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on Labour Economics |
| By: | Bonikowska, Aneta<br /> Morissette, Rene |
| Abstract: | This study examines long-term earnings losses of workers laid off during the early 1990s and the early 2000s using data from Statistics Canada's Longitudinal Worker File (LWF). In contrast to earlier studies, many of which focused on narrowly defined samples, this study compares earnings losses across all groups of displaced workers with stable labour market attachment prior to layoff. The study shows that focusing solely on high-seniority laid-off workers or workers laid off in firm closures leads to the exclusion of at least two-thirds of Canadian displaced workers with stable labour market attachment. |
| Keywords: | Labour, Employment and unemployment, Wages, salaries and other earnings |
| Date: | 2012–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2012346e&r=lab |
| By: | Premand, Patrick; Brodmann, Stefanie; Almeida, Rita; Grun, Rebekka; Barouni, Mahdi |
| Abstract: | In economies characterized by low labor demand and high rates of youth unemployment, entrepreneurship training has the potential to enable youth to gain skills and create their own jobs. This paper presents experimental evidence on a new entrepreneurship track that provides business training and personalized coaching to university students in Tunisia. Undergraduates in the final year of licence appliquee were given the opportunity to graduate with a business plan instead of following the standard curriculum. This paper relies on randomized assignment of the entrepreneurship track to identify impacts on labor market outcomes one year after graduation. The analysis finds that the entrepreneurship track was effective in increasing self-employment among applicants, but that the effects are small in absolute terms. In addition, the employment rate among participants remains unchanged, pointing to a partial substitution from wage employment to self-employment. The evidence shows that the program fostered business skills, expanded networks, and affected a range of behavioral skills. Participation in the entrepreneurship track also heightened graduates’ optimism toward the future shortly after the Tunisian revolution. |
| Keywords: | Tertiary Education,Labor Markets,Primary Education,Access to Finance,Educational Sciences |
| Date: | 2012–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6285&r=lab |
| By: | Jonathan James |
| Abstract: | This paper develops and estimates a model of occupational choice and learning that allows for correlated learning across occupation specificabilities. In the labor market, workers learn about their potential outcomes in all occupations, not just their current occupation. Based on what they learn, workers engage in directed search across occupations. The estimates indicate that sorting occurs in multiple dimensions. Workers discovering a low ability in their current occupation are significantly more likely to move to a new occupation. At the same time, workers discovering a high ability in some occupations are more likely to move up the occupational ladder into managerial occupations. By age 28 this sorting process leads to an aggregate increase in wages similar to what would occur if all workers were endowed with an additional year of education. |
| Keywords: | Labor market ; Occupational training |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1225&r=lab |
| By: | Pugatch, Todd (Oregon State University) |
| Abstract: | As an alternative to traditional academic schooling, vocational schooling in South Africa may serve as a safety valve for students encountering difficulty in the transition from school to work. Yet if ineffective, vocational schooling could also be a sinkhole, offering little chance for success on the labor market. After defining the terms "safety valve" and "sinkhole" in a model of human capital investment with multiple schooling types, I test for evidence of these characteristics using a panel of urban youth in South Africa. I find support for the safety valve role of vocational schooling, with a small increase in vocational enrollment in response to grade failure, compared to a decline of 38 percentage points for academic enrollment. In contrast, I find no evidence that vocational schooling is a sinkhole, with wage and employment returns at least as large as those for academic schooling. The results suggest that vocational schooling plays an important role in easing difficult school to work transitions for South African youth. |
| Keywords: | human capital investment, vocational schooling, youth unemployment, South Africa |
| JEL: | I25 J24 J31 O12 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7015&r=lab |
| By: | Miranda, Alfonso (CIDE, Mexico City); Zhu, Yu (University of Kent) |
