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on Labour Economics |
| By: | Fabian Slonimczyk (International College of Economics and Finance, Higher School of Economics, Moscow); Peter Skott (University of Massachusetts Amherst) |
| Abstract: | This paper analyzes the effects of the minimum wage on wage inequality, relative employment and over-education. Using an effciency wage model we show that over-education can be generated endogenously and that an increase in the minimum wage can raise both total and low-skill employment, and produce a fall in inequality. Evidence from the US suggests that these theoretical results are empirically relevant. The over-education rate has been increasing and our regression analysis suggests that the decrease in the minimum wage may have led to a deterioration of the employment and relative wage of low-skill workers. JEL Categories: J31, J41, J42 |
| Keywords: | Minimum wage, earnings inequality, monopsony, effciency wage, over-education. |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2010-03&r=lab |
| By: | Christian Keuschnigg; Thomas Davoine |
| Abstract: | This paper develops a general equilibrium model with safe and risky jobs where unemployment is concentrated in a highly productive but volatile sector. Frictional unemployment arises in the process of job creation, firing and retraining for alternative employment. The paper derives an optimal welfare policy which combines the design of the tax schedule with three pillars of the `flexicurity' model. The optimal policy is characterized by (i) a progressive wage tax schedule; (ii) a wage subsidy to re-employed workers; (iii) unemployment insurance benefits; (iv) job protection to contain firing; and (v) active labor market policy to facilitate labor reallocation. |
| Keywords: | Flexicurity, insurance, job protection, active labor market policy |
| JEL: | J64 J65 J68 J32 H30 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:usg:dp2010:2010-11&r=lab |
| By: | Anabela Carneiro (cef.up, Faculdade de Economia, Universidade do Porto); Paulo Guimaraes (University of South Carolina, cef.up, and IZA Bonn); Pedro Portugal (Banco de Portugal, Universidade NOVA de Lisboa, and IZA Bonn) |
| Abstract: | Using a longitudinal matched employer-employee data set for Portugal over the 1986-2005 period, this study analyzes the heterogeneity in wages responses to aggregate labor market conditions for newly hired workers and existing workers. Accounting for both worker and firm heterogeneity, the data support the hypothesis that entry wages are much more procyclical than current wages. A one-point increase in the unemployment rate decreases wages of newly hired male workers by around 2.8% and by just 1.4% for workers in continuing jobs. Since we estimate the fixed effects, we were able to show that unobserved heterogeneity plays a non-trivial role in the cyclicality of wages. In particular, worker fixed effects of new hires and separating workers behave countercyclically, whereas firm fixed effects exhibit a procyclical pattern. Finally, the results reveal, for all workers, a wage-productivity elasticity of 1.2, slightly above the one-for-one response predicted by the Mortensen-Pissarides model. |
| Keywords: | wage cyclicality; hires; firm-specific effects; compositional effects; labor productivity |
| JEL: | J31 E24 E32 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:por:cetedp:0903&r=lab |
| By: | Gianna Claudia Giannelli (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Ursula Jaenichen (Institute for Employment Research); Claudia Villosio (LABORatorio R. Revelli, Collegio Carlo Alberto) |
| Abstract: | According to the aims of the labour market reforms of the 90s implemented in many European countries, workers may stay at their first job for a shorter time, but should be able to switch jobs easily. This would generate a trade-off between job opportunities and job stability. This paper addresses this issue using administrative longitudinal data for Germany and Italy, two countries which have undergone changes in regulations that can be summarised under the header of “deregulation”.The estimated piecewise constant job and employment duration models show that changes in the durations of the first job and employment - measured as the sum of multiple consecutive jobs - are observed in periods of labour market reforms. However, the existence of a trade-off is not confirmed by the results. In Germany, men have experienced an increase in employment stability over time, mated with somewhat longer job durations, while women have not benefitted from an increase in employment durations as a compensation for the marked decrease in their first job durations. In Italy, employment stability of the new entrants of both sexes has not improved after the reforms. The reduction in the duration of the first job has not been counterbalanced by an increase in the opportunity to find rapidly another job. These results suggest that the objective of increasing job opportunities by means of labour market deregulation has not been fully achieved. |
| Keywords: | employment duration, work career, tenure, precarious jobs, labour market reforms, mixed proportional hazard |
