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on Labour Economics |
| By: | Wunsch, Conny (University of St. Gallen) |
| Abstract: | This paper studies the role of job search assistance programs in optimal welfare-to-work programs. The analysis is based on a framework, that allows for endogenous choice of benefit types and levels, wage taxes or subsidies, and activation measures such as monitoring and job search assistance for each period of unemployment in a dynamic environment with negative duration dependence in the exit rates to employment and potential depreciation in reemployment wages. We show that the main role of job search assistance is to delay or prevent situations in which it is no longer optimal to incentivize the worker to provide positive search effort. It is used to restore or maintain some minimum exit rate to employment which increases with the cost-effectiveness of job search assistance. We also find that in line with existing policies, these programs should mainly be used at the beginning of unemployment and for short durations. However, contrary to existing schemes, they should be exclusively targeted at unemployed workers with low initial exit rates to employment. For all other workers, they should only be used if they fail to find a job within reasonable time despite high expected initial exit rates. |
| Keywords: | job search, optimal unemployment insurance, welfare-to-work policies, recursive contracts |
| JEL: | J64 J65 J68 D82 D86 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4773&r=lab |
| By: | Wichert, Laura; Pohlmeier, Winfried |
| Abstract: | This paper investigates the relationship between personality traits and female labor force participation. While research on the role of cognitive skills for individual labor market success has a long tradition in economics, comparatively little is known about the channels through which non-cognitive skills affect individual labor market behavior. There is striking evidence that personality traits play a major role in explaining individual differences in school attendance and school performance. However, comparatively little is known about how and which personality traits effect labor supply decisions. In this paper, we relate personality traits to preference parameters using a conventional structural framework of labor force participation. This allows us to separate the direct effects of personality traits affecting the individual participation decision through different individual preferences from the indirect effects through wages. We can show that personality traits play an important role in the female labor force participation decision. The channels through which personality traits effect labor force participation are manifold and depend on the specific trait. Aggregation of traits to a single index is therefore a suboptimal strategy. -- |
| Keywords: | personality traits,female labor supply,wages |
| JEL: | C35 J22 J24 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10003&r=lab |
| By: | Martins, Pedro S. (Queen Mary, University of London); Solon, Gary (Michigan State University); Thomas, Jonathan P. (University of Edinburgh) |
| Abstract: | In models recently published by several influential macroeconomic theorists, rigidity in the real wages that firms pay newly hired workers plays a crucial role in generating realistically large cyclical fluctuations in unemployment. There is remarkably little evidence, however, on whether employers' hiring wages really are invariant to business cycle conditions. We review the small empirical literature and show that the methods used thus far are poorly suited for identifying employers’ wage practices. We propose a simpler and more relevant approach – use matched employer/employee longitudinal data to identify entry jobs and then directly track the cyclical variation in the real wages paid to workers newly hired into those jobs. We illustrate the methodology by applying it to data from an annual census of employers in Portugal over the period 1982-2007. We find that real entry wages in Portugal over this period tend to be about 1.8 percent higher when the unemployment rate is one percentage point lower. Like most recent evidence on other aspects of wage cyclicality, our results suggest that the cyclical elasticity of wages is similar to that of employment. |
| Keywords: | real wage cyclicality, entry wages, matched employer-employee data |
| JEL: | E24 J31 E32 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4757&r=lab |
| By: | Norberto Pignatti |
| Abstract: | Ukrainian women are on average much more educated than women in developing countries and they also tend to show higher participation rates, albeit smaller than men's. They are also at least as educated as Ukrainian men. Women and men with identical characteristics might show different patterns of participation to informality. This result reflects in different probabilities of women and men to move across states between the two periods under exam. This emerges clearly from the analysis of the transition matrices. Both men and women show higher propensity to go to the formal sector from the informal one than vice versa. However, contrary to what is predicted by segmented labor market theories we find a higher concentration of women in the informal sector. On average, Ukrainian women do earn less than men and this is true both in the formal and in the informal sector. However, when we decompose the gender earnings differential we find evidence of two very different patterns between the formal and the informal sectors. In the formal sector, the earnings differential is entirely due to the unexplained component, usually indicated as an indicator of wage discrimination. In the informal sector, on the contrary, when the earnings differential is significantly different from zero, it is entirely due to differences in the explained component (personal, household and job characteristics). Overall, these results can be interpreted as the evidence that the Ukrainian labor market is indeed segmented and that women suffer some sort of discrimination. This discrimination is not taking place through the segregation of women in the informal sector but, more likely, through different remuneration of characteristics in the formals sector and different career opportunities and the exclusion of women from the better remunerated jobs at the top of the hierarchy. This might also explain why women in the upper tier of the wage distribution experience higher earnings when they are self-employed compared than when they are salaried, both in the formal and in the informal sector. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwesc:diwesc17&r=lab |
| By: | Camilo Mondragón-Vélez; Ximena Peña; Daniel Wills |
| Abstract: | Informality is at the center of the economic debate in Colombia, fueled by the high level prevalent in the country and its substantial increase during the 1990s. We study the effect of labor market rigidities, namely the increase in non-wage costs and the minimum wage on the size of the informal sector, the transition into and out of informality, and wages. Our results indicate that rises in non-wage costs and the minimum wage, increase the probability of transition into informality as well as the size of the informal sector. The analysis of these effects along the income distribution points towards strong exclusion motives for low skilled informal workers, mainly driven by labor demand adjustments in response to increasing hiring costs; and argues somehow in favor of exit motives for workers at the top of the wage distribution. Furthermore, there is strong indexation of salaries to the minimum wage, except for low skilled informal workers. In addition, firms adjust salaries in response to increasing non-wage costs for all workers within the labor force. |
