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on Labour Economics |
| By: | Mirjam van Praag (University of Amsterdam); Arjen van Witteloostuijn (University of Antwerp, and Utrecht University); Justin van der Sluis (University of Amsterdam) |
| Abstract: | How valuable is education for entrepreneurs’ performance as compared to employees’? What might explain any differences? And does education affect peoples’ occupational choices accordingly? We answer these questions based on a large panel of US labor force participants. We show that education affects peoples’ decisions to become an entrepreneur negatively. We show furthermore that entrepreneurs have higher returns to education than employees (in terms of the comparable performance measure ‘income’). This is the case even when estimating individual fixed effects of the differential returns to education for spells in entrepreneurship versus wage employment, thereby accounting for selectivity into entrepreneurial positions based on fixed individual characteristics. We find these results irrespective of whether we control for general ability and/or whether we use instrumental variables to cope with the endogenous nature of education in income equations. Finally, we find (indirect) support for the argument that the higher returns to education for entrepreneurs is due to fewer (organizational) constraints faced by entrepreneurs when optimizing the profitable employment of their education. Entrepreneurs have more personal control over the profitable employment of their human capital than wage employees. |
| Keywords: | entrepreneurship; self-employment; returns to education; performance; personal control; locus of control; human capital; wages; incomes |
| JEL: | J23 J24 J31 J44 M13 |
| Date: | 2009–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20090111&r=lab |
| By: | Kilponen, Juha (Bank of Finland Research and European Central Bank); Santavirta, Torsten (Aalto University School of Economics) |
| Abstract: | We improve the precision of the test of the implicit contract model that Beaudry and DiNardo proposed twenty years ago. Our data set allows us to define the precise industry and plant of a particular employment relationship, link local labour market characteristics and company characteristics to the individual level of wages, and control for composition effects. We find evidence in favour of the spot market model of wage setting in the whole sample, but there is significant variation across industries and educational levels. In particular, the spot market matters most for low-skill workers, while the implicit contract model with one-sided limited commitment applies better to high-skill workers. |
| Keywords: | wage cyclicality; limited commitment; match-specific fixed effects |
| JEL: | E32 J41 J64 |
| Date: | 2010–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2010_012&r=lab |
| By: | Achim Schmillen (Osteuropa-Institut, Regensburg (Institut for East European Studies)); Joachim Möller (Institute for Employment Research (IAB)) |
| Abstract: | Building on a large administrative micro data set for the time span 1975 - 2004 we look at lifetime unemployment for West German birth cohorts 1950 to 1954. Descriptive evidence shows a highly uneven distribution of unemployment in West Germany - more than 60% of the individuals in our sample were not unemployed for a single day over the better part of their professional career while almost half of the total amount of unemployment fell upon 5% of the individuals covered. We employ censored quantile regressions to explain the amount of individual lifetime unemployment. Explanatory variables are either characteristics of the individual (like education), or of the job (like the wage) or the employer (like the size of the firm) early in the professional career. A particular emphasis is placed on the importance of the occupation: we find that for men working in a disadvantageous occupation at age 25 ceteris paribus leads to a signicantly higher amount of lifetime unemployment. Educational attainment or the wage earned at age 25 are also related to the amount of men's lifetime unemployment, amongst others. Some of these variables show very interesting patterns when looking at dierent quantiles. For women results are in general less clear-cut. |
| Keywords: | Lifetime unemployment, Censored-Quantile Regressions, Occupations specific human capital |
| JEL: | J64 J24 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:275&r=lab |
| By: | Miguel Angel Alcobendas; Núria Rodríquez-Planas |
| Abstract: | While much of the literature on immigrants' assimilation has focused on countries with a large tradition of receiving immigrants and with flexible labor markets, very little is known on how immigrants adjust to other types of host economies. With its severe dual labor market, and an unprecedented immigration boom, Spain presents a quite unique experience to analyze immigrations' assimilation process. Using data from the 2000 to 2008 Labor Force Survey, we find that immigrants are more occupationally mobile than natives, and that much of this greater flexibility is explained by immigrants' assimilation process soon after arrival. However, we find little evidence of convergence, especially among women and high skilled immigrants. This suggests that instead of integrating, immigrants occupationally segregate, providing evidence consistent with both imperfect substitutability and immigrants' human capital being under-valued. Additional evidence on the assimilation of earnings and the incidence of permanent employment by different skill levels also supports the hypothesis of segmented labor markets. |
| Keywords: | Key words: immigrants' assimilation effects, cohort effects, and occupational distributions and mobility, segmented labor markets. |
| JEL: | J15 J24 J61 J62 |
| Date: | 2010–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:822.10&r=lab |
| By: | Rickne, Johanna (Department of Economics) |
| Abstract: | This study compares average earnings and productivities for men and women employed in roughly 200,000 Chinese industrial enterprises. Women’s average wages lag behind men’s wages by 11%, and this result is robust to the inclusion of non-wage income in the form of social insurance payments. The gender-wage gap is wider among workers with more than 12 years of education (28%), mainly because of the higher relative wages received by skilled men in foreign-invested firms. Women’s average productivity falls behind men’s productivity by a larger margin than the gap in earnings, and the null-hypothesis of earnings discrimination is thereby rejected. Equal average wages between men and women are found among firms located in China’s Special Economic Zones, and also among some light industrial sectors with high shares of female employees. Market reform hence appears to have improved women’s relative incomes. |