| JEL: | J62 J64 J68 K31 C41 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2010_06.rdf&r=lab |
| By: | Christian Dustmann (University College London & Centre for Research and Analysis of Migration (CReAM)); Tommaso Frattini (University of Milan, CReAM, LdA and IZA); Nikolaos Theodoropoulos (University of Cyprus and CReAM) |
| Abstract: | This paper reviews the labour market performance and educational attainment of ethnic minorities and second generation immigrants in the UK over the last three decades. We first describe the size and composition of the minority population and its regional distribution over time, and investigate their labour market performance relative to the white native population. We then present an intergenerational comparison of education, employment, and wages of different ethnic minority groups born in Britain to their parents’ generation, and to equivalent groups of white native born individuals. We conclude with a summary of recent research on the school performance of children from ethnic minorities relative to their white peers. |
| Keywords: | Ethnic minorities, Second generation immigrants, Intergenerational comparison. |
| JEL: | J15 J61 J62 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:201004&r=lab |
| By: | Eva Fransen; Janneke Plantenga; Jan Dirk Vlasblom |
| Abstract: | Despite major improvements in women's labour market attachment, women still earn considerably less than men. International research shows that the persistence of the gender pay gap may be due to the fact that although the gap in characteristics between men and women is diminishing, changes in the wage structure counteract this change. This article will study whether this 'swimming upstream' phenomenon is also playing a role in the rather slow convergence between male and female wages in The Netherlands. Our results indicate that this is not the case; most of the changes in the Dutch wage structure have been rather favourable to women. The lacking convergence in wages has to be explained from the fact that despite the favourable changes, the Dutch wage structure still contains a considerable implicit gender bias. |
| Keywords: | gender pay gap, wage structure, human capital, discrimination |
| JEL: | J31 J71 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:1009&r=lab |
| By: | Bhalotra, Sonia R. (University of Bristol); Umana-Aponte, Marcela (University of Bristol) |
| Abstract: | This paper investigates cyclicality in women's labour supply motivated by the hypothesis that it contributes to smoothing household consumption in environments characterized by income volatility. We use comparable individual data on about 1.1 million women in 63 developing and transition countries merged with country-level panel data on GDP during 1986-2006. The scope of these data is unprecedented in the small but growing literature on labour markets in developing countries. We find that the within-country relationship of women's employment and income is, on average, negative in Asia and Latin America but positive in Africa. We suggest that amongst reasons why African women behave differently are that the conventional family structure with income pooling is less the norm, there are fewer opportunities for paid employment, and aggregate income shocks are more closely tied to rainfall variation. The findings are robust to controls for country-specific trends and potentially correlated shocks. In Asia and Latin America, characteristics that strengthen counter-cyclical responses include low education, being married, being married to men with low education, low wealth, no landownings, rural residence and fertility. These findings suggest that insurance motives underpin the dynamics of women's work participation. Examination of cyclicality in the distribution of employment across types suggests that recessions in every region are associated with a rise in self-employment amongst women. In Asia and Latin America, there is a parallel rise in paid employment and a sharp drop in non-employment. In Africa, there is a decline in paid employment which overwhelms the rise in self-employment and this is how total employment comes to decline. The results have potentially important implications for understanding labour markets, fertility timing and child outcomes. |
| Keywords: | insurance, women's labour supply, added worker effect, business cycles, dynamics, Africa, Asia, Latin America |
| JEL: | J22 J13 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4879&r=lab |
| By: | Sonia Bhalotra; Marcela Umaña-Aponte |
