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on Labour Economics |
| By: | Frank Oskamp; Dennis J. Snower |
| Abstract: | We explore the far-reaching implications of low-wage subsidies on aggregate employment. Low-wage subsidies have three important effects. First, they promote employment of unskilled workers (who tend to be the ones who earn low wages). Second, by raising the payoff of unskilled work relative to skilled work, low-wage subsidies reduce the incentive to become skilled, so that there are more unskilled workers associated with a relatively low employment rate. Third, the government budget constraint has to be taken into account, which is supposed to cause an additional tax burden for the skilled workers. This amplifies the negative effect of low-wage subsidies on the incentive to acquire human capital. Thus, the first effect on the one hand and the second and third effect on the other hand pull in opposite directions in terms of employment. This paper presents a theoretical model of the labor market in which these effects can be analyzed. We then calibrate the model with respect to the German labor market to shed light on the relative strengths of these effects and thereby assess the degree to which low-wage subsidies encourage or discourage employment |
| Keywords: | low-wage subsidies; training incentives; employment; unemployment; skill acquisition |
| JEL: | I29 J21 J24 J31 J38 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1292&r=lab |
| By: | Stepán Jurajda (CERGE-EI, CEPR and IZA Bonn); Teodora Paligorova (CERGE-EI) |
| Abstract: | This paper examines the gender gaps in employment and wages among top- and lower-level managerial employees in a recent sample of Czech firms. Unlike the existing analyses of managerial gender pay gaps, we acknowledge the adverse consequences of the low and uneven representation of women for the Oaxaca-Blinder decomposition and offer an alternative set of results based on a matching procedure. Only 7% of top-level Czech managers are women and their wages are about 20 percent lower even when compared only to their comparable male colleagues. |
| Keywords: | managers, gender pay gap |
| JEL: | J31 J71 P31 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2303&r=lab |
| By: | Jasper Hoek (U.S. Department of the Treasury and IZA Bonn) |
| Abstract: | This paper estimates the consequences of the decline of the Brazilian manufacturing sector for displaced workers. I estimate that earnings decline by nearly 50% after displacement relative to one year prior. About a quarter of the initial earnings loss is attributable to reduced hours of work rather than lower wages. However, hours recover fully within one year of displacement, while wages remain about a third lower. Allowing the displacement effect to differ by age yields a surprising U-shaped curve. Middle aged workers are hit hardest by a layoff, with younger and older workers relatively better off. For workers aged 35-40, the initial earnings loss reaches 70%. This is a surprising finding because most theories of job loss predict a negative relationship between the wage loss on displacement and the length of tenure on the pre-displacement job, which is increasing in age. I account for these facts with a simple model in which the ratio of specific to general human capital reaches a peak at middle age. Young workers have little specific capital and a low specific-general human capital ratio. In the early years of one’s career, specific capital (whether due to investments in specific skills or in search) accumulates much more rapidly than general human capital. Around ages 35 to 40, this trend reverses and the returns to general skills rise more rapidly. Thus, the accumulation of general skills serves to reduce the effect of job displacement at older ages despite increasing average job tenure. These findings suggest that major market reforms may have larger than anticipated effects because the primary losers are workers in the middle of their working life. This is also important from a welfare perspective because these workers are the most likely to fall through the cracks of social safety nets, which typically target younger and older workers. |
| Keywords: | job displacement, structural adjustment, specific capital |
| JEL: | J21 J24 J63 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2291&r=lab |
| By: | Anabela Carneiro (Universidade do Porto and CETE); Pedro Portugal (Banco de Portugal, Universidade NOVA de Lisboa and IZA Bonn) |
| Abstract: | This paper examines the long-term earnings losses of displaced workers in Portugal, using a nationally representative longitudinal linked employer-employee data set. The results show that four years after displacement the earnings of displaced workers remain around 9% (women) to 12% (men) below their counterfactual expected levels. The post-displacement earnings losses are mainly associated with the loss of tenure within the firm and, to a lesser extent, to the loss of sector-specific features. Furthermore, workers who experienced a spell of nonemployment are the most affected by job displacement. Finally, this study points to the importance of controlling for employers' characteristics in this type of wages-dynamic analysis, since there are systematic differences in earnings between displaced and nondisplaced workers that stem from differences in firm characteristics. Ignoring them may confound the evaluation of the earnings losses. |
