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on Labour Economics |
| By: | Antti Kauhanen; Sami Napari |
| Abstract: | We examine gender differences in careers using a large linked employer-employee dataset on Finnish white-collar manufacturing workers over the period of 1981–2006. Our focus is on labour market entrants whom we follow over time. We find that men start their careers from higher ranks of the hierarchy than women do, although gender differences in education explain much of this gap. Men are also more likely to be promoted than women, especially during the first years in the labour market, amplifying the gender differences in hierarchical positions already apparent at labour market entry. Men earn higher starting wages than women, while the results concerning gender differences in the returns to career progression are not clearcut, but depend on the type of career event and on the career phase. Overall, our results helps to understand the factors behind the large increase in the gender wage gap during the early career observed in the earlier literature. |
| Keywords: | careers, internal labour markets, promotions, mobility, wage growth, gender wage gap |
| JEL: | J16 J24 J31 J62 |
| Date: | 2011–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1241&r=lab |
| By: | Angela Cipollone (Department of Ecoomics and Business, LUISS University); Marcella Corsi (Sapienza University of Rome); Carlo D'ippoliti (Sapienza University of Rome) |
| Abstract: | This paper proposes a multidimensional concept of knowledge, encompassing several formal and informal skills to complement education and on-the-job training, under a gender perspective. By considering the case of Italy, we estimate the impact of such a concept of knowledge on men’s and women’s employment status and wages. Results point out that despite much rhetoric about the fact that women have gradually overcome men in terms of educational attainments, women still lack of the main skills and competencies that can profitably be used on the labor market. In Italy, women’s accumulation of labor market experience is mostly constrained by unpaid work and care work burdens. These activities may be regarded as a source of potential knowledge in terms of social and interpersonal skills, managerial and organizational capacities; but they do not seem to be positively valued by the market, either in terms of employability nor in terms of wages. Gender segregation in education seems to be still a relevant issue, by compressing both women’s employment chances and wages. Thus educational and cultural policies aimed at overcoming traditional gender roles and images among the younger students seem a very sensible policy option. |
| Keywords: | gender differentials, returns to knowledge, human capital. |
| JEL: | J24 J16 C43 J71 C14 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lui:celegw:1103&r=lab |
| By: | H. Lehmann; A. Muravyev; T. Razzolini; A. Zaiceva |
| Abstract: | This paper is the first to analyze the costs of job loss in Russia, using unique new data from the Russian Longitudinal Monitoring Survey over the years 2003-2008, including a special supplement on displacement that was initiated by us. We employ fixed effects regression models and propensity score matching techniques in order to establish the causal effect of displacement for displaced individuals. The paper is innovative insofar as we investigate fringe and in-kind benefits and the propensity to have an informal employment relationship as well as a permanent contract as relevant labor market outcomes upon displacement. We also analyze monthly earnings, hourly wages, employment and hours worked, which are traditionally investigated in the literature. Compared to the control group of non-displaced workers (i.e. stayers and quitters), displaced individuals face a significant income loss following displacement, which is mainly due to the reduction in employment and hours worked. This effect is robust to the definition of displacement. The losses seem to be more pronounced and are especially large for older workers with labor market experience and human capital acquired in Soviet times and for workers with primary and secondary education. Workers displaced from state firms experience particularly large relative losses in the short run, while such losses for workers laid off from private firms are more persistent. Turning to the additional non-conventional labor market outcomes, there is a loss in terms of the number of fringe and in-kind benefits for reemployed individuals but not in terms of their value. There is also some evidence of an increased probability of working in informal jobs if displaced. These results point towards the importance of both firm-specific human capital and of obsolete skills obtained under the centrally planned economy as well as to a wider occurrence of job insecurity among displaced workers. |
| JEL: | J64 J65 P50 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp734&r=lab |
| By: | Pia Rattenhuber |
| Abstract: | The very first minimum wage in Germany was introduced in 1997 for blue-collar workers in sub-sectors of the construction industry. In the setting of a natural experiment blue-collar workers in neighboring 4-digit-industries and white-collar workers are used as control groups for differences-in-differences-in-differences estimation based on linked employer-employee data. Estimation results reveal a sizable positive average impact on wages in East Germany and no effect in West Germany. Size and significance of effects are not homogeneous across wage regimes (individual vs. collective contracts) and across the distribution suggesting spillover effects to wages where the minimum is not binding. |
| Keywords: | Minimum wage, construction sector, linked employer-employee data, differences-in-differences-in-differences, unconditional quantile regression |
| JEL: | C21 J18 J38 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1111&r=lab |
| By: | Blake, Hélène; Sangnier, Marc |
| Abstract: | In order to face the aging of their populations governments of developed countries reformed their retirement systems during the last two decades, by discouraging early retirement and increasing incentives to work for older workers. Senior participation rates to the labor force not only differ strikingly in level from one country to another, they also differ in their reaction to retirement incentives set by governments. This paper highlights how disutility to work can merely influence the effectiveness of such reforms. The authors build a highly stylized model according to which the reaction of senior activity rate to monetary incentives to work depends on the properties of the specific distribution of working conditions in the country. Second, taking the quality of labor relations as a proxy for working conditions, the authors show empirically that aggregate reactions to retirement incentives depend on the distribution of labor relations at country level. They use panel data for nineteen OECD countries from 1980 to 2004. They show that the elasticity of senior male labor force participation rate to retirement incentives is stronger in countries with better and more homogeneously distributed labor relations. -- |
| Keywords: | early retirement incentives,labor relations,senior activity rate |
| JEL: | J14 J26 Z10 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20113&r=lab |
| By: | Charlot Olivier; Malherbet Franck; Terra Cristina (THEMA, Universite de Cergy-Pontoise; Universit´e de Rouen, CECO - Ecole Polytechnique, fRDB and IZA.; THEMA, Universite de Cergy-Pontoise) |
