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on Labour Economics |
| By: | Boudarbat, Brahim; Lemieux, Thomas; Riddell, W. Craig |
| Abstract: | This paper examines the evolution of the returns to human capital in Canada over the period 1980-2006. Most of the analysis is based on Census data, and on weekly wage and salary earnings of full-time workers. Our main finding is that the returns to education increased substantially for Canadian men between 1980 and 2000, in contrast to conclusions reached in previous studies. For example, the adjusted wage gap between men with exactly a bachelors’ degree and men with only a high school diploma increased from 34 percent to 43 percent during this period. Most of this rise took place in the early 1980s and late 1990s. Returns to education also rose for Canadian women, but the magnitudes of the increases were more modest. For instance, the adjusted BA-high school wage differential among women increased about 4 percentage points between 1980 and 1985 and remained stable thereafter. Results based on Labour Force Survey data show the upward trend in returns to education has recently been reversed for both men and women. Another important development is that after fifteen years of expansion (1980-1995), the return to work experience measured by the wage gap between younger and older workers declined between 1995 and 2000. Finally, we find little difference between measures based on means and those based on medians of log wages for both genders. Also, the use of broader earnings measures (such as including self-employment earnings, using weekly earnings of all workers, or using annual earnings of full-time workers) does not alter the main conclusions from the analysis based on weekly wage and salary earnings of full-time workers. |
| Keywords: | Human Capital, Wage Differentials, Returns to Education, Canada |
| JEL: | J24 J31 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-8&r=lab |
| By: | Drolet, Marie (Statistics Canada); Mumford, Karen A. (University of York) |
| Abstract: | Country-specific factors, such as the wage setting environment, are important determinants in explaining the relative size of the gender wage gap. This paper uses British and Canadian linked employer-employee data to investigate the importance of the workplace for the gender wage gap. Our main findings are that the unadjusted gender earnings gaps are similar between the two countries and that women, especially older women, are disproportionately represented in low-wage workplaces. Workplace effects, however, reduce the wage gap by 14.5% in Canada and increase the gap by 3.2% in Britain. |
| Keywords: | gender earnings gap, workplaces, Britain, Canada |
| JEL: | J16 J0 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3957&r=lab |
| By: | Autor, David (MIT); Dorn, David (Boston University) |
| Abstract: | High- and low-wage occupations are expanding rapidly relative to middle-wage occupations in both the U.S. and the E.U. We study the reallocation of workers from middle-skill occupations towards the tails of the occupational skill distribution by analyzing changes in age structure within and across occupations. Because occupations typically expand by hiring young workers and contract by curtailing such hiring, we posit that growing occupations will get younger while shrinking occupations will 'get old.' After verifying this proposition, we apply this observation to local labor markets in the U.S. to test whether markets that were specialized in middle-skilled occupations in 1980 saw a differential movement of both older and younger workers into occupations at the tails of the skill distribution over the subsequent 25 years. Consistent with aggregate trends, employment in initially middle-skill-intensive labor markets hollowed-out between 1980 and 2005. Employment losses among non-college workers in the middle of the occupational skill distribution were almost entirely countered by employment growth in lower-tail occupations. For college workers, employment losses at the middle were offset in roughly equal measures by gains in the upper- and lower-tails of the occupational skill distribution. But gains at the upper-tail were almost entirely limited to young college workers. Consequently, older college workers are increasingly found in lower-skill, lower-paying occupations. |
| Keywords: | job polarization, occupational structure, age structure, local labor markets, technical change |
| JEL: | E24 J11 J21 J24 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3970&r=lab |
| By: | Gaure, Simen; Røed, Knut (The Ragnar Frisch Centre for Economic Research); Westlie, Lars |
| Abstract: | We examine empirically the impacts of labor market policies – in terms of unemployment insurance (UI) and active labor market programs (ALMP) – on the duration and outcome of job search and on the quality of a subsequent job. We find that time invested in job search tends to pay off in the form of higher earnings once a job match is formed. More generous UI raises expected unemployment duration, while improving the quality of the resultant job. Participation in ALMP raises the probability of finding a job and the level of expected earnings, but at the cost of lengthening job search. |
| Keywords: | Multivariate hazards; job search; job quality; timing-of-events; NPMLE; MMPH |
| JEL: | C14 C15 C41 J64 J65 J68 |
| Date: | 2008–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2008_022&r=lab |
| By: | Chen, Dandan (The World Bank) |
| Abstract: | This paper examines the differentiated outcomes of vocational and general secondary academic education, particularly in terms of employment opportunities, labor market earnings, and access to tertiary education in Indonesia. With data from a panel of two waves of the Indonesia Family Life Survey in 1997 and 2000, the paper tracks a cohort of high school students in 1997 to examine their schooling and employment status in 2000. The findings demonstrate that: (1) attendance at vocational secondary schools results in neither market advantage nor disadvantage in terms of employment opportunities and/or earnings premium; (2) attendance at vocational schools leads to significantly lower academic achievement as measured by national test scores; and (3) There is no stigma attached to attendance at vocational schools that results in a disadvantage in access to tertiary education; rather, it is the lower academic achievement associated with attendance at vocational school that lowers the likelihood of entering college. The empirical approach of this paper addresses two limitations of the existing literature in this area. First, it takes into account the observation censoring issue due to college entry when evaluating labor market outcomes of secondary school graduates. Second, using an instrumental variable approach, the paper also treats endogeneity of household choice of vocational versus academic track of secondary education, teasing out the net effect of secondary school choice on labor market and schooling outcomes. |
| Keywords: | academic achievement; academic attainment; academic content; academic education; academic schools; access to higher education; access to tertiary education; catholic schools; classroom; classroom time |
| Date: | 2009–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4814&r=lab |
| By: | F. Angel-Urdinola, Diego (The World Bank) |
| Abstract: | This paper relies on a simple framework to understand the gender wage gap in Macedonia, and simulates how the gender wage gap would behave after the introduction of a minimum wage. First, it presents a newâÃÂÃÂalbeit simpleâÃÂÃÂdecomposition of the wage gap into three factors: (i) a wage level factor, which measures the extent to which the gender gap is driven by differences in wage levels among low-skilled workers of opposite sex; (ii) a skills endowment factor, which quantifies the extent to which the gender wage gap is driven by the difference in the share of high-skilled workers by gender; and (iii) returns to education, which measures the extent to which the gender gap is driven by differences by gender in returns to education. Second, the paper presents simple set of simulations that indicate that the introduction of a minimum wage in Macedonia could contribute to decrease the gender wage gap by up to 23 percent. Nevertheless, in order to significantly improve the wage gap, a rather high minimum wage may be required, which may contribute to reductions in employment. |
| Keywords: | Minimum wages; Gender Gap; Wage Differentials; Macedonia |
| JEL: | I32 J23 J38 J71 |
| Date: | 2008–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4795&r=lab |
| By: | Azam, Mehtabul (Southern Methodist University) |
| Abstract: | This paper examines changes in the wage structure in urban India during the past two decades (1983-2004) across the entire wage distribution using the Machado and Mata (2005) decomposition approach. Real wages increased throughout the wage distribution during 1983-1993; however, it increased only in the upper half of the wage distribution during 1993-2004. Quantile regression analysis reveals that the effects of many covariates are not constant across the wage distribution. Moreover, increases in returns to covariates across the entire distribution are the driving forces behind the wage changes in both decades. Change in composition of the work force contributed positively to wage growth during 1983-1993, but negatively during 1993-2004. Finally, while workers with all education levels experienced an increase in returns of roughly the same magnitude during 1983-1993, the increase in returns is much higher for workers with tertiary and secondary education during 1993-2004. The inequality increasing effects of tertiary education suggests that wage inequality in urban India may increase further in the near future as more workers get tertiary education. |
| Keywords: | earning functions, India, quantile regression decomposition, wage |
| JEL: | J30 J31 C15 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3963&r=lab |
| By: | Stefano STAFFOLANI (Universita' Politecnica delle Marche, Dipartimento di Economia); Enzo VALENTINI ([n.a.]) |
| Abstract: | This paper analyses theoretically and empirically the effects of immigration;on the wage rate of native workers. Empirical literature rarely finds that immigration generates a fall in the wages of manual workers. The theoretical model presented in this paper justifies those results, by hypothesizing an economic system where advanced firms buy an intermediate good from traditional firms, which employ manual workers in both clean and dirty tasks, the latter being more disliked by native workers. We conclude that native skilled wages always increase whereas native unskilled wages can both increase or decrease with immigration. An empirical analysis of the Italian labour market follows, showing that all native workers' wages rise with immigration. |
| Keywords: | Migrations, Wage Equation |
| JEL: | J31 J61 J82 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:330&r=lab |
| By: | Goel, Deepti; Lang, Kevin |
| Abstract: | We show that among workers whose network is weaker than formal (nonnetwork) channels, those finding a job through the network should have higher wages than those finding a job through formal channels. Moreover, this wage differential is decreasing in network strength. We test these implications using a survey of recent immigrants into Canada. At least at the lower end of an individual’s wage distribution above his reservation wage, finding a network job is associated with higher wages for those with weak networks, and the interaction between network strength and finding a job through the network is negative as predicted. |
| Keywords: | Immigrants, Job Search, Social Networks, Strong Ties |
| JEL: | J61 J64 J30 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-12&r=lab |
| By: | Bill Adamson; Ritu Hooda (South Dakota State University) |
| Keywords: | retun to education, south dakota, wages, wage premium, education |
| JEL: | J31 J24 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:sda:ibrief:2008504&r=lab |
| By: | Nordin, Martin (Department of Economics, Lund University); Persson, Inga (Department of Economics, Lund University); Rooth, Dan-Olof (Department of Economics, Lund University) |
| Abstract: | This paper adds to the small literature on the consequences of education-occupation mismatches. It examines the income penalty for field of education – occupation mismatches for men and women with higher education in Sweden and reveals that the penalty for such mismatches is large for both men and women. In fact, it is substantially larger than has been found for the US. Controlling for cognitive ability further establishes that the income penalty is not caused by a sorting by ability, at least for Swedish men. The income penalty for men decreases with work experience which is an indication that education-specific skills and work experience are substitutes to some extent. There is no evidence, though, that the mismatched individuals move to a matching occupation over time. Thus, for some, the income penalty seems to be permanent. |
| Keywords: | Human capital; rate of return; salary wage differentials; educational economics |
| JEL: | I21 J24 J31 |
| Date: | 2009–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2009_001&r=lab |
| By: | Chen, Yiu Por (Vincent) (DePaul University) |
| Abstract: | The mismatch between laborer's abilities and the target subject of the training program is one of the most primary concerns for a labor training program. The ability of different workers may significantly affect the outcomes of a labor training program. The objective of this paper is to look at the incentive of labor to enter the program using data of a pilot study at Zhejiang province in China. This paper shows that the average distance of a training center in a village, and the active labor proportion in a family are the core instruments that influence participation of laborers in the rural labor training program. It suggests that rural laborers enter the training program due to the availability of abundant labor in a family, and the convenient conveyance cost to the training center. The "Ashenfelter's dip," a pre-program wage drop, on the other hand may induce workers of higher caliber to enter the training program and cause the "cream-skimming" effect to training program. The traditional view of "opportunity cost" to enter a training program is extended by the result of cream skimming and training and can be used in revising the future design of rural labor training program. Putting the cream-skimming effect and the training issues together, a better accountability and governance of the training program which actively takes into account of rural laborer needs may be called for. |
| Keywords: | labor market policy, labor migration, rural labor training, poverty alleviation, sunshine program |
| JEL: | P36 O15 J08 J43 J48 I38 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3979&r=lab |
| By: | Westlie, Lars (Ragnar Frisch Centre of Economic Research) |
| Abstract: | This paper investigates empirically how five different vocational rehabilitation (VR) programs affect the transition rate into employment, the consecutive monthly earnings and the employment duration. VR programs increase the employment probability of the participants, but this effect varies substantially between the different programs. VR programs also lead to more stable jobs while the impact on monthly earnings is of minor magnitude. The costs and revenues of the VR programs are calculated, based on the estimated model. The results of wage subsidies, public education and work training in ordinary firms are noteworthy. The employment effect is clearly the strongest factor relative to the job quality effects, in describing the economic return of the VR programs. |
| Keywords: | Vocational rehabilitation; program evaluation; multivariate hazards; costbenefit analysis |
| JEL: | C14 C15 C41 D61 I21 J24 J64 |
| Date: | 2008–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2008_025&r=lab |
| By: | Westlie, Lars (Ragnar Frisch Centre for Economic Research) |
| Abstract: | This paper investigates the effects of five different vocational rehabilitation (VR) programs on the hazard rates into employment, disability and temporarily withdrawals from the labor market for persons who face severe problems in re-entering the labor market, mostly due to medical problems. One of the main findings is that re-education into a new profession is an effective way to improve employability and prevent disability. Work training produces varying results and is more effective the more it resembles a real job. All programs, and in particular re-education, comes with a cost of increased VR duration. Finally, those with the worst initial employment prospects are the ones who benefit most from participation. |
| Keywords: | Vocational rehabilitation; program evaluation; disability; heterogeneous treatment effects; multivariate hazards |
| JEL: | C14 C15 C41 I21 J24 J64 |
| Date: | 2008–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2008_024&r=lab |
| By: | Aldashev, Alisher; Gernandt, Johannes; Thomsen, Stephan L. |
| Abstract: | Immigrants consist of foreigners and citizens with migration background. We analyze the wage gap between natives and these two groups in Germany. The estimates show a substantial gap for both groups with respect to natives. Discarding immigrants who completed education abroad reduces much of the immigrants’ wage gap. This implies educational attainment in Germany is an important component of economic integration and degrees obtained abroad are valued less. |
| Keywords: | Immigration, wage gap, decomposition, Germany |
| JEL: | J15 J31 J61 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7431&r=lab |
| By: | Lorenzo Corsini; Elisabetta Olivieri |
| Abstract: | We study the evolution of the wage differentials between skilled and unskilled workers in Italy from 1977 to 2004. In this period, the differentials do not show a clear trend (save for a feeble increasing trend in the very last years), but they fluctuate widely around a fairly stable mean. There are four possible factors that influence the evolution of those differentials. The first is the relative supply of skilled workers, as an increase in their supply reduces their relative wage. The second is technological change, which could be skill-biased and could increase the gap. The third is international commerce, which increases the competition from less developed country, possibly reducing the wage of the less skilled. The last is related to the institutions in the labour market, which could affect the distribution of earnings and the way in which wages respond to changes in the relative labour supply. After discussing these theoretical aspects, we perform an econometrical analysis for the Italian case with the SUR estimation technique, and we test which of these factors are important in explaining the evolution of the differentials. |
| Date: | 2008–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2008/73&r=lab |
| By: | Nicodemo, Catia (Universitat Autònoma de Barcelona) |
| Abstract: | In this paper we analyze the trend of the gender gap between wives and husbands for Mediterranean countries with a strong family tradition, using data from the European Household Panel (ECHP) of 2001 and the European Survey on Income and Living Conditions (EU-SILC) of 2006. In general, wives and husbands, when married, have the same characteristics but wives suffer from two types of discrimination with respect to husbands: a lower wage for the same work and a primary responsibility for children. This paper uses quantile regression and counterfactual decomposition methods to investigate whether a glass ceiling exists or if instead a sticky floor is more prevalent among European families over time (2001 and 2006). We correct for selectivity the unconditional wage distribution of married women and we show that the wage gap decomposition is different if we ignore self-selection. We find that the wage gap is positive in each country, and the greater part of it is composed of a discrimination effect, while the characteristics effect is small. In Mediterranean countries, wives suffer from the sticky floor effect, i.e. the gender gap is bigger at the bottom of distribution, while we can observe that the glass ceiling effect decreased in most countries in 2006. |
| Keywords: | gender pay gap, selection, quantile regression, counterfactual decomposition |
| JEL: | J16 J31 C2 C3 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3978&r=lab |
| By: | Charles Bellemare; Patrick Lepage; Bruce Shearer |
| Abstract: | We present results from a real-effort experiment, simulating actual work-place conditions, comparing the productivity of workers under fixed wages and piece rates. Workers, who were paid to enter data, were exposed to different degrees of peer pressure under both payment systems. The peer pressure was generated in the form of private information about the productivity of their peers. We have two main results. First, we find no level of peer pressure for which the productivity of either male or female workers is significantly higher than productivity without peer pressure. Second, we find that very low and very high levels of peer pressure can significantly decrease productivity (particularly for men paid fixed wages). These results are consistent with models of conformism and self-motivation. |
| Keywords: | Peer effects, fixed wages, piece rates, gender |
| JEL: | M52 C91 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:0901&r=lab |
| By: | Goebel, Christian; Verhofstadt, Elsy |
