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on Labour Economics |
| By: | Jochen Michaelis (University of Kassel, Nora-Platiel-Str. 4, D-34127 Kassel); Martin Debus (University of Kassel, Nora-Platiel-Str. 4, D-34127 Kassel) |
| Abstract: | In almost all Western economies the median age of the workforce is increasing due to demographic factors. Given the empirical fact that workers of different ages are not perfect substitutes in production, this paper explores how change in the age pattern affects wages and (un)employment. We develop a general equilibrium model where wages for young and old workers are set by monopoly unions at the firm-level. Contrary to the common wisdom on this topic, we show that an increase in the relative number of older workers for a given labor force size has no effect on young and old unemployment. If, however, unions attach a higher weight to the wishes of the old, the unemployment rate of the old (young) will increase (decrease). In this case we observe a redistribution of wage income from the young to the old. |
| Keywords: | workforce ageing, unemployment, wage bargaining |
| JEL: | E2 J2 J5 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:200921&r=lab |
| By: | Krashinsky, Harry |
| Abstract: | This paper uses a unique policy change in Canada’s most populous province, Ontario, to provide direct evidence on the effect of reducing the length of high school on labour market outcomes for high school graduates. In 1999, the Ontario government eliminated the fifth year of education from its high schools, and mandated a new four-year program. This policy change created two cohorts of students who graduated from high school together with different amounts of education, thus making it possible to identify the effect of one extra year of high school education on earnings. Using restricted survey data, the results demonstrate that students who receive one less year of high school education receive wages that are approximately ten percent lower than their counterparts one year after graduation, and these effects persist two years after graduation. Using birth year to instrument for educational attainment produces estimates that are even higher than the cross-sectional findings, but quite consistent with the existing literature on the return to education. These results are a significant contribution to the literature on the return to education because unlike prior changes to the educational system, this change in schooling laws results in two cohorts entering the labour market simultaneously. As such, business cycle effects do not confound the results. |
| Keywords: | Human Capital, Returns to Education, Years of Schooling, Ontario Double Cohort |
| JEL: | I20 I28 C10 |
| Date: | 2009–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-29&r=lab |
| By: | Gomes, Pedro (London School of Economics & Political Science) |
| Abstract: | In this paper I use the Labour Force Survey to obtain stylised facts about worker gross flows in the United Kingdom. I analyse the size and cyclicality of the flows between employment, unemployment and inactivity. I also examine job-to-job flows, employment separations by reason, flows between inactivity and the labour force, flows into and out of public sector employment and flows by education. I decompose contributions of job-finding and job-separation rates to fluctuations in the unemployment rate. Although the job-finding rate has been more relevant over the past ten years, the job-separation rate was particularly important during the early 1990s recession. |
| Keywords: | Worker gross flows; job-finding rate; job-separation rate. |
| JEL: | E24 J60 |
| Date: | 2009–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0367&r=lab |
| By: | Brown, Alessio J G; Merkl, Christian; Snower, Dennis J. |
| Abstract: | This paper presents a theory explaining the labor market matching process through microeconomic incentives. There are heterogeneous variations in the characteristics of workers and jobs, and firms face adjustment costs in responding to these variations. Matches and separations are described through firms' job offer and firing decisions and workers' job acceptance and quit decisions. This approach obviates the need for a matching function. On this theoretical basis, we argue that the matching function is vulnerable to the Lucas critique. Our calibrated model for the U.S. economy can account for important empirical regularities that the conventional matching model cannot. |
| Keywords: | Adjustment costs; employment; Firing; Incentives; Job acceptance; Job offers; Matching; quits; unemployment |
| JEL: | E24 E32 J63 J64 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:7283&r=lab |
| By: | Goldmann, Gustave; Sweetman, Arthur; Warman, Casey |