| Date: | 2010–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:006717&r=lab |
| By: | Kamil Galuscak; Mary Keeney; Daphne Nicolitsas; Frank Smets; Pawel Strzelecki; Matija Vodopivec |
| Abstract: | This paper uses information from a rich firm-level survey on wage and price-setting procedures, in around 15,000 firms in 15 European Union countries, to investigate the relative importance of internal versus external factors in the setting of wages of newly hired workers. The evidence suggests that external labour market conditions are less important than internal pay structures in determining hiring pay, with internal pay structures binding even more often when there is labour market slack. When explaining their choice firms allude to fairness considerations and the need to prevent a potential negative impact on effort. Despite the lower importance of external factors in all countries there is significant cross-country variation in this respect. Cross-country differences are found to depend on institutional factors (bargaining structures); countries in which collective agreements are more prevalent and collective agreement coverage is higher report to a greater extent internal pay structures as the main determinant of hiring pay. Within-country differences are found to depend on firm and workforce characteristics; there is a strong association between the use of external factors in hiring pay, on the one hand, and skills (positive) and tenure (negative) on the other. |
| Keywords: | Wage rigidity, newly hired workers, internal pay structure, employee turnover, business cycle, survey data. |
| JEL: | J31 J41 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2009/5&r=lab |
| By: | James J. Heckman; Bas Jacobs |
| Abstract: | Trends in skill bias and greater turbulence in modern labor markets put wages and employment prospects of unskilled workers under pressure. Weak incentives to utilize and maintain skills over the life-cycle become manifest with the ageing of the population. Policies to promote human capital formation reduce welfare state dependency among the unskilled and offset inefficiencies in human capital formation. Skill formation features strong dynamic complementarities over the life-cycle. Investments in the human capital of children have higher returns than investments in the human capital of older workers. There is no trade-off between equity and efficiency at early ages of human development but there is a substantial trade-off at later ages. Later remediation of skill deficits acquired in early years often does not meet the cost-benefit criterion. Positive returns to active labor market and training policies are doubtful. Skill formation is impaired when the returns to skill formation are low due to low skill use and insufficient skill maintenance later on in life. High marginal tax rates and generous benefit systems reduce labor force participation rates and hours worked and thereby lower the utilization rate of human capital. Tax-benefit systems redistribute resources from outsiders to insiders in labor markets, which can be both distortionary and inequitable. Actuarially fairer early retirement and pension schemes reduce the incentives to retire early and strengthen incentives for human capital investment by increasing the time-horizon over which returns to human capital are harvested. |
| JEL: | H2 H5 I2 I3 J2 J3 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15742&r=lab |
| By: | Rabby, Faisal (Missouri State University); Rodgers III, William M. (Rutgers University) |
| Abstract: | Using a difference-in-differences framework, this paper estimates the impact that Britain's July 2005 bombings had on the labor market outcomes of UK residents who are either Muslim by religious affiliation or whose nativity profiles are similar to the terrorists. We find a 10 percentage point decrease in the employment of very young Muslim men relative to non-Muslim immigrants after the London bombings. The drop in employment is accompanied by consistent declines in real earnings and hours worked. A weak association between the 9-11 terrorist attacks and a drop in the employment of very young male immigrants from Muslim-majority countries is also found. The terrorist events had little impact on the employment of older men. |
| Keywords: | Muslim, ethnic minority, minorities, 9/11, employment, London bombings |
| JEL: | J15 J23 J61 J71 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4763&r=lab |
| By: | van Ours, Jan C. (Tilburg University); Stoeldraijer, Lenny (Tilburg University) |
| Abstract: | Previous empirical studies on the effect of age on productivity and wages find contradicting results. Some studies find that if workers grow older there is an increasing gap between productivity and wages, i.e. wages increase with age while productivity does not or does not increase at the same pace. However, other studies find no evidence of such an age related pay-productivity gap. We perform an analysis of the relationship between age, wage and productivity using a matched worker-firm panel dataset from Dutch manufacturing covering the period 2000-2005. We find little evidence of an age related pay-productivity gap. |
| Keywords: | age, wage, productivity |
| JEL: | J23 J31 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4765&r=lab |
| By: | Eleftheriou, Konstantinos; Athanasiou, George |
| Abstract: | This paper attempts to investigate the relation among wages, unemployment and obesity and to identify public policies to address the problem of over-weightness. To this purpose, a simple search and matching model of labour market is developed. Our framework tries to capture the relationship between obesity and employment/unemployment by assuming that the fraction of obese workers is a function of the ratio of vacant jobs to unemployment (labour market tightness). We argue that if obesity is positively related with employment, then social optimality dictates the imposition of a lump-sum tax on all individuals. In the opposite case a subsidy should be given. |
| Keywords: | Obesity; Taxation; Unemployment; Wages |
| JEL: | I18 J64 I10 |
| Date: | 2010–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20926&r=lab |
| By: | Jan Babecky; Philip Du Caju; Theodora Kosma; Martina Lawless; Julian Messina; Tairi Room |
| 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 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 extent of permanent contracts and this effect is stronger in countries with stricter employment protection regulations. |
| Keywords: | Downward nominal wage rigidity, downward real wage rigidity, wage indexation, survey data, European Union. |
| JEL: | J30 J31 J32 C81 P5 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2009/4&r=lab |
| By: | Booth, A.L.; Ours, J.C. van (Tilburg University, Center for Economic Research) |
| Abstract: | Part-time jobs are popular among partnered women in many countries. In the Netherlands the majority of partnered working women have a part-time job. Our paper investigates, from a supply-side perspective, if the current situation of abundant part-time work in the Netherlands is likely to be a transitional phase that will culminate in many women working full-time. We analyze the relationship between part-time work and life satisfaction, and between job satisfaction and preferred working hours using panel data on life and job satisfaction for a sample of partnered women and men. We also utilize time-use data to consider the distribution within the household of market work and housework, and discuss the work specialization hypothesis in this context. Our main results indicate that partnered women in part-time work have high levels of job satisfaction, a low desire to change their working hours, and live in partnerships in which household production is highly gendered. Taken together, our results suggest that part-time jobs are what most Dutch women want. |
