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on Labour Economics |
| By: | Chiara BROCCOLINI (Universita' Politecnica delle Marche, Dipartimento di Economia); Marco LILLA (Universita' Politecnica delle Marche, Dipartimento di Economia); Stefano STAFFOLANI (Universita' Politecnica delle Marche, Dipartimento di Economia) |
| Abstract: | Assuming random matching productivity, we present a search equilibrium model where each match ends in a vacancy, in a temporary job or in a permanent job. Centralized bargaining sets the wage rate of permanent workers whereas rms decide unilaterally the wage rate of temporary workers. In this segmented labour market: a) the wage setting function can be downward sloping; b) higher union bargaining power leads to higher wage and higher unemployment; c) average worker productivity shows a maximum with respect to union bargaining power. |
| Keywords: | Productivity, Search Model, Temporary contract, Unemployment, Unions |
| JEL: | J31 J51 J64 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:349&r=lab |
| By: | Shigeru Fujita |
| Abstract: | This paper provides a set of simple, yet overlooked, facts regarding on-the-job search and job-to-job transitions using the UK Labour Force Survey (LFS). The LFS is unique in that it asks employed workers whether they search on the job and, if so, why. The author finds that workers search on the job for very different reasons, which lead to different outcomes in both mobility and wage growth. A nontrivial fraction of workers engage in on-the-job search due to a fear of losing their job. This group mimics many known features of unemployed workers, such as wage losses upon finding a job. Workers also search on the job because they are unsatisfied. This group is roughly equally split into those who are unsatisfied with pay and those who are unsatisfied with other aspects of their job. Distinguishing these two groups allows the author to highlight the importance of the nonpecuniary value of a job. He further shows that the evidence that firms make a counteroffer in response to a worker's outside offer is scarce and that wage outcomes at the time of job-to-job transitions are closely linked to the worker's outside option. The evidence in this paper contributes not only to deepening our understanding of labor reallocation, but it also suggests the fruitful directions of future research in the labor search literature. |
| Keywords: | Job satisfaction ; Job security ; Labor market ; Employment |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:10-34&r=lab |
| By: | Piracha, Matloob (University of Kent); Tani, Massimiliano (Macquarie University, Sydney); Vadean, Florin (University of Kent) |
| Abstract: | The cause of immigrant education mismatch in the host country labour market might not necessarily be discrimination or imperfect transferability of human capital, as argued in previous studies. Immigrants who have gained professional experience in the home country in jobs below their education level might be assessed by host country employers as having lower abilities and skills than those expected from their educational qualifications. Using the Longitudinal Survey of Immigrants to Australia we show that a significant part of the variation in the immigrants' probability to be over-/under-educated in the Australian labour market can be explained by having been over-/under-educated in the last job in the home country. |
| Keywords: | immigrants, education-occupation mismatch, sample selection |
| JEL: | C34 J24 J61 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5302&r=lab |
| By: | Koskela, Erkki (University of Helsinki) |
| Abstract: | What are the impacts of labor tax reform on wage setting and employment to keep the relative tax burden per low-skilled and high-skilled workers constant in the case of heterogeneous domestic labor markets, i.e. imperfect competition in low-skilled labor and perfect competition in high-skilled labor in the presence of outsourcing? A higher degree of tax progression by raising the wage tax and the tax exemption for the low-skilled workers will decrease the wage rate and increase labor demand of low-skilled workers, whereas it will decrease (increase) employment of high-skilled workers in CES utility function when the elasticity of substitution between consumption and leisure is higher (lower) than one. A higher degree of wage tax progression for the high-skilled worker will have no effect on the high-skilled wage in the presence of CES utility function. |
| Keywords: | heterogeneous domestic labor markets, wage bargaining, impacts of labor taxation, outsourcing |
| JEL: | E24 H22 J21 J31 J51 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5313&r=lab |
| By: | Ken Yamada (School of Economics, Singapore Management University) |
| Abstract: | The difference in family background is an important source of economic inequality. This paper examines the effects on educational attainment, labor market outcomes, and family formation of family background, such as sibship size, gender composition of siblings, birth order, parental education, maternal age at birth, and parental income, for Japanese women. We nd that family background affects years of education, the completion of university degrees, participation in private tutoring school and enrichment courses, wages, occupational prestige, marriage, and fertility. We also show that the impact of family background on educational attainment has increased for recent decades. |
| Keywords: | Turnout, sibling composition, family background, intergenerational transmission |
| JEL: | J12 J13 J24 J31 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:26-2010&r=lab |
| By: | Alejandro Badel; Ximena Peña |
| Abstract: | Despite the remarkable improvement of female labor market characteristics, a sizeable gender wage gap exists in Colombia. We employ quantile regression techniques to examine the degree to which current small differences in the distribution of observable characteristics can explain the gender gap. We find that the gap is largely explained by gender differences in the rewards to labor market characteristics and not by differences in the distribution of characteristics. We claim that Colombian women experience both a “glass ceiling effect’’ and also (what we call) a “quicksand floor effect” because gender differences in returns to characteristics primarily affect women at the top and the bottom of the distribution. Also, self selection into the labor force is crucial for gender gaps: if all women participated in the labor force, the observed gap would be roughly 50% larger at all quantiles.> |
| Keywords: | Wages ; Discrimination in employment ; Colombia |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2010-045&r=lab |
| By: | Wolfgang Pointner (Oesterreichische Nationalbank, Brussels Representative Office, 1040 Brussels, Belgium.); Alfred Stiglbauer (Oesterreichische Nationalbank, Economic Analysis Division, 1090 Vienna, Austria.) |
