the evolution of labor market segmentation in urban China, by applying an extended version of Oaxaca-Blinder decomposition methods. During the 7-year period, the sharp increase in earnings for all workers however shows substantial differences across ownership, economic sectors, and regions. We find strong evidence of a multi-tiered labor market along these three major lines and highlight increasing segmentation within each of the three dimensions, the gap between the privileged segments of the labor market and the most competitive segments widening over time. |
| Keywords: | labor market, earnings differentials, segmentation, China. |
| JEL: | J31 J41 P23 O53 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2006-46&r=lab |
| By: | Richard W. Johnson (The Urban Institute); Gordon B.T. Mermin (The Urban Institute); Cori E. Uccello (The Urban Institute) |
| Abstract: | Life’s uncertainties can upend the best-laid retirement plans. Health can fail as people grow older, or their spouses can become ill. Older people can lose their jobs, and often have trouble finding new ones. Marriages can end in widowhood or divorce. Health, employment, and marital shocks near retirement can have serious financial repercussions, raising out-of-pocket medical spending, reducing earnings, disrupting retirement saving, and forcing people to dip prematurely into their nest eggs. This brief examines different types of negative events that can strike near retirement. It reports the incidence of widowhood, divorce, job layoffs, disability, and various medical conditions over a 10-year period, and estimates their impact on household wealth. Data come from the Health and Retirement Study (HRS), a nationally representative survey of older Americans conducted by the University of Michigan for the National Institute on Aging. The survey interviewed a large sample of non-institutionalized adults ages 51 to 61 in 1992 and re-interviewed them every other year. The analysis uses data through 2002, the most recent year available. The results show that many people in their 50s and 60s experience negative shocks that threaten retirement security. Job layoffs, divorce, and the onset of work disabilities near retirement substantially erode retirement savings. The findings highlight the limitations of the safety net when things go wrong in late midlife. |
| Keywords: | retirement, nest eggs, pensions, old age |
| Date: | 2006–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib45&r=lab |
| By: | Jungho Kim (Vienna Institute of Demography and IZA Bonn); Arnstein Aassve (ISER, University of Essex) |
| Abstract: | While a large body of literature focuses on how fertility affects female labour market participation, there are relatively few studies that examine the effect of fertility on male labour market participation. Even if the burden of child care falls mainly on women, an exogenous increase in fertility is likely to change the optimal allocation of time, therefore, the labour supply decision of both female and male in a household. This paper analyses how an exogenous increase in fertility affects labour market participation of men and women in Indonesia - a country that has seen dramatic changes in the labour market over recent decades. The finding is that women reduce their working hours in response to the higher fecundity in both rural and urban areas in Indonesia. On the other hand, the higher fecundity leads to men’s increasing their working hours only in rural areas. The higher degree of specialization in response to fertility in rural areas is driven mainly by the differences in the cost of childcare rather than the characteristics of occupation or household bargaining power. |
| Keywords: | fertility, labour supply, division of labour, Indonesia |
| JEL: | J13 J22 J24 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2162&r=lab |
| By: | Bruno Amable; Lilas Demmou; Donatella Gatti |
| Abstract: | This paper provides new evidence on the linkages between a large array of institutional arrangements (on product, labour and financial markets) and employment performance. Our analysis includes unemployment, inactivity and jobless rates, thus allowing us to control for possible substitution effects across situations of non-employment and to check whether institutional rigidities affecting unemployment impact inactivity along the same line. To cope with common problems related to the inclusion of time-invariant institutional variables in fixed effects models, we present results of regressions based on three different estimators: PCSE, GLS and FEVD, the last one being a new procedure specifically designed to treat slowly changing variables. New institutional series are proposed, namely to account for unemployment insurance net replacement rates and employment protection legislation (EPL). Among other results, we find strong evidence of a positive effect of EPL on employment performance as well as of possible complementarities across product and labour markets regulation. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2006-16&r=lab |
| By: | Stéphane Carcillo; David Grubb |
| Abstract: | Many OECD countries have in recent decades experienced periods of relatively rapid growth in nonemployment benefit expenditures and recipiency rates which have not subsequently been reversed. By contrast, in a number of OECD countries the number of unemployment benefit recipients has declined fairly sharply since the mid-1990s. Although national situations for particular benefits vary greatly, a variety of evidence suggests that there is now often substantial scope for bringing people currently in the sick and disabled, lone-parent, old-age and non-categorical social assistance groups into employment. De nombreux pays de l’OCDE ont fait l’expérience ces dernières décennies d’une hausse des prestations de non emploi, tant en termes de dépenses qu’en termes de taux de perception, sans que cette tendance ait été inversée. En comparaison, dans un certain nombre de pays, le nombre de bénéficiaires de prestations de chômage a connu une nette décrue depuis la seconde moitié des années quatre-vingt-dix. Bien que la situation pour chaque type de prestation varie fortement selon les pays, un certain nombre d’éléments suggèrent qu’il existe désormais des marges de manoeuvre pour ramener vers l’emploi des personnes qui bénéficient actuellement de prestations au titre de la maladie, du handicap, de leur statut de parents isolés, de leur âge, ainsi que les bénéficiaires de l’assistance sociale non catégorielle. |
| JEL: | H53 I38 J20 J68 |
| Date: | 2006–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:36-en&r=lab |
| By: | Alex Bryson; Richard B. Freeman |
| Abstract: | Workers have responded differently to declining union density in the US and UK. US workers have unfilled demand for unions whereas many UK workers free-ride at unionized workplaces. To explain this difference, we create a scalar measure of worker needs for representation and relate desire for unionism to this measure and to the choices that the US and UK labor relations systems offer workers. Our measure of needs has similar properties across countries and is the single most important determinant of worker desire for unions and collective representation. Conditional on needs, we find that in both countries workers are more favourable to unions when management is positive toward unions, but also favor them when management strongly opposes unionism, compared to management having a neutral view. Much of the difference in the response of US and UK workers to declining unionism appears to be due to the different institutional arrangements for voice that the countries offer to workers. |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12310&r=lab |
| By: | Axel Börsch-Supan; Hendrik Jürges |
| Abstract: | Germans retire early. On the one hand, early retirement is very costly and amplifies the burden which the German public pension system has to carry due to population aging. On the other hand, however, early retirement is also seen as a much appreciated social achievement which increases the well-being especially of those workers who suffer from work-related health problems. This paper investigates the relation between early retirement and well-being using the GSOEP panel data. The general picture that emerges from our analysis is that early retirement as such seems to be related to subjective well-being, in fact more so than normal retirement. Early retirement most probably is a reaction to a health shock. Individuals are less happy in the year of early retirement than in the years before and after retirement. After retirement, individuals attain their pre-retirement satisfaction levels after a relatively short while. Hence, the early retirement effect on well-being appears to be negative and short-lived rather than positive and long. Whether this is an effect of retirement itself or a psychological adaptation to an underlying shock cannot be identified in our data and remains an open research issue waiting for a more objective measurement of health. |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12303&r=lab |