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on Labour Economics |
| By: | María Dolores Guilló Fuentes (Universidad de Alicante); Alfonsa Denia Cuesta (Universidad de Alicante) |
| Abstract: | The aim of the paper is a gender analysis of the extent to which parttime work represents an individual’s preferred labor market situation. The work includes a theoretical model that delivers some predictions about the household’s preferences over non-chosen employment states. Furthermore, it explores the impact of individual, family and job related variables on the probabilities of involuntary and voluntary part-time employment in Spain. The main empirical findings of the paper are: first, the model is sensitive to the chosen definition of (voluntary) part-time employment; second, there exist important gender asymmetries in labour market behaviour concerning the importance of the individual’s education and family characteristics; third, the marital status and having small children are important determinants of a woman’s probability of being voluntary part-time employed, whereas having grown up children or a temporary contract increases significantly a woman’s probability of involuntary part-time employment. |
| Keywords: | part-time work, involuntary employment, family ties and labour supply. |
| JEL: | C13 C25 J16 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2011-11&r=lab |
| By: | Skedinger, Per (Research Institute of Industrial Economics (IFN)) |
| Abstract: | This paper examines the effects of collectively agreed increases in real minimum wages on employment transitions and hours among manual workers in the Swedish retail sector over the period 2001–05. The findings indicate that increases in real minimum wages are associated with more separations, whereas hours are less affected because separated workers put in relatively fewer hours before being separated. Among the young, however, both employment and hours are negatively affected. Labour-labour substitution seems to be important, since increases in minimum wages promote employment among workers with higher wages than those directly affected by the increases. The assumptions of the econometric model were tested by imposing fictitious minimum wages on lower-level non-manuals in the same industry, with turnover characteristics similar to manuals but covered by a different collective agreement with non-binding actual minimum wages. |
| Keywords: | Minimum wages; Labour-labour substitution; Employment |
| JEL: | J21 J23 J31 |
| Date: | 2011–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0869&r=lab |
| By: | Bruze, Gustaf (Department of Economics, Aarhus School of Business) |
| Abstract: | Educational homogamy is an important but poorly understood source of inequality. This paper analyzes a group of men and women who do not meet their spouses in school, are not sorted by education at work, and have no financial incentives to marry educated spouses. Nevertheless, movie actors show a strong tendency to sort positively on education in marriage. These findings suggest that male and female preferences alone induce considerable sorting on education in marriage and that men and women have very strong preferences for nonfinancial partner traits correlated with years of education |
| Keywords: | Educational Homogamy; Sorting; Inequality; Marriage |
| JEL: | I21 J12 |
| Date: | 2010–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2010_018&r=lab |
| By: | Baltagi, Badi H. (Syracuse University); Baskaya, Yusuf Soner (Central Bank of Turkey); Hulagu, Timur (Central Bank of Turkey) |
| Abstract: | This paper examines the Turkish wage curve using individual data from the Household Labor Force Survey (HLFS) including 26 NUTS-2 regions over the period 2005-2008. When the local unemployment rate is treated as predetermined, there is evidence in favor of the wage curve only for younger and female workers. However, if the lagged unemployment rate is used as an instrument for current unemployment rate, we find an unemployment elasticity of -0.099. We also find a higher elasticity for younger, less educated, low experienced workers than for older, more educated and more experienced workers. Another important finding is that the wages of females in Turkey are significantly more responsive to local unemployment rates than their male counterparts. |
| Keywords: | wage curve, fixed effects, instrumental variables, two-stage least squares |
| JEL: | J30 J60 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5633&r=lab |
| By: | Hanglberger, Dominik (Leuphana University Lüneburg); Merz, Joachim (Leuphana University Lüneburg) |
| Abstract: | Empirical analyses using cross-sectional and panel data found significantly higher levels of job satisfaction for self-employed than for employees. We argue that those estimates in previous studies might be biased by neglecting anticipation and adaptation effects. For testing we specify several models accounting for anticipation and adaptation to self-employment and job changes. Based on data from the German Socio-Economic Panel Survey (SOEP) we find that becoming self-employed is associated with large negative anticipation effects. In contrast to recent literature we find no specific long term effect of self-employment on job satisfaction. Accounting for anticipation and adaptation to job changes in general, which includes changes between employee jobs, reduces the effect of self-employment on job satisfaction by 70%. When controlling for anticipation and adaptation to job changes, we find no further anticipation effect of self-employment and a weak positive but not significant effect of self-employment on job satisfaction for three years. Thus adaptation wipes out higher satisfaction within the first three years being self-employed. According to our results previous studies at least overestimated possible positive effects of self-employment on job satisfaction. |
| Keywords: | job satisfaction, self-employment, hedonic treadmill model, adaptation, anticipation, fixed-effects panel estimations, German Socio-Economic Panel (SOEP) |
| JEL: | J23 J28 J81 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5629&r=lab |
| By: | Delaney, Liam (University College Dublin); Harmon, Colm P. (University College Dublin); Redmond, Cathy (University College London) |
| Abstract: | While there is an extensive literature on intergenerational transmission of economic outcomes (education, health and income for example), many of the pathways through which these outcomes are transmitted are not as well understood. We address this deficit by analysing the relationship between socio-economic status and child outcomes in university, based on a rich and unique dataset of university students. While large socio-economic differences in academic performance exist at the point of entry into university, these differences are substantially narrowed during the period of study. Importantly, the differences across socio-economic backgrounds in university grade attainment for female students is explained by intermediating variables such as personality, risk attitudes and time preferences, and subject/college choices. However, for male students, we explain less than half of the socio-economic gradient through these same pathways. Despite the weakening socio-economic effect in grade attainment, a key finding is that large socio-economic differentials in the earnings expectations of university students persist, even when controlling for grades in addition to our rich set of controls. Our findings pose a sizable challenge for policy in this area as they suggest that equalising educational outcomes may not translate into equal labour market outcomes. |