| Abstract: | Analyzing data from the Structure of Earnings Surveys we find that wage dispersion in Austria increased marginally between 1996 and 2002. There was an increase in the returns to education which accrued only to male workers. The positive effects of tenure and especially of experience on wages decreased over time. We adopt the Machado-Mata (2005) counterfactual decomposition technique which allows to attribute changes in each wage decile to changes in worker and workplace characteristics and into changes in returns to these characteristics. Behind the small net increase in inequality we document a number of interesting gross effects that influence the wage distribution. We find that both composition effects due to gender, education and age and market-driven effects such as changes in returns and changing workplace characteristics contributed to a higher dispersion of wages. JEL Classification: J22, J31. |
| Keywords: | Wage structure, quantile regression, Machado-Mata decomposition. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20101268&r=lab |
| By: | Jose Ignacio García Pérez; Alfonso R. Sánchez Martín |
| Abstract: | This paper explores the links between unemployment, retirement and their associated public insurance programs. The analysis combines the development of a life-cycle model of search and retirement with a detailed exploration of the empirical regularities using a Spanish administrative data-set based on employment histories. Our ultimate goal is to uncover the relative contribution of bad institutional incentives versus poor labor demand to the observed low reemployment rates of Spanish workers aged 55 or over. We find that the low labor supply of the unemployed younger than 60 (the minimum retirement age) is, according to our model, largely the product of the poor conditions in the Spanish labor market. The disincentives in the regulations would not stop these workers from searching if presented with higher job offer rates. In sharp contrast, improvements in incentives will make a real difference for workers over 60. In particular, we explore the effects of changing the pension rules to link early retirement penalties to the age when the individual stops paying contributions. This reform removes the incentive to stay unemployed without searching, encouraging individuals to either retire or actively engage in a search process. As a result, the implicit fnancial liabilities of the pension system are reduced, to the extent that it would be possible to compensate all the workers that suffer direct welfare losses through the reform. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2010-26&r=lab |
| By: | Andrea Bassanini; Thomas Breda; Eve Caroli; Antoine Rebérioux |
| Abstract: | We study the compensation package offered by family firms. Using matched employer-employee data for a sample of French establishments in the 2000s, we first show that family firms pay on average lower wages to their workers. This family/non-family wage gap is robust to controlling for several establishment and individual characteristics and does not appear to be due either to the differential of productivity between family and non-family firms or to unobserved establishment and individual heterogeneity. Moreover, it is relatively homogeneous across workers with different gende, educational attainment and age. By contrast, the family/non-family wage gap is found to be larger for clerks and bluecollar workers than for managers, supervisors and technicians, for whom we find no significant wage gap. As a second step, we investigate why workers stay in family firms while being paid less. We show that these firms offer greater job security. We find evidence that the rate of dismissal is lower in family than in non-family firms. We also show that family firms rely less on dismissals and more on hiring reductions when they downsize. These results are confirmed by subjective data: the perceived risk of dismissal is significantly lower in family firms than in non-family ones. We speculate that our results can be explained either by a compensating wage differential story or by a model in which workers sort in different firms according to their preferences. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2010-40&r=lab |
| By: | Jose Ignacio García Pérez; Sergi Jiménez Martín; Alfonso R. Sánchez Martín |
| Abstract: | In this paper we analyze the sensitivity of the labour market decisions of workers close to retirement with respect to the incentives created by public regulations. We improve upon the extensive prior literature on the effect of pension incentives on retirement in two ways. First, by modeling the transitions between employment, unemployment and retirement in a simultaneous manner, paying special attention to the transition from unemployment to retirement (which is particularly important in Spain). Second, by considering the influence of unobserved heterogeneity in the estimation of the effect of our (carefully constructed) incentive variables. Using administrative data, we find that, when properly defined, economic incentives have a strong impact on labour market decisions in Spain. Unemployment regulations are shown to be particularly influential for retirement behaviour, along with the more traditional determinants linked to the pension system. Pension variables also have a major bearing on both workers’ reemployment decisions and on the strategic actions of employers. The quantitative impact of the incentives, however, is greatly affected by the existence of unobserved heterogeneity among workers. Its omission leads to sizable biases in the assessment of the sensitivity to economic incentives, a finding that has clear consequences for the credibility of any model-based policy analysis. We confirm the importance of this potential problem in one especially interesting instance: the reform of early retirement provisions undertaken in Spain in 2002. We use a difference-in-difference approach to measure the behavioural reaction to this change, finding a large overestimation when unobserved heterogeneity is not taken into account. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2010-27&r=lab |
| By: | Kassenböhmer, Sonja (RWI); Sinning, Mathias (Australian National University) |
| Abstract: | This paper analyzes changes in wage differentials between white men and white women over the period 1993-2006 across the entire wage distribution using Panel Study of Income Dynamics (PSID) data. We decompose distributional changes in the gender wage gap to assess the contribution of observed characteristics measuring individual productivity. We find that the gender wage gap narrowed by more than 13 percent at the lowest decile and by less than 4 percent at the highest decile. The decomposition results indicate that changes in the gender wage gap are mainly attributable to changes in educational attainment at the top of the wage distribution, while a sizeable part of the changes is due to work history changes at the bottom. Our findings suggest that the educational success of women could reduce the gender wage gap at the bottom of the distribution both before and during the 1990s but did not trigger a strong decline at the top of the distribution until today. |
| Keywords: | gender wage gap, decomposition analysis, unconditional quantile regression |
| JEL: | C21 J16 J31 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5303&r=lab |