| Keywords: | China; gender wage gap; non-wage compensation |
| JEL: | I30 J16 J71 O10 |
| Date: | 2010–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2010_008&r=lab |
| By: | Claudia Münch (University of Amsterdam); Sweder van Wijnbergen (University of Amsterdam) |
| Abstract: | We analyze the determinants of female labor market participation for different age-groups in the European Union. We show that female participation is positively affected by tertiary education at any age. But upper secondary education increases participation only up to an age of 40 while after that it has no effect or even a negative impact The results are tested for robustness and controlled for endogeneity. The results show that increasing educational attainment levels in the female population will contribute significantly to higher aggregate participation rates. However,in simulations up to 2050 such benefits are partially offset by a negative aging effect. |
| Keywords: | female labour market participation; fertility; educational achievements; aging |
| JEL: | J22 J1 |
| Date: | 2009–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20090099&r=lab |
| By: | Jean-François Giret (IREDU - Institut de recherche sur l'éducation : Sociologie et Economie de l'Education - CNRS : UMR5225 - Université de Bourgogne, CEREQ - Centre d'études et de recherches sur les qualifications - Ministère de l'Education nationale, de l'Enseignement supérieur et de la Recherche - ministère de l'Emploi, cohésion sociale et logement); Mathieu Goudard (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579) |
| Abstract: | Our aim in this article is to study the relation between earnings of French universities graduates and some characteristics of their universities. We exploit data from the Céreq's "Génération 98" survey, enriched with information on university characteristics primarily from the ANETES (yearbook of French institutions of higher education). We employ multilevel modeling, enabling us to take advantage of the natural hierarchy in our separate datasets, and thus to identify, and even to measure potential effects of institutional quality. Since we take into account many individual students characteristics, we are able to obtain an income hierarchy among the different disciplines : students who graduated in science, economics or management obtain the highest earnings. Below them, we and students who graduated in law, political science, communication or language and literature, while the ones who graduated in social studies earn the lowest incomes. On the institutional level, we need two significant quality effects : the rest is from the socioeconomic composition of the university's student population, and the second effect is from the university's network in the job market. These last two results remain stable when we examine subsamples of universities according to their dominant teaching fields, except for universities that are particularly concentrated in science. |
| Keywords: | Demand for schooling, educational economics, human capital, salaries wage differentials, school choice |
| Date: | 2010–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00480289_v1&r=lab |
| By: | D. BOROWCZYK MARTINS (University of BristoL, Department of Economics); V. VANDENBERGHE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | In this paper we explore a matched employer-employee data set to investigate the presence of gender wage discrimination in the Belgian private economy labour market. We identify and measure gender wage discrimination from firm-level data using a labour index decomposition pioneered by Hellerstein and Neumark (1995), which allows us to compare direct estimates of a gender productivity differential with those of a gender labour costs differential. We take advantage of the panel structure of the data set and identify gender wage discrimination from within-firm variation. Moreover, inspired by recent developments in the production function estimation literature, we address the problem of endogeneity in input choice using a structural production function estimator (Levinsohn and Petrin, 2003). Our results suggest that there is no gender wage discrimination inside private firms located in Belgium. |
| Keywords: | labour productivity; wages; gender discrimination; structural production function estimation; panel data |
| JEL: | J24 C52 D24 |
| Date: | 2010–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2010007&r=lab |
| By: | Galeotti A (Department of Economics, University of Essex); Merlino L (ECARES, Universitè Libre de Bruxelles) |
| Abstract: | We develop a model where workers, anticipating the possibility of unemployment, invest in connections to access information about available jobs. The investment in connections is high when the job separation rate is moderate, otherwise the investment in connections is low. The response of network investment to labor market conditions generates novel predictions. In particular, the probability that a worker finds a new job via his connections increases in the separation rate, when the separation rate is low, and it decreases otherwise. These predictions are supported by the empirical patterns which we document for the UK labor market. |
| Date: | 2010–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2010-14&r=lab |
| By: | John Ermisch; Chiara Pronzato |
| Abstract: | The paper shows that parents’ education is an important, but hardly exclusive part of the common family background that generates positive correlation between the educational attainments of siblings from the same family. But the correlation between the educational attainments of parents and those of their children overstates considerably the causal effect of parents’ education on the education of their children. Our estimates based on Norwegian twin-mothers indicate that an additional year of either mother’s or father’s education increases their children’s education by as little as one-tenth of a year. There is some evidence that the mother’s effect is larger among poorer educated parents, while the father’s effect is larger among better educated parents. We also find that the effect of mother’s education is larger for daughters than sons. There is evidence that father’s education has a larger effect than that of mothers in both the USA and Norway, but the difference in the estimated parental effects is much larger in the USA and is statistically significantly there. One explanation for a smaller maternal effect is that better educated mothers work more in paid employment and spend less time interacting with their children. We test this hypothesis using a ‘matching estimator’ for Norway and find no evidence to support it; indeed children of otherwise identical mothers (on a number of criteria, including both parents education) who worked more in paid employment completed more years of education. |