| Abstract: | We focus on the effect of English deficiency on the native-immigrant wage gap for male employees in the UK using the first wave of the UK Household Longitudinal Survey. We show that the wage gap is robust to controls for age, region of residence, educational attainment and ethnicity. However, English as Additional Language (EAL) is capable of explaining virtually all the remaining wage gap between natives and immigrants. Using the interaction of language of country of birth and age-at-arrival as instrument, we find strong evidence of a causal effect of EAL on the native-immigrant wage gap. |
| Keywords: | English as Additional Language (EAL), native-immigrant wage gap, age-at-arrival |
| JEL: | J15 J61 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7019&r=lab |
| By: | Zambrano, Joshua D. |
| Abstract: | In-depth analysis of problems confronting both the U.S. budget and job market, while presenting a logical remedy for each dilemma. Problems addressed include the growing entitlement spending caused by increased lifespan since passing Medicare and Social Security, military spending on overseas operations, outsourcing to low minimum wage countries, the effects of automation on overall employment, and CEOs firing U.S. workers to increase their own compensation. |
| Keywords: | U.S. budget; U.S. job market; solutions; entitlement spending; Social Security; Medicare; military spending; lifespan; outsourcing; low minimum wages; countries; automation; employment rate; CEO compensation; U.S. workers |
| JEL: | F0 H0 E6 |
| Date: | 2012–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42870&r=lab |
| By: | Richard Dickens (Department of Economics, University of Sussex, UK); Alan Manning (Centre for Economic Performance, London School of Economics, UK); Tim Butcher (Secretariat, Low Pay Commission, UK) |
| Abstract: | Research suggests that, at the levels set in countries like the US and the UK, minimum wages have little effect on employment but do have impacts on wage inequality. However we lack models that can explain these facts – this paper presents one based on imperfect labour markets. The paper also investigates the impact of the UK’s National Minimum Wage on wage inequality finding it can explain a sizeable part of the evolution of wage inequality in the bottom half of the distribution in the period 1998-2010. We also present evidence that the impact of the NMW reaches up to 40% above the NMW in 2010 which corresponds to the 25th percentile. These spillovers are larger in low-wage segments. |
| Keywords: | Minimum Wage, Wage Inequality |
| JEL: | J38 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:4512&r=lab |
| By: | Elena Meschi (Institute of Education ,Room 405, University of London); Francesco Scervini (Collegio Carlo Alberto, Università degli Studi, Torino) |
| Abstract: | This paper analyses the relationship between schooling expansion and educational inequality in a panel of developed countries over different birth cohorts. Compared to previous literature, we expand the comprehension of this relationship by exploiting the longitudinal dimension of our data and by focusing on different measures of inequality. We find evidence of a non-linear relationship between expansion and inequality of education and we argue that this evidence is complementary and not necessarily in contrast with the educational Kuznets curve found by previous studies. We also discuss how educational policies may influence educational inequality and we find that the length of compulsory education affects inequality only through its effect on average education, while school tracking shapes inequality independently of the level of education. JEL codes: I21, I24 |
| Keywords: | education, inequality, Kuznets curve, panel data |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:aia:ginidp:61&r=lab |
| By: | Javier Valbuena |
| Abstract: | This paper is based on the first seven waves of the Longitudinal Study of Young People in England (LSYPE) that allow us to follow a recent cohort of pupils from age 14 through to Higher Education (HE) participation at age 19/20. Therefore, our approach involves using rich individual data that have been linked to school level information and geographic markers to examine some of the factors determining HE participation for individuals who were in Year 11 in 2005/06 and who could therefore first enter HE in 2008/2009. Our results indicate that differences in HE participation (including studying a science degree and attending prestigious universities) between students coming from advantaged and disadvantaged backgrounds are large and that much of the socio-economic gap in HE participation rates is driven by particularly low participation rates for students at the bottom of the income distribution. However, when we introduce controls for prior educational attainment, student’s expectations towards university, academic results during secondary schooling and type of school attended these gaps in participation are substantially reduced. Our analysis suggests that one of the main challenges to widening participation for pupils from poorer socio-economic backgrounds is early policy interventions at, say, age 11 as they are likely to have an im portant effect in HE participation. Also, relatively later intervention (at ages 14 to 16) aiming at improving educational aspirations of teenagers and targeting better GCSEs results will further close the gap. |
