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on Labour Economics |
| By: | Carlos Dobkin; Fernando Ferreira |
| Abstract: | Age based school entry laws force parents and educators to consider an important tradeoff: Though students who are the youngest in their school cohort typically have poorer academic performance, on average, they have slightly higher educational attainment. In this paper we document that for a large cohort of California and Texas natives the school entry laws increased educational attainment of students who enter school early, but also lowered their academic performance while in school. However, we find no evidence that the age at which children enter school effects job market outcomes, such as wages or the probability of employment. This suggests that the net effect on adult labor market outcomes of the increased educational attainment and poorer academic performance is close to zero. |
| JEL: | I20 I21 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14945&r=lab |
| By: | Lixin Cai (The Institute of Applied Economic and Social Research, University of Melbourne); C. Jeffrey Waddoups (Department of Economics, University of Nevada, Las Vegas) |
| Abstract: | Using data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, our research indicates that unobserved heterogeneity substantially biases cross-sectional estimates of union wage effects upward for both males and females. Estimates of the union wage premium for male workers between the ages of 25 and 64 fall from 8.7% to 5.2% after controlling for unobserved heterogeneity. For females age 25 to 63 the estimated 4.0% cross-sectional union wage premium falls to 1.9% once unobserved heterogeneity is controlled for. Our results also indicate positive sorting by unobserved skills into union membership, especially among low skilled male and female workers. There is also evidence of negative sorting into unions among the most highly skilled. |
| Keywords: | union wage effects; fixed effects models; panel data JEL codes: JEL: J31, J51 |
| JEL: | J31 J51 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nlv:wpaper:0914&r=lab |
| By: | Lixin Cai (The Institute of Applied Economic and Social Research, University of Melbourne); C. Jeffrey Waddoups (Department of Economics, University of Nevada, Las Vegas) |
| Abstract: | The positive relationship between employer size and wages is a ubiquitous feature of advanced industrialized economies. The purpose of the present study is to clarify the nature of the employer size-wage effect in Australia by determining the extent to which it can be explained by observed and unobserved quality differences, including difference in on-the-job training. The empirical results are based on analysis of the Household Income and Labour Dynamics in Australia (HILDA) Survey, which is a relatively new nationally representative panel data set focused on family income, employment, and well-being. Our findings indicate that for males, quality adjusted employer size-wage effects are quite small and mostly driven by lower wages for workers in the smallest firms (fewer than twenty workers). For females, size-wage effects disappear when unobserved quality differences are accounted for. We also find that accounting for differences in the incidence of job training has no effect on the structure of wage differences by employer size. |
| Keywords: | size wage effects; fixed effects models; panel data JEL codes: JEL: J31, J51 |
| JEL: | J31 J51 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:nlv:wpaper:0915&r=lab |
| By: | Mitra, Devashish (Syracuse University); Ranjan, Priya (University of California, Irvine) |
| Abstract: | In this paper, we introduce two sources of unemployment in a two-factor general equilibrium model: search frictions and fairness considerations. We find that a binding fair-wage constraint increases the unskilled unemployment rate and can at the same time lead to a higher unemployment rate for skilled workers, as compared to an equilibrium where fairness considerations are absent or non-binding. Starting from a constrained equilibrium, an increase in the fairness parameter leads to increases in both skilled and unskilled unemployment. The wage of unskilled workers increases but the wage of skilled workers decreases. Next we allow for offshoring of unskilled jobs in our model, and we find that, as a result, it becomes more likely that the fair-wage constraint binds. Offshoring of unskilled jobs always leads to an increase in skilled wage, a decrease in skilled unemployment and an increase in unskilled unemployment. The presence of fairness considerations increases the adverse impact of offshoring on unskilled unemployment. The unskilled wage can increase or decrease as a result of offshoring. |
| Keywords: | fair wages, unemployment, strategic effect, offshoring |
| JEL: | E24 F16 F41 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4141&r=lab |
| By: | Brown, Alessio J. G. (Kiel Institute for the World Economy); Merkl, Christian (Kiel Institute for the World Economy); Snower, Dennis J. (Kiel Institute for the World Economy) |
| 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: | matching, incentives, adjustment costs, unemployment, employment, quits, firing, job offers, job acceptance |
| JEL: | E24 E32 J63 J64 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4145&r=lab |
| By: | Laura Hospido (Banco de España) |
| Abstract: | This paper develops an error components model that is used to examine the impact of job changes on the dynamics and variance of individual log earnings. I use data on work histories drawn from the Panel Study of Income Dynamics (PSID), that makes possible to do the distinction between voluntary an involuntary job-to-job changes. The potential endogeneity of job mobility in relation to earnings es circumvented by means of an instrument variable estimation method that also allows to control for unobserved individual-job specific heterogeneity. |
| Keywords: | Panel data, dynamic models, individual-job specific fixed effects, job changes, individual wages |
| JEL: | C23 J31 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0907&r=lab |
| By: | Alessio J. G. Brown; Christian Merkl; Dennis Snower |
| 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: | Matching,incentives,adjustment costs, unemployment, employment, quits, firing, job offers, job acceptance |
| JEL: | E24 E32 J63 J64 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1512&r=lab |
| By: | Mitra, Devashish (Syracuse University); Ranjan, Priya (University of California, Irvine) |
| Abstract: | In a two-sector, general-equilibrium model with labor-market search frictions, we find that wage increases and sectoral unemployment decreases upon offshoring in the presence of perfect intersectoral labor mobility. If, as a result, labor moves to the sector with the lower (or equal) vacancy costs, there is an unambiguous decrease in economywide unemployment. With imperfect intersectoral labor mobility, unemployment in the offshoring sector can rise, with an unambiguous unemployment reduction in the non-offshoring sector. Imperfect labor mobility can result in a mixed equilibrium in which only some firms in the industry offshore, with unemployment in this sector rising. |
| Keywords: | trade, offshoring, search, unemployment |
| JEL: | F11 F16 J64 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4136&r=lab |
| By: | Picot, Garnett; Hou, Feng |
| Abstract: | Using administrative data, this paper asks (1) whether the changing characteristics of immigrants, notably the rise in the share with university education and in the "skilled economic" immigrant class, contributed positively to immigrant entry earnings during the 1990s, and (2) whether the entry earnings of immigrants improved after 2000, and if not, why not. We find that, through the 1990s, the rising number of entering immigrants with university degrees and in the skilled economic class did little to improve earnings at the bottom of the earnings distribution (and reduce poverty rates among entering immigrants), but the changes did increase earnings among immigrants at the middle and top of the earnings distribution. The increasing numbers of highly educated at the bottom of the earnings distribution were unable to convert their education and "skilled class" designation to higher earnings: they found themselves with low incomes. These outcomes may be related to language, credentialism, education quality, or supply issues, as discussed in the paper. We find that from 2000 to 2004, the entry earnings of immigrants renewed their slide, but for reasons that differed from the standard explanations of the earlier decline. Much of the fall after 2000 was concentrated among immigrants intending to practice in the information technology (IT) or engineering occupations. This coincided with the IT downturn, which appears to have significantly affected outcomes for these immigrants, particularly the men. Following the significant increase in supply in response to the call for more high-tech workers in the late 1990s, the large numbers of entering immigrants were faced with the IT downturn. |