| Keywords: | Parents Education, Children Education |
| JEL: | D0 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp05_10&r=lab |
| By: | Olivier Bargain (University College Dublin); Prudence Kwenda (University College Dublin) |
| Abstract: | The informal sector plays an important role in the functioning of labor markets in emerging economies. To characterize better this highly heterogeneous sector, we conduct a distributional analysis of the earnings gap between informal and formal employment in Brazil, Mexico and South Africa, distinguishing between dependent and independent workers. For each country, we use rich panel data to estimate fixed effects quantile regressions to control for (time-invariant) unobserved heterogeneity. The dual nature of the informal sector emerges from our results. In the high-tier segment, self-employed workers receive a significant earnings premium that may compensate the benefits obtained in formal jobs. In the lower end of the earnings distribution, both informal wage earners and independent (own account) workers face significant earnings penalties vis-à-vis the formal sector. Yet the dual structure is not balanced in the same way in all three countries. Most of the self-employment carries a premium in Mexico. In contrast, the upper-tier segment is marginal in South Africa, and informal workers, both dependent and independent, form a largely penalized group. More consistent with the competitive view, earnings differentials are small at all levels in Brazil. |
| Keywords: | self-employed, salary work, informal sector, earnings differential, quantile regression, fixed effects model |
| Date: | 2010–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201003&r=lab |
| By: | Cigno, Alessandro |
| Abstract: | As the return to education (and possibly also parental income) is uncertain, and given that the work a child does covertly for his own parents, and transfers between parents and children, are private information, the government should make school enrollment compulsory, set a legal limit (decreasing in parental income) on overt child labour, and redistribute across families using a flat-rate education grant, and a tax on parental income. That done, it should use a scholarship increasing in school results, and a tax on the skill premium, to raise the expected return to educational investment, and make it less uncertain. |
| Keywords: | child labour, education, uncertainty, moral hazard |
| JEL: | D82 H21 H31 I28 J24 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:hit:piecis:474&r=lab |
| By: | Mathias HUNGERB†HLER (FUNDP, University of Namur); Etienne LEHMANN (CREST, IZA, IDEP and UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Žconomiques et sociales (IRES)); Alexis PARMENTIER (EPEE - UniversitŽ d'Evry, TEPP-CNRS and UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Žconomiques et sociales(IRES)); Bruno VAN DER LINDEN (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES), FNRS, ERMES-UniversitŽ Paris 2 and IZA) |
| Abstract: | We propose a canonical model of optimal nonlinear redistributive taxation with matching unemployment. In our model, agents are endowed with different skill levels and labor markets are perfectly segmented by skill. The government only observes negotiated wages. More progressive taxation leads to wage moderation that boosts labor demand. We design the optimal nonlinear redistributive tax schedule in the absence of welfare benefits and extensive labor supply margin. Compared to theire efficient values, at the optimum gross wages and unemployment are lower. Average tax rates are moreover increasing in wages. The robustness of these properties is also discussed. |
| Date: | 2010–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2010008&r=lab |
| By: | Núria Rodríquez-Planas |
| Abstract: | This paper is the first to use a randomized trial in the US to analyze the short- and long-term educational and employment impacts of an afterschool program that offered disadvantaged high-school youth: mentoring, educational services, and financial rewards with the objective to improve high-school graduation and postsecondary schooling enrollment. The short-term hefty beneficial average impacts quickly faded away. Heterogeneity matters. While encouraging results are found for younger youth, and when the program is implemented in relatively small communities of 9th graders; detrimental long- lived outcomes are found for males, and when case managers are partially compensated by incentive payments and students receive more regular reminders of incentives. |
| Keywords: | short-, medium- and long-term effects, after-school programs, intrinsic and extrinsic motivation, and educational and employment outcomes. |
| JEL: | C93 I21 I22 I28 J24 |
| Date: | 2010–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:821.10&r=lab |
| By: | AYSIT TANSEL (Middle East Technical University & Institute for Study of Labor); H.MEHMET TASÇI (Balikesir University) |
| Abstract: | There is little evidence on unemployment duration and its determinants in developing countries. This study is on the duration aspect of unemployment in a developing country, Turkey. We analyze the determinants of the probability of leaving unemployment for employment or the hazard rate. The effects of the personal and household characteristics and the local labor market conditions are examined. The analyses are carried out for men and women separately. The results indicate that the nature of unemployment in Turkey exhibits similarities to the unemployment in both the developed and the developing countries. |
| Keywords: | Unemployment Duration, Hazard Analysis, Gender, Turkey |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:tek:wpaper:2010/6&r=lab |
| By: | Mevlude Akbulut-Yuksel (Dalhousie University); Hoyt Bleakley (University of Chicago Booth School of Business); Aimee Chin (University of Houston) |