| Keywords: | Education inequality; family background; higher education |
| JEL: | I21 I28 J11 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1215&r=lab |
| By: | Francesco D'Amuri (Bank of Italy); Giovanni Peri (UC Davis) |
| Abstract: | In this paper we analyse the impact of immigrants on the type and quantity of natives’ jobs. We use data on fifteen Western European countries during the 1996-2010 period. We find that immigrants, by taking up manual-routine type of occupations pushed natives towards more “complex” (abstract and communication) jobs. This job upgrade was associated with a 0.7% increase in native wages for a doubling of the immigrants’ share. These results are robust to the use of an IV strategy based on the past settlement of immigrants across European countries. The job upgrade slowed, but did not come to a halt, during the Great Recession. We also document the labour market flows behind it: the complexity of jobs offered to new native hires was greater than that of lost jobs. Finally, we find evidence that the reallocation was larger in countries with more flexible labour laws. |
| Keywords: | immigration, jobs, task specialization, employment protection laws, Europe |
| JEL: | J24 J31 J61 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_886_12&r=lab |
| By: | Blasco, Sylvie (GAINS, Université du Maine); Pertold-Gebicka, Barbara (Aarhus University) |
| Abstract: | In this paper we investigate how active labour market policy programmes affect firms' hiring strategies and, eventually, firms' performance. We focus on counseling and monitoring which may reduce search costs for employers, but which may have ambiguous effect on the employer-employee matching quality and thus on firms' performance. Using a large scale experiment which was conducted in Denmark in 2005-2006 and induced a greater provision of activation, we find that small firms hiring in the districts where the social experiment was conducted changed their hiring practices in favor of unemployed workers and experienced greater turnover than the other firms. Treated firms also experienced no change or a marginal reduction in value added and total factor productivity during the first years after the experiment. These results are consistent with the idea that monitoring creates compulsion effects which counteract the possible improvement in the matching process expected from job search assistance. |
| Keywords: | active labour market programmes, counseling and monitoring, hiring decisions, firms performance |
| JEL: | C21 J63 J68 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7013&r=lab |
| By: | Annabelle Krause; Ulf Rinne; Simone Schüller |
| Abstract: | We investigate second generation migrants and native children at several stages in the German education system to analyze the determinants of the persistent native-migrant gap. One part of the gap can be attributed to differences in socioeconomic background and another part remains unexplained. Faced with this decomposition problem, we apply linear and matching decomposition methods. Accounting for differences in socioeconomic background, we find that migrant pupils are just as likely to receive recommendations for or to enroll at any secondary school type as native children. Comparable natives, in terms of family background, thus face similar difficulties as migrant children. Our results point at more general inequalities in secondary schooling in Germany which are not migrant-specific. |
| Keywords: | Migration, education, human capital, Germany, tracking |
| JEL: | J15 J24 I21 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp508&r=lab |
| By: | Ray, Jhilam; Majumder, Rajarshi |
| Abstract: | Improvement in the living conditions of workers is an important objective of development planners and India is no exception. The crux of this lies in returns from work, or wage level. While non-wage aspects are important, wage level is the most pertinent indicator of condition of workers and increase in real wage level signals improvement in condition of labour market. Though most studies compare wages at different points of time from cross-sectional data, they provide an aggregative view without control for variables that are particular to the household/family. Contrary to this, intergenerational mobility in wage income following life cycle theory observes direction & quantum of movement of workers’ wage relative to their parents, therefore filtering out household characteristics, and providing better measure of workers’ conditions and its trends over time. Another important aspect that can be explored by looking at intergenerational wage mobility is related to the issue of equality. Stickiness of wage income with respect to parental income leads to persistence of income inequality across generations and questions the notional