|
on Labour Economics |
| By: | Dimitris Pavlopoulos |
| Abstract: | This paper uses panel data from the UK (BHPS) and Germany (GSOEP) to investigate the wage effect of entering the labour market with a temporary job. Further than the previous literature that studied the effect of the contract type on wage dynamics in the explained part of a wage regression, we also investigate the effect of the starting contract on the variance of unobserved individual effects and random earnings shocks. For this purpose, we decompose earnings into a component determined by initial unobserved earnings ability and experience-related heterogeneity and a component determined by earnings shocks. Our results for Germany, verify the existence of a wage penalty for entering the labour market with a temporary contract. This penalty disappears after 12.5 years for male workers and after 6.5 years for the female workers. In the UK, a similar wage penalty is found for male workers that persists over their working career. In contrast, no wage penalty is found for the British female workers. In the UK, the initial unobserved earnings capacity is higher for workers starting off with a permanent job, while no such difference emerges in Germany. However, this initial unexplained wage inequality decreases faster for workers starting their career with a temporary contract than their colleagues that entered the labour market with a permanent job. Finally, the persistence of earnings shocks is higher for workers entering the labour market with a temporary contract. |
| Keywords: | temporary employment, wages |
| JEL: | J31 J41 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp228&r=lab |
| By: | Fraser Summerfield (Department of Economics, University of Guelph) |
| Abstract: | The impact of a Temporary Help Agency (THA) job placement on an employee’s future employment status and labor market income is examined using NLSY79 data for the late 1990s. Several matching estimators provide gender-specific estimates of the effects of temporary agency employment on future employment outcomes. Compared to directhire temps, women’s earnings increase two years after THA employment, while men’s do not. Four years after THA employment, women continue to benefit from THA jobs, while men experience lower earnings and probability of employment. We find THA work does not help men with future income or employability, however, policy encouraging women to use THA firms for labor market re-entry would be beneficial in these two areas. |
| Keywords: | Labor Income, Wage, Occupation, Temporary Workers, Gender, Employment Status, Temporary Help Agencies. |
| JEL: | J31 J21 J22 J16 J63 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:gue:guelph:2009-11&r=lab |
| By: | Solomon W. Polachek; Jun Xiang |
| Abstract: | The gender wage gap varies across countries. For example, among OECD nations women in Australia, Belgium, Italy and Sweden earn 80% as much as males, whereas in Austria, Canada and Japan women earn about 60%. Current studies examining cross-country differences focus on the impact of labor market institutions such as minimum wage laws and nationwide collective bargaining. However, these studies neglect labor market institutions that affect women’s lifetime work behavior -- a factor crucially important in gender wage gap studies that employ individual data. This paper explicitly concentrates on labor market institutions that are related to female lifetime work that affect the gender wage gap across countries. Using ISSP (International Social Survey Programme), LIS (Luxembourg Income Study) and OECD wage data for 35 countries covering 1970-2002, we show that the gender pay gap is positively associated with the fertility rate (treated exogenously and endogenously with religion as the instrument), positively associated with the husbandwife age gap at first marriage, and positively related to the top marginal tax rate, all factors which negatively affect women’s lifetime labor force participation. In addition, we show that collective bargaining, as found in previous studies, is negatively associated with the gender pay gap. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp227&r=lab |
| By: | Luo, Xubei; Terada, Takanobu |
| Abstract: | In the Philippines, an important part of income inequality is associated with the wage difference between the less educated and the better educated. The majority of the least educated are employed in low-paid services jobs and the agricultural sector. Tertiary education is to a large extent a prerequisite for high-paid occupations. Using the Labor Force Survey 2003-2007, this paper examines disparities in human capital endowment, returns to education, and the role of education in wage differentials in the Philippines. The empirical results show that returns to education monotonically increase - workers with elementary education, secondary education, and tertiary education earn 10 percent, 40 percent, and 100 percent more than those with no education. The results also show that education is the single most important factor that contributes to wage differentials. At the national level, education accounts for about 30 percent of the difference in wages. It accounts for a higher percentage of the difference for female workers (37 percent) than male workers (24 percent). There are also differences across regions and sectors. As an economy develops, the demand for skills increases. In the Philippines, efforts to improve education to increase the supply of highly educated people are important not only for long-term growth, but also for helping to translate growth into more equal opportunities for the children of the current generation. |
| Keywords: | Labor Markets,Education For All,Tertiary Education,Labor Policies,Regional Economic Development |
| Date: | 2009–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5120&r=lab |
| By: | Hensen Maud M.; Vries M. Robert de; Cörvers Frank (ROA rm) |
| Abstract: | In this article we investigate the relationship between geographic mobility andeducation-job mismatch in the Netherlands. We focus on the role of geographicmobility in reducing the probability of graduates working (i) jobs below theireducation level; (ii) jobs outside their study fi eld; (iii) part-time jobs; (iv) fl exiblejobs; or (v) jobs paid below the wage expected at the beginning of the career. For thispurpose we use data on secondary and higher vocational education graduates in theperiod 1996–2001. We show that graduates who are mobile have higher probabilityof fi nding jobs at the acquired education level than those who are not. Moreover,mobile graduates have higher probability of fi nding full-time or permanent jobs.Th is suggests that mobility is sought to prevent not only having to take a job belowthe acquired education level, but also other education-job mismatches; graduates arespatially fl exible particularly to ensure full-time jobs. |
| Keywords: | education, training and the labour market; |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2009009&r=lab |
| By: | Almeida, Rita; Carneiro, Pedro |
| Abstract: | This paper studies the effect of enforcing labor regulation in an economy with a dual labor market. The analysis uses data from Brazil, a country with a large informal sector and strict labor law, where enforcement affects mainly the degree of compliance with mandated benefits (severance pay and health and safety conditions) in the formal sector, and the registration of informal workers. The authors find that stricter enforcement leads to higher unemployment but lower income inequality. They also show that, at the top of the formal wage distribution, workers bear the cost of mandated benefits by receiving lower wages. Wage rigidity (due, say, to the minimum wage) prevents this downward adjustment at the bottom of the income distribution. As a result, formal sector jobs at the bottom of the wage distribution become more attractive, inducing the low-skilled self-employed to search for formal jobs. |
| Keywords: | Labor Markets,Labor Policies,Economic Theory&Research,Markets and Market Access,Transport Economics Policy&Planning |
| Date: | 2009–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5119&r=lab |
| By: | Jan Babecký (Czech National Bank, Na Příkopě 28, 115 03 Praha 1, Czech Republic.); Philip Du Caju (National Bank of Belgium, Boulevard de Berlaimont 14, B-1000 Brussels, Belgium.); Theodora Kosma (Bank of Greece, 21, E. Venizelos Avenue, P. O. Box 3105, GR-10250 Athens, Greece.); Martina Lawless (Central Bank and Financial Services Authority of Ireland, Dame Street, Dublin 2, Ireland.); Julián Messina (The World Bank, 1818 H Street, NW, Washington, DC 20433, USA.); Tairi Rõõm (Bank of Estonia, Estonia pst. 13, ET-15095 Tallinn, Estonia.) |
| Abstract: | It has been well established that the wages of individual workers react little, especially downwards, to shocks that hit their employer. This paper presents new evidence from a unique survey of firms across Europe on the prevalence of downward wage rigidity in both real and nominal terms. We analyse which firm-level and institutional factors are associated with wage rigidity. Our results indicate that it is related to workforce composition at the establishment level in a manner that is consistent with related theoretical models (e.g. efficiency wage theory, insider-outsider theory). We also find that wage rigidity depends on the labour market institutional environment. Collective bargaining coverage is positively related with downward real wage rigidity, measured on the basis of wage indexation. Downward nominal wage rigidity is positively associated with the extent of permanent contracts and this effect is stronger in countries with stricter employment protection regulations. JEL Classification: J30, J31, J32, C81, P5. |