| Abstract: | This paper investigates cyclicality in women’s labour supply motivated by the hypothesis that it contributes to smoothing household consumption in environments characterised by income volatility. We use comparable individual data on about 1.1 million women in 63 developing and transition countries merged with country-level panel data on GDP during 1986-2006. The scope of these data is unprecedented in the small but growing literature on labour markets in developing countries. We find that the within-country relationship of women’s employment and income is, on average, negative in Asia and Latin America but positive in Africa. We suggest that amongst reasons why African women behave differently are that the conventional family structure with income pooling is less the norm, there are fewer opportunities for paid employment, and aggregate income shocks are more closely tied to rainfall variation. The findings are robust to controls for country-specific trends and potentially correlated shocks. In Asia and Latin America, characteristics that strengthen counter-cyclical responses include low education, being married, being married to men with low education, low wealth, no landownings, rural residence and fertility. These findings suggest that insurance motives underpin the dynamics of women’s work participation. Examination of cyclicality in the distribution of employment across types suggests that recessions in every region are associated with a rise in self-employment amongst women. In Asia and Latin America, there is a parallel rise in paid employment and a sharp drop in non-employment. In Africa, there is a decline in paid employment which overwhelms the rise in self-employment and this is how total employment comes to decline. The results have potentially important implications for understanding labour markets, fertility timing and child outcomes. |
| Keywords: | insurance, women’s labour supply, added worker effect, business cycles, dynamics, Africa, Asia, Latin America. |
| JEL: | O12 J2 J6 E32 I00 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:10/235&r=lab |
| By: | Robert J. Barro; Jong-Wha Lee |
| Abstract: | Our panel data set on educational attainment has been updated for 146 countries from 1950 to 2010. The data are disaggregated by sex and by 5-year age intervals. We have improved the accuracy of estimation by using information from consistent census data, disaggregated by age group, along with new estimates of mortality rates and completion rates by age and education level. We use these new data to investigate how output relates to the stock of human capital, measured by overall years of schooling as well as by the composition of educational attainment of workers at various levels of education. We find schooling has a significantly positive effect on output. After controlling for the simultaneous determination of human capital and output, by using the 10-year lag of parents‘ education as an instrument variable (IV) for the current level of education, the estimated rate-of-return to an additional year of schooling ranges from 5% to 12%, close to typical Mincerian return estimates found in the labor literature. |
| JEL: | F43 I21 O11 O4 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15902&r=lab |
| By: | Sansani, Shahar |
| Abstract: | In this paper I estimate the relationship between school quality and mortality. Although many studies have linked the quantity of education to health outcomes, the effect of school quality on health has yet to be examined. I construct synthetic birth cohorts and relate the quality of education they attained to their mortality rates. I find that there is a statistically significant relationship between the mortality-schooling gradients, which depict the return to a year of schooling, and the length of school term and relative teacher wage. For instance, increasing the relative teacher wage by one standard deviation results in about 1.9 less deaths per 1,000 people per extra year of education. My results suggest that one way to improve the health of the population is to improve school quality. |
| Keywords: | quality of education; health production |
| JEL: | I0 I12 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22189&r=lab |
| By: | Nicolas Herault (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Weiping Kostenko (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Gary Marks (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Rezida Zakirova (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne) |
| Abstract: | This paper examines the impact of macroeconomic conditions on the education and employment outcomes of youths in school-to-work transition. The dataset is based on five different cohorts from the Youth in Transition surveys (YIT) and the Longitudinal Surveys of Australian Youth (LSAY) and covers the period from 1985 to 2006, which is long enough to control explicitly for both poor and positive macroeconomic conditions. The multivariate analyses show that both the unemployment rates, and to a lesser extent economic growth rates, have an impact on youths’ education and employment outcomes. Although the effects vary significantly by gender an education level, overall the results reveal that poor macroeconomic conditions tend to drive young people out of full-time work and into inactivity or part-time work. In addition, poor macroeconomic conditions tend to discourage further education. A result worth noticing is that males who did not complete secondary school suffer the largest increase in unemployment risks as the unemployment rate increases. |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2010n02&r=lab |