| By: | Miguel Casares (Departamento de Economía-UPNA); Antonio Moreno (Departamento de Economía. Universidad de Navarra); Jesús Vázquez (Departamento FAE II, Universidad del País Vasco.) |
| Abstract: | As one alternative to search frictions, wage stickiness is introduced in a New-Keynesian model to generate endogenous unemployment fluctuations due to mismatches between labor supply and labor demand. The effects on an estimated New-Keynesian model for the U.S. economy are: i) the Calvo-type probability on wage stickiness rises, ii) the labor supply elasticity falls, iii) the implied second-moment statistics of the unemployment rate provide a reasonable match with those observed in the data, and iv) wage-push shocks, demand shifts and monetary policy shocks are the three major determinants of unemployment fluctuations. |
| Keywords: | sticky wages, unemployment, business cycles, New-Keynesian models. |
| JEL: | C32 E30 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:nav:ecupna:1003&r=lab |
| By: | K. C. Zachariah; B.A. Prakash; S. Irudaya Rajan |
| Abstract: | This is the fourth in a series of Working Papers published by the CDS on Kerala migration. Unlike the other three, this one is financed by the Kerala Government and the data were collected in UAE. The objectives of this Working Paper are to; document changes in the labour demand for different categories of emigrant workers, enumerate the emigration policies, examine employment and working conditions, wage levels and related problems of the Kerala emigrants, understand the education and training requirements of future emigrants to UAE. [Working Paper No. 326] |
| Keywords: | Kerala Government, UAE, workers, policies, education, training |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3185&r=lab |
| By: | Daniel Tortorice (Department of Economics, Brandeis University) |
| Abstract: | This paper shows that the Mortensen-Pissarides (MP) model requires endogenous separation to explain the volatility of unemployment. I estimate a version of the MP model with wage rigidity and permanent shocks to match productivity. The model generates sufficient volatility in unemployment, vacancies, job-finding and job-separation despite relatively low worker outside options. I then re-estimate the model while restricting the separation rate to be constant and show that, even though the estimation procedure finds the best fitting model, the model predicts too little variance in unemployment and too much variance in the job-finding rate. Based on this result I conclude that models of unemployment fluctuations need endogenous separation rates to explain unemployment fluctuations. |
| Keywords: | Unemployment, Search Models, Business Cycles |
| JEL: | J64 E24 E32 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:brd:wpaper:7&r=lab |
| By: | Livermore, Tanya; Siminski, Peter (University of Wollongong); Rodgers, Joan (University of Wollongong) |
| Abstract: | Labour market theory provides several reasons why mothers are likely to earn lower hourly wages than non-mothers. However, the size of any motherhood penalty is an empirical matter and the evidence for Australia is limited. This paper examines the effect of motherhood on Australian women’s wages and wage growth using a series of panel-data models which control for other relevant factors, both observed and unobserved. Using data from the Household, Income and Labour Dynamics in Australia (HILDA) survey, an unexplained motherhood wage penalty of around four per cent for one child, and eight per cent for two or more children, is found. Further analysis suggests that the wage penalty emerges over time through reduced wage growth, rather than through an immediate wage decline after the birth of a child. This reduction in wage growth is consistent with discrimination but also with a reduction in mothers’ work effort. |
| Keywords: | Motherhood Wage Penalty, Wage Growth, Fixed Effects |
| JEL: | J31 J13 C33 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:uow:depec1:wp10-12&r=lab |
| By: | Bernt Bratsberg (Ragnar Frisch Centre for Economic Research); Oddbjørn Raaum (Ragnar Frisch Centre for Economic Research); Marianne Røed (Institute for Social Research); Pål Schøne (Institute for Social Research) |
| Abstract: | We estimate the direct partial wage effect for native workers of an immigrant-induced increase in labor supply, using longitudinal records drawn from Norwegian registers and the national skill cell approach of Borjas (2003). Our results show overall negative wage impacts for both men and women. Focusing on differential wage impacts by immigrant origin, we find that immigrant inflows from the neighboring Nordic countries have more negative wage effects than inflows from developing countries. The pattern is consistent with factor demand theory if natives and other Nordic citizens are close substitutes. We also find that impact estimates, particularly for inflows from nearby countries, are sensitive to accounting for selective native attrtion and within-skill group variation in demand and supply conditions. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:201030&r=lab |
| By: | Marchand, Joseph (University of Alberta, Department of Economics) |
| Abstract: | The direct and indirect impacts of energy sector boom and bust upon local labor markets are analyzed through the differential growth in employment and earnings between areas with and without energy resources. The estimated differentials attributed to each of these labor demand shocks show that the direct impacts upon the energy sector are large while the indirect impacts upon non-energy sectors are smaller. The significant results of the local job multipliers indicate that job creation in energy extraction also creates new jobs in local sectors during boom periods while displaying no significant job loss spillovers during a bust. |
| Keywords: | boom and bust; Canada; energy; job multipliers; local labor markets; spillovers |
| JEL: | J20 R23 |
| Date: | 2010–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2010_017&r=lab |
| By: | V. K. Ramachandran; Madhura Swaminathan; Vikas Rawal |
| Abstract: | This paper examines factors affecting literacy and access to school education in West Bengal, India, and reports the results of a binomial probit model estimated with primary data from ten villages of West Bengal. In the analysis of adult literacy, the significant variables were sex, caste and occupational status and village location. In the probit results for educational achievements of children of ages 6 to 16 years in the same villages, however, occupational status was not statistically significant. In contemporary West Bengal, we argue, class barriers to school attendance have become less significant; other features of educational deprivation persist. [Working Paper 345] |
| Keywords: | Education, literacy, India, West Bengal |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3174&r=lab |
| By: | Grund, Christian (University of Würzburg); Martin, Johannes (University of Würzburg) |