| Abstract: | We test whether the effect of English proficiency differs between Hispanic and non-Hispanic immigrants. Using 2000 U.S. Census microdata on immigrants who arrived before age 15, we relate labor market, education, marriage, fertility and location of residence variables to their age at arrival in the U.S., and in particular whether that age fell within the “critical period” of language acquisition. We interpret the observed difference in outcomes between childhood immigrants who arrive during the critical period and those who arrive later (adjusted for non-language-related age-at-arrival effects using childhood immigrants from English-speaking countries) as an effect of English-language skills and construct an instrumental variable for English-language skills. We find that both Hispanics and non-Hispanics exhibit lower English proficiency if they arrive after the critical period, but this drop in English proficiency is larger for Hispanics. The effect of English proficiency on earnings and education is nevertheless quite similar across groups, while some differences are seen for marriage, fertility, and location of residence outcomes. In particular, although higher English proficiency reduces (for both groups) the number of children and the propensity to be married, marry someone with the same birthplace or origin, and live in an “ethnic enclave,” these effects are smaller for Hispanics. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:201007&r=lab |
| By: | Migheli, Matteo |
| Abstract: | This paper analyses the relationship between workers' gender and monetary incentives in an experimental setting based on a double-tournament scheme. The participants must choose between a piece-rate payment or a performance prize. The results show that women tend to shy away from competition, and are less sensitive than men to the monetary incentives of the tournament. In addition the tournament scheme induces males, but not women, to signal their ability and to select the contract which is more profitable for them. |
| Keywords: | gender, incentives, work, experiment |
| JEL: | C91 J16 J41 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucapdv:142&r=lab |
| By: | Veliziotis M (Institute for Social and Economic Research) |
| Abstract: | Does union membership increase sickness absence from work and, if so, by how much? And which specific channels does this effect operate through? Using UK Labour Force Survey data for 2006-2008 we find that trade union membership is associated with a substantial increase in the probability of reporting sick and in the amount of average absence taken. This result can be largely attributed to the protection that unions offer to unionized employees. Supportive evidence is also found for a reduction in “presenteeism” (attending work when sick) among union members. The results are robust to different modelling and estimation approaches. |
| Date: | 2010–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2010-15&r=lab |
| By: | Matteo PICCHIO (Tilburg University, Department of Economics, CentER, ReflecT and IZA, Germany); Chiara MUSSIDA (Department of Economics and Social Sciences, Universitˆ Cattolica, Milan and Prometeia spa, Bologna) |
| 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: | 2010–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2010005&r=lab |
| By: | Bettina Büttner (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Stephan Thomsen (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | This paper analyzes the impact of shortening the duration of secondary schooling on the accumulation of human capital. In 2003, an educational policy reform was enacted in Saxony-Anhalt, a German state, providing a natural experimental setting. The thirteenth year of schooling was eliminated for those students currently attending the ninth grade. Tenth grade students were unaffected. The academic curriculum remained almost unaltered. Primary data collected from the double cohort of 2007 Abitur graduates reveals signficantly negative effects for both genders in mathematics. Only females were negatively effected in English and the results obtained in German literature were statistically insignificant. |
| Keywords: | student performance, school duration, learning intensity, natural experiment |
| JEL: | I21 J18 C21 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:100008&r=lab |
| By: | Ciriaci, Daria; Muscio, Alessandro |
| Abstract: | Universities have come under increasing pressure to become key drivers of economic development in the age of the knowledge economy. Yet we know very little about the impact of university quality and scientific excellence on the probability of graduates finding jobs. This paper investigates the determinants of Italian graduates’ employability 1-year and 3-years after graduation, with special reference to university quality measured in terms of research performance. Our results confirm that the ‘better’ the university, the higher the likelihood that graduates will be employed. We also observe strong effects associated with field of study, and wide regional differences. |
| Keywords: | University quality; returns to education; labour market outcomes; employment |
| JEL: | I23 J24 |
| Date: | 2010–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22527&r=lab |
| By: | Hans G. Bloemen (VU University Amsterdam) |
| Abstract: | Most empirical studies on the impact of labour income taxation on the labour supply behaviour of households use a unitary modelling approach. In this paper we empirically analyze income taxation and the choice of working hours by combining the collective approach for household behaviour and the discrete hours choice framework with fixed costs of work. We identify the sharing rule parameters with data on working hours of both the husband and the wife within a couple. Parameter estimates are used to evaluate various model outcomes, like the wage elasticities of labour supply and the impacts of wage changes on the income sharing between husband and wife. We also simulate the consequences of a policy change in the tax system. We find that the collective model has different empirical outcomes of income sharing than a restricted model that imposes pooling of men's earnings and the household's non-labour income in the female's budget constraint. These differences in outcomes have consequences for the evaluation of a policy change in the tax system. |
| Keywords: | Labour supply; Household Behaviour; Collective Model; Taxation |
| JEL: | J22 |
| Date: | 2010–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100010&r=lab |
| By: | Eileen Trzcinski; Elke Holst |
