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on Labour Economics |
| By: | Vincent Bodart (Université catholique de Louvain); Olivier Pierrard (Central Bank of Luxembourg and Université catholique de Louvain); Henri R. Sneessens (Université catholique de Louvain, Université catholique de Lille and IZA Bonn) |
| Abstract: | RBC models with search unemployment and wage renegotiation generate too much wage volatility and too stable unemployment rate. Shimer (2004) shows that it is possible to reproduce a volatility of unemployment similar to that observed in actual economies by imposing full real wage rigidity. We use a similar model but with Calvo wage contracts and we obtain a microfounded equation of real wage rigidities. The models with full wage flexibility or full wage rigidity are obtained as particular cases. We show that a contract length of about six quarters fits best the observed cyclical properties of wages and unemployment. |
| Keywords: | search unemployment, Calvo wage, cyclical properties |
| JEL: | E24 E32 J30 J41 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2521&r=lab |
| By: | Isik U. Zeytinoglu; Margaret Denton |
| Abstract: | The goal of this project was to assist health system managers and policy makers develop policies and strategies to recruit and retain human resources in the homecare sector and have a satisfied, healthy workforce. The overall research question was: How do the work characteristics of homecare workers and the work environment in homecare contribute to job satisfaction, stress, physical health, and retention? The research is designed as a mixed-method approach with both qualitative and quantitative data. Results showed that restructuring and organizational change in the homecare sector has contributed to both mental and physical health problems (including job stress and musculoskeletal disorders), job dissatisfaction, and retention problems. Factors that contribute to higher levels of satisfaction and the propensity to stay with the organization include organizational and peer support, working one-on-one with clients, doing emotional labour (that is, the work involved in dealing with other people’s feelings), and satisfaction with schedules, pay, and benefits. This study also examined the association between job flexibility and job insecurity and self-reported musculoskeletal disorders and found no relationship between these variables and musculoskeletal disorders. |
| Keywords: | home care workers, job satisfaction, retention |
| JEL: | I11 J22 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:qseprr:412&r=lab |
| By: | Lorenzo Cappellari (Catholic University of Milan and IZA Bonn); Marco Leonardi (University of Milan and IZA Bonn) |
| Abstract: | This paper develops a tractable empirical approach to estimate the effect of on-the-job tenure on the permanent and the transitory variance of earnings. The model is also used to evaluate earnings instability associated with fixed-term contracts (short-tenure contracts) in Italy. Our results indicate that each year of tenure on the job reduces earnings instability on average by 15%. Workers on a fixed-term contract on average have an earnings instability 10% higher than workers on a permanent contract. Workers who spend their entire working life on fixedterm contracts can expect an earnings instability twice as high. |
| Keywords: | earnings instability, earnings dynamics, tenure, temporary contracts, minimum distance estimation |
| JEL: | C23 J21 J31 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2527&r=lab |
| By: | Andrew E. Clark (PSE and IZA Bonn); Ed Diener (University of Illinois at Urbana-Champaign and Gallup Organization); Yannis Georgellis (Brunel University); Richard E. Lucas (Michigan State University) |
| Abstract: | We look for evidence of habituation in twenty waves of German panel data: do individuals, after life and labour market events, tend to return to some baseline level of wellbeing? Although the strongest life satisfaction effect is often at the time of the event, we find significant lag and lead effects. We conclude that there is complete adaptation to divorce, widowhood, birth of first child, and layoff. However, adaptation to marriage is only incomplete, and there is no adaptation to unemployment for men. In general, men are more affected by labour market events (unemployment and layoffs) than are women. Last, we find no consistent evidence that happiness provides insurance against hard knocks: those with high and low baseline satisfaction levels are broadly equally affected by labour market and life events. |
| Keywords: | life satisfaction, anticipation, habituation, baseline satisfaction, labour market and life events |
| JEL: | I31 J12 J13 J63 J64 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2526&r=lab |
| By: | Ana Rute Cardoso (IZA Bonn and University of Minho); Dorte Verner (World Bank) |