| Abstract: | Based on a German representative sample of employees we explore the relevance and development of further training in private sector firms. We focus on formal training and explore possible individual and job-based determinants of its incidence. We also show changes over time during a 20 year observation period from 1989 to 2008. Most hypotheses are supported by the empirical evidence. Job status and firm size are the most relevant characteristics for training participation. Furthermore, our analyses reveal a general trend of rising training rates from 1989 to 2008 indicating an increased importance in the German labor market. |
| Keywords: | further training, GSOEP, human capital, panel data |
| JEL: | M53 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5315&r=lab |
| By: | Maria E. Canon |
| Abstract: | What explains differences in pre-market factors? Three types of inputs are believed to determine the skills agents take to the labor market: ability, family inputs and school inputs. Therefore to answer the previous question it is crucial to understand first the importance of each of those inputs. The literature on the production of achievement has not been able to provide an estimation that can take the three factors into account simultaneously at the student level. This paper intends to fill this gap by providing an estimation of the production function of achievement where both types of investments (families and schools) are considered in a framework where the inputs are allowed to be correlated with the unobserved term, ability to learn. I do that by applying Olley and Pakes’ (1996) algorithm which accommodates for endogeneity problems in the choice of inputs for the production of achievement and by using parents’ saving for their child’s postsecondary education to control for the unobserved component (i.e. ability to learn) in the production of skills. The estimates for the role of family inputs are in line to previous findings. Additionally, the estimates of school inputs show that they are also important for the formation of students’ skills even after controlling for ability to learn.> |
| Keywords: | Education - Economic aspects ; Education |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2010-042&r=lab |
| By: | Deepti Goel (Department of Economics, Delhi School of Economics, Delhi, India); Kevin Lang (Boston University and NBER, IZA) |
| Abstract: | We show that increasing the probability of obtaining a job offer through the network should raise the observed mean wage in jobs found through formal (non-network) channels relative to that in jobs found through the network. This prediction also holds at all percentiles of the observed wage distribution, except the highest and lowest. The largest changes are likely to occur below the median. We test and conrm these implications using a survey of recent immigrants to Canada. We also develop a simple structural model, consistent with the theoretical model, and show that it can replicate the broad patterns in the data. For recent immigrants, our results are consistent with the primary effect of strong networks being to increase the arrival rate of offers rather than to alter the distribution from which offers are drawn. |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cde:cdewps:189&r=lab |
| By: | O'Brien, Martin (University of Wollongong) |
| Abstract: | The governments of many developed economies are confronting a number of policy issues associated with ageing populations. For example, pension reforms, increasing the labour force participation of older workers and increasing the standard retirement age are various policy reforms suggested by the OECD to cope with the fiscal strain associated with ageing populations. However, many of the same governments now embracing these reforms had until recent times allowed the early exit of older workers from the labour force by various means in periods of excess labour supply, leading to the allegation that these governments had treated older workers as a ‘reserve army of labour’. In this paper panel models for the labour force participation of males aged 55-59 and 60-64 years in 12 OECD countries are estimated as a function of social security and labour market variables covering the time period 1967 to 2007. In contrast to previous OECD modelling, allowances are made for both country specific intercept and slope terms in various specifications, thereby allowing the incorporation of unique aspects of each country’s social security system or labour market. In addition, both long run models and also short run models incorporating error correction terms are estimated. The findings suggest that the ‘one size fits all’ policy advocated by the OECD is inadequate to address country specific factors affecting older worker labour force participation. The recent pension reforms are now out of character with the reserve army of labour explanation and results also imply that governments in many OECD countries will struggle to increase older male labour force participation through pension policy reform alone, without addressing the important role of the aggregate labour market. |
| Keywords: | Labour force participation, older workers, ageing society, reserve army of labour |
| JEL: | J21 J26 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:uow:depec1:wp10-01&r=lab |
| By: | Behaghel, Luc (CREST-INSEE); Blau, David M. (Ohio State University) |
| Abstract: | We use a US Social Security reform as a quasi-experiment to provide evidence on framing effects in retirement behavior. The reform increased the full retirement age (FRA) from 65 to 66 in two month increments per year of birth for cohorts born from 1938 to 1943. We find strong evidence that the spike in the benefit claiming hazard at 65 moved in lockstep along with the FRA. Results on self-reported retirement and exit from employment are less clear-cut, but go in the same direction. The responsiveness to the new FRA is stronger for people with higher cognitive skills. We interpret the findings as evidence of reference dependence with loss aversion. We develop a simple labor supply model with reference dependence that can explain the results. The model has potentially important implications for framing of future Social Security reforms. |
| Keywords: | retirement, social security, loss aversion |
| JEL: | J26 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5310&r=lab |
| By: | Gemus, Jonathan (Department of Economics) |
| Abstract: | This paper examines the distributional impacts of direct college costs - that is, whether the response of educational decisions to college costs varies by student characteristics. The primary obstacle in estimating these effects is the endogeneity of schooling costs. To overcome this issue, I use two measures of direct costs that are plausibly exogenous: living within commuting distance to a university and the elimination of the Social Security Student Benefit Program in the United States. Both sources of variation indicate that lower ability students are the most responsive to changes in college costs. In contrast, I find that the effect of both cost measures on college attendance and graduation does not substantially vary by family income, parent education, race or gender. |
| Keywords: | Schooling Costs; Educational Attainment; Financial Aid Policy |
| JEL: | I20 I28 J24 |