| Abstract: | Using a data set that provides information on source country employment, we examine the effect of source and host country occupational matching on earnings and the economic rate of return to the foreign human capital of immigrants in Canada. Examining occupational distributions we find that immigrants converge very quickly to the skill distribution of the Canadian population in terms of the main job worked, although four years after landing they are still below the source country distribution. We also find that for a large proportion of immigrants, their intended occupation differs from their source country occupation. Although immigrants who are able to match their source and host country occupations obtain higher earnings, successful occupational matching does not have any impact on the return to foreign potential work experience. However, immigrants who match their source and host country occupations do have a higher return to schooling, particularly for females. |
| Keywords: | Immigrants, Occupational Matching, Human Capital, Canada |
| JEL: | J24 J31 J61 |
| Date: | 2009–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-30&r=lab |
| By: | Michiyo Hashiguchi (Osaka School of International Public Policy (OSIPP),Osaka University) |
| Abstract: | This paper analyses the effect of family-friendly policies on wages. Using the full treatment effect model, the survey on Company Fringe Benefits 2002 was analysed. While the gender wage gap was confirmed, the effect of family-friendly policies on wages was found to differ from males to females. For instance, childcare and elder care related policies tended to be used mostly by females. As a result, these policies only had a negative impact on female wages. In turn, results of probit estimates indicated that productive workers tend to use more childcare and elder care related policies. It is suggested, therefore, that rewards and retention strategies should be provided to ensure productive workers. |
| Keywords: | family-friendly, fringe benefits, gender, leave, policy |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:osp:wpaper:09e003&r=lab |
| By: | Derek Jones; Panu -Kauhanen Kalmi |
| Abstract: | ABSTRACT : By using new panel data for Finnish banks we study the impact of training on wages and performance. To the best of our knowledge, ours is the first paper to compare explicitly the effects of general and firmspecific workplace training on outcomes for both employees and firms. Unlike much existing literature, we find stronger evidence that training improves worker outcomes rather than organizational performance. Depending upon specification, the estimated wage elasticity with respect to training is in the range of 3-7%, whereas the performance effects vary widely depending on the measures of training intensity. The other key finding is that general training is associated with higher wage and performance effects than is firm-specific training. YLEISEN JA YRITYSKOHTAISEN KOULUTUKSEN VAIKUTUKSET PALKKOIHIN JA MENESTYMISEEN : Näyttöä pankkitoimialalta |
| JEL: | M53 J24 G21 |
| Date: | 2009–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1184&r=lab |
| By: | Magali Recoules (Centre d'Economie de la Sorbonne) |
| Abstract: | This paper focuses on the interaction between gender discrimination and household decisions. It develops a general equilibrium model with endogenous fertility, endogenous labor supply and endogenous size of government spending. Family policies are assumed to decrease the time that parents spend on their children. The model shows that gender discrimination may explain differences in household decisions between countries. The solution shows a U-shaped relationship between fertility and gender discrimination. An increase in the discrimination level implies a related decrease in fertility, women's participation in the labor force and in family-friendly policies. |
| Keywords: | Gender discrimination, fertility, labor supply, public policies. |
| JEL: | D13 H31 J13 J71 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:v08098&r=lab |
| By: | Martin Schindler |
| Abstract: | Despite improvements in labor market performance over the past decade, owing in part to past reforms, Italy's employment and productivity outcomes continue to lag behind those of its European peers. This paper reviews Italy's institutional landscape and labor market trends from a cross-country perspective, and discusses possible avenues for further reform. The policy discussion draws on international reform experience and on simulations based on a calibrated labor market matching model. A key lesson is that the details of reform design, and the sequencing of reforms, matter greatly for labor market outcomes and for the fiscal costs associated with these reforms. |
| Keywords: | Labor markets , Italy , Labor market reforms , Labor productivity , Wages , Fiscal policy , Economic models , Cross country analysis , |
| Date: | 2009–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:09/47&r=lab |
| By: | Novella Bottini (Cattaneo University (LIUC)); Michael Gasiorek (University of Sussex) |