| By: | Joanna Tyrowicz (Faculty of Economic Sciences, University of Warsaw; National Bank of Poland; Rimini Center for Economic Analysis); Stanisław Cichocki (Faculty of Economic Sciences, University of Warsaw; National Bank of Poland) |
| Abstract: | Unregistered employment poses two types of challenges to the researchers: (i) reliably evaluating the wage differential between formally and informally employed and (ii) accounting for the push and pull factors in general and the effects of business cycle in particular. We address the former with the use of propensity score matching and analyse the evolution of the estimated average compensations and the differentials with reference to GDP and unemployment fluctuations. Using 13 years of quarterly labour force survey data from Poland on de iure unemployed but de facto employed individuals we find, that in-the-shadow compensations tend to be higher and procyclical. We also find considerable distributional heterogeneity. |
| Keywords: | undeclared employment, propensity score matching, transition |
| JEL: | O17 J22 P37 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2010-05&r=lab |
| By: | Drine, Imed; Bou Abid , Anis |
| Abstract: | The purpose of this paper is to study the determinants of the inefficient functioning of the Tunisian labour market. The study takes advantage of the recent development in the stochastic frontier techniques and estimates, the matching function for Tunisia using disaggregated data. We include control variables as determinants of matching efficiency and regional disparities. We confirm that the persistently high rate of unemployment is the result of not only excess labour supply but is also related to a shortfall between supply and demand (sector, location, qualification). |
| Keywords: | labour market; structural unemployment; technical efficiency; matching across regions; developing country. |
| JEL: | C23 J64 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:21994&r=lab |
| By: | Delphine Boutin (GED, Université Montesquieu Bordeaux IV) |
| Abstract: | Cette étude vise à analyser le processus d’entrée sur le marché du travail au Cameroun, et la durée de transition de l’école au travail pour les jeunes scolarisés. Nous examinons ces deux modes de transition vers le marché du travail : du système scolaire ou bien de l’inactivité (ou de l’éducation informelle) vers le monde du travail. Nous utilisons pour cela un indicateur synthétique de la transition école-travail. Pour les jeunes intégrant directement la force de travail, l’âge moyen d’accès à un premier emploi est examiné. Une attention particulière est portée sur la situation du marché du travail des jeunes ainsi que sur les facteurs clés capables d’influencer cette situation (tels que l’accumulation du capital humain). A l’aide la méthode du maximum de vraisemblance, nous utilisons un modèle probit univarié de la probabilité d’accéder à un emploi, par niveau d’éducation. Pour cette analyse, nous utilisons les données de l’enquête ECAM3, conduite en 2007 par l’Institut national de statistique (INS) au Cameroun. Les résultats suggèrent que la transition Ecole-travail au Cameroun cache d’immenses disparités entre les individus. D’autre part, les caractéristiques individuelles (le genre, le milieu de résidence, le statut marital, le statut de migration..) et celles du marché local semblent influencer la probabilité d’accéder à un emploi. L’un des apports importants de cette étude est de mettre en lumière les spécificités du marché du travail des jeunes en fonction de leur niveau d’éducation. This study aims to analyze the process of labor market entry in Cameroon and, for those who attended school, the duration of the transition from school to work. The transition to work can take two routes, through the schooling system or from inactivity (or informal schooling) to the labor force. We examine both routes, in order to identify vulnerable groups. It uses a synthetic indicator in providing an overview of the routes young people take from education to the labor force. For the group transitioning directly to the labor force, the average entry in the labor market is examined. We pay then particular attention to the labor market outcomes of young people and key factors influencing these outcomes, including human capital accumulation. To this purpose, a probit univariate model of the probability of employment by level of education was made. For this analysis, we use 2007 ECAM3 conducted by the National Statistics institute (INS) of Cameroon. Results show large differences in the school-to-work transition process. Moreover, the individuals’ characteristics and the conditions of the local labor market appear to substantially influence the probability of finding employment. One of the most interesting contributions of this study is to highlight youth labor market specificities by education’s level.(Full text in french) |
| JEL: | I20 J01 J21 J24 J64 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:mon:ceddtr:152&r=lab |
| By: | Patricia Rice |
