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on Labour Economics |
| By: | Yusuf Soner Baskaya; Timur Hulagu |
| Abstract: | Using individual level data from Turkstat Household Labor Force Survey for 2005-2009 period and a variety of parametric and semi-parametric techniques, we test two hypothesis regarding formal and informal labor markets: whether there is a wage gap between formal and informal workers and whether this gap is sensitive to variations in unemployment rates across regions and over time, where the formality of employment is defined with respect to registry status of the individuals to compulsory Social Security System. In line with most studies, the formal workers earn more than informal workers, as suggested by standard wage regressions, conditional on workers' observed individual characteristics. On the other hand, considering the limitations of parametric methods and possibility of misleading results due to the different distributional characteristics of formal and informal workers, we alternatively implement propensity score matching. In contrast with the recent studies for other developing countries showing that the wage gap estimates with propensity score matching is insignificant, we do find large and sizable wage gaps between formal and informal workers in Turkey. While parametric methods give similar estimates for formal-informal wage gap within gender groups, the semi-parametric estimates suggest that the observed formal-informal wage gap is larger among females compared to males. Finally, we show that although the parametric methods, such as wage curve regressions, suggest that wages of informal workers decreases and wages of formal workers do not change with higher unemployment rates, the semi-parametric methods show that these gaps are insensitive to unemployment rate variations across regions or over time. Keywords: Formal/Informal Employment, Wage Gap, Propensity Score Matching, Regional Labor Markets. JEL classification: C14; J30; J42; J60; O17 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p409&r=lab |
| By: | Sekyu Choi; Alexandre Janiak; Benjamín Villena-Roldán |
| Abstract: | We estimate and report life cycle transition probabilities between employment, unemployment and inactivity for male workers using Current Population Survey monthly files. We assess the relative importance of each probability in explaining the life cycle profiles of participation and unemployment rates using a novel decomposition method. A key robust finding is that most differences in participation and unemployment over the life cycle can be attributed to the probability of leaving employment and the probability of transiting from inactivity to unemployment, while transitions from unemployment to employment (the job finding probability) play secondary roles. We then show that a simple life cycle extension of a three-state labor search model with leisure shocks can qualitatively replicate the empirical unemployment and participation life cycle profiles, without introducing age or worker heterogeneity in market abilities. We conclude that models that seek to explain life cycle work patterns should not ignore transitions to and from inactivity. JEL Codes: D91, E24, J64. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:edj:ceauch:278&r=lab |
| By: | Letizia Mencarini; Cristina Solera |
| Abstract: | Paths to adulthood have changed greatly in the last decades: entries into the labour market as well as into partnership or parenthood have been postponed, with also new sequences and interconnections. In this piece of work we observe life-courses from the ages of 14 to 35 of men and women born in four successive cohorts. We distinguish them by level of education, and we analyse the timing and frequencies of their first job, the first job as an insider (as an employee with a permanent contract or as a typical self-employed worker), episodes of atypical work or unemployment between first job and age 35, couple formation, and childbirth. Our analyses confirm that today's young Italians form a 'postponement generation', which achieves later, if at all, what previous generations had already achieved in their twenties. For men, until the cohort born in the 1960s, the norm for both high- and low-educated men was to be insiders at age 35, and to achieve that status rapidly. What has changed is that now men become labour-market insiders later, and the route is more tortuous, with long and repeated spells of unemployment or atypical work. For women – for whom being in employment, and working as insiders, has never been the norm – the change has been their greater involvement in the labour market, but with the greater risk, compared with men, of job insecurity, especially if their education level is low. In the later cohorts, the ages at first marriage or cohabitation and first childbirth have also changed, especially for highly educated men. This is strongly connected with changes in labour market paths, but with gender differences. Not holding an insider position inhibits the assumption of family responsibilities for men. For women economic and job insecurity seem to have less influence on childbirth. |
| Keywords: | Labour market stability and transition to first child; paths to adulthood; gender; education; changes across cohorts |
| JEL: | J13 J16 J62 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:219&r=lab |
| By: | Alejandra Mizala |
| Abstract: | This paper documents the extent to which teachers are underpaid vis-à-vis workers in other professional and technical occupations in Latin America circa 2007. These labor earnings differences, attributed to observable socio-demographic and job characteristics, are assessed using a matching methodology (Ñopo, 2008). Teachers’ underpayment is found to be stronger than what has been previously reported in the literature, especially among pre-school and primary teachers. Nonetheless, behind the region averages there is an important cross-country heterogeneity. Teachers’ underpayment is more pronounced among males, older workers, household heads, part-timers, formal workers, those who work in the private sector, and (mostly) among those with complete tertiary education. Two amenities of the teaching profession, namely the longer job tenure and the flexible job schedules within the year, are also explored. Even after accounting for the possible compensating differentials of these two amenities, teachers’ underpayment vis-à-vis that of other professional and technicians prevail. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:edj:ceauch:282&r=lab |
| By: | Findeisen, Sebastian (University of Zurich); Sachs, Dominik (University of Konstanz) |
| Abstract: | We study optimal tax and educational policies in a dynamic private information economy, in which ex-ante heterogeneous individuals make an educational investment early in their life and face a stochastic wage distribution. We characterize labor and education wedges in this setting analytically and numerically, using a calibrated example. We present ways to implement the optimum. In one implementation there is a common labor income tax schedule, and a repayment schedule for government loans given out to agents during education. These repayment plans are contingent on loan size and income and capture the history dependence of the labor wedges. Applying the model to US-data and a binary education decision (graduating from college or not) we characterize optimal labor wedges for individuals without college degree and with college degree. The labor wedge of college graduates as a function of income lies first strictly above their counterparts from high-school, but this reverses at higher incomes. The loan repayment schedule is hump-shaped in income for college graduates. |
| Keywords: | optimal dynamic taxation, education, implementation |
| JEL: | H21 H23 I21 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6056&r=lab |
| By: | Lasse Sigbjørn Stambøl |
| Abstract: | An important motivation to establish and develop higher education institutions across regions is to improve and restructure the regional labour markets toward higher education jobs, contribute to maintain the regional settlement patterns of the population generally and to increase the numbers of higher educated labour especially. This paper introduces a short description of the Norwegian regional higher education institution system, followed by analyses of the impact of higher education institutions on regional labour markets, labour and job mobility and population development featuring e.g. studies of the students’ post graduate regional mobility and the regional ability of students to complete their graduation. Most of the analyses are based on data from individual registers covering the entire population, and partly organised as regional panel data. Tentative results suggest that regions that contain both university and high schools perform better than average on most indicators being analysed; especially, the ability to increase the number of higher educated labour, the return to the net increase of professionals at the higher education institutions on the numbers of regional higher educated labour, the ability to re-allocate jobs within firms from low to higher education jobs, higher than average net in-migration of population due to relatively low out-migration and stronger import of knowledge through in-migration than export of knowledge through out-migration, thus experiencing a strong regional “brain-gainâ€. Furthermore, the regions where the higher education institute itself represents a minor part of the local higher educated labour market, perform mostly better than those regions where the higher education institute itself represents a medium or major part of the local higher educated labour market. Finally, the regions without higher education institutes mostly perform lower than average on most indicators, except the ability to create new jobs in new established firms. However, these regions also show higher than average closures of firms generally. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1403&r=lab |
| By: | Mary C. Daly (Federal Reserve Bank of San Francisco); Bart Hobijn (Federal Reserve Bank of San Francisco, and VU University Amsterdam); Theodore S. Wiles (The Analysis Group) |
| Abstract: | Using data from the Current Population Survey from 1980 through 2010 we examine what drives variation and cyclicality in the growth rate of real wages over time. We employ a novel decomposition technique that allows us to divide the time series for median weekly earnings growth into the part associated with the wage growth of persons employed at the beginning and end of the period (the wage growth effect) and the part associated with changes in the composition of earners (the composition effect). The relative importance of these two effects varies widely over the business cycle. When the labor market is tight job switchers get high wage increases, making them account for half of the variation in median weekly earnings growth over our sample. Their wage growth, as well as that of job-stayers, is procyclical. During labor market downturns, this procyclicality is largely offset by the change in the composition of the workforce, leading aggregate real wages to be almost noncyclical. Most of this composition effect works through the part-time employment margin. Remarkably, the unemployment margin neither accounts for much of the variation nor for much of the cyclicality of median weekly earnings growth. |
| Keywords: | Business cycle; labor market dynamics; wages. |
| JEL: | E24 J3 J6 |
| Date: | 2011–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110158&r=lab |
| By: | Corak, Miles |
| Abstract: | This paper examines the education outcomes (including the chances of being a high school drop-out) of a cohort of immigrants who arrived in Canada as children using the 2006 Census. The research documents the degree to which high school graduation for immigrant children may change discretely after a particular age at arrival in Canada. |
| Keywords: | Education, training and learning, Children and youth, Ethnic diversity and immigration, Educational attainment, Immigrant children and youth, Education, training and skills, Integration of newcomers, Outcomes of education |
| Date: | 2011–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2011336e&r=lab |
| By: | Gunseli Berik; Ebru Kongar |
| Abstract: | The US economic crisis and recession of 2007-09 accelerated the convergence of women's and men's employment rates as men experienced disproportionate job losses and women's entry into the labor force gathered pace. Using the American Time Use Survey (ATUS) data for 2003-10, this study examines whether the narrowing gap in paid work over this period was mirrored in unpaid work, personal care, and leisure time. We find that the gender gap in unpaid work followed a U-pattern, narrowing during the recession but widening afterward. Through segregation analysis, we trace this U-pattern to the slow erosion of gender segregation in housework and, through a standard decomposition analysis of time use by employment status, show that this pattern was mainly driven by movement toward gender-equitable unpaid hours of women and men with the same employment status. In addition, gender inequality in leisure time increased over the business cycle. |
| Keywords: | Economics of Gender; Unemployment; Time Use; Economic Crises |
| JEL: | D13 J6 J16 J22 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_696&r=lab |
| By: | Catherine Pollak (IRDES et Centre d'Economie de la Sorbonne); Nicolas Sirven (IRDES) |
| Abstract: | This article analyses the effect of job quality on pathways to productive activities of older workers in Europe. Using comparative panel data from SHARE, we analyse the medium term effects of working conditions of workers aged 50-64 on three participation outcomes (staying in employment, participating in social activities and providing informal care) with a trivariate probit model. Several aspects of job quality appear to play a role for participation in society as a whole, including participation in social activities. Care-giving on the other hand appears independent from the considered job quality indicators, but very gender specific. However, trade-offs between full time work and care activities appear in some cases. Therefore, better working conditions and the opportunity for work time arrangements should be developed if one aims to foster participation of older workers in the society. |
| Keywords: | Job quality, ageing, early retirement, social participation, informal care. |
| JEL: | J22 J14 C35 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:11066&r=lab |
| By: | Agata Pradela |
| Abstract: | Education for labour market on the school level is neglected in Poland. Concentration on university degree and general education caused the decrease of interest of vocational education of qualified workers (needed on labor market). To the most important problems in management in the area of vocational education belong: 1. Increasing number of lower secondary schools graduates choosing general secondary schools and willing to continue education at universities. 2. Decreasing interest of vocational education. 3. Lack of information of labour market requirements and very inefficient cooperation between labour market and educational system. 4. Graduates knowledge, qualifications, skills and attitudes does meet labour market needs. To solve these problems the Author suggests to create the cluster initiative in educational system (as a part of research of the project “Creation the cluster initiatives in education systemâ€Â; caring out in Silesian University of Technology; financed by Ministry of Science and Higher Education; no 0193/B/H03/2010/39). The paper presents good practices in vocational education to implement in the initiative and a map of categories of solution. Research also indicated barriers and abilities of the implementation those solutions (or elements of them). The proposal to adapt the education to labour market requirements is based on integrated research and monitoring on cluster initiative’s participants. They are: pupils, educational area (mainly: schools directors and teachers), employers and local governments. The paper also highlights the model of cluster initiative in education. Research helped to indicate areas of the best climate to create cluster initiative, barriers and difficulties, ways of communication, range of corporation in the initiative. Indicated operations, processes and role of participants in cluster initiative will help to create the expert system to support educational management in conjunction with labour market needs. The idea of expert system is to activate communication between potential participant in cluster initiative. Making decisions on the basis of scientific research will make them rational. A tool used by every participant will help to create cluster initiative in education (firstly very narrow) and to support functioning of the cluster initiative. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p277&r=lab |
| By: | Ejrnæs, Mette (University of Copenhagen); Kunze, Astrid (Norwegian School of Economics (NHH)) |
| Abstract: | This study investigates how the first childbirth affects the wage processes of highly attached women. We estimate a flexible fixed effects wage regression model extended with post-birth fixed effects by the control function approach. Register data on West Germany are used and we exploit the expansionary family policy during the late 1980s and 1990s for identification. On the return to work after the birth, mothers' wages drop by 3 to 5.7 per cent per year of leave. We find negative selection back to full-time work after birth. We discuss policy implications regarding statistical discrimination and results on family gap. |
| Keywords: | wages, parental leave, human capital, return to work, non-random selection |
| JEL: | C23 J18 J22 J24 J31 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6066&r=lab |
| By: | Sebastian Findeisen; Dominik Sachs |
| Abstract: | We study optimal tax and educational policies in a dynamic private information economy, in which ex-ante heterogeneous individuals make an educational investment early in their life and face a stochastic wage distribution. We characterize labor and education wedges in this setting analytically and numerically, using a calibrated example. We present ways to implement the optimum. In one implementation there is a common labor income tax schedule, and a repayment schedule for government loans given out to agents during education. These repayment plans are contingent on loan size and income and capture the history dependence of the labor wedges. Applying the model to US-data and a binary education decision (graduating from college or not) we characterize optimal labor wedges for individuals without college degree and with college degree. The labor wedge of college graduates as a function of income lies first strictly above their counterparts from high-school, but this reverses at higher incomes. The loan repayment schedule is hump-shaped in income for college graduates. |