| Abstract: | In this paper we explore the dynamics of labour market adjustment in Morocco with a particular emphasis on the role of trade liberalisation. We utilise the methodology of Davis and Haltiwanger (1990) which enables us to distinguish between job creation, job destruction, overall levels of turnover, and the extent of movement within and between sectors. The results suggest that while average levels of employment growth are typically extremely low, this masks considerable movement in the labour market. The Moroccan labour market is characterised by high levels of simultaneous job-creation and job destruction as well as high levels of turnover. Our decompositions show the importance of both "between" and "within" job movements, suggesting that Morocco is changing its specialisation pattern. The regression analysis suggests that increasing trade openness, as well as technological change have significantly impacted on the Moroccan labour market and in particular with regard to job creation as opposed to job destruction. In turn this suggests that rigidities in the Moroccan labour market may be impeding the long run adjustment process, but which in turn is likely to lessen the short-run adjustment costs for workers |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:liu:liucec:224&r=lab |
| By: | J. Ignacio García-Pérez (Universidad Pablo de Olavide, FEDEA & FCEA); Antonio Villar (Universidad Pablo de Olavide & Ivie) |
| Abstract: | This paper presents a measure of social discrimination based on the principle of equality of opportunity. According to this principle we only have to care about the inequality derived from people’s differential circumstances (and not about outcome differences due to people’s diverse degree of effort). We propose approaching the measurement of group discrimination as the “welfare loss” attributed to the inequality between social groups of similar characteristics. We also provide an empirical application to the analysis of gender discrimination in the European labour market. We estimate wage equations to breakdown wage gaps and to control for extra individual heterogeneity. Given these predictions, we compute the index of welfare loss due to gender discrimination. |
| Keywords: | Equality of opportunity, welfare losses, gender discrimination, wage equations. |
| JEL: | D63 J71 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:09.05&r=lab |
| By: | Cichocki, Stanislaw; Tyrowicz, Joanna |
| Abstract: | Shadow employment may follow from two main market failures. In the first, official market distortions make it ineective for agents to engage in registered employment (revenues from shadow employment are higher than the corresponding official ones). Consequently, shadow market pays eectively more than would have been within the reach of an individual in registered forms. The alternative explanation draws to labor market tightness from the side of an employee - for a particular group of workers regular employment may be unattainable, which results in seeking earning opportunities beyond the boundaries of official markets. Depending on the sources, very dierent policy recommendations are raised to address the problem of undeclared work. We use a unique dataset from survey on undeclared employment. Individuals declaring employment in the shadow economy are matched with their statistical twins declaring official employment. Using propensity score matching and decomposition techniques we demonstrate that actually workers of the shadow economy are characterized by slightly higher endowments, while their revenues are lower than among the matched counterparts. Although unobservable heterogeneity is considerable, results are robust and demonstrate that eectively shadow economy pays less than the regular market, which points to social exclusion and market segmentation hypotheses. |
| Keywords: | undeclared employment; propensity score matching; transition |
| JEL: | O17 P37 J22 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14885&r=lab |
| By: | Migheli, Matteo; Scacciati, Francesco |
| Abstract: | Participants (96 students) were divided into three groups. Subjects in Group 1 were asked their labor supply, being their income burdened by a 25% tax rate. Then they were asked their labor supply if the tax rate were 40%. Subjects in G2 were asked their labor supply with a 25% tax rate, and subjects in G3 with a 40% tax rate. We first compared labor supplies within G1; then we compared labor supplies between G2 and G3. Finally we compared the two comparisons. In G1, subjects' labor supply is different, negatively related with the tax rate: this is probably due to how the questions are put, which suggest different answers. In fact, comparing G2 and G3, the labor supply is almost the same. Students who are part-time workers and students who are not supply different amounts of labor. There is no difference at all when comparing G2 and G3 as for non-working students, being the whole difference between G2 and G3 due to working students, who probably compare the tax rate they pay on their real income to the ones suggested in the questionnaire. Singling out non-biased responders, i.e. non-working students in G2 and G3, the tax rate on income – if given, independently of its level – does not influence the labor supply. |
| Keywords: | labour supply, taxation, individual behaviour |
| JEL: | H39 J20 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucapdv:124&r=lab |
| By: | Gagliarducci, Stefano (CEMFI, Madrid); Paserman, Daniele (Boston University) |