| Keywords: | socio-economic status, education, inequality, discrimination |
| JEL: | I21 J62 C81 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5646&r=lab |
| By: | Andrew E. Clark (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, IZA - Institute for the Study of Labor - IZA, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris); Andreas Knabe (OvGU - Otto-von-Guericke - University Magdeburg - University Magdeburg, CESifo - CESifo); Steffen Rätzel (OvGU - Otto-von-Guericke - University Magdeburg - University Magdeburg) |
| Abstract: | The social norm of unemployment suggests that aggregate unemployment reduces the well-being of the employed, but has a far smaller effect on the unemployed. We use German panel data to reproduce this standard result, but then suggest that the appropriate distinction may not be between employment and unemployment, but rather between higher and lower levels of labour-market security. Those with good job prospects, both employed and unemployed, are strongly negatively affected by regional unemployment. However, the insecure employed and the poor-prospect unemployed are less negatively, or even positively, affected. We use our results to analyse labour-market inequality and unemployment hysteresis. |
| Keywords: | unemployment, externalities, job insecurity, well-being |
| Date: | 2011–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-00586022&r=lab |
| By: | Cristini, Annalise (Department of Economics, University of Bergamo); Eriksson, Tor (Department of Economics, Aarhus School of Business); Pozzoli, Dario (Department of Economics, Aarhus School of Business) |
| Abstract: | High-performance work practices are frequently considered to have positive eects on corporate performance, but what do they do for employees? After showing that organizational innovation is indeed positively associated with rm performance, we investigate whether high-involvement work practices are associ- ated with higher wages, changes in wage inequality and workforce composition, using data from a survey directed at Danish private sector rms matched with linked employer-employee data. We also examine whether the relationship be- tween high-involvement work practices and employee outcomes is aected by the industrial relations context |
| Keywords: | Workplace practices; wage inequality; workforce composition; hierarchy |
| JEL: | C33 J41 J53 L20 |
| Date: | 2011–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2011_001&r=lab |
| By: | Blasco, Sylvie (Aarhus School of Business); Rosholm, Michael (Aarhus School of Business) |
| Abstract: | While job search theory predicts that active labour market policies (ALMPs) can affect post-unemployment outcomes, empirical evaluations investigating transition rates have mostly focused on the impact of ALMPs on exit rates from the current unemployment spell. We use a social experiment, which was conducted in Denmark in 2005-6, to investigate the effects of a dramatic intensification of ALMPs on reemployment stability. We investigate the nature of this impact. We estimate a duration model with lagged duration dependence to separately identify "indirect" (via shorter unemployment duration) and "direct" (through a more efficient matching process) effects of ALMPs on subsequent employment duration. We find that overall intensive activation significantly reduces unemployment recurrence for men, but not for women. When we control for dynamic selection into employment and lagged duration dependence, the positive impact of the treatment becomes smaller but remains significant. 80% of the global impact of intensification acts through the direct channel for men. |
| Keywords: | social experiment, labour market policy regime, treatment effect, post-unemployment outcome, duration model, lagged duration dependence, dynamic selection |
| JEL: | J64 C21 C41 J68 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5631&r=lab |
| By: | Stenberg, Anders (Swedish Institute for Social Research, Stockholm University); de Luna, Xavier (Department of Statistics, Umeå University); Westerlund, Olle (Department of Economics, Umeå University) |
| Abstract: | Governments in the US, Canada and Europe have expressed an ambition to stimulate education of older. In this paper, we analyze if there are effects on annual earnings of formal education for participants aged 42-55 at the time of enrolment in 1994-1995. The analysis explores longitudinal population register data stretching from 1982 to 2007. The method used is difference-in-differences propensity score matching based on a rich set of covariates, including indicators of health and labor market marginalization. Results differ from earlier studies, implying no significant average earnings effects for males, positive effects for females, although insufficient to cover total costs. |
| Keywords: | Adult education; Earnings; Government Expenditures; Human capital |
| JEL: | C21 H52 H75 I28 |
| Date: | 2011–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2011_008&r=lab |
| By: | Bruze, Gustaf (Department of Economics, Aarhus School of Business) |
| Abstract: | A collective marriage matching model is estimated and calibrated to quantify the share of returns to schooling that is realized through marriage. The predictions of the model are matched with US data on the relationship between schooling and wage rates, the division of time within the household, and the extent to which men and women sort positively on several traits in marriage. Counterfactual analysis conducted with the model, suggests that US middle aged men and women are earning in the order of 30 percent of their return to schooling through improved marital outcomes. |
| Keywords: | Marriage; Sorting; Returns to Education |
| JEL: | D10 I21 J12 |
| Date: | 2010–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2010_017&r=lab |
| By: | Stenberg, Anders (SOFI, Stockholm University); de Luna, Xavier (Department of Statistics, Umeå University); Westerlund, Olle (Department of Economics, Umeå University) |
| Abstract: | Governments in the US, Canada and Europe have expressed an ambition to stimulate education of older. In this paper, we analyze if there are effects on annual earnings of formal education for participants aged 42-55 at the time of enrolment in 1994-1995. The analysis explores longitudinal population register data stretching from 1982 to 2007. The method used is difference-in-differences propensity score matching based on a rich set of covariates, including indicators of health and labor market margi-nalization. Results differ from earlier studies, implying no significant average earnings effects for males, positive effects for females, although insufficient to cover total costs. |