| Keywords: | Optimal dynamic taxation, education, implementation |
| JEL: | H21 H23 I21 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:040&r=lab |
| By: | Lasse Steiner; Lucian Schneider |
| Abstract: | The artistic labor market is marked by several adversities, such as low wages, above-average unemployment, and constrained underemployment. Nevertheless, it attracts many young people. The number of students exceeds the available jobs by far. A potential explanation for this puzzle is that artistic work might result in exceptionally high job satisfaction, a conjecture that has been mentioned at various times in the literature. We conduct the first direct empirical investigation of artists’ job satisfaction. The analysis is based on panel data from the German Socio-Economic Panel Survey (SOEP). Artists on average are found to be considerably more satisfied with their work than non-artists, a finding that corroborates the conjectures in the literature. Differences in income, working hours, and personality cannot account for the observed difference in job satisfaction. Partially, but not fully, the higher job satisfaction can be attributed to the higher self-employment rate among artists. Suggestive evidence is found that superior “procedural” characteristics of artistic work, such as increased variety and on-the-job learning, contribute to the difference in job satisfaction. |
| Keywords: | Job satisfaction, artists, work-preference, cultural economics |
| JEL: | Z10 J24 J28 J31 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:037&r=lab |
| By: | Rafael Lalive; Analía Schlosser; Andreas Steinhauer; Josef Zweimüller |
| Abstract: | Parental leave regulations in most OECD countries have two key policy instruments: job protection and cash benefits. This paper studies how mothers’ return to work behavior and labor market outcomes are affected by alternative mixes of these key policy parameters. Exploiting a series of major parental leave policy changes in Austria, we find that longer cash benefits lead to a significant delay in return to work and that the magnitude of this effect depends on the relative length of job protection and cash benefits. However, despite their impact on time on leave, we do not find a significant effect on mothers’ labor market outcomes in the medium run, neither of benefit duration nor of job-protection duration. To understand the relative importance (and interaction) of the two policy instruments in shaping mothers’ return to work behavior, we set up a non-stationary job search model in which cash benefits and job protection determine decisions of when to return to work and whether or not to return to the pre-birth employer. Despite its lean structure, the model does surprisingly well in matching empirically observed return to work profiles. The simulation of alternative counterfactual regimes shows that a policy that combines both job protection and benefits payments succeeds to induce mothers to spend some time with the child after birth without jeopardizing their medium run labor market attachment. |
| Keywords: | Parental leave, family and work obligations, return to work, labor supply, earnings, family earnings gap |
| JEL: | J13 J18 J22 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:042&r=lab |
| By: | Maciej Jakubowski (Faculty of Economic Sciences, University of Warsaw; Organisation for Economic Co-operation and Development); Artur Pokropek (Institute of Educational Research (IBE)) |
| Abstract: | This paper discusses a method to compare progress in reading achievement from primary to secondary school across countries. The method is similar to value-added models that take into account intake levels when comparing student progress in different schools. Value-added models are preferred over raw scores as they better reflect school efforts. The method dis-cussed in this paper uses measures of achievement in primary schools from PIRLS and com-pares them to secondary school results from PISA. Changes in achievement are estimated using IRT models and random draws of test items. Results describe an interval in which esti-mates of progress can lie, depending on the comparability of these two assessments. Estimates of progress are also adjusted for student age, gender and other characteristics that differ be-tween countries and surveys. Separate results by gender, immigrant status, and proficiency level provide a detailed picture of how students in different countries progress in school from the age of 10 to 15. |
| Keywords: | human capital, cognitive skills, international student achievement tests, education, PISA, PIRLS |
| JEL: | I21 J24 O15 P50 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2011-20&r=lab |
| By: | Böckerman, Petri; Haapanen, Mika |
| Abstract: | This paper examines the effect of polytechnic reform on geographical mobility. A polytechnic, higher education reform took place in Finland in the 1990s. It gradually transformed former vocational colleges into polytechnics and also brought higher education to regions that did not have a university before. This expansion of higher education provides exogenous variation in the regional supply of higher education. We find that the reform increased the migration of high school graduates. The migration propensities increased particularly close to graduation from high school, but some results also suggest a smaller positive effect over a longer period. |
| Keywords: | Migration; higher education; school reform; polytechnics; high school graduates |
| JEL: | I20 J10 J61 R23 |
| Date: | 2011–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34619&r=lab |
| By: | Roberto Leombruni; Michele Mosca |
| Abstract: | In Italy large work career gender gaps currently exists, particularly regarding wages and activity rates. The paper investigates the issue looking at lifetime incomes, where from the one side all the career gaps tend to accumulate, from the other the redistribution acted by the pension system may mitigate the differences. Exploiting an original database on the entire work careers, we document how the pay gap constantly opens with age and how women tend to cumulate lower seniority. Both gaps have an impact in the pension calculation, so that the day after retirement gender differences are even higher. By means of a microsimulation model we show that the pension system partially countervails labour market outcomes, implying lower differences in lifetime incomes. However, due to the current transition to an actuarially neutral system, the effect is going to vanish in following decades, posing some concerns about future prospects of gender income inequality. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:113&r=lab |
| By: | Hjalmarsson, Randi; Holmlund, Helena; Lindquist, Matthew |
| Abstract: | This paper studies the causal effect of educational attainment on conviction and incarceration using Sweden's compulsory schooling reform as an instrument for years of schooling and a 25 percent random sample from Sweden's Multigenerational Register matched with more than 30 years of administrative crime records. The first stage of the analysis employs a differences-in-differences design to account for the non-random implementation of the reform across municipalities, and finds that exposure to the reform increased average educational attainment by 0.28 years for males and 0.16 years for females. Our 2SLS estimates indicate that more schooling has a significant negative effect on convictions and incarceration at both the extensive and intensive margins. These effects are generally seen for both males and females. Specifically, one additional year of schooling decreases the likelihood of incarceration by 16 percent for males and the likelihood of conviction by 7.5 and 11 percent for males and females, respectively. In addition, we find that the effect of education on crime persists across birth cohorts, throughout the life cycle, and across crime categories. |
| Keywords: | crime; education; school reform |
| JEL: | I2 K42 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8646&r=lab |
| By: | Dobre Mihaela Hrisanta; Ailenei Dorel; Cristescu Amalia |
| Abstract: | A highly segmented labor market usually favors a mismatch between supply and demand, significantly limiting the functional flexibility and the resilience of this market to macroeconomic shocks. From this perspective, such a market hampers the transition of an EU member to the euro zone, adversely affecting the quality of integration. The causes of labor market segmentation are related to: imperfect competition between firms, information asymmetry, how workers signal on the labor market, limited mobility of workers across different sectors, etc. Labor market segmentation can be done according to several criteria: type of employment, length of employment, salary level, gender, ethnicity, age, etc. When the labor market segmentation is based on discriminatory attitudes, the propagated effects may adversely affect the economic, social and territorial cohesion status of a country. Being in the process of modernizing the labor market, of adapting the economic and social institutions to the requirements of the acquis communautaire, Romania has significant gaps to recover in relation to more developed countries in EU. Although virulent discrimination does not occur on the Romanian labor market, this phenomenon may delay the process of modernization and effective integration in the single European market. In this article, the authors analyze the main forms of discrimination at the regional level based on the following indicators: the Duncan Index at local level; rate discrimination by sex, nationality, and age; wage gap and occupational segregation by gender. They will also assess the effects of various forms of discrimination on the Romanian labor market flexibility. Keywords: discrimination; wage ; labor market. JEL classification: J01, J15, 16. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1129&r=lab |
| By: | Blanco, German (Binghamton University, New York); Flores, Carlos A. (University of Miami); Flores-Lagunes, Alfonso (Binghamton University, New York) |
| Abstract: | We assess the effectiveness of Job Corps (JC), the largest job training program targeting disadvantaged youth in the United States, by constructing nonparametric bounds for the average and quantile treatment effects of the program on wages. Our preferred estimates point toward convincing evidence of positive effects of JC on wages both at the mean and throughout the wage distribution. For the different demographic groups analyzed, the statistically significant estimated average effects are bounded between 4.6 and 12 percent, while the quantile treatment effects are bounded between 2.7 and 11.7 percent. Furthermore, we find that the program's effect on wages varies across quantiles and groups. Blacks likely experience larger impacts in the lower part of their wage distribution, while Whites likely experience larger impacts in the upper part of their distribution. Non-Hispanic Females show statistically significant impacts in the upper part of their distribution but not in the lower part. |
| Keywords: | training programs, wages, bounds, quantile treatment effects |
| JEL: | J24 I38 C21 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6065&r=lab |
| By: | Bruno Decreuse (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); André Zylberberg (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | We propose a search equilibrium model in which homogenous rms post wages along with a vacancy to attract job-seekers, while homogenous unemployed workers invest in costly job-seeking. The key innovation relies on the organization of the search market and the search behavior of the job-seekers. The search market is continuously segmented by wage level, individuals can spread their search investment over the di¤erent sub-markets, and search intensity has marginal decreasing returns on each sub-market. We show that there exists a non-degenerate equilibrium wage distribution. The density of this wage distribution is increasing at low wages, and decreasing at high wages. Under additional restrictions, it is hump-shaped, and it can be right-tailed. Our results are illustrated by an example originating a Beta wage distribution. |
| Keywords: | Search e¤ort; Segmented markets; Equilibrium wage dispersion |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00638150&r=lab |
| By: | Victor Montuenga; Roberto Bande; Melchor Fernandez |
| Abstract: | In this paper we analyse wage flexibility in Spain and its regional differences, departing from the estimation of wage curves. Specifically, and using as the main data source the Wage Structure Survey, we proceed to estimate for each Spanish region a wage equation, which explains observed wage received by workers to a group of personal and job characteristics, as well as the unemployment rate. This analysis allows to test hypothesis concerning the possible changes that may have occurred in each region in the degree of wage flexibility between the two years considered in the Survey. Also, we test the existence of regional differences in the degree of wage flexibility, which may have an important influence in the evolution of regional unemployment, given its impact on the ability of the local labour market to absorb negative shocks. The paper also allows to analyse the variability of the wage flexibility estimation with respect to the dependent variable, which could explain opposite results in the existing literature |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p414&r=lab |
| By: | Amparo Castelló-Climent; Ana Hidalgo-Cabrillana |
| Abstract: | We develop a theory of human capital investment to study the channels through which students react to school quality when deciding on investments in secondary education and above, and to study how educational quality affects economic growth. In a dynamic general equilibrium closed economy, primary education is mandatory but there is an opportunity to continue on in education, which is a private choice. High-quality education increases the returns to schooling, and hence the incentives to accumulate human capital. This is caused by two main effects: higher quality makes higher education accessible to more people (extensive channel), and once individuals decide to participate in higher education, higher quality increases the volume of investment made per individual (intensive channel). Furthermore, educational quality plays a central role in explaining the composition of human capital and the long-run level of income. Cross-country data evidence shows that the proposed channels are quantitatively important and that the effect of the quality and quantity of education on growth depends on the stage of development. |
| Keywords: | Quality of education, human capital composition, economic growth |
| JEL: | I21 O11 O15 O4 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1087&r=lab |
| By: | Charlotte Cabane (Centre d'Economie de la Sorbonne) |
| Abstract: | In this study I use the German Socio-Economic Panel to evaluate the impact of leisure sport participation on the unemployment duration. The empirical literature on sport participation has focused on labour market outcomes and job quality while the impact of this activity on job search has not been studied. However, sports participation fosters socialization which, through the networking effect, accelerates the exit from unemployment. Furthermore, there may be a selection effect of individuals with higher non-cognitive skills (which may optimize their job search). These hypotheses are tested using a duration model, taking into account unobservable heterogeneity. Because the timing of participation in sports activities is relevant, various measure of sport participation are tested as well as other activities. |
| Keywords: | Unemployment duration, non-cognitive skills, sport. |
| JEL: | J24 J64 L83 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:11049&r=lab |
| By: | Facundo Albornoz; Antonio Cabrales; Esther Hauk |
| Abstract: | Immigration is an important problem in many societies, and it has wide-ranging effects on the educational systems of host countries. There is a now a large empirical literature, but very little theoretical work on this topic. We introduce a model of family immigration in a framework where school quality and student outcomes are determined endogenously. This allows us to explain the selection of immigrants in terms of parental motivation and the policies which favor a positive selection. Also, we can study the effect of immigration on the school system and how school quality may self-reinforce immigrants' and natives' choices. |
| Keywords: | education, immigration, school resources, parental involvement, immigrant sorting. |
| JEL: | I20 I21 I28 J24 J61 |
| Date: | 2011–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:888.11&r=lab |
| By: | Runjuan Liu; Daniel Trefler |
| Abstract: | We study how the rise of trade in services with China and India has impacted U.S. labour markets. The topic has two understudied aspects: it deals with service trade (most studies deal with manufacturing trade) and it examines the historical first of U.S. workers competing with educated but low-wage foreign workers. Our empirical agenda is made complicated by the endogeneity of service imports and the endogenous sorting of workers across occupations. To develop an estimation framework that deals with these, we imbed a partial equilibrium model of ‘trade in tasks’ within a general equilibrium model of occupational choice. The model highlights the need to estimate labour market outcomes using changes in the outcomes of individual workers and, in particular, to distinguish workers who switch ‘up’ from those who switch ‘down’. (Switching ‘down’ means switching to an occupation that pays less on average than the current occupation). We apply these insights to matched CPS data for 1996-2007. The cumulative 10-year impact of rising service imports from China and India has been as follows. (1) Downward and upward occupational switching increased by 17% and 4%, respectively. (2) Transitions to unemployment increased by a large 0.9 percentage points. (3) The earnings of occupational ‘stayers’ fell by a tiny 2.3%. (4) The earnings impact for occupational switchers is not identified without an assumption about worker sorting. Under the assumption of no worker sorting, downward (upward) switching was associated with an earning change of -13.9% (+12.1%). Under the assumption of worker sorting, there is no statistically significant impact on earnings. |