| Keywords: | part-time work;happiness;satisfaction;working hours;gender. |
| JEL: | J22 I31 J16 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201005&r=lab |
| By: | Ours, J.C. van; Tuit, S. (Tilburg University, Center for Economic Research) |
| Abstract: | We study how changes in the maximum benefit duration affec the inow into unemployment in the Netherlands. Until August 2003, workers who became un- employed after age 57.5 were entitled to unemployment benefits until the age of 65, after which they would receive old age pensions. This characteristic made it attractive for workers to enter unemployment shortly after age 57.5 rather than shortly before. Indeed, we find a peak in the inow into unemployment for workers after age 57.5. From August 2003 onwards the maximum benefit durations were reduced. We find that shortly after 2003 the peak in the inow disappeared. |
| Keywords: | Unemployment insurance;potential benefit duration;unemployment inflow |
| JEL: | H55 J64 J65 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201007&r=lab |
| By: | Bonsang Eric; Adam Stéphane; Perelman Sergio (ROA rm) |
| Abstract: | This paper analyzes the effect of retirement on cognitive functioning using two large scale surveys. On the one hand the HRS, a longitudinal survey among individuals aged 50+ living in the United States, allows us to control for individual heterogeneity and endogeneity of the retirement decision by using the eligibility age for Social Security as an instrument. On the other hand, a comparable international European survey, SHARE, allows us to identify the causal effect of retirement on cognitive functioning by using the cross-country differences in the age-pattern of retirement. The results highlight in both cases a significant negative, and quantitatively comparable, effect of retirement on cognitive functioning. Our results suggest that promoting labor force participation of older workers is not only desirable to insure the viability of retirement schemes, but it could also delay cognitive decline, and thus the occurrence of associated impairments at older age. |
| Keywords: | education, training and the labour market; |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2010001&r=lab |
| By: | Orley C. Ashenfelter; Kirk B. Doran; Bruce Schaller |
| Abstract: | Virtually all public policies regarding taxation and the redistribution of income rely on explicit or implicit assumptions about the long run effect of wages rates on labor supply. The available estimates of the wage elasticity of male labor supply in the literature have varied between -0.2 and 0.2, implying that permanent wage increases have relatively small, poorly determined effects on labor supplied. The variation in existing estimates calls for a simple, natural experiment in which men can change their hours of work, and in which wages have been exogenously and permanently changed. We introduce a panel data set of taxi drivers who choose their own hours, and who experienced two exogenous permanent fare increases instituted by the New York City Taxi and Limousine Commission, and we use these data to fit a simple structural labor supply function. Our estimates suggest that the elasticity of labor supply is about -0.2, implying that income effects dominate substitution effects in the long run labor supply of males. |
| JEL: | H31 J22 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15746&r=lab |
| By: | Mosthaf, Alexander; Schnabel, Claus; Stephani, Jens |
| Abstract: | Using representative linked employer-employee data of the German Federal Employment Agency, this paper shows that just one out of seven full-time employees who earned low wages (i.e. less than two-thirds of the median wage) in 1998/99 was able to earn wages above the low-wage threshold in 2003. Bivariate probit estimations with endogenous selection indicate that upward wage mobility is higher for younger and better qualified low-wage earners, whereas women are substantially less successful. We show that the characteristics of the employing firm also matter for low-wage earners’ probability of escaping low-paid work. In particular small plants and plants with a high share of low-wage earners often seem to be dead ends for low-wage earners. The likelihood of leaving the low-wage sector is also low when staying in unskilled and skilled service occupations and in unskilled commercial and administrational occupations. Consequently, leaving these dead-end plants and occupations appears to be an important instrument for achieving wages above the low-wage threshold. ; Mit repräsentativen verbundenen Arbeitgeber-Arbeitnehmer-Daten der Bundesagentur für Arbeit verdeutlicht diese Studie, dass nur jeder siebte Vollzeitbeschäftigte, der 1998/99 einen Niedriglohn (von weniger als zwei Dritteln des Medianlohns) bezog, bis 2003 den Niedriglohnsektor verlassen konnte. Bivariate Probit-Schätzungen mit endogener Selektion deuten darauf hin, dass die Aufwärtsmobilität für jüngere und besser qualifizierte Geringverdiener höher ausfällt, wohingegen Frauen deutlich weniger erfolgreich sind. Wir zeigen, dass auch die Merkmale des Beschäftigungsbetriebes die Aufstiegswahrscheinlichkeit beeinflussen. Insbesondere kleinere Betriebe und solche mit einem hohen Anteil von Niedriglohnbeschäftigten scheinen häufig Sackgassen für Geringverdiener darzustellen. Die Wahrscheinlichkeit, den Niedriglohnsektor zu verlassen, ist ferner relativ gering, wenn man in bestimmten (meist weniger qualifizierten) Jobs verharrt. Die Abwanderung aus solchen Betrieben und Beschäftigungen, die Sackgassen darstellen, dürfte deshalb ein wichtiges Mittel sein, um höhere Löhne zu erzielen. -- |
| Keywords: | low-wage employment,wage mobility,Germany |
| JEL: | J30 J60 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:012010&r=lab |
| By: | Jørgen Drud Hansen; Hassan Molana; Catia Montagna; Jørgen Ulff-Møller Nielsen |
| Abstract: | We examine how openness interacts with the coordination of consumption-leisure decisions in determining the equilibrium working hours and wage rate when there are leisure externalities (e.g., due to social interactions). The latter are modelled by allowing a worker’s marginal utility of leisure to be increasing in the leisure time taken by other workers. Coordination takes the form of internalising the leisure externality and other relevant constraints (e.g., labour demand). The extent of openness is measured by the degree of capital mobility. We find that: coordination lowers equilibrium work hours and raises the wage rate; there is a U-shaped (inverse-U-shaped) relationship between work hours (wages) and the degree of coordination; coordination is welfare improving; and, the gap between the coordinated and uncoordinated work hours (and the corresponding wage rates) is affected by the extent and nature of openness |
| Keywords: | coordination, corporatism, openness, capital mobility, social multiplier, welfare, work hours |
| JEL: | F2 J2 J5 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:dun:dpaper:229&r=lab |
| By: | Hartley, G.R.; Ours, J.C. van; Vodopivec, M. (Tilburg University, Center for Economic Research) |