| Keywords: | Adult education; Earnings; Government Expenditures; Human capital |
| JEL: | C21 H52 H75 I28 |
| Date: | 2011–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0823&r=lab |
| By: | A. Kerem Coşar (The University of Chicago Booth School of Business); Nezih Guner (ICREA-MOVE, Universitat Autònoma de Barcelona and Barcelona GSE); James Tybout (Pennsylvania State University and NBER) |
| Abstract: | This paper explores the effects of tariffs, trade costs, and firing costs on firm dynamics and labor markets outcomes. The analysis is based on a general equilibrium model with labor market search frictions, wage bargaining, firing costs, firm-specific productivity shocks, and endogenous entry/exit decisions. Firing costs reduce firms' profits and discourage them from quickly adjusting their employment levels in response to idiosyncratic shocks. Tariffs and other trade costs reduce rents for efficient firms and increase rents for inefficient firms, as in Melitz (2003). These well-known effects interact with idiosyncratic productivity shocks and with scale economies in hiring costs to determine the equilibrium size distribution of firms, entry/exit rates, job turnover rates, rate of informality, and cross-firm wage distributions. |
| Date: | 2011–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2011-06&r=lab |
| By: | Mirko Abbritti (Universidad de Navarra.); Stephan Fahr (European Central Bank, Kaiserstraße 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | Growth of wages, unemployment, employment and vacancies exhibit strong asymmetries between expansionary and contractionary phases. In this paper we analyze to what degree downward wage rigidities in the bargaining process affect other variables of the economy. We introduce asymmetric wage adjustment costs in a New-Keynesian DSGE model with search and matching frictions in the labor market. We find that the presence of downward wage rigidities strongly improves the fit of the model to the skewness of variables and the relative length of expansionary and contractionary phases even when detrending the data. Due to the asymmetry, wages increase more easily in expansions, which limits vacancy posting and employment creation, similar to the flexible wage case. During contractions nominal wages decrease slowly, shifting the main burden of adjustment to employment and hours worked. The asymmetry also explains the differing transmission of positive and negative demand shocks from wages to inflation. Downward wage rigidities help explaining the asymmetric business cycle of many OECD countries where long and smooth expansions with low growth rates are followed by sharp but short recessions with large negative growth rates. JEL Classification: E31, E52, C61. |
| Keywords: | labor market, unemployment, downward wage rigidity, asymmetric adjustment costs, non—linear dynamics. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20111321&r=lab |
| By: | Gonzalo Castex |
| Abstract: | Attending college is thought of as a very profitable investment decision, as its estimated annualized return ranges from 8% to 13%. However, a large fraction of high school graduates do not enroll in college. I reconcile the observed high average returns to schooling with relatively low attendance rates when considering college as a risky investment decision. A high dropout risk has two important effects on the estimated average returns to college: selection bias and risk premium. In order to explicitly consider the selection bias, I explore the dropout risk in a life-cycle model with heterogeneous ability. The risk-premium of college participation accounts for 21% of the excess returns to college education for highability students and 19% of the excess return for low-ability students. Risk averse agents are willing to reduce their return to college in order to avoid the dropout risk. The effect is not uniform across ability levels. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:606&r=lab |
| By: | Rita Asplund; Sami Napari |
| Abstract: | This paper compares the effects of intangible capital on wage formation among white-collar manufacturing workers using comparative data from three European countries : the Czech Republic, Finland and Norway. The analysis is undertaken in two steps. First, we explore the wage differentials and the underlying sources for two occupation groups : innovation and non-innovation workers. In a second step, this analysis is broken down by gender. We apply a decomposition method based on unconditional quantile regression techniques to examine the factors underlying the wage gaps observed along the whole wage distribution. The use of comparative cross-country data and a more elaborated wage decomposition method provides important new insights. We find, for example, that although innovation workers earn more than non-innovation workers in all three countries under scrutiny, there is considerable variation across the countries both in the levels and profiles of these wage differentials. Also the sources underlying these wage differentials vary between the countries. The levels and profiles of the gender wage gaps prevailing among innovation and non-innovation workers also reveal conspicuous cross-country differences. However, when it comes to the major sources contributing to these gender wage gaps, the results are strikingly similar across countries : what matters is marked gender differences in the rewards to similar basic human capital characteristics, not gender differences in these endowments. |
| Keywords: | gender wage gap, decomposition, human capital, intangible capital, manufacturing, quantile regression, wage formation, cross-country comparison |
| JEL: | J16 J31 |
| Date: | 2011–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1248&r=lab |
| By: | Goux, Dominique (CREST-INSEE); Maurin, Eric (Paris School of Economics); Petrongolo, Barbara (London School of Economics) |
| Abstract: | We investigate spillovers in spousal labour supply exploiting independent variation in hours worked generated by the introduction of the shorter workweek in France in the late 1990s. We find that female and male employees treated by the shorter legal workweek reduce their weekly labour supply by about 2 hours, and do not experience any reduction in their monthly earnings. While wives of treated men do not seem to adjust their working time at either the intensive or extensive margins, husbands of treated wives respond by cutting their workweek by about half an hour to one hour, according to specifications and samples. In particular, managers and professionals respond much more strongly to the shorter legal workweek in their wives’ firms than men in lower occupations. These effects are consistent with the presence of significant cross-hour effects on labour supply for husbands, though not for wives. |
| Keywords: | spill-over effects, labour supply, workweek reduction |
| JEL: | J22 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5639&r=lab |