| Abstract: | Many school-leavers enter the labour market via temporary employment. In this paper we investigate the impact of a temporary employment spell at the start of the career on the transition rate into permanent employment. We compare the case of temporary employment to the hypothetical case of a direct transition from unemployment to permanent employment. In order to control for selective participation in temporary employment we include a large set of explanatory variables which have been especially collected to study school-leavers. We apply the AIC-information criterion to select the appropriate specification for unobserved heterogeneity. Based on the information criteria we conclude that given our data, there is no support for a model with selection in unobserved characteristics. Simulation exercises provide insights into the development of the effect of temporary employment over time. For a sample of unemployed Flemish school-leavers we find that in the short run temporary employment delays the school leaver’s transition to permanent employment. However, in the long run temporary employment acts as a stepping stone and decreases the duration until permanent employment. |
| Keywords: | temporary employment, school leavers, labour market policy |
| JEL: | J08 J41 J64 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7435&r=lab |
| By: | Oleksiy Kryvtsov; Alexander Ueberfeldt |
| Abstract: | This paper analyzes the differences in wage ratios of university graduates to less than university graduates, the education premium, in Canada and the United States from 1980 to 2000. Both countries experienced a similar increase in the fraction of university graduates and a similar increase in skill biased technological change based on capital-embodied technological progress, but only the United States had a large increase in the education premium. Using a calibrated Krussel et al. (2000) model, the paper finds that the cross country difference is in equal proportion due to the effective stock of capital equipment, the growth in skilled labor supply relative to unskilled labor and the relative abundance of skilled population in 1980. Growth in the working age population is unimportant for the difference. |
| Keywords: | Labour markets; Productivity |
| JEL: | E24 E25 J24 J31 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:09-4&r=lab |
| By: | Azam, Mehtabul (Southern Methodist University) |
| Abstract: | The tertiary-secondary (college-high school) wage premium has been increasing in India over the past decade, but the increase differs across age groups. The increase in wage premium has been driven mostly by younger age groups, while older age groups have not experienced any significant increase. This paper uses the demand and supply model with imperfect substitution across age groups developed in Card and Lemieux (2001) to explain the uneven increase in the wage premium across age groups in India. The findings of this paper are that the increase in the wage premium has come mostly from demand shifts in favor of workers with a tertiary education. More importantly, the demand shifts occurred in both the 1980s and 1990s. Relative supply has played an important role not only determining the extent of increase in wage premium, but also its timing. The increase in relative supply of tertiary workers during 1983-1993 offset the demand shift, limiting the wage premium increase. But during 1993-1999, the growth rate of the relative supply of tertiary workers decelerated, while relative supply was virtually stagnant during 1999-2004. Both of these periods saw an increase in the wage premium as the countervailing supply shift was weak. |
| Keywords: | India, wage premium, tertiary (college), secondary (high school) |
| JEL: | J20 J23 J31 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3968&r=lab |
| By: | Shintaro Yamaguchi |
| Abstract: | This paper constructs and estimates a model of strategic wage bargaining with on-the-job search to explore three different components of wages: general human capital, match-specific capital, and outside option. As the workers find better job opportunities, the current employer has to compete with outside firms to retain them. This between-firm competition results in wage growth even when productivity remains the same. The model is estimated by a simulated minimum distance estimator and data from the NLSY79. The results indicate that the improved value of outside option raises wages of ten-year-experienced workers by 16%. |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd08-26&r=lab |
| By: | Nomaan Majid (International Labour Office, Economic and Labour Market Analysis Department) |
| Keywords: | import/technological change/employment/unemployment/labour demand/skilled worker/North South /role of developing countries/developed countries |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:emwpap:2008-22&r=lab |
| By: | Hedvig Horváth (Central European University); Zoltán Szalai (Magyar Nemzeti Bank) |
| Abstract: | It is widely believed today, that the operation of the labour markets is influenced by institutional factors, affecting macroeconomic adjustment in response to shocks. In this way, labour market institutions affect both cyclical and long-term growth and inflation performance of an economy. The aim of our paper is to review the operation of Hungarian labour market institutions from the point of view of labour market flexibility and find its place in international comparison in the light of existing stock of knowledge on the subject. We describe the institutional setup of the labour markets through seven dimensions (unemployment generosity, tax wedge, active labour market policies, employment protection legislation, product market regulation, union density and coverage and wage bargaining institutions) for which internationally comparable data are available. We conclude that the Hungarian labour market institutions are rather flexible in EU-comparison. However, tax wedge is high and the active labour market policies still perform poorly, both contributing to weak employment. |
| Keywords: | wage flexibility, unemployment, labour market institutions, product market regulation, policy complementarity. |
| JEL: | J31 J51 K20 L43 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:opaper:2008/77&r=lab |
| By: | E. de Hoyos, Rafael (SEMS); Bussolo, Maurizio (The World Bank); Nunez, Oscar (The World Bank) |
| Abstract: | This paper identifies and estimates the strength of the reduction in poverty linked to improved opportunities for women in the expanding maquila sector. A simulation exercise shows that, at a given point in time, poverty in Honduras would have been 1.5 percentage points higher had the maquila sector not existed. Of this increase in poverty, 0.35 percentage points is attributable to the wage premium paid to maquila workers, 0.1 percentage points to the wage premium received by women in the maquila sector, and 1 percentage point to employment creation. Given that female maquila workers represent only 1.1 percent of the active population in Honduras, this contribution to poverty reduction is significant. |
| Keywords: | Trade liberalization; maquila; poverty; gender wage gap; Honduras |
| JEL: | F16 I32 J24 J31 |
| Date: | 2008–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4789&r=lab |
| By: | Christopher Flinn; James Mabli |
| Abstract: | We look at the impact of a binding minimum wage on labor market outcomes and welfare distributions in a partial equilibrium model of matching and bargaining in the presence of on-the-job search. We use two different specifications of the Nash bargaining problem. In one, firms engage in a Bertrand competition for the services of an individual, as in Postel-Vinay and Robin (2002). In the other, firms do not engage in such competitions, and the outside option used in bargaining is always the value of unemployed search. We estimate both bargaining specifications using a Method of Simulated Moments estimator applied to data from a recent wave of the Survey of Income and Program Participation. Even though individuals will be paid the minimum wage for a small proportion of their labor market careers, we find significant effects of the minimum wage on the ex ante value of labor market careers, particularly in the case of Bertrand competition between firms. An important futures goal of this research agenda is to develop tests capable of determining which bargaining framework is more consistent with observed patterns of turnover and wage change at the individual level. |
| Keywords: | Minimum wage, On-the-job search, Renegotiation, Matching functions |
| JEL: | C5 D83 J31 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:91&r=lab |
| By: | Campolieti, Michele |
| Abstract: | This paper studies the incidence and duration of unemployment in Canada at an aggregate and a number of disaggregated levels with data from the Canadian Labour Force Survey covering 1976 to 2006. The principal empirical findings indicate that most of the changes in steady state unemployment rates during the study period can be attributed to changes in incidence rather than changes in expected duration. |
| Keywords: | Education, Training, Youth, Labour Market Outcomes |
| JEL: | J64 J63 C41 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-14&r=lab |
| By: | Hesselius, Patrik (IFAU); Johansson, Per (IFAU); Nilsson, Peter (IFAU) |
| Abstract: | We utilize a large-scale randomized social experiment to identify how coworkers affect each other's effort as measured by work absence. The experiment altered the work absence incentives for half of all employees living in Göteborg, Sweden. Using administrative data we are able to recover the treatment status of all workers in more than 3,000 workplaces. We first document that employees in workplaces with a high proportion treated coworkers increase their own absence level significantly. We then examine the heterogeneity of the treatment effect in order to explore what mechanisms are underlying the peer effect. While a strong effect of having a high proportion of treated coworkers is found for the nontreated workers, no significant effects are found for the treated workers. These results suggest that pure altruistic social preferences can be ruled out as the main motivator for the behaviour of a nonnegligible proportion of the employees in our sample. |
| Keywords: | social interactions, employer employee data, work absence, fairness, reciprocal preferences |
| JEL: | J24 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3960&r=lab |
| By: | Kenn Ariga (Institute of Economic Research, Kyoto University); Ryo Kambayashi (Institute of Economic Research, Hitotsubashi University) |
| Abstract: | We use the result from a survey of Japanese firms in manufacturing and service to investigate the choice of wage and employment adjustments when they needed to reduce substantially the total labor cost. Our regression analysis indicates that the large size reduction favors the layoffs of the core employees, whereas the base wage cuts are more likely if the firms do not feel immediate pressures from the external labor market or the strong competition in the product market. We also find some evidence that the concerns over adverse selection or demoralizing effects of wage cuts are real. Firms do try to avoid using base wage cuts if they consider these factors more important. |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:668&r=lab |
| By: | Nicola Meccheri |
| Abstract: | This paper analyzes how non-competes, via wage bargaining, can affect firms’ incentives to provide their employees with on-the-job training. The results show that non-competes increase incentives to provide general training, but reduce those related to specific training. |
| Keywords: | non-competes, bargaining, general training, specific training |
| JEL: | J24 J41 K31 |
| Date: | 2008–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2008/72&r=lab |
| By: | Belley, Phillippe; Lochner, Lance |
| Abstract: | This paper uses data from the 1979 and 1997 National Longitudinal Survey of Youth cohorts(NLSY79 and NLSY97) to estimate changes in the effects of ability and family income on educational attainment for youth in their late teens during the early 1980s and early 2000s. Cognitive ability plays an important role in determining educational outcomes for both NLSY cohorts, while family income plays little role in determining high school completion in either cohort. Most interestingly, we document a dramatic increase in the effects of family income on college attendance (particularly among the least able) from the NLSY79 to the NLSY97. Family income has also become a much more important determinant of college `quality' and hours/weeks worked during the academic year (the latter among the most able) in the NLSY97. Family income has little effect on college delay in either sample. To interpret our empirical findings on college attendance, we develop an educational choice model that incorporates both borrowing constraints and a `consumption' value of schooling – two of the most commonly invoked explanations for a positive family income - schooling relationship. Without borrowing constraints, the model cannot explain the rising effects of family income on college attendance in response to the sharply rising costs and returns to college experienced from the early 1980s to early 2000s: the incentives created by a 'consumption' value of schooling imply that income should have become less important over time (or even negatively related to attendance). Instead, the data are more broadly consistent with the hypothesis that more youth are borrowing constrained today than were in the early 1980s. |
| Keywords: | Ability, Achievement, Borrowing Constraints, College, Credit Constraints, Family Income, High School |
| JEL: | I21 I22 I28 J24 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-9&r=lab |
| By: | Rita Cappariello (Bank of Italy); Roberta Zizza (Bank of Italy) |
| Keywords: | irregular employment, underground economy, dual informal sector, occupational choice, education, school drop-out, North and South divide Abstract: The paper empirically tests the relationship between underground labour and schooling achievement for Italy, a country ranking badly in both respects when compared to other high-income economies, with a marked duality between North and South. In order to identify underground workers, we exploit the information on individualsÂ’ social security positions available from the Bank of ItalyÂ’s Survey on Household Income and Wealth. After controlling for a wide range of socio-demographic and economic variables and addressing potential endogeneity and selection issues, we show that a low level of education sizeably and significantly increases the probability of working underground. Switching from completing compulsory school to graduating at college more than halves this probability for both men and women. The gain is slightly higher for individuals completing the compulsory track with respect to those having no formal education at all. The different probabilities found for self-employed and dependent workers support the view of a dual informal sector, in which necessity and desirability coexist. |
| JEL: | I21 J24 O17 R23 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_702_09&r=lab |
| By: | Munich, Daniel (University of Michigan,); Svejnar, Jan (University of Michigan,) |
| Abstract: | The paper tests three hypotheses about the causes of unemployment in the Central-East European transition economies and in a benchmark market economy (Western part of Germany). The first hypothesis (H1) is that unemployment is caused by inefficient matching. Hypothesis 2 (H2) is that unemployment is caused by low demand. Hypothesis 3 (H3) is that restructuring is at work. Our estimates suggest that the west and east German parts of Germany, Czech Republic and Slovakia are consistent with H2 and H3. Hungary provides limited support to all three hypotheses. Poland is consistent with H1. The economies in question hence contain one broad group of countries and one or two special cases. The group comprises the Czech Republic, Hungary, Slovak Republic and (possibly) East Germany. These countries resemble West Germany in that they display increasing returns to scale in matching and unemployment appears to be driven by restructuring and low demand. The East German case is complex because of its major active labor market policies and a negative trend in efficiency in matching. In some sense, East Germany resembles more Poland, which in addition to restructuring and low demand for labor appears to suffer from a structural mismatch reflected in relatively low returns to scale in matching. Finally, our data provide evidence that goes counter to one of the main predictions of the theories of transition, namely that the turnover (inflow) rate in the transition countries would rise dramatically at the start of the transition, be temporarily very high and gradually decline and approach the level observed in otherwise similar market economies such as West Germany. |
| Keywords: | access to information; Active Employment; Active Employment Policy; active labor; active labor market; active labor market policies; active labor market programs; Active Labour; Active Labour Market |
| JEL: | C33 J40 J60 P20 |
| Date: | 2009–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4810&r=lab |
| By: | Engström, Per (Department of Economics); Hesselius, Patrik (IFAU); Holmlund, Bertil (Department of Economics) |
| Abstract: | One goal of the public employment service is to facilitate matching between unemployed job seekers and job vacancies; another goal is to monitor job search so as to bring search efforts among the unemployed in line with search requirements. The referral of job seekers to vacancies is one instrument used for these purposes. We report results from a randomized Swedish experiment where the outcome of referrals is examined. To what extent do unemployed individuals actually apply for the jobs they are referred to? Does information to job seekers about increased monitoring affect the probability of applying and the probability of leaving unemployment? The experiment indicates that a relatively large fraction (one third) of the referrals do not result in job applications. Information about intensified monitoring causes an increase in the probability of job application, especially among young people. However, we find no significant impact on the duration of unemployment. |
| Keywords: | vacancy referral; job matching; job search; randomized experiment |
| JEL: | C99 J64 J68 |
| Date: | 2009–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2009_001&r=lab |
| By: | Aldashev, Alisher; Gernandt, Johannes; Thomsen, Stephan L. |
| Abstract: | Language proficiency may not only affect the earnings of the individual, but the probability to participate in the labor market or becoming employed as well. It may also affect selection of people into economic sector and occupation. In this paper, the effects of language proficiency on earnings are analyzed for foreigners in Germany with joint consideration of up to four types of selection. The results show that language proficiency significantly increases participation and employment probability and affects occupational choice. When selection into economic sector and occupation is regarded, we do not find an impact of language ability on earnings thereby implying an indirect effect. |
| Keywords: | Foreigners, Participation, Employment, Language Ability, Multiple Selection |
| JEL: | C35 J15 J24 J61 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7432&r=lab |
| By: | Kirdar, Murat |
| Abstract: | This paper examines how immigrants' migration duration and saving decisions in the host country respond to changes in purchasing power parity (ppp) as well as in the wage ratio between the host and source countries. For this purpose, I develop a model of immigrants' joint migration duration and saving decisions and derive comparative static results regarding the impact of ppp and wage ratio on these decisions. An interesting implication of the theoretical model is that immigrants may in fact stay longer in the host country as a result of an increase in ppp, in particular those with a low degree of relative risk aversion. I test the implications of this model using a longitudinal data set that includes immigrants from four different source countries in Germany and employing panel data estimation methods. The empirical results reveal that an increase in ppp decreases the optimal migration duration. Moreover, optimal migration duration is elastic with respect to ppp. An interesting empirical finding is that, holding individual immigrant characteristics constant, immigrants from poorer source countries have a shorter migration duration than immigrants from wealthier source countries. The empirical results also reveal that ppp has a positive effect on saving rate, which is consistent with the implications of the model, and that saving rate is also elastic with respect to ppp. |
| Keywords: | International Migration; Immigrant Workers |
| JEL: | F22 J61 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13322&r=lab |
| By: | Hoffman, Florian; Oreopoulos, Philip |