| Abstract: | This paper aims at identifying the major drop-out and push-out factors that lead to school abandonment in an urban surrounding, the shantytowns of Fortaleza, Northeast Brazil. We use an extensive survey addressing risk factors faced by the population in these neighborhoods, which covered both in-school and out-of-school youth, of both genders. The role of early parenthood, child labor, and poverty in pushing teenagers out of school is subject to particular attention. The potential endogeneity of some of the determinants is dealt with in the empirical analysis. We take advantage of the rich set of variables available and apply an instrumental variables approach. Early parenthood is instrumented with the age declared by the youngsters as the ideal age to start having sexual relationships; work is instrumented using the declared reservation wage (minimum salary acceptable to work). Results indicate that early parenthood has a strong impact driving teenagers out of school. Extreme poverty is another factor lowering school attendance, as children who have suffered hunger at some point in their lives are less likely to attend school. In this particular urban context, working does not necessarily have a detrimental effect on school attendance, which could be linked to the fact that dropping out of school leads most often to inactivity, and not to work. |
| Keywords: | school drop-out, investment in human capital, education, development, Latin America, Brazil |
| JEL: | I21 O15 D1 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2515&r=lab |
| By: | Peter A. Riach (IZA Bonn (Research Fellow)); Judith Rich (University of Portsmouth and IZA Bonn) |
| Abstract: | In a field experiment of age discrimination, pairs of men aged twenty-seven and forty-seven, inquired, by email, about employment as waiters in twenty four French towns. The rate of net discrimination found against the older French waiter, corresponds to the highest rates ever recorded anywhere, by written tests, for racial discrimination. Discrimination was higher in Paris than in the rest of France. |
| Keywords: | age, discrimination, employment, field experiment, hiring |
| JEL: | J71 C93 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2522&r=lab |
| By: | Armin Falk (IZA Bonn, University of Bonn and CEPR); David Huffman (IZA Bonn); Uwe Sunde (IZA Bonn, University of Bonn and CEPR) |
| Abstract: | Standard search theory assumes that individuals know, with certainty, how they compare to competing searchers in terms of ability. In contrast, we hypothesize that searchers are uncertain about relative ability, with important implications for search behavior. We test our hypotheses in a laboratory experiment. The first main finding is that people are substantially uncertain about whether they are a type with a high or low probability of success, determined by being above or below the median in terms of ability. Self-confidence, defined as an individual’s self-assessed probability of being a high type, is too high (above zero) for many low types, and too low (below 1) for many high types. Second, people update beliefs based on search outcomes. Self-confidence increases or decreases in the right direction, but is less sensitive to new information than predicted by Bayes’ rule. Third, updating affects future search decisions: people are less likely to search as confidence about being a high type falls. Fourth, some search too little, and others search too much, due to wrong beliefs. Fifth, at the end of the experiment a substantial fraction turn down the chance to learn their exact rank. These are overwhelmingly those with low ability, suggesting an aversion to learning that one is one of the worst performers. Given that people are uncertain even in the simple setting of our experiment, our evidence strongly suggests that uncertainty about ability is relevant in more complex, real-world search settings, including search for a job or search for a mate. Focusing on the case of job search, we discuss how our findings can provide a new explanation for various important stylized facts from field evidence. |
| Keywords: | search, self-confidence, discouraged workers, unemployment, gender |
| JEL: | J64 D01 D83 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2525&r=lab |
| By: | David G. Blanchflower (Dartmouth College, NBER, Bank of England and IZA Bonn); Alex Bryson (Policy Studies Institute and Centre for Economic Performance); John Forth (National Institute of Economic and Social Research) |
| Abstract: | There was a time before the first Workplace Industrial Relations Survey (WIRS80) in 1980 when what we knew of industrial relations was based primarily upon small scale surveys and case studies. WIRS80 marked a radical departure in the study of industrial relations for two reasons. First, following in the footsteps of a small number of survey forerunners, it sought to ‘map’ industrial relations in Britain with nationally-representative large-scale surveys of workplace managers, thus permitting investigation of the incidence of practices and changes over time. Second, it focused on industrial relations institutions and outcomes, linking them to the processes of industrial relations that had been the chief focus of studies up until that point. This paper reflects on some of what we have learned in the five surveys over the quarter century since 1980, focusing selectively on the demise of collective IR, pay determination, union wage effects, variable pay, the climate of employment relations and union effects on employment growth. |