| Keywords: | downward nominal wage rigidity, downward real wage rigidity, wage indexation, survey data, European Union. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091105&r=lab |
| By: | Ramón Cobo-Reyes (Department of Economic Theory and Economic History, University of Granada.); Natalia Jiménez (Department of Economic Theory and Economic History, University of Granada.); Juan Antonio Lacomba (Department of Economic Theory and Economic History, University of Granada.); Francisco Lagos (Department of Economic Theory and Economic History, University of Granada.) |
| Abstract: | This paper analyzes the effect of delegating on the employees’ performance in an experimental gift exchange game where employers may allow workers to choose their own wages. Our results show that higher effort levels are displayed when workers are free to choose their wage, even when wages chosen by employees are similar to those assigned by employers. Notwithstanding this better performance, the employers’ profits depend on whether the wage decision is bounded or not. Perceiving the delegating decision as a signal of trust or as a larger responsibility for the allocation of payoffs, might trigger a higher employees’ performance. |
| Keywords: | labor market, gift exchange-game, delegation, responsibility-allevietion, reciprocity, experiments. |
| Date: | 2009–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:gra:wpaper:09/07&r=lab |
| By: | Gonzalo Fernández-de-Córdoba (Universidad de Salamanca); Javier J. Pérez (Banco de España); José L. Torres (Universidad de Málaga) |
| Abstract: | This paper develops a dynamic general equilibrium model in which the public and the private sector interact in the labor market. Previous studies that analyze the labor market effects of public sector employment and wages have mostly assumed exogenous rules for public wage and public employment. We show that theories that equalize wages with marginal products in the private sector can rationalize the interaction of public and private sector wages when extended to accommodate a non-trivial government sector/public sector union that endogenously determines public employment and wages. Our model suggests a positive correlation between public and private sector wages. Any increase in tax revenues, coupled with the existence of a positive public-private sector wage gap, makes working in the public sector an attractive option. Thus, a positive neutral productivity shock increases public and private sector wages. More interestingly, even a private-sector specific productivity shock spills-over to the public sector, increasing public wages. These facts lend some support to the wage leading role of the private sector. Nevertheless, at the same time, a positive shock to public sector wages would lead to an increase in private sector wages, via the flow of workers from the private to the public sector. |
| Keywords: | Public wages, public employment, labor market, trade unions |
| JEL: | C32 J30 J51 J52 E62 E63 H50 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0924&r=lab |
| By: | Djavad Salehi-Isfahani; Insan Tunali; Ragui Assaad |
| Abstract: | This paper presents a comparative study of private returns to schooling of urban men in Egypt, Iran, and Turkey using similar survey data and a uniform methodology. We employ three surveys for each country that span nearly two decades, from the 1980s to 2006, and, to increase the comparability of the estimates across surveys, we focus on urban men 20-54 years old and in full time wage and salary employment. Our aim is to learn how the monetary signals of rewards that guide individual decisions to invest in education are shaped by the institutions of education and labor markets in these countries. Our estimates generally support the stylized facts of the institutions of education and labor markets in Middle Eastern countries. Their labor markets have been described as dominated by the public sector and therefore relatively inflexible, and their education systems as more focused on secondary and tertiary degrees than teaching practical and productive skills. Returns in all countries are increasing in years of schooling, which is contrary to the Mincer assumption of linear returns but consistent with overemphasis on secondary and tertiary degrees. Low returns to vocational training relative to general upper secondary, which have been observed in many developing countries, are observed in Egypt and Iran, but not Turkey. This pattern of returns across countries seems to correspond to how students are selected into vocational and general upper secondary tracks, which is an important part of the education institutions of these countries, and the fact that Turkey’s economy is more open than the other two. Greater competitiveness in all three countries over time seems to have increased returns to university education and in few cases to vocational education, but not to general high school. |
| Keywords: | Egypt, Iran, Turkey, returns to education, Mincer equation, labor market institutions, education institutions, labor market flexibility |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:vpi:wpaper:e07-17&r=lab |
| By: | Jan Babecký (Czech National Bank, Na Příkopě 28, 115 03 Praha 1, Czech Republic.); Philip Du Caju (National Bank of Belgium, Boulevard de Berlaimont 14, B-1000 Brussels, Belgium.); Theodora Kosma (Bank of Greece, 21, E. Venizelos Avenue, P. O. Box 3105, GR-10250 Athens, Greece.); Martina Lawless (Central Bank and Financial Services Authority of Ireland, Dame Street, Dublin 2, Ireland.); Julián Messina (The World Bank, 1818 H Street, NW, Washington, DC 20433, USA.); Tairi Rõõm (Bank of Estonia, Estonia pst. 13, ET-15095 Tallinn, Estonia.) |
| Abstract: | Firms have multiple options at the time of adjusting their wage bills. However, previous literature has mainly focused on base wages. We broaden the analysis beyond downward rigidity in base wages by investigating the use of other margins of labour cost adjustment at the firm level. Using data from a unique survey, we find that firms make frequent use of other, more flexible, components of compensation to adjust the cost of labour. Changes in bonuses and non-pay benefits are some of the potential margins firms use to reduce costs. We also show how the margins of adjustment chosen are affected by firm and worker characteristics. JEL Classification: J30, C81, P5. |
| Keywords: | labour costs, wage rigidity, firm survey, European Union. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091106&r=lab |
| By: | Christopher M Gilbert; Francesca Modena |
| Abstract: | Many empirical and theoretical studies explore the effects of ex-ante risk and ex-post shocks on child education. While scholars share the opinion that shocks reduce investment in education, there is no general agreement over the effects of uncertainty on child schooling. This work uses the Indonesian Family Life Survey to explore the effects of ex-ante risk and ex-post shocks on school progression in rural Indonesia. We develop a model of household school transition decisions from elementary to junior education and from junior to senior school considering different sources of uncertainty related both to parental and adult income, and under the assumption that withdrawal from school is permanent. In this way, temporary interruptions in child schooling have long term impacts on the child human capital. We show that there is no simple answer to the question of how uncertainty affects schooling decisions. Econometric results suggest that uncertainty about parental income for the time the child may be potentially at school increases the probability of attending junior school while uncertainty about expected earnings from education has a negative and significant effect only for senior school attendance. Finally, positive (negative) income shocks increase (decrease) the probability of attending junior school. |
| Date: | 2009–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:679&r=lab |
| By: | Lawless, Martina (Central Bank and Financial Services Authority of Ireland); Babecký, Jan (Czech National Bank); Du Caju, Philip (National Bank of Belgium); Kosma, Theodora (Bank of Greece); Messina, Julián (World Bank); Rõõm, Tairi (Bank of Estonia) |
| Abstract: | It has been well established that the wages of individual workers are only marginally affected, particularly downwards, by shocks to their firms. This paper presents new evidence from a unique survey of firms across Europe on the prevalence of downward wage rigidity in both real and nominal terms. We analyse which firm-level and institutional factors are associated with wage rigidity. Our results indicate that downward wage rigidity is related to workforce composition at the establishment level in a manner that is consistent with related theoretical models (e.g. efficiency wage theory, insider-outsider theory). We also find that wage rigidity depends on the labour market institutional environment. Collective bargaining coverage is positively related with downward real wage rigidity, measured on the basis of wage indexation. Downward nominal wage rigidity is positively associated with the presence of permanent contracts and this effect is stronger in countries with stricter employment protection regulations. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:wpaper:11/rt/09&r=lab |
| By: | V. Gimpelson; R. Kapeliushnikov; A. Lukiyanova |