| Abstract: | Many wonder whether teacher gender plays an important role in higher education by influencing student achievement and subject interest. The data used in this paper helps identify average effects from male and female university students assigned to male or female teachers. In contrast to previous work at the primary and secondary school level, our focus on large first-year undergraduate classes isolates gender interaction effects due to students reacting to instructors rather than instructors reacting to students. In addition, by focussing on university students, we examine the extent to which gender interactions may exist at later ages. We find that assignment to a same-sex instructor boosts relative grade performance and the likelihood of completing a course, but the magnitudes of these effects are small. A same-sex instructor increases average grade performance by at most 5 percent of its standard deviation and decreases the likelihood of dropping a course by 1.2 percentage points. The effects are similar when conditioning on initial ability (high school achievement), and ethnic background (mother tongue not English), but smaller when conditioning on mathematics and science courses. The effects of same-sex instructors on upper-year course selection are insignificant. |
| Keywords: | Teacher Quality, Higher Education, Gender Role Model Effects |
| JEL: | I2 H4 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-13&r=lab |
| By: | Dawson, Christopher (University of Wales, Swansea); Henley, Andrew (University of Wales, Swansea); Latreille, Paul L. (University of Wales, Swansea) |
| Abstract: | This paper undertakes an analysis of the motivating factors cited by the self-employed in the UK as reasons for choosing self-employment. Very limited previous research has addressed the question of why individuals report that they have chosen self-employment. Two questions are addressed using large scale labour force survey data for the UK. The first concerns the extent to which the self-employed are self-employed out of necessity, opportunity, lifestyle decision or occupational choice. The second concerns the extent to which there is heterogeneity amongst the self-employed on the basis of the motivations that they report for choosing self-employment. Factor analysis reveals a number of different dimensions of entrepreneurship on the basis of stated motivation, but with no evidence that being 'forced' into entrepreneurship through economic necessity is a significant factor. Motivation towards entrepreneurship is therefore highly multidimensional. Multivariate regression analysis is employed using a method to control for self-selection into self-employment. This reveals significant differences between men and women, with women concerned more with lifestyle factors and less with financial gain. Market-directed 'opportunity' entrepreneurship is more strongly associated with higher educational attainment. Those joining family businesses appear not to value prior educational attainment. Public policy to promote entrepreneurship therefore needs to be tailored carefully to different groups. |
| Keywords: | self-employment, entrepreneurship, motivation, occupational choice |
| JEL: | L26 J24 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3974&r=lab |
| By: | Elisabet Motellón (Faculty of Economics, University of Barcelona); Enrique López-Bazo (Faculty of Economics, University of Barcelona); Mayssun El-Attar (Faculty of Economics, University of Barcelona and European University Institute.) |
| Abstract: | Regional differences in real wages have been shown to be both large and persistent in the U.S. and the U.K., as well as in the economies of other countries. Empirical evidence suggests that wage differentials adjusted for the cost of living cannot only be explained by the unequal spatial distribution of characteristics determining earnings. Rather, average wage gap decomposition reveals the important contribution made by regional heterogeneity in the price assigned to these characteristics. This paper proposes a method for assessing regional disparities in the entire wage distribution and for decomposing the effect of differences across regions in the endowments and prices of the characteristics. The hypothesis forwarded is that the results from previous studies obtained by comparing average regional wages may be partial and non-robust. Empirical evidence from a matched employer-employee dataset for Spain confirms marked differences in wage distributions between regions, which do not result from worker and firm characteristics but from the increasing role of regional differences in the return to human capital. |
| Keywords: | Regional Labour Markets, Human Capital, Wage Gap Decomposition, Counterfactual Distributions |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:200903&r=lab |
| By: | James Ted McDonald; M. Rebecca Valenzuela |
| Abstract: | This paper considers the issue of skill mismatch among immigrants and its impact on their remittance behaviour using cross-sectional data from two linked surveys in the Philippines: the Survey on Overseas Filipinos (SOF) and the Family Income and Expenditure Survey (FIES) for the years 1997, 2000, and 2003. Our main hypothesis is that skills mismatch - broadly defined here as the over-qualification of migrants in terms of educational attainment relative to occupation in their destination country - is prevalent among skilled migrants and exerts a downward pressure on the level of international remittances received by the sending economies. Accordingly, a high incidence of skill mismatch implies that the remittances expatriated would be significantly less compared to conditions of no skills mismatch. We find evidence of substantial skill mismatch, particularly among highly educated women, but there is also systematic variation in the incidence of skill mismatch by family characteristics and host country. In terms of remittances, we find that for women, higher education levels are associated with lower incidence of remittances but larger amounts remitted. However, negative skill mismatch leads to men and women both being more likely to remit money, but for women the amount is significantly less than it otherwise would have been. |
| Keywords: | remittances, immigrants, education mismatch |
| JEL: | J24 J61 O15 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:242&r=lab |
| By: | Gábor Kátay (Magyar Nemzeti Bank) |
| Abstract: | In this paper I address the question to what extent wages are affected by product market uncertainty. Implicit contract models imply that it is Pareto optimal for risk neutral firms to provide insurance to risk averse workers against shocks. Using matched employer-employee dataset, I adopted the estimation strategy proposed by Guiso et al. (2005) to evaluate wage responses to both permanent and transitory shocks in Hungary and compared my results to similar studies on Italian and Portuguese datasets. I found that firms do insure workers against product market uncertainties, but the magnitude of the wage response differs depending on the nature of the shock. Broadly speaking, the wage response to permanent shocks is twice as high as the response to transitory shocks. Comparing my results to the two other studies, the main difference lies in the elasticity of wages to transitory shocks. Unlike these previous findings, my results show that full insurance to transitory shocks is rejected. |
| Keywords: | product market uncertainty, risk sharing, wage insurance, optimal wage contract, matched employer-employee data. |
| JEL: | C33 D21 J33 J41 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2008/8&r=lab |
| By: | Isik U. Zeytinoglu; Margaret Denton; Sharon Davies; M. Bianca Seaton; Jennifer Millen |
| Abstract: | The home health care sector in Canada experienced major restructuring in the mid-1990s creating a variety of flexibilities for organizations and insecurities for workers. This paper examines the emotional and physical health consequences of employer flexibilities and worker insecurities on home health care workers. For emotional health the focus is on stress and for physical health the focus is on selfreported musculoskeletal disorders. Data come from our survey of home health care workers in a mid-sized city in Ontario, Canada. Data are analyzed separately for 990 visiting and 300 office workers. For visiting workers, results showed that none of the ‘objective’ flexibility/insecurity measures are associated with stress or musculoskeletal disorders controlling for other factors. However, ‘subjective’ flexibility/insecurity factors, i.e. feelings of job insecurity and labour market insecurity, are significantly and positively associated with stress. When stress is included in the analysis, for visiting workers stress mediates the effects of ‘subjective’ flexibility/insecurity with musculoskeletal disorders. For office workers, none of the objective flexibility/insecurity factors are associated with stress but subjective flexibility/insecurity factor of feelings of job insecurity is positively and significantly associated with stress. For office home care workers, work on call is negatively and significantly associated with musculoskeletal disorders. Feeling job insecurity is mediated through stress in affecting musculoskeletal disorders. Feeling labour market insecurity is significantly and positively associated with musculoskeletal disorders for office home care workers. Decision-makers in home care field are recommended to pay attention to insecurities felt by workers to reduce occupational health problems of stress and musculoskeletal disorders. |
| Keywords: | home health care workers, stress, worker insecurity |
| JEL: | I11 J28 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:qseprr:429&r=lab |
| By: | Radowski, Daniel; Bonin, Holger |
| Abstract: | The paper provides evidence concerning incidence and sources of nominal wage rigidity in services and manufacturing, using a new and large employer survey on wage and price setting behaviour for Germany. We observe that wage freezes are more frequent in services than in manufacturing, whereas wage cuts are less frequent. The significant sector gaps do not vanish after controlling for relevant firm characteristics influencing the incidence of wage freezes and wage cuts, notably coverage by collective agreements and the degree of price competition on the product market. An analysis of firms’ view on the reasons preventing wage cuts suggests that specific fear of excess worker turnover could explain distinct wage setting behaviour in services. |
| Keywords: | Nominal Wage Rigidity, Efficiency Wages, Manufacturing and Services, Germany |
| JEL: | J31 L60 M52 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7471&r=lab |
| By: | V. Del Carpio, Ximena (The World Bank); Macours, Karen (Johns Hopkins University) |
| Abstract: | This paper analyzes changes in the allocation of child labor within the household in reaction to exogenous shocks created by a social program in Nicaragua. The paper shows that households that randomly received a conditional cash transfer compensated for some of the intra-household differences, as they reduced child labor more for older boys who used to work more and for boys who were further behind in school. The results also show that households that randomly received a productive investment grant, in addition to the basic conditional cash transfer benefits, both targeted at women, show an increased specialization of older girls in nonagricultural and domestic work, but no overall increase in girls' child labor. The findings suggest that time allocation and specialization patterns in child labor within the household are important factors to understand the impact of a social program. |
| Keywords: | Child labor; intra-household; human capital; impact evaluation; gender |
| JEL: | D13 J16 J22 J24 O12 |
| Date: | 2009–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4822&r=lab |
| By: | Helen Simpson |
| Abstract: | This paper provides new evidence on the effects of overseas FDI on the skill-mix of multinational firms’ home-country operations. The analysis exploits China’s WTO accession to identify the impact of outward investment into a low-wage economy, and uses plant-level data to investigate changes in industrial structure within firms driven by plant closures. As predicted by models of vertical FDI the paper demonstrates that overseas investment in low-wage economies is associated with asymmetric effects on workers in low and high skill industries in the home economy, and in particular with firms closing down plants in low-skill industries. |
| Keywords: | multinational enterprises; skills; globalisation |
| JEL: | F2 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:08/207&r=lab |
| By: | Paul A. Grout; Wendelin Schnedler |
| Abstract: | How does the environment of an organization influence whether workers voluntarily provide effort? We study the power relationship between a non-profit unit (e.g. university department, NGO, health trust), where workers care about the result of their work, and a bureaucrat, who supplies some input to the non-profit unit, but has opportunity costs in doing so (e.g. Dean of faculty, corrupt representative, government agency). We find that marginal changes in the balance of power eventually have dramatic effects on donated labor. We also identify when strengthening the non-profit unit decreases and when it increases donated labor. |
| Keywords: | donated labor, intrinsic motivation, non-profit organizations, power within organizations |
| JEL: | J32 H11 H42 M52 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:08/202&r=lab |
| By: | Azam, Mehtabul Azam (Southern Methodist University); Blom, Andreas (The World Bank) |
| Abstract: | Using nationally representative household surveys, this paper examines the trends in attainment, enrollment, and access to tertiary (higher) education in India from 1983 to 2005. The findings suggest that there has been considerable progress in attainment and participation; however, they remain low. Important gaps exist in enrollment between rich and poor, rural and urban areas, men and women, disadvantaged groups and the general population, and states. Analysis of transition rates from secondary education to tertiary education and regression analysis indicate that inequality in tertiary education between disadvantaged groups and the general population is explained by low completion rates of secondary education. Inequality in tertiary education related to income, gender, rural residence, and between states is explained by: (i) differences in completion rates of secondary education, and (ii) differences in the probability of transitioning from secondary education to tertiary education. In particular, the importance of household income has grown markedly. Equitable expansion of secondary education is therefore critical for improving the equity of tertiary education. There is also a need to help qualified youth from low-income families and rural backgrounds to attend tertiary education, in particular the technical and engineering streams, in which participation is lower. |
| Keywords: | access to higher education; access to tertiary education; age cohort; age group; age groups; colleges; competition for entry; completion rate; completion rates degree courses; degrees |
| Date: | 2008–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4793&r=lab |
| By: | Luciano Fanti; Luca Gori |
| Abstract: | We offer an analysis of the existence of a positive relationship between minimum wages and economic growth in a fairly standard general equilibrium, one-sector, two-period overlapping generations model, where the usual Romer-typed knowledge spill-over mechanism in production represents the engine of endogenous growth. It is shown that – contrary to the conventional view which has failed to pay due attention to dynamic contexts with labour market rigidities – the minimum-wage economy may grow faster than the competitive-wage economy in spite of a reduced employment rate and, in particular, a growth-maximising minimum wage does exist. A straightforward message is therefore that policymakers may appropriately use minimum wage policies to promote economic growth and individuals’ welfare. |
| Keywords: | Endogenous growth; Minimum wage; Unemployment; OLG model |
| JEL: | H24 J60 O41 |
| Date: | 2009–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2009/78&r=lab |
| By: | Bauer, Philipp C. (economiesuisse); Riphahn, Regina T. (University of Erlangen-Nuremberg) |
| Abstract: | We use Swiss data to test whether intergenerational educational mobility is affected by the age at which children first enter (primary) school. Early age at school entry significantly affects mobility and reduces the relative advantage of children of better educated parents. |
| Keywords: | age at entry, intergenerational transmission of education, educational mobility |
| JEL: | I2 I21 J24 D30 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3977&r=lab |
| By: | Francesco Nucci (Universit… di Roma "La Sapienza"); Alberto Franco Pozzolo (Universit… degli Studi del Moliste) |
| Abstract: | Using a representative panel of manufacturing firms, we estimate the response of job and hours worked to currency swings, showing that it depends primarily on the firm's exposure to foreign sales and its reliance on imported inputs. Further, we show that, for given international;orientation, the response to exchange rate ;fluctuations is magnified when firms exhibit a lower monopoly power and when they face foreign pressure in the domestic market through import penetration. The degree of substitutability between imported and other inputs and the distribution of workers by type introduce additional degrees of specilcity in the employment sensitivity;to exchange rate swings. Further, wage adjustments are also shown to provide a channel through which firms react to currency shocks. Finally, gross job ;ows within the firm are found to depend;on exchange rate fluctuations, although the effect on job creation is predominant. |
| Keywords: | Employment, Exchange rate, Firm's foreign exposure |
| JEL: | E24 F16 F31 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wmofir:12&r=lab |
| By: | Eugene Choo (University of Calgary); Shannon Seitz (Boston College); Aloysuis Siow (University of Toronto) |
| Abstract: | We develop and estimate an empirical collective model with endogenous marriage formation, participation, and family labor supply. Intra-household transfers arise endogenously as the transfers that clear the marriage market. The intra-household allocation can be recovered from observations on marriage decisions. Introducing the marriage market in the collective model allows us to independently estimate transfers from labor supplies and from marriage decisions. We esti- mate a semi-parametric version of our model using 2000 US Census data. Estimates of the model using marriage data are much more consistent with the theoretical predictions than estimates derived from labor supply. |
| Keywords: | matching, marriage, family labor supply |
| Date: | 2008–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:704&r=lab |
| By: | Bertocchi, Graziella (University of Modena and Reggio Emilia); Brunetti, Marianna (University of Rome Tor Vergata); Torricelli, Costanza (University of Modena and Reggio Emilia) |
| Abstract: | We study the joint impact of gender and marital status on financial decisions. First, we test the hypothesis that marriage represents - in a portfolio framework - a sort of safe asset, and that this effect is stronger for women. Controlling for a number of observable characteristics, we show that single women have a lower propensity to invest in risky assets than married females and males. Second, we show that the differential behavior of single women evolves over time, reflecting the increasing incidence of divorce and the expansion of female labor market participation. In particular, towards the end of our sample period, we observe a reduction in the gap between women with different family status, which can be attributed to the gradual erosion of the perception of marriage as a sort of safe asset. Our results therefore suggest that the differential behavior of single vs. married women can be explained by the evolution of gender roles in society, even after controlling for differential risk attitudes. Our empirical investigation is based on a dataset drawn from the 1989-2006 Bank of Italy Survey of Household Income and Wealth. |
| Keywords: | portfolio choice, marriage, divorce, labor force participation |
| JEL: | G11 E21 J12 J21 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3975&r=lab |
| By: | Dongshu Ou |
| Abstract: | The high school exit exam (HSEE) is rapidly becoming a standardized assessment procedure foreducational accountability in the United States. I use a unique state-specific dataset to identify theeffect of failing the HSEE on the likelihood that a student drops out early based on a RegressionDiscontinuity design. It shows that students who barely fail the exam are more likely to exit thanthose who barely pass despite being offered retest opportunities. The discontinuity amounts to a largeproportion of the dropout probability of barely-failers, particularly for minority and low-incomestudents, suggesting that the potential benefit of raising educational standards might come at the costof increasing inequalities in the educational system. |
| Keywords: | high school exit exam, student dropout, regression discontinuity |
| JEL: | I21 I28 J24 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0907&r=lab |
| By: | Aitor Lacuesta (Banco de España); Sergio Puente (Banco de España); Pilar Cuadrado (Banco de España) |