| JEL: | F16 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17559&r=lab |
| By: | Robert Gold; Oliver Falck; Stephan Heblich |
| Abstract: | In this paper, we assess educational factors which might have an impact on entrepreneurship. We analyze influences on the entrepreneurial intentions of German university students and find that pre-university education significantly affects their desire to become an entrepreneur. Using the recent German history of separation and reunification as quasi-natural experiment, we focus on the early formation of entrepreneurial endowments during adolescence and investigate whether pre-university education affects university students’ entrepreneurial intentions. Particularly, we analyze the impact of socialization and schooling under the socialist regime of the former German Democratic Republic (GDR) which might hamper entrepreneurship. Our results show that socialist education has a negative effect on the entrepreneurial intentions of students in reunified Germany who were brought up in the GDR. When analyzing the subsample of East German students who were partly educated in the FRG after reunification in 1990, we find that some years of education in the liberal market system increase the entrepreneurial intentions of students born in the GDR. We focus on university students, since universities are seen as potential “breeding ground†for innovative entrepreneurship as described by Schumpeter (1912). Here we assume according to Falck et al. (2009) that entrepreneurial intentions are a good predictor for future entrepreneurship. We use data from a regularly repeated survey among university students in Germany. Our analysis rests on the three waves conducted after reunification at 23 universities, in (the former socialist) East as well as in West Germany. Generally, German students have significantly lower entrepreneurial intentions when they were educated in the GDR. We further restrict our sample to mobile students at West German universities and still find a negative effect of socialist education. This effect is also robust to the inclusion of a rich set of control variables concerning the students’ family background, job experience as well as further measures for their educational training. Overall, being educated in the socialist GDR decreases the likelihood of having entrepreneurial intentions between around 4 and 7 percentage points Thus our findings suggest that adolescents’ education might act as effective measure to stimulate entrepreneurship. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p999&r=lab |
| By: | Wolfgang Dauth; Reinhard Hujer; Katja Wolf |
| Abstract: | The analysis of active labour market policies (ALMP) at the macroeconomic level measures net effects on labour market outcomes. These net effects consist of direct treatment effects on participants as well as indirect effects on non-participants and on the economy as a whole, e.g. deadweight, substitution and displacement effects. This paper contributes to the empirical studies of macroeconometric evaluation of ALMP by considering the regional effects on both the matching process and the job-seeker rate. This joint view permits us to draw conclusions on how ALMP achieves the goals set by policy makers. To this end, we use an exclusive data set on Austrian job-seekers in the years 2001 to 2007 and employ contemporaneous GMM and quasi-ML estimators to take into account both the simultaneity of ALMP and spatial interrelations between employment office districts. The empirical results indicate that a large number of participants in job schemes in the non-profit sector, wage subsidies, and apprenticeships cause particularly favourable effects on the regional matching function and the job-seeker rate. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p114&r=lab |
| By: | Michela Limardi |
| Abstract: | Many Developing Countries ratified ILO Fundamental Conventions and authorized local labour unions. Multinational companies producing in these countries pay more when NGOs campaigns take place and reputation counts. However, whether this external pressure from NGOs benefit local workers outside MNEs affiliates in host countries remains an open issue. Segmented and weak local labour unions often rely on external funding from the North and technical assistance by labour NGOs. They need to increase their visibility in the labour intensive sectors targeted by Northern donations and activism. To address these issues we develop a bargaining model adapted to peculiarities of labour market institutions in developing countries, i.e. external funding and the complementarity with labour NGOs. This model is estimated on data on Indonesian manufacturing firms, before and after the authorisation of labour unions, in sensitive and non sensitive sectors. We find that, in sector with visibility for labour unions, the net outcome on wages of the presence of NGOs is negative. The external fundings imply a distortion in the objective of labour unions, confronted with the constraint of increasing the employment in the formal sector. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p555&r=lab |
| By: | Ossi Korkeamäki |
| Abstract: | In this paper I evaluate the effects of a regional experiment that reduced payroll-taxes by 3–6 percentage points of the firm’s wage sum in Northern and Eastern Finland. I estimate the effect of the payroll-tax reduction on firms’ employment, wage sum and profits, and on workers hourly pay and monthly hours worked, by comparing employment and wage changes before and after the start of the experiment to a control region. According to my results, the reduction in the payroll-taxes did not lead to any clear cut aggregate effects in the target region. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p898&r=lab |
| By: | Choe, Chung (K.U.Leuven); Flores-Lagunes, Alfonso (Binghamton University, New York); Lee, Sang-Jun (Korea Research Institute for Vocational Education and Training) |
| Abstract: | Failure of participants to complete training programs is pervasive in existing active labor market programs both in developed and developing countries. The proportion of dropouts in prototypical programs ranges from 10 to 50 percent of all participants. From a policy perspective, it is of interest to know if dropouts benefit from the time they spend in training since these programs require considerable resources. We shed light on this issue by estimating the average employment effects of different lengths of exposure to a program by dropouts in a Korean job training program. To do this, we employ parametric and semiparametric methods to estimate effects from continuous treatments using the generalized propensity score, under the assumption that selection into different lengths of exposure is based on a rich set of observed covariates. We find that participants who drop out later – thereby having longer exposures – exhibit higher employment probabilities one year after receiving training, and that marginal effects of additional exposure to training are initially fairly small, but increase sharply past a certain threshold of exposure. One implication of these results is that this and similar programs could benefit from providing incentives for participants to stay longer in the program. |
| Keywords: | training programs, dropouts, developing countries, continuous treatments, generalized propensity score, dose-response function |
| JEL: | O15 I38 C21 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6064&r=lab |
| By: | Luis Fernando Gamboa (Universidad del Rosario, Bogotá, Colombia); Blanca Zuluaga (Universidad Icesi, Cali, Colombia) |
| Abstract: | The aim of this paper is to provide an estimation and decomposition of the motherhood wage penalty in Colombia. Our empirical strategy is based on the matching procedure designed by Ñopo (2008) for the case of gender wage gaps. This is an alternative procedure to the well-known Blinder-Oaxaca decomposition method. The cross-section data of the Colombian Living Standard Survey allows us to decompose the wage gap in four components, according to the characteristics of mothers and non-mothers. We found that mothers earn, in average, 1:73% less than their counterparts without children and that this gap slightly decreases as the group includes older women. Taking into account that this procedure is sensitive to the set of variables included in the matching, several specifications are tested. The main result of the paper is obtained when considering schooling as a matching variable. Once schooling is included, the unexplained part of the gap considerably decreases and turns non significant. Thus, we do not find evidence of wage discrimination against mothers in Colombia. |
| Keywords: | Family wage gap; childbearing costs; female wages. |
| JEL: | J31 J16 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2011-220&r=lab |
| By: | Kristin Kronenberg; Tobias Kronenberg |
| 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. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1445&r=lab |
| By: | Kandice Kapinos |
| Abstract: | In light of the recent concerns regarding the solvency of Social Security’s Old-Age, Survivors and Disability Insurance (OASDI), private pensions may play an increasingly important role in retirement welfare of US retirees. However, the private pension landscape has evolved in ways that may result in lower private pension wealth for retirees. One recent such phenomenon involves the conversion of traditional defined benefit pension plans to cash balance plans, which resulted in lower pension benefits for many workers. In this study, I investigate how characteristics of the firm’s workforce influenced whether the firm converted their traditional pension plan to a cash balance plan and how these characteristics related to the firm’s pension plan policy more generally. Using the Longitudinal Employer-Household Data and pension plan data from the Department of Labor/Internal Revenue Service and the Pension Benefit Guaranty Corporation, I found little evidence of workforce age distribution effects on the likelihood of DB plan conversion to a cash balance plan in the 1990s. More generally, I consistently find positive associations between firms with older and more female workforces and defined contribution plans during the same time. |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:11-36&r=lab |
| By: | Nicolas Jacquemet (Centre d'Economie de la Sorbonne); Jean-Marc Robin (Sciences Po - Département d'Economie) |
| Abstract: | We propose a search-matching model of the marriage market that extends Shimer and Smith (2000) to allow for labor supply. We characterize the steady-state equilibrium when exogenous divorce is the only source of risk. The estimated matching probabilities that can be derived from the steady-state flow conditions are strongly increasing in both male and female wages. We estimate that the share of marriage surplus appropriated by the man increases with his wage and that the share appropriated by the woman decreases with her wage. We find that leisure is an inferior good for men and a normal good for women. |
| Keywords: | Marriage search model, collective labor supply, structural estimation. |
| JEL: | C78 D83 J12 J22 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:11050&r=lab |
| By: | Lemos, Sara (University of Leicester) |
| Abstract: | Using the underexplored, sizeable and long Lifetime Labour Market Database (LLMDB) we estimated the immigrant-native earnings gap across the entire earnings distribution, across continents of nationality and across cohorts of arrival in the UK between 1978 and 2006. We exploited the longitudinal nature of our data to separate the effect of observed and unobserved individual characteristics on earnings. This helped us to prevent selectivity biases such as cohort bias and survivor bias, which have been long standing unresolved identification issues in the literature. In keeping with the limited existing UK literature, we found a clear and wide dividing line between whites and non-whites in simple comparable models. However, in our more complete models we found a much narrower and subtler dividing line. This confirms the importance of accounting for unobservable individual characteristics, which is an important contribution of this paper. It also suggests that the labour market primarily rewards individual characteristics other than immigration status. We also found that the lowest paid immigrants, whom are disproportionately non-white, suffer an earnings penalty in the labour market, whereas higher paid immigrants, whom are disproportionately white, do not. Finally, we found less favourable earning gaps for cohorts that witnessed proportionately larger non-white and lower paid white immigration. |
| Keywords: | immigration, wages, earnings, earnings-gap, UK |
| JEL: | J24 J31 J61 J71 J82 F22 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6058&r=lab |
| By: | Obstbaum, Meri (Aalto University School of Economics and Ministry of Finance) |
| Abstract: | This paper shows how frictions in the labour market shape the responses of the economy to government spending shocks. The open economy New Keynesian DSGE model is extended by labour market frictions of the Mortensen-Pissarides type and a detailed description of fiscal policy. The nature of offsetting fiscal measures is found to be critical for the effects of fiscal stimulus, due to the different effects of different tax instruments on the labour market. Specifically, shifting the debt-stabilizing burden towards distortionary labour taxes has detrimental effects on the labour market outcome and on overall economic performance in a flexible wage regime. The results show that wage rigidity increases the effectiveness of fiscal policy in the short term but leads to a worse longer term result including unemployment exceeding steady state levels. The analysis suggests that a closer look at the functioning of labour markets may help to identify fiscal policy transmission channels not captured by the standard New Keynesian model. |
| Keywords: | search frictions; wage bargaining; wage and price rigidity; fiscal rules; debt stabilization |
| JEL: | E62 J41 |
| Date: | 2011–08–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2011_016&r=lab |
| By: | Charlotte Cabane (Centre d'Economie de la Sorbonne); Andrew Clark (Paris School of Economics) |
| Abstract: | It is well known that non-cognitive skills are an important determinant of success in life. However, their returns are not simple to measure and, as a result, relatively few studies have dealt with this empirical question. We consider sports participation while at school as one way of improving or signalling the individual's non-cognitive skills endowment. We use four waves of Add Health data to study how sports participation by schoolchildren translates into labour-market success. We specifically test the hypotheses that participation in different types of sports at school leads to, ceteris paribus, very different types of jobs and labour-market insertion in general when adult. We take seriously the issue of endogeneity of sporting activities in order to tease out a causal relationship between childhood sporting activity and adult labour market success. As such, we contribute to the literature on the returns to non-cognitive skills. |
| Keywords: | Job quality, sport, non-cognitive skills. |
| JEL: | J24 J28 L83 I2 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:11052&r=lab |
| By: | Wikström, Magnus (Department of Economics, Umeå University); Wikström, Christina (Department of Applied Educational Science, Umeå University) |
| Abstract: | The purpose of this study is to find out if the income premium from university entrance differs with respect to prior achievement as measured by previous grades. Using income at the age of 28 to 30, we analyze if high-achievers have larger income premiums from entering university than low-achievers in a sample of Swedish upper secondary school students. We find that income differences generally are positive, albeit larger for females than for males. It is also found that the income premium is larger for high-achievers than for low-achievers. However, especially for males, the income premium rises only marginally with prior achievement for a large part of the grade distribution, indicating that there are only small differences in the returns to university entrance for a majority of upper secondary school graduates. |
| Keywords: | Premium; Predictive validity; Upper secondary GPA; Achievement; University entrance |
| JEL: | I21 J24 |
| Date: | 2011–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0834&r=lab |
| By: | Hannu Tervo; Hannu Niittykangas |
| Abstract: | Workforce is aging in most developed countries, but still needed in productive work. Entrepreneurship at older ages is an option for many aging individuals. As existing and future generations are healthier and more able to work than previous generations, working careers can, and also have been extended. Various reasons such as age, health, gender and education, family status, accumulated savings and organizational factors can affect the choice between full-time work, bridge employment and retirement. But bridge employment as well as career choices may also be affected by many environmental factors. Regions with strong traditions of entrepreneurship may be more favourable to bridge employment in the form of self-employment than other regions. On the other hand, demand conditions may also account for possibilities to bridge employment. Regions with a low level of demand may not be favourable to self-employment at older ages. While some studies have focused on transitions into self-employment among older workers, the question of the motives and background still need clarification. This paper analyzes those who start a business at older ages in different regions in Finland. Who are they, and what is their background? What is the effect of human and financial capital on self-employment decisions? What is the role of previous experience in entrepreneurship - are those without experience from entrepreneurship different from those who have it? Is self-employment at older ages a real alternative only for serial and habitual entrepreneurs? In the analysis, we utilize a large longitudinal micro data to examine transfers of workers and those out of employment aged 55-74 into self-employment in Finland in 1998-2004. The data set represents a 7 percent sample of all Finns in 2001 of whom we have a lot of register-based and other data even from the year 1970 onward. Note: An alternative choice was : theme N: enterpreuneurship, networks and innovation |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p764&r=lab |
| By: | Catherine Haeck; Pierre Lefebvre; Philip Merrigan |