objective of equity in opportunity and openness of any society. Historically some groups are belonging to lower strata of society due to economic and or social discrimination leading to lower income and asset possession as well as capability formation which excluded them from the process of capability formation and income-earning. This exclusion and backwardness surpass the boundary of the current generation and spills over to successive generations as well. As a result Intergenerational Mobility is very low among backward classes. Also of importance is to enquire whether economic liberalization and structural reforms have had any impact on the intergenerational income mobility – has mobility today more than that in the 1990s? In this paper we explore these issues, throwing light on a hitherto neglected area of research in Indian labour market studies – intergenerational income mobility, desegregated across social classes and comparing pre-reform and post-reform results. We observe that wage income mobility between generations have been generally low in India. Though such stickiness over generations is declining over time, especially in the post-reform period, stickiness is still higher for excluded social classes. Improvement over the last decade has occurred mainly for the scheduled castes and not for the tribals who are much more spatially isolated and hence outside the orbit of economic dynamics. |
| Keywords: | Intergenerational Mobility; wage; social class; income persistence; India |
| JEL: | J62 J31 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42984&r=lab |
| By: | Randall W. Eberts (W.E. Upjohn Institute for Employment Research); Mark E. Schweitzer |
| Keywords: | wage differential, cost-of-living, regional issues |
| JEL: | J31 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:rwe1994er2&r=lab |
| By: | Xavier Raurich (Universitat de Barcelona); Valeri Sorolla (Universitat Autonoma de Barcelona) (Universitat de Barcelona) |
| Abstract: | The purpose of this paper is to introduce a noncompetitive labor market and unemployment into the growth models with exogenous saving rates found in economic growth textbooks (SalaiMartin, 2000; Barro and SalaiMartin, 2003; Romer, 2006). We first derive a general framework with a neoclassical production function to analyze the relationship between growth and employment. We use this framework to study the joint dynamics of growth and employment when different wage setting rules are considered |
| Keywords: | wage inertia., growth, unemployment |
| JEL: | E24 O41 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bar:bedcje:2012287&r=lab |
| By: | Schurer, Stefanie (Victoria University of Wellington); Kuehnle, Daniel (University of Erlangen-Nuremberg); Scott, Anthony (Melbourne Institute of Applied Economic and Social Research); Cheng, Terence Chai (Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | Using data from a new longitudinal survey of doctors from Australia, the authors test whether observed large gender-pay gaps among general practitioners (GPs) are the result of women's larger willingness to interrupt their careers. On average, female GPs earn A$83,000 or 54% less than male GPs. The difference between men and women with children is A$105,000, and A$45,000 for men and women without children. Of this gap, 66-75% is explained by differences in observable characteristics such as hours worked. The family gap emerges also within the sexes. Female GPs with children experience an earnings penalty of A$15,000-A$25,000 in comparison to women without children; almost 100% of this difference is due to observable characteristics such as hours worked and career interruptions. Male GPs with children experience a family premium of A$35,000 in comparison to men without children, indicating the presence of a breadwinner effect that exacerbates the gender-earnings gap. |
| Keywords: | gender-earnings gap, family-earnings gap, labour force attachment, decomposition methods, family physicians, MABEL |
| JEL: | J24 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7017&r=lab |
| By: | Caner, Asena (TOBB University of Economy and Technology); Okten, Cagla (Bilkent University) |
| Abstract: | We investigate how the benefits of publicly financed higher education in Turkey are distributed among students with different socioeconomic backgrounds. We use a unique dataset from a nationally representative sample of university entrance exam takers together with data on government subsidies to public universities. We compare the characteristics of students who succeed in the exam to those who do not and those who enter public universities to those who go to private ones. Our econometric analyses based on a three-stage selection model reveal that students from wealthier and more educated families are more likely to be successful at university entrance. Unlike the findings in other countries, students who enroll in private universities come from higher income and more educated families. However, among those who enter public universities, students from higher income and more educated families are more likely to go to universities that receive larger subsidies from the government. |