| Abstract: | Traditional measures of labour quality might have the shortcoming of missing some features of the very important increase in labour utilization within European countries. In particular, we explore the case of Spain. Despite showing one of the most important increases in labour quality in the EU according to standard methods, it also offers a negative increase in TFP growth. This paper computes an index of labour quality in Spain between 1988 and 2006 using microdata from the Labour Force Survey and the Structural Earnings Survey-2002 that allows the introduction of all possible interactions in a semi-parametric fashion between gender, age, education, experience in the current job and nationality. Considering those observable characteristics, the index still shows a notable growth at an average annual rate of 0.42 pp. After a period of slight decline (between 1988 and 1992) the index grows continuously until 2006 when it fell again. This is the case because education is, even by considering all possible interactions with other demographic variables, the highest contributor to the quality index’s growth. However, the paper shows the importance of considering changes in average productivities of different socio-demographic groups over time. We include in the analysis two usually omitted variables that help explaining the recent productivity slowdown in Spain: type of occupation held by the individual and unobserved heterogeneity of workers. Both the inclusion of occupation and especially the entry of individuals with below-average productivity levels compared to precedent periods decrease the labour quality growth to an average annual rate of 0.20 pp. Indeed with the addition of these two factors labour quality slightly decreases from 1997 onwards. |
| Keywords: | index number, labour quality, productivity slowdown, unobserved heterogeneity |
| JEL: | C4 J1 J3 O4 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0835&r=lab |
| By: | Luciano Fanti; Luca Gori |
| Abstract: | This paper formally explores the joint roles played, on the one side, by the regulation of wages and, on the other side, by the existence of a “backyard” (or home) technology exploited by the unemployed people, in a standard neoclassical OLG growth model. The main findings are the following: 1) the introduction of a “binding” regulated wage fosters the capital accumulation and lead to a higher long term capital stock (and thus to higher output and welfare as well) in comparison with a competitive wage economy, provided that both the labour productivity at “home” and the capital weight in the firms technology are sufficiently high; 2) however, if the regulated wage is set at a too high level, the capital accumulation will be inferior to that of the competitive wage economy. These results, so far escaped closer scrutiny by economic growth literature, shed a new light on the effects of the regulation of wages and may have interesting policy implications. |
| Keywords: | Regulated wage; Unemployment; Home production; OLG model |
| JEL: | D13 E24 J22 O41 |
| Date: | 2008–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2008/74&r=lab |
| By: | Fortin, Nicole; Parent, Daniel |
| Abstract: | In this paper we first analyze the determinants of training using data from the 2003 International Adult Literacy and Skills Survey (IALSS). We find that education plays a key role in the receipt of all forms of training except in the case of employer-sponsored training. We also find substantial differences across demographic groups in the relationship between literacy skills and training. In the second part of the paper we merge the 1994 IALS to the 2003 IALSS and perform an analysis of the impact of the Quebec policy introduced in 1995 by which employers are required to devote at least 1% of the payroll to training activities. In the case of males we find no effect of the policy on the incidence of employer-sponsored training. On the other hand, Quebec females did experience a very large relative increase in training incidence between 1994 and 2003. However, the magnitude of the estimates is much too large to be plausibly caused by the policy given its modest scale. We show evidence of a significant relative increase in female employment rates in Quebec that could explain part -but probably not all-of the large increase in female employer-sponsored training. |
| Keywords: | Literacy, Employer Training, Payroll Tax |
| JEL: | J24 J38 M53 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-10&r=lab |
| By: | Deborah Nusche |
| Abstract: | Education plays an essential role in preparing the children of immigrants for participation in the labour market and society. Giving these children opportunities to fully develop their potential is vital for future economic growth and social cohesion in OECD countries. But migrant students in most OECD countries tend to have lower education outcomes than their native peers. Extensive previous research has described the system level, school level and individual level factors that influence the education outcomes of migrant students. Building on such previous research, this paper looks at the ways in which education policies can influence these factors to help provide better educational opportunities for migrant students.<BR>L’éducation joue un rôle crucial dans la préparation des enfants d’immigrants au monde du travail et à la vie sociale. Donner à ces enfants l’opportunité de développer pleinement leur potentiel est une nécessité pour assurer la croissance économique future et la cohésion sociale dans les pays de l’OCDE. Cependant, les résultats scolaires des étudiants migrants sont en moyenne plus faibles que ceux des natifs dans la plupart des pays de l’OCDE. De nombreux travaux de recherche ont décrit les facteurs influençant la performance des migrants, au niveau du système d’éducation dans son ensemble, comme au niveau de chaque école et de chaque individu en particulier. En s’appuyant sur les résultats de la recherche existante, ce papier étudie comment les politiques d’éducation peuvent à leur tour influencer ces facteurs, afin de donner aux étudiants migrants les meilleures opportunités. |
| Date: | 2009–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaab:22-en&r=lab |
| By: | Andreas Georgiadis; Alan Manning |
| Abstract: | There is widespread concern currently that some ethnic minority communities within Britain,especially Muslim, are not following the stereotypical immigrant path of economic andcultural assimilation into British society. Indeed, many seem to have the impression thatdifferences between Muslims and non-Muslims are widening. In this paper we compare thetwo largest Muslim communities in Britain (Pakistanis and Bangladeshis) with other ethnicminorities to ask the questions 'are Muslims different?' and 'is their behaviour changing overtime?' The indicators we look at are the gender gap in education, age at marriage,cohabitation and inter-marriage, fertility and the employment of women. In all thesedimensions we find that the Muslim communities are different but we also find evidence ofchange. This is partly because those born in Britain generally have markedly differentbehaviours from those born in the country of origin, but also because there is change withinboth the UK-born and foreign-born communities. The evidence suggests there is, alongalmost all dimensions, a movement towards convergence in behaviour. |
| Keywords: | Immigration, assimilation |
| JEL: | J15 J61 F22 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0903&r=lab |
| By: | Tomer Blumkin; Yossi Hadar; Eran Yashiv |
| Abstract: | The standard motivation for unemployment compensation is consumption smoothing andmost papers in the literature have analyzed trade-offs involving consumption smoothing andmoral hazard. This paper shows how such policy can increase output by enhancing theassignment of workers to jobs in the face of firm productivity heterogeneity and skill-biasedtechnological change. It shows that in order to do so policy needs to be a function of theproperties of the firm's productivity distribution. The paper undertakes an empiricallygrounded,normative analysis of this issue. The analysis also bears upon the wagedistribution, showing how optimal unemployment compensation policy is affected by wagesand affects them in turn. A key insight emerging from the analysis is that the degree of firmproductivity heterogeneity, in terms of skewness and variance, matters for the design of thetime path of unemployment compensation. |
| Keywords: | Productivity, heterogeneity, unemployment compensation policy, technologicalchange, assortative matching |
| JEL: | E24 E61 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0909&r=lab |
| By: | Tanya Wanchek (Center for Economic and Policy Studies) |
| Abstract: | By specializing in preventative oral healthcare, dental hygienists (DHs) have the potential to improve oral health in the United States. DHs decrease the cost and increase the availability of oral healthcare beyond what would be provided by dentists alone. Yet, laws and regulations in many U.S. states prevent DHs from fulfilling their potential. A prior study by Wing et al. (2005) found that states that impose more restrictions on the functions DHs are permitted to perform have lower wages and poorer oral health outcomes. This study adds entry restrictions, including educational and licensure requirements, to the analysis by developing a model in which a state’s entry and practice restrictions jointly affect the DH labor market and access to care. After evaluating anecdotal evidence from four case studies, we estimate the effect of variations in entry and practice restrictions across the U.S. using a three stage least squares (3SLS) estimation method. The results are consistent with the hypotheses that entry restrictions reduce employment rates, practice restrictions increase productivity and wage rates, and wage and employment rates are endogenous to each other and jointly influence access to care. The implication for states seeking to improve oral health is that both entry and practice laws and regulations must be considered jointly in order to significantly improve access to care. |
| Keywords: | Oral health, dental hygiene regulation, occupational licensure |
| JEL: | J44 I11 K23 J21 |
| Date: | 2009–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:vac:wpaper:wp09-02&r=lab |
| By: | Lena Suchanek |
| Abstract: | In continental Europe, labour shares in national income have exhibited considerable variation since 1970. Empirical and theoretical research suggests that the evolution of labour markets and labour market imperfections can, in part, explain this phenomenon. The author analyzes the role of capital market imperfections in the determination of the distribution of national income, comparing European and Anglo-Saxon countries. She uses a simple general-equilibrium model to trace the effects of credit and labour market imperfections on factor shares. Simulations indicate that improvements in capital markets can explain lower labour shares. An increase in the degree of employee power results in higher labour shares. Regression results confirm the author's findings. Improvements in credit markets and decreasing employee bargaining power have contributed to shrinking labour shares, especially in Europe. Openness is a negative determinant of labour shares. |
| Keywords: | Economic models; Labour markets; Financial institutions |
| JEL: | C78 E25 J64 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocadp:09-2&r=lab |
| By: | Hou, Xiaohui (The World Bank) |
| Abstract: | The relationship between wealth and child labor has been widely examined. This paper uses three rounds of time-series, cross-sectional data to examine the relationship between wealth and child labor and schooling. The paper finds that wealth is crucial in determining a child's activities, but that this factor is far from being a sufficient condition to enroll a child in school. This is particularly the case for rural girls. Nonparametric analysis shows a universal increase in school enrollment for rural girls from 1998 to 2006. This increase is independent of wealth (measured by per capita expenditure). Multinomial logit regression further shows that wealth is insignificant in determining rural girls' activity decisions. Thus, interventions to increase school enrollment should incorporate broad-targeted, demand-side interventions as well as supply-side interventions. |
| Keywords: | Child labor; Education; Poverty |
| JEL: | D01 J13 O12 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4831&r=lab |
| By: | Farré, Lídia (University of Alicante); Klein, Roger (Rutgers University); Vella, Francis (Georgetown University) |
| Abstract: | This paper investigates the degree of intergenerational transmission of education for individuals from the National Longitudinal Survey of Youth 1979. Rather than identifying the causal effect of parental education via instrumental variables we exploit the feature of the transmission mechanism responsible for its endogeneity. More explicitly, we assume the intergenerational transfer of unobserved ability is invariant to the economic environment. This, combined with the heteroskedasticity resulting from the interaction of unobserved ability with socioeconomic factors, identifies this causal effect. We conclude the observed intergenerational educational correlation reflects both a causal parental educational effect and a transfer of unobserved ability. |
| Keywords: | intergenerational mobility, endogeneity, conditional correlation |
| JEL: | C31 J62 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3967&r=lab |
| By: | Schanne, Norbert (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Weyh, Antje (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "'What makes start-ups out of unemployment different?' To answer this question we formulate a theoretical sketch for start-up activity out of unemployment. Furthermore, we estimate spatial autoregressive models for the regional start-up rates out of unemployment as well as out of employment with German data from 1999 to 2004 at the NUTS3-level. Characteristics describing the populations of potential entrepreneurs as well as agglomeration externalities have a similar impact on both start-up rates. They are, however, affected in different ways by the regional wage level and the probability of entrepreneurial success. Moreover, the local impact of these determinants is amplified by spatial spillover and spatial feedback effects in particular for the start-up rate out of unemployment." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Unternehmensgründung - Determinanten, Arbeitslose, berufliche Selbständigkeit, regionale Faktoren, Lohnhöhe, Persönlichkeitsmerkmale, regionale Verteilung |
| JEL: | C31 J23 M13 R12 |
| Date: | 2009–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200904&r=lab |
| By: | Mansur, Kasim; Abd. Rahim, Dayangku Aslinah; Lim, Beatrice; Mahmud, Roslinah |
| Abstract: | Malaysian women have continued to play an increasingly important role in the national development of the country including greater participation in the economy and labor market. These improvements were made possible by the increasing numbers of females having access to education. Education provides better work opportunities and thus increases the level of income of an individual. Therefore education is perceived to be an important factor in human capital formation. In Islam, every Muslim is required to acquire knowledge as much as possible. Knowledge generates wealth. Thus, Islam condemns idleness, inactivity and poverty are condemned. A Muslim should be actively involved in the pursuit of increasing their knowledge and skill to ensure that their life is not of mere subsistence. This paper will look at the perception towards the importance of education among Muslim women. A total of 189 respondents were interviewed from selected kampongs in the district of Papar, Sabah. The data collected was analyzed and reported using descriptive statistics. About 42.4 percent respondents have obtained a diploma and degree level education. From the study, it is found that 78 percent of the total respondents perceived that education is very important. A total of 47.1 percent strongly agreed that education can influence future income. Essentially, a total of 78.8 per cent agreed that higher level of education leads to a higher level of income. |
| Keywords: | Education; Women; Sabah |
| JEL: | O18 I20 |
| Date: | 2009–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13274&r=lab |
| By: | Dessus, Sebastien (The World Bank); Nahas, Charbel (The World Bank) |
| Abstract: | With growing international skilled labor mobility, education and migration decisions have become increasingly inter-related, and potentially have a large impact on the growth trajectories of source countries, through their effects on labor supply, savings, or the cost of education. The authors develop a generic dynamic general equilibrium model to analyze the education-migration nexus in a consistent framework. They use the model as a laboratory to test empirical conditions for the existence of net brain gain, that is, greater domestic accumulation of human capital (in per capita terms) with greater migration of skilled workers. The results suggest that although some structural parameters can favor simultaneously greater human capital accumulation and greater skilled migration --such as high ratio of remittances over domestic incomes, high dependency ratios in migrant households, low dependency ratios in source countries, increasing returns to scale in the education sector, technological transfers and export market access with Diasporas, and efficient financial markets -- this does not necessarily mean that greater migration encourages the constitution of greater stocks of human capital in source countries. |
| Keywords: | Migration; Education; Brain Gain; Brain Drain; General Equilibrium Models |
| JEL: | C68 P36 R23 |
| Date: | 2008–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4775&r=lab |
| By: | Henley, Andrew (University of Wales, Swansea) |
| Abstract: | Contemporary dynamic theories of self-employment choice focus on occupational switching costs, and the risk associated with entrepreneurial income streams. However little or no previous research has addressed the question of what factors determine the length of time that it takes aspiring entrepreneurs to switch into self-employment. The existence of switching costs suggests that choice may be subject to 'hysteresis' (akin to investment under conditions of irreversibility and uncertainty). This paper presents empirical evidence on the dynamics of entrepreneurial transition drawing on data from Waves 8 to 16 of the British Household Panel Survey. The paper estimates a discrete-time duration model of the time between initial expressions of aspiration to transition into self-employment. The model incorporates measures of local economic volatility to capture uncertainty, as well as a range of demographic and background factors which may be associated with lower switching costs. Econometric results reveal that switching costs are lower for men, older individuals and graduates, as well as for those with prior entrepreneurial experience. Increased volatility in the local housing market is also found to be associated with slower transition, suggesting that information about the housing market may form an important indicator of uncertainty for aspiring entrepreneurs. |
| Keywords: | self-employment, entrepreneurship, switching costs, occupational choice |
| JEL: | J23 J24 C23 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3969&r=lab |
| By: | Goerg, Sebastian (University of Bonn); Kube, Sebastian (Max Planck Institute for Research on Collective Goods); Zultan, Ro'i (Max Planck Institute for Economics) |
| Abstract: | The importance of fair and equal treatment of workers is at the heart of the debate in organizational management. In this regard, we study how reward mechanisms and production technologies affect effort provision in teams. Our experimental results demonstrate that unequal rewards can potentially increase productivity by facilitating coordination, and that the effect strongly interacts with the exact shape of the production function. Taken together, our data highlight the relevance of the production function for organization construction and suggest that equal treatment of equals is neither a necessary nor a sufficient prerequisite for eliciting high performance in teams. |
| Keywords: | team incentives, equity, production function, social preferences, laboratory experiment, discriminating mechanism, mechanism desig |
| JEL: | C92 D23 D63 J31 J33 J41 M12 M52 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3959&r=lab |
| By: | Leonardo Becchetti (University of Rome Tor Vergata); Stefano Castriota (University of Trento); Melania Michetti (Fondazione Enrico Mattei) |
| Abstract: | We evaluate the impact of fair trade (FT) affiliation on child labour on a sample of Chilean honey producers with a retrospective panel data approach. From a theoretical point of view we argue that, in the short run, FT acts, on both adult and child wages, as a pure income effect to which a productivity effect adds up in the medium run. The direction of the impact is therefore uncertain and requires empirical testing. Our econometric findings document a significant impact of affiliation years on child schooling after controlling for endogeneity and the heterogeneity between treatment and control sample. |
| Keywords: | Fair Trade, child labor. |
| JEL: | O19 O22 D64 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2008-103&r=lab |
| By: | Luciano Fanti; Luca Gori |
| Abstract: | Since little attention has been paid to the effects of the regulation of wages on individuals' fertility choice, this paper investigates such effects within a standard OLG model of neoclassical growth. Some new results, so far escaped closer scrutiny by the increasing literature investigating economic growth and fertility, and which may have interesting policy implications, emerge: introducing minimum wages may, under suitable conditions, (1) have a favourable impact on the long-run outcomes of the economy; and (2) reduce the population growth rate. This occurs more likely when both sufficiently high capital's weight in technology and unemployment benefits do exist. Interestingly, these results are robust to different extensions introducing pensions and intra-family transfers. Therefore, to the extent that the absence of unions and of any regulation of wages are related with low wages, and the weight of capital in the distribution is increasing, the findings of this work also offer some policy implications which are, especially for developing countries in which the population growth may be too high, very interesting. |