| Abstract: | The efficiency of the labour market critically depends on the design of its institutions with employment protection legislation (EPL) playing a special role here. However, since formal laws can be observed or ignored to varying degrees, the actual enforcement regime shapes incentives and constraints. Most of the studies exploring EPL effects on labour market performance implicitly assume that EPL compliance is near to complete and therefore all firms bear full adjustment costs incurred by the regulations. This seems to be a very strong assumption for any country but it sounds especially strong and hardly plausible for developing and transition economies. But if compliance and enforcement varies widely across regions/cities or segments of firms, then this variation is likely to cause variation in performance. This paper looks at Russia in particular. The main idea of this paper is to reveal and describe cross-regional and inter-temporal variation in EPL enforcement and to explore empirically whether it is translated into regional labour market outcomes. The paper employs unique data set based on the State Labour Inspectorate data and the Supreme court statistics on labour disputes. |
| Keywords: | employment protection regulations, enforcement, employment, unemployment, regional labor markets |
| JEL: | J21 J23 J52 K31 R23 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwesc:diwesc11&r=lab |
| By: | Lawless, Martina (Central Bank and Financial Services Authority of Ireland); Babecký, Jan (Czech National Bank); Du Caju, Philip (National Bank of Belgium); Kosma, Theodora (Bank of Greece); Messina, Julián (World Bank); Rõõm, Tairi (Bank of Estonia) |
| Abstract: | Firms have multiple options at the time of adjusting their wage bills. However, previous literature has mainly focused on base wages. We broaden the analysis beyond downward rigidity in base wages by investigating the use of other margins of labour cost adjustment at the firm level. Using data from a unique survey, we find that firms make frequent use of other, more flexible, components of compensation to adjust the cost of labour. Changes in bonuses and non-pay benefits are some of the potential margins firms use to reduce costs. We also show how the margins of adjustment chosen are affected by firm and worker characteristics. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:wpaper:12/rt/09&r=lab |
| By: | Yuemei JI |
| Abstract: | This paper proposes a behavioral model to study how schools influence students’ educational behavior and academic achievements. The school quality is then defined into two dimensions: the amount of market-valued skills schools impart and how well schools cultivate an educational identity. Using data from Add Health in the US, I test the major hypotheses from the theoretical model. On the one hand, school resources (average class size and teacher supply) and student-level curriculum have some effects on the math GPA scores. On the other hand, educational identity indicators (school-level happiness and participation at school teams, clubs or organizations) and the previous math GPA scores are significant determinants in students’ observable effort level such as absenteeism behavior, and through this channel both determinants indirectly influence math GPA achievement. These empirical results inform us that an identity-based behavioral model adds to a rational expectation educational choice model in understanding the widening academic achievement gap between adolescents from different socioeconomic backgrounds. The paper presents the limitation of using school resources to study the school quality and advocates a richer set of school quality measures. |
| Keywords: | identity, educational choice, school |
| JEL: | D81 I20 I30 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces09.17&r=lab |
| By: | Sarena Goodman (Columbia University - Department of Economics); Lesley Turner (Columbia University - Department of Economics) |
| Abstract: | In current debates regarding the future of education, teacher compensation schemes are often criticized for their lack of performance-based pay. Proponents of merit pay for teachers argue that tying teacher salaries to student achievement will induce teachers to focus on the success of their students and stimulate innovation in the school system as a whole. In this paper, we use a randomized policy experiment conducted in the New York City public school system to explore the effects of one group-based pay scheme. We investigate potential impacts of incentive pay over two academic years (2007-2008 and 2008-2009) on student performance on annual math and reading exams, teacher absences, and responses to environmental surveys of teachers and students. We also consider whether the program had differential outcomes on groups within schools that were especially likely to be targeted, given the particular incentive structure of the program. Last, we explore relative impacts on the market for teachers by examining end-of-year teacher turnover and the quality composition of newly hired teachers. In general, we find no significant effects of this program. However, there is some evidence that the program reduced teacher absenteeism in schools with a small number of teachers, and that these effects were weakened in larger schools by the presence of free-riding. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:clu:wpaper:0910-05&r=lab |
| By: | Hartmut Lehmann; Jonathan Wadsworth |
| Abstract: | Using longitudinal data from the Ukraine we examine the extent of any long-lasting effects of radiation exposure from the Chernobyl disaster on the health and labour market performance of the adult workforce. The variation in the local area level of radiation fallout from the Chernobyl accident is considered as a potential instrument to try to establish the causal impact of poor health on labour force participation, hours worked and wages. There appears to be a significant positive association between local area-level radiation dosage and health perception based on selfreported poor health status, though much weaker associations between local area-level dosage and other specific health conditions or labour market performance. Any effects on negative health perceptions appear to be stronger among women and older individuals. |
| Keywords: | Chernobyl, Health, LabourMarket Performance |
| JEL: | H00 J00 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwesc:diwesc12&r=lab |
| By: | Davide Dottori (Bank of Italy); I-Ling Shen (Université catholique de Louvain) |
| Abstract: | A political-economic model is provided to study the impact of low-skilled immigration on the receiving country's education system, in terms of sources of school funding, expenditure per pupil, and type of parents who are more likely to send children to privately funded schools. The education regime results from the interplay between households' choices on fertility and education and the public education provided. No exogenous culturally-based difference is assumed among agents. Low-skilled migrant workers differ from their local counterparts only in voting rights and adjustment costs. The impact of immigration on public school congestion, tax base, wages and skill premium are considered. When the number of low-skilled immigrants is large, the education regime tends to become more segregated, with wealthier locals more likely to opt out of the public system into private schools. The fertility differential between high- and low-skilled locals increases due to a quantity/quality trade-off. The theoretical predictions conform to stylized facts revealed in US census data and OECD PISA (2003). |
| Keywords: | double taxation, education funding, fertility, migration, segregation, voting |
| JEL: | H42 H52 I21 D72 O15 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_726_09&r=lab |
| By: | Shimizutani, Satoshi |
| Abstract: | In Japan, retirement is a gradual process that transpires over a particularly long period of time. Using large scale micro-level datasets from the Survey of Employment of the Elderly compiled by the Japanese government, we provide some stylized facts on the development of retirement behavior since the 1980s and explore factors affecting the individual retirement decision. First, we observed a general declining trend in the proportion of retired individuals aged 55-59 (especially females) while the proportion of retired individuals aged 65-69 (especially males) increased. Second, the survival analysis on actual retirement age shows that males who worked as an expert/technician or manager before retirement or individuals receiving a larger public pension income are likely to retire earlier. Third, another survival analysis on expected retirement age shows that workers with lower job satisfaction in terms of rewards and males with a larger family size are more likely to retire earlier. |
| Keywords: | retirement, labor supply of the elderly, survival analysis, Japan |
| JEL: | J14 J26 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:hit:piecis:458&r=lab |
| By: | Luo, Xubei |
| Abstract: | The Philippine economy has been growing rapidly, at an annual growth rate of 5 percent over the past five years. Such decent growth in gross domestic product, however, did not translate into an increase in household income. Wage income declined in real terms. The poverty headcount increased slightly. The fruits of economic growth were not shared equally across the country. Challenges remain to create more jobs to keep pace with the rapidly growing active population. Using the Philippines Labor Force Survey data (2003-2007), this paper reviews the disparities in labor market performance and examines the contribution of regional and individual characteristics. The results show that real wages declined and disparities widened between the National Capital Region and other islands. The youth, less educated, and women face more challenges in finding employment with a decent salary, other things being equal. Disparities in labor market performance are largely associated with the difference in regional structure and human capital endowment. Individual characteristics account for roughly one-third of the difference in wages between the National Capital Region and other regions; regional structures and other unobservable factors account for two-thirds of the difference. |