| Abstract: | This paper studies gender interactions within hierarchical organizations using a large data set on the duration of Italian municipal governments elected between 1993 and 2003. A municipal government can be viewed as a hierarchy, whose stability over time depends on the degree of cooperation between and within ranks. We find that in municipalities headed by female mayors, the probability of early termination of the legislature is higher. This result persists and becomes stronger when we control for municipality fixed effects as well as non-random sorting of women into municipalities using regression discontinuity in gender-mixed electoral races decided by a narrow margin. The likelihood that a female mayor survives until the end of her term is lowest when the council is entirely male, and in regions with less favorable attitudes towards working women. The evidence is suggestive that female mayors are less able at fostering cooperation among men, or alternatively, that men are more reluctant to be headed by women. Other interpretations receive less support in the data. Our results may provide an alternative explanation for the underrepresentation of women in leadership positions. |
| Keywords: | cooperativeness, gender, discrimination, government stability, hierarchies, mayors |
| JEL: | D74 J16 H72 M54 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4128&r=lab |
| By: | Paula Armstrong (Department of Economics, University of Stellenbosch) |
| Abstract: | More than a decade after South Africa’s transition from apartheid, the racially delineated picture of education in the country remains. Brahm Fleisch (2008) refers to the South Africa’s education system as consisting effectively of two education systems: the well-performing historically white system, and the weak-performing historically black system. Significant difference in educational quality exist between these two systems. It is widely acknowledged that the role of teachers in the quality of education is vital. This paper makes use of Hierarchical Linear Modeling to investigate which teacher productive characteristics impact first of all on average student performance, and secondly, on the relationship between the socioeconomic status of students and the performance. It is found that teachers who have specialized in the subject which they teach or in the education of that subject at university, as well as teachers with between 26 and 30 years of teaching experience influence student performance positively. No teacher productive characteristics are found to weaken the relationship between students’ socioeconomic status and their performance. |
| Keywords: | Analysis of education |
| JEL: | I21 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers79&r=lab |
| By: | Hirsch, Boris (University of Erlangen-Nuremberg); Schank, Thorsten (University of Erlangen-Nuremberg); Schnabel, Claus (University of Erlangen-Nuremberg) |
| Abstract: | Using a large linked employer-employee data set for Germany, we find that the existence of a works council is associated with a lower separation rate to employment, in particular for men and workers with low tenure. While works council monopoly effects show up in all specifications, clear voice effects are only visible for low tenured workers. Works councils also reduce separations to non-employment, and this impact is more pronounced for men. Insurance effects only show up for workers with tenure of more than one year. Our results indicate that works councils primarily represent the interests of a specific clientele. |
| Keywords: | works council, separations, collective voice, duration models, Germany |
| JEL: | J53 J63 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4126&r=lab |
| By: | Thiessen, Victor |
| Abstract: | Using the nationally representative longitudinal Youth in Transition Survey, this paper examines the argument that inferior educational outcomes of various visible minorities and immigrants can be attributed to their socio-economic disadvantages, while superior outcomes of other visible minorities is due to their cultural supports. The analyses document sizable inequalities in educational pathways of First Nations, visible minorities, and immigrants. However, neither structural location nor cultural attributes (nor both in conjunction) totally account for differences in their educational pathways nor can they be reduced to a simple pattern whereby structural disadvantages account for inferior pathways and cultural factors for superior ones. |
| Keywords: | Aboriginals, Visible Minorities, Immigrants, Academic Performance, Educational Attainment, Post-Secondary Education |
| JEL: | I20 I21 I29 |
| Date: | 2009–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-28&r=lab |
| By: | H. Lehmann; J. Kluve |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:646&r=lab |
| By: | Prachi Mishra; Antonio Spilimbergo |
| Abstract: | We analyze how the pass-through from exchange rate to domestic wages depends on the degree of integration between domestic and foreign labor markets. Using data from 66 countries over the period 1981–2005, we find that the elasticity of domestic wages to real exchange rate is 0.1 after a year for countries with high barriers to external labor mobility, but about 0.4 in countries with low barriers to mobility. The results are robust to the inclusion of various controls, different measures of exchange rates, and concepts of labor market integration. These findings call for including labor mobility in macro models of external adjustment. |