| Keywords: | Minimum wage, Unemployment, Endogenous fertility |
| JEL: | E24 J13 O41 |
| Date: | 2008–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2008/70&r=lab |
| By: | Arntz, Melanie; Wilke, Ralf A. |
| Abstract: | With the purpose to reduce winter unemployment and to promote all-season employment in the constructions sector, Germany maintains an extensive bad weather allowance system. Since the mid 1990s, these regulations have been subject to several reforms that resemble the range of approaches for employment promotion which can be found in other European countries. We analyse the effect of these reforms on individual unemployment risks using large individual administrative data merged with information about local weather conditions and the business cycle. We find a weaker direct link between seasonal layoffs and actual weather than broadly assumed, since most of the layoffs take place at fixed dates. The reforms under consideration have economically plausible effects; Regulations that limit an employer's financial burden reduce transitions to unemployment and render it less weather-dependent. |
| Keywords: | panel data, temporary layoffs, employment stability |
| JEL: | J38 J48 J68 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7479&r=lab |
| By: | Majidov, Toshtemir; Ghosh, Dipak; Ruziev, Kobil |
| Abstract: | Uzbekistan's higher education system has undergone some dramatic changes in the past century, evolving from largely traditional religious colleges to fully state-funded communist-atheist institutions. Since the end of the communist administration and subsequent market-oriented reforms, the institutions of higher education (IHE) in Uzbekistan have had to reinvent and reform themselves again, as the demand for different kind of education increased. This paper puts the current changes and trends in IHEs into an historical perspective and highlights some important effects of the market reforms on the educational scene. |
| Keywords: | Education; Higher; Uzbekistan; Reforms; Transition |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2009-03&r=lab |
| By: | Shintaro Yamaguchi |
| Abstract: | This paper constructs and structurally estimates a dynamic model of occupational choice where all occupations are characterized in a continuous multidimensional space of skill requirement using the data from the Dictionary of Occupational Titles and the NLSY79. This skill space approach allows the model to include hundreds of occupations at the three-digit census classification level without a large number of parameters. Thereby it provides more detailed analysis of occupations than previous papers. Parameter estimates indicate that skill demanding occupations offer higher returns to education and experience, which results in occupational sorting. They also suggest that the estimated skill prices by the OLS are severely biased due to this sorting. |
| Keywords: | Occupational choice, occupational sorting, human capital, skills, structural estimation |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd08-25&r=lab |
| By: | Simon Burgess; Deborah Wilson; Adam Briggs; Anete Piebalga |
| Abstract: | In this paper we ask whether ethnic segregation in schools and in neighbourhoods has a causal effect on differential school attainment. We ask two related but different questions. First, we look at the test score gap between White and minority ethnic students, separately for Black Caribbean, Indian and Pakistani ethnic groups. Second, we consider the absolute performance of students in each of these minority ethnic groups across cities with varying levels of segregation. We show that, in strong contrast to similar studies in the US, the test score gap is largely unaffected by segregation for any of the three groups we study, and we find no evidence of a negative impact of ethnic segregation on absolute attainment levels. |
| Keywords: | ethnic segregation, schools |
| JEL: | I20 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:08/204&r=lab |
| By: | Ambra Poggi |
| Abstract: | According to Sen’s capability approach, objective working conditions can be seen as functionings (i.e. things experienced by the individuals). The corresponding capability set includes all sets of alternatives working conditions existing in the society for a given kind of job. Observing the existing capability set of working conditions, individuals formulate expectations about their own working conditions. These expectations might create biases in the realistic perceptions of job satisfaction. Our aim is to study the determinants of worker perceptions of quality of work in EU Countries. In particular, we shed light on the complex relationship that exists between job satisfaction, objective working conditions and workers expectations. First, we determine which objective working conditions impact on the level of job satisfaction. Second, we test the existence, and the signs, of biases in the realistic perception of job satisfaction due to the existence of expectations. Third, we test if expectations are affected by the working conditions actually experienced in the job place. From a technically point of view, we estimate a two-tiered stochastic frontier model. We find that expectations biases exist. High expectations have stronger effects in reducing job satisfaction than low expectation in increasing job expectations. Finally, expectations are affected by the working conditions actually experienced by the workers. |
| Keywords: | Job satisfaction, working conditions, expectations, two-tiered stochastic frontier model. |
| JEL: | J81 J28 I31 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:73&r=lab |
| By: | Pablo Antolín; Edward R. Whitehouse |
| Abstract: | The current generation of workers can expect lower pension benefits in retirement than the current generation of pensioners. Private, voluntary pension savings will therefore play a greater role in providing for old age. This paper calculates the size of the “pension gap”: the difference between the benefits from mandatory retirement-income provision and a target pension level. It then computes the amount that people would need to save to achieve the target. Data on coverage of private, voluntary pension schemes in a range of OECD countries are then presented. The paper also shows how coverage varies with age and earnings. The results show significant gaps in coverage, particularly among low earners and younger workers. The effect could be a resurgence of old-age poverty when these generations reach retirement. Data on contributions to private pensions show that these are, on average, at a level likely to fill the pension gap. Expanding coverage rather than raising contribution rates should therefore be the policy priority. Five policy options for increasing coverage are assessed: (i) mandating private pensions; (ii) “soft compulsion”, which is automatic enrolment in private pensions but with an opt-out; (iii) facilitating access to the means for saving for retirement; (iv) preferential tax treatment of retirement savings; and (v), improving financial awareness.<BR>L’actuelle génération de travailleurs peut s’attendre à toucher des prestations de retraite inférieures à celles que perçoit l’actuelle génération de retraités. Les régimes privés, volontaires, d’épargne-retraite seront donc appelés à jouer un plus grand rôle en tant que source de revenu pour les personnes âgées. Le présent document évalue l’ampleur du déficit d’épargne-retraite : c’est-à-dire de la différence entre les prestations servies par les régimes obligatoires de retraite et l’objectif visé en matière de pension. Il calcule ensuite les sommes que les salariés devraient épargner pour atteindre cet objectif. Le document présente ensuite des données sur la couverture des régimes de retraite volontaires privés dans un certain nombre de pays de l’OCDE. Il montre aussi que cette couverture varie fortement en fonction de l’âge et des gains et qu’elle est particulièrement réduite dans le cas des titulaires de bas salaires et des jeunes travailleurs. La conséquence pourrait être une résurgence de la pauvreté des personnes âgées, lorsque ces générations atteindront l’âge de la retraite. Les données sur les cotisations aux régimes de pensions privés montrent qu’elles se situent, en moyenne, à un niveau qui devrait permettre de combler le déficit d’épargne retraite. L’extension de la couverture plutôt que l’augmentation des taux de cotisation, devrait donc être considérée comme la priorité d’action. Cinq lignes d’action pour étendre cette couverture sont évaluées : (i) l’adhésion obligatoire à des régimes de pension privés ; (ii) la contrainte douce, c’est-à-dire l’inscription automatique à des régimes de pensions privés, avec possibilité de refuser; (iii) un accès facilité aux dispositifs d’épargne-retraite ; (iv) l’application d’un régime fiscal préférentiel aux revenus épargnés en vue de la retraite et (v) le développement de l’éducation financière. |
| JEL: | D14 G23 H24 H31 J14 |
| Date: | 2009–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:69-en&r=lab |
| By: | Jan Eeckhout (Department of Economics, University of Pennsylvania); Philipp Kircher (Department of Economics, University of Pennsylvania) |
| Abstract: | We argue that using wage data alone, it is virtually impossible to identify whether Assortative Matching between worker and firm types is positive or negative. In standard competitive matching models the wages are determined by the marginal contribution of a worker, and the marginal contribution might be higher or lower for low productivity firms depending on the production function. For every production function that induces positive sorting we can find a production function that induces negative sorting but generates identical wages. This arises even when we allow for non-competitive mismatch, for example due to search frictions. Even though we cannot identify the sign of the sorting, we can identify the strength, i.e., the magnitude of the cross-partial, and the associated welfare loss. While we show analytically that standard fixed effects regressions are not suitable to recover the strength of sorting, we propose an alternative procedure that measures the strength of sorting in the presence of search frictions independent of the sign of the sorting. |
| Keywords: | sorting, assortative matching, identification, linked employer-employee data, interpretation of fixed-effects |
| JEL: | J31 C78 |
| Date: | 2009–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:09-007&r=lab |
| By: | Dabalen, Andrew (The World Bank); Kilic, Talip (The World Bank); Wane, Waly (The World Bank) |
| Abstract: | In 1993, in response to persistent unemployment, and rising poverty and social unrest, the government of Albania introduced an anti-poverty program, namely Ndihma Ekonomike; in 1995 it was extended to all poor households. This paper estimates the separate effects of participation in this income support program and the old-age pension program on objective and subjective measures of household poverty. The analysis uses the nationally representative Albanian Living Standards Measurement Surveys carried out in 2002 and 2005. Using propensity score matching methods, the paper finds that Ndihma Ekonomike households, particularly urban residents, have lower per capita consumption and are more likely to be discontented with their lives, financial situation, and consumption levels than their matched comparators. In contrast, households receiving pensions are not significantly different from their matched comparators in reference to the same set of outcomes. The paper finds that the negative impact of Ndihma Ekonomike participation on welfare is driven by a negative labor supply response among work-eligible individuals. This negative labor response is larger among women and urban residents. In contrast to Ndihma Ekonomike, the receipt of old-age pension income transfers does not significantly impact the labor supply of prime-age individuals living in pension households |
| Keywords: | Social protection; Labor supply; Albania |
| JEL: | H53 J22 |
| Date: | 2008–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4783&r=lab |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)) |
| Abstract: | We identify pertinent institutions governing the structure of payoffs with regard to female career progression. Drawing on recent insights in behavioral economics, we hypothesize that interactions between psychological mechanisms and the institutional setup may be important determinants of cross-country differences in the level and evolution of female representation in executive positions in the business sector. We test this proposition informally by exploring whether it can be used to account for some of the observed differences between the Anglo-Saxon and Scandinavian countries in this respect. Three particularly important conclusions emerge: (i) broad welfare state policy promotes high female labor force participation, but blunts incentives to pursue top executive positions in the business sector; (ii) therefore, it is likely to be misleading to use the share of female executives as a proxy for gender equality in welfare states; and (iii) psychological mechanisms are likely to amplify the effects of policies and institutions. |
| Keywords: | Career choice; Career incentives; Gender equality; Parental leave; Household production |
| JEL: | D13 D63 J16 J20 M52 |
| Date: | 2009–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0786&r=lab |
| By: | Murtin, Fabrice (Stanford University); Viarengo, Martina (CEP, London School of Economics) |
| Abstract: | This paper derives original series of average years of schooling in the United States 1870-1930, which take into account the impact of mass migrations on the US educational level. We reconstruct the foreign-born US population by age and by country of origin, while combining data on the flow of migrants by country and the age pyramids of migrants by country. Then we use original data on educational attainment in the nineteenth century presented in Morrisson and Murtin (2008) in order to estimate the educational level of US immigrants by age and by country. As a result, our series are consistent with the first national estimates of average schooling in 1940. We show that mass migrations have had a significant but modest impact on the US average educational attainment. However, the educational gap between US natives and immigrants was large and increased with the second immigration wave, a phenomenon that most likely fostered the implementation of restrictive immigration rules in the 1920s. |
| Keywords: | economic history, migrations, education, economic development research |
| JEL: | I2 J24 N70 O1 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3964&r=lab |
| By: | Bunar, Nihad (Stockholm University Linnaeus Center for Integration Studies - SULCIS) |
| Abstract: | The aim of this article is to describe and analyze how a number of multicultural urban schools in the Swedish cities of Stockholm and Malmö identify, understand and respond to the competition they have been exposed to on the emerging educational quasi-market. Based on interviews with school leaders and research on a wide range of secondary literature it is possible to identify three types of competitors: “white” schools, ordinary and religious/ethnic free schools and neighboring multicultural schools. The responding strategies vary from the logic of resignation and condemnation of parents for making “wrong” choices to a critical redefinition of pedagogical practices towards minority students and the equivocal alliances. I argue that the competition as an exclusive incentive for school development, as proposed by the neoliberal educationalists, only partly has proven its aptitude. If the education system is to maintain its transformative capacity then interventions are needed in the very basis of the structure of inequality that generates social differences; in the way the educational market is organized as well as; in the multicultural urban schools’ daily operations and communications with their local communities. |
| Keywords: | school choice; multicultural urban schools; competition; resignation |
| JEL: | I21 |
| Date: | 2009–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sulcis:2009_003&r=lab |
| By: | Luciano Fanti; Luca Gori |
| Abstract: | Unemployment and population ageing are probably two of the most important concerns in developed countries. Since reforming labour markets is high on the political agenda, a theoretical knowledge of the possible long-run interaction between unemployment and the childcare system may be highly valuable. Applying a fairly standard OLG model with endogenous fertility and minimum wages, we show that a child tax (rather than the more conventional child subsidy) can be used as an instrument (1) to promote population growth and (2) to reduce unemployment and, in particular, to restore the full employment equilibrium. |
| Keywords: | Child Tax; Fertility; OLG model; Unemployment |
| JEL: | H24 J13 J18 |
| Date: | 2009–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2009/76&r=lab |
| By: | Carlsson, Magnus (Kalmar University); Rooth, Dan-Olof (Kalmar University) |
| Abstract: | Today there is a variation within the EU to what extent nations allow for situation test results to constitute mass of evidence in court in order to prevent ethnic discrimination. In the UK The Equality and Human Rights Commission has the right to conduct discrimination tests and to even prosecute firms, implying that discriminating firms face the risk of a significant penalty. Other European countries have been reluctant to use such tests as a tool for counteracting discrimination and discuss a much softer version with only monitoring. In this study two labor market field experiments, sending qualitatively identical job applications with randomly assigned Swedish and Middle Eastern sounding names to employers, show that ethnic discrimination exists in hiring in the Swedish labor market. In both studies extensive media coverage occurred when being only halfway finished informing employers of their hiring practices being monitored by such situation testing. This study utilizes these unique events and the data from the experiments to perform a difference-in-differences analysis of whether discrimination decreased after the media coverage. The results reveal no sign of employers changing their hiring practices when being aware of running the risk of being included in such an experiment. This suggests that the detection risk alone is not sufficient if authorities wish to use field experiments as a discrimination prevention strategy. Instead, it must be combined with some penalty to become effective. |
| Keywords: | ethnic discrimination, correspondence testing, situation testing, field experiments |
| JEL: | J64 J71 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3972&r=lab |
| By: | Pasqualino Montanaro (Banca d'Italia) |
| Abstract: | Student performance has been tested by various surveys at the international level in recent years, using different aims and methodologies. On the basis of a comparative analysis, this paper aims to describe the differences in performance between Italian regions, subjects and ages or grades. All the surveys revealed significant gaps in performance across the Italian regions, with students in the South being far behind those in the North in all the subjects surveyed (reading, mathematics, science). This gap is particularly marked in technical (“istituti tecnici”) and vocational (“istituti professionali”) schools. Also the degree of disparity in scores is higher in the South. The geographical divides increase with grade: the gaps between North and South are more mitigated at the earlier grades and concentrated among students with a low parental background. Student achievement is strongly correlated with the socio-cultural and economic conditions of the family. However, this relationship seems to be sharper at the earlier grades, while it vanishes at the upper secondary school level, when the type-of-program and school effects have much greater impact. Finally, this paper also suggests that marks (or final grades) given internally by schools do not reflect the real levels of proficiency, and do not, therefore, distinguish good students from bad ones. |
| Keywords: | quality of education, international assessments, regional disparities |
| JEL: | I20 I21 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_14_08&r=lab |
| By: | Dreber, Anna (Dept. of Economics, Stockholm School of Economics); von Essen, Emma (Department of Economics); Ranehill, Eva (Dept. of Economics, Stockholm School of Economics) |
| Abstract: | Recent studies find that women are less competitive than men. This gender difference in competitiveness has been suggested as a possible explanation for why men occupy the majority of top positions in many sectors. In this study we explore competitiveness in children. A related field experiment on Israeli children shows that only boys react to competition by running faster when competing in a race, and that only girls react to the gender of their opponent. Here we test if these results carry over to 8-10 year old Swedish children. We also include two more "female" sports: skipping rope and dancing. Our results contradict previous findings in two ways. First, we fail to replicate the running result. In our study, both boys and girls compete. We also find no gender differences in competition in skipping rope and dancing. Second, we find no clear effect on competitiveness of the opponent’s gender, neither on girls or boys, in any of the tasks. Our findings suggest that the gender gap in competitiveness found in previous studies on adults may be caused by factors that emerge later in life. It remains to be explored whether these factors are biological or cultural. |