| Keywords: | Ethnic diversity and immigration, Labour, Wages, salaries and other earnings, Immigrants and non-permanent residents |
| Date: | 2009–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2008315e&r=lab |
| By: | Sarah Brown (Department of Economics, The University of Sheffield); Karl Taylor |
| Abstract: | In this paper we analyse the role of wage expectations in an empirical model of incomplete spells of unemployment and reservation wages. To be specific, we model the duration of unemployment, reservation wages and expected wages simultaneously for a sample of individuals who are not in work, where wage expectations are identified via an exogenous policy shock based upon the introduction of Working Family Tax Credits (WFTC) in the UK. The results from the empirical analysis, which is based on the British Household Panel Survey, suggest that WFTC eligibility served to increase expected wages and that expected wages are positively associated with reservation wages. In addition, incorporating wage expectations into the econometric framework was found to influence the magnitude of the key elasticities: namely the elasticity of unemployment duration with respect to the reservation wage and the elasticity of the reservation wage with respect to unemployment duration. |
| Keywords: | Expected Wages. |
| JEL: | J13 J24 J64 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2009001&r=lab |
| By: | Ryosuke Okazawa (Graduate School of Economics, Kyoto University) |
| Abstract: | This paper analyzes the effect of the recent technical change on the labor market and explains the observed differences in wage inequality among advanced countries. In particular, we focus on the difference between the wage inequality in the U.S. and continental Europe. By introducing human capital investment into Acemoglu (1999)’s model, we show that ex ante homogeneous economies would have distinct ex post wage inequality. In addition, we show that the differences in tax or education system can explain the difference in wage inequality between the U.S. and Europe. |
| Keywords: | skill-biased technical change, wage inequality, human capital investment, matching |
| JEL: | E24 J24 J31 J64 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:674&r=lab |
| By: | Chen, Qihui |
| Abstract: | This paper investigates the determinants of academic achievement in basic education (grade 1-9) for a sample of children (aged 9-12 in 2000) from rural China. A set of instrumental variable generated by the Great Famine in China, 1958-1961, is used to instrument an error-ridden measure of child innate ability, the cognitive ability score of each sampled child. Empirical results indicate strong effects of family background variables such as household income and parental education. Fatherâs education has significantly positive effect on academic achievements for both boys and girls, while motherâs education only matters for girls. Consistent with the common findings in the literature, most of school quality variables do not have significantly positive effects on child academic achievements. |
| Keywords: | student achievement, school quality, ability, Famine in China 1958-1961, Consumer/Household Economics, Labor and Human Capital, Public Economics, J24, I21, D13, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49429&r=lab |
| By: | Feng, Shuaizhang (Princeton University) |
| Abstract: | The paper reexamines the employer size-wage puzzle using NLSY79 data. The empirical results show that even for those who never receive any training from their employers, size-wage premium still exists and is quantitatively important. Wage increases associated with receiving on-the-job training are less in large establishments than in small ones. In addition, there is no evidence that starting wages in large establishments are lower than in small establishments. Theories that explain the size-wage puzzle using training and other endogenous productivity differences are not consistent with these new findings. |
| Keywords: | size-wage premium, return to training, establishment size |
| JEL: | J31 J24 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4143&r=lab |
| By: | Barth, Erling (Institute for Social Research, Oslo); Bratsberg, Bernt (Ragnar Frisch Centre for Economic Research); Haegeland, Torbjørn (Statistics Norway); Raaum, Oddbjørn (Ragnar Frisch Centre for Economic Research) |
| Abstract: | This paper examines the impact of performance-related pay on wage differentials within firms. Our theoretical framework predicts that, compared to a fixed pay system, pay schemes based on individual output increase within-firm wage inequality, while group-based bonuses have minor effects on wage dispersion. Theory also predicts an interaction between performance-related pay and union bargaining, where union power reduces the impact of performance pay on wage dispersion. The empirical contribution utilizes two recent Norwegian employer surveys, linked to a full set of individual employee pay records. A longitudinal sub-sample allows for identification based on fixed establishment effects. Introduction of performance-related pay is shown to raise residual wage inequality in nonunion firms, but not in firms with high union density. Our findings suggest that even though performance-related pay appears to be on the rise, the overall impact on wage dispersion is likely to be small, particularly in European countries with strong unions. |
| Keywords: | performance related pay, wage inequality, union bargaining |
| JEL: | J31 J33 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4137&r=lab |
| By: | Ozkan Eren (Department of Economics, University of Nevada, Las Vegas); Ozan Sula (Department of Economics, Western Washington University) |
| Abstract: | Using the National Educational Longitudinal Study data, we examine the role of pre-market abilities, as well as other determinants, on young men’s self-employment decision. Our results indicate that cognitive and noncognitive abilities are two important, in opposing directions, predictors of self-employment. We also find that cognitive and noncognitive abilities differ in their malleability with the latter being more malleable during adolescence. In addition, having a self-employed father, being black and family size exert large influences on self-employment probability. |
| Keywords: | Cognitive Ability, Endogeneity, Intergenerational Correlation, Malleability, Noncognitive Ability. |
| JEL: | C25 J0 J24 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:nlv:wpaper:0913&r=lab |
| By: | Rob Euwals; Ruud de Mooij; Daniel van Vuuren |
| Abstract: | This study argues that Dutch policy regarding the labour market for elderly is at a crossroads. Previous reforms in the Netherlands have encouraged labour supply and are expected to boost labour-market participation of individuals aged 55 to 64 to 60% in 2020. Further stimulus of supply is debatable due to perverse distributive implications. The increase in participation reveals inefficiencies in the demand side of the market. Indeed, the Dutch labour market for elderly is characterised by long unemployment duration, long job tenures, low mobility and little investment in human capital. The inefficiencies were previously hidden by massive early retirement, but will become more pressing as the workforce ages and participation rates increase. This imposes a new challenge for Dutch policy, a challenge that has become more urgent due to the current financial crisis that is expected to cause a substantial rise in unemployment. The study offers up-to-date insight in the consequences of policy reforms for the labour market. |
| Keywords: | Participation; Welfare-state institutions; Retirement; Wage-productivity gap; Flexibility; Allocation |
| JEL: | D6 H2 H5 J14 J26 J3 J6 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:spcial:80&r=lab |
| By: | Giacomo DeGiorgi; Michele Pellizzari; Silvia Redaelli |
| Abstract: | In this paper we investigate whether peers' behavior influences the choice of college major, thus contributing to the mismatch of skills in the labor market. Using a newly constructed dataset, we are able to identify the endogenous effect of peers on such decisions through a novel identification strategy that solves the common econometric problems of studies of social interactions. Results show that, indeed, one is more likely to choose a major when many of her peers make the same choice. We also provide evidence on skills mismatch in terms of entry wages and occupation. We find that peers can divert students from majors in which they have a relative ability advantage, with adverse consequences on academic performance, entry wages and job satisfaction. |
