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on Labour Economics |
| By: | Sullivan, Paul |
| Abstract: | This paper examines career choices using a dynamic structural model that nests a job search model within a human capital model of occupational and educational choices. Individuals in the model decide when to attend school and when to move between firms and occupations over the course of their career. Workers search for suitable wage and non-pecuniary match values at firms across occupations given their heterogeneous skill endowments and preferences for employment in each occupation. Over the course of their careers workers endogenously accumulate firm and occupation specific human capital that affects wages differently across occupations. The parameters of the model are estimated with simulated maximum likelihood using data from the 1979 cohort of the National Longitudinal Survey of Youth. The structural parameter estimates reveal that both self-selection in occupational choices and mobility between firms account for a much larger share of total earnings and utility than the combined effects of firm and occupation specific human capital. Eliminating the gains from matching between workers and occupations would reduce total wages by 31%, eliminating the gains from job search would reduce wages by 19%, and eliminating the effects of firm and occupation specific human capital on wages would reduce wages by only 2.8%. |
| Keywords: | occupational choice; job search; human capital; dynamic programming models |
| JEL: | J24 J62 I21 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3896&r=lab |
| By: | Shihe Fu (Southwestern University of Finance and Economics (China)); Stephen L. Ross (University of Connecticut) |
| Abstract: | The correlation between wage premia and concentrations of firm activity may arise due to agglomeration economies or workers sorting by unobserved productivity. A worker's residential location is used as a proxy for their unobservable productivity attributes in order to test whether estimated work location wage premia are robust to the inclusion of these controls. Further, in a locational equilibrium, identical workers must receive equivalent compensation so that after controlling for residential location (housing prices) and commutes workers must be paid the same wages and only wage premia arising from unobserved productivity differences should remain unexplained. The models in this paper are estimated using a sample of male workers residing in 33 large metropolitan areas drawn from the 5% Public Use Microdata Sample (PUMS) from the 2000 U.S. Decennial Census. We find that wages are higher when an individual works in a location that has more workers or a greater density of workers. These agglomeration effects are robust to the inclusion of residential location controls and disappear with the inclusion of commute time suggesting that the effects are not caused by unobserved differences in worker productivity. Extended model specifications suggest that wages increase with the education level of nearby workers and the concentration of workers in an individual's own industry or occupation. |
| Keywords: | Agglomeration, Wages, Sorting, Locational Equilibrium, Human Capital |
| JEL: | R13 R30 J24 J31 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2007-26&r=lab |
| By: | Weichselbaumer, Doris; Winter-Ebmer, Rudolf; ZweimÃÂüller, Martina |
| Abstract: | Two very different approaches are used to explore the relation between market orientation and gender wage differentials in international data. More market orientation might be related to gender wage gaps via its effects on competition in product and labour markets and the general absence of regulation in the economy. The first approach employs meta-analysis data and takes advantage of the fact that many studies already exist which use national data sources to the best possible extent. The second approach uses comparable micro data from the International Social Survey Programme (ISSP), which allows calculating internationally consistent gender wage residuals in the first place. By comparing these two very different methods of data collection we get a robust result relating higher levels of market orientation as proxied by the Economic Freedom Index with lower gender wage gaps. |
| Keywords: | competition; Gender wage gap; market orientation |
| JEL: | J16 J31 J71 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6388&r=lab |
| By: | Christine Jolls |
| Abstract: | Legal rules governing the employer-employee relationship are many and varied. Economic analysis has illuminated both the efficiency and the effects on employee welfare of such rules, as described in this paper. Topics addressed include workplace safety mandates, compensation systems for workplace injuries, privacy protection in the workplace, employee fringe benefits mandates, targeted mandates such as medical and family leave, wrongful discharge laws, unemployment insurance systems, minimum wage rules, and rules requiring that employees receive overtime pay. Both economic theory and empirical evidence are considered. |
| JEL: | J08 J18 J38 K00 K31 K32 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13230&r=lab |
| By: | Dagsvik John. K.; Locatelli Marilena (University of Turin); Strom Steinar (University of Turin) |
| Abstract: | This paper analyzes the properties of a particular sectoral labor supply model developed and estimated in Dagsvik and StrÃÂøm (2006). Agents have preferences over sectors and latent job attributes. Moreover, the model allows for a representation of the individual choice sets of feasible jobs in the economy. The properties of the model are explored by calculating elasticities and through simulations of the effects of particular tax reforms. The overall wage elasticities are rather small, but these small elasticities shadow for much stronger sectoral responses. An overall wage increase and, of course, a wage increase in the private sector only, gives women an incentive to shift their labor supply from the public to the private sector. Marginal tax rates were cut considerably in the 1992 tax reform. We find that the impact on overall labor supply is rather modest, but again these modest changes shadow for stronger sectoral changes. The tax reform stimulated the women to shift their labor from the public to the private sector and to work longer hours. A calculation of mean compensated variation shows that the richest households benefited far more from the 1992 tax reform than did the poorest households. |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:200706&r=lab |
| By: | Conny Wunsch |
| Abstract: | Labour market policies for the unemployed combine passive income support with active measures that aim at improving jobseekers' employment prospects. This paper extends the theoretical framework developed by Pavoni and Violante (2005a) for the optimal choice between different active and passive policies for the unemployed to a setting which allows for the use of a job search assistance programme that affects the exit rate to employment by raising search effectiveness but not productivity in the job. These programmes are one of the most widely used activation measures in OECD countries and should, therefore, be taken into account when considering the optimal design of labour market policies. The enriched model allows to answer a wide range of interesting policy questions. It is used to assess the optimality of the West German policy in the period 2000-2002 as well as the benefits from introducing tight monitoring. It is shown that sizeable budget savings could have been realised by switching to the optimal scheme, but that the net gains from monitoring are only small. In addition, some interesting results on the optimal use of job search assistance and training are derived. It is shown that existing policies already share some but not all features of the optimal scheme. |
| Keywords: | Unemployment insurance, active labour market policies, recursive contracts, job search, human capital |
| JEL: | D82 J24 J64 J68 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:usg:dp2007:2007-26&r=lab |