| Abstract: | This study examines the determinants of job-finding rates of unemployment benefit recipients under the Chilean program. This is a unique, innovative program that combines social insurance through a solidarity fund (SF) with self-insurance in the form of unemployment insurance savings accounts (UISAs) - so as to mitigate the moral hazard problem of traditional unemployment insurance programs. Our study is the first one to empirically investigate whether UISAs improve work incentives. We find that for beneficiaries using the SF, the pattern of job finding rates over the duration of unemployment is consistent with moral hazard effects, while for beneficiaries relying on UISAs, the pattern is free of such effects. We also find that for benefit recipient not entitled to use the SF, the amount of accumulation on the UISA does not affect the exit rate from unemployment, suggesting that such individuals internalize the costs of unemployment benefts. Our results provide strong support to the idea that UISAs can improve work incentives. |
| Keywords: | Unemployment insurance;unemployment duration;savings accounts |
| JEL: | C41 H55 J64 J65 A |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201004&r=lab |
| By: | Emmanuel Saez; Manos Matsaganis; Panos Tsakloglou |
| Abstract: | This paper analyzes the response of earnings to payroll tax rates using a cohort-based reform in Greece. All individuals who started working on or after 1993 face permanently a much higher earnings cap for payroll taxes, creating a large and permanent discontinuity in marginal payroll tax rates by date of entry in the labor force for upper earnings workers. Using full population administrative Social Security data and a Regression Discontinuity Design, we estimate the long-term incidence and effects of marginal payroll tax rates on earnings. Standard theory predicts that, in the long run, new regime workers should bear the entire burden of the payroll tax increase (relative to old regime workers). In contrast, we find that employers compensate new regime workers for the extra employer payroll taxes but not for the extra employee payroll taxes. We do not find any evidence of labor supply responses around the discontinuity, suggesting low efficiency costs of payroll taxes. The non-standard incidence results are the same across firms of different sizes. Tax incidence, however, is standard for older workers in the new regime as they bear both the employee and employer tax. Those results, combined with a direct small survey of employers, can be explained by social norms regarding seniority-based pay which create a growing wedge between pay and productivity as workers age. |
| JEL: | J23 J38 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15745&r=lab |
| By: | Fernando Alexandre (University of Minho and NIPE); Pedro Bação (University of Coimbra and GEMF); João Cerejeira (University of Minho and NIPE); Miguel Portela (University of Minho, NIPE and IZA) |
| Abstract: | There is increasing evidence that the interaction between shocks and labour market institutions is crucial to understanding the dynamics of employment. In this paper, we show that the inclusion of labour adjustment costs in a trade model affects the impact of exchange rate movements on employment. We also explore how labour market rigidities interact with the degree of exposure to international competition and with the technology level. Our model-based predictions are consistent with estimates obtained using panel data for 23 OECD countries. Namely, our estimates suggest that employment in low-technology sectors that have a very high degree of openness to trade and are located in countries with more flexible labour markets are more sensitive to exchange rate changes. Our model and estimates therefore provide additional evidence on the importance of interacting external shocks and labour market institutions. |
| Keywords: | exchange rates, international trade, job flows, employment protection. |
| JEL: | J23 F16 F41 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2010-03&r=lab |
| By: | Kulich, C.; Trojanowski, G.; Ryan, M.; Haslam, S.A.; Renneboog, L.D.R. (Tilburg University, Center for Economic Research) |
| Abstract: | This paper offers a new explanation of the gender pay gap in leadership positions by examining the relationship between managerial bonuses and company performance. Drawing on findings of gender studies, agency theory, and the leadership literature, we argue that the gender pay gap is a context-specific phenomenon which results partly from the fact that company performance has a moderating impact on pay inequalities. Employing a matched sample of 192 female and male executive directors of UK listed firms we corroborate the existence of the gender pay disparities in corporate boardrooms. In line with our theoretical predictions, we find that bonuses awarded to men are not only larger than those allocated to women, but also that managerial compensation of male executive directors is much more performance-sensitive than that of female executives. The contribution of attributional and expectancy-related dynamics to these patterns is highlighted in line with previous work on gender stereotypes and implicit leadership theories such as the romance of leadership. Gender differences in risk-taking and confidence are also considered as potential explanations for the observed pay disparities. The implications of organizations’ indifference to women’s performance are examined in relation to issues surrounding the recognition and retention of female talent. |
| Keywords: | executive compensation;gender pay gap;gender stereotypes;implicit leadership theories;corporate performance;romance of leadership |
| JEL: | J31 J33 M52 G30 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201002&r=lab |
| By: | Picchio, M.; Mussida, C. (Tilburg University, Center for Economic Research) |
| Abstract: | Sizeable gender differences in employment rates are observed in many countries. Sample selection into the workforce might therefore be a relevant issue when estimating gender wage gaps. This paper proposes a new semi-parametric estimator of densities in the presence of covariates which incorporates sample selection. We describe a simulation algorithm to implement counterfactual comparisons of densities. The proposed methodology is used to investigate the gender wage gap in Italy. It is found that when sample selection is taken into account gender wage gap widens, especially at the bottom of the wage distribution. Explanations are offered for this empirical finding. |
| Keywords: | gender wage gap;hazard function;sample selection;glass ceiling;sticky floor. |
| JEL: | C21 C41 J16 J31 J71 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201016&r=lab |
| By: | Rabe B (Institute for Social and Economic Research); Taylor M (Institute for Social and Economic Research) |
| Abstract: | Most previous empirical studies of individual migration choice analyze the reasons associated with out-migration from an origin location. In contrast, we model the migration decision within the context of potential destinations, using British panel data over the period 1991-2003. Contrary to earlier micro studies we show that regional differences in expected individual wages, employment opportunities, and house prices are important determinants of migration, thus confirming results of aggregate analyses. Moreover, we find that it is important to control for unobserved individual heterogeneity. After doing so, the effects on migration choice of individual unemployment and being a council tenant disappear. |
| Date: | 2010–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2010-05&r=lab |
| By: | Michaelides, Marios; Benus, Jacob |
| Abstract: | In 2002, the U.S. Department of Labor and the Small Business Administration implemented Project GATE, an experimental demonstration program designed to provide free self-employment assistance to individuals interested in starting their own business. This paper uses data from Project GATE to examine the efficacy of public self-employment training programs in the modern U.S. economy. Our analyses show that GATE led to significant improvements in the post-training outcomes of treatment group participants who were unemployed at the time of application. Particularly, GATE had a significant positive impact on new business starts and sustainability for unemployed participants five years after random assignment. For those who were unemployed at random assignment, GATE also led to higher employment likelihood and higher total earnings five years after random assignment. GATE had no impact, however, for participants who were employed, self-employed, or out of the labor force at the time of application. |