| Abstract: | This paper studies the impact of product and labor market regulations on informality and unemployment in a general framework where formal and informal firms are subject to the same externalities, differing only with respect to some parameter values. Both formal and informal firms have monopoly power in the goods market, they are subject to matching friction in the labor market, and wages are determined through bargaining between large firms and their workers. The informal sector is found to be endogenously more competitive than the formal one. We find that lower strictness of product or labor market regulations lead to a simultaneous reduction in informality and unemployment. The difference between these two policy options lies on their effect on wages. Lessening product market strictness increases wages in both sector but also increases the formal sector wage premium. The opposite is true for labor market regulation. Finally, we show that the so-called overhiring externality due to wage bargaining translates into a smaller relative size of the informal sector. |
| Keywords: | Informality; Product and Labor Market Imperfections; Firm Size |
| JEL: | E24 E26 J60 L16 O1 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2011-03&r=lab |
| By: | Skedinger, Per (Research Institute of Industrial Economics (IFN)) |
| Abstract: | This article surveys the literature and adds to the evidence on the impact of employment protection legislation on employment. While stringent employment protection contributes to less turnover and job reallocation, the effects on aggregate employment and unemployment over the business cycle are more uncertain. Exploitation of partial reforms and the use of micro data in recent research appear not to have affected results regarding employment and unemployment in any systematic way. Labour market prospects of young people and other marginal groups seem to worsen as a consequence of increased stringency of the legislation. It is debatable whether marginal groups have gained much from the widespread policy strategy to liberalize regulations of temporary employment and leave regulations of regular employment intact. My own analysis suggests that increased stringency of regulations for regular work is associated with a higher incidence of involuntary temporary employment, particularly among the young. |
| Keywords: | Job security; Employment effects; Employment protection reforms |
| JEL: | J23 J50 K31 |
| Date: | 2011–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0865&r=lab |
| By: | Uschi Backes-Gellner (Department of Business Administration, University of Zurich); Yvonne Oswald (Department of Business Administration, University of Zurich); Simone N. Tuor (Department of Business Administration, University of Zurich) |
| Abstract: | Previous studies on employer-provided training have consistently shown a gap in training participation between part-time and full-time workers. This study examines whether the training disadvantage for part-time workers differs by gender. To capture the uncertainty in the firm’s training decision and to factor in heterogeneity among part-time workers, our analysis draws not only on human capital but also on statistical discrimination theory. Our empirical results indicate that gender plays a role in determining part-time/full-time training differences. Whereas for women working part-time or full-time makes only a minor difference, for men working part-time constitutes a serious disadvantage in access to employer-provided training. The results remain consistent among different subsamples. |
| Keywords: | employer-provided trainnig, part-time |
| JEL: | I21 J16 M53 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0058&r=lab |
| By: | Catalina Amuedo-Dorantes (San Diego State University); Cynthia Bansak (St. Lawrence University) |
| Abstract: | This paper tests whether amnesty, a provision of the 1986 Immigration Reform and Control Act (IRCA), affected the labor market outcomes of the legalized population. Using the Legalized Population Survey (LPS) and the National Longitudinal Survey of Youth (NLSY79) from 1987-1992, a quasi-experimental framework is developed to assess the differential impact of amnesty on the legalized population relative to a comparison group. After the implementation of the amnesty program, employment fell and unemployment rose for newly legalized men relative to the comparison group of already legal U.S. residents. For women, employment also fell and transitions out of the workforce increased among the newly legalized population. Increasing returns to skill, as captured by English proficiency, only played an important role in explaining the employment of newly legalized women. Finally, newly legalized men and women enjoyed higher wage growth rates than their working native counterparts, perhaps owing to their comparatively growing returns to U.S. educational attainment over this period. |
| JEL: | J6 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:201106&r=lab |
| By: | Bergemann, Annette; Caliendo, Marco; van den Berg, Gerard J; Zimmermann, Klaus F |
| Abstract: | Labor market programs may affect unemployed individuals’ behavior before they enroll. Such ex ante effects may differ according to ethnic origin. We apply a novel method that relates self-reported perceived treatment rates and job search behavioral outcomes, such as the reservation wage or search intensity, to each other. We compare German native workers with migrants with a Turkish origin or Central and Eastern European (including Russian) background. Job search theory is used to derive theoretical predictions. We examine the omnibus ex ante effect of the German ALMP system, using the novel IZA Evaluation Data Set, which includes self-reported assessments of the variables of interest as well as an unusually detailed amount of information on behavior, attitudes and past outcomes. We find that the ex ante threat effect on the reservation wage and search effort varies considerably among the groups considered. |
| Keywords: | active labor market policy; expectations; immigrants; policy evaluation; program evaluation; reservation wage; search effort; unemployment duration |
| JEL: | C21 D83 D84 J61 J64 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8295&r=lab |
| By: | Richard Blundell (Institute for Fiscal Studies and University College London); Monica Costa Dias (Institute for Fiscal Studies and Institute for Fiscal Studies); Costas Meghir (Institute for Fiscal Studies and University College London); Jonathan Shaw (Institute for Fiscal Studies) |
| Abstract: | <p><p>This paper presents a life-cycle model of woman's labour supply, human capital formation and savings for the evaluation of welfare-to-work and tax policies. Women's decisions are formalised in a dynamic and uncertain environment. The model includes a detailed characterisation of the tax system and of the dynamics of family formation while explicitly considering the determinants of employment and education decisions: (i ) contemporaneous incentives to work, (ii ) future consequences for employment through human capital accumulation and (iii) anticipatory effects on the value of employment and education. The choice of parameters follows a careful calibration procedure, based of a large sample of data moments from the British population during the nineties using BHPS data. Many important features established in the empirical literature are reproduced in the simulation exercises, including the employment effects of the WFTC reform in the UK. The model is used to gain further insight into the responses to two recent policy changes, the October 1999 WFTC and the April 2003 WTC/CTC reforms. We find small but non-negligible anticipation effects on employment and education.</p></p> |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:07/11&r=lab |
| By: | Merve Cebi (University of Massachusetts - Dartmouth; W.E. Upjohn Institute for Employment Research) |