| Abstract: | This paper uses the introduction of the national minimum wage in the UK in April 1999 as a ‘natural experiment’ to analyse the impact of minimum wages on enrolment in schooling. At the time of its introduction, only workers aged 18 years or more were covered by the legislation. The paper uses panel data for a sample of young people in a given school-year cohort, some of whom were aged 18 years in spring 1999 and therefore eligible to receive the national minimum wage, and others who were aged only 17 years. We compare participation in post-compulsory schooling for the two groups, both before and after the enactment of the legislation and find robust evidence that eligibility for the national minimum wage significantly reduces the probability of participation in post-compulsory schooling for young people living in areas where the national minimum is high relative to local earnings. |
| Keywords: | Minimum wages, Enrolment in schooling, Natural experiment approach |
| JEL: | J22 J24 J38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:482&r=lab |
| By: | Crombrugghe Denis de; Espinoza Henry; Heijke Hans (ROA rm) |
| Abstract: | Projoven is an ongoing Peruvian youth job-training programme started in 1996and conducted in successive waves or ‘public calls’. The programme has twophases of instruction: i) three months of classroom training, followed by ii) threemonths of on-the-job training internship. From 1997 to 2007, less than 60% ofregistrants completed both phases. This paper estimates the effectiveness ofProjoven’s sixth Public Call, in terms of overall and formal employment andwage outcomes, while accounting for the presence of trainees with partialinstruction. Four groups are compared pairwise: the control group, the dropoutgroup with only classroom training, the dropout group with classroom trainingand internship placement, and the group completing the full programme. Ourestimations account for selection effects and the potential endogeneity of trainingcompletion. We find that in terms of overall and formal employment, theprogramme yields returns only in the short run and conditioned on internshipcompletion. The programme seems to increase trainee wages, but these effectsdiminish over time. Projoven is relatively more effective for individuals with nowork experience prior to enrolment. |
| Keywords: | education, training and the labour market; |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2010004&r=lab |
| By: | Ana Sofia Lopes (Departamento de Gestão e Economia, ESTG/Instituto Politécnico de Leiria, Portugal, and GEMF); Paulino Teixeira (GEMF/Faculdade de Economia, Universidade de Coimbra, Portugal) |
| Abstract: | In spite of the importance of workplace training in human capital accumulation, relatively little is known on its returns for workers and firms. Our investigation tries to fill this gap by developing an alternative modelling that examines the determinants of firm productivity and wages, on the one hand, and the internal rate of return to firm training investments, on the other. Our estimates, obtained using a firm-level dataset in which we have detailed information on firm-provided training, indicate that an additional hour of training per worker implies some 0.1 percent increase in productivity. We also found that 2/3 of the gains in productivity are captured by firms and 1/3 by workers. In turn, the internal rate of return for an average firm in our sample is equal to 11 percent while for workers it is considerably higher at 24 percent. As expected, the dispersion across firms is very high, with 66 percent of firms having a positive internal rate of return for an annual depreciation rate of 35 percent. |
| Keywords: | Firm-Provided Training, Internal Rate of Return, Human Capital, Productivity, Earnings. |
| JEL: | J24 J31 I2 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2010-05&r=lab |
| By: | Yamamura, Eiji |
| Abstract: | Using Japanese panel data for 2006-2009, this study attempts to examine how the pass rate of law school student taking the new bar examination influences the number of applicants for the law school in the following years. The major finding is that the higher the law school student pass rate, the greater the number of applicants for the law school becomes. Furthermore, the positive effect of the pass rate is larger for a prestigious university’s law school than for other schools. It follows that the “brand” and the school’s current performance are complementary in increasing demand for places in the law school. |
| Keywords: | brand; law school; Japan; demand |
| JEL: | K40 A23 |
| Date: | 2010–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22036&r=lab |
| By: | Johansson, Elly-Ann (IFAU - Institute for Labour Market Policy Evaluation) |
| Abstract: | This paper investigates the effect of parental leave – both own and spousal – on subsequent earnings using different sources of variation. Using fixed-effect models, and in line with previous results, parental leave is found to decrease each parent’s future earnings. Also spousal leave is important, but only for mothers. In fact, each month the father stays on parental leave has a larger positive effect on maternal earnings than a similar reduction in the mother’s own leave. Using two reforms of the parental leave system as exogenous sources of variation yields only imprecisely estimated effects, even though the reforms had a strong effect on parental leave usage. However, the point estimates tentatively suggest effects in the same range or larger than the fixed-effects model found. |