| JEL: | I21 J0 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14948&r=lab |
| By: | Ferrall, Christopher (Queen's University); Salvanes, Kjell G. (Norwegian School of Economics and Business Administration); Sorensen, Erik (Norwegian School of Economics and Business Administration) |
| Abstract: | We develop an equilibrium model of wages and estimate it using administrative data from Norway. Coworkers interact through a task-assignment model, and wages are determined through multilateral bargaining over the surplus that accrues to the workforce. Seniority affects wages through workplace output and relative bargaining power. These channels are separately identified by imposing equilibrium restrictions on data observing all workers within workplaces. We find joint production is important. Seniority affects bargaining power but is unproductive. We reinterpret gender and firm-size effects in wages in light of the rejection of linearly separable production. |
| Keywords: | wage distributions, productivity, matched data, multilateral bargaining, assignment models |
| JEL: | D2 J3 J24 L25 J7 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4130&r=lab |
| By: | Roel van Elk; Marc van der Steeg; Dinand Webbink |
| Abstract: | This paper examines the impact of early tracking on enrollment in and completion of higher education. We compare pupils that are directly tracked in lower general secondary education (‘mavo’) to pupils that postpone their choice of education level by entering secondary education in a combined first-grade class. Potential self-selection problems are addressed in two ways. First of all, using micro data allows us to control for a large set of individual background characteristics including tests of cognitive ability. Second, we exploit differences in regional supply of particular school types. The estimates show that early tracking has a detrimental effect on enrollment in and completion of higher education for pupils who leave primary education with a mavo advice. In addition, we find no evidence that pupils who leave primary education with a higher general secondary education (‘havo’) advice would be negatively affected by being in a comprehensive class together with the mavo advice pupils. Enrollment in and completion of higher education can be increased by stimulating participation in combined first-grade classes that keep pupils with a mavo or havo advice together for an additional one or two years. |
| Keywords: | early tracking |
| JEL: | I21 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:docmnt:182&r=lab |
| By: | Jesse Rothstein |
| Abstract: | The Earned Income Tax Credit (EITC) is intended to encourage work. But EITC-induced increases in labor supply may drive wages down, shifting the intended transfer toward employers. I simulate the economic incidence of the EITC under a range of plausible supply and demand elasticities. In all of the scenarios that I consider, a substantial portion of the intended transfer to low income single mothers is captured by employers through reduced wages. The transfer to employers is borne in part by low skill workers who are not themselves eligible for the EITC and are therefore made strictly worse off by its existence. I contrast the EITC with a traditional Negative Income Tax (NIT). The NIT discourages work, and so induces large transfers from employers of low skill labor to their workers. With my preferred parameters the EITC increases after-tax incomes by $0.73 per dollar spent, while the NIT yields $1.39. |
| JEL: | H22 H23 I38 J23 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14966&r=lab |
| By: | Manquilef-Bächler, Alejandra A. (University of Warwick); Arulampalam, Wiji (University of Warwick); Smith, Jennifer C. (University of Warwick) |
| Abstract: | Wage premia related to union membership and coverage are examined over 1991-2003, a period involving first decline, then stabilization, of unionization. Differences in union premia across workers and over time are studied using individual-level British Household Panel Survey data and quantile regression techniques allowing for endogeneity of the membership decision. Raw differentials suggest the presence of large positive membership and coverage premia that are stronger at the bottom of the wage distribution in both private and public sectors. After controlling for other factors influencing wages, union asymmetries are no longer apparent in the private sector. When endogeneity of union membership is taken into account, the private sector union wage premium disappears, indicating that individuals positively select into unions. In contrast, the public sector total union wage premium remains significant – entirely due to a coverage effect; it is stronger at the bottom among males, while for females the premium is constant across workers and substantial over the whole period, reflecting the continuing strength of public sector unions. Once we control for endogeneity, the membership premium is nowhere significant; there is no free rider puzzle in the private sector, as there is no coverage premium, but the puzzle persists for the public sector. |
| Keywords: | union membership premium, quantile regression, endogenous union membership |
| JEL: | C2 J31 J51 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4138&r=lab |
| By: | Aguiar, Angel; Walmsley, Terrie |
| Abstract: | In January 2004, President George Bush proposed the creation of a temporary worker program to allow more migrant workers to enter the US legally. This new temporary worker program would be open to undocumented workers in the US, as well as to prospective migrants currently residing abroad. The program would temporarily allow immigrants to fill jobs that, according to employers, would otherwise go unfilled at the current wage. The US Congress vetoed the presidential proposal, however, and requested a stricter enforcement of immigration law and the consequent deportation of undocumented immigrants. This study analyzes the economic effects of these immigration reforms on the US economy using an applied global general equilibrium model of migration. In this paper the global trade and migration model (GMig2) developed by Walmsley, Winters and Ahmed (2007) is modified to include a third labor category â undocumented unskilled â to reflect estimates of undocumented workers residing in the United States. The model is then used to analyze the impacts of two policy scenarios on the US economy: first, the deportation of undocumented workers currently residing in the US; and second, the legalization of undocumented agricultural workers. The first scenario is implemented through a decline in the number of undocumented workers residing in the US to zero, and a corresponding increase in the number of workers in Mexico. The second scenario is achieved by allowing undocumented workers to obtain legal status, thereby increasing their wages and productivity. We find that the deportation of undocumented workers causes a considerable loss to the US economy in terms of real GDP. Legalization of Mexican undocumented immigrants, on the other hand, is found to increase US real GDP. Hence the paper demonstrates there are clear advantages to the US economy of implementing proposals that both allow migrant workers to remain in the United States and increase the workers ability to participate freely in the US labor force as legal residents. |
| Keywords: | US Undocumented Workers, Applied General Equilibrium, Political Economy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49302&r=lab |
| By: | Nils Braakmann (Institute of Economics, University of Lüneburg) |
| Abstract: | This paper provides first evidence on the anatomy of human capital externalities arising from both firm-level and regional human capital. Using panel data from German social security records, both at an individual and aggregated at the plant and regional level, I estimate earnings functions incorporating measures of regional and firm-level human capital while controlling for various types of unobserved heterogeneity. The results suggest that the firm-level share of high-skilled workers generates positive, although small social returns to education for low-skilled and skilled workers but not for the high-skilled. This finding is in line with learning based theories of human capital externalities. Some estimates also suggest negative social returns for the regional shares of low-skilled workers. No such effects are found for the firm-level shares of low-skilled workers and the regional shares of high-skilled workers. |
| Keywords: | Human capital externalities, social returns to education, error-component model |
| JEL: | D62 J24 J31 R11 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:126&r=lab |