| Abstract: | This work presents new evidence on the effect of husbands’ health insurance on wives’ labor supply. Previous cross-sectional studies have estimated a significant negative effect of spousal coverage on wives’ labor supply. However, these estimates potentially suffer from bias due to the simultaneity of wives’ labor supply and the health insurance status of their husbands. This paper attempts to obtain consistent estimates by using several panel data methods. In particular, the likely correlation between unobserved personal characteristics of husbands and wives—such as preferences for work—and potential joint job choice decisions can be controlled by using panel data on intact marriages. The findings, using data from the National Longitudinal Survey of Youth and the Current Population Survey, suggest that the negative effect of spousal coverage on labor supply found in cross-sections results mainly from spousal sorting and selection. Once unobserved heterogeneity is controlled for, a relatively smaller estimated effect of spousal coverage on wives’ labor supply remains. |
| Keywords: | Health insurance, Labor supply, Marriage, Panel data |
| JEL: | J22 J32 I18 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:11-171&r=lab |
| By: | Tindara Addabbo; Anna Maccagnan |
| Abstract: | The aim of this paper is to analyse the effects of the crisis on the Italian labour market. The Italian labour market is characterized by deep gender differences and regional variability. The data show that the crisis lead to an increase in the gap of female employment rates and women?s inactivity rates with respect to Europe. The North of Italy experienced a higher increase in unemployment than the South, where many people withdrew from the labour market because of poor employment prospects. Moreover, in Italy, the increase in unemployment has been mitigated by the increase in the number of workers having access to the wage supplementation fund who are not computed within the unemployed. However, the heterogeneity in the system of unemployment benefits increased inequalities amongst the unemployed. Using a micro simulation techniques, we estimate the effect of the crisis on income distribution and poverty and find that at the national level, the population showed a reduction in equivalised household income by about 1 percent. The limited impact on household?s equivalent income can be connected to the relatively high share of unemployed who are young with relatively low income and sustained by other members of the household |
| Keywords: | labour market, poverty, economic crisis |
| JEL: | I32 J6 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:mod:depeco:0644&r=lab |
| By: | de Carvalho Andrade, Eduardo; de Castro, Luciano I. |
| Abstract: | A parallel of education with transformative processes in standard markets suggest that a more severe control of the quality of the output will improve the overall quality of the education. This paper shows a somehow counterintuitive result: an increase in the exam difficulty may reduce the average quality (productivity) of selected individuals. Since the exam does not verify all skills, when its standard rises, candidates with relatively low skills emphasized in the test and high skills demanded in the job may no longer qualify. Hence, an increase in the testing standard may be counterproductive. One implication is that policies should emphasize alignment between the skills tested and those required in the actual jobs, rather than increase exams' difficulties. -- |
| Keywords: | school standards,signaling model,cognitive skills,non-cognitive skills |
| JEL: | I2 J24 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20112&r=lab |
| By: | Matt Dickson; Sarah Smith |
| Abstract: | The 1973 Raising of the School Leaving Age in England and Wales has been used to identify returns to years’ schooling. However, the reform affected the proportion with qualifications, as well as schooling length. To shed light on whether the returns reflect extra schooling or qualifications, we exploit another institutional rule – the Easter Leaving Rule – to obtain unbiased estimates of the effect of qualifications. We find sizeable returns to academic qualifications – increasing the probability of employment by 40 percentage points. This is more than 70% of the estimated return based on RoSLA, suggesting that qualifications drive most – but not all – of the returns to education. |
| Keywords: | Returns to education; RoSLA; qualifications |
| JEL: | I21 I28 J24 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:10/256&r=lab |
| By: | Tindara Addabbo; Antonella Caiumi; Anna Maccagnan |
| Abstract: | taly is characterized by a very uneven distribution of paid and unpaid work in gender terms. Italy has the lowest female employment rate apart from Malta in the European region, with a tangibly wide gender gap in employment and participation rates to the disadvantage of women. Furthermore, the female labour supply is very unevenly distributed across the Italian regions, and both institutional and labour market factors may be considered as lying at the basis of the high regional heterogeneity. This paper aims at understanding more in depth the uneven allocation of time by gender in Italian households. For this purpose we propose a model on the partners? allocation of time, that takes into account the simultaneity of partners? allocation of time decisions, as well as the issue of censored observations in some partenrs? uses of time. In order to estimate this model, we use IT SILC 2007 data that provides us with information on income and hours of work as well as on other relevant socio-demographic variables, maintaining the significance at regional level. This also allows us to analyze the contribution of institutional factors (like the heterogeneous distribution of childcare services in Italy and labour market differences) and interaction with various dimensions of wellbeing. Our findings suggest that an increase in women?s wages affects women?s working time, both by directly increasing women?s paid hours of work, and decreasing the time devoted to household activities and indirectly via a more equal distribution of unpaid work within the couple. The presence of children in the household tends to reduce women?s paid work, while having a positive effect on the time spent by the husband in paid work and on both partners? supply of unpaid work. We also note that the availability of childcare services represents the most relevant factor affecting women?s participatory decisions as well as their hours of paid work. |
| Keywords: | time use; economics of gender; labour supplì; |
| JEL: | J16 J22 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:mod:depeco:0646&r=lab |
| By: | Michaelides, Marios; Benus, Jacob |
| Abstract: | This paper presents new evidence on the efficacy of self-employment training programs using data from Project GATE (Growing America Through Entrepreneurship). Project GATE was an experimental design demonstration program that offered free self-employment training to a random sample of individuals who expressed a strong interest in self-employment. Our analyses show that the program was very effective in assisting unemployed participants start their own business, leading to significant gains in self-employment and overall employment in the early months following program participation. These impacts, however, dissipated over time. Despite the program’s impact on the rapid reemployment of unemployed participants, the program did not lead to significant gains in total earnings. Moreover, our analyses provide no evidence that the program was effective for participants who were employed, self-employed, or not in the labor force at the time of application. |
| Keywords: | self-employment; small business; unemployment; workforce development; SEA; Project GATE |
| JEL: | H4 J6 L2 |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20883&r=lab |
| By: | Kiss, David |