| Keywords: | Labor Markets,Labor Policies,Youth and Governance,Population Policies,Regional Economic Development |
| Date: | 2009–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5124&r=lab |
| By: | Martine Druant (National Bank of Belgium); Silvia Fabiani (Bank of Italy); Gabor Kezdig (Central European University); Ana Lamo (European Central Bank); Fernando Martins (Bank of Portugal); Roberto Sabbatini (Bank of Italy, Economic Research Department) |
| Abstract: | This paper presents new evidence on the patterns of price and wage adjustment in European firms and on the extent of nominal rigidities. It uses a unique dataset collected through a firm-level survey conducted in a broad range of countries and covering various sectors. Several conclusions are drawn from this evidence. Firms adjust wages less frequently than prices: the former tend to remain unchanged for about 15 months on average, the latter for around 10 months. The degree of price rigidity varies substantially across sectors and depends strongly on economic features, such as the intensity of competition, the exposure to foreign markets and the share of labour costs in total cost. Instead, country specificities, mostly related to the labour marketÂ’s institutional setting, are more relevant in characterising the pattern of wage adjustment. The latter also exhibits a substantial degree of time-dependence, as firms tend to concentrate wage changes in a specific month, mostly January in the majority of countries. Wage and price changes feed into each other at the micro level and there is a relationship between wage and price rigidity. |
| Keywords: | survey, wage rigidity, price rigidity, indexation, labour market institutions, time dependence |
| JEL: | D21 E30 J31 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_725_09&r=lab |
| By: | Jérémi Montornès (Banque de France, 31, rue croix-des-petits-champs, 75 049 Paris Cedex 01, France); Jacques-Bernard Sauner-Leroy (Banque de France, 31, rue croix-des-petits-champs, 75 049 Paris Cedex 01, France) |
| Abstract: | We investigate the wage-setting behavior of French companies using an ad-hoc survey conducted specifically for this study. Our main results are the following. i) Wages are changed infrequently. The mean duration of wage contracts is one year. Wage changes occur at regular intervals during the year and are concentrated in January and July. ii) We find a lower degree of downward real wage rigidity and nominal wage rigidity in France compared to the European average. iii) About one third of companies have an internal policy to grant wage increases according to inflation. iv) When companies are faced adverse shocks, only a partial response is transmitted into prices. Companies also adopt cost-cutting strategies. The wage of newly hired employees plays an important role in this adjustment. JEL Classification: E3, D4, L11. |
| Keywords: | wage rigidity, wage-setting behavior, survey data. |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091102&r=lab |
| By: | Soohyung Lee; Benjamin A. Malin |
| Abstract: | We explore education's role in improving the allocation of labor between China's agricultural and nonagricultural sectors and measure the portion of China's recent growth attributable to this channel. Building from micro-level estimates, we find that education's impact on labor reallocation between sectors accounts for about 9 percent of Chinese growth, whereas its impact on within-sector human capital growth explains only 2 percent. Our findings suggest that, when frictions cause large productivity gaps across sectors and returns to education are greater in higher-productivity sectors, education policy may be a useful tool for increasing efficiency. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2009-41&r=lab |
| By: | Christian Thöni; Simon Gächter |
| Abstract: | We investigate the impact of wage comparisons for worker productivity. We present three studies which all use three-person gift-exchange experiments. Consistent with Akerlof and Yellen's (1990) fair wage-effort hypothesis we find that disadvantageous wage discrimination leads to lower efforts while advantageous wage discrimination does not increase efforts on average. Two studies allow us to measure wage comparison effects at the individual level. We observe strongly heterogeneous wage comparison effects. We also find that reactions to wage discrimination can be attributed to the underlying intentions of discrimination rather than to payoff consequences. |
| Keywords: | fair wage-effort hypothesis, wage comparison, gift exchange, horizontal fairness, discrimination |
| JEL: | J31 J71 C91 C92 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:usg:dp2009:2009-29&r=lab |
| By: | Dickey, Heather; Watson, Verity; Zangelidis, Alexandros |
| Abstract: | The North Sea oil and gas industry currently faces recruitment and retention difficulties due to a shortage of skilled workers. The vital contribution of this sector to the U.K. economy means it is crucial for companies to focus on retaining existing employees. One means of doing this is to improve the job satisfaction of workers. In this paper, we investigate the determinants of job satisfaction and intentions to quit within the U.K. North Sea oil and gas industry. We analyse the effect of personal and workplace characteristics on the job satisfaction and quit intentions of offshore employees. The data used were collected using a self-completed questionnaire. Job satisfaction was analysed using an ordinal probit model and quit intentions were analysed using a binary probit model. 321 respondents completed the questionnaire. We find that respondents in good financial situations, those whose skills are closely related to their job, and those who received training reported higher levels of job satisfaction. Furthermore, we establish the importance of job satisfaction, promotion prospects and training opportunities in determining workers’ intentions to quit the offshore oil and gas sector. To encourage better retention, companies should seek to adopt policies that focus not only on pay but also provide promotion and training opportunities aimed at investing in their employees’ skills development. |
| Keywords: | Job satisfaction; Quit intentions; U.K. offshore industry; Principal components analysis |
| JEL: | J63 J28 |
| Date: | 2009–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:18666&r=lab |
| By: | Lena Edlund (Columbia University - Department of Economics); Joseph Engelberg (UNC Chapel Hill - Kenan Flagler School of Business); Christopher A. Parsons (UNC Chapel Hill - Kenan Flagler School of Business) |
| Abstract: | Edlund and Korn [2002] (EK) proposed that prostitutes are well paid and that the wage premium reflects foregone marriage market opportunities. However, studies of street prostitution in the U.S. have revealed only modest wages and considerable risks of disease and violence, casting doubt on EK’s premise of an unexplained wage premium. In this paper, we present evidence from high-end prostitution, the so called escort market, a market that is, if not entirely safe, notably safer than street prostitution. Analyzing wage information on more than 40,000 escorts in the U.S. and Canada collected from a web site, we find strong support for EK. First, escorts in the sample earn high wages, on average $280/hour. Second, while looks decline monotonically with age, wages follow a hump-shaped pattern, with a peak in the 26-30 age bracket, which coincides with the most intensive marriage ages for women in the U.S. Third, the age-wage profile is significantly flatter, and prices are lower (5%), despite slightly better escort characteristics, in cities that rank high in terms of conferences, suggesting that servicing men in transit is associated with less stigma. Fourth, this hump in the age-wage profile is absent among escorts for whom the marriage market penalty is lower or absent: escorts who do not provide sex and transsexuals. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:clu:wpaper:0809-16&r=lab |
| By: | Ciccone, Antonio (Universitat Pompeu Fabra); Garcia-Fontes, Walter (Universitat Pompeu Fabra) |
| Abstract: | For Catalonia and Spain, public perception is that the PISA reports show that their education systems are underperforming. The goal of this chapter is to quantify how much of the Catalan and Spanish PISA score can be attributed to the education levels of parents and what part must instead be explained by other factors. To do so we use standard statistical techniques to examine how the Catalan and Spanish PISA score would have compared with other countries and regions if all had the same parental education levels and immigration levels. For Spain the main results show that there is a sizable increase in PISA scores relative to the rest of Europe when parental schooling is accounted for. But Spain's performance is rather poor to start out with and only rises to somewhat above average when accounting for parental education levels. For Catalonia accounting for parental education levels leads to small improvements in the PISA score compared to other Spanish regions and to Flanders, Lombardy, and Denmark. Moreover, immigration or the concentration of immigrants at some schools accounts for little of the below average performance of Catalonia. |
| Keywords: | Catalan education systems; Spanish education systems; |