| Keywords: | higher education, public finance of higher education, Turkey, education, government subsidies |
| JEL: | O12 I22 I24 O15 H4 J1 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7011&r=lab |
| By: | Christopher J. O'Leary (W.E. Upjohn Institute for Employment Research); Piotr Kolodziejczyk; Gyorgy Lazar |
| Keywords: | active labor market programs, hungary, poland |
| JEL: | J64 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:cjo19983&r=lab |
| By: | van den Berg, Gerard J. (University of Mannheim); Lundborg, Petter (Lund University); Vikström, Johan (IFAU) |
| Abstract: | We study the short-run and long-run economic impact of one of the largest losses that an individual can face; the death of a child. We utilize unique merged registers on the entire Swedish population, combining information on the date and cause of death with parents' labor market outcomes, health outcomes, marital status, and subsequent fertility. We exploit the longitudinal dimension of the data and deal with a range of selection issues. We distinguish between effects on labor and various non-labor income components and we consider patterns over time. We find that labor market effects are persistent. |
| Keywords: | sickness absenteeism, depression, child mortality, labor supply, bereavement, employment, marriage, death, divorce, mental health, fertility |
| JEL: | I12 I11 J14 J12 C41 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7010&r=lab |
| By: | Horstschräer, Julia |
| Abstract: | Applying a differences-in-differences strategy, I study the decentralization of university admission as a natural experiment. Is the centralized or decentralized procedure better suited to match prospective students to universities? The analysis uses administrative data on all students within Germany and complements the prominent theoretical literature on college admission. The results show that the matching efficiency increased in course of the decentralization. This increase is mainly driven by enabling law schools to abolish admission restrictions. The matching quality is not significantly affected by the decentralization process but suggests that abolishing admission restrictions could be associated with increasing drop-out rates. -- |
| Keywords: | higher education,college admission problem,university admission |
| JEL: | I21 I23 C21 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:12076&r=lab |
| By: | Ronny Freier; Johanna Storck |
| Abstract: | This paper studies the effect of attending a high-quality secondary school on subsequent educational outcomes. The analysis is based on data from the German Socio-Economic Panel Study in which we observe children when they make their secondary school choice (between ages 10-12) and later when they self-report on their intentions with regard to their further educational path (between ages 16-17). To identify the treatment effect, we use a regression-control framework as well as an instrumental variable approach (based on local supply of schools). In a second step, we carefully examine the influence of unobservable characteristics, using the new technique proposed by Altonji, Elder, and Taber (2005b). Our findings suggest that unobservable characteristics are indeed crucial to the validity of the research design. While we find large positive and significant effects of attending a high-quality school, we cannot rule out that the estimates are not in fact driven by selection on unobservables. |
| Keywords: | secondary school choice, school quality instrumental variable estimation, selection on unobservables |
| JEL: | I20 I21 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1256&r=lab |
| By: | Z. Eylem Gevrek (Department of Economics, University of Konstanz, Germany); Ruben R. Seiberlich (Department of Economics, University of Konstanz, Germany) |
| Abstract: | Using the data from the 2006 Programme for International Student Assessment (PISA), this study sheds light on the gender gap in mathematics and science achievement of 15-year-olds in Turkey. We apply a semiparametric Oaxaca-Blinder (OB) decomposition to investigate the gap. This technique relaxes the parametric assumptions of the standard OB decomposition, accounts for the possible violation of the common support assumption and allows us to explore the gender test score gap not only at the mean but also across the entire distribution of test scores. Our findings provide evidence that the failure to recognize the common support problem leads to the underestimation of the part of the gap attributable to observable characteristics. We find that girls outperform boys in science while the gap is not statistically significant in math. School characteristics are the most important observable characteristics in explaining the gap. We also find that the gender test score gap changes across the distribution |