| Abstract: | This study used data from the German Socio-economic Panel to examine gender differences in the extent to which self-reported subjective well-being was associated with occupying a high-level managerial position in the labour market, compared with employment in nonleadership, non-high-level managerial positions, unemployment, and non-labour market participation. Our results indicated that a clear hierarchy exists for men in term of how status within the labour market was associated with subjective life satisfaction. Unemployed men were the least satisfied, followed by men who were not in the labour market, while men in leadership positions reported the highest level of subjective life satisfaction. For women, no statistically significant differences were observed among women in high-level managerial positions, women who worked in non-high-level positions, and women who specialized in household production, with no market work. Only women who were unemployed reported lower levels of life satisfaction, compared with women in other labour-market statuses. Our results lend evidence to the contention that men can "have it all", but women must still choose between career and family in Germany. We argue that interventions need to address how the non-pecuniary rewards associated with high-level managerial and leadership positions can be increased for women. Such policies would also likely serve to mitigate the "pipeline" problem concerning the number of women who are available to move into high positions in the private sector. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp998&r=lab |
| By: | Maciej Jakubowski (Faculty of Economic Sciences, University of Warsaw; Organisation for Economic Co-operation and Development (OECD)); Harry Anthony Patrinos (World Bank); Emilio Ernesto Porta (World Bank); Jerzy Wiśniewski (Center for Social and Economic Research (CASE), Poland) |
| Abstract: | Increasing the share of vocational secondary schooling has been a mainstay of development policy for decades, perhaps nowhere more so than in formerly socialist countries. The transition, however, led to significant restructuring of school systems, including a declining share of vocational students. Exposing more students to a general curriculum could improve academic abilities. This paper analyzes Poland’s significant improvement in international achievement tests and the restructuring of the education system that expanded general schooling to test the hypothesis that delayed vocational streaming improves outcomes. Using propensity score matching and differences-in-differences estimates, the authors show that delayed vocationalization had a positive and significant impact on student performance on the order of one standard deviation. |
| Keywords: | education, streaming, tracking, curriculum |
| JEL: | I21 I28 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2010-04&r=lab |
| By: | Kevin Denny (University College Dublin); Orla Doyle (University College Dublin); Patricia O'Reilly (University College Dublin); Vincent O'Sullivan (University of Warwick) |
| Abstract: | There is a well established socioeconomic gradient in educational attainment, despite much effort in recent decades to address this inequality. This study evaluates a university access program that provides financial, academic and social support to low socioeconomic status (SES) students using a natural experiment which exploits the time variation in the expansion of the program across schools. The program has parallels with US affirmative actions programs, although preferential treatment is based on SES rather than ethnicity. Evaluating the effectiveness of programs targeting disadvantaged students in Ireland is particularly salient given the high rate of return to education and the lack of intergenerational mobility in educational attainment. Overall, we identify positive treatment effects on first year exam performance, progression to second year and final year graduation rates, with the impact often stronger for higher ability students. We find similar patterns of results for students that entered through the regular system and the ‘affirmative action’ group i.e. the students that entered with lower high school grades. The program affects the performance of both male and female students, albeit in different ways. This study suggests that access programs can be an effective means of improving academic outcomes for socio-economically disadvantaged students. |
| Keywords: | Education inequality, Access programs, Natural experiment, Economics of education |
| Date: | 2010–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201011&r=lab |
| By: | Olof Åslund (IFAU & Uppsala University); Per-Anders Edin (IFAU & Uppsala University); Peter Fredriksson (Stockholm University); Hans Grönqvist (SOFI, Stockholm University) |
| Abstract: | We examine to what extent immigrant school performance is affected by the characteristics of the neighborhoods that they grow up in. We address this issue using a refugee placement policy which provides exogenous variation in the initial place of residence in Sweden. The main result is that school performance is increasing in the number of highly educated adults sharing the subject’s ethnicity. A standard deviation increase in the fraction of high-educated in the assigned neighborhood raises compulsory school GPA by 0.9 percentile ranks. This magnitude corresponds to a tenth of the performance gap between refugee immigrant and native-born children. |
| Keywords: | Peer effects, ethnic enclaves, immigration, school performance |
| JEL: | J15 I20 Z13 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/5/doc2010-19&r=lab |
| By: | Patrizia Luongo (Università di Bari) |
| Abstract: | The aim of the study is to test for equality of opportunity at the entry into the national labour market of Italian graduates. By using an Italian survey data on the transition from university to work, we focus on the probability to get a job within three years from the graduation, and we find significant differences across individuals with different family background. In an attempt to explain whether these differences refiect opportunity inequality, we adopt the Gomulka-Stern decomposition method. This method allows us to decompose differences in the probability to find a job between groups of people with different family background into two additive components. The first component can be attributed to differ- ences between groups in the distribution of individualsfi characteristics. The second component is a residual difference which can be attributed to opportunity inequality under the assumption that there is no unobserved heterogeneity between groups. In the presence of unobserved heterogeneity, this residual component gives us a biased estimation for the difference in probability explained by opportunity inequality. |