| Date: | 2009–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0810&r=lab |
| By: | Sara Ayllón Gatnau |
| Abstract: | Youth is one of the phases in the life-cycle when some of the most decisive life transitions take place. Entering the labour market or leaving parental home are events with important consequences for the economic well-being of young adults. In this paper, the interrelationship between employment, residential emancipation and poverty dynamics is studied for eight European countries by means of an econometric model with feedback effects. Results show that youth poverty genuine state dependence is positive and highly significant. Evidence proves there is a strong causal effect between poverty and leaving home in Scandinavian countries, however, time in economic hardship does not last long. In Southern Europe, instead, youth tend to leave their parental home much later in order to avoid falling into a poverty state that is more persistent. Past poverty has negative consequences on the likelihood of employment. |
| Keywords: | youth poverty dynamics, trivariate multinomial probit, state dependence, feedback effects, unobserved heterogeneity |
| JEL: | I32 J13 C33 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1180&r=lab |
| By: | Sara Ayllón |
| Abstract: | Youth is one of the phases in the life-cycle when some of the most decisive life transitions take place. Entering the labour market or leaving parental home are events with important consequences for the economic well-being of young adults. In this paper, the interrelationship between employment, residential emancipation and poverty dynamics is studied for eight European countries by means of an econometric model with feedback effects. Results show that youth poverty genuine state dependence is positive and highly significant. Evidence proves there is a strong causal effect between poverty and leaving home in Scandinavian countries, however, time in economic hardship does not last long. In Southern Europe, instead, youth tend to leave their parental home much later in order to avoid falling into a poverty state that is more persistent. Past poverty has negative consequences on the likelihood of employment. |
| Keywords: | Youth poverty dynamics, trivariate multinomial probit, state dependence, feedback effects, unobserved heterogeneity |
| JEL: | I32 J13 C33 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp235&r=lab |
| By: | Carlos Carrillo-Tudela; Guido Menzio; Eric Smith |
| Abstract: | This paper revisits the no-recall assumption in job search models with take-it-or-leave-it offers. Workers who can recall previously encountered potential employers in order to engage them in Bertrand bidding have a distinct advantage over workers without such attachments. Firms account for this difference when hiring a worker. When a worker first meets a firm, the firm offers the worker a sufficient share of the match rents to avoid a bidding war in the future. The pair share the gains to trade. In this case, the Diamond paradox no longer holds. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2009-28&r=lab |
| By: | Gadi Barlevy; Derek Neal |
| Abstract: | We propose an incentive pay scheme for educators that links educator compensation to the ranks of their students within appropriately defined comparison sets, and we show that under certain conditions our scheme induces teachers to allocate socially optimal levels of effort to all students. Because this scheme employs only ordinal information, our scheme allows education authorities to employ completely new assessments at each testing date without ever having to equate various assessment forms. This approach removes incentives for teachers to teach to a particular assessment form and eliminates opportunities to influence reward pay by corrupting the equating process or the scales used to report assessment results. Our system links compensation to the outcomes of properly seeded contests rather than cardinal measures of achievement growth. Thus, education authorities can employ our incentive scheme for educators while employing a separate system for measuring growth in student achievement that involves no stakes for educators. This approach does not create direct incentives for educators to take actions that contaminate the measurement of student progress. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-09-09&r=lab |
| By: | Claire Dujardin (Université catholique de Louvain, CORE, Voie du Roman Pays, 34, B-1348 Louvain-la-Neuve, Bel- gium); Florence Goffette-Nagot (University of Lyon; CNRS, UMR 5824, GATE, France) |
| Abstract: | The aim of this paper is to test for the influence of neighborhood deprivation on individual unemployment probability in the case of Lyon (France). We estimate a bivariate probit model of unemployment and location in a deprived neighborhood. Our identiï¬cation strategy is twofold. First, we instrument neighborhood type by the gender composition of household’s children and the spouse’s workplace. Second, we use the methodology proposed by Altonji et al. (2005), that in our case consists in making hypotheses as to the correlation between the unobservables that determine unemployment and the unobservables that influence the selection into neighborhood types. Our results show that the effect of neighborhood deprivation is not significantly different from zero in the bivariate probit with exclusion restrictions. We also show that a correlation of the unobservables as low as ten percent of the correlation of observables is sufficient to explain the positive neighborhood effect that is observed when endogeneity is not accounted for. |
| Keywords: | Neighborhood effects, unemployment, simultaneous probit models, instrumental variables, selection on unobservables |
| JEL: | R2 I32 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:0924&r=lab |
| By: | Sylvie Démurger (University of Lyon; CNRS, UMR 5824, GATE, France); Martin Fournier (University of Lyon; CNRS, UMR 5824, GATE, France); Weiyong Yang (University of International Business & Economics, Beijing, China) |
| Abstract: | Economic reforms in rural China have brought opportunities to diversify both within-farm activities and off-farm activities. Participation in these activities plays an important role in increasing rural households’ income. This paper analyzes the factors that drive rural households and individuals in their income-source diversification choices for ten villages in Northern China. At the household level, we distinguish three types of diversification as opposed to grain production only : within farm (non- grain production) activities, local off-farm activities, and migration. At the individual level, we analyze the determinants of participation in three different types of jobs as compared to agricultural work : local off-farm employment, local self-employment and migration. At the household level, we find that land and labor availability stimulates on-farm diversification. Local off-farm activities are mostly driven by household wealth and credit constraints, while migration decisions strongly depend on the household age and composition. At the individual level, we find a clear gender and age bias in access to off-farm activities that are mostly undertaken by male and by young people. More surprisingly, education is found to play a role for accessing local wage employment but not in migration decision. As at the household level, the household assets position is found to strongly affect participation in any off-farm activity. |
| Keywords: | income-source diversification, agricultural households, off-farm employment, China |
| JEL: | J2 R2 Q1 O53 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:0923&r=lab |
| By: | Maria De Paola; Valeria Pupo; Vincenzo Scoppa (Dipartimento di Economia e Statistica, Università della Calabria) |
| Abstract: | In this paper we analyse how the absence behaviour of Italian public sector employees has been affected by a law, passed in June 2008, reducing sick leave compensation and increasing monitoring intensity. We use micro-data on a sample of about 860 workers, employed at an Italian public administration, for years going from 2005 to 2009. We estimate the effect of the reform using linear and non-linear estimators. As predicted by agency theory, individuals react to economic incentives: the employees in our sample have considerably reduced their absences under the new regime. Since the reform has affected employees in a non uniform way, we show that the reduction of absenteeism is significantly stronger for employees suffering higher earning losses. Results also show that while the reform has reduced the duration of short absence spells, the duration of long spells has increased. We argue that this is due to the non-linearity of earning losses introduced by the new law. |
| Keywords: | Worker Absenteeism, Moral Hazard, Shirking, Sickness, Insurance Contracts |
| JEL: | J41 J45 M52 D86 C20 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:200916&r=lab |
| By: | Haizheng Li; Barbara M. Fraumeni; Zhiqiang Liu; Xiaojun Wang |