| Keywords: | Labor markets , Migration , Exchange rates , Wages , Economic integration , Time series , Cross country analysis , Economic models , |
| Date: | 2009–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:09/44&r=lab |
| By: | Beffy, Magali (CREST-INSEE); Fougère, Denis (CREST-INSEE); Maurel, Arnaud (ENSAE-CREST) |
| Abstract: | This paper examines the determinants of the choice of the major when the length of studies is uncertain, by using a framework in which students entering post-secondary education are assumed to anticipate their future earnings. For that purpose, we use French data coming from the 1992 and 1998 Génération surveys collected by the Centre d'Etudes et de Recherches sur l'Emploi et les Qualifications (CEREQ, Marseille). Our econometric approach is based on a semi-structural three-equations model, which is identified thanks to some exclusion restrictions. We exploit in particular exogenous variations in the earnings returns associated with the majors across the business cycle, in order to identify the causal effect of expected earnings on the probability of choosing a given major. Relying on a three-component mixture distribution, we account for correlation between the unobserved individual-specific terms affecting the preferences for the majors, the unobserved individual-specific factors entering the equation determining the length of studies within each major, and that affecting the labor market earnings equation. Following Arcidiacono and Jones (2003), we use the EM algorithm with a sequential maximization step to produce consistent parameter estimates. Simulating for each given major a 10 percent increase in the expected earnings suggests that expected earnings have a statistically significant but quantitatively small impact on the allocation of students across majors. |
| Keywords: | post-secondary education, major choice, returns to education, EM algorithm |
| JEL: | J24 C35 D84 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4127&r=lab |
| By: | Mireille Chiroleu-Assouline (Paris School of Economics - Centre d'Economie de la Sorbonne); Mouez Fodha (Paris School of Economics - Centre d'Economie de la Sorbonne) |
| Abstract: | This paper analyzes the environmental tax policy issues within an overlapping generations models framework. The objective is to analyze whether an environmental tax policy can respect the two equity principles simultaneously, the vertical as well the horizontal one. We characterize the necessary conditions for the obtaining of a Pareto improving shift when the revenue of the pollution tax is recycled by a change in the labor tax rate or by a change in the distributive properties of the labor tax. We show that, depending on the production function elasticities and on the heterogeneity characteristics of labor supply, an appropriate policy mix could be designed in order to leave each workers' class unharmed by the environmental tax reform. It will consist in an increase of the progressivity of the labor tax together with a decrease of the minimal wage tax rate. |
| Keywords: | Environmental tax, overlapping generations model,double dividend, tax progressivity. |
| JEL: | D60 D62 E62 H23 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:v08097&r=lab |
| By: | Germana Bottone (ISAE - Institute for Studies and Economic Analyses) |
| Abstract: | The “return to education” issue has been widely investigated in the economic literature. However, how the social value of education can affect its economic return and individual decisions on “human capital” investments has been somewhat neglected. The paper criticises the traditional definition of human capital and the premises of Becker’s equation and considers the following questions: does education have a consistent return in Italy? If not, does education have any social value?. From an economic point of view and at a conceptual level, numerous difficulties arise when one seeks to define “human capital”. One may make a list of factors endogenous to an individual, such as education, training and ability, and of factors exogenous to him/her such as level of family education, social capital, system of relations, freedom of knowledge transmission, institutions. All of these factors may affect “human capital”. Moreover, the decision to invest in “human capital” may not be completely rational. Rationality would probably instead suggest on-the-job training and training. Education has a cultural, social and historical value; as a consequence, individuals may make decisions about the proper investment in education not only by considering marginal costs and future benefits of that investment, but for other reasons as well. |
| Keywords: | human capital, bounded rationality, institutional economics. |
| JEL: | J24 J31 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:isa:wpaper:109&r=lab |
| By: | Philippon, Thomas; Reshef, Ariell |