| Keywords: | Inequality of Opportunity, Higher Education, Gomulka-Stern Decomposition. |
| JEL: | D63 I2 C25 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:bai:series:wp0030&r=lab |
| By: | Giorgio Brunello; Daniele Fabbri; Margherita Fort |
| Abstract: | We find that the protective effect of years of schooling on the BMI of European females is non negligible, but smaller than the one recently found for the US. By using individual standardized cognitive tests instead of years of schooling as the measure of education we show that the current focus in the literature on years of schooling is not misplaced. We also investigate whether the response to changes in compulsory education is heterogeneous, and find that the protective effect of schooling is stronger among overweight than among obese females. |
| Keywords: | obesity, human capital, Europe |
| JEL: | I12 I21 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp02_10&r=lab |
| By: | Elliott Fan; Xin Meng; Zhichao Wei; Guochang Zhao |
| Abstract: | Estimating the rate of return to a university degree has always been difficult due to the problem of omitted variable biases. Benefiting from a special feature of the University Admission system in China, which has clear cutoffs for university entry, combined with a unique data set with information on individual National College Entrance Examination (NCEE) scores, we estimate the Local Average Treatment Effects (LATE) of university education based on a Regression Discontinuity design. To the best of our knowledge, this is the first study to use RD design to estimate the causal effect of a university education on earnings. Our results show that the rates of return to 4-year university education relative to 3-year college education are 40 and 60 per cent for the compliers in the male and female samples, respectively, which are much larger than the simple OLS estimations revealed in previous literature. Since in our sample a large proportion of individuals are compliers (45 per cent for males and 48 per cent for females), the LATEs estimated in this paper have a relatively general implication. In addition, we find that the LATEs are likely to be larger than ATEs, suggesting that the inference drawn from average treatment effects might understate the true effects of the university expansion program introduced in China in 1999 and thereafter. |
| Keywords: | Rate of return to education, Regression Discontinuity Design, China |
| JEL: | I21 I28 J24 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:auu:dpaper:634&r=lab |
| By: | Alfonso Arpaia; Gilles Mourre |
| Abstract: | This paper presents a selective survey of the recent literature on labour market institutions and performance and offers new empirical EU-based evidence on the impact of labour market reforms on employment and labour market adjustment. While the literature traditionally treats labour market institutions as exogenous, attention shifted recently towards understanding the underlying causes of specific institutional arrangements. As a consequence, the literature highlights the great importance of an efficient policy design exploiting these interactions wisely and identifies general principles for achieving an efficient policy design at both macro and micro levels. While empirical evidence does no show a major change in terms of intensity of labour market reform after the setting of the Economic and Monetary Union and the creation of the euro, the reforms aiming at strengthening the labour market attachment of vulnerable groups tend to have been successful both in raising their employment and increasing labour market adjustment. |
| Keywords: | 'Institutions and Performance in European Labour Markets', 'labour market functioning; political economy; endogeneity; institutions; policy design'; Arpaïa, Mourre |
| JEL: | J20 J50 J64 K31 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:euf:ecopap:0391&r=lab |
| By: | Christiano, Lawrence J. (Northwestern University); Trabrandt, Mathias (European Central Bank); Walentin, Karl (Research Department, Central Bank of Sweden) |
| Abstract: | We propose a monetary model in which the unemployed satisfy the official US definition of unemployment: they are people without jobs who are (i) currently making concrete efforts to find work and (ii) willing and able to work. In addition, our model has the property that people searching for jobs are better off if they find a job than if they do not (i.e., unemployment is ‘involuntary’). We integrate our model of invol- untary unemployment into the simple New Keynesian framework with no capital and use the resulting model to discuss the concept of the ‘non-accelerating inflation rate of unemployment’. We then integrate the model into a medium sized DSGE model with capital and show that the resulting model does as well as existing models at accounting for the response of standard macroeconomic variables to monetary policy shocks and two technology shocks. In addition, the model does well at accounting for the response of the labor force and unemployment rate to the three shocks. |
| Keywords: | DSGE; unemployment; business cycles; monetary policy; Bayesian estima- tion. |
| JEL: | E20 E30 E50 J20 J60 |
| Date: | 2010–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:rbnkwp:0238&r=lab |
| By: | Kai-Uwe Müller; Viktor Steiner |
| Abstract: | In view of rising wage and income inequality, the introduction of a legal minimum wage has recently become an important policy issue in Germany. We analyze the distributional effects of a nationwide legal minimum wage of 7.50 € per hour on the basis of a microsimulation model which accounts for the complex interactions between individual wages, the tax-benefit system and net household incomes, also taking into account potential employment effects as well as indirect effects on consumption. Simulation results show that the minimum wage would be rather ineffective in raising net household incomes and reducing income inequality, even if it led to a substantial increase in hourly wages at the bottom of the wage distribution. The ineffectiveness of a minimum wage in Germany is mainly due to the existing system of means-tested income support and the position of minimum wage earners in the income distribution. |
| Keywords: | minimum wage, wage distribution, employment effects, income distribution, inequality, microsimulation |
| JEL: | I32 H31 J32 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1000&r=lab |
| By: | Elbert Dijkgraaf (Erasmus University Rotterdam); Raymond H.J.M. Gradus (VU University Amsterdam, and Erasmus University Rotterdam); Matthijs de Jong (Erasmus University Rotterdam) |