| Abstract: | We investigate the impact of an ambitious provincial school reform in Canada on students’ mathematical achievements. This reform provides advantages for the purpose of evaluation and cuts across some of the methodological difficulties of previous research. First, the reform was implemented in every school across the province in both primary and secondary schools. Second, we can differentiate impacts according to the number of years students are affected by the reform. Third, our data set provides a longer observation period than typically encountered in the literature. We find negative effects on students’ mathematical achievements at all points of the skills distribution. |
| Keywords: | School reform, Math achievements, DID and CIC estimators |
| JEL: | I21 I28 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1135&r=lab |
| By: | John M. Nunley; Richard Alan Seals Jr. |
| Abstract: | We investigate whether a change in the expectation of child custody affects the amount of time that married mothers and fathers devote to market and household work. Data from the Panel Study of Income Dynamics (PSID) coupled with plausibly exogenous variation in the adoption of joint-custody laws across states and time allow us to examine how the prospect of shared child custody affects within-marriage time allocation. We exploit the longitudinal feature of the PSID to adjust our estimates for sample selection based on the reform’s potential impact on the composition of the married couples. We find that custody reform induces a reallocation of time within marriage, with mothers working more in the market and fathers working more in the home. |
| Keywords: | market work, household work, child custody, household bargaining |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:abn:wpaper:auwp2011-14&r=lab |
| By: | Enrique López-Bazo; Elisabet Motellón |
| Abstract: | Regional disparities in unemployment rates are large and persistent, particularly in some economies such as Spain. Previous contributions to the literature have provided evidence on their magnitude and evolution, as well as on the role of some economic, demographic and environmental factors in explaining the gap between low and high unemployment regions. Most of these studies have used an aggregate approach. That is, they have not accounted for the individual characteristics of the unemployed and the employed in each region. This paper aim at filling this gap, as it addresses the analysis of regional differentials in unemployment rates by using the information from the Spanish wave of the Labour Force Survey. An appropriate decomposition of the regional gap in the average probability of being unemployed allows us to tell the contribution of differences in the regional distribution of individuals’ characteristics from that attributable to a different impact of these characteristics on the probability of unemployment. The results suggest that the well-known disparities in regional unemployment are not just the result of regional heterogeneity in the distribution of individual and job characteristics. Non-negligible differences in the probability of unemployment remain after controlling for that type of heterogeneity, as a result of differences across regions in the effect of the individual characteristics. Among the factors considered in the analysis, regional differences in the individuals’ endowment of human capital, and in its effect, play an outstanding role. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1128&r=lab |
| By: | Diamond, Peter A. (Massachusetts Institute of Technology) |
| Abstract: | Peter A. Diamond delivered his Prize Lecture on 8 December 2010 at Aula Magna, Stockholm University. |
| Keywords: | Search frictions; |
| JEL: | E24 J64 |
| Date: | 2010–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:nobelp:2010_007&r=lab |
| By: | Pere Gomis-Porqueras; Oscar A. Mitnik; Adrian Peralta-Alva; Maximilian D. Schmeiser |
| Abstract: | This paper assesses whether a causal relationship exists between recent increases in female labor force participation and the increased prevalence of obesity amongst women. The expansions of the Earned Income Tax Credit (EITC) in the 1980s and 1990s have been established by prior literature as having generated variation in female labor supply, particularly amongst single mothers. Here, we use this plausibly exogenous variation in female labor supply to identify the effect of labor force participation on obesity status. We use data from the National Health Interview Survey (NHIS) and replicate labor supply effects of the EITC expansions found in previous literature. This validates employing a difference-in-differences estimation strategy in the NHIS data, as has been done in several other data sets. Depending on the specification, we find that increased labor force participation can account for at most 19% of the observed change in obesity prevalence over our sample period. Our preferred specification, however, suggests that there is no causal link between increased female labor force participation and increased obesity. |
| Keywords: | Women - Employment ; Obesity ; Tax credits |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2011-035&r=lab |
| By: | Tiago Freire |
| Abstract: | It is generally accepted that migration will lead to an increase in income. However the question is how will income be distributed across individuals in society? If migrants have lower education levels, when compared to current urban workers, then the in ow of migrants will increase the skill wage gap in urban areas. Previous work on this topic has focused on international migration in developed countries. To the best of our knowledge this is the rst study to look at the impact of rural-urban migration on city wages. Our results contribute to the evaluation of regional policies, as recent research has found that regional policies can lead to an increase (or decrease) in the number of rural to urban migrants. We use data the Brazilian Census for 1980 to 2000 to estimate the elasticity of substitution between high and low skill workers. We instrument for the change in the ratio of high to low skill workers, with rural-urban migrants (driven by rainfall shocks in rural areas). Finally, in our simulations we show that migration can only explain 3% of the decrease in the wage gap between high and low skill workers, in Brazil, between 1991 and 2000. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p384&r=lab |
| By: | Messina, Julian; Sanz-de-Galdeano, Anna |
| Abstract: | This paper examines the consequences of rapid disinflation for downward wage rigidities in two emerging countries, Brazil and Uruguay, relying on high quality matched employer-employee administrative data. Downward nominal wage rigidities are more important in Uruguay, while wage indexation is dominant in Brazil. Two regime changes are observed during the sample period, 1995-2004: (i) in Uruguay wage indexation declines, while workers'resistance to nominal wage cuts becomes more pronounced; and (ii) in Brazil, the introduction of inflation targeting by the Central Bank in 1999 shifts the focal point of wage negotiations from changes in the minimum wage to expected inflation. These regime changes cast doubts on the notion that wage rigidity is structural in the sense of Lucas (1976). |
| Keywords: | Labor Markets,Income,Economic Theory&Research,Environmental Economics&Policies,Labor Policies |
| Date: | 2011–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5863&r=lab |
| By: | Deuchert, Eva; Kauer, Lukas; Meisen Zannol, Flurina |
| Abstract: | The low employment among people with disabilities in general, and mental disorders in particular, generates high costs to the society. This raises the need to develop effective vocational rehabilitation methods. Supported Education/Employment is effective in increasing sustainable employment for people with mental disorders. This vocational rehabilitation method places patients directly in realistic work settings instead of training them in a protected work environment. Supported Education and Employment has not yet been widely implemented. Using a discrete choice experiment, we demonstrate that one of the key problems is to find employers willing to provide training. Non-cognitive dysfunctions are the main deterrents. |
| Keywords: | upported Vocational Education & Training; vocational rehabilitation; mental disorders; discrete choice experiment |
| JEL: | J24 M53 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2011:41&r=lab |
| By: | Keslair, Francois (Paris School of Economics); Maurin, Eric (Paris School of Economics); McNally, Sandra (London School of Economics) |
| Abstract: | The need for education to help every child rather than focus on average attainment has become a more central part of the policy agenda in the US and the UK. Remedial programmes are often difficult to evaluate because participation is usually based on pupil characteristics that are largely unobservable to the analyst. In this paper we evaluate programmes for children with moderate levels of 'special educational needs' in England. We show that the decentralized design of the policy generates significant variations in access to remediation resources across children with similar prior levels of difficulty. However, this differential is not reflected in subsequent educational attainment – suggesting that the programme is ineffective for 'treated' children. In the second part of our analysis, we use demographic variation within schools to consider the effect of the programme on whole year groups. Our analysis is consistent with no overall effect on account of the combined direct and indirect (spillover) effects. Thus, the analysis suggests that a key way that English education purports to help children with learning difficulties is not working. |
| Keywords: | education, special needs, evaluation |
| JEL: | I2 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6069&r=lab |
| By: | David Canning (Harvard School of Public Health); Abdur Razzaque (ICDDR,B); Julia Driessen (Johns Hopkins University); Damian G. Walker (Johns Hopkins University); Peter Kim Streatfield (ICDDR,B); Mohammad Yunus (ICDDR,B) |
| Abstract: | We investigate the effects of ante-natal maternal vaccination against tetanus on the schooling attained by children in Bangladesh. Maternal vaccination prevents the child from acquiring tetanus at birth through blood infection and substantially reduces infant mortality and may prevent impairment in children who would otherwise acquire tetanus but survive. We follow up on a 1974 randomized trial of maternal tetanus toxoid, looking at outcomes for children born in the period 1975-1979. We find significant schooling gains from maternal tetanus vaccination for children whose parents had no schooling, showing a large impact on a small number of children. |
| Keywords: | Vaccination, tetanus, schooling, education, Bangladesh |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:7611&r=lab |
| By: | Ulrich Zierahn |
| Abstract: | Regional labor markets are characterized by huge disparities of unemployment rates. Models of the New Economic Geography explain how disparities of regional goods markets endogenously arise but usually assume full employment. This paper discusses regional unemployment disparities by introducing a wage curve based on efficiency wages into the New Economic Geography. The model shows how disparities of regional goods and labor markets endogenously arise through the interplay of increasing returns to scale, transport costs, congestion costs, and migration. In result, the agglomeration pattern might be catastrophic or smooth depending on congestion costs. The transition between both patterns is smooth. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p303&r=lab |
| By: | Amparo Castelló-Climent; Abhiroop Mukhopadhyay |
| Abstract: | This paper analyses whether in developing countries mass education is more growth enhancing than to have a minority well educated elite. Using the Indian census data as a benchmark and enrollment rates at different levels of education we compute annual attainment levels for a panel of 16 Indian states from 1961 to 2001. Results indicate that if the reduction of illiteracy stops at the primary level of education, it is not worthwhile for growth. Instead, the findings reveal a strong and robust significant effect on growth of a greater share of population completing tertiary education. The economic impact is also found to be very large: if one percent of the adult population were to complete tertiary education instead of completing only primary, the annual growth rate could increase by about 4 percentage points. Moreover, we find that a one percentage change in tertiary education has the same effect on growth as a decrease in illiteracy by 13 percentage points. A sensitivity analysis shows the results are unlikely to be driven by omitted variables, structural breaks, reverse causation or atypical observations. |
| Keywords: | Distribution of education, attainment levels, economic growth, panel data |
| JEL: | I28 O11 O50 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1086&r=lab |
| By: | Christos Koutsampelas and Panos Tsakloglou |
| Abstract: | The present paper examines the short-run distributional impact of public education in Greece using the micro-data of the 2004/5 Household Budget Survey. The aggregate distributional impact of public education is found to be progressive although the incidence varies according to the level of education under examination. In-kind transfers of public education services in the fields of primary and secondary education lead to a considerable decline in relative inequality, whereas transfers in the field of tertiary education appear to have a small distributional impact whose size and sign depend on the treatment of tertiary education students living away from the parental home. When absolute inequality indices are used instead of the relative ones, primary education transfers retain their progressivity, while secondary education transfers appear almost neutral and tertiary education transfers become quite regressive. The main policy implications of the findings are outlined in the concluding section. |
| Keywords: | public education, redistribution |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:12-2011&r=lab |
| By: | Michael W.L. Elsby (University of Edinburgh, and NBER); Bart Hobijn (FRB San Francisco, and VU University Amsterdam); Aysegul Sahin (FRB New York) |
| Abstract: | We provide a set of comparable estimates for the rates of inflow to and outflow from unemployment using publicly available data for fourteen OECD economies. We then devise a method to decompose changes in unemployment into contributions accounted for by changes in inflow and outflow rates for cases where unemployment deviates from its flow steady state, as it does in many countries. Our decomposition reveals that fluctuations in both inflow and outflow rates contribute substantially to unemployment variation within countries. For Anglo-Saxon economies we find approximately a 15:85 inflow/outflow split to unemployment variation, while for Continental European and Nordic countries, we observe much closer to a 45:55 split. Using the estimated flow rates we compute gross worker flows into and out of unemployment. In all economies we observe that increases in inflows lead increases in unemployment, whereas outflows lag a ramp up in unemployment. |
| Keywords: | Unemployment; Worker flows; Job Finding Rate; Separation Rate |
| JEL: | E24 J6 |
| Date: | 2011–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110159&r=lab |
| By: | Felipe Balmaceda |
| Abstract: | This paper studies the problem of how to allocate n =2 independent tasks among an ndogenously determined number of jobs in a setting with risk neutral workers subject to limited liability and ex-post asymmetric information. The main message is that firms narrow down the scope of their jobs to deal with workers’ incentives to game the performance system (workers’ incentives to work harder in tasks that are well rewarded ex-post and to underperform in tasks that are poorly rewarded). Firms’ incentives to narrow job scopes are diminished when workers are intrinsically motivated by moral standards and, in contrast to Holmström and Milgrom (1991), when the degree to which tasks are substitutes increases. JEL-Classification: J41, J24, D21. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:edj:ceauch:279&r=lab |
| By: | Terry Gregory; Melanie Arntz; Florian Lehmer |
| Abstract: | This paper examines the determinants of internal migration in a context where wages tend to be rather inflexible at a regional scale so that regional labor demand shocks have a prolonged impact on employment rates. Regional income differentials, then, reflect both regional pay and employment differentials. In such a context, migrants tend to move to regions that best reward their skills in terms of both of these dimensions. As an extension to the Borjas framework, the paper thus hypothesizes that regions with a low employment inequality attract more unskilled workers compared to regions with unequal employment chances. By estimating a migration model for the average skill level of gross labor flows between 27 German regions, we find evidence in favor of this hypothesis. While rising employment inequality in a region raises the average skill level of an in-migrant, higher pay inequality in a region does not have a significant impact on the average skill level of its in-migrants. A higher employment inequality in Eastern as compared to Western Germany may, thus, be the missing link to explain the fact that East-West migrants tend to be rather unskilled. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p972&r=lab |
| By: | William W. Olney (Williams College) |
| Abstract: | This paper is the first to examine the impact of immigrant remittances on the wages of native workers in the host country. The model shows that the effect of immigration on wages depends on the ratio of an immigration-induced change in the consumer base relative to an immigration-induced change in the workforce. Remittances provide a unique way of identifying changes in this ratio since they reduce the consumer base but not the workforce. The model is then tested using an unusual data set that follows the same individuals over time and has detailed information on remittances. Consistent with the prediction of the model, the results indicate that remittances depress the wages of native workers, especially those in non-traded industries. |
| Keywords: | Remittances; Immigration; Wages |
| JEL: | F24 J61 J31 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2011-15&r=lab |
| By: | Sparber, Chad (Department of Economics, Colgate University) |