| Keywords: | trade unions, wages, employment, growth |
| JEL: | J51 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2518&r=lab |
| By: | Bernd Frick; Carlos Pestana Barros; José Passos |
| Abstract: | This article analyzes how long head coaches survive in the clubs of the first German football league (“Bundesliga”), where the dismissal of a presumably weak coach is a generally adopted procedure in case of a poor sporting performance of the team. We use duration models for repeated events to accommodate the correlation within individuals. We find that the head coaches of successful teams and those working during the more recent “three points rule” period are more likely to survive in the Bundesliga. Moreover, the head coaches of clubs with relatively high team wage bills are likely to survive for shorter periods of time. |
| Keywords: | Duration Models; Head Coach Dismissal; Soccer; Bundesliga; Germany |
| JEL: | L83 M12 M51 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp372006&r=lab |
| By: | Ana Rute Cardoso (IZA and University of Minho); Miguel Portela (Tinbergen Institute, NIPE-University of Minho and IZA); Carla Sá (Tinbergen Institute and NIPE-University of Minho); Fernando Alexandre (NIPE-University of Minho) |
| Abstract: | The Bologna process aims at creating a European Higher Education Area where intercountry mobility of students and staff, as well as workers holding a degree, is facilitated. While several aspects of the process deserve wide public support, the reduction of the length of the first cycle of studies to three years, in several continental European countries where it used to last for four or five years, is less consensual. The paper checks the extent of public confidence in the restructuring of higher education currently underway, by looking at its implications on the demand for academic programs. It exploits the fact that some programs have restructured under the Bologna process and others have not, in Portugal. Precise quantification of the demand for each academic program is facilitated by the rules of access to higher education, in a nation-wide competition, where candidates must list up to six preferences of institution and program. We use regression analysis applied to count data, estimating negative binomial models. Results indicate that the programs that restructured to follow the Bologna principles were subject to higher demand than comparable programs that did not restructure, as if Bologna were understood as a quality stamp. This positive impact was reinforced if the institution was a leader, i.e. the single one in the country that restructured the program. Still an additional increase in demand was experienced by large programs that restructured to offer an integrated master degree, thus conforming to Bologna principles while not reducing the program duration. |
| Keywords: | education policy, European Higher Education Area, economic, social and cultural integration, count data |
| JEL: | I28 I21 F15 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2532&r=lab |
| By: | Kenn Ariga (Kyoto University); Giorgio Brunello (Padova University, Kyoto University, CESifo and IZA); Roki Iwahashi (University of the Ryukyus, Okinawa); Lorenzo Rocco (Padova University) |
| Abstract: | During the postwar period, many countries have de-tracked their secondary schools, based on the view that early tracking was unfair. What are the efficiency costs, if any, of de-tracking schools? To answer this question, we develop a two skills - two jobs model with a frictional labour market, where new school graduates need to actively search for their best match. We compute optimal tracking length and the output gain/loss associated to the gap between actual and optimal tracking length. Using a sample of 18 countries, we find that: a) actual tracking length is often longer than optimal, which might call for some efficient de-tracking; b) the output loss of having a tracking length longer or shorter than optimal is sizeable, and close to 2 percent of total net output. |
| Keywords: | mismatch, school tracking |
| JEL: | I2 J6 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2534&r=lab |
| By: | Vincent Bodart (Université catholique de Louvain); Gregory De Walque (National Bank of Belgium); Olivier Pierrard (Central Bank of Luxembourg and Université catholique de Louvain); Henri R. Sneessens (Université catholique de Louvain, Université catholique de Lille and IZA Bonn); Raf Wouters (National Bank of Belgium) |
| Abstract: | In this paper, we propose a search and matching model with nominal stickiness à la Calvo in the wage bargaining. We analyze the properties of the model, first, in the context of a typical real business cycle model driven by stochastic productivity shocks and second, in a fully specified monetary DSGE model with various real and nominal rigidities and multiple shocks. The model generates realistic statistics for the important labor market variables. |