| Keywords: | Gender test score gap, semiparametric decomposition, propensity score matching |
| JEL: | I21 C14 |
| Date: | 2012–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1232&r=lab |
| By: | Jimenez, Emmanuel; Nguyen, Vy; Patrinos, Harry Anthony |
| Abstract: | The challenge of sustaining economic growth over the long term is one that only a few countries have been able to surmount. Slowing momentum in countries like Malaysia and Thailand has led analysts and policy makers to consider what it would take to lift them out of middle-income status, where other countries have arguably become stuck. The paper examines the role of human capital formation in the quest to sustain economic growth in these two countries. It argues that a good education system is fundamental to equip workers with marketable skills. Malaysia and Thailand have successfully expanded access to schooling, but the quality of education remains an issue. Modern education systems should aim to provide universally-available quality education using the following policies: prioritize budgets to deliver quality and universally-available basic education before expanding higher levels of schooling; provide appropriate incentives and rewards to teachers; permit school autonomy and ensure accountability for results; invest in early childhood development; and consider implementing income-contingent loan financing schemes to expand higher education. |
| Keywords: | Education For All,Primary Education,Access&Equity in Basic Education,Teaching and Learning,Tertiary Education |
| Date: | 2012–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6283&r=lab |
| By: | Michael Clemens (Center for Global Development); Erwin Tiongson (World Bank, AIM, and IZA) |
| Abstract: | Labor markets are increasingly global. Overseas work can enrich households but also split them geographically, with ambiguous net effects on decisions about work, investment, and education. These net effects, and their mechanisms, are poorly understood. We study a policy discontinuity in the Philippines that resulted in quasi-random assignment of temporary, partial-household migration to high-wage jobs in Korea. This allows unusually reliable measurement of the reduced-form effect of these overseas jobs on migrant households. A purpose-built survey allows nonexperimental tests of different theoretical mechanisms for the reduced-form effect. We also explore how reliably the reduced-form effect could be measured with standard observational estimators. We find large effects on spending, borrowing, and human capital investment, but no effects on saving or entrepreneurship. Remittances appear to overwhelm household splitting as a causal mechanism. |
| JEL: | J61 O15 R23 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1234&r=lab |
| By: | Murat Tasci |
| Abstract: | This paper proposes an empirical method for estimating a long-run trend for the unemployment rate that is grounded in the modern theory of unemployment. I write down an unobserved-components model and identify the cyclical and trend components of the underlying unemployment flows, which in turn imply a timevarying estimate of the unemployment trend, the natural rate. I identify a sharp decline in the outflow rate—the job finding rate—since 2000, which was partly offset by the secular decline in the inflow rate—the separation rate—since the 1980s, implying a relatively stable natural rate, currently at 6 percent. Numerical examples show that slower labor reallocation, along with the weak output growth, explains most of the persistence in unemployment since the Great Recession. ; Contrary to the business-cycle movements of the unemployment rate, a significant fraction of the low-frequency variation can be accounted for by changes in the trend of the inflows, especially prior to 1985. Finally, I highlight several desirable features of this natural rate concept that makes it a better measure than traditional counterparts. These include statistical precision, the significance of required revisions to past estimates with subsequent data additions, policy relevance and its tight link with the theory. |
| Keywords: | Unemployment ; Business cycles |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1224&r=lab |
| By: | Rafael Domenech; Amparo Castello Climent |
| Abstract: | Using a broad number of indicators from an updated data set on human capital inequality for 146 countries from 1950 to 2010, this paper documents several facts regarding the evolution of income and human capital inequality. The main findings reveal that, in spite of a large reduction in human capital inequality around the world driven by a decline in the number of illiterates of several hundreds of millions of people, the inequality in the distribution of income has hardly changed. In many regions, the income Gini coefficient in 1960 was very similar to that in 2005. Therefore, improvements in literacy are not a sufficient condition to reduce income inequality, even though they improve life standards of people at the bottom of the income distribution. Increasing returns to education, external effects on wages of higher literacy rates or the simultaneous concurrence of other exogenous forces (e.g., globalization or skill-biased technological progress) may explain the lack of correlation between the evolution of income andeducation inequality. |