| Abstract: | We use detailed information about wages, education and occupations to shed light on the evolution of the U.S. financial sector over the past century. We uncover a set of new, interrelated stylized facts: financial jobs were relatively skill intensive, complex, and highly paid until the 1930s and after the 1980s, but not in the interim period. We investigate the determinants of this evolution and find that financial deregulation and corporate activities linked to IPOs and credit risk increase the demand for skills in financial jobs. Computers and information technology play a more limited role. Our analysis also shows that wages in finance were excessively high around 1930 and from the mid 1990s until 2006. For the recent period we estimate that rents accounted for 30% to 50% of the wage differential between the financial sector and the rest of the private sector. |
| Keywords: | finance; human capital; regulation; wages |
| JEL: | G0 J0 N0 O0 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:7282&r=lab |
| By: | Jacques Bouchoux (Centre d'Economie de la Sorbonne); Yvette Houzel (Centre d'Economie de la Sorbonne); Jean-Luc Outin (Centre d'Economie de la Sorbonne) |
| Abstract: | The RMI programme combines an allowance, associated rights, social accompaniments and activation measures. Since its creation in 1988, the operation of the programme has led to distinguish 3 modes of implementation ; minimum welfare, additional wages and unemployment benefit. The variety of its roles comes along with a great diversity of the beneficiaries and their paths. Our analysis builds a framework which permits to evaluate the programme, both in relation to the social protection system and the regulation with the labor market. We use data taken from the DREES inquiry in June 2006 thus retracing the beneficiaries' trajectories over an 18 months period and characterizing the links between them and various institutions. We first describe the different groups and suggest a framework (Chapter 1). Then, we consider the similarities and the differences between the groups (Chapter 2). Next, we analyze their relationships with the labor market and social protection institutions (Chapter 3). At last, we develop their long term trajectories (Chapter 4). |
| Keywords: | Poverty, minimum income, labor market, trajectoires. |
| JEL: | I3 J4 J6 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:r08090&r=lab |
| By: | Marisa Hidalgo Hidalgo (Department of Economics, Universidad Pablo de Olavide) |
| Abstract: | Parents and policy makers often wonder whether, and how, the choice between a tracked or a mixed educational system affects the efficiency and equity of national educational outcomes. This paper analyzes this question taking into account their impact on educational results at later stages and two main results are found. First, it shows that tracking can be the efficient system in societies where the opportunity cost of college attendance is high or the pre-school achievement distribution is very dispersed. Second, this paper shows that although conventional wisdom suggests that equality of opportunities is best guaranteed under mixing, this is not necessarily the case. In fact, tracking is the most equitable system for students with intermediate levels of human capital required to attend college.. |
| Keywords: | Peer Effects, Tracking, Mixing, College attendance gap. |
| JEL: | D63 I28 J24 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:09.04&r=lab |
| By: | Wenshu Gao; Russell Smyth |
| Abstract: | We estimate the returns to height using data from 12 Chinese cities. We present both ordinary least squares (OLS) and two-stage least squares (TSLS) estimates. In the latter height is instrumented using proxies for health human capital accumulated in childhood and adolescence, which influence adult height. The OLS estimates suggest that an additional centimetre of adult height is associated with wages being 1.1 per cent higher for males and 0.9 per cent higher for females. The TSLS estimates suggest each additional centimetre of adult height is associated with wages being 4.8 per cent higher for males and 10.8 per cent for females. The difference reflects the fact that the OLS estimates are predominantly determined by the random genetic factors influencing height, while the TSLS estimates also take into account returns from investment in health human capital during childhood and adolescence. These results imply considerable returns to investment in health human capital. |
| Keywords: | China, health, height, wages |
| JEL: | I10 J15 J31 J71 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2009-05&r=lab |
| By: | Horácio Faustino and Nuno Leitão |
| Abstract: | According to the smooth adjustment hypothesis (SAH), the labor-market adjustment costs in the form of unemployed resources will be lower if trade expansion is intra-industry rather than inter-industry in nature. This is what we attempt to test empirically using the Brulhart (1994) marginal intra-industry trade (MIIT) index and a dynamic panel data analysis. Considering the contemporaneous effect the results do not support the SAH. However, if we consider the one- year and-two years lags effects, the conclusion is different and it is sensitive to the size of the lag. Comparing with other empirical studies our results suggest that the validity of SAH depends on the variable choose as adjustment labor cost index, the time lag structure and the set of control variables. KEY Words: Adjustment costs; labor market; marginal intra-industry trade. |