| Keywords: | displacement, earnings losses, firm-specific human capital |
| JEL: | J31 J63 J65 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2289&r=lab |
| By: | Beblo, Miriam; Bender, Stefan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolf, Elke |
| Abstract: | "We analyze the wage effects of employment breaks of women entering motherhood using a novel within-firm matching approach where mothers' wages upon return to the job are compared with those of their female colleagues within the same firm. Using an administrative German data set we investigate three different matching procedures based on information two years before birth: (1) exact matching on individual characteristics, (2) propensity score matching and (3) a combined procedure of exact and propensity score matching. Our results yield new insights into the nature of the wage penalty associated with motherhood, since we find first births to reduce women's wages by 16 to 19 percent, regardless of the matching procedure applied. Neglecting the firm identifier and matching across all firms, however, yields a wage cut of 30 percent. Furthermore, we can show that the wage loss increases with the duration of the employment break." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Mütter, Erwerbsunterbrechung, erwerbstätige Frauen, Einkommenseffekte, Lohnhöhe, Erziehungsurlaub, Elternschaft, ökonomische Faktoren, Kinderlosigkeit, Lohnunterschied, IAB-Beschäftigtenstichprobe |
| JEL: | J13 J31 C14 |
| Date: | 2006–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200613&r=lab |
| By: | George J. Borjas; Jeffrey Grogger; Gordon H. Hanson |
| Abstract: | The employment rate of black men, and particularly of low-skill black men, fell precipitously from 1960 to 2000. At the same time, the incarceration rate of black men rose markedly. This paper examines the relation between immigration and these trends in black employment and incarceration. Using data drawn from the 1960-2000 U.S. Censuses, we find a strong correlation between immigration, black wages, black employment rates, and black incarceration rates. As immigrants disproportionately increased the supply of workers in a particular skill group, the wage of black workers in that group fell, the employment rate declined, and the incarceration rate rose. Our analysis suggests that a 10-percent immigrant-induced increase in the supply of a particular skill group reduced the black wage by 3.6 percent, lowered the employment rate of black men by 2.4 percentage points, and increased the incarceration rate of blacks by almost a full percentage point. |
| JEL: | J2 J3 J6 K42 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12518&r=lab |
| By: | Arne Uhlendorff (DIW Berlin, Free University of Berlin and IZA Bonn); Klaus F. Zimmermann (IZA Bonn, University of Bonn, DIW Berlin and Free University of Berlin) |
| Abstract: | Unemployment rates are often higher for migrants than for natives. This could result from longer periods of unemployment as well as from shorter periods of employment. This paper jointly examines male native-migrant differences in the duration of unemployment and subsequent employment using German panel data and bivariate discrete time hazard rate models. Compared to natives with the same observable and unobservable characteristics, unemployed migrants do not find less stable positions but they need more time to find these jobs. The probability of leaving unemployment also varies strongly between ethnicities, while first and second generation Turks are identified as the major problem group. Therefore, policy should concentrate on the job finding process of Turkish migrants to fight their disadvantages on the labor market. |
| Keywords: | unemployment duration, employment stability, bivariate hazard rate models, migration, ethnicity |
| JEL: | C41 J61 J64 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2299&r=lab |
| By: | Adrian Masters |
| Abstract: | An urn-ball matching model of directed search is analyzed in which the usual assumption of commitment to posted wages is dropped. One-on-one matches lead to a Nash bargained wage but when multiple applicants arrive competition drives the workers down to their continuation value. A minimum wage can act as a commitment device when (as in the USA) willful underpayment carries a stiffer penalty than "inadvertetn underpayment. The theory sheds new light on why firms appear to voluntarily bind themselves into paying higher wages than they would otherwise pay. Robustness to various sources of heterogeneity is considered |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:nya:albaec:05-02&r=lab |
| By: | Skaksen, Jan Rose (Department of Economics, Copenhagen Business School); Sørensen , Anders (Department of Economics, Copenhagen Business School) |