| By: | Jacquet, Laurence (Norwegian School of Economics and Business Administration); Lehmann, Etienne (CREST-INSEE); Van der Linden, Bruno (IRES, Université catholique de Louvain) |
| Abstract: | This paper characterizes the optimal redistributive tax schedule in a matching unemployment framework with endogenous (voluntary) nonparticipation and (involuntary) unemployment. The optimal employment tax rate is given by an inverse employment elasticity rule. This rule depends on the global response of the employment rate, which depends not only on the participation (labor supply) responses, but also on the vacancy posting (labor demand) responses and on the product of these two types of responses. For plausible parameters, our matching environment induces much lower employment tax rates than the usual competitive participation model. |
| Keywords: | optimal taxation, labor market frictions, unemployment |
| JEL: | D82 H21 J64 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5642&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:11/256&r=lab |
| By: | Boeri, Tito (Bocconi University); Brücker, Herbert (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | The Great Recession triggered a resurgence of short-time work (STW) throughout the OECD. Several countries introduced from scratch STW or significantly expanded the scope of the programmes already in place. In some countries like Italy, Japan and Germany between 2.5 and 5 per cent of the workforce participated in short-time work schemes at the trough of the recession. In this paper we analyse the rationale for short time work benefits and their effects on labour adjustment from both a cross-country and a time-series perspective. We find that STW actually contributed to reduce job losses during the Great Recession. However, the number of jobs saved, according to our macroeconomic estimates, is smaller than the full-time equivalents jobs involved by these programmes, pointing in some cases to sizeable deadweight costs. Other institutions, like plant-level bargaining over hours, wages and employment levels may be more effective than STW in encouraging adjustment along the intensive margins in presence of temporary shocks. Our results also suggest that STW cannot be readily extended to countries having much different institutional configurations as the demand for STW is very much affected by other institutions such as employment protection legislation and the degree of centralization of collective bargaining. The micro evidence from firm-level data in Germany is more encouraging as to the effectiveness of STW, pointing to rather moderate deadweight losses. We interpret this result as due to specific design features of the German STW that could make it more effective in addressing the moral hazard problems related to reliance on subsidised hour reductions. The German Kurzarbeit scheme is indeed discouraging 100 per cent hours reductions and is experience-rated. |
| Keywords: | intensive margin, short-time |
| JEL: | J63 J65 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5635&r=lab |
| By: | Jose Maria Millan (University of Huelva, Spain); Emilio Congregado (University of Huelva, Spain); Concepcion Roman (University of Huelva, Spain); Mirjam van Praag (ACE, University of Amsterdam); Andre van Stel (EIM Business and Policy Research, Zoetermeer, the Netherlands) |
| Abstract: | Human capital obtained through education has been shown to be one of the strongest drivers of entrepreneurship performance. The entrepreneur's human capital is, though, only one of the input factors into the production process of her venture. The value of other input factors, such as (knowledge) capital and labor is likely to be affected by the education level of the possible stakeholders in the entrepreneur’s venture. The education distribution of the (local) population may thus shape the supply function of the entrepreneur. Likewise, the demand function faced by the entrepreneur is also likely to be shaped by the taste, sophistication and thus the education level of the population in their role as consumers. In other words, a population with a higher education level may be associated with (i) a working population of higher quality; (ii) more and/or higher quality universities with a positive effect on research and development (R&D) and knowledge spillovers leading to more high tech and innovative ventures; and finally, (iii) a more sophisticated consumer market. Based on this, we formulate the following proposition: The performance of an entrepreneur is not only affected positively by her own education level but in addition, also by the education level of the population. We test this proposition using an eight years (1994-2001) panel of labor market participants in the EU-15 countries from which we select individuals who have been observed as entrepreneurs. We find strong support for a positive relationship between enrolment rates in tertiary education in country <I>j</I> and year <I>t</I> and several measures of the performance of individual entrepreneurs in that same country and year, including survival and the probability that an entrepreneur starts employing personnel and maintains as an employer for a longer period of time. An implication of our novel finding is that entrepreneurship and higher education policies should be considered in tandem with each other. |
| Keywords: | entrepreneurship; performance; survival; personnel; education |
| Date: | 2011–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110066&r=lab |
| By: | Kevin Denny (School of Economics and Geary Institute, University College Dublin) |
| Abstract: | This paper addresses the question of whether higher levels of education contribute to greater tolerance of homosexuals. Using survey data for Ireland and exploiting a major reform to education, the abolition of fees for secondary schools in 1968, it is shown that increases in education causes individuals to be significantly more tolerant of homosexuals. Ignoring the endogeneity of education leads to much lower estimates of the effect of education. Replicating the model with data for the United Kingdom generates very similar results. |
| Keywords: | education, homophobia, tolerance, social returns |
| Date: | 2011–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201109&r=lab |
| By: | Heinesen, Eskil (AKF, Danish Institute of Governmental Research); Husted, Leif (AKF, Danish Institute of Governmental Research); Rosholm, Michael (Aarhus School of Business) |
| Abstract: | We estimate the effect of active labour market programmes on the exit rate to regular employment for non-western immigrants in Denmark who receive social assistance. We use the timing-of-events duration model and rich administrative data. We find large positive post-programme effects, and, surprisingly, even most in-programme effects are positive. The effects are largest for subsidized employment programmes, but effects are also large and significant for direct employment programmes and other programmes. The effects are larger if programmes begin after six months of unemployment. Implications of our estimates are illustrated by calculating effects on the duration to regular employment over a five-year period. |