| Abstract: | In this paper we estimate China’s human capital stock from 1985 to 2007 based on the Jorgenson-Fraumeni lifetime income approach. An individual’s human capital stock is equal to the discounted present value of all future incomes he or she can generate. In our model, human capital accumulates through formal education as well as on-the-job training. The value of human capital is assumed to be zero upon reaching the mandatory retirement ages. China’s total real human capital increased from 26.98 billion yuan in 1985 (i.e., the base year) to 118.75 billion yuan in 2007, implying an average annual growth rate of 6.78%. The annual growth rate increased from 5.11% during 1985-1994 to 7.86% during 1995-2007. Per capita real human capital increased from 28,044 yuan in 1985 to 106,462 yuan in 2007, implying an average annual growth rate of 6.25%. The annual growth rate also increased from 3.9% during 1985-1994 to 7.5% during 1995-2007. Therefore, although population growth contributed significantly to the total human capital accumulation before 1994, per capita human capital growth was primary driving force after 1995. The substantial increase in educational attainment during 1985-2007 contributed significantly to the growth in total and per capita real human capital. |
| JEL: | J24 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15500&r=lab |
| By: | Setsuya Fukuda (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Japan is one of few developed countries in which marriage and higher earning potential among women are negatively associated. As the proportion of births occurring outside of marriage remains low in Japan, fertility is still significantly influenced by marriage trends, which are in turn influenced by societal expectations regarding the marriageability of educated women. Previous studies have suggested that the economic independence associated with higher education is at the root of this negative relationship, but how persistent will this relationship prove to be? As women’s education rapidly catches up with men’s, there is reason to suspect that marriage trends are also in transition. This study examines the latest marriage-related behavior patterns among Japanese women from 2002 onward, focusing on the relationship between women’s economic emancipation and marriage in a gender-traditional society. Using a newly available large panel survey on young adults in Japan, it will demonstrate that the effects of women’s education have reversed, and are now in fact positive. |
| Keywords: | Japan, economic theory, education of women, event history analysis, marriage, mate selection, social change, women's emancipation |
| JEL: | J1 Z0 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2009-033&r=lab |
| By: | D'amuri F (Institute for Social and Economic Research); Marcucci J (Bank of Italy) |
| Abstract: | We suggest the use of an Internet job-search indicator (the Google Index, GI) as the best leading indicator to predict the US unemployment rate. We perform a deep out-of-sample forecasting comparison analyzing many models that adopt both our preferred leading indicator (GI), the more standard initial claims or combinations of both. We find that models augmented with the GI outperform the traditional ones in predicting the monthly unemployment rate, even in most state-level forecasts and in comparison with the Survey of Professional Forecasters. |
| Date: | 2009–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2009-32&r=lab |
| By: | Giovanni Peri |
| Abstract: | Using the large variation in the inflow of immigrants across US states we analyze the impact of immigration on state employment, average hours worked, physical capital accumulation and, most importantly, total factor productivity and its skill bias. We use the location of a state relative to the Mexican border and to the main ports of entry, as well as the existence of communities of immigrants before 1960, as instruments. We find no evidence that immigrants crowded-out employment and hours worked by natives. At the same time we find robust evidence that they increased total factor productivity, on the one hand, while they decreased capital intensity and the skill-bias of production technologies, on the other. These results are robust to controlling for several other determinants of productivity that may vary with geography such as R&D spending, computer adoption, international competition in the form of exports and sector composition. Our results suggest that immigrants promoted efficient task specialization, thus increasing TFP and, at the same time, promoted the adoption of unskilled-biased technology as the theory of directed technologial change would predict. Combining these effects, an increase in employment in a US state of 1% due to immigrants produced an increase in income per worker of 0.5% in that state. |
| JEL: | F22 J61 R11 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15507&r=lab |
| By: | Sreelekha Nair |
| Abstract: | This joint paper attempts an unusual collaborative approach that offers an understanding of the problems that registered nurses of India have faced. Through this paper, the problem of ‘social status’ in both historical and contemporary landscapes, representing a relatively rare attempt to bridge the gap between studies of the institutions of colonial society, and studies of the current fortunes of their post-colonial inheritors are located. [CWDS]. |
| Keywords: | social status, Indian, registered nurses, India, historical, contemporary, colonial society, inheritors, institutions, women professionals, teachers, nursing education, young institution, lower middle-class women, labour, nursing, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2277&r=lab |
| By: | Evan Borkum (Columbia University - Department of Economics) |
| Abstract: | The charging of school user fees is a much-debated policy issue in developing countries. In this paper, I evaluate the impact of a South African fee elimination program that was targeted at the poorest two quintiles of schools based on a community poverty score. Fixed effects estimates find that the program increased enrollment by almost 2% in treated secondary schools, an increase concentrated in earlier secondary grades. There is substantial heterogeneity in the estimated secondary school effect: it is driven entirely by an increase of around 3.5% in the poorer of the two treated quintiles. Regression discontinuity estimates confirm that the relatively wealthy schools near the treatment cutoff did not experience any effects on enrollment. Overall, the abolition of fees seems to have been reasonably effective in increasing secondary school enrollment in particularly poor communities. This is despite the fact that the eliminated fees were relatively low, comprising only around 1.5% of annual household income (per child) in these communities. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:clu:wpaper:0910-06&r=lab |
| By: | Musgrave, Ralph S. |
| Abstract: | Those advocating “government as employer of last resort schemes” (ELR) nearly always assume, first, that “ELR employers” should be specially set up to employ those out of work, i.e. that these projects or “employers” should be separate from existing public sector employers. A second almost universal assumption is that, as already intimated, the work involved should be public sector type work rather than private sector commercial type work. This paper puts an argument which demolishes or weakens both the above two assumptions. That is, it is argued, first, that ELR work should be with EXISTING employers. Second, it is argued that this work should be in BOTH public and private sectors, not just the public sector. I actually argued against the above two assumptions in a paper in 1991 (Musgrave (1991)) but for different reasons. The argument below complements these “1991” reasons, rather than renders them obsolete in any way. These 1991 reasons are set out below in abbreviated form, and begin after the heading “Marginal Employment Subsidy” below. The argument that is new in this paper centres around the other factors of production (OFP) that need to be employed alongside the relatively unskilled ELR employees (these factors of production are skilled labour, materials and equipment). If ELR involves little or no OFP, then output will be hopeless. On the other hand if ELR involves anywhere near the usual ratios of different factors of production, then the ELR scheme amounts to much the same thing as a normal employer. This suggests that ELR employees should be placed with existing public sector employers. Second, traditional ELR advocates normally claim that public sector ELR is not inflationary. This claim is based on the assumption that no OFP need be withdrawn from the private sector to make ELR work. Once this false assumption is rectified, it turns out there is no difference in the inflationary impact as between public and private sector ELR, thus there is no reason to confine ELR to the public sector. |
| Keywords: | Government as employer of last resort; workfare; private sector; marginal employment subsidy. |
| JEL: | E24 J68 |
| Date: | 2009–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:18593&r=lab |
| By: | Hess, Wolfgang (Department of Economics, Lund University) |
| Abstract: | This paper proposes a discrete-time hazard regression approach based on the interrelation between hazard rate models and excess over threshold models, which are frequently encountered in extreme value modelling. The proposed duration model incorporates a grouped-duration analogue of the well-known Cox proportional hazards model and a proportional odds model as special cases. The theoretical setup of the model is motivated, and simulation results are reported to suggest that it performs well. A numerical example using US unemployment data is also provided. |
| Keywords: | Discrete-Time Duration Model; Hazard Rate; Threshold Excess Model; Unemployment Duration |
| JEL: | C41 J64 |
| Date: | 2009–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2009_018&r=lab |
| By: | Jaison R. Abel; Richard Deitz |