| By: | Mathews, Leah Greden |
| Abstract: | The benefits that students gain from designing and implementing their own independent undergraduate research projects is often presented as a valuable step in their academic career, and a stepping stone to graduate school success. However, it is not clear what benefits students receive when working as undergraduate research assistants on faculty research projects where they, the students, have little or no input into the project or its design. This paper reports on a survey of undergraduate students who participated as wage laborers on two separate faculty-directed research projects. The results of the study suggest that students gain valuable knowledge and skills that serve as constructive preparation for work, personal lives and graduate school careers; in addition, their participation in research enhances their overall undergraduate experience. |
| Keywords: | student learning, assessment, undergraduate research, Teaching/Communication/Extension/Profession, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49446&r=lab |
| By: | Lacroix, Guy (Université Laval) |
| Abstract: | In 2002 the Quebec government implemented the "Action Emploi" (AE) program aimed at making work pay for long-term social assistance recipients (SA). AE offered a generous wage subsidy that could last up to three years to recipients who found a full-time job within twelve months. The program was implemented on an experimental basis for a single year. Based on little empirical evidence, a slightly modified version of the program was implemented on permanent basis in May 2008. The paper investigates the impact of the temporary program by focusing on the labour market transitions of the targeted population starting one year before the implementation of the program and up until the end of 2005. We use a multi-state multi-episode model. The endogeneity of the participation status is accounted for by treating AE as a distinct state and by allowing correlated unobserved factors to affect the transitions. The model is estimated by the method of simulated moments. Our results show that AE has indeed increased the duration of Off-SA spells and decreased the duration of SA spells slightly. There is also some evidence that the response to the program varies considerably with unobserved individual characteristics. |
| Keywords: | multi-state multi-episode transition model, social assistance, wage subsidy |
| JEL: | I38 J31 J64 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4134&r=lab |
| By: | Brenda Gannon; Jennifer Roberts (Department of Economics, The University of Sheffield) |
| Abstract: | Part-time work is viewed as a viable option for people who wish to have a gradual transition to retirement. From a policy viewpoint, this may help to alleviate some labour supply shortages, especially in the context of the aging population. Factors such as health or pension provision may influence a person´s decision to work part-time. This paper considers the impact of health on the work decision for people aged 50 and over in the UK and Ireland. Methodological issues are discussed and the impact of unobserved individual effects is estimated using the Mundlak estimator applied to the multinomial probit model. The impact of health on part-time work is negative in Ireland, but we find no significant effect in the UK. The paper discusses potential reasons for these impacts and current policies on part-time work.. |
| Keywords: | health, retirement, panel data |
| JEL: | J26 I10 C23 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2008013&r=lab |
| By: | Casey Warman (Queen's University); Christopher Worswick (Carleton University) |
| Abstract: | We examine the impact of mandatory retirement on the retirement decisions of professors in Canada using administrative data. We find that the age distributions of professors at universities without mandatory retirement and those at universities with mandatory retirement at age 65 have diverged over time with a higher fraction of professors over the age of 65 being at universities without mandatory retirement. Estimation of a discrete time hazard model indicates that faculty members at universities with mandatory retirement at age 65 have exit rates at age 65 that are around 30 to 36 percentage points higher than those of their counterparts at universities without mandatory retirement. Similar results are found for both men and women; however, the magnitude of this effect is somewhat smaller for women. |
| Keywords: | Retirement, Faculty, University |
| JEL: | J26 J14 J45 J18 J21 I23 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1202&r=lab |
| By: | Scott E. Carrell; Marianne E. Page; James E. West |
| Abstract: | Why aren’t there more women in science? Female college students are currently 37 percent less likely than males to obtain a bachelor’s degree in science, technology, engineering, and math (STEM), and comprise only 25 percent of the STEM workforce. This paper begins to shed light on this issue by exploiting a unique dataset of college students who have been randomly assigned to professors over a wide variety of mandatory standardized courses. We focus on the role of professor gender. Our results suggest that while professor gender has little impact on male students, it has a powerful effect on female students’ performance in math and science classes, their likelihood of taking future math and science courses, and their likelihood of graduating with a STEM degree. The estimates are largest for female students with very strong math skills, who are arguably the students who are most suited to careers in science. Indeed, the gender gap in course grades and STEM majors is eradicated when high performing female students’ introductory math and science classes are taught by female professors. In contrast, the gender of humanities professors has only minimal impact on student outcomes. We believe that these results are indicative of important environmental influences at work. |
| JEL: | I20 J24 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14959&r=lab |
| By: | Daras, Tomasz; Tyrowicz, Joanna |
| Abstract: | n this paper we take a simulation approach towards household budgets survey, analysing the impact of changes in labour market status of household members on the ability of this household to service the mortgage payments. Using the current status as benchmark, we performed simulations using stylised facts about labour market evolutions. Households with mortgage are characterised by higher activity rates and lower unemployment rates than demographically comparable households without a credit. While these are typical preconditions for the credit approval decision, this state of matters may not necessarily persist throughout the entire mortgage service period. Firstly, labour market conditions may worsen in general, comprising the credit takers together with the rest of the population. Alternatively, credit takers may undergo employment experience in the \emph{same way} as other labour market participants. Consequently, we performed analyses along two scenarios: (i) households with mortgages will gradually become alike the demographically comparable group in terms of employment performance; and (ii) recognising the fact that debtor households members may exert potentially higher effort in maintaining labour market status we model the effects of general employment outlooks deterioration. We use labour force survey data to obtain the probabilities of changing the individual labour market status, while we resort to propensity score matching techniques to provide adequate benchmark for the changes among creditors with relation to general population. In the simulations we find the share of creditors loosing liquidity with the change in the labour market status and the implied burden to the financial sector stability. |
| Keywords: | financial sector stability; mortgages; labour market |
| JEL: | C15 R20 G21 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15202&r=lab |
| By: | Jennifer Roberts (Department of Economics, The University of Sheffield); Nigel Rice; Andrew M. Jones |
| Abstract: | Both health and income inequalities have been shown to be much greater in Britain than in Germany. One of the main reasons seems to be the difference in the relative position of the retired, who, in Britain, are much more concentrated in the lower income groups. Inequality analysis reveals that while the distribution of health shocks is more concentrated among those on low incomes in Britain, early retirement is more concentrated among those on high incomes. In contrast, in Germany, both health shocks and early retirement are more concentrated among those with low incomes. We use comparable longitudinal data sets from Britain and Germany to estimate hazard models of the effect of health on early retirement. The hazard models show that health is a key determinant of the retirement hazard for both men and women in Britain and Germany. The size of the health effect appears large compared to the other variables. Designing financial incentives to encourage people to work for longer may not be sufficient as a policy tool if people are leaving the labour market involuntarily due to health problems. |