| Keywords: | programme evaluation, duration analysis, timing-of-events model |
| JEL: | J64 J24 J68 J61 C41 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5632&r=lab |
| By: | Gonzalo Castex |
| Abstract: | This paper analyzes changes in the distribution of college enrollment rates that occurred between 1980 and 2000. It aims not only to explain the 69% increase in the overall college enrollment, but also changes in the profile of college students in terms of their ability and financial status. College attendance increased by 27% less than average among individuals in the lowest quartile of the joint family income and ability distribution. However, it increased by 12% more than average for individuals in the highest quartile of the distribution. The increase in college enrollment was far from uniform and, to explain these changes, I construct a life-cycle heterogeneous agents model of labor supply and human capital formation. The model is calibrated to match schooling patterns and labor market outcomes for the 1979 and 1997 NLSY cohorts. I explicitly model and quantitatively estimate the effect of four potential driving forces to explain the observed changes: The increase in the college wage gap, the change in the allocation of grants and scholarships, the increase in educational costs, and the changes in the ability and family income distribution. Finally, I explore alternative educational policies and their effect on different population groups. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:598&r=lab |
| By: | Hyytinen, Ari; Ilmakunnas, Pekka; Toivanen, Otto |
| Abstract: | The returns to entrepreneurship are monetary and non-monetary. We offer new evidence on these returns using a large sample of genetically identical male twins. Our within-twin analysis suggests that OLS estimates are downwards, and traditional first-differenced panel data estimates upwards biased. We find no differences in the earnings of men with either low or high education. Our within-twin analysis of non-monetary returns shows that entrepreneurs with low education work longer hours and have greater responsibilities, but also face a reduced risk of divorce and less monotonous work tasks. The same does not apply to highly educated entrepreneurs. |
| Keywords: | entrepreneurship; earnings; twin data; education; monetary returns; nonmonetary returns; selection |
| JEL: | J24 L26 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30076&r=lab |
| By: | Doan, Tinh |
| Abstract: | This paper employs the Ordinary Least Squares, Instrumental Variables and Treatment Effect models to a new dataset from the Vietnam Household Living Standards Survey (VHLSS) to estimate return to the four-year university education in 2008. Our estimates reveal that the return to university education is about 17% (annualized) and robust to the various estimators. The return to higher education has significantly increased since the economic reform in late 1980s. -- |
| Keywords: | economic transition,returns to higher education,IV model,Vietnam |
| JEL: | C31 J31 O15 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20114&r=lab |
| By: | Chris van Klaveren (TIER, Maastricht University); Henriette Maassen van den Brink (TIER, Maastricht University, and University of Amsterdam); Bernard van Praag (University of Amsterdam) |
| Abstract: | This study examines if couples time their work hours and how this work timing influences child care demand and the time that spouses jointly spend on leisure, household chores and child care. By using a innovative matching strategy, this studies identifies the timing of work hours that cannot be explained by factors other than the partners' potential to communicate on the timing of their work. The main findings are that couples with children create less overlap in their work times and this effect is more pronounced the younger the children. We find evidence for a togetherness preference of spouses, but only for childless couples. Work timing also in uences the joint time that is spent on household chores, but the effect is small. Finally, work timing behavior affects the demand for informal child care, but not the demand for formal child care. |
| Keywords: | Labor supply; Work timing; Time allocation |
| JEL: | D13 I31 J12 J22 |
| Date: | 2011–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110065&r=lab |
| By: | Richard Harris |
| Abstract: | This paper uses methods of spatial analysis to show that lower and higher attaining pupils are separating from each other as they make the transition from primary to secondary schools in London. The observation is not simply a function of geography – that some places are more affluent, with a link between wealth and educational advantage – because separations emerge between locally competing secondary schools: those that are drawing their intakes from the same primary schools. Whilst the separations are partly exacerbated by selective and by faith schools, in all but one year during the period 2003‐8 they remain statistically significant even when those schools are omitted. However, there is no evidence to suggest the separation of lower and higher attaining pupils is getting worse or better, suggesting the geographical determinants of “choice” are strong and not easily changed. |
| Keywords: | primary school, secondary school, transition, London, spatial analysis |
| JEL: | I28 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:11/257&r=lab |
| By: | Philip Du Caju (National Bank of Belgium, Boulevard de Berlaimont 14, 1000 Brussels, Belgium.); François Rycx (Université Libre de Bruxelles (ULB), Belgium.); Ilan Tojerow (DULBEA Université Libre de Bruxelles (ULB), Belgium.) |
| Abstract: | In the last decades, international trade has increased between industrialised countries and between high- and low-wage countries. This important change has raised questions on how international trade affects the labour market. In this spirit, this paper aims to investigate the impact of international trade on wage dispersion in a small open economy. It is one of the few to: i) use detailed matched employer-employee data to compute industry wage premia and disaggregated industry level panel data to examine the impact of changes in exports and imports on changes in wage differentials, ii) examine the impact of imports according to the country of origin. Looking at the export side, we find a positive effect of exports on the industry wage premium. The results also show that import penetration from low–income countries has a significant and negative impact on the inter-industry wage differentials, while imports from high-income countries seem to have a more ambiguous impact on the wage structure. The results suggest that trade with low-income and high-income countries has different effects on the inter-industry wage differentials. JEL Classification: F16, J31. |
| Keywords: | Wage Structure, Inter-industry Wage Differentials, International Trade, Matched Employer-employee Data. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20111325&r=lab |
| By: | Miguel Ricaurte |