| Keywords: | Parental leave; gender equality; earnings |
| JEL: | J13 J16 J24 |
| Date: | 2010–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2010_004&r=lab |
| By: | Judit Vall Castello |
| Abstract: | The Social Security system is Spain provides four different types of permanente disability pensions which are granted according to the severity of the disabling condition and the remaining capacity to work that is left for these individuals. Therefore, the system is designed to allow for a certain part of the disabled individuals to work while receiving the disability pension. However, the majority of these individuals do not effectively work and employment rates for this group of people have remained very low since 1996. The aim of this research is to evaluate the results of an employment promotion policy introduced in 2004 which increased the deductions of the Social Security contributions paid by employers that hire disabled women. In order to do that we first analyze employment rates of disabled individuals in Spain from 1996 until 2007 followed by the estimation of a bivariate probit model to evaluate the existence of shifts in employment trends in the women relative to the men sample conditioning on the existence of preexisting trends. We find that the increase in the deductions of the Social Security contributions resulted in rises in employment rates for disabled women with respect to disabled men. |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2010-10&r=lab |
| By: | Corak, Miles (University of Ottawa); Piraino, Patrizio (Statistics Canada) |
| Abstract: | Our analysis of intergenerational earnings mobility modifies the Becker-Tomes model to incorporate the intergenerational transmission of employers, which is predicted to increase the intergenerational elasticity of earnings. About 6% of young Canadian men have the same main employer as their fathers but this is positively related to paternal earnings and rises discretely at the top of the distribution. We use a switching regression model and identify two regimes associated with the inheritance of employers that have different intergenerational earnings elasticities. The model also demonstrates that the inheritance of employers plays a role in understanding observed nonlinearities. |
| Keywords: | intergenerational mobility, job search, networks |
| JEL: | J62 J64 J24 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4876&r=lab |
| By: | Moron, Eduardo; Castro, Juan F.; Villacorta, Lucciano |
| Abstract: | After almost 20 years of prudent macro policies, Peru seems in better shape than before to withstand the effects of a financial crisis. Progress, however, has left some policy areas unscathed and the labor market is one of them. In this paper we analyze the potential effects of the crisis on labor market outcomes, and discuss policy options to address short run and structural considerations. We review stylized facts from this and previous crisis to account for potential transmission mechanisms, review policy options and results from past and existing labor market interventions, and build a DSGE model to provide further insight regarding labor market outcomes and the effects of transitory and permanent policy measures. On the countercyclical front, our analysis reveals that the main risk that the policymaker should aim to mitigate is a surge in informality and underemployment. For this, job protection alternatives (as temporary payroll tax holidays already implemented) have to be accompanied by a strengthened and better focalized reemployment service, especially if the shock transpires into the nontradable sector. On the more structural side, policy should aim at the prime drivers of informality in our country: low productivity and high formal labor costs. For the latter, progressive access to labor benefits for small firms (already introduced via a special labor regime) could be complemented by introducing different minimum wage levels according to firm size and a generalized reduction in firing costs. Low productivity issues, on the other hand, can be addressed by strengthening and integrating existing training programs and information networks which have already proven successful in terms of formal job creation. Simulations reveal that permanent non-wage cost reductions (like those introduced via the special labor regime) can increase formal employment and formal GDP participation by 2 percentage points. Structural policy interventions also exhibit a large countercyclical potential due to their permanent nature. This implies that we should not wait for the crisis to be over to start their implementation. |
| Keywords: | Global crisis; labor markets; Peru |
| JEL: | J08 E32 D58 |
| Date: | 2009–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22120&r=lab |
| By: | Guy Lacroix |