| Date: | 2010–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2010_020&r=lab |
| By: | Adriana Kemp |
| Abstract: | Since the early 1990s, Israel has enacted a managed migration scheme for low-skilled foreign workers. Originally designed to replace Palestinian cross-border workers from the Occupied Territories in the secondary labour market, in 2007 foreign workers comprised 8.7% of the private-sector labour force, 40% of them without permits. Foreign workers are employed in three major sectors: construction, agriculture and home-care for the elderly. The latter has become the largest and fastest-growing sector employing foreign workers, mainly women. The Israeli temporary labour migration scheme is characterised by a strong dependency of certain sectors on foreign workers; disengagement of governmental agencies from direct involvement in recruitment, inspection of work conditions, effective enforcement of labour laws, and provision of services for foreign workers; a strong emphasis on temporariness coupled with lengthy and sometimes indefinite extension of possible stay (up to 63 months and potentially more); and lastly, by an entrenched client politics that guides policies on quota setting, permit allocation and employer subsidies. Recent government decisions that seek to overcome the distorting effects of the scheme on the Israeli labour market, while tempering deep-rooted norms that violate workers' labour and human rights, are heading in the right direction. However, they are also destined to fail if the scheme is not substantially revised in all its parts rather than through a patchwork of focused and segmented measures.<BR>Depuis le début des années 1990, Israël a promulgué un système de gestion de l’immigration des travailleurs étrangers peu qualifiés, initialement conçu pour remplacer les travailleurs transfrontaliers des territoires palestiniens, occupés dans le marché secondaire du travail. En 2007, les travailleurs étrangers représentaient 8,7% de la force de travail du secteur privé, dont 40% étaient en situation irrégulière. Les travailleurs étrangers sont employés principalement dans trois secteurs : le BTP, l’agriculture et les soins à domicile pour les personnes âgées. Ce dernier secteur est devenu le plus important et a connu la plus forte croissance de l’emploi des travailleurs étrangers, principalement des femmes. Le régime temporaire des migration de travail en Israël se caractérise par une forte dépendance de certains secteurs envers les travailleurs étrangers; un désengagement des organismes gouvernementaux dans le processus de recrutement, la surveillance des conditions de travail, l’exécution effective des réglementations du travail, et les services de soutien aux travailleurs étrangers ; l’accent mis sur le caractère temporaire du séjour, malgré les possibilités d’extension parfois infinies (jusqu’à 63 mois et plus) et, enfin, par une politique clientéliste persistante guidée par la fixation de quotas, l’attribution des permis et des subventions à l’employeur. Quelques décisions récentes du gouvernement visant à neutraliser les effets néfastes de ce système de gestion du marché du travail israélien, tout en tempérant les normes profondément enracinées qui violent les droits du travail et de l’homme, vont dans la bonne direction. Cependant, elles seront aussi vouées à l’échec si l’ensemble du système n’est pas sensiblement revu, à la place d’un patchwork de mesures ciblées et segmentées. |
| Keywords: | foreign workers scheme, binding system, elderly home-care, closed skies, human trafficking, private brokers, Palestinian non-citizen workers, Israel |
| JEL: | F22 O15 |
| Date: | 2010–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:103-en&r=lab |
| By: | Vinoj Abraham |
| Abstract: | A persistent widening of skill based wage inequality in the Indian Organised Manufacturing sector has been reported by many researchers. Two main hypotheses had been tested in developed economies to explain such a phenomenon; an inter-sectoral shift in demand structure and an intra-sectoral shift in production technology. A decomposition of the change in wage share of skilled workers showed that sector bias explained very little of the changes in the share of skilled worker wages while more than 85 percent of the changes occurred within industries, giving support to the argument of changing skill mix within industries, rather than between industries. [Working Paper No. 437] |
| Keywords: | Skill Biased Technological Change, Wage Inequality, Information Technology, Indian Manufacturing sector |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3180&r=lab |
| By: | Herwig Immervoll; Olivier Bargain; Andreas Peichl; Sebastien Siegloch |
| Abstract: | Macro-level changes can have substantial effects on the distribution of resources at the household level. While it is possible to speculate about which groups are likely to be hardest-hit, detailed distributional studies are still largely backward-looking. This paper suggests a straight forward approach to gauge the distributional and scale implications of large output changes at an early stage. We illustrate the method with an evaluation of the impact of the 2008-2009 crisis in Germany. We take as a starting point a very detailed administrative matched employer-employee dataset to estimate labor demand and predict the effects of output shocks at a disaggregated level. The predicted employment effects are then transposed to household-level micro data, in order to analyze the incidence of rising unemployment and reduced working hours on poverty and inequality. We focus on two alternative scenarios of the labor demand adjustment process, one based on reductions in hours (intensive margin) and close to the German experience, and the other assuming extensive margin adjustments that take place through layoffs (close to the US situation). Our results suggest that the distributional and scale consequences are less severe when labor demand reacts along the intensive margin.<BR>Les changements au niveau macroéconomique peuvent exercer des effets importants sur la répartition des ressources au niveau des ménages. Alors qu’on peut conjecturer des catégories qui risquent d’être le plus fortement touchées, les études détaillées sur la distribution des revenus sont en grande partie rétrospectives. Ce document propose une approche directe pour mesurer les implications de la répartition et l’ampleur des évolutions d’ensemble à un stade précoce. La méthode est illustrée par une évaluation de l’impact de la crise de 2008-2009 en Allemagne. On utilise comme point de départ un ensemble de données administratives employeur/employé pour estimer la demande d’emploi et prédire les effets des chocs à un niveau détaillé. Les effets attendus sur l'emploi sont ensuite transposés aux micro-données au niveau du ménage de manière à analyser l’incidence de l’augmentation du chômage et de la réduction des heures de travail sur la pauvreté et l’inégalité. . Deux scénarios sur le processus d’ajustement de la demande d’emploi sont étudiés : un scénario sur la réduction des heures de travail (marge intensive), proche de l’expérience allemande ; et un scénario qui suppose des ajustements intensifs des marges par le biais des licenciements (proche de la situation existant aux États-Unis). Les résultats laissent penser que les conséquences sur la répartition et l’ampleur du phénomène sont moins sévères quand la demande d’emploi réagit selon la marge intensive |