| Abstract: | Why did services become the dominant sector in industrialized economies? While abundant literature exists on the transition from agriculture to industry (i.e., the industrial revolution), there is no consensual explanation for the second wave of structural change. I argue that sectoral differences in regulation affecting the degree of competition in labor and goods markets explain: (a) the rise in the services sector share of output and employment, (b) international differences in cross-sector structure, and (c) changes in relative wages among sectors. Using evidence on market imperfections, I calibrate a two-sector model where household unions bargain with firms for wages. The least competitive sector pays higher wages, and employment is restricted accordingly. The model produces time series consistent with the “service revolution” as experienced in the Unites States and European economies between 1950 and 2000. In particular, while generating changes in shares of output and employment, the model offers an explanation for relative wage differences, which the standard literature fails to capture. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:584&r=lab |
| By: | Ayyagari, Meghana; Demirguc-Kunt, Asli; Maksimovic, Vojislav |
| Abstract: | This paper describes a unique cross-country database that presents consistent and comparable information on the contribution of the small and medium enterprises sector to total employment, job creation, and growth in 99 countries. The authors compare and contrast the importance of small and medium enterprises to that of young firms across different economies. They find that small firms (in particular, firms with less than 100 employees) and mature firms (in particular, firms older than 10 years) have the largest shares of total employment and job creation. Small firms and young firms have higher job creation rates than large and mature firms. However, large firms and young firms have higher productivity growth. This suggests that while small firms employ a large share of workers and create most jobs in developing economies their contribution to productivity growth is not as high as that of large firms. |
| Keywords: | Labor Markets,Microfinance,Small Scale Enterprise,Labor Policies,Emerging Markets |
| Date: | 2011–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5631&r=lab |
| By: | Schlicht, Ekkehart (University of Munich) |
| Abstract: | The increasing wage inequality in many countries is usually seen as brought about by economic forces that drive for economic efficiency within a changing technological and social environment. Ethical evaluations of these developments diverge, yet the view that free labor markets drive to efficiency remains undisputed. This note sets out to criticize, in a non-technical manner, this efficiency presumption which is based on Adam Smith’s theory of wage setting. It is urged that a Smithian wage structure would indeed be both efficient and fair. Yet modern labor markets work in ways that are fundamentally different to what was envisaged by Adam Smith. That makes the outcomes observed in modern labor markets, according to Smithian standards, both inefficient and unfair. As a consequence, the pursuit of the Smithian ideal requires organizational remedies, intervention and regulation in labor markets. |
| Keywords: | inequality, compensating differentials, equalizing differentials, fairness, efficiency, efficiency wages, selection wages, Reder competition, collective organization, taxation, over-qualification |
| JEL: | J2 J3 D3 H2 B1 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp26&r=lab |
| By: | Barbara Liberda (Faculty of Economic Sciences, University of Warsaw); Marek Pęczkowski (Faculty of Economic Sciences, University of Warsaw) |
| Abstract: | The aim of this paper is to identify how the mobility between different types of broadly defined occupation (hired work, self-employment in industry, services and agriculture or social security beneficiaries) changes personal income of individuals. We apply the Markov matrices to the panel data on 30540 individuals for 2007-2008 from the Polish Household Budget Surveys. Our hypothesis is that a change of occupation affects individual capability to earn income, controlling for the occupation a person quits and the occupation a person starts, as well as age, education level and a permanent or temporary character of work. We test our hypothesis using the regression analysis. Our results show that the inter-occupational mobility matters mostly for those quitting hired work for self-employment, for the better educated, as well as for respondents above 60 years of age. |
| Keywords: | income, earning, mobility, occupation, hired work, self-employment |
| JEL: | D11 D12 D14 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2011-09&r=lab |
| By: | Dimova, Ralitza (University of Manchester); Epstein, Gil S. (Bar-Ilan University); Gang, Ira N. (Rutgers University) |
| Abstract: | We examine agricultural child labor in the context of emigration, transfers, and the ability to hire outside labor. We start by developing a theoretical background based on Basu and Van, (1998), Basu, (1999) and Epstein and Kahana (2008) and show how hiring labor from outside the household and transfers to the household might induce a reduction in children’s working hours. Analysis using Living Standards Measurement Survey (LSMS) data on the Kagera region in Tanzania lend support to the hypothesis that both emigration and remittances reduce child labor. |
| Keywords: | child labor, emigration, transfers, Tanzania |
| JEL: | D62 F22 I30 J13 J20 J24 O15 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5641&r=lab |
| By: | Bhashkar Mazumder; Jonathan Davis |
| Abstract: | We estimate the association between parental earnings and a wide variety of indicators of child well-being using data from the Survey of Income and Program Participation (SIPP) matched to administrative earnings records from the Social Security Administration. We find that the use of longer time averages of parent earnings leads to substantially higher estimated effects compared to using only a single year of parent earnings. This suggests that previous studies may have understated the potential efficacy of income support programs to improve child well-being. Further, policy makers should take into account the attenuation bias when comparing studies that use different time spans to measure parental income. Using 7 year time averages of parent earnings, we show for example, that a doubling of parent earnings reduces the probability of a teenager reporting being in poor health by close to 50 percent and a child having insufficient food by 75 percent. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:11-12&r=lab |
| By: | Eriksson, Tor (Department of Economics, Aarhus School of Business); Kristensen, Nicolai (Danish Institute for Governmental Research and IZA) |