| Keywords: | self-employment; small business; unemployment; workforce development; SEA; Project GATE |
| JEL: | H4 J6 L2 |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20880&r=lab |
| By: | Karsten Albæk (Department of Economics, University of Copenhagen) |
| Abstract: | The present paper analyses employment subsidies to vocational training under union wage bargaining. The analysis includes an investigation of the consequences of financing the subsidy by a levy on employment, which is the typical way of financing these types of subsidies in many countries. The paper demonstrates high incidence rates of subsidies to vocational training under standard assumptions about the preference structure of the union. The financing scheme appears to counteract the purpose of the subsidy. |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuieca:2010_02&r=lab |
| By: | Philippe Bocquier (University of the Witwatersrand,Johannesburg, South Africa); Christophe Nordman (DIAL, IRD, Paris); Aude Vescovo (IRD, Centre de Recherche Appliquée CERA-AFRISTAT) |
| Abstract: | (english) In this article, we develop indicators of vulnerability in employment in seven economic capitals of West Africa and study their links with individual incomes from the main job. We draw on data from the 1-2-3 Surveys in 2002-2003 to make a cross-country comparison using rigorously the same variables and methodology for each country. The theory of compensating differentials states that workers may receive pecuniary compensation commensurate with the strenuous or hazardous nature of their tasks or adverse working conditions. Our interpretation of the link between employment status and incomes draws on these developments, applying them to both working conditions themselves and more broadly to vulnerability in employment. The main tested assumption is that high levels of employment vulnerability could be compensated by greater earnings. We allow for individual and job characteristics (the latter being used to construct the composite index of vulnerability) to be differentially valued for conditionally high and low income earners. Our composite index of employment vulnerability indicates that 85% of the private sector workers in all the economic capitals studied are vulnerable on the basis of at least one criterion. The results show that the average impact of vulnerability on earnings is generally negative for an average level of vulnerability. In the formal private sector of the West African cities, losses of income due to vulnerability are lower for high levels of vulnerability, but do not translate into gains. In the informal sector, however, the average predicted income for a high vulnerability level is higher than the average predicted income for a low vulnerability level. Quantitative, distributional and qualitative analyses show that vulnerability compensating mechanism is mainly seen in the informal sector, in the upper tail of the earnings distribution, and particularly in the circumstance of visible underemployment. Employment vulnerability is not compensated for the poorest workers in the private sector of these large west-African cities. _________________________________ (français) Dans cet article, nous construisons des indicateurs de la vulnérabilité au travail dans sept capitales économiques d’Afrique de l’Ouest et étudions leurs liens avec les revenus individuels de l’activité principale. Selon la théorie des salaires compensatoires, les travailleurs pourraient recevoir des compensations pécuniaires à hauteur de la pénibilité de leur tâche ou de leurs conditions de travail. Notre interprétation du lien entre le statut dans l’emploi et le revenu s’inspire de ces développements, en les appliquant non seulement aux conditions de travail proprement dites, mais plus largement à la vulnérabilité dans l’emploi (précarité contractuelle, conditions d’exercice, sous-emploi, emploi de secours inadapté aux caractéristiques individuelles). Notre indicateur composite de la vulnérabilité dans l’emploi révèle que 85% des travailleurs des secteurs privés de l'ensemble des capitales économiques étudiées sont vulnérables selon au moins un de nos critères de vulnérabilité (sur huit critères). L'effet moyen de la vulnérabilité sur les gains est généralement négatif pour un niveau moyen de vulnérabilité. Dans le secteur privé formel, les pertes de revenu causées par la vulnérabilité diminuent pour des hauts niveaux de vulnérabilité, mais ne se transforment pas en gains. Dans le secteur informel en revanche, le revenu prédit moyen pour une vulnérabilité élevée est supérieur à ce revenu pour une vulnérabilité faible. Finalement, nos analyses, qui sont tour à tour quantitative, distributive et « qualitative », montrent que des mécanismes compensatoires de la vulnérabilité dans l’emploi n’existeraient que dans le secteur informel, pour les travailleurs de la partie haute de la distribution des revenus, et en particulier dans le cas du sous-emploi visible. La vulnérabilité dans l’emploi n’est donc pas compensée pour les travailleurs les plus pauvres du secteur privé de ces grandes villes ouest-africaines. |
| Keywords: | Vulnerability, working conditions, compensating differentials, earnings, informal sector, West Africa, Vulnérabilité, conditions de travail, différentiels compensatoires, revenus, secteur informel,Afrique de l’Ouest. |
| JEL: | J24 J31 O12 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt201005&r=lab |
| By: | Schaik, A.B.T.M. van; Klundert, T.C.M.J. van de (Tilburg University, Center for Economic Research) |
| Abstract: | The productivity slowdown in Europe since the mid-1990s is a reason for concern. Labour market rigidity, hampering innovation, may be a cause of the slowdown. In the paper this argument is placed in a broader perspective. Labour force participation is an important factor in explaining differences in productivity and welfare over time and across regions as can be illustrated by comparing the US and the EU-15. Moreover, technological change is not entirely exogenous. Dynamic increasing returns as introduced by Kaldor and Verdoorn may boost productivity. For countries other than the US catching up appears to be of importance. The question is then to what extent labour market institutions account for productivity growth. Regression analysis on a panel of 21 OECD countries covering the period 1960-2005 reveals that employment protection is relevant but that the impact is qualitatively different before and after 1980. The reason is that in the first sub-period technological change is driven in most countries by imitation, whereas in the second sub-period innovation becomes the predominant factor everywhere. |
| Keywords: | Labour productivity growth;catching-up;labour force participation;employment protection |
| JEL: | O43 O47 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201006&r=lab |
| By: | Julien Champagne; André Kurmann |