| Keywords: | competitiveness; gender differences; field experiment |
| JEL: | C93 J16 |
| Date: | 2009–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hastef:0709&r=lab |
| By: | Mika Maliranta; Petri Böckerman |
| Abstract: | ABSTRACT : We examine the sources and micro-level mechanisms of the changes in the labor share of value added. We link the micro-level dynamics of the labor share change with that of productivity and wage growth. Using a useful variant of the decomposition method we make a distinction between the change in the average plant and the micro-level restructuring. With Finnish plant-level data covering three decades we show that micro-level restructuring is the link between the declining labor share and increasing productivity in 12 manufacturing industries of four regions, and that increased international trade is a factor underlying those shifts. |
| Keywords: | globalization, international trade,foreign ownership, micro-level restructuring, labor share |
| JEL: | F16 J31 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1178&r=lab |
| By: | Tsuyoshi Tsuru |
| Abstract: | This paper examines incentives and gaming behavior in a sales workforce using personnel records from one of Japanfs largest auto sales chains. The company replaced a simple, linear compensation system in 2000 with nonlinear pay scheme kinked around a draw line. Econometric analysis indicates the following. First, the new pay scheme yields productivity increases, although a month-end deadline induces gaming behavior. Second, the incentive effect is weaker for used car sales staff than for new car sales staff. The difference can be attributed to disincentives such as smaller gross profits and larger servicing burdens that discouraged workers near the threshold from putting forth additional effort. |
| Keywords: | Compensation; Automobile Dealership; Incentives; Gaming |
| JEL: | M12 M5 J31 J33 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:a510&r=lab |
| By: | Blomeyer, Dorothea; Coneus, Katja; Laucht, Manfred; Pfeiffer, Friedhelm |
| Abstract: | This paper investigates the development of basic cognitive, motor and noncognitive abilities from infancy to adolescence. We analyse the predictive power of these abilities, initial risk conditions and home resources for children’s achievement. Our data are taken from the Mannheim Study of Children at Risk (MARS), an epidemiological cohort study, which follows the long-term outcome of early risk factors. Results indicate that differences in abilities increase during childhood, while there is a remarkable stability in the distribution of the economic and socio-emotional home resources during childhood. Initial risk conditions trigger a cumulative effect. Cognitive, motor and noncognitive abilities acquired during preschool age contribute to the prediction of children’s achievement at school age. |
| Keywords: | Initial Conditions, Home Resources, Intelligence, Persistence, Social Competencies, School Achievement |
| JEL: | D87 I12 I21 J13 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7474&r=lab |
| By: | Pandey, Priyanka (The World Bank); Goya, Sangeeta (The World Bank); Sundararaman, Venkatesh (The World Bank) |
| Abstract: | This study evaluates the impact of a community-based information campaign on school performance from a cluster randomized control trial. The campaign consisted of eight to nine public meetings in each of 340 treatment villages across three Indian states to disseminate information to the community about its state mandated roles and responsibilities in school management. The findings from the first follow-up 2-4 months after the campaign show that providing information through a structured campaign to communities had a positive impact in all three states. In two states there was a significant and positive impact on reading (14-27 percent) in one of the three grades tested; in the third state there was a significant impact on writing in one grade (15 percent) and on mathematics in the other grade tested (27 percent). The intervention is associated with improvement in teacher effort in two states. Some improvements occurred in the delivery of certain benefits entitled to students (stipend, uniform, and mid day meal) and in process variables such as community participation in each of the three states. Follow-up research needs to examine whether there is a systematic increase in learning when the impact is measured over a longer time period and whether a campaign sustained over a longer time is able to generate greater impact on school outcomes. |
| Keywords: | annual grants; attendance requirements; average treatment effect; basic education; blackboards; call; civil service; civil service teachers; classroom; Community Participation; competencies |
| Date: | 2008–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4776&r=lab |
| By: | Fabian Waldinger |
| Abstract: | This paper analyzes peer effects among university scientists. Specifically, it investigates whether thenumber of peers and their average quality affects the productivity of researchers in physics, chemistry,and mathematics. The usual endogeneity problems related to estimating peer effects are addressed byusing the dismissal of scientists by the Nazi government as a source of exogenous variation in the peergroup of scientists staying in Germany. Using a newly constructed panel dataset covering the universeof physicists, chemists, and mathematicians at all German universities from 1925 until 1938 Iinvestigate peer effects at the local level and among co-authors. There is no evidence for localizedpeer effects, as neither department level (e.g. the physics department) nor specialization level (e.g. alltheoretical physicists in the department) peers affect a researcher's productivity. Among co-authors,however, there is strong and significant evidence that peer quality affects a researcher's productivity.Loosing a co-author of average quality reduces the productivity of an average scientist by about 13percent in physics and 16.5 percent in chemistry. |
| Keywords: | peer effects, Nazi Germany, science, university, higher education, spillovers, co-authors |
| JEL: | I20 I21 I23 I28 J24 L31 L38 N34 N44 O31 O38 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0910&r=lab |
| By: | Mihaescu, Diana; Mihaescu, Liviu; Andrei, Olivia; Bologa, Lia |
| Abstract: | The life of any organization is not only manifested through its activities, but also by subjective states that its members live and shape its human dimension. Involved in carrying out different activities, the TTD’s academic human resource interact and cooperate, their work is accompanied by all kinds of experiences: dissatisfaction-satisfaction, happiness-sadness, confidence-deterrence, etc. These states are the subjective dimension of work, influencing, at a high level, the overall condition and the smooth running of the organization, its performance. |
| Keywords: | human resources; quality assurance; educational management |
| JEL: | M14 I23 M54 M12 |
| Date: | 2008–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12986&r=lab |
| By: | Neill, Christine |
| Abstract: | Student loan programs are an important feature of post-secondary education systems around the world. However, there is little direct evidence on whether these programs are effective in increasing enrolments of credit constrained students. Unlike other countries, Canada has a system of student loans and grants that is based on combined provincial/federal jurisdiction, leading to policy differences over time between provinces. I exploit these differences to evaluate the effects of changes in maximum student loan limits on enrolments of young people. I find that although there is evidence that increasing nonrepayable assistance leads to increases in enrolments, loans appear to increase only the probability of youth living away from their parents’ house while studying. |
| Keywords: | Post-Secondary Education, Student Loans, Credit Constraints |
| JEL: | I2 I28 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-11&r=lab |
| By: | Anders Holm (Department of Sociology, University of Copenhagen); Mads Meier Jæger (Danish National Centre for Social Research, Copenhagen) |
| Abstract: | Most studies which use Mare’s (1980, 1981) seminal model of educational transitions find that the effect of family background variables decreases across educational transitions. Cameron and Heckman (1998, 2001) have argued that this “waning coefficients” phenomenon might be driven by selection on unobserved variables. This paper, first, analyzes theoretically how selection on unobserved variables leads to waning coefficients and, second, illustrates empirically how selection affects estimates of the effect of family background variables on educational transitions. Our empirical analysis which uses data from the United States, United Kingdom, Denmark, and the Netherlands shows that the effect of family background variables on educational transitions is largely constant across transitions when we control for selection on unobserved variables. We also discuss the inherent difficulties in estimating educational transition models which deal effectively with selection on unobserved variables. |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuieca:2009_05&r=lab |
| By: | Christian N. Brinch (Statistics Norway) |
| Abstract: | I study the effects of the level of disability benefits on disability uptake. Estimation of such effects is difficult because individual levels of disability pension benefits are closely related to individual characteristics that may also affect disability uptake through other mechanisms. I exploit variation in disability benefits related to individual characteristics only through birth cohort, due to special rules of the phasing in of the Norwegian National insurance scheme. These rules imply a nonlinear relationship between birth cohort and disability benefit level, which allows me to estimate the effects of benefits based on between-cohort differences, while controlling for age and year effects and hence implicitly linear trends in birth cohorts. The results show a statistically significant and strong positive effect of benefits on transitions to disability. The robustness of the results is studied in a number of tests based on sample partitions and other groups that are not exposed to the nonlinear relationship between birth cohort and disability benefit level. |
| Keywords: | Disability benefits; disability uptake; instrumental variables. |
| JEL: | I38 J22 J26 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:576&r=lab |
| By: | Paul Gregg; Claudia Vittori |
| Abstract: | Starting from the approach proposed by Schluter and Trede (2003) we develop a continuous and alternative measure of mobility which first, allows to identify mobility over different parts of the earnings distribution and second, to distinguish between mobility that tends to reduce or increase the level of permanent inequality. This paper focuses on four European countries, Denmark, Germany, Spain and the UK. In a global perspective, mobility in the short and long-run analysis tends to equalize the level of permanent inequality. Six year changes comparing the average between 1994 and 1995 with the average of 2000 and 2001, suggests that Denmark has the highest mobility mainly almost entirely from higher mobility at the middle and top of the distribution. Germany has the lowest overall mobility. Overall mobility over six years produces only a modest reduction in inequality patterns (5 to 10%) adopting the Gini index and there is no clear correlation between mobility and inequality levels. Exploiting the decomposability of the mobility index developed, we carry out a local analysis by earnings quintiles which draw some general key facts. It emerges that it is the bottom 20 percent of the earnings distribution that makes the largest contribution to the global mobility pattern and that mobility, with the exception of Denmark, does not lead to clear convergence to the mean but at points around 0.7-0.8 and 1.5 to 2 times the mean. |
| Keywords: | Earnings, mobility, inequality |
| JEL: | J3 J62 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:08/206&r=lab |
| By: | Irina Denisova (Center for Economic and Financial Research (CEFIR), Moscow); Markus Eller (Oesterreichische Nationalbank (OeNB)); Timothy Frye (Columbia University and the Harriman Institute); Ekaterina Zhuravskaya (New Economic School, CEFIR, and CEPR) |
| Abstract: | Using survey data from 28 transition countries, we test for the complementarity and substitutability of market-relevant skills and institutions. We show that democracy and good governance complement market skills in transition economies. Under autocracy and weak governance institutions there is no significant difference in support for revising privatization between high and low-skilled respondents. As the level of democracy and the quality of governance increases, the difference in the level of support for revising privatization between the high and low skilled grows dramatically. This finding contributes to our understanding of microfoundations of the politics of economic reform. |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0127&r=lab |
| By: | Pansini, Rosaria Vega |
| Abstract: | The aim of this paper is to show how and why is possible to assess both direct and indirect effects of exogenous income injections on mean income of different household groups using a new approach based on the decomposition of SAM-based multipliers. The approach we propose in this paper allows analyzing the level of inequality in the distribution of income linking the formation of individual/family income to the features of each country’s productive structure and it can be used both for structural analysis and for simulations of redistributive and antipoverty policies. The first step in order to link changes in the level of poverty and inequality to policy measures will be to derive the “accounting price multipliers matrix”, which allows considering the effects of policies affecting the labour market, thus changing the level of wages for different workers ‘categories. Using the traditional Pyatt and Round’s multiplicative decomposition method, we will be then able to disentangle the transfer, the open-loop and the closed-loop effects of a change in the income of exogenous SAM’s accounts. The second step will be to use a new technique introduced by Pyatt and Round (2006) to further decompose each element of the total multiplier matrix in order to enlighten in “microscopic detail” the linkages between each household group’s income of and other accounts whose income has been exogenously injected (i.e. Activities account and Factors account). Moreover, this new approach allows assessing the linkages between each household endowment in terms of factors and the features of the productive system and shading light on the most powerful links among different components of the economic system affecting the distribution of income. The empirical results obtained using the Vietnamese SAM for year 2000 show that the highest direct effects are related to exogenous injections to the agricultural sector and to less skilled labour force and that these effects involved not only on rural male headed but also other household groups. At the same time, the new type of multiplier decomposition shows which are the sectors and factors of production whose increase in income will have the greater indirect effects, increasing also the level of income of all household types. For example, investing in the sector of food processing and on female labour force will benefit the most all household groups, thus representing a policy option good for aggregate growth and for improving the distribution of income. |
| Keywords: | Income distribution; social accounting matrix; multiplier decomposition; growth; labour market; structure of production |
| JEL: | D31 D33 D57 O43 O15 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13182&r=lab |
| By: | Elvio Accinelli; Silvia London; Edgar J. Sanchez Carrera |
| Abstract: | We study an imitation game of strategic complementarities between the percentage of high-skilled workers and innovative firms, namely, human capital and R&D, respectively. We show that this model has two pure Nash equilibria, one of them with high investment in R&D and skilled workers while the other one, which we interpret as poverty trap, exhibits lack of skills and underinvestment. Furthermore, we show that we can avoid the poverty trap if the number of innovative firms is larger than a threshold value allowing an increment of the number of skilled workers |
| Keywords: | Imitative behavior, conformism, poverty traps, strategic complementarities |
| JEL: | C72 C79 D83 O12 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:554&r=lab |
| By: | Entorf, Horst (University of Frankfurt) |
| Abstract: | In this paper data from a survey of 1,771 inmates conducted in 31 German prisons provide microeconometric evidence on the relationship between individual anticipated labour market opportunities and the perceived probability of future recidivism. Results show that inmates with poor labour market prospects expect a significantly higher rate of future recidivism. Having a closer look at subgroups of prisoners reveals that drug and alcohol addiction cause adverse effects. Thus, improving prisoner health care by installing effective anti-drug programmes would be one of the most effective measures against crime. |
| Keywords: | inmates survey, recidivism, job opportunities, illicit drug use |
| JEL: | J38 J68 K42 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3976&r=lab |
| By: | Andersson, Åke E (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | This study gives an account of theory, models and measurements of returns to higher education, seen as the results of economically rational investment decisions. The focus is on returns in the form of increased wages and salaries. These returns vary considerably between different countries and tend to be considerably larger in the USA than in western Europe. One of the reasons for these differences in returns may be the differences in systems of funding of higher education. It is claimed that practically all studies of returns to investments in higher education disregard the benefits from reductions in consumer transaction costs and the role played by education as an important input in household production functions. Econometric studies, reported in the paper, accordingly indicate that the level of education has a considerable impact on the structure of household consumption expenditures. |
| Keywords: | education; returns; growth; higher education |
| JEL: | I21 I23 O11 O15 O31 |
| Date: | 2009–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0163&r=lab |
| By: | Kai Zhao (University of Western Ontario) |
| Abstract: | Economists and demographers have long argued that fertility differs by income (differential fertility), and that social security creates incentives for people to rear fewer children. Does the effect of social security on fertility differ by income? How does social security change the cross-sectional relationship between fertility and income? Does social security further affect the dynamics of the earnings distribution by changing differential fertility? We answer these questions in a three-period OLG model with heterogeneous agents and endogenous fertility. We argue that given its redistributional property, social security affects people's fertility behavior differentially by income. In the model, earning ability is transmitted from parents to children. Hence, social security can have a significant impact on the dynamics of the earnings distribution through its effects on differential fertility. The mechanism used in the model to generate differential fertility is novel. We follow the line of the "old-age security" hypothesis and assume that children are an investment good in parents' old-age consumption. Thus,the optimal fertility choice depends on how much transfer is expected from children in relation to the cost of rearing these children to adult life. Since the intergenerational earnings process is mean-reverting, poor (rich) parents tend to have more (fewer) children because they have lower (higher) child-rearing cost and expect their children will have higher (lower) earnings than themselves and give back relatively more (less) in transfers. Social security reduces fertility by substituting children out of parents' old-age portfolio. It reduces fertility of the poor proportionally more than it reduces fertility of the rich because social security payments are a larger portion of old-age savings for poor people. These results are consistent with features of the U.S. fertility data. We calibrate the model to the U.S. data and find that social security can explain 32% of the decline in poor-rich fertility differential between the cohort of women born during 1891-1895 and the cohort of women born during 1946-1950. |
| Keywords: | Social Security; Differential Fertility; Earnings Distribution; Growth |
| JEL: | E60 H31 J13 O15 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:uwowop:20091&r=lab |
| By: | Pandey, Priyanka (The World Bank); Goya, Sangeeta (The World Bank); Sundararaman, Venkatesh (The World Bank) |