| Abstract: | This paper estimates the impact of peer achievement and variance on math achievement growth. It exploits exogenous variation in peer characteristics generated at the transition to upper-secondary school in a sample of Berlin fifth graders. Parents and schools are barely able to condition their decisions on peer characteristics since classes are newly built up from a large pool of elementary school pupils. I find positive peer effects on achievement growth and no effects for peer variance. Lower-achieving pupils benefit more from abler peers. Results from simulations suggest that pupils are slightly better off in comprehensive than in ability-tracked school systems. -- |
| Keywords: | peer effects in secondary school,comparison between ability-tracked and comprehensive school,natural experiment |
| JEL: | I21 I28 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:022011&r=lab |
| By: | Lechner, Michael; Wunsch, Conny |
| Abstract: | Based on new, exceptionally informative and large German linked employer-employee administrative data, we investigate the question whether the omission of important control variables in matching estimation leads to biased impact estimates of typical active labour market programs for the unemployed. Such biases would lead to false policy conclusions about the cost-effectiveness of these expensive policies. Using newly developed Empirical Monte Carlo Study methods, we find that besides standard personal characteristics, information on individual health and firm characteris-tics of the last employer are particularly important for selection correction. Moreover, it is important to account for past performance on the labour market in a very detailed and flexible way. Information on job search behaviour, timing of unemployment and program start, as well as detailed regional characteristics are also relevant. |
| Keywords: | active labour market policies; job search assistance; matching estimation; Training |
| JEL: | J68 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8294&r=lab |
| By: | Zibrowius, Michael |
| Abstract: | Using a rich German panel data set, I estimate wage assimilation patterns for immigrants in Germany. This study contributes to the literature by performing separate estimations by skill groups and controlling for a wide range of socio-economic background variables. It aims to answer the question whether Germany can be considered an attractive host country from an immigrant's perspective. Comparisons with similar natives reveal that immigrants' experience earnings profiles are flatter on average, although clear differences show up among skill groups. The effect of time spent in the host country is significantly positive for all skill groups and thus partly offsetting the diverging trend in the experience earnings profiles. Still, wage differences between natives and immigrants remain. They are particularly noticeable for highly skilled immigrants, the group needed most in Germany's skill intensive labor market. Separate estimations for immigrant subgroups confirm the general validity of the results. -- |
| Keywords: | international migration,wage differentials,assimilation,longitudinal data |
| JEL: | F22 J31 J61 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:032011&r=lab |
| By: | Patricia Justino (Institute of Development Studies); Olga Shemyakina (Georgia Institute of Technology) |
| Abstract: | This paper analyzes the impact of remittances on the labor supply of men and women in post-conflict Tajikistan. We find that on average men and women from remittance-receiving households are less likely to participate in the labor market and supply fewer hours when they do. The negative effect of remittances on labor supply is smaller for women, which is an intriguing result as other studies on remittances and labor supply (primarily focused on Latin America) have shown that female labor supply is more responsive to remittances. The results are robust to using different measures of remittances and inclusion of variables measuring migration of household members. We estimate a joint effect of remittances and an individual’s residence in a conflict-affected area during the Tajik civil war. Remittances had a larger impact on the labor supply of men living in conflict-affected areas compared to men in less conflictaffected areas. The impact of remittances on the labor supply of women does not differ by their residence in both the more or less conflict affected area. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:83&r=lab |
| By: | Bonfatti, Roberto; Ghatak, Maitreesh |
| Abstract: | An interesting puzzle is that trade liberalization in the 1980s and 1990s has been associated with a sharp increase in the skill premium in both developed and developing countries. This is in contrast with neoclassical theory, according to which trade should increase the relative return of the relatively abundant factor. We develop a simple model of trade with capital market imperfections, and show that trade can increase the skill premium in both the North and the South, and both in the short run as well as in the long run. We show that trade with a skill-intensive economy has two effects: it reduces the skilled wage, and thus discourages non talented agents out of the skilled labor force; and it reduces the cost of subsistence, thus allowing the talented offspring of unskilled workers to go to school. This compositional effect has a positive effect on the observed skill premium, possibly strong enough to counterweight the decrease in the skilled wage. |
| Keywords: | credit market frictions; Latin America; skill premium; trade liberalization |
| JEL: | F16 O15 O16 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8286&r=lab |
| By: | Bas ter Weel; Semih Akcomak |
| Abstract: | This paper introduces indicators about the division of labour to measure and interpret recent trends in employment in the Netherlands. |
| JEL: | F2 J24 J31 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:161&r=lab |
| By: | Davide Antonioli; Paolo Pini; Rocco Manzalini |
| Abstract: | The shifting of labour demand towards relatively more skilled workers has been a hot issue in the economic field for many years. A consolidated explanation for the upskilling phenomenon is that technological-organisational changes have driven the labour demand with detrimental consequences for less skilled workers (skill-biased technological-organisational change). In order to upgrade the skill workforce the firm has at least two main channels at its disposal: the external labour market strategy, mainly based on hiring and firing mechanisms; the internal labour market strategies, which improve the skill base of the employees through training activities. The main objective of the present work is to verify the relations between innovative strategies and both the workforce composition and the training activities, within an integrated framework that also leads us to consider the role of specific aspects of the industrial relations system. The firm level analysis is based on original datasets which include data on manufacturing firms for two Italian local production systems, located in the Emilia-Romagna region. The results suggest that the firms use both the two channels to improve their skill base, which is actually related to the innovation activities, although there is weak supporting evidence of the use of external labour markets to upgrade the workforce skills: the upskilling phenomenon seems to be associated to specific innovative activities in the technological sphere, while specific organisational aspects emerge as detrimental for blue collars. On the side of internal labour market strategies the evidence supports the hypothesis that innovation intensity induce the firms to implement internal procedures in order to upskill the workforce, confirming the importance of internal labour market strategies. Moreover, we have recognized the important role of firm level industrial relations in determining the training activities for the blue collar workers. |