| Abstract: | In 2002 the Quebec government implemented the “Action Emploi" (AE) program aimed at making work pay for long-term social assistance recipients (SA). AE offered a generous income supplement that could last up to three years to recipients who found a full-time job within twelve months. The program was implemented for a trial period of one year. Based on little empirical evidence, a slightly modified version of the program was implemented on a permanent basis in May 2008.<p> The paper investigates the impact of the temporary program by focusing on the labour market transitions of the targeted population starting one year before the implementation of the program and up until the end of 2005. We use a multi-state multi-episode model. The endogeneity of the participation status is accounted for by treating AE as a distinct state and by allowing correlated unobserved factors to affect the transitions. The model is estimated by the method of simulated moments. Our results show that AE has indeed increased the duration of Off-SA spells and decreased the duration of SA spells slightly. There is also some evidence that the response to the program varies considerably with unobserved individual characteristics. <P>En 2002, le gouvernement du Québec a mis sur pied le programme Action emploi (AE) qui visait à mieux rémunérer le travail des prestataires de l’aide sociale (AS) de longue durée. AE offrait un supplément de revenu généreux pouvant s’échelonner sur une période d’au plus trois ans aux prestataires ayant trouvé un emploi à temps plein à l’intérieur de 12 mois. Le programme a été mis en œuvre pendant une période d’essai d’un an. Sur la base d’une faible évidence empirique, une version légèrement modifiée du programme a été adoptée de façon permanente en mai 2008.<p> Le document examine l’incidence du programme temporaire en mettant l’accent sur les transitions de la population ciblée sur le marché du travail, à compter de l’année précédant la mise en œuvre du programme jusqu’à la fin de 2005. Nous utilisons un modèle multi-états et multi-épisodes. Afin de prendre en compte l’endogénéité du statut de participation, nous considérons que le programme AE est un état distinct et nous permettons à des facteurs latents corrélés d’influencer les transitions. Le modèle est évalué par la méthode du maximum de vraisemblance simulée. Nos résultats démontrent que le programme a effectivement augmenté la durée des périodes de sortie de l’AS et diminué légèrement la durée des périodes de recours à l’AS. Le document montre également que la réponse au programme varie considérablement en fonction des caractéristiques individuelles latentes. |
| Keywords: | , assistance sociale, supplément de revenu, modèle de transition multi-états et multi-épisodes. |
| Date: | 2010–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2010s-19&r=lab |
| By: | Oesch, Daniel |
| Abstract: | Switzerland's system of industrial relations was for a long time synonymous for stability. Once the system of collective bargaining had been put into place at the beginning of the 1950s, Swiss trade unions settled into their role as subordinate partners in decentralized and consensual industrial relations. Stability came to an abrupt end in the 1990s, a decade that confronted trade unions with three major challenges. The first and foremost challenge arose from the unusually long recession of the early 1990s, which dealt a severe blow to membership in the traditional union strongholds. A second challenge was raised by the neoliberal turn in business organizations, which caught trade unions on the wrong foot. Thirdly, trade unions were challenged, at the end of the 1990s, by the imminent opening up of Switzerland’s labour market to the European Union. The liberalization of labour migration was threatening to undermine unions’ influence on wage-setting. These challenges – notably declining membership and the questioning of collective bargaining – put unions under pressure to initiate revitalization efforts. They took place on three different fronts. First, Swiss unions responded to the harsher economic context by investing more resources into political action, using direct democratic instruments to block neoliberal reforms. In parallel, they began to adopt new means of recruitment, targeting hitherto almost union-free private services, and resorted more frequently to strikes. Finally, the European wave of union mergers also seized the Swiss labour movement. Starting in the mid-1990s and gaining pace after 2000, a series of union mergers led to a profound restructuring of organized labour in Switzerland. |
| Keywords: | trade unions; collective bargaining; corporatism; strike; Switzerland; minimum wages; union density; union merger |
| JEL: | J51 J21 J5 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22059&r=lab |
| By: | Markus Knell (Oesterreichische Nationalbank, Economic Studies Division, Otto-Wagner-Platz 3, POB 61, A-1011 Vienna) |