| Abstract: | This paper documents that over the past 25 years, aggregate hourly real wages in the United States have become substantially more volatile relative to output. We use micro-data from the Current Population Survey (CPS) to show that this increase in relative volatility is predominantly due to increases in the relative volatility of hourly wages across different groups of workers. Compositional changes, by contrast, account for at most 12% of the increase in relative wage volatility. Using a Dynamic Stochastic General Equilibrium (DSGE) model, we show that the observed increase in relative wage volatility is unlikely to come from changes outside of the labor market (e.g. smaller exogenous shocks or more aggressive monetary policy). By contrast, increased flexibility in wage setting is capable of accounting for a large fraction of the observed increase in relative wage volatility. At the same time, increased wage flexibility generates a substantial decrease in the magnitude of business cycle fluctuations, which suggests a promising new explanation for the Great Moderation. |
| Keywords: | Wage volatility, business cycles, great moderation, current population survey, dynamic stochastic general equilibrium models |
| JEL: | E24 E32 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1010&r=lab |
| By: | Alberto F. Alesina; Yann Algan; Pierre Cahuc; Paola Giuliano |
| Abstract: | Flexible labor markets require geographically mobile workers to be efficient. Otherwise, firms can take advantage of the immobility of workers and extract monopsony rents. In cultures with strong family ties, moving away from home is costly. Thus, individuals with strong family ties rationally choose regulated labor markets to avoid moving and limiting the monopsony power of firms, even though regulation generates lower employment and income. Empirically, we do find that individuals who inherit stronger family ties are less mobile, have lower wages, are less often employed and support more stringent labor market regulations. There are also positive cross-country correlations between the strength of family ties and labor market rigidities. Finally, we find positive correlations between labor market rigidities at the beginning of the twenty first century and family values prevailing before World War II, which suggests that labor market regulations have deep cultural roots. |
| JEL: | J2 K2 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15747&r=lab |
| By: | Jordi Galí |
| Abstract: | The standard New Keynesian model with staggered wage setting is shown to imply a simple dynamic relation between wage inflation and unemployment. Under some assumptions, that relation takes a form similar to that found in empirical applications–starting with the original Phillips (1958) curve–and may thus be viewed as providing some theoretical foundations to the latter. The structural wage equation derived here is shown to account reasonably well for the comovement of wage inflation and the unemployment rate in the U.S. economy, even under the strong assumption of a constant natural rate of unemployment. |
| JEL: | E31 E32 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15758&r=lab |
| By: | Steve Bradley; Jim Taylor; Giuseppe Migali |
| Abstract: | We evaluate the effect on test scores of a UK education reform which has increased funding of schools and encouraged their specialisation in particular subject areas, en- hancing pupil choice and competition between schools. Using several data sets we apply matching methods to confront issues of the choice of an appropriate control group and different forms of selection bias. We demonstrate a statistically significant causal effect of the specialist schools policy on test score outcomes and test score gain. The effect peaks after 4 years, at which point the additional funding ceases. A specialisation effect occurs yielding relatively large improvements in test scores in particular subjects. |
| Keywords: | School Quality, Subject Specialisation, Matching models |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:006416&r=lab |
| By: | Elhanan Helpman |
| Abstract: | Recent research has emphasized firm heterogeneity as a source of comparative advantage. Combining this approach with labor market frictions and worker heterogeneity provides a framework for studying the impact of trade on unemployment and inequality. This paper reviews this approach and reports a number of results from recent studies. |
| JEL: | F12 F16 J64 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15764&r=lab |
| By: | Lundborg, Petter (Lund University); Nystedt, Paul (Linköping University); Rooth, Dan-Olof (Linneaus University) |
| Abstract: | The negative association between obesity and labor market outcomes has been widely documented, yet little is known about the mechanisms through which the association arises. Using rich and unique data on 450,000 Swedish men enlisting for the military, we find that the crude obesity penalty in earnings, which amounts to about 18 percent, is linked to supply-side characteristics that are associated with both earnings and obesity. In particular, we show that the penalty reflects negative associations between obesity, on the one hand, and cognitive skills, non-cognitive skills, and physical fitness, on the other. Our results suggest that employers use obesity as a marker for skill limitations in order to statistically discriminate. |
| Keywords: | obesity, overweight, earnings, cognitive ability, non-cognitive ability, health, physical fitness |
| JEL: | I10 J10 J70 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4775&r=lab |
| By: | Indrani Chakraborty; Achin Chakraborty |
| Abstract: | Female work participation in West Bengal is one of the lowest among all the states in India. However, it varies widely across the state’s 341 blocks. An analysis of some block level characteristics based on Census 2001 data show that female work participation varies inversely with the female literacy rate and percentage of Muslim population, and is positively related to the overall work opportunity as reflected by male work participation. However, there are a few blocks with very high percentage of Muslim population where female work participation is rather high. These are the blocks where women are engaged in home-based work in large numbers. Surveys were conducted of households in two such areas in Murshidabad and South 24 Parganas, respectively. [IDSK OP 18]. |
| Keywords: | men, women, India, census 2001, households, west bengal, female work participation, Muslim population, labour force, NSS, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2438&r=lab |
| By: | Groezen, B.J.A.M. van; Meijdam, A.C. (Tilburg University, Center for Economic Research) |
| Abstract: | In this paper we investigate the effects of subsidizing low-skilled, labourintensive services hired by high-skilled individuals in the presence of labour income taxation. Whether such a subsidy can be Paretoimproving depends crucially on the degree of substitutability of both types of labour in the non-service sector. In case of some substitutability, a service subsidy can benefit all and decrease inequality, but in case of complementarity, low-skilled individuals benefit and high-skilled individuals are worse off. |
| Keywords: | household production;services;skill premium;subsidy;wage tax |
| JEL: | D13 H24 H53 J13 J22 J24 O17 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201001&r=lab |
| By: | Angle, John |