| Keywords: | technological change; organisational change; industrial relations; skills |
| JEL: | J24 J53 L23 L6 O33 |
| Date: | 2011–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:201106&r=lab |
| By: | Kronenberg, Kristin; Kronenberg, Tobias |
| Abstract: | It has been shown that a person’s relative income – compared to a reference group – has a negative impact on self-reported happiness. This suggests that people who aim at increasing their happiness should try to find a better-paid job if their relative income is low. In this paper we study this hypothesis by estimating the effect of relative income on job mobility, using a dataset containing information on roughly four million Dutch employees. We consider three different reference groups: people who live in the same neighborhood, people who work for the same employer, and people who share certain demographic characteristics. Our findings suggest that workers compare their own income to that of their neighbors, and low relative income is associated with higher job mobility. We conclude that low relative income (compared to the neighbors) reduces workers’ happiness, and workers react to this by finding a new job which may offer the prospect of higher pay. |
| Keywords: | Relative income; job mobility; happiness; social status |
| JEL: | J62 D10 R23 |
| Date: | 2011–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29426&r=lab |
| By: | Mendolicchio, Concetta (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Paolini, Dimitri; Pietra, Tito |
| Abstract: | "We study a two-sector economy with investments in human and physical capital and imperfect labor markets. Human and physical capital are heterogeneous. Workers and firms endogenously select the sector they are active in and choose the amount of their sector-specific investments. To enter the high-skill sector, workers must pay a fixed cost that we interpret as a direct cost of education. Given the distribution of the agents across sectors, at equilibrium, in each sector there is underinvestment in both human and physical capital, due to non-contractibility of investments. A second source of inefficiency is related to the self-selection of the agents into the two sectors: typically too many workers invest in education. Under suitable restrictions on the parameters, the joint effect of the two distortions is that equilibria are characterized by too many people investing too little effort in the high skill sector. We also analyze the welfare properties of equilibria and study the effects of several tax policies on the total expected surplus. In particular, consider the equilibrium associated with a flat labor income tax. Under suitable restrictions on the parameters, a revenue neutral progressive change in the marginal tax rates is welfare improving." (author's abstract, IAB-Doku) ((en)) |
| JEL: | J24 H2 |
| Date: | 2011–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201107&r=lab |
| By: | Antoni, Manfred (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Despite ample evidence on intergenerational persistence of formal education as well as on the determinants of non-formal training, these issues have not yet been analysed jointly. The question remains whether people from low-qualified family backgrounds make up for their relatively sparse own formal education by means of non-formal training during adulthood. Hypotheses based on economic theory and findings from various other disciplines suggest otherwise. I use the German ALWA survey to estimate the influence of family background on non-formal training participation. Count data analyses show that a low-qualified family background is negatively related to both likelihood and frequency of on-the-job training. This result holds when controlling for education, ability and personality as well as job and firm characteristics." (author's abstract, IAB-Doku) ((en)) |
| JEL: | C25 I21 J24 J62 |
| Date: | 2011–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201109&r=lab |
| By: | Katherine Eyal (SALDRU, School of Economics, University of Cape Town); Ingrid Woolard (SALDRU, School of Economics, University of Cape Town) |
| Abstract: | We estimate the effect of the child support grant on mothers' labour supply in South Africa. Identification is based on the use of specific samples, such as black mothers, aged 20 to 45, whose youngest child is aged within 2 years of the age eligibility cut-off, and unanticipated variation over the years in the age eligibility cut-off. Balancing tests across the age cut-o s are used to show that there are no signi cant di erences between mothers of eligible and ineligible children in the samples used, over the years. Different techniques are used to estimate the effect of the child support grant from many angles, including simple OLS as a bench mark, a difference in difference estimator, using appropriately constructed treatment and control groups, instrumental variables estimates, and descriptive analysis. The effect of having an age eligible child is large. Mothers who become recipients in their twenties see an average increase in employment probability of 15%, and in labour force participation of 9%. Many robustness and specification checks are used, including placebo regressions in the pre-treatment years, to ensure the estimated effect is not due to age or another variable. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:53&r=lab |
| By: | Nyborg, Karine (Dept. of Economics, University of Oslo); Zhang, Tao (Ragnar Frisch Center for Economic Research) |
| Abstract: | Firms with a reputation as socially responsible may have an important cost advantage: If workers prefer their employer to be socially responsible, equilibrium wages may be lower in such firms. We explore this hypothesis, combining Norwegian register data with data on firm reputation collected by an employer branding firm. Adjusting for a large set of background variables, we find that the firm’s social responsibility reputation is significantly associated with lower wages. |
| Keywords: | Self-regulation; wage differentials; CSR |
| JEL: | C51 D21 D64 Q56 |
| Date: | 2011–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2011_001&r=lab |
| By: | Cyriaque Edon ; Thierry Kamionka (Crest) |
| Abstract: | We jointly model fertility and participation decisions of women who live in couple using a dynamic model. In this paper we analyze the labour supply and the fertility decisions of married or cohabiting women in France, Spain, Germany, UK and Denmark. We estimate, for the period going from 1994 to 2001, a dynamic bivariate probit model with random effects using the ECHP (European Community Household Panel) and using a simulated maximum likelihood estimator. These estimates are made on an annual basis taking into account the initial conditions problem. The decisions of participation and fertility of women who live in couple depend on the individual characteristics (observed or unobserved) and are characterized by a significant state dependence. Our results suggest that the decisions of employment and fertility cannot be modeled separately. The differences in fertility across these countries are explained by individual characteristics and variations in social and fiscal policies. However, the unobserved components of heterogeneity also play a central role in the observed differences across countries. We show the importance of the permanent income component in the participation decision. Random effects are negatively correlated across the equations of the model. Consequently, women who, a priori, prefer to have a higher consumption have weaker preferences for fertility. |
| Keywords: | optimal matching |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2010-09&r=lab |
| By: | Colciago, Andrea; Rossi, Lorenza |