| Abstract: | We investigate whether the degree production and research and development (R&D) activities of colleges and universities are related to the amount and types of human capital present in the metropolitan areas where the institutions are located. We find that degree production has only a small positive relationship with local stocks of human capital, suggesting that migration plays an important role in the geographic distribution of human capital. Moreover, we show that spillovers from academic R&D activities tilt the structure of local labor markets toward occupations requiring innovation and technical training. These findings demonstrate that colleges and universities raise local human capital levels by increasing both the supply of and demand for skill. |
| Keywords: | Research and development ; Human capital ; Universities and colleges ; Regional economics ; Labor market |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:401&r=lab |
| By: | Sessions, John; Theodoropoulos, N. |
| Abstract: | We undertake the first empirical investigation of the relationship between the slope of the wagetenure profile and the level of monitoring. On the assumption that firms strive for the optimal trade-off between these various instruments, we hypothesise that increased monitoring leads to a decline in the slope of the wagetenure profile. Our empirical analysis, using two cross sections of matched employer-employee British data, provides robust support for this prediction. |
| Keywords: | Monitoring; tenure; efficiency wages; |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:eid:wpaper:17071&r=lab |
| By: | Bollard, Albert; McKenzie, David; Morten, Melanie; Rapoport, Hillel |
| Abstract: | Two of the most salient trends surrounding the issue of migration and development over the past two decades are the large rise in remittances, and an increased flow of skilled migration. However, recent literature based on cross-country regressions has claimed that more educated migrants remit less, leading to concerns that further increases in skilled migration will hamper remittance growth. This paper revisits the relationship between education and remitting behavior using microdata from surveys of immigrants in 11 major destination countries. The data show a mixed pattern between education and the likelihood of remitting, and a strong positive relationship between education and the amount remitted conditional on remitting. Combining these intensive and extensive margins gives an overall positive effect of education on the amount remitted. The microdata then allow investigation as to why the more educated remit more. The analysis finds that the higher income earned by migrants, rather than characteristics of their family situations, explains much of the higher remittances. |
| Keywords: | Population Policies,Remittances,Debt Markets,International Migration,Access&Equity in Basic Education |
| Date: | 2009–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5113&r=lab |
| By: | Dimitris N. Chryssochoou |
| Abstract: | This paper employs a civic learning approach to discussing recent developments in citizenship education through an analysis of contemporary democratic thinking. By reviving Europe’s great democratic tradition in the sense of a liberal republicanist understanding of citizenship, it argues the case for the transformation of democratic norms into policy structures, educational initiatives and school curricula. Central to the analysis is the Council of Europe’s EDCHRE programme and the lessons to be drawn from this uniquely observed pan-European project that equips young people to participate actively in society and in daily school life. The paper makes an effort to present and evaluate various aspects of the Greek school curriculum that are relevant to the study. The general conclusion to be drawn is that citizenship education relates to the search for a ‘democracy of ideas’ in Pettit’s sense of the term that can link together two different incentives of civic learning: on the one hand, the notion of a participatory ethos at the traditional state level and, on the other, the practice of active citizenship alongside and even beyond that level. |
| Keywords: | citizenship education; civic learning; republican polity. |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:hel:greese:27&r=lab |
| By: | Giovanni Facchini (Erasmus University Rotterdam, University of Milan, CEPR, LdA and CES-Ifo); Anna Maria Mayda (Georgetown University, CEPR, IZA, CReAM and LdA) |
| Abstract: | It is commonly argued that skilled immigration benefits the destination country through several channels. Yet, only a small group of countries reports to have policies in place aimed at increasing the intake of skilled immigrants. Why? In this paper we analyze the factors that affect a direct measure of individual attitudes towards skilled migration, focusing on two main channels: the labor market and the welfare state. We find that more educated natives are less likely to favor skilled immigration - consistent with the labor-market channel – while richer people are more likely to do so – in accordance with the welfare state channel under the tax adjustment model. Our findings thus suggest that the labor market competition threat perceived by skilled natives in the host countries might be driving the observed cautious policies. |
| Keywords: | Skilled Immigration, Attitudes, Immigration Policy, Political Economy |
| JEL: | F22 J61 |
| Date: | 2009–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:281&r=lab |
| By: | Oshio, Takashi; Kobayashi, Miki |
| Abstract: | Background: It is widely known that smokers tend to feel less satisfied than non-smokers with their jobs and life more generally. However, it is not easy to establish a causal relationship between smoking and individual well-being, because of shared associations with socioeconomic or demographic factors. This issue was largely avoided in the present study, which used propensity score matching methods to investigate whether smoking affects the extent to which individuals are satisfied with their job and other aspects of their life. Methods: Using a large-scale Japanese dataset, we first estimated propensity scores for smoking as a function of numerous socioeconomic and demographic factors. We then matched smokers to non-smokers on the basis of these. We subsequently estimated the average treatment effect, considering smoking as a treatment and smokers as the treated group. We used different matching methods to ascertain the robustness of any effects. Results: We found that smoking made both males and females unhappy, and that it reduced both the extent to which they were satisfied with multiple aspects of their lives (including their job, non-working activities, household's financial conditions, family life, friendships, residential area, health and physical conditions) and their level of self-rated health. Some of these effects differed between males and females. Conclusions: Our propensity score matching analyses identified smoking as having direct adverse effects on individual well-being. |
| Keywords: | Smoking, Happiness, Job satisfaction, Self-rated Health, Propensity score matching |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:hit:piecis:453&r=lab |
| By: | Barakat, Bilal; Urdal, Henrik |
| Abstract: | Much of the developing world has experienced a decline in mortality, while fertility often has remained high. This has produced youthful populations in many countries, generally referred to as"youth bulges."Recent empirical research suggests that youth bulges may be associated with increased risks of political violence and conflict. This paper addresses ways that education may serve as a strategy to reduce the risk of political violence, particularly in the context of large cohorts of young males. The authors use a new education dataset measuring educational attainment. The dataset is constructed using demographic back-projection techniques, and offers uninterrupted time-series data for 120 countries. The empirical analysis finds evidence that large, young male population bulges are more likely to increase the risk of conflict in societies where male secondary education is low. The effect on conflict risk by low education and large youth populations is particularly strong in low and middle-income countries. This is especially challenging for Sub-Saharan Africa, the region facing the youngest age structure and the lowest educational attainment levels. Although quantitative studies generally find a strong relationship between indicators of development and conflict risk, the results suggest that poor countries do have some leverage over reducing conflict potential through increased educational opportunities for young people. There is further evidence that the interaction of large youth cohorts and low education levels may be mediated by structural economic factors. The study supports broad policy interventions in education by relaxing concerns about the consequences of rapid educational expansion. |
| Keywords: | Population Policies,Access&Equity in Basic Education,Adolescent Health,Primary Education,Youth and Governance |
| Date: | 2009–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5114&r=lab |
| By: | Sabrina Di Addario (Bank of Italy); Daniela Vuri (University of Rome Tor Vergata) |
| Abstract: | We analyze empirically the effects of urban agglomeration on Italian college graduates’ work possibilities as entrepreneurs three years after graduation. We find that each 100,000 inhabitant-increase in the size of the individual’s province of work reduces the chances of being an entrepreneur by0.2 per cent. This result is robust to controlling for regional fix effects and to instrumenting urbanization with three different sets of instruments. However, a positive urbanization externality emerges after taking into account urban amenities and dis-amenities, and, above all, provinces’ competition and cost of labor. In this case, every 100,000 inhabitant-increase raises the chance of entrepreneurship by 2.4 percent. Finally, as long as they succeed in entering the largest markets, young entrepreneurs are able to reap off the benefits of urbanization externalities: every 100,000 inhabitant-increase in the province’s population raises entrepreneurs’ net hourly income by 0.2 percent. |