| JEL: | C33 F16 J30 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp172009&r=lab |
| By: | Marie-Pierre Dargnies (Paris School of Economics - Centre d'Economie de la Sorbonne); Guillaume Hollard (Paris School of Economics - Centre d'Economie de la Sorbonne) |
| Abstract: | Miscalibration can be defined as the fact that people think that their knowledge is more precise than it actually is. In a typical miscalibration experiment, subjects are asked to provide subjective confidence intervals. A very robust finding is that subjects provide too narrow intervals at the 90% level. As a result a lot less than 90% of correct answers fall inside the 90% intervals provided. As miscalibration is linked with bad results on a experimental financial market (Biais et al., 2005) and entrepreneurial success is positively correlated with good calibration (Regner et al., 2006), it appears interesting to look for a way to cure or at least reduce miscalibration. Previous attempts to remove the miscalibration bias relied on extremely long and tedious procedures. Here, we design an experimental setting that provides several different incentives, in particular strong monetary incentives ; i.e. that make miscalibration costly. Our main result is that a thirty-minute training session has an effect on men's calibration but no effect on women's. |
| Keywords: | Miscalibration, overconfidence, incentives, gender effect. |
| JEL: | D81 C91 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:v08088&r=lab |
| By: | Martin Huber |
| Abstract: | Sample selection is inherent to a range of treatment evaluation problems as the estimation of the returns to schooling or of the effect of school vouchers on test scores of college admissions tests, when some students abstain from the test in a non-random manner. Parametric and semiparametric estimators tackling selectivity typically rely on restrictive functional form assumptions that are unlikely to hold in reality. This paper proposes nonparametric weighting and matching estimators of average and quantile treatment effects that are consistent under more general forms of sample selection and incorporate effect heterogeneity with respect to observed characteristics. These estimators control for the double selection problem (i) into the observed population (e.g., working or taking the test) and (ii) into treatment by conditioning on nested propensity scores characterizing either selection probability. Weighting estimators based on parametric propensity score models are shown to be root-n-consistent and asymptotically normal. Simulations suggest that the proposed methods yield decent results in scenarios when parametric estimators are inconsistent. |
| Keywords: | treatment effects, sample selection, inverse probability weighting, propensity score matching. |
| JEL: | C13 C14 C21 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:usg:dp2009:2009-07&r=lab |
| By: | Cater, Bruce; Lew, Byron; Pivato, Marcus |
| Abstract: | Academic research is a public good whose production is supported by the tuition-paying students that a faculty's research accomplishments attract. A professor's spot contribution to the university's revenues thus depends not on her spot research production, but rather on her cumulative research record. We show that a profit-maximizing university will apply a `high' minimum retention standard to the production of a junior professor who has no record of past research, but a `zero' retention standard to the spot production of a more senior professor whose background includes accomplishments sufficient to have cleared the `high' probationary hurdle. |
| Keywords: | academic tenure; labour contract; up-or-out |
| JEL: | J41 J31 |
| Date: | 2009–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14823&r=lab |
| By: | Armin Zeinali (Department of Economics, Queen's University, Canada); Glenn Jenkins (Queen's University, Kingston, On, Canada, Eastern Mediterranean University, North Cyprus); Andrey Klevchuk (Cambridge Resources International Inc.) |
| Abstract: | The purpose of this study is to develop a model to arrive at a joint optimizing strategy for the use of a given capital budget for the construction of new school buildings and for the repair of the already existing schools. This is to be done in a way that will have the maximum positive impact on the enhancement of the education system. Cost effectiveness analysis is used as the main analytical tool in the analysis. A key factor of the model is that it gives one the optimal mix of repair versus new construction that should be undertaken under a fixed budget constraint. The model is simulated using a sample data set from the information available for the education sector of Limpopo Province, South Africa. It utilizes a very basic set of information that is available in all school districts across the province. Application of this model for the selection of infrastructure investments (either building or repair) in the education sector would increase the efficiency of capital expenditure in this sector. This is particularly the case for the countries that are faced with a large excess demand for school buildings. |