| Keywords: | DSGE, search and matching, nominal wage rigidity, monetary policy |
| JEL: | E31 E32 E52 J64 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2528&r=lab |
| By: | Anzelika Zaiceva (IZA Bonn) |
| Abstract: | This paper briefly reviews the existing literature on potential migration into the enlarged European Union, reconciles the results with recent evidence and presents an additional migration scenario. The estimation procedure accounts for both sending and receiving countries' unobserved heterogeneity, and in the simulations a counterfactual scenario is calculated, in which all EU member states introduce free movement of workers simultaneously in 2011. The results suggest that the overall level of migration from the East will amount to around 1 per cent of the EU15 population within a decade after enlargement, and that the legal introduction of free movement of workers will not increase immigration significantly. These findings are compared both with the previous literature and emerging evidence. |
| Keywords: | migration extrapolations, EU enlargement, panel data |
| JEL: | F22 J11 J61 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2519&r=lab |
| By: | Holger Bonin (IZA and DIW Berlin); Ulf Rinne (IZA and Free University of Berlin) |
| Abstract: | The paper studies the causal impact of participation in an active labor market program - the ‘Beautiful Serbia’ program providing training and temporary work in the construction sector in Serbia and Montenegro - on measures of subjective well-being approximating individual welfare. According to our estimates, the positive impact of this particular program appears much stronger judged by subjective well-being than judged by the immediate labor market effect. |
| Keywords: | subjective well-being, program evaluation, Serbia and Montenegro |
| JEL: | J68 H43 P27 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2533&r=lab |
| By: | Peter S. Heller |
| Abstract: | Many Asian countries (such as China, Singapore, Korea, Thailand, Malaysia, Indonesia, India, and the Philippines) will experience a significant aging of their populations during the next several decades. This paper explores how these aging Asian countries are addressing and anticipating the challenges of an aging society. It suggests that Asia's preparedness for an aging population is decidedly mixed. While growth policies have been successful, much work is still needed in many countries to establish an adequate and farsighted policy framework in the areas of pensions, health insurance, and labor market policies. |
| Date: | 2006–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/272&r=lab |
| By: | Nanak Kakwani; Marcelo Neri; Hyun H. Son |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:epgewp:634&r=lab |
| By: | John Micklewright (S3RI, University of Southampton and IZA Bonn); Sylke V. Schnepf (S3RI, University of Southampton and IZA Bonn) |
| Abstract: | Within-country differences in educational outcomes are compared for a large group of industrialised countries. We investigate where inequality is greatest, the association between inequality in learning and average levels of learning, the interpretation of measured levels of inequality, and differences in inequality at the top and bottom of the national distributions. Our analysis is based on test score data for 21 countries present in the Trends in International Mathematics and Science Study (TIMSS), the Programme for International Student Assessment (PISA), and the Progress in International Reading Literacy Study (PIRLS). The use of three different surveys avoids reliance on a single source. |
| Keywords: | inequality, learning, education, TIMSS, PISA, PIRLS |
| JEL: | D39 I21 I39 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2517&r=lab |
| By: | Laura Zimmermann (University of Oxford and IZA); Klaus F. Zimmermann (IZA, Bonn University and DIW Berlin); Amelie Constant (IZA, Georgetown University and DIW DC) |
| Abstract: | This paper uses the concept of ethnic self-identification of immigrants in a two-dimensional framework. It acknowledges the fact that attachments to the home and the host country are not necessarily mutually exclusive. There are three possible paths of adjustment from separation at entry, namely the transitions to assimilation, integration and marginalization. We analyze the determinants of ethnic self-identification in this process using samples of first-generation immigrants for males and females separately, and controlling for pre- and post-migration characteristics. We find strong gender differences and the unimportance of a wide range of pre-migration characteristics like religion and education at home. |
| Keywords: | ethnic self-identification, first-generation immigrants, gender, ethnicity |
| JEL: | F22 J15 J16 Z10 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2535&r=lab |
| By: | Fredrik Carlsen (Department of Economics, Norwegian University of Science and Technology); Jørn Rattsø (Department of Economics, Norwegian University of Science and Technology); Bjørg Langset (Research Department, Statistics Norway); Lasse Stambøl (Research Department, Statistics Norway) |