| Keywords: | income distribution, labour demand, crisis, Tax-benefit system |
| JEL: | D58 H24 H60 J23 |
| Date: | 2010–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:110-en&r=lab |
| By: | Fernando Albornoz; Samuel Berlinski; Antonio Cabrales |
| Abstract: | We study a model where student effort and talent interact with parental and teachers' investments, as well as with school system resources. The model is rich, yet sufficiently stylized to provide novel implications. We can show, for example, that an improvement in parental outside options will reduce parental and school effort, which are partially compensated through school resources. In this way we provide a rationale for the ambiguous existing empirical evidence on the effect of school resources. We also provide a novel microfoundation for peer effects, with empirical implications on welfare and on preferences for sorting across schools. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2010-28&r=lab |
| By: | Eriksson, Tor (Aarhus School of Business); Kristensen, Nicolai (AKF, Danish Institute of Governmental Research) |
| Abstract: | The two key predictions of hedonic wage theory are that there is a trade-off between wages and nonmonetary rewards and that the latter can be used as a sorting device by firms to attract and retain the kind of employees they desire. Empirical analysis of these topics are scarce as they require detailed data on all monetary as well as nonmonetary rewards, not only for the job chosen but also for alternative offers. In this paper this data predicament is solved by the use of the vignettes method to estimate individuals' willingness to pay for fringe benefits and job amenities. We find clear negative wage-fringe trade-offs, considerable heterogeneity in willingness to pay for fringe benefits, and signs of sorting. The findings imply that personnel economics models can be applied also to the analysis of nonmonetary rewards. |
| Keywords: | fringe benefits, nonmonetary rewards, trade-off, sorting, heterogeneity |
| JEL: | J32 J33 M52 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5309&r=lab |
| By: | Ljubica Nedelkoska (Friedrich Schiller University-Jena & Max Planck Institute of Economics) |
| Abstract: | The empirical investigation into the economic relevance of knowledge codification lacks behind the allied theoretical contributions. The article empirically examines the link between codifiable work content and code-based technologies. For this purpose, we use detailed information about the tasks that employees performed at their jobs, and the work devices assisting them, in West Germany, over a period of 27 years. The main results suggest that automation decreased both the explicit manual task content within occupations and the job security of occupations specialized in such tasks. Occupations which frequently performed explicit manual tasks were disproportionally concentrated in middle of the wage distribution, contributing to the widely-observed polarization of jobs. |
| Keywords: | Skills, tasks, explicit knowledge, occupations, automation, job security |
| JEL: | J21 J24 J63 O33 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/11/doc2010-48&r=lab |
| By: | Habermalz, Steffen (Northwestern University) |
| Abstract: | Research on employer learning has provided important insights into the dynamic process that determines individual wages, especially during the early part of a worker's career. However, the recent evidence on the absence of employer learning for college graduates by Arcidiacono et al. (2008) and results that economic conditions at labor market entry have persistent effects on wages (for example Oreopoulos et al. (2008)) cast doubt on the model’s validity. This paper extends the employer learning model with the theory of rational inattention introduced by Sims (2006). In the model firms optimally allocate attention (=information processing capacity) to learning about the productivity of different worker groups. I find that firms allocate more attention to learning about the productivities of workers who have a higher impact on profits. Furthermore, firms learn about workers’ productivities as quickly as possible. Taken together these results resolve the discrepancy between the data and the employer learning model. |
| Keywords: | employer learning, rational inattention, endogenous information |
| JEL: | D21 J21 J24 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5311&r=lab |
| By: | Thomas Bassetti, Luca Corazzini, Darwin Cortes |
| Abstract: | Does immigration cause crime? To answer this question, we build a two-country general equilibrium model with search costs in which the migration (in/out-)flows, the crime rates and the equilibrium wages in the two countries are determined by the interaction between the labor market, the crime market and the decision to migrate. The main result of our model is that, in equilibrium, the relationship between immigration and crime depends on the conditions of both the labor and crime markets of the two countries. In particular, when the tightness of the labor market is sufficiently elastic relative to that of the crime market, immigration causes a reduction in the domestic crime rate of the host country. An implication of this result is that migration flows from countries with strong work rigidities to societies characterized by more elastic labor markets are mutually benefic in terms of reducing the corresponding crime rates. |
| Keywords: | Crime Rate, Labor Market, Immigration. |
| JEL: | J61 J64 K42 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:slp:islawp:islawp38&r=lab |
| By: | Alessia LO TURCO (Universita' Politecnica delle Marche, Dipartimento di Economia); Aleksandra PARTEKA (Universita' Politecnica delle Marche, Dipartimento di Economia) |
| Abstract: | We analyse the consequences of trade integration in Europe (1995-2005) detecting how the labor costs in partner countries affects the demand for domestic high- and low-skilled labor in the EU-15 and five new member states. In general, independently on the skill level, the results hint at complementarity between domestic and foreign labor. However, the demand for the high skilled in New EU members' low skill intensive sectors is boosted by the increase of the average labor cost in Old EU members, thus hinting for these sectors at the high skilled in New member countries substituting for labor in Old EU. |
| Keywords: | EU integration, labor markets, trade |
| JEL: | F15 F16 J31 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:348&r=lab |
| By: | Ken Yamada (School of Economics, Singapore Management University) |
| Abstract: | This paper examines changes in the allocation of time in response to wage variation over the life cycle among Japanese married women. We begin with the disaggregated analysis of the allocation of time and turn to the intertemporal analysis of labor supply and home production. The estimated elasticities of intertemporal substitution are moderate both in the labor supply model and the home production model. |