| Abstract: | The relative demand for skills has increased considerably in many OECD countries during recent decades. This development is potentially explained by capital-skill complementarity and high growth rates of capital equipment. When production functions are characterized by capital-skill complementarity, relative wages and employment of skilled labor are countercyclical because capital equipment is a quasi-fixed factor in the short run. The exact behavior of the two variables depends on relative wage flexibility. Relative wages are rigid in Denmark, implying that the employment share of skills should be countercyclical. The labor market is competitive in the United States and therefore relative wages of skilled labor are expected to be countercyclical. We find that the business cycle development of the two economies is consistent with capital-skill complementarity. |
| Keywords: | capital-skill complementarity; relative wages; business cycle |
| JEL: | H00 |
| Date: | 2006–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2004_010&r=lab |
| By: | Björn Brügemann (Yale University and IZA Bonn) |
| Abstract: | This paper investigates the ability of employment protection to generate its own political support. A version of the Mortensen-Pissarides model is used for this purpose. Under the standard assumption of Nash bargaining, workers value employment protection because it strengthens their hand in bargaining. Workers in high productivity matches benefit most from higher wages as they expect to stay employed for longer. By reducing turnover employment protection shifts the distribution of match-specific productivity toward lower values. Thus stringent protection in the past actually reduces support for employment protection today. Introducing involuntary separations is a way of reversing this result. Now workers value employment protection because it delays involuntary dismissals. Workers in low productivity matches gain most since they face the highest risk of dismissal. The downward shift in the productivity distribution is now a shift towards ardent supporters of employment protection. In a calibrated example this mechanism sustains both low and high employment protection as stationary political outcomes. A survey of German employees provides support for employment protection being more strongly favored by workers likely to be dismissed. |
| Keywords: | employment protection, wage determination, search and matching, political economy |
| JEL: | E24 J41 J65 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2286&r=lab |
| By: | Eckhard Wurzel |
| Abstract: | High levels of unemployment and rising social charges have lead to considerable pressure on labour markets to adjust. Major steps in labour market reform have been implemented over the last three years. These need to be followed up in several respects in order to raise the economy’s capacity to generate employment. The present tax and transfer system still implies significant disincentives for labour supply of older people and spouses, which should be eliminated. Unemployment related benefits and active labour market policies can be better geared toward activating the unemployed, while institutional reform of the Public Employment Service should continue. On the labour demand side, there remains scope to raise the efficiency of Germany's employment protection system. Also, provisions should be made to allow for a higher degree of wage flexibility across qualifications and regions to fight unemployment. Regulatory conditions in other parts of the economy interact in important ways with labour market performance, underlining the need for a broad based reform approach. This Working Paper relates to the 2006 OECD Economic Survey of Germany (www.oecd.org/eco/surveys/Germany). <P>La réforme du marché du travail en Allemagne : Comment améliorer l’efficacité <BR>Face à un chômage élevé et à un alourdissement des charges sociales, des ajustements sont devenus de plus en plus nécessaires sur les marchés du travail. D'importantes réformes du marché du travail ont été mises en oeuvre ces trois dernières années. Elles doivent être poursuivies dans plusieurs domaines afin de permettre à l'économie de créer davantage d'emplois. Le système actuel de prélèvements et de transferts dissuade encore dans bien des cas les personnes âgées et les conjoints de travailler, situation à laquelle il y aurait lieu de remédier. L'indemnisation du chômage et les politiques actives du marché du travail pourraient être conçues de manière à favoriser davantage le retour à l'emploi des chômeurs, et la réforme institutionnelle du service public de l'emploi doit être poursuivie. S'agissant de la demande de main-d'oeuvre, l'efficience du système de protection de l'emploi pourrait être améliorée. Par ailleurs, il y aurait lieu de prendre des dispositions pour permettre une plus grande flexibilité des salaires en fonction des qualifications et suivant les régions, afin de lutter contre le chômage. Les conditions de réglementation dans d'autres secteurs de l'économie interagissent de façon importante avec la performance du marché du travail, soulignant le besoin d'une approche globale des réformes. Ce document de travail se rapporte à l’Étude économique de l’OCDE de l’Allemagne (www.oecd.org/eco/etudes/Allemagne). |