| Abstract: | This paper employs reduced-form microeconometric analysis to examine how yearly changes in aggregate income and GDP growth affect the unemployment probability of individuals with varied skills in the United States. The paper goes beyond traditional education-based measures and assesses how manual, communication, and quantitative skills affect the relationship between macroeconomic shocks and unemployment. Workers specialized in communication skills exhibit lower unemployment rates, reduced unemployment volatility, and less sensitivity to macroeconomic fluctuations. |
| Keywords: | Unemployment, Skills, Business Cycle, Macroeconomic Shocks, GDP |
| JEL: | E24 E32 J21 J24 J64 |
| Date: | 2011–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:cgt:wpaper:2011-04&r=lab |
| By: | Giovanni Peri |
| Abstract: | In this paper I first analyze the wage effects of immigrants on native workers in the US economy and its top immigrant-receiving states and metropolitan areas. Then I quantify the consequences of these wage effects on the poverty rates of native families. The goal is to establish whether the labor market effects of immigrants have significantly affected the percentage of "poor" families among U.S.-born individuals. I consider the decade 2000-2009 during which poverty rates increased significantly in the U.S. As a reference, I also analyze the decade 1990-2000. To calculate the wage impact of immigrants I adopt a simple general equilibrium model of productive interactions, regulated by the elasticity of substitution across schooling groups, age groups and between US and foreign-born workers. Considering the inflow of immigrants by age, schooling and location I evaluate their impact in local markets (cities and states) assuming no mobility of natives and on the US market as a whole allowing for native internal mobility. Our findings show that for all plausible parameter values there is essentially no effect of immigration on native poverty at the national level. At the local level, only considering the most extreme estimates and only in some localities, we find non-trivial effects of immigration on poverty. In general, however, even the local effects of immigration bear very little correlation with the observed changes in poverty rates and they explain a negligible fraction of them. |
| JEL: | J3 J61 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17570&r=lab |
| By: | Brian Bell; John Van Reenen |
| Abstract: | Does it matter whether you work for a successful company? And if so, does it matter who you are? To answer these questions we construct a unique panel dataset covering the pay of all CEOs, senior managers and a fully representative sample of workers for a large group of publicly-listed companies covering just under 90% of the market capitalization of the UK stock market. We show that senior management appear to have pay that is strongly associated with various measures of firm performance (such as shareholder return), while workers' pay is only weakly associated with such measures. A 10% increase in firm value is associated with an increase of 3% in CEO pay but only 0.2% in average workers' pay. Falls in firm performance are also followed by CEO pay cuts (but not as aggressively as upside rewards) and significantly more CEO firings. This is essentially a result of the responsiveness of flexible pay to performance and only senior executives have a large enough share of pay in bonuses to generate a sizeable overall effect on pay. Accounting for firm performance over the last decade can potentially explain between one-quarter and one-half of the rise in the gap between CEO pay and the pay of workers. |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1088&r=lab |
| By: | Adriana Grigorescu |
| Abstract: | Education represents one of the fundamentals of the social and economic environment in each and every society, even more in the current stage of development that involves higher educational levels for proper access to technologies. Depending on the specific level of education and training, people are able to find a suitable position in the society by integrating themselves into the labor market. The human potential within a region might be an essential element for embarking the area upon a positive trend in economic development. Without a doubt, the economic environment is primarily attracted to areas rich in human and material resources. Skilled human resources provide an edge especially as the share of the tertiary sector in the economy is becoming larger. Previous research were focused on determining the skill, knowledge and activities management and marketing specialists from the public and private - similarities and differences, selection schemes. A regional analysis of the educational system by taking into account the distribution of infrastructure and the educational categories within the structure of the active population could lead towards an “attractiveness chart†from this perspective. This paper aims to perform specific analyses for various types of infrastructure elements of the individual and integrated educational system in order to emphasize the educational capacity of each county. At the same time, on the basis of data on existing occupational groups in each county and by using the same method, counties can be ranked with respect to the materialized potential of the educational system. The outcomes of the study can be integrated into complex structural analyses, which underpin the public policies on education and employment of workforce and represent a possible approach of the infrastructure and outputs of a system. Organizational change and strategies for medium and long term are out coming of high technologies used by a skilled workforce. Romania is known less as a high-tech generation laboratory, but especially as the skilled workforce and highly qualified with outstanding creative and innovative skills reservoir. That is why the management of technological change should be understood in relationship with the workforce. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p872&r=lab |
| By: | Junankar, Pramod N. (Raja) (University of New South Wales) |
| Abstract: | This paper analyses the impact of the global economic crisis on unemployment and long term unemployment in the OECD. It uses simple econometric models using panel data (quarterly) and time series data. In general, we find that long term unemployment increases with the unemployment rate, there is persistence in long term unemployment, and that the employment protection variable and the replacement rate are statistically insignificant. Overall, the findings of our research are that there are many differences between the impact of the Great Recession on different countries. Countries that faced a significant financial crisis and a collapse of the housing market bubble have had large increases in unemployment and long term unemployment. There was a big fall in employment in the (especially) construction and manufacturing industries. The financial collapse led to an increase in unemployment in the financial and business sector. As a result of these twin shocks labour mobility of the unemployed is likely to be affected: with negative equity in housing, unemployed workers are unlikely to move regionally. With a loss of wealth (in housing and financial assets, including superannuation) there will be a fall in consumer spending which will slow down the recovery of economies. This means that, especially for some countries, there will be a long period of high unemployment and long term unemployment. |
| Keywords: | long-term unemployment, global crisis, labour market policies, OECD |
| JEL: | E24 J60 J68 J69 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6057&r=lab |
| By: | Susan Dynarski; Jonathan Gruber; Danielle Li |
| Abstract: | The effect of vouchers on sorting between private and public schools depends upon the price elasticity of demand for private schooling. Estimating this elasticity is empirically challenging because prices and quantities are jointly determined in the market for private schooling. We exploit a unique and previously undocumented source of variation in private school tuition to estimate this key parameter. A majority of Catholic elementary schools offer discounts to families that enroll more than one child in the school in a given year. Catholic school tuition costs therefore depend upon the interaction of the number and spacing of a family’s children with the pricing policies of the local school. This within-neighborhood variation in tuition prices allows us to control for unobserved determinants of demand with a fine set of geographic fixed effects, while still identifying the price parameter. We use data from 3700 Catholic schools, matched to restricted Census data that identifies geography at the block level. We find that a standard deviation decrease in tuition prices increases the probability that a family will send its children to private school by one-half percentage point, which translates into an elasticity of Catholic school attendance with respect to tuition costs of -0.19. Our subgroup results suggest that a voucher program would disproportionately induce into private schools those who, along observable dimensions, are unlike those who currently attend private school. |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:11-34&r=lab |
| By: | Yolanda Pena-Boquete; Melchor Fernandez |
| Abstract: | Human capital and productive structure could account for an important part of the differences in productivity between Spanish regions; nevertheless we consider that gender wage discrimination could also have effects on it. The existence of a degree of discrimination means that there is a wage differential in which employer prefer to hire less productive workers instead of discriminated workers. Thus, the cost of producing a unit of product would be higher than the cost of producing without discrimination, i.e. discrimination could has effects on productivity. Based on Becker (1957) we develop a maximization problem with discrimination using an aggregate production function with constant elasticity of substitution (CES). As a result, we get a productivity function depending on discrimination and other traditional factors such as wages or production. Our results show that the discrimination growth hast a negative and significant effect on productivity for the Spanish regions. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1272&r=lab |
| By: | Kampkötter, Patrick (University of Cologne); Sliwka, Dirk (University of Cologne) |
| Abstract: | It is often claimed that supervisors do not differentiate enough between high and low performing employees when evaluating performance. The purpose of this paper is to study the incentive effects of this behavior empirically. We first show in a simple model that the perceived degree of past differentiation affects future incentives. We then study the impact of differentiation empirically with a large panel data set spanning many firms in one industry. On average, stronger differentiation has a substantial positive effect on performance. This effect is larger on higher hierarchical levels. But differentiation may become harmful at the lowest levels. |
| Keywords: | bonus payments, differentiation, subjective performance evaluation, incentives |
| JEL: | M52 D23 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6070&r=lab |
| By: | Sammara Soares; Tatiane Menezes |
| Abstract: | The quality of the educational system is crucial to the most diverse socioeconomic and cultural aspects of a country. The objective of this paper is highlighting the importance of quality of education to explain the wide income disparities between Brazilian people. In face of such evidence, and considering the need to better understand the factors associated with education quality and efficiency, this study aims to investigate which factors are the most significant to determine elementary school students’ performance in capital and small towns. For this purpose, it will be used the Brazilian Educational Search (SAEB) for 4th grades of elementary education. The estimation method is the hierarchical regression, which, in this work, will be structured into 2 levels, respectively: students, and school. The results suggest, after socioeconomic control, the positive correlation of principal’s characteristic; class-time, kindergarten and presence of library to a better performance. In opposite way, the influence of professor’s turnover seems to be quite harmful to determine the student´s score in capital city and small towns respectively. These results can serve as aid to public policies aimed at equity and educational qualification. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1707&r=lab |
| By: | Regis Barnichon (CREi); Michael Elsby (University of Edinburgh); Bart Hobijn (Fed. Reserve Bank San Francisco, and VU University Amsterdam); Aysegul Sahin (Federal Reserve Bank of New York) |
| Abstract: | The negative relationship between the unemployment rate and the job openings rate, known as the Beveridge curve, has been relatively stable in the U.S. over the last decade. Since the summer of 2009, in spite of firms reporting more job openings, the U.S. unemployment rate has not declined in line with the Beveridge curve. We decompose the recent deviation from the Beveridge curve into different parts using data from the Job Openings and Labor Turnover Survey (JOLTS). We find that most of the current deviation from the Beveridge curve can be attributed to a shortfall in hires per vacancy. This shortfall is broad-based across all industries and is particularly pronounced in construction, transportation, trade, and utilities, and leisure and hospitality. Construction alone accounts for more than half of the Beveridge curve gap. |
| Keywords: | Beveridge Curve; job openings; measurement; search frictions |
| JEL: | J23 J60 J63 |
| Date: | 2011–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110157&r=lab |
| By: | Julien Albertini; Günes Kamber; Michael Kirker (Reserve Bank of New Zealand) |
| Abstract: | This paper investigates labour market dynamics in New Zealand by estimating a structural small open economy model enriched with standard search and matching frictions in the labour market. We show that the model its the business cycle features of key macroeconomic variables reasonably well and provides an appealing monetary transmission mechanism. We then extend our analysis to understand the driving forces behind labour market variables. Our findings suggest that the bulk of variation in labour market variables is solely explained by disturbances pertaining to the labour market. |
| JEL: | E32 J6 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:nzb:nzbdps:2011/04&r=lab |
| By: | Madalozzo, Regina; Gomes, Carolina Flores |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:ibm:ibmecp:wpe_256&r=lab |
| By: | Pissarides, Christopher A. (London School of Economics) |
| Abstract: | Christopher A. Pissarides delivered his Prize Lecture on 8 December 2010 at Aula Magna, Stockholm University. |
| Keywords: | Search frictions; |
| JEL: | E24 J64 |
| Date: | 2010–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:nobelp:2010_009&r=lab |
| By: | Diana Perez-Dacal; Yolanda Pena-Boquete |
| Abstract: | The great capacity of tourism to provide employment, especially between groups of workers with a more difficult insertion in the labour market, is one of its most well-known positive aspects. However Tourism employment is often described as low skilled, which is associated with average lower wages, higher percentage of fixed-term contracts, and longer working day than other industries. Nevertheless, this is not true for all tourism activities. Although this description could be close for hotels and restaurants labour market, it is completely different for land transport, travel agencies and tour operators activities. This could be related with the fact that each characteristic tourism industry provides a different percentage of his output to tourists, as it is shown in the Spanish Tourism Satellite Account. Given that, the aim of this paper is to analyse what factors can determine the incidence of temporary employment in Tourism activities in Spain and to discuss regional differences. As result, our first step is to identify the labour market characteristics of the different tourism activities. These results are clear influenced by the particularities of the different activities (labour market of transport activities is very different from hotels and restaurants activities) and not by a tourism characteristic. Thus, the second step is to analyse how tourism influence in the labour-market conditions after controlling for the particularities of the different tourism activities. In this case, we focus in just one characteristic of the labour market very associated with low-quality jobs; the share of workers with fixed-term jobs. Although Spain is one of the countries with the highest arrivals of tourists, those are not equally distributed by regions. This allows us to identify the degree of specialization of each region in tourism, and to analyse its impact in the share of workers with fixed-term contracts. Results show that the highest tourism specialization of the region decreases the share of workers with fixed-term contracts, after isolating the particularities of the different tourism activities. It seems that this low-quality characteristic disappear with the development of the sector in some regions. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1811&r=lab |
| By: | Marx, Ive (University of Antwerp); Vandenbroucke, Pieter (University of Antwerp); Verbist, Gerlinde (University of Antwerp) |
| Abstract: | At the European level and in most EU member states, higher employment levels are seen as key to better poverty outcomes. But what can we expect the actual impact to be? Up until now shift-share analysis has been used to estimate the impact of rising employment on relative income poverty. This method has serious limitations. We propose a more sophisticated simulation model that builds on regression based estimates of employment probabilities and wages. We use this model to estimate the impact on relative income poverty of moving towards the Europe 2020 target of 75 percent of the working aged population in work. Two sensitivity checks are included: giving priority in job allocation to jobless households and imputing low instead of estimated wages. This paper shows that employment growth does not necessarily result in lower relative poverty shares, a result that is largely consistent with observed outcomes over the past decade. |
| Keywords: | employment growth, poverty, Europe 2020, household work intensity, low pay |
| JEL: | I32 J21 J68 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6068&r=lab |
| By: | Kristin Kronenberg |