| Abstract: | We use surveys in which respondents evaluate local amenities in Norway to compute proxy variables for the quality of local public services as well as other local amenities relevant to location decisions. Average satisfaction reported by the respondents is computed for each amenity and each municipality, adjusted for sample variation in personal characteristics and included as explanatory variables in a cross-section study of house prices. We find that house prices are increasing in satisfaction with health care, cultural activities and public transportation, suggesting that the quality of local public services indeed affects the attractiveness of a residential site. When the analysis is repeated with input measures of service levels instead of satisfaction variables, we find no effects of local public services on house prices, indicating that traditional Tiebout studies based on input measures may have underestimated the importance of local public services for location decisions. |
| Keywords: | Capitalization; Local public services; Survey data |
| JEL: | R23 |
| Date: | 2006–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:nst:samfok:8106&r=lab |
| By: | Holger Bonin (IZA and DIW Berlin); Amelie Constant (IZA, Georgetown University and DIW DC); Konstantinos Tatsiramos (IZA); Klaus F. Zimmermann (IZA, Bonn University and DIW Berlin) |
| Abstract: | The paper investigates the role of social norms as a determinant of individual attitudes by analyzing risk proclivity reported by immigrants and natives in a unique representative German survey. We employ factor analysis to construct measures of immigrants’ ethnic persistence and assimilation. The estimated effect of these measures on risk proclivity suggests that adaptation to the attitudes of the majority population closes the immigrantnative gap in risk proclivity, while stronger commitment to the home country preserves it. As risk attitudes are behaviorally relevant, and vary by ethnic origin, our results could also help explain differences in economic assimilation of immigrants. |
| Keywords: | risk attitudes, ethnic persistence, assimilation, second generation effects, gender |
| JEL: | D1 D81 F22 J15 J16 J31 J62 J82 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2537&r=lab |
| By: | Anzelika Zaiceva (IZA Bonn) |
| Abstract: | This paper investigates the causal effect of geographic mobility on income. The returns to German East-West migration and commuting are estimated, exploiting the structure of centrally planned economies and a "natural experiment" of German reunification for identification. I find that the migration premium is insignificantly different from zero, the returns for commuters equal to 40 per cent, and the local average treatment effects for compliers are insignificant. In addition, estimation results suggest no positive self-selection on unobservables for migrants, and some evidence of positive self-selection on unobservables for commuters. |
| Keywords: | returns to migration, causality, treatment effects |
| JEL: | F22 J61 R23 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2524&r=lab |
| By: | Maarten Lindeboom (Free University Amsterdam, Tinbergen Institute, HEB, Netspar and IZA Bonn); Ana Llena-Nozal (Free University Amsterdam and Tinbergen Institute); Bas van der Klaauw (Free University Amsterdam, Tinbergen Institute, CEPR and IZA Bonn) |
| Abstract: | This paper investigates the impact of parental education on child health outcomes. To identify the causal effect we explore exogenous variation in parental education induced by a schooling reform in 1947, which raised the minimum school leaving age in the UK. Findings based on data from the National Child Development Study suggest that postponing the school leaving age by one year had little effect on the health of their offspring. Schooling did however improve economic opportunities by reducing financial difficulties among households. We conclude from this that the effects of parental income on child health are at most modest. |
| Keywords: | returns to education, intergenerational mobility, health, regression-discontinuity |
| JEL: | I12 I28 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2516&r=lab |
| By: | Carlos Pestana Barrosa; Nicolas Peypoch; Jonathan Williams |
| Abstract: | This paper proposes a framework for benchmarking European co-operative banks and the rationalization of their operational activities. The analysis is based on the Luenberger productivity indicator. A key advantage of this method is that it allows for both input contraction and output expansion in determining relative efficiencies and productivity changes. Benchmarks are provided for improving the operations of those banks which perform worse than others. Several interesting and useful managerial insights and implications arise from the study. The general conclusion is that, between 1996 and 2003, productivity increased for the majority of European co-operative banks analyzed. |
| Keywords: | Europe; Co-operative banks; Luenberger productivity indicator. |
| JEL: | G21 D24 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp362006&r=lab |