| Keywords: | unemployment, chômage, employment protection legislation, législation sur la protection de l'emploi, Germany, Allemagne, employment, emploi, salaire minimum, public employment services, service public de l'emploi, minimum wage, labour market reform, unemployment benefits, labour force participation, activation strategies, wage rigidities, wage determination, policy synergies, réforme du marché du travail, allocations chômages, activité des personnes sur le marché du travail, stratégie d'activation, rigidités salariales, détermination des rémunérations, synergies des politiques |
| JEL: | J22 J23 J26 J31 J32 J33 J48 J52 J65 J68 |
| Date: | 2006–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:512-en&r=lab |
| By: | Sami H. Miaari (World Bank West Bank and Gaza Office and Hebrew University of Jerusalem); Robert M. Sauer (University of Southampton and IZA Bonn) |
| Abstract: | In this paper, we measure the implications of the Israeli-Palestinian conflict for Palestinian employment and earnings. We quantify the conflict by the frequency of temporary closures of the West Bank and Gaza Strip and the number of overseas foreign workers in the Israeli labor market. Data on Palestinian employment and earnings are taken from the Palestinian Labor Force Survey (PLFS) of the Palestinian Central Bureau of Statistics. The PLFS micro level panel data are combined with quarterly time series data on the number of foreign workers in Israel, the number of foreign worker permits issued by the Israeli government, and the frequency of temporary closures of the West Bank and Gaza Strip, between the years 1999 and 2004. Fixed-effects estimates which exploit the number of foreign worker permits issued by the Israeli government as an instrument for the number of foreign workers, yield large and statistically significant negative effects of the Israeli-Palestinian conflict on Palestinian employment rates in Israel and mean monthly earnings, regardless of work location (Israel or West Bank and Gaza Strip). Closures also significantly reduce Palestinian employment rates in Israel and mean monthly earnings. The impact of foreign workers is relatively stronger than the impact of closures because foreign workers are long-run substitutes for Palestinians in the Israeli labor market while closures represent only a transitory, short-run restriction on Palestinian labor supply. However, the impact of foreign workers also reflects a permanent effect of closures. |
| Keywords: | conflict, immigration, Palestinians, Israelis, foreign workers, closures, employment, earnings, instrumental variables, panel data |
| JEL: | J21 J31 J40 J61 F22 C23 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2282&r=lab |
| By: | Andrew Leigh; Chris Ryan |
| Abstract: | International research suggests that differences in teacher performance can explain a large portion of student achievement. Yet little is known about how the quality of the Australian teaching profession has changed over time. Using consistent data on the academic aptitude of new teachers, we compare those who have entered the teaching profession in Australia over the past two decades. We find that the aptitude of new teachers has fallen considerably. Between 1983 and 2003, the average percentile rank of those entering teacher education fell from 74 to 61, while the average rank of new teachers fell from 70 to 62. One factor that seems to have changed substantially over this period is average teacher pay. Compared to non-teachers with a degree, average teacher pay fell substantially over the period 1983-2003. Another factor is pay dispersion in alternative occupations. During the 1980s and 1990s, non-teacher earnings at the top of the distribution rose faster than earnings at the middle and bottom of the distribution. For an individual with the potential to earn a wage at the 90th percentile of the distribution, a non-teaching occupation looked much more attractive in the 2000s than it did in the 1980s. We believe that both the fall in average teacher pay, and the rise in pay differentials in non-teaching occupations are responsible for the decline in the academic aptitude of new teachers over the past two decades. |
| Keywords: | test scores, teacher salary, occupational choice |
| JEL: | I21 I28 J31 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:auu:dpaper:534&r=lab |
| By: | Kai-Joseph Fleischhauer |
| Abstract: | There is an ongoing discussion in Germany about the implementation of tax credits in order to reintegrate low-skilled workers into the labor market. This paper aims at analyzing the policy instrument of tax credits in a theoretical model that systematically compares its costs and benefits in the context of the German system of apprenticeship training and social security. Building on recent training literature, a two-period partial-equilibrium model is developed that allows for worker heterogeneity in ability. In our model, the implementation of tax credits in terms of a negative income tax solves a trade-off with respect to overall welfare. While tax credits reduce the number of unemployed workers at the extensive margin, they increase at the same time the opportunity costs of apprenticeship training, which implies that human capital formation is decreased. Furthermore, the model suggests that the reintegration of those workers at the bottom of the ability-distribution into the labor market is not optimal. The additional implementation of minimum wages is counteractive to the reduction of unemployment because firms would thus be prevented from employing workers with very low productivities. |