| Abstract: | The Inequality Process (IP) is a stochastic particle system in which particles are randomly paired for wealth exchange. A coin toss determines which particle loses wealth to the other in a randomly paired encounter. The loser gives up a fixed share of its wealth, a positive quantity. That share is its parameter, ω_ψ, in the ψth equivalence class of particles. The IP was derived from verbal social science theory that designates the empirical referent of (1-ω_ψ) as worker productivity, operationalized as worker education. Consequently, the stationary distribution of wealth of the IP in which particles can have different values of ω (like workers with different educations) is obliged to fit the distribution of labor income conditioned on education. The hypothesis is that when a) the stationary distribution of wealth in the ψth equivalence class of particles is fitted to the distribution of labor income of workers at the ψth level of education, and b) the fraction of particles in the ψth equivalence class equals the fraction of workers at the ψth level of education, then c) the model's stationary distributions fit the corresponding empirical distributions, and d) estimated (1-ω_ψ) increases with level of education. The Saved Wealth Model (SW) was proposed as a modification of the particle system model of the Kinetic Theory of Gases (KTG). The SW is isomorphic to the IP up to the stochastic driver of wealth exchange between particles. The present paper shows that 1) the stationary distributions of both particle systems pass test c): they fit the distribution of U.S. annual wage and salary income conditioned on education over four decades, 2) the parameter estimates of the fits differ by particle system, 3) both particle systems pass test d), but 4) the IP's overall fits are better than the SW's because 5) the IP's stationary distribution conditioned on larger (1-ω_ψ) has a heavier tail than the SW's fitting the distribution of wage income of the more educated better, and 6) since the level of education in the U.S. labor force rose, the IP's fit advantage increased over time. |
| Keywords: | labor income distribution; goodness of fit; Inequality Process; particle system model; Saved Wealth Model |
| JEL: | D31 C63 B59 |
| Date: | 2010–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20835&r=lab |
| By: | Krishnan, P.; Krutikova, S. |
| Abstract: | We examine the impact of a programme designed to raise the psychosocial skills (self-esteem and self-efficacy) and aspirations of children in the slums of Bombay. We use a cross-cutting design with two comparison groups of peers for young adults who have attended the programme until leaving high school to analyse whether, compared to those from a similar environment and background, enrollment in the programme demonstrably raises psychosocial skills. We also use extensive data on parental background and psychosocial skills to construct difference-in-difference estimates that account for for family-level ob- servables and unobservables. This is a non-randomised evaluation: hence, we are cautiously optimistic in our finding of substantial impacts on both self-esteem and self-efficacy, as well as evidence of an impact on aspirations. Furthermore, in line with the literature, both self-esteem and self-efficacy are positively related to success in school-leaving examinations and initial labour market outcomes. |
| Date: | 2010–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1010&r=lab |
| By: | Michaelides, Marios |
| Abstract: | Previous research on migration has focused more on the effect of wage differences between the destination and the origin on migration and less on how non-pecuniary attachments workers have to their current location may affect their migration decisions. In this paper, we examine how the presence of a strong social network and desirable location amenities in the current location may deter individual migration across U.S. metropolitan areas. Our empirical results show that, controlling for wage and housing cost differences between metropolitan areas, workers with strong attachments to their current location are significantly less likely to move. Interestingly, the effects of a strong social network and desirable location amenities on individual migration decisions are more important than the effect of wage or housing cost differentials between the destination and the origin. |
| Keywords: | migration; worker mobility; mobility costs; location amenities; wages; housing costs |
| JEL: | J6 R3 J3 J01 R2 |
| Date: | 2009–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20379&r=lab |
| By: | Giuseppe Moscarini (Cowles Foundation, Yale University); Fabien Postel-Vinay (University of Bristol and Paris School of Economics) |
| Abstract: | We analyze a stochastic equilibrium contract-posting model. Firms post employment contracts, wages contingent on all payoff-relevant states. Aggregate productivity is subject to persistent shocks. Both employed and unemployed workers search randomly for these contracts, and are free to quit at any time. An equilibrium of this contract-posting game is Rank-Preserving [RP] if larger firms offer a larger value to their workers in all states of the world. We show that every equilibrium is RP, and equilibrium is unique, if firms differ either only in their initial size, or also in their fixed idiosyncratic productivity but more productive firms are initially larger, in which case turnover is always efficient, as workers always move from less to more productive firms. The RP equilibrium stochastic dynamics of firm size provide an explanation for the empirical finding that large employers are more cyclically sensitive (Moscarini and Postel-Vinay, 2009). RP equilibrium computation is tractable, and we simulate calibrated examples. |
| Keywords: | Equilibrium job search, Dynamic contracts, Stochastic dynamics |
| JEL: | J64 J31 D86 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1754&r=lab |
| By: | Michaelides, Marios |
| Abstract: | This paper uses data from Project GATE to examine the efficacy of offering free self-employment assistance to unemployed individuals interested in self-employment, overall and by race. We also examine the effect of participants’ self-employment background, finances, and personal circumstances on their self-employment outcomes. We find that Project GATE led to significant gains in the outcomes of unemployed participants, particularly for black participants. Our analyses also show that significant portions of the race disparities in self-employment outcomes among unemployed participants are attributed to race differences in access to financing. The policy implications of our findings are discussed. |
| Keywords: | self-employment; small business; unemployment; workforce development; SEA; Project GATE |
| JEL: | H4 J6 L2 |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20884&r=lab |
| By: | Edison Roy César; François Vaillancourt |
| Abstract: | The purpose of this note is to examine the effect of belonging to a specific union on negotiated wage increases, given unionisation status. The data consist of all collective agreements with more than 500 employees, which were signed in Quebec (N=632) or Ontario (N=1349) during the 1985-2007 period. The model used is a standard wage equation with the negotiated rate of increase of base wages, annualized as the dependent variable and four dichotomous variables for a specific union, the CPI and the unemployment rate two quarters before the collective agreements, the presence or not of a cost of living agreements in the collective agreement and eighteen industrial dichotomous variables. We find with one exception no evidence that one union is better than another in obtaining higher wage growth. <P>L’objectif de ce cahier est d’examiner l’impact d’une affiliation syndicale spécifique sur l’augmentation des salaires négociés, étant donné la syndicalisation. Les données sont l’ensemble des conventions collectives de 500 employés et plus qui ont été signées au Québec (N=632) et en Ontario (N=1349) durant la période 1985-2007. Le modèle utilisé est une équation salariale typique avec le taux d’augmentation salariale annualisé comme variable dépendante et quatre variables dichotomiques pour les syndicats spécifiques, l’IPC et le taux de chômage retardée de deux périodes par rapport à la signature, la présence ou non d'une clause d’ajustement au coût de la vie et 18 variables de secteur industriel. Nous ne trouvons sauf pour une exception aucun résultat indiquant qu’un syndicat obtient des augmentations plus élevées qu’un autre. |