| Abstract: | Ample evidence is available for the effect of competition on educational quality as only a few countries allow large scale competition. In the Netherlands free parental choice is present since the beginning of the 20th century, which can be characterized as a full voucher program with 100% funding. Based on panel data for the Netherlands we show that there is a relation between competition and educational outcomes in secondary education, but that it is negative and small. This effect is larger for small and medium sized schools and for schools which do not have a Protestant or Catholic denomination. |
| Keywords: | Competition; Private Schools; Scale; Quality; Secondary Education |
| JEL: | H70 I20 |
| Date: | 2009–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20090100&r=lab |
| By: | Jenny Chesters |
| Abstract: | This paper examines whether the expansion of higher education has reduced inequality by providing more opportunities for students from less privileged backgrounds to attend university or further entrenched existing inequalities. Drawing on Maximally Maintained Inequality theory and Relative Risk Aversion theory, I use logistic regressions to analyse data collected by three nationally representative, crosssectional surveys conducted between 1987 and 2005 (N= 4463) to examine the association between parents’ education and child’s education. Having a universityeducated parent is used as a proxy for membership of the privileged class based on the assumption that children of university-educated parents are more likely to take advantage of opportunities to acquire higher education. University-educated parents are also better placed to provide extra tuition and to assist their children negotiate the education system. I find that although the expansion of higher education has had some impact, having a university-educated parent continues to exert a direct effect on an individual’s propensity to graduate from university. |
| Keywords: | Higher Education, Inequality, Mobility |
| JEL: | I23 N30 Z13 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:auu:dpaper:637&r=lab |
| By: | Alfonso Arpaia; Kamil Dybczak; Fabiana Pierini |
| Abstract: | After presenting an extensive overview of the reforms undertaken in the EU between 1990 and 2006, The paper assess with a diff-in-diff technique the short-term effects of pension reforms on the participation rates of individuals aged between 50 and 64 years. The analysis suggests that in the short-term pension reforms have different effects on the participation rate of men and women. First, reforms tightening the access to early retirement have a positive effect on female participation, but reduce somewhat male participation rates. Second, the results for non-fundamental reforms are more uncertain. Third, reforms that change the way of financing pensions or the eligibility conditions (what we dubbed fundamental reforms), usually with long phasing-in periods, may have unintended short-run effects on the female participation rate. Thus, our findings point at the importance of designing pension reforms and strategies to reform social security that reduce the risks of undesired effects on the decision to remain in the labour market. Workers' information about pension rules and uncertainties about long transition periods may influence in the short-term the retirement decision in a way which is not consistent with the intended effects of the reform |
| Keywords: | Diff-in-Diff, pension reforms, participation rates, Arpaia, Dybczak, Pierini |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:euf:ecopap:0385&r=lab |
| By: | Rana Hendy (Centre d'Economie de la Sorbonne et CREST-INSEE); Catherine Sofer (Centre d'Economie de la Sorbonne - Paris School of Economics) |
| Abstract: | This paper examines the intrahousehold ressource allocation in Egyptian married couples and its impact on females labor supply. Using data from the Egyptian Labor market and Panel Survey of 2006, we estimate a discrete-choice model for female labor supply within a collective framework. The economic model incorporates the possibility of non-participation for females which represents the working situation of more than 70 percent of Egyptian married women. The originality of this paper consists on testing new distribution factors, i.e., a set of exogenous variables which influence the intrahousehold allocation of resources without affecting preferences or the budget constraint. The latter are variables related to the marriage market, gender attitudes, domestic violence, direct access to the household income and participation in household decision making. Indentification of the model relies on the assumption that only some parameters of the utility function are identical for single and married females. We find significant relations between females bargaining power and labor supply decisions. This study's results has important policy implications. |
| Keywords: | Collective model, labor supply, distribution factors, maximum simulated likelihood, Egypt. |
| JEL: | D11 D12 J22 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:10035&r=lab |
| By: | Christian Lehmann (International Policy Centre for Inclusive Growth); Guilherme Issamu Hirata (International Poverty Centre) |
| Abstract: | An increasing number of policies in developing countries seek to empower women through female entrepreneurship. Many microfinance institutions (MFIs), for example, lend exclusively to women. Loans are usually combined with capacity building workshops on entrepreneurial activities such as the production of handicrafts, clothes or food to be sold in local markets. While there is evidence that these strategies have been successful in empowering women (Panjaitan-Drioadisuryo and Cloud, 1999), less is known about how such an increase in mothers? non-domestic labour affects the working hours of their children. In the few available studies, the results are ambiguous: see, for example, Hazarika et al. (2007) and Dehejia and Gatti (2002). Drawing on a study of Mexico (Lehman, 2010), this One Pager points out that policies which encourage the small business activities of women may lead to an increase in child labour. It hypothesises that the provision of family and/or social support infrastructure (full-day schools and childcare facilities), and/or policies that encourage investment in the children?s future, may help mitigate these unintended impacts. |
| Keywords: | Unintended Effects of Microfinance: An Increase in Child Labour in Some Contexts? |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:opager:108&r=lab |