| Keywords: | Unemployment of Low-Skilled Workers, Tax Credits, Labor Supply, Human Capital Formation |
| JEL: | H31 I38 J21 J24 J31 J68 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:usg:dp2006:2006-21&r=lab |
| By: | Abdurrahman Aydemir (Statistics Canada); Arthur Sweetman (Queen's University and IZA Bonn) |
| Abstract: | The educational and labor market outcomes of the first, first-and-a-half, second and third generations of immigrants to the United States and Canada are compared. These countries’ immigration flows have large differences in source countries, scale and timing, and Canada has a much larger policy emphasis on skilled workers. Following from these, the educational attainment of US immigrants is currently lower than that in Canada and the intergenerational transmission of education is expected to cause the gap to grow. This in turn influences earnings. Controlling only for age, the current US second generation has earnings comparable to those of the third, while earnings are higher for the second generation in Canada. Interestingly, the positive wage gap in favour of first-and-a-half and second generation immigrants in Canada is exceeded by the gap in educational attainment, but a lower immigrant rate of return attenuates education’s impact. Moreover, observable characteristics explain little of the difference in earnings outcomes across generations in the US but their introduction into an earnings equation causes the Canadian second generation premium to switch signs and become negative relative to the third. |
| Keywords: | immigration, second generation, Canada, United States, education |
| JEL: | J61 J62 I29 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2298&r=lab |
| By: | Antoni, Manfred (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Jahn, Elke J. (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Over the past three decades Germany has repeatedly deregulated the law on temporary agency work by stepwise increasing the maximum period for hiring-out employees and allowing temporary work agencies to conclude fixed-term contracts. These reforms should have had an effect on the employment duration within temporary work agencies. Based on an informative administrative data set we use hazard rate models to examine whether the employment duration has changed in response to these reforms. We find that the repeated prolongation of the maximum period for hiring-out employees significantly increased the average employment duration while the authorization of fixed-term contracts reduced employment tenure." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Leiharbeit, Diffusion, Leiharbeitnehmer, Persönlichkeitsmerkmale, Beschäftigungsdauer, Arbeitsmarktpolitik, Arbeitsrecht, Deregulierung, Betriebszugehörigkeit |
| JEL: | C41 J23 J40 J48 K31 |
| Date: | 2006–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200618&r=lab |
| By: | Olivier L'Haridon (GRID, CNRS, ENSAM); Franck Malherbet (THEMA, CNRS, Université de Cergy-Pontoise, fRDB and IZA Bonn) |
| Abstract: | The design of the employment protection legislation (EPL) is of a particular acuity in the European debate on the contours of the EPL reform. In this article we used an equilibrium unemployment model to investigate the virtue of an EPL reform whose modality is a lessening in the red tape and legal costs associated with layoffs and the introduction of an U.S. like experience rating system modelled as a combination of a layoff tax and a payroll subsidy. The reform considered shows that it is possible to improve both the consistency and the efficiency of employment protection policies while leaving the workers' protection untouched on the labor market. These results are consistent with the conventional wisdom that experience rating is desirable, not only as a part of unemployment compensation finance as most studies acknowledge but also as part and parcel of a virtuous EPL system. |
| Keywords: | matching models, employment protection, experience rating |
| JEL: | J41 J48 J60 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2304&r=lab |
| By: | Daniela Del Boca (University of Turin and IZA Bonn); Robert M. Sauer (University of Southampton and IZA Bonn) |
| Abstract: | In this paper, we formulate a dynamic utility maximization model of female labor force participation and fertility choices and estimate approximate decision rules using data on married women in Italy, Spain and France. The pattern of estimated state dependence effects across countries is consistent with aggregate patterns in part-time employment and child care availability, suggesting that labor market rigidities and lack of child care options are important sources of state dependence. Simulations of the model reveal that Italian and Spanish women would substantially increase their participation rates were they to face the French institutional environment. |
