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on Labour Economics |
| By: | Sîle O'DOrchai (DULBEA, Université libre de Bruxelles, Brussels); Robert Plasman (DULBEA, Université libre de Bruxelles, Brussels); François Rycx (DULBEA, Université libre de Bruxelles, Brussels, and IZA, Bonn) |
| Abstract: | Economic theory advances a number of reasons for the existence of a wage gap between part-time and full-time workers. Empirical work has concentrated on the wage effects of part-time work for women. For men, much less empirical evidence exists, mainly because of lacking data. In this paper, we take advantage of access to unique harmonised LEE data (i.e. the 1995 ESES) to investigate the magnitude and sources of the part-time wage penalty for male workers in six European countries (i.e. Belgium, Denmark, Ireland, Italy, Spain, and the UK). Findings show that the raw part-time wage gap for men fluctuates substantially across countries. They also suggest that policy initiatives to promote lifelong learning and training are of great importance to help part-timers catch up. Furthermore, except for Italy, they point to a persisting problem of occupational and sectoral segregation between men working part-time and full-time which requires renewed policy attention. |
| Keywords: | work status, part-time employment, wage gap, decomposition, human capital, segregation. |
| JEL: | C13 C31 J24 J31 J71 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:07-02rs&r=lab |
| By: | Benoit Dostie (IEA, HEC Montréal) |
| Abstract: | In this article, we estimate age based wage and productivity differentials using linked employer-employee Canadian data from the Workplace and Employee Survey 1999-2003. Data on the firm side is used to estimate production functions taking into account the age profile of the firm’s workforce. Data on the workers’ side is used to estimate wage equations that also depend on age. Results show concave age-wage and age-productivity profiles. Wage-productivity comparisons show that the productivity of workers aged 55 and more with at least an undergraduate degree is lower than their wages. For other groups, we find that wages do not deviate significantly from productivity estimates. |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iea:carech:0615&r=lab |
| By: | E. VERHOFSTADT; H. DE WITTE; E. OMEY |
| Abstract: | In this paper we test whether starters in a stressful job get a compensation for the burden they face. The compensating wage differentials model predicts a wage compensation for accepting a job with high workload. The Karasek model (1979) highlights the importance of a balance between demands and control in the job. The combination of both models leads to the hypothesis that the wage compensation for high workload will be lower in a job with high autonomy. The selectivity corrected estimations do not confirm this hypothesis. So, entrants on the labour market who start in a stressful job are in a problematic position as they are not compensated for this burden. |
| Keywords: | job-demand-control model of Karasek, wage compensation, stress |
| JEL: | J31 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:07/436&r=lab |
| By: | Görg, Holger; Strobl, Eric; Walsh, Frank |
| Abstract: | While foreign-owned firms have consistently been found to pay higher wages than domestic firms to what appear to be equally productive workers, the causes of this remain unresolved. In a two-period bargaining framework we show that if training is more productive and specific in foreign firms, foreign firm workers will have a steeper wage profile and thus acquire a premium over time. Using a rich employer-employee matched data set we verify that the foreign wage premium is only acquired by workers over time spent in the firm and only by those that receive on the job training, thus providing empirical support for a firm specific human capital acquisition explanation. |
| Keywords: | foreign firms; on-the-job training; wages |
| JEL: | F23 J24 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6171&r=lab |
| By: | Hyder, Asma |
| Abstract: | This paper examines the magnitude of public/private wage differentials in Pakistan using data drawn from the 2001-02 Labour Force Survey. Pakistan Labour Force Survey is a nationwide survey containing micro data from all over the country containing demographic and employment information. As in many other countries, public sector workers in Pakistan tend to have higher average pay and educational levels as compared to their private sector counterparts. First, this paper presents the inter-sectoral earning equations for the three main sectors of the economy, i.e., public, private, and state-owned enterprises. These results are further decomposed into “treatment” and “endowment effect”. To examine the role of human capital in wage gap, the rate of return to different levels of schooling is calculated. These rates of return to education may be important for policy formulation. The relative earning share is also worked out to look into the distribution of wages across the occupational categories. The earning equations are estimated with and without correction for selectivity, which is also the main objective of the study, i.e., to find out if any non-random selection is taking place within these three sectors of employment. |
| Keywords: | Wage Differentials; Rate of Return to Education; Public Sector; Labour Markets |
| JEL: | J45 J24 J32 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2224&r=lab |
| By: | Boman, Anders (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Displaced workers are followed for ten years in order to analyse the earnings effects from internal migration. We utilise a large dataset containing all workers in Sweden who were displaced during 1987 or 1988. Effects from migration are investigated controlling for human capital, family, and labour market characteristics. Internal migration has positive earnings effects for men, while the consequences for women are in general negative or non-existent. Positive effects for immigrant men occur several years after migration, implying that long term effects are important to migrants and showing the importance of using a long observation period in migration studies. <p> |