| Keywords: | labor supply, home production, intertemporal substitution |
| JEL: | J22 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:27-2010&r=lab |
| By: | Vijay Korra |
| Abstract: | In India, migration from rural areas is an important issue that is gaining more significance year after year. Moreover, the extent, nature, characteristics and pattern of migration have been evolving over time. In fact, the growing part of the migration taking place is seasonal and cyclical in nature. Seasonal or short duration migration is certainly not a new phenomenon in India. However, the magnitude of rural labour circulation is of recent origin, and a direct consequence of structural changes in the economy. [Working Paper No.433] |
| Keywords: | Migration, Seasonal migration, Circular/cyclical migration, Survival migration, Employment, Wage rate, Occupation, Destination, Migrants earnings, Distress |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3182&r=lab |
| By: | Nelly Exbrayat (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Carl Gaigné (INRA-ESR - Unité d'économie et de sociologie rurales - INRA); Stéphane Riou (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines) |
| Abstract: | We investigate the impact of trade liberalization upon the taxation of capital within a context of labor market rigidities. Using a model of trade and location, we show that labor market imperfections not only strengthen tax competition but also affect the relationship between trade integration and tax policies. Capital taxation follows a J-shaped relationship with trade costs when labor markets are flexible, whereas it may increase with falling trade costs in the presence of trade unions acting as Stackelberg leaders or playing simultaneously with governments. In addition, we analyze the outcome which arises from di§erences between the various countries' labor market institutions. Trade liberalization reduces the international differences in wage and capital taxation, making the unionized country more attractive. |
| Keywords: | Tax competition; unions; capital mobility; trade integration |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00537021_v1&r=lab |
| By: | Cecilia S. Lyche |
| Abstract: | This paper reviews international research in the field of dropout from upper secondary education and training in OECD countries in order to present possible solutions to policymakers faced with the completion challenge. The paper begins by presenting existing definitions of dropout and upper secondary completion and states that dropout must be understood as the final step in a process of disengagement that begins early. Causes that lead to dropout in OECD countries are then studied, and the paper illustrates that causes of dropout are highly complex and intertwined. Finally, to address these causes or risk factors, the paper reviews research that had been carried out on piloted or implemented measures across OECD countries. It finds that successful measures address several risk factors and involve action both within school, outside school and at systemic level simultaneously. The paper concludes by presenting a set of solutions according to educational level and emphasizes that preventive measures to reduce dropout should start early. Early identification enables broader, less costly measures to be set up earlier and leaves the more costly one-on-one measures for later stages of education to the remaining at risk students that have not yet been picked up. Overcoming the completion challenge requires a close cooperation between educational authorities and many other parts of government such as social and labour services, health services and justice system in some countries.<BR>Ce rapport étudie la recherche internationale dans le domaine du décrochage scolaire dans l'enseignement secondaire au sein des pays de l'OCDE afin de suggérer aux décideurs confrontés à ce défit des solutions possibles. Dans un premier temps, le document présente les définitions existantes et affirme que le décrochage scolaire doit être compris comme la dernière étape d'un processus de désengagement commençant tôt dans la vie éducative de l’élève. Les causes conduisant au décrochage scolaire dans les pays de l'OCDE sont ensuite étudiées, et le rapport montre qu’elles sont non-seulement complexes, mais qu’elles sont étroitement liées. Enfin, pour remédier à ces causes ou facteurs de risque, le rapport étudie la recherche qui porte sur les mesures préventives mises en oeuvre ou mises à l'essai dans les pays de l'OCDE. Il constate que les mesures fructueuses aborde plusieurs facteurs de risque et impliquent une action simultanée au sein de l'école, en dehors de l'école et au niveau systémique. Le rapport conclut en présentant un ensemble de solutions selon le niveau d'éducation et souligne que les mesures préventives pour réduire le décrochage scolaire doivent être prises de bonne heure. L'identification précoce permet la mise en place de mesures globales, moins coûteuses aux premiers stades de l’éducation et relègue la mise en place de mesures individuelles plus coûteuses aux étapes ultérieures. Ces dernières concernent les élèves à risque n’ayant pas encore été identifiés. Surmonter le défi du décrochage scolaire exige une coopération étroite entre les autorités éducatives et de nombreux autres secteurs du gouvernement tels que les services sociaux et de l’emploi, les services de santé et, dans certains pays, le système judiciaire. |
| Keywords: | accès préférentiel au marché |
| Date: | 2010–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaab:53-en&r=lab |
| By: | Alejandro Badel; Mark Huggett |
| Abstract: | Data on consumption, earnings, wages and hours dispersion over the life cycle is commonly viewed as incompatible with a Pareto efficient allocation. We show that a model with preference and wage shocks and full insurance produces the rise in consumption, wages and hours dispersion over the life cycle found in U.S. data. The efficient allocation model requires an increasing preference shifter dispersion profile to account for an increasing consumption dispersion profile. We examine U.S. data and find support for the view that the dispersion in preference shifters increases with age.> |
| Keywords: | Consumption (Economics) ; Econometric models |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2010-046&r=lab |
| By: | Tepe, Markus |