| Keywords: | female employment, fertility, child care, institutions, decision rules |
| JEL: | J2 J6 C3 D1 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2285&r=lab |
| By: | David L. Dickinson (Appalachian State University); Ronald L. Oaxaca (University of Arizona and IZA Bonn) |
| Abstract: | Statistical discrimination occurs when distinctions between demographic groups are made on the basis of real or imagined statistical distinctions between the groups. While such discrimination is legal in some cases (e.g., insurance markets), it is illegal and/or controversial in others (e.g., racial profiling and gender-based labor market discrimination). “First-moment” statistical discrimination occurs when, for example, female workers are offered lower wages because females are perceived to be less productive, on average, than male workers. “Second-moment” discrimination would occur when risk-averse employers offer female workers lower wages based not on lower average productivity but on a higher variance in their productivity. This paper reports results from controlled laboratory experiments designed to study second-moment statistical discrimination in a labor market setting. Since decision-makers may not view risk in the same way as economists or statisticians (i.e., risk=variance of distribution), we also examine two possible alternative measures of risk: the support of the distribution, and the probability of earning less than the expected (maximum) profits for the employer. Our results indicate that individuals do respond to these alternative measures of risk, and employers made statistically discriminatory wage offers consistent with loss-aversion. |
| Keywords: | statistical discrimination, experiments, labor markets |
| JEL: | J31 J71 C92 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2305&r=lab |
| By: | Munch, Jakob Roland (Department of Economics, Copenhagen Business School); Skaksen, Jan Rose (Department of Economics, Copenhagen Business School) |
| Abstract: | This paper studies the impact of outsourcing on individual wages. In contrast to the standard approach in the literature, we focus on domestic outsourcing as well as foreign outsourcing. By using a simple theoretical model, we argue that, if outsourcing is associated with specialization gains arising from an increase in the extent of the market for intermediate goods, domestic outsourcing tends to increase wages for both unskilled and skilled labor. We use a panel data set of workers in Danish manufacturing industries to show that domestic and foreign outsurcing affect wages as predicted by the theory. |
| Keywords: | Outsourcing; Comparative advantage; Specialization; Wages |
| JEL: | C23 F16 J31 |
| Date: | 2006–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2005_019&r=lab |
| By: | Alexandre Mas (University of California, Berkeley and NBER); Enrico Moretti (University of California, Berkeley, NBER and IZA Bonn) |
| Abstract: | We investigate how and why the productivity of a worker varies as a function of the productivity of her co-workers in a group production process. In theory, the introduction of a high productivity worker could lower the effort of incumbent workers because of free riding; or it could increase the effort of incumbent workers because of peer effects induced by social norms, social pressure, or learning. Using scanner level data, we measure high frequency, worker-level productivity of checkers for a large grocery chain. Because of the firm‘s scheduling policy, the timing of within-day changes in personnel is unsystematic, a feature for which we find consistent support in the data. We find strong evidence of positive productivity spillovers from the introduction of highly productive personnel into a shift. A 10% increase in average co-worker permanent productivity is associated with 1.7% increase in a worker’s effort. Most of this peer effect arises from low productivity workers benefiting from the presence of high productivity workers. Therefore, the optimal mix of workers in a given shift is the one that maximizes skill diversity. In order to explain the mechanism that generates the peer effect, we examine whether effort depends on workers’ ability to monitor one another due to their spatial arrangement, and whether effort is affected by the time workers have previously spent working together. We find that a given worker’s effort is positively related to the presence and speed of workers who face him, but not the presence and speed of workers whom he faces (and do not face him). In addition, workers respond more to the presence of co-workers with whom they frequently overlap. These patterns indicate that these individuals are motivated by social pressure and mutual monitoring, and suggest that social preferences can play an important role in inducing effort, even when economic incentives are limited. |
| Keywords: | spillovers |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2292&r=lab |
| By: | Eliasson, Kent (National Institute for Working Life) |