| Keywords: | internal migration; earnings effects; job displacement |
| JEL: | J31 J61 J65 |
| Date: | 2007–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0244&r=lab |
| By: | I.U. Zeytinoglu; G.B. Cooke; K. Harry |
| Abstract: | This paper provides evidence of on-the-job training among older workers in Canada. It also examines the effect of age associated with on-the-job training. Statistics Canada’s Workplace and Employee Survey (WES) 2001 data, linking employee responses to workplace (i.e. employer) responses are used. Three quarters of workers are categorized as middle aged, with about one in ten being younger and one in five considered to be older. Only 32% of Canadian workers received on-the-job training in the year preceding this survey. When separating workers into the three age categories, 37%, 34%, and 24% of younger, middle-aged, and older workers, respectively, received on-the-job training in that year. Logistic regression analysis results showed that, controlling for workplace, job and individual factors, as compared to middle-aged workers, older workers are significantly less likely to receive on-the-job training. The lack of on-the-job training for older workers should be a concern for policy makers at a time when labour shortages are being predicted. Older workers are healthier than ever and the provision of on-the-job training should be encouraged to retain older workers in the labour market in Canada. |
| Keywords: | older workers, on-the-job training, Workplace and Employment Survey |
| JEL: | J14 J18 J24 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:179&r=lab |
| By: | Pierre-Carl Michaud; Arthur van Soest |
| Abstract: | We look at the effect of the 2000 repeal of the earnings test above the normal retirement age on retirement expectations of workers in the Health and Retirement Study, aged 51 to 61 in 1992. For men, we find that those whose marginal wage rate increased when the earnings test was repealed, had the largest increase in the probability to work full-time past normal retirement age. We do not find significant evidence of effects of the repeal of the earnings test on the probability to work past age 62 or the expected claiming age. On the other hand, for those reaching the normal retirement age, deviations between the age at which Social Security benefits are actually claimed and the previously reported expected age are more negative in 2000 than in 1998. Since our calculations show that the tax introduced by the earnings test was small when accounting for actuarial benefit adjustments and differential mortality, our results suggest that although male workers form expectations in a way consistent with forward-looking behavior, they misperceive the complicated rules of the earnings test. Results for females suggest similar patterns but estimates are imprecise. |
| Keywords: | social security earnings test, expectations, retirement, difference in differences, panel data |
| JEL: | H55 J22 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:174&r=lab |
| By: | Alan L. Gustman; Thomas Steinmeier |
| Abstract: | This paper examines retirement and related behavioral responses to policies that on average are actuarially neutral. Many conventional models predict that actuarially neutral policies will not affect retirement behavior. In contrast, our model allows those with high time preference rates to find that the promise of an actuarially fair increase in future rewards does not balance the loss from foregone current benefits. Using data from the Health and Retirement Study, we find that from age 62 through full retirement age, the earnings test reduces full-time work by married men by about four percentage points, or by about ten percent of married men at full-time work. Abolishing the requirements on many jobs that an individual work full-time or not at all, what we term a minimum hours constraint on employment, would induce more than twice as many people to enter partial retirement as would leave full-time work, so that total full-time equivalent (FTE) employment would increase, although by a modest amount. If all benefits from personal accounts could be taken as a lump sum, the fraction not retired at age 62 would fall by about 5 percentage points compared to a system where there is mandatory annuitization of benefits. |
| JEL: | D31 D91 E21 H55 I3 J08 J14 J26 J32 J38 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12958&r=lab |
| By: | Lorenzo Cappellari (DISCE, Università Cattolica); Marco Leonardi (Dipartimento di Studi del Lavoro, Università di Milano) |
| Abstract: | This paper develops a tractable empirical approach to estimate the effect of on-the-job tenure on the permanent and transitory variance of earnings. The model is also used to evaluate the earnings instability associated with fixed-term contract (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 fixed-term 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: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie4:ieil48&r=lab |
| By: | Benoit Dostie (IEA, HEC Montréal); David Sahn |
| Abstract: | In this paper, we estimate a model of labor market dynamics among individuals in Romania using panel data for three years, 1994 to 1996.Our motivation is to gain insight into the functioning of the labor market and how workers are coping during this period of economic liberalization and transformation that began in 1990. Our models of labor market transitions for men and women examine changing movements in and out of employment, unemployment, and self-employment, and incorporate specific features of the Romanian labor market, such as the social safety net. We take into account demographic characteristics, state dependence, and individual unobserved heterogeneity by modeling the employment transitions with a dynamic mixed multinomial logit. |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:iea:carech:0617&r=lab |
| By: | Mideksa, Torben |