| Abstract: | This study explores the determinants of public employees' job satisfaction. We are focusing on three concepts - reciprocal motives, personality traits and wage differences - to explain job satisfaction and production sector affiliation. Estimation results obtained from multivariate analyses on individual level data from the German Socio-economic Panel Study (GSOEP) can be summarized in three points: First, in contrast to reciprocal motives, personality traits have a unique and direct effect on public and private sector employees' job satisfaction. Second, even though we cannot proof that public employees at the high-end of the earnings distribution trade a loss in pecuniary benefits against an increase in non-pecuniary benefits, the empirical analysis strongly supports the notion that public employees' job satisfaction function varies across the earnings distribution. Finally, public employees' personal characteristics can be associated with lower levels of negative reciprocity, conscientiousness and neuroticism, pointing out to a potential self-selection and recruitment bias in the public sector. -- Diese Studie untersucht die Determinanten der Arbeitszufriedenheit von Beschäftigten im öffentlichen Dienst. Wir konzentrieren uns auf drei Konzepte - reziprokes Verhalten, Persönlichkeitsmerkmale und Lohndifferenzen - um Arbeitszufriedenheit und Produktionssektorzugehörigkeit zu erklären. Die vorläufigen Ergebnisse der multivariaten Analyse auf Basis der Daten des Sozio-oekonomischen Panels (SOEP) 2005 können in drei Punkten zusammengefasst werden: Erstens, im Gegensatz zur Reziprozität, haben die Persönlichkeitsmerkmale einen distinkten und direkten Einfluss auf die Arbeitszufriedenheit im öffentlichen und privaten Sektor. Zweitens, wir finden systematische Variation in den Determinanten der Arbeitszufriedenheit öffentlich und privat Beschäftigter in Abhängigkeit von deren Position in der Lohneinkommensverteilung. Drittens, die empirische Analyse liefert Anhaltspunkte, dass Personen mit geringerer negativer Reziprozität, Gewissenhaftigkeit, Neurotizismus tendenziell eher im öffentlichen Sektor beschäftigt sind. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:sfb597:131&r=lab |
| By: | Di Cintio, Marco; Grassi, Emanuele |
| Abstract: | In this paper, we estimate wage differentials among Italian university Graduates three years after graduation due to sequential geographic mobility. By means of a matching procedure we quantify wage premia associated with the choice of studying far from home, moving after graduation and moving back home after graduation. We find evidence of large gains for those who move after graduation, little benefits for those who choose to go back home after having studied in regions different from that of origin. We also assess a “transitivity” result for the estimated treatment effects. |
| Keywords: | Geographic mobility; wage differentials; kernel matching. |
| JEL: | J31 J61 J24 |
| Date: | 2010–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:26707&r=lab |
| By: | Cathel Kornig (Laboratoire d'Economie et de Sociologie du Travail (LEST)); François Michon (Centre d'Economie de la Sorbonne) |
| Abstract: | This paper is the French contribution for an international comparative survey directed by the Japan Institute for Labour Policy and Training (Tokyo). It assesses available empirical data, analyses and debates. It obeys to the standard architecture of the international questionnaire : definitions, usual evaluations and main characteristics of the various non standard employment relationships ; brief outline of reasons for use that are invoked ; a few key topics that are discussed in the international scene (willingness of non regular employment, opportunities for transitions towards permanent positions ; equivalence of treatment ; resistance of employment stability, etc.). |
| Keywords: | Temporary employment, part time employment, employment policies. |
| JEL: | J5 J6 J8 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:10082&r=lab |
| By: | Daniel Tortorice (Department of Economics, Brandeis University) |
| Abstract: | I compare unemployment expectations from the Michigan Survey of Consumers to VAR forecastable movements in unemployment. I document three key facts. First, one- half to one-third of the population expects unemployment to rise when it is falling at the end of a recession even though the VAR is able to predict the fall in unemployment. Second, more people expect unemployment to rise when it is falling at the end of a recession than expect it to rise when it is rising at the beginning of a recession even though these movements are predictable with the VAR. Finally, the lag change in unemployment is as important as the VAR prediction of the future unemployment change in predicting the fraction of the population that expects unemployment to rise. Least squares learning or real time expectations do little to help explain these facts. However, delayed updating of expectations can addresses some of these puzzles and extrapolative expectations addresses these puzzles the best. Individuals with higher income or education are only slightly less likely to make these expectational errors and those who makes these errors are 8-10 percent less likely to believe it is a good time to make a major purchase. |
| Keywords: | Consumer Sentiment, Rational Expectations, Business Fluctuations, Cycles |
| JEL: | E32 E37 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:brd:wpaper:5&r=lab |
| By: | Sergio Destefanis (Università di Salerno, CELPE and CSEF); Giuseppe Mastromatteo (Università Cattolica di Milano.) |
| Abstract: | We assess the impact on employment growth of the Lisbon Strategy, examining long-run trends in total, female and old-age employment rates from 1994 to 2009. We find that the Strategy had some favourable (but weak) impact, especially for old-age workers. However, no improvement ensued from its mid-term reassessment. |
| Keywords: | European Employment Strategy, difference-in-difference, employment policies |
| JEL: | E24 J08 E65 |
| Date: | 2010–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:264&r=lab |
| By: | Matthias Göcke (University of Giessen); |
| Abstract: | Sunk firing costs shelter employment – and this effect is typically amplified by uncertainty due to an option value of waiting. Thus, if sunk firing costs are high, e.g. due to a employment protection legislation, and if recession related losses are with a high probability expected to be only transitory and not permanent, a relatively small employment subsidy will be sufficient to avoid layoffs by firms operating with current losses. Depending on the size of sunk hiring costs cyclical layoffs or even permanent job destruction can be avoided by short run subsidies during the beginning of a recession. |
| Keywords: | recession; employment; sunk firing costs; uncertainty; employment subsidy |
| JEL: | J63 J68 D81 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201029&r=lab |
| By: | Andreas Kuhn |
| Abstract: | This paper describes individuals' perceptions and normative valuations of executive compensation using comparable survey data for fifteen OECD member countries. An overwhelming majority of individuals (more than 90%) believes that top executives earn more than they actually deserve. However, there is also substantial variation in the actual and ethical levels of executive compensation, both within and across countries. The empirical analysis further shows that subjective estimates of executive pay are associated with objective measures of inequality and redistribution, and that individuals' perceptions and normative valuations of executive compensation are associated with their more general political preferences. |
| Keywords: | Executive compensation, subjective wage estimates, political preferences |
| JEL: | D31 D63 J31 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:zur:iewwpx:518&r=lab |