| Keywords: | health, early retirement, hazard models |
| JEL: | J26 I10 C23 C41 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2008012&r=lab |
| By: | Kitov, Ivan; Kitov, Oleg |
| Abstract: | Labor productivity in Turkey, Spain, Belgium, Austria, Switzerland, and New Zealand has been analyzed and modeled. These counties extend the previously analyzed set of the US, UK, Japan, France, Italy, and Canada. Modelling is based on the link between the rate of labor participation and real GDP per capita. New results validate the link and allow predicting a drop in productivity by 2010 in almost all studied countries. |
| Keywords: | productivity; labor force; real GDP; prediction; modelling |
| JEL: | J21 O4 |
| Date: | 2009–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15152&r=lab |
| By: | Bauer, Christian |
| Abstract: | A continuous-time sequential job search model with savings and CARA preferences is solved analytically without resorting to unlimited borrowing and real-valued consumption. I isolate the effects of limited borrowing and nonnegative consumption as well as risk-aversion on the reservation wage by using a system of ordinary differential equations. |
| Keywords: | labor income risk; wealth-dependent reservation wage; borrowing limit |
| JEL: | C61 E21 D91 J64 |
| Date: | 2009–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:10291&r=lab |
| By: | Bernhard Michel (Federal Planning Bureau, Brussels.); François Rycx (Centre Emile Bernheim, DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and IZA-Bonn.) |
| Abstract: | The fear of massive job losses has prompted a fast-growing literature on offshoring and its impact on employment in advanced economies. This paper examines the situation for Belgium. It improves the offshoring intensity measure by computing a volume measure of the share of imported intermediates in output and it is among the first to address both materials and business services offshoring to high-wage and low-wage countries. Estimations of static and dynamic industry-level labour demand equations augmented by offshoring intensities do not reveal a significant impact of either materials or business services offshoring on total employment for Belgium between 1995 and 2003. |
| Keywords: | Offshoring, imported intermediate inputs, supply and use tables, industry-level employment, labour demand equations, panel data. |
| JEL: | F J |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:09-018&r=lab |
| By: | Kai Christoffel; Keith Kuester; Tobias Linzert |
| Abstract: | In this paper, we explore the role of labor markets for monetary policy in the euro area in a New Keynesian model in which labor markets are characterized by search and matching frictions. We first investigate to which extent a more flexible labor market would alter the business cycle behavior and the transmission of monetary policy. We find that while a lower degree of wage rigidity makes monetary policy more effective, i.e. a monetary policy shock transmits faster onto inflation, the importance of other labor market rigidities for the transmission of shocks is rather limited. Second, having estimated the model by Bayesian techniques we analyze to which extent labor market shocks, such as disturbances in the vacancy posting process, shocks to the separation rate and variations in bargaining power are important determinants of business cycle fluctuations. Our results point primarily towards disturbances in the bargaining process as a significant contributor to inflation and output fluctuations. In sum, the paper supports current central bank practice which appears to put considerable effort into monitoring euro area wage dynamics and which appears to treat some of the other labor market information as less important for monetary policy |
| Keywords: | Labor Market, wage rigidity, bargaining, Bayesian estimation |
| JEL: | E32 E52 J64 C11 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1513&r=lab |
| By: | Richard B. Freeman |
| Abstract: | This study documents the rapid spread of higher education around the world and the consequent reduced share of the US in the world's university students and graduates. It shows that the proportion of young persons who go to college has risen in many advanced countries to exceed that in the US while human capital leapfrogging in the huge populous developing countries has produced massive increases in their university educated work forces. One result of the expansion of higher education overseas is that the US has come to rely extensively on the immigration of highly educated persons to maintain a lead position in science and technology. International students make up roughly half of university graduate immigrants to the US, which makes policies toward those students a key determinant in the country’s success in attracting immigrant talent. |
| JEL: | J01 J2 J24 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14962&r=lab |
| By: | Kees Folmer |
| Abstract: | This study analyses macro wage elasticities on labour productivity, payroll taxes, average and marginal income tax, consumer and producer prices, the replacement ratio and the unemployment rate. The data have been analyzed in a meta analysis that relates differences in each elasticity of pay to variations in study characteristics, economic or institutional variables and the econometric specification of underlying wage equations. The results indicate that notably the econometric specification of the reported wage equation matters. The dynamic specification, the choice of explanatory variables and restrictions on estimated coefficients all have their impact on estimated elasticities. The reported value of the output price elasticity of pay is sensitive to restrictions on the consumer price and vice versa. In case of tax elasticities the dynamic specification matters, and the value of the replacement ratio elasticity of pay based on sectoral data is higher than the one obtained from macro data. The results for the unemployment elasticity of pay are close to those found in the wage curve literature. Finally, we generate benchmark values for each type of elasticity. |
| Keywords: | elasticity of pay; meta analysis |
| JEL: | C42 J30 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:memodm:224&r=lab |
| By: | Audrey Beck (Princeton University); Carlos González-Sancho (Juan March Institute and Nuffield College) |
| Abstract: | One of the concerns behind parental educational sorting is its potential to widen disparities in the ability of families to invest in their children’s development. Using data from the Fragile Families and Children Wellbeing Study, this paper investigates the association between parental educational homogamy and children’s school readiness at age 5. Our analyses reveal a positive impact of homogamy across child outcomes, most notably on socio-emotional indicators of development. Enhanced levels of parental agreement about the organization of family life and symmetry in the allocation of time to child care emerge as the intervening mechanisms behind this association. Our findings lend support to theoretical claims about the relevance of within-family social capital in the creation of human capital. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:pri:crcwel:1142&r=lab |
| By: | Bolli, Thomas (ETH Zurich); Zurlinden, Mathias (Swiss National Bank) |
| Abstract: | The standard economy-wide indices of labor quality (or human capital) largely ignore the role of unobservable worker characteristics. In this paper, we develop a methodology for identifying the contributions of both observable and unobservable worker characteristics in the presence of the incidental parameter problem. Based on data for Switzerland over the period 1991-2006, we find that a large part of growth in labor quality is caused by shifts in the distribution of unobservable worker characteristics. The overall index differs little from the standard indices, but contributions to growth attributed to education and age are corrected downwards. |
| Keywords: | human capital; labor quality |
| JEL: | J24 J31 |
| Date: | 2009–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:ris:snbwpa:2009_001&r=lab |
| By: | Tyrowicz, Joanna; Wójcik, Piotr |