| By: | Rana Hendy (Centre d'Economie de la Sorbonne - Paris School of Economics et CREST-INSEE) |
| Abstract: | The present research explores for the first time to our best knowledge the extremely biased division of labor within Egyptian households. Time activities in respect of paid and unpaid work are an important aspect of this study. The classical dichotomy of "work in the market" versus "leisure" may serve as a good approximation of the role the male plays in the production activity of the household but does gross injustice to the female since it overlooks the whole time she spends, outside the market, on domestic activities. And, studying the females' invisible unpaid work is crucial since it remains the female's main occupation. Time use profiles are constructed using the Egyptian time use data available, only for females, in the Egyptian Labor Market and Panel Surveys of 1998 and 2006. The empirical exercise consists in, on the one hand-analyzing the main features of Egyptian females' time allocation relying on both cross-sectional and longitudinal analysis. On the other hand, we estimate a Propensity Score Matching model in order to evaluate the effect of marriage on females market and domestic labor supplies. |
| Keywords: | Time allocation, domestic production, descriptive analysis, propensity score matching, Egypt. |
| JEL: | D13 J16 J22 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:10034&r=lab |
| By: | Carmen CAMACHO (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); I-Ling SHEN (UniversitŽ de Genve, Department of Econometrics, Institute for the Sudy of Labor (IZA) and Institut de Recherches Žconomiques et sociales de lÕUCL) |
| Abstract: | This paper examines the role of public education in the context of parental migration, and it studies the effects of an expansive income tax policy that is adopted to increase public education expenditure per pupil. It is shown that such a policy may exacerbate income inequality in the long run if for the less skilled dynasties, the benefits of more public spending on education does not make up for the negative effects of increased parental absences. However, if the migration-induced tax base erosion is not severe, an expansive income tax policy indeed enhances future human capital for all dynasties, and moreover, it may help the less skilled households escape from the poverty trap, thus reducing long-run inequality. |
| Keywords: | Human Capital; Income Inequality; Parental Migration; Public Education Expenditure; Tax Base Erosion |
| JEL: | H20 H52 O15 O40 |
| Date: | 2010–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2010006&r=lab |
| By: | Paul Glewwe (Department of Applied Economics, University of Minnesota); Ana Lúcia Kassouf (Department of Economics, Esalq-University of São Paulo) |
| Abstract: | Many researchers have shown that Brazil?s Bolsa Família programme had a large impact on reducing poverty and income inequality. But evidence for the programme?s impact on educational outcomes is in short supply. Does Bolsa Família increase school enrolment? Does it reduce dropout rates? Does it improve grade promotions? (...) |
| Keywords: | What Is the Impact of the Bolsa Família Programme on Education? |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:opager:107&r=lab |
| By: | Benjamin J. Keys |
| Abstract: | This paper demonstrates the important role of job displacement in the household bankruptcy decision. I develop a dynamic, forward-looking model of unemployment and bankruptcy where persistent negative income shocks increase a household's likelihood of filing for bankruptcy both immediately and in the future. Consistent with the model's predictions, I find that households in the NLSY are 2.5 times more likely to file for bankruptcy in the year immediately following a job loss, at a rate of an additional 10 bankruptcies per 1000 job losses. Heightened bankruptcy risk then declines in magnitude but persists for two to three years. Aggregate patterns in job loss and bankruptcy are also consistent with the micro model. Using county-level data, I similarly find that 1000 job losses are associated with 8 to 11 bankruptcies and that the effects also last two to three years. In addition, the loss of a manufacturing job, a proxy for a more persistent separation, is three times more likely to lead to bankruptcy than the loss of a non-manufacturing job. The results suggest that even relatively brief unemployment spells can have significant long-term consequences on households' credit market outcomes. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2010-24&r=lab |
| By: | Alessandro Corsi; Cristina Salvioni |
| Abstract: | In a recent paper, Benjamin and Kimhi (2006) argued that using multivariate probit for analysing off-farm participation of farm couples suffers from a theoretical inconsistency. This note tries to clarify this issue, and illustrates the joint participation rules based on reservation wages of household members. The reservation wages of each household member is contingent on the participation status of the other member. Hence, participation rules have to keep into account the joint participation probabilities of the couple. |
| Keywords: | off-farm labour participation, farm household, multivariate probit |
| JEL: | J22 J43 Q12 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp03_10&r=lab |
| By: | Borghans Lex; Romans Margo; Sauermann Jan (METEOR) |
| Abstract: | Conferences are an important element in the work of researchers, requiring substantial investments in fees, travel expenses and the time spent by the participants. The aim of this paper is to identify the preferences of participants with respect to conference characteristics. Based on a sample of European labour economists, preferences are measured using the vignette approach where participants are asked to choose between hypothetical European Association of Labour Economists (EALE) conferences. We find that the keynote speakers are the most important element in the preference for a conference, followed by the location of the conference. There is substantial heterogeneity in the taste of labour economists especially with respect to location, though the link between preference parameters and measured characteristics like gender, age and seniority is limited. Factor analysis suggests that the variety in preferences can be best described by a latent variable that reflects the weights people put on content versus fun. |
| Keywords: | labour economics ; |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2010020&r=lab |