| Abstract: | We propose a flexible prices model where endogenous market structures and search and matching frictions in the labor market interact endogenously. The interplay between firms endogenous entry, strategic interactions among producers and labor market frictions represents a strong amplification channel of technology shocks on labor market variables, and helps addressing the unemployment-volatility puzzle. Consistently with U.S. evidence, new firms create a large fraction of new jobs and grow faster than more mature firms, net firms' entry is procyclical and the price mark up is countercyclical. |
| Keywords: | Endogenous Market Structures; Firms' Entry; Search and Matching Frictions |
| JEL: | E32 L11 E24 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29311&r=lab |
| By: | Holvoet, Nathalie; D'Exelle, Ben |
| Abstract: | This paper examines the relation between gender and network formation in rural Nicaragua. Applying dyadic regression techniques and controlling for individual socio-economic characteristics, we obtain insights into the determinants of the size and density as well as the socio-economic heterogeneity of individual networks. Assuming these network characteristics correlate with one's agency and benefits from network participation, we look for differences between men's and women's networks and its relation with gender. In general, the gendered private/public dichotomy and labor division is replicated in men's and women's networks. Furthermore, consistent with the restricted mobility of poor rural women, we observe that geographic distance limits the networks of women but not men. Next, female education and mobility, and newly-residing men, have a positive influence on the integration between men and women. Finally, clique formation is stronger around women than men. |
| Keywords: | Social network analysis; dyadic regression; gender sorting; social integration |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:iob:wpaper:2011001&r=lab |
| By: | Aniruddha Bagchi; Siddharth Bandyopadhyay |
| Abstract: | We examine the relationship between the incidence of workplace deviance (on-the-job crime) and the business cycle. A worker's probability of future employment depends on whether she has been deviant as well as on the availabilty of jobs. Using a two period model we show that the net impact on deviant behaviour to changes in unemployment is ambiguous and depends on the strength of two effects. If the probability of being employed for a non-deviant improves as expected market conditions improve, then that lowers deviant behaviour, while if the deviant's probability of being employed improves as market conditions improve, that increases deviance as market conditions improve. In either case, there is a setup cost to deviant behaviour and the attractiveness of incurring that increases with an increase in expected probability of future employment. This second effect therefore increases the incentive to be deviant and thus can reinforce the first effect or weaken it. Finally, we show that an increase in optimism i.e. the probability of facing a recession going down unambiguously increases deviant behaviour. |
| Keywords: | Crime, Business Cycle, Dynamic Deterrence |
| JEL: | D84 E32 J63 K42 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:11-06&r=lab |
| By: | Eiichi Tomiura (Department of Economics, Yokohama National University, and Research Institute of Economy, Trade and Industry (RIETI)); Banri Ito (Senshu University and RIETI); Ryuhei Wakasugi (Institute of Economic Research, Kyoto University and RIETI) |
| Abstract: | Previous studies have established that offshoring firms employ more non-production workers. By using micro-data on Japanese firms, this paper disaggregates non-production workers. The share of skilled non-production workers tends to be high in offshoring firms but that of unskilled non-production workers is not. The share of non-production workers for the management of overseas activities tends to be high in FDI firms and in firms outsourcing to foreign suppliers, but not in Japanese firms outsourcing to offshore suppliers owned by other Japanese firms. These findings suggest that offshoring has different impacts on employment depending on suppliers and the worker's skill. |
| Keywords: | offshoring; outsourcing; non-production workers; skill; firm-level data |
| JEL: | D23 F23 L24 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:760&r=lab |
| By: | Wouterse, Fleur |
| Abstract: | This study applies regression analysis as well as a non-parametric method to survey data from Burkina Faso to analyze the role of human capital in explaining technical efficiency in smallholder agricultural production. Exploiting the panel nature of the data and explicitly treating human capital inputs as endogenous, a two-stage estimation method is used for the analysis of determinants of data envelopment analysis (DEA) technical efficiency scores in a double-bootstrap procedure. Findings suggest that the impact of human capital on technical efficiency differs strongly by gender. Strong positive returns exist for education of females, whereas male education is associated with higher inefficiency. Body mass index of adult females also positively relates to technical efficiency. At the community level, presence of a clinic, connection to the electrical grid, presence of a secondary school, and year-round accessibility of the community are found to be vital for human capital formation. |
| Keywords: | Human capital, non-parametrics, public services, Smallholders, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1068&r=lab |
| By: | G. Ecchia; M. Gelter; P. Pasotti |
| Abstract: | We set up a model to study how ownership structure, corporate law and employment law interact to set the incentives that influence the decision by the large shareholder or manager effectively controlling the firm to divert resources from minority shareholders and employees. We suggest that agency problems between the controller and other investors and holdup problems between shareholders and employees are connected if the controller bears private costs of “expropriating” these groups. Corporate law and employment law may therefore somethimes be substitutes; employees may benefit from better corporate law intended to protect minority shareholder, and viceversa. Our model has implications for the domestic and comparative study of corporate governance structure and addresses, among other things, the question whether large shareholders are better able to “bond” with employees than dispersed ones, or whether the separation of ownership facilitates longterm relationships with labor. |
| JEL: | G30 K22 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp735&r=lab |
| By: | Aadland, David; Shaffer, Sherrill |
| Abstract: | Economists have generally ignored the notion that perceived time may differ from clock time. Borrowing from the behavioral psychology literature, we investigate the case of time compression whereby perceived time passes more quickly than actual time. A framework is presented to embed time compression in economic models. We then apply the principle to a standard lifecycle permanent income model with endogenous labor. Time compression provides an alternative explanation of why older individuals, even those without declining labor productivity, may choose to reduce their work effort. |
| Keywords: | Time Compression; Discounting; Lifecycle Permanent Income Model; Retirement |
| JEL: | D91 |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29298&r=lab |
| By: | Eric Bettinger; Rachel Baker |