| Abstract: | In this paper we approach the issue of social cohesion across NUTS4 regions in Poland. We analyse regional dynamics of unemployment rates and try to evaluate the impact of Active Labour Market Policies (ALMPs) in observed trends. Using data for 1999 till 2008 we employ tools typically applied to income convergence analyses to test the stability of unemployment distribution - both unconditionally and taking into account explanatory power of unemployment structure and ALMPs in Polish regions. Our findings suggest no unconditional convergence understood both in terms of levels and in terms of dispersion, while the latter seems to suggest "convergence of clubs" within a group highest unemploy- ment regions. The analysis comprised as well accounting for potential impact of ALMPs, controlling for dierentiated unemployment structure. We find no evidence that cohesion eorts contribute to the convergence or less of the divergence phenomena. |
| Keywords: | regional unemployment rate differentials; convergence analysis; Poland |
| JEL: | R58 J43 E64 J18 R23 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15201&r=lab |
| By: | Andreas Knabe (Faculty of Economics and Management, Freie University Berlin); Steffen Rätzel (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | We reexamine the claim that the effect of income on subjective well-being suffers from a systematic downward bias if one ignores that higher income is typically associated with more work effort. We analyze this claim using German panel data, controlling for individual unobserved heterogeneity, and specifying the impact of working hours in a non-monotonic form. Our results suggest that the impact of working hours on happiness is rather small and exhibits an inverse U-shape. We do not find evidence that leaving working hours out of the analysis leads to an underestimation of the income effect. |
| Keywords: | Happiness, Life Satisfaction, Income, Working Hours |
| JEL: | D60 I31 J01 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:09010&r=lab |
| By: | Albert van der Horst; Hugo Rojas-Romagosa; Leon Bettendorf |
| Abstract: | We investigate the trade-o¤ between employment and labour productivity in a panel of OECD countries in 1970-2003. The endogeneity of employment is shown to matter crucially for assessing its e¤ect on productivity. Estimating a structural model with 3SLS, where employment depends on demographic variables and labour market institutions, we .nd that employment tends to boost productivity. Literature ignoring the endogeneity of employment, including our own OLS results, incorrectly .nds a negative or insigni.cant e¤ect from employment on productivity. The productivity gain is, however, not a guaranteed by-product of additional employment, as regressions with rolling windows reveal. |
| Keywords: | labour productivity; employment |
| JEL: | E20 J24 O41 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:119&r=lab |
| By: | Elizabeth U. Cascio |
| Abstract: | In the 1960s and 1970s, many states introduced grants for school districts offering kindergarten programs. This paper exploits the staggered timing of these initiatives to estimate the long-term effects of a large public investment in universal early education. I find that white children aged five after the typical state reform were less likely to be high school dropouts and had lower institutionalization rates as adults. I rule out similar positive effects for blacks, despite comparable increases in their enrollment in public kindergartens in response to the initiatives. The explanation for this finding that receives most empirical support is that state funding for kindergarten crowded out participation in federally-funded early education among the poorest five year olds. |
| JEL: | H75 I28 J15 J24 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14951&r=lab |
| By: | Wendt, Minh; Kinsey, Jean |
| Abstract: | This paper investigates the association between weight and elementary school studentsâ academic achievement, as measured by standardized Item Respond Theory scale scores in reading and math. Data for this study come from the 1998 cohort of the Early Childhood Longitudinal Study, Kindergarten-Fifth Grade (ECLS-K), which contains a large national sample of children between the ages of 5 and 12. Estimates of the association between weight and achievement were obtained by utilizing two regression model specifications, a mixed-effects linear model and a student-specific fixed-effects model. A comprehensive set of explanatory variables such as a householdâs motivation in helping the student learn (e.g. parentsâ expectations for their childâs schooling and levels of parental involvement with school activities), teacher qualification, and school characteristics are controlled for. The results show that malnourished children, both underweight and overweight, especially obese, achieve lower scores on standardized tests, particularly for mathematics, when compared to normal weight children. The outcomes are more pronounced for female students compared to male students. These results emphasize the need to reduce childhood malnutrition, especially childhood obesity. |
| Keywords: | Childhood overweight, academic achievement, ECLS-K, Consumer/Household Economics, Teaching/Communication/Extension/Profession, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49347&r=lab |
| By: | Picot, Garnett; Hou, Feng |
| Abstract: | En fondant notre recherche sur des données administratives, nous nous demandons 1) si l'évolution des caractéristiques des immigrants, notamment l'augmentation de la proportion d'immigrants ayant un niveau de scolarité universitaire et de celle des immigrants dans la catégorie des « travailleurs qualifiés de l'immigration économique », ont contribué favorablement à l'augmentation des gains initiaux des immigrants dans les années 1990 et 2) si les gains initiaux des immigrants se sont améliorés après 2000 et, dans la négative, pourquoi. Nous avons constaté qu'au cours des années 1990, le nombre croissant de nouveaux immigrants possédant un diplôme universitaire et d'immigrants dans la catégorie des travailleurs qualifiés de l'immigration économique n'a guère fait augmenter les gains dans la tranche inférieure de la répartition des gains (et diminuer les taux de pauvreté chez les nouveaux immigrants), mais que cette évolution a effectivement fait augmenter les gains des immigrants dans la tranche supérieure et dans celle du milieu de la répartition des gains. Les personnes très instruites de plus en plus nombreuses dans la tranche inférieure de la répartition des gains n'ont pu mettre à profit leur niveau de scolarité et leur appartenance à la catégorie des « travailleurs qualifiés » pour toucher des revenus plus élevés, de sorte qu'elles n'ont touché que de faibles revenus. Ces résultats peuvent être liés à la langue, à la diplômanie, à la qualité de l'éducation, ou à des questions d'offre, ce dont il est question dans le document. Nous constatons que les gains initiaux des immigrants ont diminué de nouveau de 2000 &agr |
| Keywords: | Diversité ethnique et immigration, Travail, Salaires, traitements et autres gains, Immigrants et résidents non permanents au Canada |
| Date: | 2009–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3f:2008315f&r=lab |
| By: | Ederington, Josh (University of Kentucky); Minier, Jenny (University of Kentucky); Troske, Kenneth (University of Kentucky) |
| Abstract: | Gary Becker's theory of discrimination argues that increasing competition will reduce discrimination in the labor market. We use the Colombian trade liberalization episode over the period 1984–91 to investigate this claim on plant-level data in three ways. First, we examine whether women are concentrated in exporting plants. Second, we examine whether the increase in foreign competition due to unilateral trade liberalization disproportionately drove discriminating plants out of the market. Finally, we investigate whether trade liberalization affected hiring decisions (and thus gender segregation) by Colombian firms. |
| Keywords: | discrimination, trade, competition |
| JEL: | J7 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4131&r=lab |
| By: | Jennifer Hunt; Marjolaine Gauthier-Loiselle |
| Abstract: | We measure the extent to which skilled immigrants increase innovation in the United States by exploring individual patenting behavior as well as state-level determinants of patenting. The 2003 National Survey of College Graduates shows that immigrants patent at double the native rate, and that this is entirely accounted for by their disproportionately holding degrees in science and engineering. These data imply that a one percentage point rise in the share of immigrant college graduates in the population increases patents per capita by 6%. This could be an overestimate of immigration's benefit if immigrant investors crowd out native investors, or an underestimate if immigrantes have positive spill-overs on investors. Using a 1950-2000 state panel, we show that natives are not crowded out by immigrants, and that immigrants do have positive spill-overs, resulting in an increase in patents per capita of about 15% in response to a one percentage point increase in immigrant college graduates. We isolate the causal effect by instrumenting the change in the share of skilled immigrants in a state with the initial share of immigrant high school dropouts from Europe, China and India. In both data sets, the positive impacts of immigrant post-college graduates and scientists and engineers are larger than for immigrant college graduates. |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:mcl:mclwop:2008-07&r=lab |