| Abstract: | This paper investigates the impact of skilled immigrants on the welfare the host natives. By employing the idea of induced technical change, and the skilled wage premium, this paper tries to link skilled immigration with observed rise in college enrolment, rise in skilled wages, and further acceleration of skilled wage premium. Through creation of demand for skill complimenting capital goods, skilled immigration raise the incentive for skill directed technical change which fuel up skilled wage in North, international wage differential, and the incentive for human capital formation. The results of the model are consistent with broad empirical regularities observed for three decades or more. |
| Keywords: | Skilled immigration; technical change; human capital; economic growth. |
| JEL: | O41 J41 J31 O32 J61 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2168&r=lab |
| By: | Jean-Michel Grandmont (CREST, Malakoff Cédex, France) |
| Abstract: | This paper introduces efficiency wages designed to provide workers with incentives to make appropriate effort levels, and involuntary unemployment, along the pioneering lines of Negishi (1979), Solow (1979), Shapiro and Stiglitz (1984), in a dynamic model involving heterogeneous agents and financial constraints as in Woodford (1986) and Grandmont, Pintus and de Vilder (GPV, 1998). Effort varies continuously while there is unemployment insurance funded out of taxation of labour incomes. Increasing unemployment insurance is beneficial to employment along the deterministic stationary state, and can even in some cases lead to a Pareto welfare improvement for all agents, through general equilibrium effects, by generating higher individual real labour incomes, hence larger consumptions of employed and unemployed workers, and thus a higher production. On the other hand, the local (in)determinacy properties of the stationary state are opposite to those obtained in the competitive specification of the model (GPV, 1998) : local determinacy (indeterminacy) occurs for elasticities of capitalefficient labour substitution lower (larger) than a quite small bound. Increasing unemployment insurance is more likely to lead to local indeterminacy and thus to generate dynamic inefficiencies due to the corresponding expectations coordination failures. |
| Keywords: | Efficiency wages, involuntary unemployment, unemployment insurance, effort incentives, local indeterminacy, capital-labour substitution, local bifurcations. |
| JEL: | E24 E32 C62 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:60_06&r=lab |
| By: | Gautier, Pieter A; Wolthoff, Ronald |
| Abstract: | We study a search model where workers can apply to high and or low productivity firms. Firms that compete for the same candidate can increase their wage offers as often as they like. We show that if workers apply to two jobs, there is a unique symmetric equilibrium where workers mix between sending both applications to the high and sending both to the low productivity sector. But, efficiency requires that they apply to both sectors because a higher matching rate in the high-productivity sector can then be realized with fewer applications (and consequently fewer coordination frictions) if workers always accept the offer of the most productive sector. However, in the market the worker's payoff is determined by how much the firm with the second highest productivity is willing to bid. This is what prevents them from applying to both sectors. For many configurations, the equilibrium outcomes are the same under directed and random search. Allowing for free entry creates a second source of inefficiency. We discuss the effects of increasing the number of applications and show that our results can easily be generalized to N-firms. |
| Keywords: | simultaneous search; directed search; efficiency; heterogeneous firms |
| JEL: | D83 E24 J23 J24 J64 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6169&r=lab |
| By: | Viktor Pirmana (Department of Economics, Padjadjaran University) |
| Abstract: | This Research aims to analyze the earnings inequality in Indonesia and to know whether the earnings inequality can be explained by individual characteristic factors such as education and experience; location both urban-rural and province where individual reside and work; and based on socio-demography-economic characteristic. Furthermore, this research tries to know how big those factors contribute to the existing inequality, before and after crisis. Using data from SAKERNAS 1996, 1999, 2002, and 2004, the valid observation is about 145660 individual. Result of analysis clearly indicate that there are significant gender inequalities in earnings in Indonesia, based on education and experience; urban-rural location and province where individual reside and work and based on socio-demography-economic characteristic. The profile of earnings inequality by gender seems to be an “inverted U” fashion, with the male-female earnings gap narrowing as educational attainment went up, and reached a plateau at the “post-secondary level” and then tapered off. The analysis also suggests that the industrial affiliation of female workers matter.The result of estimating Mincerian earnings equation shows that such factor as human capital (years of schooling and experience); socio-demography-economic characteristic (being household’s head, gender, marriage status, work sector); and location factors (urban-rural and province which individual reside and work), significantly affects individual earning in Indonesia. Meanwhile, the result of decomposing this earnings inequality indicate that factor causing earnings inequality between “male” and “female” is about 41.6 percent caused by endowment differences. On the other hand, most of the gap about 58.4 percent attributed to unobserved and unexplained factors, rather than attributed to differences in observable endowments. |
| Keywords: | Earnings inequality, Decomposition analysis, SAKERNAS, Indonesia |
| JEL: | O15 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:unp:wpaper:200608&r=lab |
| By: | Giovanni Peri |