| Abstract: | College completion and college success often lag behind college attendance. One theory as to why students do not succeed in college is that they lack key information about how to be successful or fail to act on the information that they have. We present evidence from a randomized experiment which tests the effectiveness of individualized student coaching. Over the course of two separate school years, InsideTrack, a student coaching service, provided coaching to students from public, private, and proprietary universities. Most of the participating students were non-traditional college students enrolled in degree programs. The participating universities and InsideTrack randomly assigned students to be coached. The coach contacted students regularly to develop a clear vision of their goals, to guide them in connecting their daily activities to their long term goals, and to support them in building skills, including time management, self advocacy, and study skills. Students who were randomly assigned to a coach were more likely to persist during the treatment period, and were more likely to be attending the university one year after the coaching had ended. Coaching also proved a more cost-effective method of achieving retention and completion gains when compared to previously studied interventions such as increased financial aid. |
| JEL: | I21 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16881&r=lab |
| By: | Beath, John; Poyago-Theotoky, Joanna; Ulph, David |
| Abstract: | We address the following question: how does a higher education funding system influence the trade-off that universities make between research and teaching? We do so by constructing a model that allows universities to choose actively the quality of their teaching and research when faced with different funding systems. In particular, we derive the feasible sets that face universities under such systems and show how, as the parameters of the system are varied, the nature of the university system itself changes. The culture of the university system thus becomes endogenous. This makes the model useful for the analysis of reforms in funding and also for international comparisons. -- |
| Keywords: | university funding systems,higher education,research quality,teaching quality,university budget constraint |
| JEL: | I21 I22 I23 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20111&r=lab |
| By: | Carlos Bozzoli (German Institute of Economic Research); Tilman Brück (German Institute of Economic Research); Nina Wald (German Institute of Economic Research) |
| Abstract: | Many Colombians are confronted with the ongoing conflict which influences their decision making in everyday life, including their behaviour on labour markets. This study focuses on the impact of violent conflict on self-employment, enlarging the usual determinants by a set of conflict variables. In order to estimate the effect of conflict on selfemployment, we employ fixed effects estimation. Three datasets are combined for estimation: the Familias en Acción dataset delivers information about individuals, a second dataset contains different indicators of the Colombian conflict on the municipality level and the third dataset includes taxes to measure a municipality’s economic situation. Our results show that high homicide and displacement rates at the community of origin reduces self-employment while a high influx of displaced increases the probability of self-employment at the municipality of destination. |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:82&r=lab |
| By: | Javier Silvestre; Vicente Pinilla; Mª Isabel Ayuda |
| Abstract: | Very few empirical studies have analyzed the labor market performance of internal migrants in the nineteenth and early twentieth centuries. Using a new dataset, this article examines the occupational attainment of migrants, mostly internal migrants, in the city of Barcelona. We find that, in comparison with natives, the occupational outcome of migrants is partly explained by differences in labor market experience and skills. Nevertheless, other factors also appear to play an important role. Estimates, moreover, do not suggest the existence of improved economic assimilation over time. The results indicate that at least some groups of migrants faced barriers to occupational mobility. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdacee:02-2011&r=lab |
| By: | Cheah, Yong Kang; Tang, Chor Foon |
| Abstract: | This study examines the role of socio-demographic determinants on individual’s level of happiness. Primary survey data on Penang, Malaysia is used for analysis. Based on the findings, being married and Malay are associated with higher probability of feeling very happy or happy. Nevertheless, individuals who suffer from chronic diseases are more likely to have unhappy or very unhappy feelings. The rest of the factors such as income, education, age, gender, and employment status are found to have insignificant effects on happiness. Several policy implications can be recommended based on the outcomes. |
| Keywords: | Education; Health; Happiness; Income; Malaysia; Well-being |
| JEL: | I31 D60 |
| Date: | 2011–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29419&r=lab |
| By: | Daghbashyan, Zara (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | The paper investigates the economic efficiency of higher education institutions (HEI) in Sweden to determine the factors that cause efficiency differences. Stochastic frontier analysis is utilized to estimate the economic efficiency of 30 HEI using both pooled and panel data approaches. HEI specific factors such as size, load, staff and student characteristics as well as government allocations are suggested to be the potential determinants of economic efficiency. The results suggest that HEI are not identical in their economic efficiency; though the average efficiency is high, they do perform differently. This variation is explained by the joint influence of HEI specific factors; the quality of labor is found to be highly significant for the cost efficiency of Swedish HEI. |
| Keywords: | Cost efficiency; Stochastic Frontier Analysis; Universities |
| JEL: | C21 C24 I21 |
| Date: | 2011–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0245&r=lab |
| By: | Pfarr, Christian; Schneider, Udo |
| Abstract: | In 2002, the German government tried to increase private old-age provisions by introducing incentives such as supplementary subsidies and tax credits. Since then, the so-called “Riester pension” has grown in popularity. Apart from subsidized pension plans, unsubsidized private pension insurances as an instrument for old-age have been enormously important for a long time. With data for the years 2005 to 2009 from the German SAVE study, we analyze whether the decision for a “Riester pension” is independent of the decision for unsubsidized private pension insurance using methods for simultaneous equations. Our estimation results indicate that decisions on “Riester” and private pensions are not independent and the proposed random-parameters bivariate probit model results in efficiency gains compared to single probit estimations. Regarding governmental subsidies, we find positive incentive effects of child subsidies whereas low income earners are not induced to increase their old-age provisions. Further, there is strong evidence for a “crowding-in” among alternative assets as well as a significant effect of demand inducement. Finally, considering the saving motives, individuals do not take a “Riester pension” because of securing pension payments only but to pick up granted subsidies. |
| Keywords: | subsidized pension; saving incentives; bivariate probit panel |
| JEL: | H31 D12 I38 |
| Date: | 2011–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29400&r=lab |
| By: | Ali, Tanweer |