| By: | Danzer, Alexander M. (Royal Holloway, University of London); Dietz, Barbara (Institute for Eastern European Studies, Regensburg) |
| Abstract: | This paper investigates patterns and determinants of temporary labour migration in Armenia, Belarus, Georgia, Moldova and Ukraine after EU enlargement in 2004. Migration incidence, destination choices and migration determinants differ between poorer and better-off countries. Although broadly in line with general results from the migration literature, we observe some peculiarities like the high share of older migrants and a modest role of family obligations in the migration decision process. We find no indication of a brain drain related to temporary migration in sending regions as the educational background of migrants is rather low. Migration is used as household insurance against unemployment and is associated with lower incidence of poverty. This finding remains robust when attempting to reduce the potential omitted variable bias with an instrumental variable approach. |
| Keywords: | temporary migration, welfare, Eastern Europe, cross-country study |
| JEL: | F22 J61 I31 P23 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4142&r=lab |
| By: | Joëlle Noailly; Suncica Vujic; Ali Aouragh |
| Abstract: | We investigate the impact of competition between primary schools on the quality of education in the Netherlands. Do schools facing more competition in their neighbourhood perform better than schools facing less competition? As a measure of school quality, we look at the performance of pupils at the nationwide standard test (the so-called Cito test) in the final year of primary education. Since competition is likely to be endogenous to the quality of schools, we use the distance between the school and the town centre as an instrument for the level of competition faced by a school. The intuition is that schools located close to the town centre, which are easily accessible to a large number of parents, face more competition than schools located further away from the town centre. Using a large range of data on pupil, school and market characteristics, we find that school competition has a small positive significant effect on pupil achievement. An increase in competition by one standard deviation (comparable to 5 additional schools in the market) increases pupil achievement at the Cito test by five to ten percent of the mean standard deviation, so about less than one point. This result is robust to a large range of specifications. |
| Keywords: | education; competition; primary schools; pupil achievement |
| JEL: | I20 H70 R5 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:120&r=lab |
| By: | Carletto, Calogero; Kilic, Talip |
| Abstract: | The contribution of return migrants to economic development in source countries can be significant. Overseas savings of returnees may lead to improvements in household welfare and provide liquidity for investments in the face of credit market failures. Labor market experience and skills acquired abroad may also lead migrants to find occupations higher in the skill and remuneration spectrum upon return. This study uses the 2005 Albanian Living Standards Measurement Study Survey and estimates the impact of international migration experience on the occupational mobility of return migrants vis a vis working-age Albanian residents that never migrated. Controlling for the non-random nature of international migration and return, the results show that past migration experience increases the likelihood of upward occupational mobility. Exploring the heterogeneity of impact by host country indicates that the positive effect of past migration experience on upward occupational mobility is driven by past migration experience in Italy and countries further a field, while past migration experience in Greece does not exert any significant impact on mobility outcomes. The results, which are consistent across different sample specifications and outcome variables measuring occupational mobility, hint at the link between migration and human/financial capital formation among migrants and foster optimism concerning the positive effect of return migration on economic development. This insight is particularly important since remittances from permanent migrants, which have fueled the impressive growth performance of the country in the recent era, may taper off in the medium to long term with the decline in out-migration and growing global economic woes. |
| Keywords: | Population Policies,Labor Markets,Voluntary and Involuntary Resettlement,Human Migrations&Resettlements,Debt Markets |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4908&r=lab |
| By: | Michele Belloni (CeRP-Collegio Carlo Alberto, Turin); Rob Alessie (University of Groningen) |
| Abstract: | This study exploits a new dataset in order to quantify the effect of financial incentives on retirement choices. This dataset contains - for the first time in Italy - information on seniority. In accordance with the general finding in Gruber and Wise (2004), we find that financial incentives have an effect on retirement. The effect goes in the expected direction; when employees become eligible for pension benefits the change in financial incentives they experience is so high that their retirement probability increases in a sizable way. We also find that the procedure to impute seniority used in previous studies leads to a sizable measurement error. Due to this measurement error, the key parameters of the model are inconsistently estimated. Our sensitivity analysis suggests that the lack of appropriate information on seniority is an important reason for the unclear evidence so far obtained in retirement studies for Italy. |
| Keywords: | retirement, social security wealth, seniority, unobserved heterogeneity. |
| JEL: | J2 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:73&r=lab |
| By: | Federico Cingano (Bank of Italy); Marco Leonardi (University of Milan and IZA); Julian Messina (University of Girona, FEDEA and IZA); Giovanni Pica (Università di Salerno and CSEF) |
| Abstract: | This paper analyzes the joint effect of EPL and financial market imperfections on investment, capital-labour substitution, labour productivity and job reallocation in a cross-country framework. In the spirit of Rajan and Zingales (1998) and Ciccone and Papaioannou (2006), we exploit variation in the need for reallocation at the sectoral and aggregate level to assess the average effect of EPL on firms’ policies. Then, exploiting firm-level information we study if the effect of EPL is stronger in firms with lower levels of internal resources. We find that, on average, EPL reduces investment per worker, capital per worker and value added per worker in high reallocation sectors relative to low reallocation sectors. The reduction in the capital-labour ratio is less pronounced in firms with higher internal resources, suggesting that financial constraints exacerbate the negative effects of EPL on capital deepening. |
| Date: | 2009–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:227&r=lab |
| By: | Paul de Hek; Frank van Erp |
| Abstract: | In light of the ageing of the Dutch society, policy measures aim at increasing the participation rate of elderly workers, particularly in the age-group between 55 and 64. This paper develops a stylized numerical simulation model describing consumption, savings and labour supply behaviour over the life cycle to analyze the labour-market implications of such proposals. For example, we simulate a shift in the (normal) retirement age from 65 to 67, the elimination of the Social Security premium exemption after age 65, and a premium on first-tier pension benefits if the commencement date of these benefits is postponed. Each of these reforms affect the economic outcomes via wealth effects, income effects and inter- and intratemporal substitution effects. The stylized model offers a profound theoretical underpinning which helps us to understand these policy effects over the entire life cycle of individuals. However, the numerical outcomes should be taken with some caution as the model ignores insights of behavioural economics (such as ‘framing effects’). |