| Abstract: | As of 2004 California employed almost 30% of all foreign born workers in the U.S. and was the state with the largest percentage of immigrants in the labor force. It received a very large number of uneducated immigrants so that two thirds of workers with no schooling degree in California were foreign-born in 2004. If immigration harms the labor opportunities of natives, especially the least skilled ones, California was the place where these effects should have been particularly strong. But is it possible that immigrants raised the demand for California's native workers, rather than harming it? After all immigrants have different skills and tend to work in different occupations then natives and hence they may raise productivity and the demand for complementary production tasks and skills. We consider workers of different education and age as imperfectly substitutable in production and we exploit differences in immigration across these groups to infer their impact on US natives. In order to isolate the "supply-driven" variation of immigrants across skills and to identify the labor market responses of natives we use a novel instrumental variable strategy. Our estimates use migration by skill group to other U.S. states as instrument for migration to California. Migratory flows to other states, in fact, share the same "push" factors as those to California but clearly are not affected by the California-specific "pull" factors. We find that between 1960 and 2004 immigration did not produce a negative migratory response from natives. To the contrary, as immigrants were imperfect substitutes for natives with similar education and age we find that they stimulated, rather than harmed, the demand and wages of most U.S. native workers. |
| JEL: | F22 J31 J61 R23 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12956&r=lab |
| By: | Rita Asplund |
| Abstract: | This paper provides a brief overview of the Finnish wage bargaining system and its evolution over the past decades into its current mode by drawing on existing documents, reports and analyses. The emphasis is on the changes having occurred in the system’s over-all structure as well as in its main content. Finally attempts are made, by use of the existing empirical evidence, to contrast these changes against the development of wages and the unionisation rate. The paper concludes with a brief discussion of future challenges as ex-pressed in recent studies of the Finnish wage bargaining system. |
| Keywords: | collective agreement, Finland, wage bargaining |
| JEL: | J52 |
| Date: | 2007–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1077&r=lab |
| By: | E. VERHOFSTADT; H. DE WITTE; E. OMEY |
| Abstract: | Karasek (1979) defined a stressful job as a job with an imbalance between the demands of the job and the control one can exercise in that job (a ‘high strain job’). Previous research showed that starters in a high strain job are indeed less satisfied. They are also not compensated for the high workload they face. In this paper, we raise the question whether this strain (‘high strain job’) is only temporary. The results of our duration analysis show that those starting in a high strain job leave their job significantly sooner than those in an active job. However, this is no guarantee that the strain is only temporarily, since there is a significant probability of still having a high strain job at the age of 26. This finding determines our policy implication: the discussion on work stress should focus on those trapped in high strain jobs. |
| Keywords: | duration analysis, job-demand-control model of Karasek, job mobility |
| JEL: | J62 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:07/437&r=lab |
| By: | Pipit Pitriyan (Department of Economics, Padjadjaran University) |
| Abstract: | Employing child as a labor is categorized as a violation to the human right. But it seems unavoidable in developing country to prevent children entering labor market. Many extensive literatures on the determinant of child labor have been found, but yet, there is limited research on the impact of children work on socioeconomic outcomes. This paper investigates the impact of child labor on child’s education by using the Indonesian Labor Survey/SAKERNAS 2002 data at the district level. |
| Keywords: | Child Labor, Bivariate Probit, SAKERNAS, Indonesia |
| JEL: | I20 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:unp:wpaper:200609&r=lab |
| By: | Robert Elliott; Joanne Kathryn Lindley (Department of Economics, The University of Sheffield) |
| Abstract: | The economic performance and a related discussion on the existence, or otherwise, of racial discrimination in the UK labour market for migrants and ethnic minorities are of great interest to policymakers. In this paper we investigate the concept of occupational clustering as an explanation for the relatively poor earnings performance of non-white migrants and non-white natives. Although occupational clustering and other human capital and socio-economic factors provide a partial explanation for the raw earnings differential, evidence of ethnic based disadvantage persists. |
| Keywords: | Discrimination, earnings, occupation. |
| JEL: | J6 J7 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2006008&r=lab |
| By: | Khan, M. Ali Khan |
| Abstract: | The Harris-Todaro hypothesis replaces the equality of wages by the equality of ‘expected’ wages as the basic equilibrium condition in a segmented but homogeneous labour market, and in so doing it generates an equilibrium level of urban unemployment when a mechanism for the determination of urban wages is specified. This article reviews work in which the Harris-Todaro hypothesis is embedded in canonical models of trade theory in order to investigate a variety of issues in development economics. These include the desirability (or the lack thereof) of foreign investment, the complications of an informal sector, and the presence of clearly identifiable ethnic groups. |
| Keywords: | Harris-Todaro; Wages; Labour Economics; Labour Market; Rural to Urban Migration |
| JEL: | J3 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2201&r=lab |