| Abstract: | We estimate the causal effect on earnings of graduating from old universities rather than new universities/university colleges. The study is based on Swedish administrative data that is comparatively rich in terms of school grades, parental characteristics and other attributes. Despite the more favorable conditions at old universities in terms of factors related to college quality, we find no significant difference in estimated earnings between graduates from the two groups of colleges. This finding holds for male and female sub-samples covering all majors, as well as male and female sub-samples covering two broad fields of education. The results are robust with regard to different methods of propensity score matching and regression adjustment. The results furthermore indicate little sensitivity with regard to the empirical support in the data and alternative model specifications. |
| Keywords: | College choice; earnings; propensity score matching |
| JEL: | A22 C14 I21 J31 |
| Date: | 2006–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0692&r=lab |
| By: | Hujer, Reinhard; Zeiss, Christopher |
| Abstract: | "Job creation schemes have been one of the most important programmes of active labour market policy in Germany throughout the 1990s and into the first decade of the new century. A number of studies have analysed the effects of job creation schemes in Germany, presenting an overall disappointing picture. JCS seem to perform poorly in improving the employability or the chances of leaving unemployment for the participating individuals. The study extends the existing literature by an evaluation of JCS with the timing-of-events methodology in the duration context using administrative data for East Germany. The analysis is based on a multivariate mixed proportional hazard rate model that accounts for observable and unobservable characteristics. The results show that JCS increase the individual unemployment duration of the participants. The negative effect results from a locking-in effect and a strong negative effect after the programme has finished. Therefore, the results suggest that JCS do not improve the employment prospects for the participants." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Arbeitsbeschaffungsmaßnahme, Beschäftigungseffekte, Arbeitslosigkeitsdauer, Beschäftigungsfähigkeit, Arbeitsmarktchancen, Arbeitslose, berufliche Reintegration, IAB-Bewerberangebotsdatei, IAB-Beschäftigtenstichprobe, IAB-Maßnahmeteilnehmergrunddatei, Ostdeutschland, Bundesrepublik Deutschland |
| Date: | 2006–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200616&r=lab |
| By: | Dany LANG (LEREPS-GRES) |
| Abstract: | During the last years, there has been a growing interest for the Danish “flexicurity” system all over Europe. Following the European Commission, the subtle combination of flexibility and security chosen by the Danes would even be a matrix of inspiration for the reform of the European labour markets. This paper analyses the core elements of the Danish “model” to determine whether these views are relevant. The flexible labour market, the generous welfare system, and the active labour market policy are examined. We focus on the 1993 labour market reform, which is supposed to have triggered the remarkable decrease of unemployment that took place in Denmark since 1994. |
| Keywords: | Flexicurity, unemployment, labour market |
| JEL: | J40 J48 J50 J80 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:grs:wpegrs:2006-18&r=lab |
| By: | Eliasson, Kent (National Institute for Working Life) |
| Abstract: | This paper examines the effect on earnings of graduating from five different college groups. The study is based on an administrative data set unusually rich in terms of school grades, parental characteristics and other attributes. Contrary to most previous Swedish research, we find no systematic differences in estimated earnings between the college categories. This finding holds for all college graduates, for men and women separately and for graduates in two specific fields of education. The results indicate that an estimator of the earnings effects of college choice that does not properly adjust for ability is likely to be substantially biased. |
| Keywords: | College choice; ability; earnings; selection on observables |
| JEL: | A22 I21 J31 |
| Date: | 2006–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0691&r=lab |
| By: | Bennedsen, Morten (Department of Economics, Copenhagen Business School); Nielsen, Kasper (Department of Economics, Copenhagen Business School); Pérez-González, Francisco (Department of Economics, Copenhagen Business School); Wolfenzon, Daniel (Department of Economics, Copenhagen Business School) |