| Abstract: | The two key predictions of hedonic wage theory are that there is a trade-o¤ between wages and nonmonetary rewards and that the latter can be used as a sorting device by …rms 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 o¤ers. In this paper this data predicament is solved by the use of the vignettes method to estimate individuals’ willingness to pay for fringe bene…ts and job amenities. We …nd clear negative wage-fringe trade-o¤s, con- siderable heterogeneity in willingness to pay for fringe bene…ts, and signs of sorting. The …ndings 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: | 2010–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2010_016&r=lab |
| By: | Giordano Mion; Luca David Opromolla |
| Abstract: | This paper investigates whether the arrival of managers with export experience, i.e. experience acquired through participation in the export activity of previous employers, is related to firms’ international trade status and to what extent this relationship is of a causal nature. We construct a worker-firm matched panel dataset which enables us to track managers across different firms over time and observe firms’ trading stance as well as a large set of workers’ and firms’ characteristics. Contrary to blue and white collars, we find that managers are paid a sizeable premium for export experience which has both a level and a trend component. Conditioning for the firm past trade status, we find that a one standard deviation increase in the firm’s share of managers’ with export experience corresponds to about 35% more chances of starting to export. The impact is stronger for larger firms and is roughly of the same order of magnitude of the firm productivity effect. On the contrary, export experience acquired by managers from previous employers positively affects the capacity to keep exporting in small firms only. To give a causality flavor to our findings, we use in a final step an IV strategy that mimics a random matching between managers with export experience and firms. IV estimations indicate that export experience matters even more for entry while it has no effect on exit. |
| JEL: | F10 L25 J31 J60 M50 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201104&r=lab |
| By: | H. Luke Shaefer (University of Michigan); Liyun Wu (University of Michigan) |
| Abstract: | Using the Survey of Income and Program Participation (SIPP), a nationally representative, longitudinal survey, this study examines changing levels of Unemployment Insurance (UI) eligibility and benefit receipt among working low-educated single mothers, 1990–2005. It also examines changing participation in cash welfare and the Food Stamp Program (FSP). Relative to single childless women, there has been no increase in UI benefit receipt among single mothers entering a spell of unemployment in the postreform period, even though single mothers have increased their relative rates of UI eligibility. Because of declining cash assistance receipt, UI became a more common income support than cash assistance for this population during the period 2001–2005. Furthermore, the probability of accessing FSP for low-educated single mothers entering a spell of unemployment increased in the years 2001–2005. As a result, the proportion of this population accessing benefits from one or more of these programs remained virtually unchanged across the study period. |
| Keywords: | Welfare Reform, Unemployment Insurance, Low-educated Single Mothers |
| JEL: | J65 J68 I38 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:11-173&r=lab |
| By: | Christopher J. O'Leary (W.E. Upjohn Institute for Employment Research) |
| Abstract: | The American Recovery and Reinvestment Act (ARRA) of 2009 provided financial incentives for UI modernization. The financial incentive is the state share of $7 billion available nationwide. States can receive one-third of their allocation by having an alternate base period (ABP) for monetary determination of UI eligibility that includes the most recently completed calendar quarter. States can receive the remaining two-thirds of their allocation for having two of four additional program features: 1) UI eligibility while seeking only part-time work, 2) UI eligibility after job separations due to harassment or compelling family reasons, 3) continuation of UI benefits for at least 26 additional weeks after exhaustion of regular benefits while in approved training, and 4) dependents’ allowances of at least $15 per dependent up to $50. This paper presents estimates of the UI benefit payment costs of these five program changes based on data from the Commonwealth of Kentucky. To date 39 states have received modernization payments for having an ABP, and 32 states have received the remaining two-thirds of funds available. The numbers of states adopting each of these additional features are as follows: 25 for seeking part-time, 18 for family reasons, 14 for exhaustee benefits while in training, and 7 for dependents’ allowances. Estimates of the UI benefit payment costs for these features, based on Kentucky data, suggest a pattern of states choosing UI modernization features to minimize the expected benefit payment costs. However, for states broadening UI eligibility through modernization, UI benefit payment costs will be higher for any given level of unemployment. Liberalized eligibility rules must be balanced by structural financing enhancements to ensure long-term fiscal stability of the system. |
| Keywords: | unemployment insurance, UI, modernization, American Recovery and Reinvestment Act, benefit payments, Kentucky, administrative data, state expenditures |
| JEL: | J65 J68 H83 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:11-172&r=lab |
| By: | Flannery, Darragh (University of Limerick); O'Donoghue, Cathal (Teagasc Rural Economy Research Centre) |
| Abstract: | In this paper we utilise microsimulation techniques in the form of an income generation model and a tax/benefit model to estimate both the fiscal and net private return to education at a marginal level. This is carried out empirically using Irish data across the period 1987-2005 and is the first study to utilise these techniques in such a manner. The results indicate that a more generous tax/benefit system, combined with a greater state burden of the cost of education over this period may have helped increase the individual’s return to education, while reducing the state return from investing in education. The methodology employed allows us to specifically analyse the impact of various components of the tax/benefit system upon these returns across time and show the role of income tax changes upon the return to education for the individual and the state. |
| Keywords: | returns to education, microsimulation, income generation model |
| JEL: | I22 I28 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5627&r=lab |
| By: | McCoy, Selina; Byrne, Delma |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb2010/4/3&r=lab |
| By: | Müller, Julia; Schwieren, Christiane |