| Keywords: | education, cost effectiveness, school location, school construction, school repair, South Africa |
| JEL: | D61 I28 H52 H75 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:qed:dpaper:158&r=lab |
| By: | Luigi Guiso (European University Institute and CEPR); Tullio Jappelli (Università di Napoli Federico II, CSEF, and CEPR); Mario Padula (Università di Venezia, and CSEF) |
| Abstract: | Using a representative sample of Italian investors, we estimate the risk associated with pension benefits by eliciting for each individual the subjective distribution of the replacement rate as a summary indicator of social security wealth. We find substantial heterogeneity of pension risk and show that it is consistently related to observable features in the pension system that have different effects on individuals with different characteristics. We then relate subjective pension risk to individuals’ financial decisions. We find that people try to attenuate the adverse consequences of pension wealth uncertainty by increasing demand for targeted retirement saving and for insurance. Individuals facing more pension wealth risk tend to enroll more often in private pension funds, invest more in life insurance and buy more private health insurance. These effects are consistent with people becoming more risk-averse when pension wealth becomes less predictable, leading them to search for greater financial security. |
| Keywords: | Pension Risk, Retirement Saving, Insurance |
| JEL: | H55 E21 |
| Date: | 2009–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:223&r=lab |
| By: | Kanbur, Ravi |
| Abstract: | This paper raises a number of issues in thinking about and addressing the intergenerational transmission of disadvantage. Starting with choice subject to constraints by parents as determining outcomes for children, the paper identifies sequences of interventions to relieve âbinding constraintsâ in the expansion of education. But the fact that parents choose for children is shown to raise a number of questions on normative aspects of inequality measurement. The main conclusions are as follows: (i) A key analytical task is to identify whether education is supply constrained or demand constrained; (ii) The cost-benefit analysis of identifying the âmost binding constraintâ requires the estimation of an education quality production function; (iii) The recent focus on âquality as opposed to quantityâ in education is not self-evidently pro-poor; (iv) The intergenerational links inherent in education between parental choice and childrenâs outcomes, raise serious conceptual and empirical questions on attempts to separate out inequality of opportunity from inequality of outcomes. |
| Keywords: | Intergenerationalities, Health Economics and Policy, International Development, Political Economy, Public Economics, |
| Date: | 2009–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cudawp:48922&r=lab |
| By: | Delphine Van Hoorebeke |
| Abstract: | If consumer behavior is of interest for research in management, employees behavior is still neglected. The development of studies on firm's responsibility is done in consideration that the firm is a global entity and a unit. The point of view of this paper is that the actions of few employees could be agglomerated to sustain the global politic of firms in their sustainable development. In that, this article proposes a review and a modelization of the employees responsible behavior at work based on consumer behavior and marketing research. <P>Alors que le thème de développement durable et de responsabilité sociale des entreprises et des consommateurs sont d’un intérêt grandissant dans le domaine de la gestion, la recherche sur le comportement responsable de l’employé au travail reste inexplorée. Parce que les actes des employés au travail soutiennent et confortent auprès des clients et autres stakeholders la politique globale suivie par l’organisation, cet article réalise une investigation théorique et modélise le concept de comportement responsable des salariés au travail. En cela, il ouvre un nouveau pan de recherche et une nouvelle investigation pour les recherches futures en développement durable. |
| Keywords: | employees responsible behavior at work, modelization, review , comportement responsable au travail, modélisation, investigation théorique |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2009s-15&r=lab |
| By: | Kathleen J. Mullen; Richard G. Frank; Meredith B. Rosenthal |
| Abstract: | Despite the popularity of pay-for-performance (P4P) among health policymakers and private insurers as a tool for improving quality of care, there is little empirical basis for its effectiveness. The authors use data from published performance reports of physician medical groups contracting with a large network HMO to compare clinical quality before and after the implementation of P4P, relative to a control group. They consider the effect of P4P on both rewarded and unrewarded dimensions of quality. In the end, they fail to find evidence that a large P4P initiative either resulted in major improvement in quality or notable disruption in care. |
| JEL: | D23 I12 H51 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:680&r=lab |