| Abstract: | This paper presents findings from baseline surveys on student learning achievement, teacher effort and community participation in three Indian states, Karnataka, Madhya Pradesh and Uttar Pradesh. Results indicate low teacher attendance and poor student learning. Parents and school committees are neither aware of their oversight roles nor participating in school management. However, there is substantial heterogeneity in outcomes across states. Karnataka has better student and teacher outcomes as well as higher levels of community awareness and participation than the other two states. We find substantial variation in teacher effort within schools, but most observable teacher characteristics are not associated with teacher effort. One reason for low teacher effort may be lack of accountability. Regression analysis suggests low rates of teacher attendance are only part of the problem of low student achievement. The gains in test scores associated with higher rates of attendance and engagement in teaching are small in the states of Madhya Pradesh and Uttar Pradesh, suggesting teachers themselves may not be effective. Ineffective teaching may result from lack of accountability as well as poor professional development of teachers. Further research is needed to examine not only issues of accountability but also professional development of teachers. |
| Keywords: | Academic Achievement; annual grants; average class size; basic competencies; basic education; basic services; blackboards; call; civil service; civil service teachers; class size; class sizes |
| Date: | 2008–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4777&r=lab |
| By: | Geraint Johnes |
| Abstract: | We construct a family of models to analyse the effect on optimal educational investment of (i) society's preferences for equity and (ii) competition between countries. The models provide insights about the impact of a variety of parameters on optimal policy. In particular, we identify a form of 'overeducation' that is new to the literature, and provide a counterexample to a common finding in the literature on fiscal federalism. |
| Keywords: | education, taxation, income distribution, competition |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:005891&r=lab |
| By: | Alberto Chong; Eliana La Ferrara |
| Abstract: | This paper studies the link between television and divorce in Brazil by exploiting variation in the timing of availability of the signal of Rede Globo—the network that had a virtual monopoly on telenovelas in the country—across municipal areas. Using three rounds of Census data (1970, 1980 and 1991) and controlling for area fixed effects and for time-varying characteristics, the paper finds that the share of women who are separated or divorced increases significantly after the Globo signal becomes available. The effect is robust to controlling for potential determinants of Globo’s entry strategy and is stronger for relatively smaller areas, where the signal reaches a higher fraction of the population. |
| Keywords: | Divorce, Television, Brazil, Soap Operas, Media, Women, Empowerment |
| JEL: | O1 J12 N36 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4611&r=lab |
| By: | Wagstaff, Adam (The World Bank) |
| Abstract: | This paper exploits the transitions between tax-financed health care and social health insurance in the OECD countries over the period 1960-2006 to assess the effects of adopting social health insurance over tax finance on per capita health spending, amenable mortality, and labor market outcomes. The paper uses regression-based generalizations of difference-in-differences and instrumental variables to address the possible endogeneity of a country's health system. It finds that adopting social health insurance in preference to tax financing increases per capita health spending by 3-4 percent, reduces the formal sector share of employment by 8-10 percent, and reduces total employment by as much as 6 percent. For the most part, social health insurance adoption has no significant impact on amenable mortality, but for one cause--breast cancer among women--social health insurance systems perform significantly worse, with 5-6 percent more potential years of life lost. |
| Keywords: | Social health insurance; labor markets; health finance; health sector reform. |
| Date: | 2009–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4821&r=lab |
| By: | Leonardo Becchetti (University of Rome Tor Vergata); Stefano Castriota (University of Trento) |
| Abstract: | We evaluate the impact of affiliation to Fair Trade on a sample of Chilean honey producers. Evidence from standard regressions and propensity score matching shows that affiliated farmers have higher productivity (income from honey per worked hour) than the control sample. We show that the productivity effect is partially explained by the superior capacity of affiliated workers to exploit economies of scale. Additional results on the effects of affiliation on training, cooperation and advances on payments suggest that affiliation contributed both to, and independently from, the economies of scale effect. |
| Keywords: | Fair Trade, economies of scale, productivity. |
| JEL: | D63 D64 O18 O19 O22 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2008-104&r=lab |
| By: | Kudo, Ines (The World Bank); Bazan, Jorge (Pontifical Catholic University of Peru) |
| Abstract: | Based on analysis of reading performance data from 475 third-graders in Peru, this study makes recommendations on improving reading tests, choice of reading standards, and how to present the results at the school and individual levels. The paper reviews the literature on using reading skills measurement in the early grades to guide policymaking, strengthen accountability, and improve education quality. It uses data generated from the same students using two common approaches to measuring reading skills: an individually-administered oral fluency test, and a group-administered written comprehension test designed by the Ministry of Education for the 2006 universal standard test of second grade reading comprehension. These two approaches have sometimes been presented as competing alternatives, but the paper shows that it is better if they are used together, as complements. Based on psychometric analysis, the paper shows that both the oral and written tests adequately measured studentsâÃÂàreading abilities. The results show that reading fluency and comprehension are correlated: fluent readers are more likely to understand what they read than non-fluent readers. The strength of the fluency-comprehension relationship depends on the level of fluency, the difficulty of the questions, and social characteristics of the school. The paper recommends using improved versions of both tests to evaluate early grade reading skills, as a central element of a system of accountability for results. It proposes a model for reporting test results desgned to highlight the importance of reading standards, mobilize the education community to reach them, track progress, and identify students in need of extra support. |
| Keywords: | academic performance; access to education; access to preschool; access to preschool education; Achievement; achievements; addition; adults; Assessment of Literacy; average score; Basic Skills; |
| Date: | 2009–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4812&r=lab |
| By: | Titus Galama; Arie Kapteyn; Raquel Fonseca; Pierre-Carl Michaud |
| Abstract: | The authors formulate a stylized structural model of health, wealth accumulation and retirement decisions building on the human capital framework of health provided by Grossman. They explicitly assume a functional form of the utility function and carefully account for initial conditions, which allow them to derive analytic solutions for the time paths of consumption, health, health investment, savings and retirement. They argue that the Grossman literature has been unnecessarily restrictive in assuming that health is always at Grossman's "optimal" health level. Exploring the properties of corner solutions they find that advances in population health (health capital) can explain the paradox that while population health and mortality have continued to improve in the developed world, retirement ages have continued to fall with retirees pointing to deteriorating health as an important reason for early retirement. They find that improvements in population health decrease the retirement age, while at the same time individuals retire when their health has deteriorated. In their model, workers with higher human capital (say white collar workers) invest more in health and because they stay healthier retire later than those with lower human capital (say blue collar workers) whose health deteriorates faster. Plausibly, most individuals are endowed with an initial stock of health that is substantially greater than the level required to be economically productive. |
| JEL: | I10 I12 J00 J24 J26 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:658&r=lab |
| By: | Lindbeck, Assar (Institute for International Economic Studies); Palme, Mårten (Dept. of Economics, Stockholm University); Persson, Mats (Institute for International Economic Studies) |
| Abstract: | Is the sickness absence of an individual affected by the sickness absence behavior of the neighbors? Well-known methodological problems, in particular the so-called reflection problem, arise when trying to answer such questions about group effects. Based on data from Sweden, we adopt several different approaches to solve these problems. Regardless of the approach chosen, we obtain statistically significant estimates indicating that group effects are important for individual sickness absence behavior. |
| Keywords: | Sick-pay insurance; work absence; moral hazard; reflection problem; social norms |
| JEL: | H56 I38 J22 Z13 |
| Date: | 2009–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2009_0004&r=lab |
| By: | Matsuoka, Yuji; Fukushima, Marcelo |
| Abstract: | We build a trade model with two countries located in different time zones, a monopolistically competitive sector in which production requires differentiated goods produced using day and night labor, and shift working disutility. Consumers choose between working at a day shift or a night shift and firms may choose to “virtually” outsource foreign day time labor by using communications services. We found that the higher the disutility of working at night is, the smaller is the number of varieties produced. Trade is beneficial only under certain concavity and cost conditions. The higher the disutility of working at night, the larger can be the gains from trade. |
| Keywords: | Communications networks; shift work; time zones; outsourcing |
| JEL: | J3 F1 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13355&r=lab |
| By: | Jamal, Mayeda (Dept. of Business Administration, Stockholm School of Economics) |
| Abstract: | This paper examines two approaches to Child Protection Policy and Practise in UK. Governmental policy is examined first, followed by an overview of alternative approach suggested by its critics. Efficacy of policy reforms is examined from the perspective of the front liners, i.e., the child protection social workers who are the main agents responsible for translating policy into practise. The “reality” of the social workers is mapped through empirical analysis and used as a measure to indicate which ideology, one currently adopted by the State or the one being advocated by its critics, is better suited to improving well-being of workers as well as recipients of welfare. The importance of taking their contextual reality into account when formulating policy is highlighted as crucial to determining the fate of the policy as well quality of life of social workers. The findings are strongly in favour of the critics and highlight severe shortcomings in current State ideology of child and family welfare. |
| Keywords: | Social Policy; Child Welfare; New Public Management; Child Protection Social Workers |
| Date: | 2008–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhb:hastba:2009_002&r=lab |
| By: | Edward R. Whitehouse |
| Abstract: | The rapid rise in inflation in 2006-07 has attracted attention – once again – both to how pensions systems should react to changes in prices, and to how they do so in practice. Although inflation is now falling as a result of lower commodity prices and weakening demand, this brings with it the risk of deflation – falling prices – which also raises questions as to how pension systems should react. Most OECD countries have a legislated commitment to indexation of pensions in payment. However, the empirical evidence in this paper shows that these rules have frequently been over-ridden. Furthermore, because indexation to price inflation rather than wage inflation is much more common – and wages can be expected to rise more rapidly than prices – the effect of following legislated indexation rules will be to reduce pensioner incomes compared with those of the working-age population. However, indexation to prices is less costly, allowing a larger initial pension than under earnings indexation for a given budget constraint. This paper sets out current, national indexation policies and historical data on how pensions have been adjusted in practice. It examines different indexation policies: to prices, earnings or a mix of the two; the choice of the price index and progressive indexation (where smaller pensions are increased more rapidly than larger).<BR>La forte reprise de l’inflation en 2006-07 a, de nouveau, attiré l’attention à la fois sur la manière dont les régimes de pensions devraient réagir aux évolutions des prix, et sur la manière dont ils réagissent dans les faits. Même si l’inflation est actuellement en chute, par suite de la baisse des prix des matières premières et de l’affaiblissement de la demande, il en résulte un risque de déflation – c’est-à-dire de chute des prix – qui conduit aussi à s’interroger sur la manière dont les régimes de pensions devraient réagir. Dans la plupart des pays de l’OCDE, la loi prévoit l’indexation obligatoire des prestations de retraite. Cependant, les données d’observation réunies dans le présent document montrent que, bien souvent, ces règles sont négligées. Par ailleurs, dans la mesure où le plus souvent, cette l’indexation s’opère beaucoup sur les prix plutôt que sur les salaires,– et que l’on peut s’attendre à ce que les salaires augmentent plus rapidement que les prix – l’application des règles d’indexation prescrites par la loi aura pour effet de réduire les revenus des retraités par rapport à ceux de la population en âge de travailler. Toutefois, l’indexation sur les prix étant moins onéreuse, cela permet de servir un montant initial de pension plus élevé que dans le cas d’une indexation sur la base des gains, pour un niveau donné de contrainte budgétaire. Le document présente différentes politiques nationales d’indexation en vigueur ainsi que des données historiques retraçant l’évolution des modalités concrètes d’ajustement des pensions. Il passe en revue différentes options : indexation sur les prix, sur les gains ou formule mixte ; choix de l’indice des prix et indexation progressive (lorsque les pensions moins élevées augmentent plus vite que les pensions plus élevées). |
| JEL: | D14 D80 J14 |
| Date: | 2009–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:77-en&r=lab |
| By: | John Ryan (Hult International Business School); Andrew Holmes (Partner, Paricint) |
| Abstract: | This paper examines the pressures of commoditization will continue to exert itself on companies and managers everywhere: the increasing impact of demographic change; the requirement to maintain a keen eye on costs in order to compete effectively within the global market; the continued advance of technology; the ability to standardize processes and eliminate major inefficiencies; the pressure to outsource and offshore business activities in order to exploit the cost advantages of cheaper labour and the opportunity for your competition to attack your markets and replicate your products and services more freely.Tackling commoditization in a fragmented or short-termist way will not allow you to understand its effects and nor will it provide the solid platform required to build an effective response. So when it comes to considering the potential impacts of commoditization you need to ask yourself the following two questions: 1. Can all or part of our business become commoditized? It is easy to believe that you are immune to the effects of commoditization and that you don’t need to respond to something that may not even be on your horizon. When responding to this question the best approach is to start from the position that everything you do is capable of becoming commoditized if not now, then certainly at some point in the future. Of course you may find that not everything can be commoditized, but it is far better to come to this conclusion after completing a thorough analysis of your business than making assumptions based upon a limited perspective or worse still, gut feel 2. How should we respond to the threat of commoditization? In particular should we embrace it or avoid it? This is a crucial question to answer once you have understood the threats and opportunities commoditization poses to the organization. As with any strategic decision it is likely to have significant operational implications. In some cases you may find that you have little alternative but to become more commoditized yourself, whilst in others you may be able to adopt a more flexible approach. When considering the response, you will need to think about such things as: • How can we insulate ourselves from the threat of commoditization? • Given the choice what parts of our business should we allow to become commoditized? • Where and in which markets should we innovate as a way of avoiding the commoditization trap? • Where should we target our investments – with our customers, on our back office processes, in research and development, on acquisitions or all of the above? |
| Keywords: | Commoditization, Offshoring, Talent, Technology, Competition, Inequality |
| JEL: | A10 D21 D23 D24 D40 F02 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2009_01&r=lab |
| By: | Steve Bradley; Jim Taylor; Giuseppe Migali |
| Abstract: | We evaluate the effectiveness of a resource-based policy on im- proving school quality measured in terms of pupils’ test scores. Using several data sets, we present a set of empirical tests to control for pupil’s prior attainment, policy-off policy-on, duration of the funding and subjects of specialisation. We apply matching methods to con- front issues of the choice of an appropriate control group and selection bias. After matching we find a positive and statistically significant policy effect on test score levels, but this is approximately 50% lower than our ‘naive’ estimates. Difference-in-differences estimates show a significant and positive effect on the change in test scores. |
| Keywords: | School Quality, Subject Specialisation, Matching models. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:005894&r=lab |
| By: | Antonio Merlo; Vincenzo Galasso; Massimiliano Landi; Andrea Mattozzi |
| Abstract: | In this study, we analyze the career profiles of Italian politicians in the post-war period. Using a unique, newly collected data set that contains detailed information on all the politicians who have been elected to the Italian Parliament between 1948 and 2008, we address a number of important issues that pertain to: (1) their career paths prior to election to Parliament; (2) their parliamentary careers; and (3) their post-Parliament employment. Our data encompass two institutional regimes: the First Republic (1948-1993) and the Second Republic (1993-present), characterized by different electoral rules and party structures. After providing a comprehensive view of the career profiles of Italian politicians over the entire sample period, we highlight the major differences between the First and the Second Republic. We also compare the career paths of Italian legislators to those of the members of the United States Congress. |
| Keywords: | political careers, career politicians, Republic of Italy |
| JEL: | D72 J44 J45 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:89&r=lab |
| By: | Deborah Wilson |
| Abstract: | The use of choice as a mechanism to improve public service delivery is now well established in the UK. Current policy discourse additionally considers voice as a further, complementary, user-driven mechanism. In this paper I scrutinise the assumption that choice (exit) and voice complement each other in creating user-driven incentives to increase quality for all consumers in the context of education. I do this by going back to Hirschman’s (1970) thesis, focussing in particular on the definitions of quality put forward by him. I apply his analysis to the English education sector and show that, while the current policy discourse evokes the language of Hirschman, it doesn’t follow through on the actual implications of his analysis. In particular, I argue that in the current system, choice and voice may complement each other for only a subset of consumers. |
| Keywords: | exit, choice, voice, education |
| JEL: | I2 H4 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:08/194&r=lab |
| By: | Powers, Daniel A. (University of Texas at Austin); Yun, Myeong-Su (Tulane University) |