| Abstract: | There is ample evidence that women do not react to competition as men do and are less willing to enter a competition than men (e.g., Gneezy et al.(2003), Niederle and Vesterlund (2007)). In this paper, we use personality variables to understand the underlying motives of women (and men) to enter a competition or avoid it. We use the Big Five personality factors (Goldberg (1981), McCrae and Costa JR (2003)), where especially neuroticism has been related to performance in achievement settings. We first test whether scores on the Big Five are related to performance in our experiment, and second how this is related to incentives. We can show that the sex difference in the willingness to enter a competition is mediated by neuroticism and further that neuroticism is negatively related to performance in competiton. This raises the possibility that those women who do not choose competitive incentives "know" that they should not. |
| Keywords: | Gender; Personality; Big Five; Five-factor Model; Competition; Experiment |
| JEL: | C91 J16 L00 |
| Date: | 2011–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0511&r=lab |
| By: | Roque Montero |
| Abstract: | This paper tests the hypothesis of linearity against a specific form of nonlinearity in the Data Generating Process (DGP) of the unemployment rate and the difference between the inflation rate (CPI and CPIX1) and the inflation target. The test is performed over each variable using time series models. Under the null hypothesis, the DGP has a linear representation (AR model) and under the alternative, a non linear specification (SETAR model). Unlike traditional ARIMA models, these models allow the endogenous variable to have different regimes across time. The main results are: it is not possible to reject linearity in the deviation of inflation from the inflation target. During the last twenty years, inflation has converged smoothly to the target without any regime switching. Finally, strong evidence is found against linearity in the unemployment rate. On the contrary, it fluctuates with high probability between states or regimes through time. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:614&r=lab |
| By: | Bandick, Roger (Department of Economics, Aarhus School of Business) |
| Abstract: | This paper studies the effect of foreign acquisition on wages and total factor productivity (TFP) in the years following a takeover by using unique detailed firm-level data for Sweden for the period 1993-2002. The paper takes particular account of the potential endogeneity of the acquisition decision (for example due to “cherry picking”) by implementing an instrumental variable approach and propensity score matching with difference-in-difference estimation technique. Moreover, in line with recent literature on firm heterogeneity in international trade, this paper allows for the acquisition effect to differ depending on whether the targeted firms were domestic multinational or non-multinationals before the foreign takeover. This paper also allows for the acquisition effect to differ depending on whether the acquisition is horizontal or vertical. The result shows that foreign acquisition has no effects on overall, skilled or less-skilled wage growth neither in targeted Swedish MNEs nor in targeted Swedish non-MNEs and neither if the acquisition was motivated by vertical or horizontal motives. However, the results indicate that both targeted Swedish MNEs and non- MNEs have better growth in TFP after vertical foreign acquisition only but no such impact from horizontal foreign acquisition |
| Keywords: | heterogeneity; multinational enterprises; acquisitions; wage differentials; productivity; matching; difference-in-difference |
| JEL: | F23 J31 L23 |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2010_021&r=lab |
| By: | Flannery, Darragh (University of Limerick); O'Donoghue, Cathal (Teagasc Rural Economy Research Centre) |
| Abstract: | With increasing numbers of young people participating in higher education in Ireland and a heavy reliance of higher education institutions on state funding, the introduction of an alternative finance system for Ireland has been muted over the past number of years. However, no study has been conducted to gauge the potential impact of such measures. In this chapter we utilize a dynamic microsimulation model developed for Ireland to simulate the impact of both an income contingent loan system (ICL) and a graduate tax system from a fiscal and redistributional viewpoint and to analyze the repayment length under the former system. Our results suggest that an ICL system would is more equitable, while the graduate tax system would be a better alternative from a fiscal viewpoint. The results also illustrate the important of the interest rate attached to any future student loan system within Ireland from a fiscal viewpoint. |
| Keywords: | higher education financing, dynamic microsimulation, income contingent loan, graduate tax |
| JEL: | I22 I28 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5626&r=lab |
| By: | Feijten, Peteke (University of St. Andrews); van Ham, Maarten (University of St. Andrews) |
| Abstract: | The number of people who have ever experienced a divorce, or a split up of a non-marital union, is rising every year. It is well known that union dissolution has a disruptive effect on the housing careers of those involved, often leading to downward moves on the housing ladder. Much less is known about the geographies of residential mobility after union dissolution. There are reasons to expect that those who experienced a union dissolution are less likely to move over longer distances, which could negatively influence the spatial flexibility of the labour force. This study contributes to the existing literature by investigating the occurrences of moves, distances moved and the destinations of moves after union dissolution. The paper also contributes to the literature by not only investigating the effect of divorce, but also splitting up, and repartnering on mobility. Using longitudinal data from the British Household Panel Survey (BHPS) and logistic regression models we found that union dissolution has a significant effect on the occurrence of moves and moving distances. |
| Keywords: | union dissolution, splitting up, divorce, housing career, spatial mobility, longitudinal data, BHPS, United Kingdom |
| JEL: | J12 J61 R21 R23 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5628&r=lab |
| By: | Bayo-Moriones, Alberto (University of Navarra); Galdón-Sánchez, José Enrique (Universidad Pública de Navarra); Martinez-de-Morentin, Sara (Universidad Pública de Navarra) |
| Abstract: | The determinants of the dimensions that shape a formal system of performance appraisal are studied in relation to a sample of Spanish manufacturing establishments. In particular, the factors that influence the measures used to evaluate performance, the person who carries out such appraisal and its frequency are analysed. Our results show that the characteristics of the establishment exert a significant influence on the configuration of performance appraisal. Specifically, we find that the use of practices complementary to performance evaluation and the structural factors of the establishment are found to correlate closely with the dimensions of formal performance appraisal. |
| Keywords: | performance appraisal, monitoring, establishment characteristics, dimensions of appraisal |
| JEL: | M12 M5 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5623&r=lab |