| Keywords: | Unions wages collective agreements, salaires syndicats, conventions collectives |
| JEL: | J31 J50 |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2010s-09&r=lab |
| By: | Maria Burlutskaya; Olga Rybakova |
| Abstract: | The internal labor market is a field where the employer and the employees interact within an organization, this field being similar in its functions to the ordinary external labor market, that is, it determines the cost of manpower, and the staff movements within the enterprise, which include both horizontal and vertical mobility. The processes analyzed by economists within the framework of the concept of the internal labor market are studied in sociology as processes of intra-organizational mobility: its factors, trajectories, and the ascent opportunities of its staff. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwesc:diwesc16&r=lab |
| By: | Dutta, Mousumi; Husain, Zakir |
| Abstract: | It was initially believed that the rapid growth of the Information Technology (IT) industry in India would generate less exploitative avenues of employment for women. Further, economic empowerment would strengthen the bargaining power of women within the household and improve her self-esteem. However, recent studies argue that the IT sector has been unable to isolate itself from the social context, so that the organizational process continues to be shaped by the conflicting and asymmetrical gender relationships that prevail in Indian society. This leads to the imposition of a dual burden (of work and home commitments) on working women. Based on a survey of women workers in Calcutta’s IT sector, this paper agues that contextual developments have weakened the patriarchal foundations of the family. This has allowed women workers to break out of a passive mould and attempt to carve out their individual destinies. However, organizational constraints and the family structure impose structural constraints on their agency, so that women workers have to adapt their aspirations to contextual realities. Decision-making of working women may, in this emerging situation, be conceptualized in terms of Simon’s satisficing model. |
| Keywords: | Women’s agency; Gender; Information Technology; Calcutta; Satisficing |
| JEL: | J16 |
| Date: | 2010–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20766&r=lab |
| By: | Rosario Crinò |
| Abstract: | This paper studies the effects of service offshoring on the skill composition of labor demand, using novel comparable data for nine Western European countries between 1990 and 2004. The empirical analysis delivers three main results. First, service offshoring is skill-biased, because it increases the demand for high and medium skilled labor and decreases the demand for low skilled labor. Second, the effects of service offshoring are similar to those of material offshoring, both qualitatively and quantitatively. Third, the economic magnitude of these effects is not large. |
| Keywords: | Offshoring; Labor Demand; Skills |
| JEL: | F1 |
| Date: | 2010–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:802.10&r=lab |
| By: | William R. Kerr; William F. Lincoln |
| Abstract: | This study evaluates the impact of high-skilled immigrants on US technology formation. We use reduced-form specifications that exploit large changes in the H-1B visa program. Higher H-1B admissions increase immigrant science and engineering (SE) employment and patenting by inventors with Indian and Chinese names in cities and firms dependent upon the program relative to their peers. Most specifications find limited effects for native SE employment or patenting. We are able to rule out displacement effects, and small crowding-in effects may exist. Total SE employment and invention increases with higher admissions primarily through direct contributions of immigrants. |
| JEL: | F15 F22 J44 J61 O31 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15768&r=lab |
| By: | Addison, John T. (University of South Carolina); Bryson, Alex (National Institute of Economic and Social Research); Teixeira, Paulino (University of Coimbra); Pahnke, André (IAB, Nürnberg) |
| Abstract: | This paper presents the first comparative analysis of the decline in collective bargaining in two European countries where that decline has been most pronounced. Using workplace-level data and a common model, we present decompositions of changes in collective bargaining and worker representation in the private sector in Germany and Britain over the period 1998-2004. In both countries within-effects dominate compositional changes as the source of the recent decline in unionism. Overall, the decline in collective bargaining is more pronounced in Britain than in Germany, thus continuing a trend apparent since the 1980s. Although workplace characteristics differ markedly across the two countries, assuming counterfactual values of these characteristics makes little difference to unionization levels. Expressed differently, the German dummy looms large. |
| Keywords: | behavioral and composition effects, patterns of erosion, worker representation, union coverage, union recognition, shift share analysis |
| JEL: | J50 J51 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4760&r=lab |
| By: | Marco Sunder |
| Abstract: | We analyze the timing of birth of the first three children based on German panel data (GSOEP) within a hazard rate framework. A random effects estimator is used to accommodate correlation across spells. We consider the role of human capital – approximated by a Mincer-type regression – and its gender-specific effects on postponement of parenthood and possible recuperation at higherorder births. An advantage of the use of panel data in this context consists in its prospective nature, so that determinants of fertility can be measured when at risk rather than ex-post, thus helping to reduce the risk of reverse causality. The analysis finds evidence for strong recuperation effects, i.e., women with greater human capital endowments follow, on average, a different birth history trajectory, but with negligible curtailment of completed fertility. |
| Keywords: | fertility,humancapital,eventhistoryanalysis |
| JEL: | J13 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:22-09&r=lab |
| By: | Pierpaolo Benigno; Luca Antonio Ricci |
| Abstract: | In the presence of downward nominal wage rigidities, wage setters take into account the future consequences of their current wage choices, when facing both idiosyncratic and aggregate shocks. We derive a closed-form solution for a long-run Phillips curve which relates average output gap to average wage inflation: it is virtually vertical at high inflation and flattens at low inflation. Macroeconomic volatility shifts the curve outward and reduces output. The results imply that stabilization policies play an important role, and that optimal inflation may be positive and differ across countries with different macroeconomic volatility. |
| JEL: | E24 E3 E30 E5 E50 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15762&r=lab |
| By: | Kimberly Beaton |
| Abstract: | TThis article investigates the stability of Okun's law for Canada and the United States using a time varying parameter approach. Time variation is modeled as driftless random walks and is estimated using the median unbiased estimator approach developed by Stock and Watson (1998). Okun's law exhibits structural instability in both countries, with the sensitivity of the unemployment rate to movements in output growth increasing recently over time in both Canada and the United States. |
| Keywords: | Business fluctuations and cycles; Labour markets |
| JEL: | E24 J00 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:10-7&r=lab |