| Abstract: | This study analyzes determinants of business relocation and identifies regional characteristics which attract relocating firms, using register data provided by Statistics Netherlands. Results indicate that the relocation decisions of firms are not only influenced by firm- and location-specific characteristics, but also by the qualities of a firm’s workforce, and by the attractiveness of a municipality for individuals regarding the amenities which are provided. Furthermore, the findings show that relocation decisions are sector-dependent. Generally, its age and being located in an appealing municipality with high sectoral specialization keep a firm from relocating, whereas firms employing large shares of highly educated workers, paying high average salaries and being located in a municipality with high sector-specific wages are pushed out of their present location. Relocating firms avoid specialized municipalities, while they are attracted by densely populated, appealing municipalities with high wage levels (both general and sector-specific) and large shares of highly educated workers, and which are specialized in the firm’s own sector. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1450&r=lab |
| By: | Anca Dachin; Raluca Popa |
| Abstract: | The sustained economic growth in 2000-2008 in Romania was accompanied by a declining employment rate from 63.6% to 59% in the same period, which improved the overall labor productivity. The unprecedented reduction of labor force participation in some regions was strongly determined by the decline in agricultural employment, negative net migration, as well as increase of social protection. These combined processes were mainly induced by Romania´s integration to the EU allowing higher labor force mobility and by social policy measures. In addition, there are longer lasting structural influences, such as the demographic and educational composition of employment. The paper aims at measuring the cross-regional variation of age structure and education levels in Romania and their contribution to regional differences in productivity compared to the most developed region - Bucharest-Ilfov (NUTS2 level). The differences regarding these structures and their changes in the last decade explain partly the territorial polarization of development, which is expected to increase under the impact of the economic crisis. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1370&r=lab |
| By: | Hildegunn Stokke; Jørn Rattsø |
| Abstract: | Accumulation of education and geographic concentration of educated people in cities are expected to generate urban income growth. New economic geography predicts income divergence across regions. We investigate the dynamic process of accumulating tertiary education and regional income growth in Norway during the past four decades. The expansion of smart cities goes along with catching up of education level in the periphery and overall the education levels converge. Income levels also are shown to converge in distribution analysis using Kernel functions and first order Markov chains. However, the movements in the income distribution are unrelated to the accumulation of education. The hypothesis of equal income transition probabilities across subgroups of regions with different increases in education cannot be rejected. We conclude that accumulation of education has not been important for the pattern of income growth. Catching up from low income is not driven by education and income growth has not taken off in cities with increasing education level. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p460&r=lab |
| By: | Maria Abreu; Alessandra Faggian; Philip McCann |
| Abstract: | Career progression is often associated with migration and/or industry change, but the relationship between the two, and their effect on the earnings and career satisfaction of recent graduates are not well understood. We analyse the relationship between migration and inter-industry mobility using longitudinal microdata on 5,000 recent UK graduates who finished their studies in 2002/03, and who were surveyed 6 months and 3 ½ years after graduation. We define migration as a move of more than 15 km from the location of employment, and analyse the effects of a locational move in conjuction, or in the absence of, a change in industry. We allow for the possibility of selection bias, whereby unobservable characteristics may lead graduates to both change their location and/or industry, and earn a higher or lower salary, by estimating a treatment effects model with multinomial choice. Our results indicate that the effect on both earnings and career satisfaction of a change in location is positive, and there is a strong negative effect associated with changing both location and industry. The results also show that the subject of study is an important determinant of both migration choice and career outcomes for UK graduates. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p118&r=lab |
| By: | Ferreira, Francisco H. G.; Gignoux, Jeremie |
| Abstract: | This paper proposes two related measures of educational inequality: one for educational achievement and another for educational opportunity. The former is the simple variance (or standard deviation) of test scores. Its selection is informed by consideration of two measurement issues that have typically been overlooked in the literature: the implications of the standardization of test scores for inequality indices, and the possible sample selection biases arising from the Program of International Student Assessment (PISA) sampling frame. The measure of inequality of educational opportunity is given by the share of the variance in test scores that is explained by pre-determined circumstances. Both measures are computed for the 57 countries in which PISA surveys were conducted in 2006. Inequality of opportunity accounts for up to 35 percent of all disparities in educational achievement. It is greater in (most of) continental Europe and Latin America than in Asia, Scandinavia, and North America. It is uncorrelated with average educational achievement and only weakly negatively correlated with per capita gross domestic product. It correlates negatively with the share of spending in primary schooling, and positively with tracking in secondary schools. |
| Keywords: | Teaching and Learning,Secondary Education,Education For All,Poverty Impact Evaluation,Tertiary Education |
| Date: | 2011–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5873&r=lab |
| By: | Stephan Brunow; Uwe Blien |
| Abstract: | International immigration affects the degree of cultural diversity present in a labour force. This paper focuses on the consequences of immigration with respect to the level of cultural diversity by estimating employment functions for individual establishments. The theory behind the empirical analyses is based on a 'turned around' New Economic Geography model. The data basis used is a linked employer -- employee data set generated by a fusion of the IAB Establishment Panel with the Employment Statistics of Germany, which provides very detailed information about individual workers and establishments. In the empirical analyses it is shown that employment is lower when the degree of diversity is higher, regarding the revenue of an individual establishment as given. From this result it can be derived under the conditions of monopolistic competition (implying elastic product demand) that the establishment is able to occupy a relatively large part of the market. Finally this implies relatively high labour demand. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p187&r=lab |
| By: | Sébastien Massoni (Centre d'Economie de la Sorbonne); Jean-Christophe Vergnaud (Centre d'Economie de la Sorbonne) |
| Abstract: | The Action Lecture program is an innovative teaching method run in some nursery and primary schools in Paris and designed to improve pupils' literacy. We report the results of an evaluation of this program. We describe the experimental protocol that was built to estimate the program's impact on several types of indicators. Data were processed following a Differences-in-Differences (DID) method. Then we use the estimation of the impact on academic achievement to conduct a cost-effectiveness analysis and take a reduction of the class size program as a benchmark. The results are positive for the Action Lecture program. |
| Keywords: | Economics of education, evaluation Cost-effectiveness analysis, fiel experiment. |
| JEL: | C93 I20 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:11055&r=lab |
| By: | Ozdemir, Zeynel Abidin (Gazi University); Balcilar, Mehmet (Eastern Mediterranean University); Tansel, Aysit (Middle East Technical University) |
| Abstract: | This paper examines the possibility of unit roots in the presence of endogenously determined multiple structural breaks in the total, female and male labour force participation rates (LFPR) for Australia, Canada and the USA. We extend the procedure of Gil-Alana (2008) for single structural break to the case of multiple structural breaks at endogenously determined dates using the principles suggested by Bai and Perron (1998). We use the Robinson (1994) LM test to determine the fractional order of integration. We find that endogenously determined structural breaks render the total, female and male LFPR series stationary or at best mean-reverting. |
| Keywords: | fractional integration, gender, labour force participation rates, structural breaks |
| JEL: | C22 E24 J16 J21 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6063&r=lab |
| By: | Stanislaw Walukiewicz; Aneta Wiktorzak |
| Abstract: | We consider education as a number of multistage creative processes and analyse one of them - teaching knowledge (process P1) - in detail. In part 1 we describe the idea of Virtual Production Line (VPL), introduced by Walukiewicz in 2006 as an extension of Classical Production Line (CPL), an epitome of our perception of Henry Ford’s assembly line. Teachers connected by modern ICT network (in most cases it will just be the Internet) provide education to students on a VPL – kind of a virtual belt - instructing a given set of subjects (tasks) in a prescribed sequence, offering knowledge by a prescribed methodology, etc. In contrast to CPL, teachers on VPL will use their brain power mostly and divide the teaching process into a number of tasks in what we will call ‘self-organization of VPL’. In that perspective, VPL shall be defined as a conscious experience of a division of labour into tasks (self-organization) via the Internet, while CPL will just remain a partition of labour into a fixed number of jobs (tasks). In part 2 we introduce the value of human capital of a given student as a measure of P1 efficiency and compare it with the indicators used so far. In Poland the problem is that, different skills of students are not measured within one, integrated system. We propose a solution to this problem. Field study results are furnished. In conclusion, we formulate suggestions for further research. Key words: Human capital; Virtual Production Line (VPL); Classical Production Line (CPL); efficiency of education. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p866&r=lab |
| By: | Durante, Ruben; Labartino, Giovanna; Perotti, Roberto |
| Abstract: | Decentralization can lead to "good" or "bad" outcomes depending on the socio-cultural norms of the targeted communities. We investigate this issue by looking at the evolution of familism and nepotism in the Italian academia before and after the 1998 reform, which decentralized the recruitment of professors from the national to the university level. To capture familism we use a novel dataset on Italian university professors between 1988 and 2008 focusing on the informative content of last names. We construct two indices of "homonymy" which capture the concentration of last names in a given academic department relative to that in the underlying general population. Our results suggest that increased autonomy by local university officials resulted in a significant increase in the incidence of familism in areas characterized by low civic capital but not in areas with higher civic capital. |
| Keywords: | Civic capital; Familism; Higher education |
| JEL: | D71 D73 I23 Z1 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8645&r=lab |
| By: | Flora M. Diaz-Perez; Olga Gonzalez-Morales |
| Abstract: | Abstract The present paper aims to ascertain whether gender differences continue to exist in Spain’s working population. It sets out to obtain empirical evidence of the employment profile according to gender, quantify the extent to which self-employment or salaried employment is associated with certain characteristics (age, education, marital status and economic sector) and to analyse the evolution undergone during the recent economic crisis (2005-2009). In the study multivariate analysis statistical techniques will be applied to micro-data from the Working Population Survey compiled by Spain’s National Statistics Office (INE). Results shows that significant gender differences in employment status are seen when this is disaggregated and that the economic crisis has had a negative impact especially in certain groups. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p478&r=lab |
| By: | Matthew Rutledge |
| Abstract: | Despite the notable increase in earnings volatility and the attention paid to the growing ranks of the uninsured, the relationship between career earnings and short- and mediumrun health insurance status has been ignored due to a lack of data. I use a new dataset, the SIPP Gold Standard File, that merges health insurance status and demographics from the Survey of Income and Program Participation with career earnings records from the Social Security Administration (SSA) and the Internal Revenue Service (IRS) to examine the relationship between long-run family earnings volatility and health insurance coverage. I find that more volatile career earnings are associated with an increased probability of experiencing an uninsured episode, with larger effects for men, young workers, and the unmarried. These findings are consistent with the “scarring” literature, and suggest the importance of safety-net measures for job losses and health insurance coverage. |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:11-35&r=lab |
| By: | Dennis Fredriksen and Nils Martin Stølen (Statistics Norway) |
| Abstract: | Norway. The new system fulfils several criteria for a defined contribution scheme. Earnings from all years in work count in the accumulation of entitlements, and an actuarial rule converting the final balance into an annuity is introduced. But the pension system will still be a part of the general public finances and therefore financed pay-as-you-go. And before taking adjustments for increasing life expectancy into account, the level of old age pension benefits is calibrated to the former defined benefit system. The paper shows that given these restrictions it is of minor importance if the new pension system is described as defined benefit versus defined contribution. One modification follows from the treatment of inheritance of entitlements from persons who die before the lower age limit of retirement. The discussion is illustrated empirically by using Statistics Norway’s dynamic microsimulation model MOSART. |
| Keywords: | Pension systems; pension reform; life expectancy adjustment; microsimulation. |
| JEL: | H53 H55 J26 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:669&r=lab |
| By: | Cathleen Johnson; Claude Montmarquette |
| Abstract: | Evidence is presented on whether the willingness to borrow for education varies significantly among some at-risk students: low SES levels, First Nations, and first generation students. 1248 students participated in a survey, a numeracy assessment and took part in experimental decisions. During these sessions, students were presented with a series of paid binary decisions: bursaries vs. cash, loans for postsecondary education studies vs. cash, intertemporal decisions and risky decisions. The paid binary decisions involved trade-offs between cash and various types of student financial aid, allowing us to generate a cost per dollar of educational financing (grants, loans, mixtures of loans and grants). Prices for the various types of educational financing overlapped substantially in order to more clearly distinguish the impact of loan aversion on the decision to take up financial assistance to pursue PSE. Results show that several factors influence the subjects’ decisions about education financing but the most prominent influence was the price of educational subsidies. Participants were marginally sensitive to the form of financing (grant or loan), with no evidence of systematic loan aversion being detected. <P>Cette étude montre que la volonté d'emprunter pour s’instruire varie considérablement chez certains étudiants issus de milieu socio-économique faible, des Premières nations, et les étudiants de première génération. 1248 étudiants ont participé à une enquête, une évaluation de leur niveau de connaissances numériques et ont pris part à des décisions expérimentales. Pendant ces séances, les étudiants ont été confrontés à une série de décisions binaires rémunérées : bourses vs dollars, prêts d’études pour le postsecondaire vs dollars, des décisions intertemporelles et des décisions risquées. Les décisions binaires rémunérées impliquant un arbitrage entre des dollars et divers types d'aide financière, nous ont permis de générer un coût par dollar du financement de l'éducation (bourses, prêts, mélanges de prêts et de bourses). Les prix pour les différents types de financement de l'éducation se chevauchent de manière substantielle pour permettre de distinguer clairement l'impact de l'aversion pour les prêts sur la décision de prendre ou non l’option d’une aide financière pour poursuivre des études postsecondaires. Les résultats montrent que plusieurs facteurs influencent les décisions des sujets sur le financement de leur éducation, mais l'influence la plus importante est le prix en dollars des subventions à l'éducation. Les participants ont été légèrement influencés par la forme de financement (subvention ou prêt), mais aucune preuve d'aversion pour les prêts n’a été décelée. |
| Keywords: | Intertemporal choice, field experiments, risk attitudes, loans aversion, choix intertemporels, expériences sur le terrain, attitudes vis-à-vis des risques, l'aversion aux prêts d’études. |
| Date: | 2011–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2011s-67&r=lab |
| By: | Makiko Matsumoto (International Labour Office, Country Employment Policy Unit); Sher Verick (International Labour Office, Employment Analysis and Research Unit) |