| Abstract: | This paper examines the development of employment policy in the United Kingdom leading to the creation of the Young Person’s Guarantee and its main component, the Future Jobs Fund. Past public-sector direct employment schemes, including those associated with the workfare model, had been discredited as ineffective across the OECD. In numerous countries, however, newer job creation schemes were implemented from the 1990s, aimed at addressing some of the shortcomings of earlier projects, and utilizing the growth of smaller community-based projects – the Intermediate Labour Markets, or ILMs. Whilst there was no strategic policy commitment to demand-led active labour market policy in the UK until recent years, a network of ILMs came into existence, and much of the funding for these small-scale local projects came from the government. With the onset of the current economic downturn, and the substantial rise in cyclical unemployment, policy-makers more closely examined options for a demand-led strategy. Although ILMs had not been created with a view to forming part of an ‘employer of last resort’ policy, and were generally directed at very specific groups, the potential of these schemes to form part of a wider national strategy was clearly seen. In 2009 the government announced a job guarantee for all young people, primarily through the Future Jobs Fund. This initiative was inspired by ‘employer of last resort’ (or ‘job guarantee’) concept and the work of Hyman Minsky, and the intention was to extend it over time. Although the Future Jobs Fund was scrapped in May 2010 following a change of government in the UK, it incorporates the lessons of past policy failures, representing a bold step in active labour market policy – and may form a model for reviving demand-led employment policy. |
| Keywords: | Unemployment; New Deal; Job Guarantee; Employer of Last Resort; Minsky; Future Jobs Fund |
| JEL: | J08 B50 |
| Date: | 2011–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29422&r=lab |
| By: | Nomaan Majid (International Labour Office, Economic and Labour Market Analysis Department) |
| Abstract: | This paper discusses the problems aassociated with measuring economy wide employment in developing countries. In doing so, it sets up the outline of a framework in which employment and its dimensions in developing countries ought to be conceived. The paper then goes on to propose a measure of employment that gives relatively acceptable returns to the worker. Based on this measure, the work explores how the incidence of good employment has been associated with economic growth and income inequality in the developing world. |
| Keywords: | employment / income generating activities / income distribution / measurement / developing countries |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:emwpap:2011-72&r=lab |
| By: | Wall, Howard J. |
| Abstract: | This paper examines the spatial interaction of neighboring cities over their employment cycles. The cycles of neighboring cities tend to be more similar to one another than are those of non-neighboring cities, although this is due primarily to neighbors’ tendency to be in the same state. In addition to these same-state effects, neighborness interacts with industry and human capital in ways that make the cyclical interaction of neighbors different from that of non-neighbors. Specifically, neighboring cities with similar levels of educational attainment and establishment size tend to have more-similar employment cycles, but neighboring cities with similar racial compositions tend to have less-similar employment cycles. |
| Keywords: | Neighboring cities; employment cycles |
| JEL: | R10 E32 |
| Date: | 2011–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29410&r=lab |
| By: | Alcalde, Jose; Subiza, Begoña |
| Abstract: | This paper proposes a reform for school allocation procedures in order to help integration policies reach their objective. For this purpose, we suggest the use of a natural two-step mechanism. The (stable) first step is introduced as an adaptation of the deferred-acceptance algorithm designed by Gale and Shapley (1962), when students are divided into two groups. The (efficient) second step captures the idea of exchanging places inherent to Gale's Top Trading Cycle. This latter step could be useful for Municipal School Boards when implementing some integration policies. |
| Keywords: | Integration Policy; School Allocation; Affirmative Action |
| JEL: | I28 J18 C72 |
| Date: | 2011–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29145&r=lab |
| By: | Blau, David M. (Ohio State University) |
| Abstract: | Empirical analyses of the effects of public and private pensions on household saving impose strong assumptions in order to obtain a tractable empirical model: fixed retirement and pension claiming ages, no borrowing constraint, little or no uncertainty, and no institutional restrictions on pension claiming. I specify a richer version of the life cycle model that relaxes these assumptions. I calibrate, solve, and simulate the model and use the results to study three issues: (1) How much household wealth is crowded out by pensions? (2) Can linear regression analysis accurately estimate the magnitude of crowdout when the assumptions used in the empirical analysis are invalid? (3) How valuable are pensions to households? Simulation results indicate that private pensions in the US crowd out less than $0.15 of household saving per dollar of pension wealth. Crowdout by Social Security is larger at $0.33, but far smaller than the one-for-one offset predicted by a stylized version of the life cycle model. Regression estimates of crowdout using the simulated data are systematically larger than simulated crowdout, indicating that empirical estimates of crowdout are quite sensitive to the assumptions required in order to use the regression approach. The welfare analysis implies that, conditional on Social Security, DB pensions are worth less than their expected present discounted value to households, while DC pensions are worth more than their dollar value. In the absence of a private pension, Social Security is worth 50% more to households than its expected dollar value. |
| Keywords: | pensions, saving, retirement |
| JEL: | J26 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5554&r=lab |
| By: | Ghatak, Maitreesh; Karaivanov, Alexander |
| Abstract: | We analyze optimal contracts and optimal matching patterns in a simple model of partnership where there is a double-sided moral hazard problem and potential partners differ in their productivity in two tasks. It is possible for one individual to accomplish both tasks (sole production) and there are no agency costs associated with this option but partnerships are a better option if comparative advantages are significant. We show that the presence of moral hazard can reverse the optimal matching pattern relative to the first best, and that even if partnerships are optimal for an exogenously given pair of types, they may not be observed in equilibrium when matching is endogenous, suggesting that empirical studies on agency costs are likely to underestimate their extent by focusing on the intensive margin and ignoring the extensive margin. |
| Keywords: | contractual structure; endogenous matching; partnerships |
| JEL: | D12 D21 D23 D82 Q15 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8298&r=lab |
| By: | Rune Vejlin (School of Economics and Management, Aarhus University, Denmark) |
| Abstract: | I develop and simulate an equilibrium model of search with endogenous savings and search intensity. The wage offer distribution is endogenized by firms making vacancy and entry choices. This allows me to conduct a counterfactual analysis of the optimal unemployment insurance (UI) level. The provision of UI is motivated by the worker's inability to perfectly insure against income shocks, but at the same time UI introduces a distortion to the level of search intensity of the worker and vacancy intensity of firms. I find that equilibrium effects are important to take into account. Making policy from a partial model can introduce large welfare loses. It is also shown that different kinds of taxes have different implications on welfare. |
| Keywords: | Equilibrium Search Model, Optimal Unemployment Insurance, Endogenous Saving |
| JEL: | D3 D9 E2 E61 J6 |
| Date: | 2011–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2011-03&r=lab |