| Keywords: | Labor market transitions; Urbanization |
| JEL: | R12 J24 J21 |
| Date: | 2009–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:280&r=lab |
| By: | Kelly, Elish; McGuinness, Seamus; O'Connell, Philip J. |
| Abstract: | This paper provides a sub-sectoral analysis of changes in the public-private sector pay gap in Ireland between 2003 and 2006. We find that between March 2003 and October 2006 the public sector pay premium increased from 14 to 26 per cent and that there was substantial variation between subsectors of the public service. Within the public service the premium in 2006 was highest in Education and Security Services and lowest in the Civil Service and Local Authorities. In the private sector the pay penalty in 2006, relative to the public sector, was most severe in Hotels & Restaurants and in Wholesale & Retail and least severe in Financial Intermediation and Construction. The paper tests for the sensitivity of the pay gap estimates using a matching framework, which provides a stronger emphasis on job content, and finds the results to be broadly comparable to OLS. Finally, the study highlights the problems associated with controlling for organisational size in any study of the public-private pay gap in Ireland. |
| Keywords: | Employer-EmployeeLinked Data/Ireland/Propensity Score Matching/Public-Private Sector Pay Gap/Sub-Sectoral Analysis |
| JEL: | J31 J38 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp321&r=lab |
| By: | Giovanni Andrea cornia (Università degli Studi di Firenze, Dipartimento di Scienze Economiche) |
| Abstract: | This paper reviews the decline in income inequality that has taken place over 2002-2007 in most Latin American countries against the background of its steady increase over 1980-2002. The paper analyzes then the factors that could explain this trend reversal. It focuses in particular on favorable external conditions, cyclical factors, improvements in the distribution of educational achievements and the subsequent drop in skill-premium, and changes in macroeconomic and social policies introduced in several countries, particularly by a growing number of left-of-centre governments which have come to power during the last decade. An econometric test for the years 1990-2007 indicate that, in addition to a favorable business cycle and external conditions, a decline in skill premium and the new policy model of fiscally prudent social-democracy which is emerging this decade in much of Latin America impacted favorably the distribution of income. If this approach will survive the current crisis, much of the recent inequality decline is likely to become permanent. |
| Keywords: | income inequality, human capital inequality, external conditions, policy regimes, Latin America. |
| JEL: | D31 E6 H53 I28 I38 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2009_16.rdf&r=lab |
| By: | C. Bram Cadsby (Department of Economics, University of Guelph); Fei Song (Ted Rogers School of Business Management, Ryerson University); Francis Tapon (Department of Economics, University of Guelph) |
| Abstract: | We demonstrate that effectiveness of performance-contingent incentives is inversely related to individual risk-aversion levels through two mechanisms: 1) rational optimizing decisions about the amount of effort to supply when effort is positively correlated with risk exposure and 2) the possibly choke-inducing stress accompanying financial uncertainty. In two laboratory studies using real-effort tasks, we find a significant inverse relationship between productivity improvement under performance pay and risk-aversion levels. Moreover, we show that both mechanisms help explain this result. For about 25% of participants, performance actually deteriorates under performance pay, and the probability of such deterioration increases with risk aversion and stress. |
| Keywords: | risk aversion, performance pay, incentive, stress, choking under pressure, productivity, pay for performance, piece rate, experiment, compensation. |
| JEL: | C91 M52 J33 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:gue:guelph:2009-12&r=lab |
| By: | David Card; Christian Dustmann; Ian Preston |
| Abstract: | Economists are often puzzled by the stronger public opposition to immigration than trade, since the two policies have similar effects on wages. Unlike trade, however, immigration can alter the composition of the local population, imposing potential externalities on natives. While previous studies have addressed fiscal spillover effects, a broader class of externalities arise because people value the 'compositional amenities' associated with the characteristics of their neighbors and co-workers. In this paper we present a new method for quantifying the relative importance of these amenities in shaping attitudes toward immigration. We use data for 21 countries in the 2002 European Social Survey, which included a series of questions on the economic and social impacts of immigration, as well as on the desirability of increasing or reducing immigrant inflows. We find that individual attitudes toward immigration policy reflect a combination of concerns over conventional economic impacts (i.e., wages and taxes) and compositional amenities, with substantially more weight on the latter. Most of the difference in attitudes toward immigration between more and less educated natives is attributable to heightened concerns over compositional amenities among the less-educated. |
| JEL: | J61 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15521&r=lab |
| By: | Allen, Robert C.; Bassino, Jean-Pascal; Ma, Debin; Moll-Murata, Christine; Zanden, Jan Luiten van |
| Abstract: | The paper develops data on the history of wages and prices in Beijing, Canton, Suzhou/Shanghai in China from the eighteenth century to the twentieth and compare them with leading cities in Europe, Japan and India in terms of nominal wages, the cost of living, and the standard of living. In the eighteenth century, the real income of building workers in Asia was similar to that of workers in the backward parts of Europe but far behind that in the leading economies in northwestern Europe. Real wages declined in China in the eighteenth and early nineteenth centuries and rose slowly in the late nineteenth and early twentieth with little cumulative change for two hundred years. The income disparities of the early twentieth century were due to long run stagnation in China combined with industrialization in Japan and Europe. |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2009-03&r=lab |
| By: | Junji Kageyama (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | This paper investigates the causes of the positive correlation between happiness and the sex gap in happiness between women and men observed in Europe. Departing from a variety of hypotheses that are based on the sex differences at the individual level, this paper tests whether the positive correlation can be explained by the sex difference in life expectancy. The mechanisms working behind are as follows. First, national average happiness affects the sex gap in life expectancy negatively because men are more fragile to stress (unhappiness). Second, the sex difference in life expectancy influences the sex gap in happiness negatively because it affects the chance of being a widow for women. Using a 3SLS approach, it found that both effects are significant and that the direct effects between happiness and the happiness gap are insignificant. These results indicate that the positive correlation between happiness and the happiness gap is an artifact of the demographic compositional effect resulted from the sex gap in life expectancy. |
| Keywords: | Europe, economic and social development, life expectancy |
| JEL: | J1 Z0 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2009-032&r=lab |
| By: | Joy Deshmukh Ranadive |
| Abstract: | Questions about the processes of empowerment generated under each of these interventions and also suggests synergistic linkages between the two are raised. |
| Keywords: | women, Institutions, financially, families, Panchayati Raj, rural development, village, education, Empowerment, decision making, synergistic linkages, interventions, Self Help Groups, woman, child marriage, SHGs, micro finance |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2286&r=lab |
| By: | Bruhn, Miriam |
| Abstract: | This paper examines the characteristics and performance of female-owned firms in Latin America. Data from firm surveys show that female-owned firms tend to be smaller than male-owned firms in terms of employees, sales, costs, and physical capital. Female-owned firms also have lower profits than male-owned firms, but for larger firms this difference disappears after controlling for labor and capital inputs. Medium-size and large female-owned firms are as productive as male-owned firms of the same size, although micro and small female-owned firms are less productive than male-owned firms. There is no evidence that the differences between female and male-owned firms are due to differences in access to finance or regulatory burdens. However, this paper finds a negative correlation between child care and household obligations and female-owned firm size and performance. |
| Keywords: | Access to Finance,Microfinance,Gender and Health,Gender and Law,E-Business |
| Date: | 2009–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5122&r=lab |