| Abstract: | The East Asian financial crisis of 1997-1998 hit Indonesia hard, resulting in a winding back of the substantial economic and social gains made during the previous two decades. However, that crisis did not result in a large fall in employment and a commensurate rise in unemployment; rather, the economic contraction of over 13 per cent was accompanied by considerable transitions within employment,namely, from formal sector to informal and agricultural employment, particularly among women. The years following were characterized by slow growth and weak formal job creation, which has often been attributed to such factors as rigid labour regulations, especially the enactment of the Manpower Law in 2003. The economic and labour market situation in Indonesia only began to consistently improve over the last five years, notably during the boom years leading up to the global financial crisis. During this period, unemployment fell from its 2005 peak and employment increased. When the global financial crisis spread in late 2008 to emerging economies like Indonesia, it was expected that these countries would be severely affected. However, in contrast to the East Asian financial crisis, Indonesia proved to be rather resilient despite the fact that exports collapsed by almost 18 per cent from 2008 to 2009. This paper presents estimates that confirm the milder labour market impact of the most recent crisis. At the same time, the move towards more flexible and less protected forms of employment, as reflected by the increase in casualization, notably among the less-skilled, appear to be part of longer term trends. In this respect, labour market regulations, notably the Manpower Law of 2003, may have contributed to this trend, but the Law alone is not the main problem for employers in Indonesia. Overall, despite the apparent resilience to the global financial crisis, Indonesia continues to face a number of substantial challenges at both the macroeconomic and labour market level. |
| Keywords: | employment / unemployment / labour force participation / employment status / economic recession / economic recovery / trend / Indonesia |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:emwpap:2011-99&r=lab |
| By: | Anette Primdal Kvist; Helena Skyt Nielsen; Marianne Simonsen (School of Economics and Management, Aarhus University, Denmark) |
| Abstract: | This paper uses Danish register-based data for the population of children born in 1990-1997 to investigate the effects on parents of having a child with attention-deficit/hyperactivity-disorder (ADHD). Ten years after birth, parents of children diagnosed with ADHD have a 75 % higher probability of having dissolved their relationship and a 7-13 % lower labor supply. Exploiting detailed information about documented risk factors behind ADHD, we find that roughly half of this gap is due to selection. However, a statistically and economically significant gap is left, which is likely related to the impact of high psychic costs of coping with a child with ADHD. |
| Keywords: | ADHD, child health, marital dissolution, labor supply |
| JEL: | I12 J12 J13 J22 |
| Date: | 2011–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2011-14&r=lab |
| By: | Akarcay-Gurbuz, Ayca (Galatasaray University Economic Research Center); Ulus, Mustafa (Galatasaray University Economic Research Center) |
| Abstract: | The nature of the informal sector is a much debated issue. Is working in the informal sector a choice or a constraint? What is the relation between informality and poverty? Theoretically, both are possible, and in this sense, the informal sector bears its own dualism (Fields, 1990, 2005). Consequently, the answer is an empirical issue. In this study, we aim at providing further information about the Turkish labor market using the 2003 and 2008 Household Budget Surveys(HBS) which allows combining income levels with labor force status. We compare income according to five labor force statuses: non-participant, unemployed, worker in the formal sector and worker in the informal sector (agricultural and non-agricultural), and relate findings to poverty. We investigate data to see whether observable heterogeneities in terms of income exist not only between the different statuses, but also within the informal sector. |
| Keywords: | Labor force status; Income disparity; Turkey |
| Date: | 2011–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:ris:giamwp:2011_005&r=lab |
| By: | Cipollone, Angela |
| Abstract: | By using data from the latest wave of the Indonesia Life Family Survey, the present work investigates whether and to which extent child time allocation depends on the joint impact of liquidity constraints and risk attitudes. We employ a double selection model of school hours, by adding time preferences, risk attitudes and proxies of risks and shocks among the relevant regressors, and controlling for sample selection and endogeneity of liquidity constraints and school enrolment. To this aim, we exploit measures of time preferences and risk attitudes elicited from individuals’ responses to hypothetical gambles and consider the past occurrence of shocks to proxy the risk profiles of the households under the assumption that households use past income volatility to predict future volatility. It will be shown that, under liquidity constraints, risk averse parents raise a precautionary demand for education as an ex-ante risk coping strategy, so to insure future consumption through higher returns from their children’s work. |
| Keywords: | schooling; risk aversion; liquidity constraints; risks; shocks |
| JEL: | J13 J22 D91 |
| Date: | 2011–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34575&r=lab |
| By: | Allison Morris |
| Abstract: | This report discusses the most relevant issues concerning student standardised testing in which there are no-stakes for students (“standardised testing”) through a literature review and a review of the trends in standardised testing in OECD countries. Unlike standardised tests in which there are high-stakes for students, no-stakes implies that test results have no impact on the student’s academic career. The same tests, however, may have high stakes for teachers and schools. The report provides an overview of the standardised testing typology in the no-stakes context, including identifying the driving trends behind the gradual increase in standardised testing in OECD countries and the different purposes of standardised tests. Within this framework the report reviews how standardised tests with no-stakes for students are designed, implemented and used across OECD countries. The report also aims to synthesise the relevant empirical research on the impact of standardised testing on teaching and learning and to draw out lessons from the literature on aspects of standardised tests that are more effective in improving student outcomes. Key debates concerning standardised testing are identified throughout and include (among others): 1) selecting the appropriate test purpose; 2) teacher evaluation based on student test results; 3) the impact of publishing standardised test results; and 4) minimising strategic behaviour by teachers and administrators in standardised testing.<BR>Ce rapport analyse les questions essentielles sur les tests standardisés des élèves dont les résultats n’ont pas d’implications pour les élèves (« tests standardisés ») à travers une revue de la littérature et une analyse des tendances dans les pays de l’OCDE. Ce type de tests n’a pas d’implications pour le parcours scolaire des élèves. Ces mêmes tests peuvent toutefois avoir des conséquences pour les enseignants et les écoles. Le rapport offre une typologie de l’utilisation des tests standardisés sans conséquences pour les élèves y compris les raisons pour l’augmentation de leur utilisation dans les pays de l’OCDE et ses différents objectifs. Dans ce cadre, le rapport analyse la façon dont les tests standardisés sans conséquences pour les élèves sont conçus, implémentés et utilisés dans les pays de l’OCDE. Le rapport a aussi pour buts de synthétiser la recherche empirique pertinente sur l’impact des tests standardisés sur l’enseignement et l’apprentissage et de retirer des leçons de la littérature sur les aspects des tests standardisés qui sont plus efficaces dans l’amélioration des résultats des élèves. Des débats clés concernant les tests standardisés sont identifiés, notamment (entre autres) : 1) sélectionner l’objectif approprié pour le test ; 2) évaluation des enseignants sur la base des résultats des tests standardisés des élèves ; 3) l’impact de la publication des résultats des tests standardisés des élèves ; et 4) minimisation du comportement stratégique des enseignants et administrateurs dans la mise en place des tests standardisés. |
| Date: | 2011–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaab:65-en&r=lab |
| By: | Rafael Perez Ribas; Fabio Veras Soares; Clarissa Teixeira; Elydia Silva; Guilherme Hirata |
| Abstract: | This paper investigates the impact of the pilot phase of Paraguay’s conditional cash transfer programme, Tekoporã, on the demand for healthcare and education, and how much of this impact was due to the cash transfers and/or due to changes in behaviour/preferences, possibly as an effect of other, non-monetary programme components such as the conditionalities and family support visits. It also explores the presence of externalities effects through a decomposition of the average treatment effect on the treated (ATT) into participation and externality effect. This decomposition was possible thanks to the use of two distinct comparison groups, one within the village and possibly exposed to the externality, and another in a different district not affected by the programme. The results indicate that the programme was successful in improving children’s attendance at school and increasing visits to the health centres. They also suggest that the positive impacts do not reach non-beneficiary families (no externality effect). In the pilot phase, with no conditionality enforcement in place, the role of conditionality and social worker visits is not yet clear. No differential effect was found for those who were aware of the conditionalities and/or were visited by social workers, although the message of the importance of education and healthcare somehow did reach the households, altering their preferences towards a greater consumption of healthcare and education services. |
| Keywords: | Externality, Income effect, Behaviour effect, Conditional cash transfer |
| JEL: | C21 D12 D62 I38 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:piercr:2011-19&r=lab |
| By: | Link, Albert N. (University of North Carolina at Greensboro, Department of Economics); Scott, John T. (Dartmouth College) |
| Abstract: | We investigate the impacts of the U.S. publicly-funded Small Business Innovation Research (SBIR) program’s funding on the overall employment growth of SBIR-award recipient firms. This paper is motivated by the U.S. Congress’ continued emphasis of employment growth during its deliberations on the reauthorization of the SBIR program. We set forth a model of employment growth; the model offers a framework through which we can compare the firm’s actual level of employment after receipt of an SBIR award and completion of the research project to the level of employment predicted by the firm’s characteristics prior to the award. Using data collected by the National Research Council within the National Academies, we estimate our model, and we conclude that, on average, the overall employment effects associated with the SBIR program are large absolutely and relative to dollars of funding, but these effects are, in general, not statistically significant. |
| Keywords: | Employment growth; Entrepreneurship; Innovation; Technology; Small business |
| JEL: | J48 L26 O31 O38 |
| Date: | 2011–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2011_017&r=lab |
| By: | Luis Ayala (Universidad Rey Juan Carlos); Olga Cantó (Instituto de Estudios Fiscales); Juan G. Rodríguez (Universidad Complutense de Madrid) |
| Abstract: | Conventional wisdom predicts that changes in the aggregate unemployment rate may significantly affect a country’s income distribution and, as a consequence, have a relevant impact on the evolution of the poverty rate. However, the relationship between labour macroeconomic indicators and poverty seems to have become weaker in recent times. Using panel data on unemployment and poverty for Spanish regions we estimate a System GMM model in order to model this relationship taking into account that the intrahousehold distribution of unemployment can be more relevant than aggregate unemployment in order to explain poverty changes. We also test the hypothesis of asymmetric effects of the business cycle on the share of poor individuals in the population. Our results show that unemployment has a positive impact on severe poverty, while inflation has a negative effect. Among the three unemployment measures considered in order to predict poverty, the percentage of households where all active members are unemployed registers the highest explanatory power. We also find that a change in unemployment has a larger effect on poverty during a period of economic recession than during a period of expansion. |
| Keywords: | poverty forecasting, unemployment, system GMM model |
| JEL: | E3 I3 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2011-222&r=lab |
| By: | Freddy, Liew |
| Abstract: | This paper investigates the empirical relationship between labor productivity, real wages and real GDP in Singapore from 1997 to 2011. The paper begins with a review of productivity, wage and growth situations in Singapore in the past decade and further attempts to uncover the underlying relationship in this nexus using theoretical framework from labor and growth literature. Using the Vector-Autoregressive or Vector-Error Correction Mechanism when cointegration is present, this paper uncovers various causality relations in different industries which conform to economic theory and empirics. An impulse response analysis is also undertaken to understand how specific policy decisions could be framed to provide for higher wages across industries. The empirical results suggest that in the Singapore economy, there exist a bi-directional causality relation between labor productivity and real GDP but that wages seem to be caused by other underlying factors. However, real wages respond positively to positive shocks in the real GDP or labor productivity using cholesky or generalized decomposition. This paper concludes by discussing policies that could be undertaken to promote inclusive growth in the environment of sustained economic growth. |
| Keywords: | Causality; Productivity; Wage; Economic Growth; Singapore |
| JEL: | C22 O40 J30 |
| Date: | 2011–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34459&r=lab |
| By: | Reuschke, Darja (University of St. Andrews); van Ham, Maarten (Delft University of Technology) |
| Abstract: | Based on the notion that entrepreneurship is a 'local event', the literature argues that self-employed workers and entrepreneurs are 'rooted' in place. This paper tests the 'residential rootedness'-hypothesis of self-employment by examining for Germany and the UK whether the self-employed are less likely to move or migrate than employees. Using longitudinal data from the German Socio-economic Panel Study (SOEP) and the British Household Panel Survey (BHPS) and accounting for transitions in employment status we found little evidence that the self-employed in Germany and the UK are more rooted in place than employees. Firstly, the self-employed are not less likely to move or migrate over the period 2001–08. Secondly, those who are currently self-employed are also not more likely to have remained in the same place over a period of three years (2008–06 and 2005–03) as compared to those who are currently employed. Thirdly, those who are continuously self-employed are not less likely to have moved or migrated over a 3-period than those in continuous paid employment. Fourthly, in contrast to the prevalent 'residential rootedness'-hypothesis in economic geography and regional studies, we found that the entry into and the exit from self-employment are associated with internal migration. |
| Keywords: | self-employment, migration, residential mobility, rootedness hypothesis, UK, Germany |
| JEL: | J61 J62 L26 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6062&r=lab |
| By: | Ricardo Monge-González; Juan A. Rodríguez-Alvarez; John Hewitt; Jeffrey Orozco; Keynor Ruiz |
| Abstract: | This paper studies the degree to which innovation by Costa Rican manufacturing firms creates or displaces employment, how different innovation strategies affect employment, and how these effects vary by firm size and type of employment demand characteristics (skills and gender). In particular the research focuses on the differential effects of product and process innovations on employment growth. Particular attention is paid to identifying innovation impacts on employment generation by SMEs (small and medium-sized enterprises). |
| Keywords: | Science & Technology :: Research & Development, Labor :: Workforce & Employment, Private Sector :: SME, Science & Technology :: New Technologies, Innovation, employment, skills, genders, SMEs, Costa Rica |
| JEL: | O31 O38 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:54278&r=lab |
| By: | Elena Simonova (Certified General Accountants Association of Canada); Rock Lefebvre (Certified General Accountants Association of Canada); Kevin Girdharry (Certified General Accountants Association of Canada) |
| Abstract: | Retirement planning is often seen as a tool that may assist individuals to successfully accumulate retirement capital. However, the low level of ‘customization’ of the general information on retirement planning may prompt some individuals to oversimplify their approach to retirement savings while discouraging others. Given the already weak propensity of Canadian households to accumulate retirement savings, this paper seeks to accentuate the importance associated with – and the complexity involved in – choosing the mix of savings instruments for accumulating retirement capital. The analysis shows that relying on private retirement savings continues to be of high importance for Canadian households. Some individuals may achieve the best saving outcome through the strategy that often would not be viewed as “saving for retirement”; however, comparing the outcomes of different savings options is challenging. Considering planning for retirement in broader terms than just setting aside a portion of monthly income may be beneficial as the narrow focus may overlook some important strategies of accumulating retirement capital. |
| Keywords: | planning for retirement, Canadain retirement income system, savings instruments, funding postion of pension plans, household savings, registered retierment savings plans, tax-free savings accounts, retirement savings, retirement income, |