| Abstract: | We develop a regression decomposition technique for hazard rate models, where the difference in observed rates is decomposed into components attributable to group differences in characteristics and group differences in effects. The baseline hazard is specified using a piecewise constant exponential model, which leads to convenient estimation based on a Poisson regression model fit to person-period, or split-episode data. This specification allows for a flexible representation of the baseline hazard and provides a straightforward way to introduce time-varying covariates and time-varying effects. We provide computational details underlying the method and apply the technique to the decomposition of the black-white difference in first premarital birth rates into components reflecting characteristics and effect contributions of several predictors, as well as the effect contribution attributable to race differences in the baseline hazard. |
| Keywords: | decomposition, hazard rates, piecewise constant exponential model, Poisson regression |
| JEL: | C20 C41 J13 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3971&r=lab |
| By: | Valerie Albouy (INSEE Institut national de la statistique et des études économiques); Laurent Davezies (INSEE Institut national de la statistique et des études économiques); Thierry Debrand (IRDES institut for research and information in health economics) |
| Abstract: | This study compares estimates of outpatient expenditure computed with different models. Our aim is to predict annual health expenditures. We use a French panel dataset over a six year period (2000-2006) for 7112 individuals. Our article is based on the estimations of five different models. The first model is a simple two part model estimated in cross section. The other models (models 2 to 5) are estimated with selection models (or generalized tobit models). Model 2 is a basic sample selection model in cross section. Model 3 is similar to model 2, but takes into account the panel dimension. It includes constant unobserved heterogeneity to deal with state dependency. Model 4 is a dynamic sample selection model (with lagged adjustement), while in model 5, we take into account the possible heteroskedasticity of residuals in the dynamic model. We find that all the models have the same properties in the cross section dimension (distribution, probability of health care use by gender and age, health expenditure by gender and age) but model 5 gives better results reflecting the temporal correlation with health expenditure. Indeed, the retransformation of predicted log transformed expenditures in homoscedastic models (models 1 to 4) generates very poor temporal correlation for " heavy consumers ", although the data show the contrary. Incorporation of heteroskedasticity gives better results in terms of temporal correlation. |
| Keywords: | Health econometrics, expenditures, panel data, selection models |
| JEL: | I0 C1 C5 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:irh:wpaper:dt20&r=lab |
| By: | Zaidi, Salman (The World Bank) |
| Abstract: | Present levels of income inequality in Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovakia, and Slovenia remain considerably higher than their pre-transition levels, although the relative pace of change over time has varied quite a bit across countries. Using data from the 2006 European Union Survey of Income and Living Conditions, this paper finds that prevailing levels of income inequality in these countries continue to be low by international standards, and that this is in large part due to the very high redistributive impact of direct taxes and public transfers. In addition to the instrumental role of tax and transfer policies in redistributing income, the paper highlights the important role played by differences in education levels and labor market participation rates in explaining observed inequalities across people and across different regions (although not in explaining observed differences across countries). The paper includes an analysis of key factors that help explain observed variation across countries in the level of public support for redistribution, including peoples' economic background and relative success in life, whether they perceive poverty to be associated with factors within or outside the control of those it afflicts (for example, laziness/lack of willpower vs. injustice in society). |
| Keywords: | accounting; Average income; average incomes; average share; calculations; capital investments; cash transfers; client country; consumer; consumer durable; Contribution; Cross-country comparisons |
| Date: | 2009–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4815&r=lab |
| By: | Çoban, Serap |
| Abstract: | This study focuses on the relationships among mortality rates, income and educational inequality in terms of economic growth to investigate similarities and differences between the Euro Area and Turkey. For this purpose, income gini as an indicator of income inequality and education gini as an indicator of education inequality are used in the analyses. The relations among the variables are examined with panel data analysis for the Euro Area and with time series analysis for Turkey by using these coefficients and mortality rates for the period of 1980 and 2006. The results show that access to education is more important than the others for Turkey and the Euro Area. There is also a considerable relation between education inequality and mortality rates of infant and adult. |
| Keywords: | Educational Gini; Income Gini; Mortality Rates; Economic Growth; Panel Data Analysis; Euro Area; Turkey |
| JEL: | I30 I20 I10 |
| Date: | 2008–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13296&r=lab |
| By: | Abo-Zaid, Salem |
| Abstract: | This paper studies optimal monetary policy in a small open economy with Inflation Targeting, incomplete pass-through and rigid nominal wages. The paper shows that the right index to target depends on the structure of the individual economy. When wages are fully flexible, the consumer price index (CPI) is better to target given low to moderate levels of pass-through. On the other hand, assuming complete pass-through, economies with relatively high degrees of wage rigidity and wage indexation should either target their CPIs or fully stabilize nominal wages. Also, CPI targeting and nominal wage targeting are superior to targeting the Producer Price Index (DPI) in relatively high degrees of pass-through given that wages are relatively rigid and indexation degrees are high. The results of the paper suggest that, by committing to a common monetary policy in a common-currency area, some countries may not be conducting monetary policy optimally. |
| Keywords: | Optimal Monetary Policy; Incomplete Pass-Through; Sticky Wages; Inflation Targeting; Conumer Price Index; Domestic Price Index |
| JEL: | E12 E31 E52 E4 F31 |
| Date: | 2009–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13177&r=lab |
| By: | Luca Marchiori (IRES, Université catholique de Louvain); Patrice Pieretti (CREA, Université du Luxembourg); Benteng Zou (CREA, Université du Luxembourg) |
| Abstract: | How do high and low skilled migration affect fertility and human capital in migrants’ origin countries? This question is analyzed within an overlapping generations model where parents choose the number of high and low skilled children they would like to have. Individuals migrate with a certain probability and remit to their parents. It is shown that a brain drain induces parents to have more high and less low educated children. Under certain conditions fertility may either rise or decline due to a brain drain. Low skilled emigration leads to reversed results, while the overall impact on human capital of either type of migration remains ambiguous. Subsequently, the model is calibrated on a developing economy. It is found that increased high skilled emigration reduces fertility and fosters human capital accumulation, while low skilled emigration induces higher population growth and a lower level of education. |
| Keywords: | migration, human capital, fertility |
| JEL: | F22 J13 J24 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:bie:wpaper:409&r=lab |
| By: | Luca Marchiori (IRES, Université catholique de Louvain); Patrice Pieretti (CREA, Université du Luxembourg); Benteng Zou (CREA, Université du Luxembourg) |
| Abstract: | How do high and low skilled migration affect fertility and human capital in migrants’ origin countries? This question is analyzed within an overlapping generations model where parents choose the number of high and low skilled children they would like to have. Individuals migrate with a certain probability and remit to their parents. It is shown that a brain drain induces parents to have more high and less low educated children. Under certain conditions fertility may either rise or decline due to a brain drain. Low skilled emigration leads to reversed results, while the overall impact on human capital of either type of migration remains ambiguous. Subsequently, the model is calibrated on a developing economy. It is found that increased high skilled emigration reduces fertility and fosters human capital accumulation, while low skilled emigration induces higher population growth and a lower level of education. |
| Keywords: | Skilled emigration, remittances, fertility, human capital |
| JEL: | F22 F24 J13 J24 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:bie:wpaper:408&r=lab |
| By: | Donado, Alejandro; Wälde, Klaus |
| Abstract: | "Worker movements played a crucial role in making workplaces safer. Workplace safety is costly for firms but increases labour supply. A laissez-faire approach leaving safety of workplaces unknown is suboptimal. Safety standards set by better-informed trade unions are output and welfare increasing. Trade between a country with trade unions (the North) and a union-free country (the South) can imply a reduction in work standards in the North. When trade unions are established in the South, the North, including northern unions, tend to lose. Quantitatively, these effects are small and overcompensated by gains in the South." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Gewerkschaftspolitik - Internationalisierung, Gewerkschaftspolitik, Arbeitsschutzpolitik, Arbeitsschutz, Arbeitssicherheit, Unfallschutz, Arbeitsunfälle, Kapitalmobilität, gesellschaftliche Wohlfahrt |
| JEL: | J51 J81 F16 F21 |
| Date: | 2009–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200903&r=lab |
| By: | Herwig Immervoll; Henrik Jacobsen Kleven; Claus Thustrup Kreiner; Nicolaj Verdelin |
| Abstract: | This paper presents an evaluation of the tax-transfer treatment of married couples in 15 EU countries using the EUROMOD microsimulation model. First, we show that many tax-transfer schemes in Europe feature negative jointness defined as a situation where the tax rate on one person depends negatively on the earnings of the spouse. This stands in contrast to the previous literature on this question, which has focused on a specific form of positive jointness. The presence of negative jointness is driven by family-based and means-tested transfer programs combined with tax systems that usually feature very little jointness. Second, we consider the labour supply distortion on secondary earners relative to primary earners implied by the current tax-transfer systems, and study the welfare effects of small reforms that change the relative taxation of spouses. By adopting a small-reform methodology, it is possible to set out a simple analysis based on more realistic labour supply models than those considered in the existing literature. We present microsimulations showing that simple revenue-neutral reforms that lower the tax burden on secondary earners are associated with substantial welfare gains in most countries. Finally, we consider the tax-transfer implications of marriage and estimate the so-called marriage penalty. For most countries, we find large marriage penalties at the bottom of the distribution driven primarily by features of the transfer system.<BR>Ce document présente une évaluation des régimes d’imposition et de transfert des couples mariés dans 15 pays de l’UE à l’aide du micro-modèle de simulation EUROMOD. Nous montrons tout d’abord qu’en Europe, de nombreux régimes d’imposition et de transfert font ressortir des caractéristiques négatives résultant de l’imposition conjointe, dans la mesure où le taux d’imposition appliqué à un contribuable dépend des gains du conjoint, ce qui est désavantageux pour lui. Cette observation va à l’encontre des études consacrées précédemment à cette question, qui faisaient ressortir les aspects positifs de l’imposition conjointe. Les effets négatifs de l’imposition conjointe des revenus tiennent au fait que les programmes de transfert sont modulés en fonction des charges de famille et subordonnées à des critères de ressources, conjugués aux effets de régimes fiscaux qui, d’ordinaire font très peu de place à l’imposition conjointe. Deuxièmement, nous considérons l’effet de distorsion exercé sur l’offre de main-d’oeuvre dû au fait que les seconds apporteurs de revenu sont pénalisés par rapport aux premiers apporteurs de revenu par les systèmes actuels d’imposition-de transfert, et étudions les effets sur le bien-être de réformes de portée restreinte modifiant la fiscalité relative applicable aux conjoints. L’adoption d’une méthode préconisant une réforme de portée restreinte, permet de faire apparaître une analyse simple, fondée sur des modèles plus réalistes de l’offre de main-d’oeuvre que ceux qui sont pris en compte dans les travaux actuels. Nous présentons des micro-simulations montrant que de simples réformes, neutres en termes de recettes, qui permettent d’abaisser le poids de la fiscalité applicable aux seconds apporteurs de revenu, entraînent des hausses substantielles de bien-être dans la plupart des pays. Enfin, nous considérons les répercussions du mariage sur le régime d’imposition-de transfert et procédons à l’estimation de ce que l’on appelle la pénalisation du mariage. Dans la plupart des pays, nous observons que cette pénalisation est forte au bas de l’échelle de distribution des revenus et s’explique essentiellement par des caractéristiques du système de transfert. |
| JEL: | H20 |
| Date: | 2009–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:76-en&r=lab |
| By: | Weiss, Volkmar |
| Abstract: | Any general statement as to whether the secular trend of a society is eugenic or dysgenic depends upon a reliable calibration of the measurement of general intelligence. Richard Lynn set the mean IQ of the United Kingdom at 100 with a standard deviation of 15, and he calculated the mean IQs of other countries in relation to this “Greenwich IQ”. But because the UK test scores could be declining, the present paper recalibrates the mean IQ 100 to the average of seven countries having a historical mean IQ of 100. By comparing Lynn-Vanhanen-IQ with PISA scores and educational attainment of native and foreign born populations transformed into the IQ metric, we confirmed brain gain and brain drain in a number of nations during recent decades. Furthermore, the growth of gross domestic product per capita can be derived as a linear function of the percentage of people with an IQ above 105 and its underlying frequency of a hypothetical major gene of intelligence. |
| Keywords: | General intelligence; PISA; GDP; Dysgenics; Smart fraction theory; Immigration; Brain Gain; Brain Drain |
| JEL: | I2 J15 E01 |
| Date: | 2008–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13239&r=lab |
| By: | Skoufias, Emmanuel (The World Bank); Katayama, Roy (The World Bank) |
| Abstract: | Brazil's inequalities in welfare and poverty across and within regions can be accounted for by differences in household attributes and returns to those attributes. This paper uses Oaxaca-Blinder decompositions at the mean as well as at different quantiles of welfare distributions on regionally representative household survey data (2002-03 Household Budget Survey). The analysis finds that household attributes account for most of the welfare differences between urban and rural areas within regions. However, comparing the lagging Northeast region with the leading Southeast region, differences in returns to attributes account for a large part of the welfare disparities, in particular in metropolitan areas, supporting the presence of agglomeration effects in booming areas. |
| Keywords: | Brazil; Leading and Lagging Regions; Welfare; Poverty; Oaxaca-Blinder decompositions |
| JEL: | I31 O15 O18 R10 R23 R58 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4803&r=lab |
| By: | Geraint Johnes; Jill Johnes; E Thanassoulis; Mika Kortelainen |
| Abstract: | As student numbers in the UK's higher education sector have expanded substantially during the last 15 years, it has become increasingly important for government to understand the structure of costs in higher education, thus allowing it to evaluate the potential for expansion and associated cost implications. This study applies Data Envelopment Analysis (DEA) to higher education institutions (HEIs) in England in the period 2000/01-2002/03 to assess the cost structure and the performance of various HEI groups. The paper continues and complements an earlier study by Johnes, Johnes and Thanassoulis (forthcoming), who used parametric regression methods to analyse the same panel data. Interestingly, the DEA analysis provides estimates of subject-specific unit costs that are in the same ballpark as those provided by the parametric methods. We then extend the previous analysis by examining potential cost savings and output augmentations in different HEI groups using several different DEA models. The findings include a suggestion that substantial gains of the order of 20-27% are feasible if all potential savings are directed at raising student numbers so that each HEI exploits to the full not only operating and scale efficiency gains but also adjusts its student mix to maximise student numbers. Finally we use a Malmquist index approach to assess productivity change in UK HEIs. The results reveal that for a majority of HEIs productivity has actually decreased during the study period. |
| Keywords: | higher education; data envelopment analysis; performance measurement; productivity; cost function |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:005896&r=lab |
| By: | Beegle, Kathleen (The World Bank); De Weerdt, Joachim (EDI); Dercon, Stefan (Oxford University) |
| Abstract: | This study explores the extent to which migration has contributed to improved living standards of individuals in Tanzania. Using longitudinal data on individuals, the authors estimate the impact of migration on consumption growth between 1991 and 2004. The analysis addresses concerns about heterogeneity and unobservable factors correlated with both income changes and the decision to migrate. The findings show that migration adds 36 percentage points to consumption growth, during a period of considerable growth in consumption. These results are robust to numerous tests and alternative specifications. Unpacking the findings, the analysis finds that moving out of agriculture is correlated with much higher growth than staying in agriculture, although growth is always higher in any sector if one physically moves. Economic mobility is strongly linked to geographic mobility. The puzzle is why more people do not move if returns to geographic mobility are high. The evidence is consistent with models in which exit barriers are set by home communities (through social and family norms) that prevent migration of certain categories of people. |
| Keywords: | adult mortality; agricultural activities; agricultural produce; AIDS epidemic; basic needs; Business Ownership; Change in Consumption; consumption aggregate; consumption data; consumption expenditure |
| Date: | 2008–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4798&r=lab |
| By: | Jaeger, David A. (CUNY Graduate Center); Parys, Juliane (University of Bonn) |
| Abstract: | We provide a comparison of return to schooling estimates based on an influential study by Angrist and Krueger (1991) using two stage least squares (TSLS), limited information maximum likelihood (LIML), jackknife (JIVE), and split sample instrumental variables (SSIV) estimation. We find that the estimated return to education is quite sensitive to the age controls used in the models as well as the estimation method used. In particular, we provide evidence that JIVE coefficients' standard errors are inflated by a group of extreme years of education observations, for which identification is especially weak. We propose to use Cook's Distance in order to identify influential outliers having substantial influence on first-stage JIVE coefficients and fitted values. |
| Keywords: | Cook's Distance, heteroskedasticity, outliers, return to education, specification, weak instruments |
| JEL: | C13 C31 J31 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3961&r=lab |
| By: | Docquier, Frederic (Catholic University of Louvain); Schiff, Maurice (The World Bank) |
| Abstract: | Recent changes in information and communication technologies have contributed to a dramatic increase in the degree of integration and interdependency of countries, markets, and people. Against this background, one aspect of particular concern for small states is the international movement of people. This paper focuses on this particularly important aspect of globalization, with emphasis on the movement of skilled people and its relationship with country size. In addition to overall skilled migration, it provides evidence that controls for migration age in order to distinguish between those educated in the home country and those educated abroad. The authors discuss the growth implications of the brain drain from small countries and policies that may help control it. |
| Keywords: | age structure; aliens; average emigration; average migration; brain; brain drain; brain gain; Census Bureau; Census data; citizen; citizens; citizenship; communication technologies; |
| Date: | 2009–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4827&r=lab |