| Keywords: | Distribution of education, income inequality, human development, panel data |
| JEL: | I24 I25 O15 O50 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:1228&r=lab |
| By: | Christian Schluter (University of Southampton); Jackline Wahba (University of Southampton and IZA) |
| Abstract: | We consider the issue of illegal migration from Mexico to the US, and examine whether the lack of legal status causally impacts on outcomes, specifically wages and remitting behavior. These outcomes are of particular interest given the extent of legal and illegal migration, and the resulting financial flows. We formalize this question and highlight the principal empirical problem using a potential outcome framework with endogenous selection. The selection bias is captured by a control function, which is estimated non-parametrically. The framework for remitting is extended to allow for endogenous regressors (e.g. wages). We propose a new reparametrisation of the control function, which is linear in case of a normal error structure, and test linearity. Using Mexican Migration project data, we find considerable and robust illegality effects on wages, the penalty being about 12% in the 1980s and 22% in the 1990s. For the latter period, the selection bias is not created by a normal error structure; wrongly imposing normality overestimates the illegality effect on wages by 50%, while wrongly ignoring selection leads to a 50% underestimate. In contrast to these wage penalties, legal status appears to have mixed effects on remitting behavior. |
| Keywords: | illegal migration, illegality effects, counterfactuals, selection, control functions, non-parametric estimation, intermediate outcomes, Mexican Migration Project |
| JEL: | J61 J30 J40 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2012037&r=lab |
| By: | Harold L. Cole (Department of Economics, University of Pennsylvania); Soojin Kim (Department of Economics, University of Pennsylvania); Dirk Krueger (Department of Economics, University of Pennsylvania) |
| Abstract: | This paper constructs a dynamic model of health insurance to evaluate the short- and long run effects of policies that prevent firms from conditioning wages on health conditions of their workers, and that prevent health insurance companies from charging individuals with adverse health conditions higher insurance premia. Our study is motivated by recent US legislation that has tightened regulations on wage discrimination against workers with poorer health status (Americans with Disability Act of 2009, ADA, and ADA Amendments Act of 2008, ADAAA) and that will prohibit health insurance companies from charging different premiums for workers of different health status starting in 2014 (Patient Protection and Affordable Care Act, PPACA). In the model, a trade-off arises between the static gains from better insurance against poor health induced by these policies and their adverse dynamic incentive effects on household efforts to lead a healthy life. Using household panel data from the PSID we estimate and calibrate the model and then use it to evaluate the static and dynamic consequences of no-wage discrimination and no-prior conditions laws for the evolution of the cross-sectional health and consumption distribution of a cohort of households, as well as ex-ante lifetime utility of a typical member of this cohort. In our quantitative analysis we find that although a combination of both policies is effective in providing full consumption insurance period by period, it is suboptimal to introduce both policies jointly since such policy innovation induces a more rapid deterioration of the cohort health distribution over time. This is due to the fact that combination of both laws severely undermines the incentives to lead healthier lives. The resulting negative effects on health outcomes in society more than offset the static gains from better consumption insurance so that expected discounted lifetime utility is lower under both policies, relative to only implementing wage nondiscrimination legislation. |
| Keywords: | Health, Insurance, Incentive |
| JEL: | E61 H31 I18 |
| Date: | 2012–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:12-047&r=lab |
| By: | Timothy J. Bartik (W.E. Upjohn Institute for Employment Research) |
| Keywords: | local economic development, labor demand, industries |
| JEL: | R3 J23 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:tjb1996&r=lab |
| By: | Quinn Moore; Robert G. Wood; rew Clarkwest; Alexandra Killewald; Shannon Monahan |
| Keywords: | BSF, Building Strong Families, Relationship Skills Education, Unmarried Parents |
| JEL: | I |
| Date: | 2012–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:7580&r=lab |