| Abstract: | In this paper I study the relation between real wage rigidity (RWR) and nominal price and wage rigidity. I show that in a standard DSGE model RWR is mainly affected by the interaction of the two nominal rigidities and not by other structural parameters. The degree of RWR is, however, considerably influenced by the modelling assumption about the structure of wage contracts (Calvo vs. Taylor) and about other institutional characteristics of wage-setting (clustering of contracts,heterogeneous contract length, indexation). I use survey evidence on price- and wage-setting for 15 European countries to calculate the degrees of RWR implied by the theoretical model. The average levels of RWR are broadly in line with empirical estimates based on macroeconomic data. In order to be able to also match the observed cross-country variation in RWR it is, however, essential to move beyond the country-specific durations of price and wages and to take more institutional details into account. |
| Keywords: | Inflation Persistence, Real Wage Rigidity, Nominal Wage Rigidity, DSGE models, Staggered Contracts, |
| JEL: | E31 E32 E24 J51 |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:onb:oenbwp:161&r=lab |
| By: | Jennifer Hunt |
| Abstract: | I use the 1993 and 2003 National Surveys of College Graduates to examine the higher exit rate of women compared to men from science and engineering relative to other fields. I find that the higher relative exit rate is driven by engineering rather than science, and show that 60\% of the gap can be explained by the relatively greater exit rate from engineering of women dissatisfied with pay and promotion opportunities. Contrary to the existing literature, I find that family--related constraints and dissatisfaction with working conditions are only secondary factors. My results differ due to my use of non--science and engineering fields as a comparison group. The relative exit rate by gender from engineering does not differ from that of other fields once women's relatively high exit rates from male fields generally are taken into account. |
| JEL: | J16 J62 J71 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:mcl:mclwop:2010-03&r=lab |
| By: | Lisa Warth (United Nations Economic Commission for Europe) |
| Abstract: | This paper focuses on how the commitment of businesses to promote gender equality within their organisations can be strengthened. A dual approach of encouraging voluntary measures and corporate social responsibility for gender equality on the one hand, and regulating and enforcing change through legislative reforms on the other hand are reviewed, focusing mainly on the European region. There are arguments for a business case for gender equality in terms of better financial performance and competitiveness, improved recruitment, and retention of talent. Nevertheless gender inequalities in employment prevail. Focusing on the areas women in management and decision-making, gender pay gap and work-family reconciliation, the paper reviews innovative policy measures undertaken in the European region assessing the merits of encouragement versus regulation. The paper concludes that employers cannot solve persisting gender inequalities in the corporate sector on their own. A mix of encouraging, enabling, and obliging measures is needed to advance gender equality in the corporate sector. |
| Keywords: | gender equality, corporate sector, government policy, gender pay gap, work-family reconciliation, women in management |
| JEL: | D61 I38 J16 J21 J22 J24 J31 J58 J81 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ece:dispap:2009_4&r=lab |
| By: | Peter Sanfey (European Bank for Reconstruction and Development); Gorana Krstic (University of Belgrade) |
| Abstract: | We analyse the extent and evolution of informality and inequality in the Serbian labour market between 2002 and 2007, using data from the Living Standard Measurement Surveys (LSMS). Two surprising results emerge. First, the level of informal employment has risen significantly over the period, despite strong economic growth and the introduction of a range of market-oriented reforms. Second, the level of inequality in earnings seems to have remained more or less constant over the period, in contrast to the experience of other countries at a similar stage of transition. We show that informal employees earn significantly less than those in the formal sector, controlling for a range of other variables, and informality plays an increasingly important role in explaining earnings inequality. |
| Keywords: | Informal economy; inequality; Serbia |
| JEL: | J3 J4 P2 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ebd:wpaper:114&r=lab |
| By: | Gerard Postiglione |
| Abstract: | This paper reviews the capacity of colleges and universities to serve poor and vulnerable populations during past and present economic shocks. The main argument is that the environment of the global recession—an Asia far more economically integrated than during past economic shocks, with more unified aspirations to be globally competitive and socially responsible—need not delay reforms in higher education. [ADBI WP 208]. |
| Keywords: | colleges, universities, poor, vulnerable, population, environemnt, global, recession, Asia, education, economic, socially responsible, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2469&r=lab |