| Abstract: | This paper uses a unique dataset from Denmark to investigate (1) the role of family characteristics in corporate decision making, and (2) the consequences of these decisions on firm performance. We focus on the decision to appoint either a family or an external chief executive officer (CEO). We show that a departing CEO’s family characteristics have a strong predictive power in explaining CEO succession decisions: family CEOs are more frequently selected the larger the size of the family, the higher the ratio of male children and when the departing CEOs had only had one spouse. We then analyze the impact of family successions on performance. We overcome endogeneity and omitted variables problems of previous papers in the literature by using the gender of a departing CEO’s first-born child as an instrumental variable (IV) for family successions. This is a plausible IV as male first-child family firms are more likely to pass on control to a family CEO than female first-child firms, but the gender of the first child is unlikely to affect firms' performance. We find that family successions have a dramatic negative causal impact on firm performance: profitability on assets falls by at least 6 percentage points around CEO transitions. These estimates are significantly larger than those obtained using ordinary least squares. Finally, our findings demonstrate that professional nonfamily CEOs provide extremely valuable services to the organizations they work for. |
| Keywords: | Family firms; Successions; CEO turnover; governance |
| JEL: | G32 G34 M13 |
| Date: | 2005–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2005_021&r=lab |
| By: | Steffen Habermalz (Northwestern University and IZA Bonn) |
| Abstract: | This paper discusses the claim made in Altonji and Pierret (1997) and Lange (2005) that a high speed of employer learning indicates a low value of job market signaling. The claim is first discussed intuitively in light of Spence’s original model and then evaluated in a simple extension of a model developed in Altonji and Pierret (1997). The analysis provided indicates that, if employer learning is incomplete, a high speed of employer learning is not necessarily indicative of a low value of job market signaling. |
| Keywords: | employer learning, signaling |
| JEL: | I20 D8 J41 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2309&r=lab |
| By: | Suzanne Grazier (WELMERC, University of Wales at Swansea); Peter J. Sloane (WELMERC, University of Wales at Swansea and IZA Bonn) |
| Abstract: | Many studies show that women are more risk averse than men. In this paper, following DeLeire and Levy (2004) for the US, we use family structure as a proxy for the degree of risk aversion to test the proposition that those with strong aversion to risk will make occupational choices biased towards safer jobs. In line with DeLeire and Levy we find that women are more risk averse than men and those married with children are more risk averse than those without. However, the effect on the degree of gender segregation is much smaller than for the US. |
| Keywords: | accident risk, gender segregation, family status, occupational choice |
| JEL: | J0 J2 K2 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2302&r=lab |
| By: | J. Ignacio Conde-Ruiz (Spanish Prime Minister's Economic Bureau and FEDEA); Vincenzo Galasso (IGIER, Università Bocconi, CSEF and CEPR); Paola Profeta (Università Bocconi) |
| Abstract: | We provide a long term perspective on the individual retirement behavior and on the future of retirement. In a Markovian political economic theoretical framework, in which incentives to retire early are embedded, we derive a political equilibrium with positive social security contribution rates and early retirement. While aging has opposite economic and political effects on social security contributions, it may lead to postponing retirement -- by reducing the generosity of pension benefits -- unless the political effect leads to a large increase in contribution and hence higher benefits. Economic slowdowns, captured by a reduction in wage income in youth, will also induce workers to postpone retirement and to vote for less social security |
| Keywords: | pensions, income effect, tax burden, politico-economic Markovian equilibrium |
| JEL: | H53 H55 D72 |
| Date: | 2006–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:165&r=lab |
| By: | Nil Demet Güngör (Atilim University); Aysit Tansel (Middle East Technical University and IZA Bonn) |
| Abstract: | The emigration of skilled individuals from Turkey attracted greater media attention and the interest of policymakers in Turkey, particularly after the experience of recurrent economic crises that have led to an increase in unemployment among the highly educated young. This study estimates a model of return intentions using a dataset compiled from an Internet survey of Turkish students residing abroad. The findings of this study indicate that, as expected, higher salaries offered in the host country and lifestyle preferences, including a more organized environment in the host country, increase the probability of student non-return. However, the analysis also points to the importance of prior return intentions and the role of the family in the decision to return to Turkey or stay overseas. It is also found that the compulsory service requirement attached to government scholarships increases the probability of student return. Turkish Student Association membership also increases return intentions. Longer stay durations, on the other hand, decrease the probability of return. These findings have important policy implications. |
| Keywords: | student non-return, brain drain, return intentions, Turkey |
| JEL: | F20 F22 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2287&r=lab |