| JEL: | D14 E21 G23 G28 H21 H24 H31 H55 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cga:wpaper:111105&r=lab |
| By: | Melania Salazar-Ordóñez; Carlos GarcÃa-Alonso; Gabriel Perez-Alcalá |
| Abstract: | Borjas (1987, 1991 and 1994) developed the self-selection theory, applying Roy’s model (1951) to migration studies. He establishes that the characteristics of migrants in terms of skills and abilities are driven by wage distribution differences between the host country and home. In this regard, when the country of origin has higher relative returns for skills and more disperse income distribution, a negative selection of migrants is generated, and vice versa. A great deal of literature has studied Self-selection model to analyse how wage distribution influences migrants’ decisions, leading to consistent and inconsistent results. Given the conflicting results in the literature, this paper examines how migration costs and wage differences influence self-selection patterns –i.e. skills in terms of schooling levels. Taking into account that self-selection can not be studied systematically by means of standard data sources because of the lack of data, we propose an analytical model based on the individual investment decision theory (Human Capital theory), applying simulated data by Monte-Carlo method. The theory of individual investment decisions allows us to analyze self-selection patterns across differences in wages and economic conditions at home and in host countries and to introduce uncertainty using a stochastic framework. An empirical application for long-distant migrations –from Ecuador to Spain– is implemented. Our findings show that migrants are positively selected on observable skills between Spain and Ecuador, considering both constant direct migration costs and constant direct migration costs-plus-variable opportunity migration costs. Secondary data from official sources confirm this tendency. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p347&r=lab |
| By: | Michael Stops |
| Abstract: | This work refers to analyses of matching processes on occupational labour markets in Germany. Up to now, all studies in this field are based on the crucial assumption of separate occupational labour markets. I outlined some theoretical considerations that occupational markets are probably not completely separated. By using information about similarities of occupational groups I constructed an 'occupational topology' and finally tested my hypothesis of non-separated occupational labour markets with Spatial Econometric Estimators, particularly with a restricted version of a Spatial Durbin Model that includes “spatial†lags for regressors. The results show considerable dependencies between similar occupational groups in the matching process. Particularly, the results indicate occupational specific set-up and set-down processes in similar occupational groups. This has important implications for estimating the matching efficiencies of unemployed and vacancies, because the matching process is not only determined by the unemployed and vacancies in the same occupational group but also by those in other occupational groups. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p372&r=lab |
| By: | Arjen Edzes; Marije Hamersma; Jouke Van Dijk |
| Abstract: | This paper deals with the question of regional variation in two transitions that low educated can make. The first transition is the choice between learning through versus not learning and entering the labour market. Second, if they enter the labour market, the question is whether there is a regional difference in outcomes in terms of earned wages. Several explanatory regional circumstances are considered like urbanization and regional economic growth. The questions are analyzed using data of a schoolleaverssurvey in the period of 1996-2008 in the Netherlands. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1067&r=lab |
| By: | Peichl, Andreas; Pestel, Nico; Siegloch, Sebastian |
| Abstract: | Using a unique dataset of German members of parliament (MPs) this paper analyzes the politicians’ wage gap (PWG). After controlling for observable characteristics as well as accounting for election probabilities and campaigning costs, we find a positive income premium for MPs which is statistically and economically significant. Our results are consistent with the citizen candidate model: The PWG amounts to 35–65% when comparing MPs to citizens in an executive position. However, it shrinks to zero when restricting the control group to top-level executives. This suggests that German politicians do not receive excessive pay when compared to senior executives. |
| Keywords: | politicians’ wage gap; citizen-candidate model; office remuneration; outside earnings |
| JEL: | J45 J31 H11 H83 D72 |
| Date: | 2011–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34595&r=lab |
| By: | Ronald B Davies (University College Dublin); Krishna Chaitanya Vadlamannati (University of Heidelberg) |
| Abstract: | Among the many concerns over globalization is that as nations compete for mobile firms, they will relax labour standards as a method of lowering costs and attracting investment. Using spatial estimation on panel data for 148 developing countries over 18 years, we find that the labour standards in one country are positively correlated with the labour standards elsewhere (i.e. a cut in labour standards in other countries reduces labour standards in the country in question). This interdependence is more evident in labour practices (i.e. enforcement) than in labour laws. Further, competition is most fierce in those countries with already low standards. |
| Keywords: | Labour Standards, Competition for FDI, Spatial Econometrics |
| Date: | 2011–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201123&r=lab |
| By: | Gilberto Fraga; Carlos Bacha |
| Abstract: | The study of Brazilian export determinants is a very important issue to policy-markers, principally when the export determinants are different among the Brazilian states or regions. Human capital (measured by the average level of employee formal schooling) has been one of these determinants and this paper, basing on Dixit and Woodland (1982) model, aims to evaluate the role played by human capital in the evolution of Brazilian states exports from 1995 to 2006, highlighting the differences among Brazilian states and/or regions. The empirical analysis is implemented by running regression of the data organized into a panel and considering the fixed effects (i.e., the amenities) among the 27 Brazilian states. The findings are consistent with the selected theoretical model and suggest that human capital has a non-linear effect on exports. The latter suggests the continuous improvement in the worker skill should not be neglected by public policies aimed at increasing the foreign trade of Brazilian states, but the unique characteristics of these states must be taken into account. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1016&r=lab |
| By: | Peter Bearse; Buly A. Cardak; Gerhard Glomm; B. Ravikumar |
| Abstract: | We compare a uniform voucher regime against the status quo mix of public and private education, focusing on the distribution of welfare gains and losses across house- holds by income. We argue that the topping-up option available under uniform vouchers is not sufficiently valuable for the poorer households, so the voucher regime is defeated at the polls. Our result depends critically on the opting-out feature in the current system. |
| Keywords: | Education ; Households |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2011-032&r=lab |
| By: | Dimitris Kallioras; Yorgos Kandylis; Nikos Kromydakis; Panagiotis Pantazis |
| Abstract: | Labor does not move only between firms and occupations; labor moves also between geographic areas. The territorial dimension of labor markets, however, has been rather loosely conceptualized, suggesting a unity absent in practice, probably because spatial theories have been developed, to a great extent, separately from the economic ones. The recognition of the “multiplicity of sub-markets†in the real world – noticeable is the term “balkanization†– necessitates the definition of local labor market areas (LLMAs) since the geographical dimension of both production process and labor force breeds territorial partitions in the labor market, setting obstacles to – and creating opportunities for – the mobility of (potential) workers. The aim of the paper is the definition of LLMAs in Greece on the basis of travel-to-work flows (i.e. incoming and outgoing), towards the formation of better-targeted policy interventions. The definition of LLMAs is bound to establish a unit of locality which commands general acceptance as a reference for addressing issues of planning and development as well as issues of labor market, in a manner which is not possible through the conventional, administrative and/or statistical, territorial partitions. The identification of the functional linkages, under the prism of territorial structure and hierarchy, which exist within and between LLMAs is going to detect relations of interaction, overlapping and interdependence – and also discontinuities – in the Greek territory. The analysis is going to utilize the disaggregated travel-to-work data, among the 1,034 municipalities and communities, solicited in the 2001 Population Census and included in the “Panorama of Census Data 1991-2001â€Â. The aforementioned data are referred to permanent population and include both daily and seasonal travel-to-work flows. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p75&r=lab |
| By: | Carlos Gradín (Universidade de Vigo) |
| Abstract: | The aim of this paper is to explain why poverty and material deprivation in South Africa are significantly higher among those of African descent than among whites. To do so, we estimate the conditional levels of poverty and deprivation Africans would experience had they the same characteristics as whites. By comparing the actual and counterfactual distributions, we show that the racial gap in poverty and deprivation can be attributed to the cumulative disadvantaged characteristics of Africans, such as their current level of educational attainment, demographic structure, and area of residence, as well as to the inertia of past racial inequalities. Progress made in the educational and labor market outcomes of Africans after Apartheid explains the reduction in the racial poverty differential. |
| Keywords: | poverty, deprivation, race, decomposition, South Africa, households’ characteristics. |
| JEL: | D31 D63 I32 J15 J71 J82 O15 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2011-224&r=lab |
| By: | Simon Falck |
| Abstract: | The aim of this study is to investigate how labour market specialization influences the regional distribution of foreign direct investments (FDI) within a country. It examines all new foreign start-ups (Greenfield investments) that were made in Sweden between 2001 and 2008 and analyzes how these are related to different professionals in 21 regional host-economies. Labour market specialization is captured through location quotients which indicate the regional proportion of employees in one occupational category relative to the national proportion in the same occupational category. Thirteen different occupational categories are created and tested empirically with a negative binomial regression model on foreign start-ups across 10 different industries, in the primary, secondary and tertiary sector. The results indicate that foreign companies prefer to invest in regions which have a relative high share of professionals in business, finance, legal affairs and engineering. On the contrary regions with a relative high share of employees in public services, social work or administrative professionals appear not to be preferred by foreign companies. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p842&r=lab |
| By: | Charlie Weir (Aberdeen Business School); Oleksandr Talavera (Durham Business School); Alexander Muravyev (IZA and St. Petersburg University GSOM) |
| Abstract: | This paper studies the relationship between directors’ human capital and the company’s performance. In particular, we focus on the effect on performance of non-executive directors who are also executive directors in other firms. We find a positive relationship between the presence of these non-executive directors and the accounting performance of the appointing company. The effect is stronger if these directors are also executive directors at companies that are performing well. Additionally, the similarity of industry plays a role. The results support the view that appointing firms benefit from the human capital of the appointee. |
| Keywords: | human capital, executive directors, non-executive directors, company performance |
| JEL: | G34 G39 |
| Date: | 2011–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:dur:durham:2011_12&r=lab |
| By: | Francis, Bill (Lally School of Management, Rensselaer Polytechnic Institute); Hasan, Iftekhar (Lally School of Management, Rensselaer Polytechnic Institute, and Bank of Finland); Sharma, Zenu (Long Island University) |
| Abstract: | We investigate the relationship between chief executive officer (CEO) compensation and innovation. In an empirical examination of compensation contracts of S&P 400, 500, and 600 firms we find that long-term incentives in the form of options are positively related to patents and citations to patents. In addition, convexity of options has a positive effect on innovation. We also find no relationship between pay for performance sensitivity (PPS) with patents and citations to patents while we did discover a positive relationship between these and golden parachutes. Finally, we show that subsequent to project failure managers’ compensation contracts are reset favourably. We provide support for the theory that compensation contracts that offer long-term commitment and protection from failure are more suitable for innovation. |
| Keywords: | CEO compensation; innovation and incentives |
| JEL: | D82 O31 |
| Date: | 2011–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2011_017&r=lab |
| By: | Andrade, Eduardo de Carvalho; Moita, Rodrigo Menon Simões; Silva, Carlos Eduardo Lobo |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:ibm:ibmecp:wpe_245&r=lab |
| By: | Sofia Wixe |
| Abstract: | Increased productivity is one of the main drivers of economic growth. Considering the increasing importance of the service sector in many economies studies of productivity in service firms are essential, but still rare. Questions concerning the underlying reasons for productivity differences in service firms are therefore important. Why is the productivity in certain firms higher than in others and what are the possibilities for less-productive firms to increase their productivity levels? This paper aims to examine these issues with a particular focus on the importance of externalities. Externalities are defined as region-specific economic effects influencing firm efficiency. These externalities can be broadly divided in the following categories: i) urbanization economies which relate to diversity and density (Jacobs externalities), ii) localization economies which concern specialization and concentration (MAR externalities), iii) competition (Porter externalities), and iv) labor market externalities. The purpose of the paper is to explain the productivity levels of Swedish service firms using measures of these externalities. However, also firm specific characteristics, including characteristics of the workforce, are included. These are used both as control variables and to capture potential spillover effects that indirectly affect productivity through the employees. The characteristics of the workforce are essential to include since the employees have the potential to affect the way different firms absorb and use possible spillover effects. They are therefore a crucial component to channel externalities to the firm as a whole. This is the case especially for service firms since these are generally very labor intensive. The results of this study should be of interest to policy makers since they have the possibility to make decisions that contribute to more productive regional environments. This is also of interest to company leaders since they have the possibility to decide where to locate and how to structure their firms in order to take advantage of productivity enhancing externalities. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p754&r=lab |
| By: | Salvatore Piccolo (Università Cattolica di Milano and CSEF); Emanuele Tarantino (Università di Bologna and TILEC) |
| Abstract: | We study the effects of information sharing on optimal contracting in a vertical hierarchies model with moral hazard and effort externalities. The paper has three main objectives. First, we determine and compare the equilibrium contracts with and without communication. We identify how each principal relates her agent’s wage to the opponent’s performance when they share information about agents’ performances. It turns out that the type of effort externalities across organizations is the main determinant of the responsiveness of each agent’s reward to the opponent’s performance. Second, in order to throw novel light on the emergence of information sharing agreements, we characterize the equilibria of a non- cooperative game where principals first decide whether to share information and then offer contracts to their exclusive agents. We explore the implications of introducing certification costs and show that three types of equilibria may emerge depending on the nature and (relative) strength of effort externalities: principals bilaterally share information if agents’ effort choices exhibit strong complementarity; only the principal with stronger monitoring power discloses information in equilibrium for intermediate levels of effort’s complementarity; principals do not share information if efforts are substitutes and for low values of effort’s complementarity. Moreover, differently from the common agency framework studied in Maier and Ottaviani (2009), in our model a prisoner’s dilemma may occur when efforts are substitutes and certification costs are negligible: if a higher effort by one agent reduces the opponent’s marginal productivity of effort the equilibrium involves no communication although principals would jointly be better off by sharing information. Finally, the model also offers novel testable predictions on the impact of competition on the basic trade-off between risk and incentives, the effects of organizations’ asymmetries on information disclosure policies as well as on the link between corporate control and the power of incentives. |
| Keywords: | Competing Hierarchies, Information Sharing, Moral Hazard |
| Date: | 2011–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:294&r=lab |