| Keywords: | Life-cycle policies; Lifetime labour supply; Retirement |
| JEL: | J26 H55 E21 D31 J14 J32 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:docmnt:179&r=lab |
| By: | David S. Lee (Princeton University and NBER); Alexandre Mas (University of California, Berkeley and NBER) |
| Abstract: | We estimate the effect of new unionization on firms’ equity value over the 1961-1999 period using a newly assembled sample of National Labor Relations Board (NLRB) representation elections matched to stock market data. Event-study estimates show an average union effect on the equity value of the firm equivalent to a cost of at least $40,500 per unionized worker. At the same time, point estimates from a regression-discontinuity design—comparing the stock market impact of close union election wins to close losses—are considerably smaller and close to zero. We find a negative relationship between the cumulative abnormal returns and the vote share in support of the union, allowing us to reconcile these seemingly contradictory findings. Using the magnitudes from the analysis, we calibrate a structural “median voter” model of endogenous union determination in order to conduct counterfactual policy simulations of policies that would marginally increase the ease of unionization. |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:1136&r=lab |
| By: | Nick Netzer (Socioeconomic Institute, University of Zurich); Florian Scheuer (Massachusetts Institute of Technology) |
| Abstract: | We examine equilibria in competitive insurance markets with adverse selection when wealth differences arise endogenously from unobservable savings or labor supply decisions. The endogeneity of wealth implies that high risk individuals may ceteris paribus exhibit the lower marginal willingness to pay for insurance than low risks, a phenomenon that we refer to as irregular-crossing preferences. In our main model, both risk and patience (or productivity) are privately observable. In contrast to the models in the existing literature, where wealth heterogeneity is exogenously assumed, equilibria in our model no longer exhibit a monotone relation between risk and coverage. Individuals who purchase larger coverage are no longer higher risks, a phenomenon frequently observed in empirical studies. |
| Keywords: | Insurance Markets, Adverse Selection, Multidimensional Screening |
| JEL: | D82 G22 J22 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:soz:wpaper:0907&r=lab |
| By: | Poutvaara, Panu (University of Helsinki); Munk, Martin D. (SFI - Danish National Centre for Social Research); Junge, Martin (CEBR, Copenhagen) |
| Abstract: | Following a seminal contribution by Borjas (1987), a large literature has analyzed how income distribution and redistribution are related to immigration to various rich countries. In this paper, we take a look at the other side of the coin. We analyze emigration from Denmark, which is one of the richest and most redistributive European Welfare States. Using comprehensive register data on full population and a unique new representative survey, we analyze whether Danes with relatively high earnings ability favor countries with more unequal income distribution and lower taxes, like the United States. |
| Keywords: | migration, emigration, redistribution, brain drain, education |
| JEL: | F22 J61 H2 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4144&r=lab |
| By: | Jordan, Jeffrey L.; Anil, Bulent; Herbert, Velma; Chatterjee, Swan |
| Abstract: | The purpose of this paper is to investigate the relationship between housing uncertainties, child time preferences and education outcomes in the form of staying in school. The paper tests the hypothesis that students who face housing uncertainties through mortgage foreclosures and evictions learn impatient behavior and are therefore at greater risk of dropping our of school, impeding human capital formation and economic development. |
| Keywords: | discount rates, housing and educaiton, Community/Rural/Urban Development, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49320&r=lab |
| By: | Bonanno, Alessandro |
| Abstract: | Wal-Mart, the largest retailer worldwide, has been suspected of exercising market power over input providers, both merchandise suppliers and workers. However, in spite of a growing body of literature investigating the beneficial economic impact of the company through its price-lowering effect, research analyzing the companyâs economic impact over input suppliers is limited. This paper presents a general framework which can be used to investigate Wal-Martâs market power over input suppliers, vis-Ã -vis a variation in input productivity, focusing on homogenous intermediate goods supplied locally. The model is general enough to account for incumbentsâ reaction to Wal-Martâs entry resulting in exit, entry and changes in the production technology. A simplified version of the theoretical model is tested using data on local labor markets. Preliminary results show Wal-Mart having a wage lowering effect due mainly to the increased productivity of labor, while the increase in oligopsony power counts only for 15% of such effect. |
| Keywords: | Wal-Mart, oligopsony power, entry, wages, Industrial Organization, Labor and Human Capital, L13, L81, J42, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49599&r=lab |
| By: | Chumacero, Romulo; Gomez, Dabiel; Paredes, Ricardo |
| Abstract: | One of the pillars of the educational voucher system instituted in Chile is that competition among schools to attract students would improve the quality of the education provided. Surveys have suggested that families rank the distance of the school from their home as the most important factor for choosing a school. They also suggest that parents largely ignore the results of standardized tests. We use a novel data set which includes measures of the distance between homes and schools to analyze the determinants of school choice. Economic theory suggests, and the estimations confirm, that parents consider quality of the school and its location when choosing schools. The paper quantifies the relevant trade-offs. |
| Keywords: | Vouchers; School Choice; Distance; Chile |
| JEL: | I21 C25 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15125&r=lab |
| By: | Steven J. Atlas; Jonathan S. Skinner |
| Abstract: | Many Americans report chronic and disabling pain, even in the absence of identifiable clinical disorders. We first examine the prevalence of pain in the older U.S. population using the Health and Retirement Study (HRS). Among 50-59 year females, for example, pain rates ranged from 26 percent for college graduates to 55 percent for those without a high school degree. Occupation, industry, and marital status attenuated but did not erase these educational gradients. Second, we used a study of patients with lower back pain and sciatica arising from intervertebral disk herniation (IDH). Initially, nearly all patients reported considerable pain and discomfort, with a sizeable fraction undergoing surgery for their IDH. However, baseline severity measures and surgical or medical treatment explained little of the variation in 10-year outcomes. By contrast, education exerted a strong impact on changes over time in pain: just 9 percent of college graduates report leg or back pain "always" or "almost always" after 10 years, compared to 34 percent for people without a high school degree. This close association of education with pain is consistent with recent research emphasizing the importance of neurological – and perhaps economic -- factors in the perception of pain. |
| JEL: | I1 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14964&r=lab |
| By: | Armin Zeinali (Queen's University); Glenn P. Jenkins (Queen's University); 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:wpaper:1204&r=lab |
| By: | G. Antonelli; R. Antonietti; G. Guidetti |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:661&r=lab |
| By: | Peake, Whitney O.; Marshall, Maria I. |
| Abstract: | The impact of experience on entrepreneurial performance has been widely tested. Although experience is expected to positively impact performance, results are varied. This research synthesizes the current literature by determining systematic sources of variation through both exploratory and ordered probit analyses. Results reveal that start date for data collection and form of experience tested pose a major impact on the probability of obtaining a positive estimate for the experience-performance relationship. This research further emphasizes the need for tightened standards across the experience-performance literature in order to equip both academics and practitioners with better information. |
| Keywords: | Entrepreneurship, Experience, Performance, Meta-Analysis, Agribusiness, Labor and Human Capital, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49275&r=lab |