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on Labour Economics |
| By: | Kolm, Ann-Sofie (Dept. of Economics, Stockholm University); Tonin, Mirco (University of Southampton (and Central European University, Budapest; IZA, Bonn)) |
| Abstract: | Welfare benefits in the Nordic countries are often tied to employment. We argue that this is one of the factors behind the success of the Nordic model, where a comprehensive welfare state is associated with high employment. In a general equilibrium setting, the underlining mechanism works through wage moderation and job creation. The benefits make it more important to hold a job, thus lower wages will be accepted, and more jobs created. Moreover, we show that the incentive to acquire higher education improves, further boosting employment in the long run. These positive effects help counteracting the negative impact of taxation. |
| Keywords: | Nordic model; in-work benefits; wage adjustment; unemployment; education; skill formation; earnings |
| JEL: | H24 J21 J24 |
| Date: | 2013–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2013_0001&r=lab |
| By: | Vikman, Ulrika (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | This paper evaluates how access to paid parental leave affects labor market entrance for immigrating mothers with small children. Paid parental leave together with job protection may increase labor force participation among women but if it is too generous it may create incentives to stay out of the labor force. This incentive effect may be especially true for mothers immigrating to a country where having small children automatically makes the mothers eligible for the benefit. To evaluate the differences in the assimilation process for those who have access to the parental leave benefit and those who do not, Swedish administration data is used in a difference-in-differences specification to control for both time in the country and the age of the youngest child. The results show that labor market entrance is delayed for mothers and that they are less likely to be a part of the labor force for up to seven years after theír residence permit if they had access to parental leave benefits when they came to Sweden. This reduction in the labor force participation is to some extent driven by unemployment since the effect on employment is smaller. But there is still an effect on employment of 3 percentage points lower participation rates 2-6 years after immigration. |
| Keywords: | Immigrant assimilation; labor market entrance; paid parental leave benefit |
| JEL: | J13 J15 J21 |
| Date: | 2013–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2013_004&r=lab |
| By: | Shintaro Yamaguchi |
| Abstract: | How did skilled-biased technological change affect wage inequality, particularly between men and women? To answer that question this paper constructs a task-based Roy model in which workers possess a bundle of basic skills, and occupations are characterized as a bundle of basic tasks. The model is structurally estimated using the task data from the Dictionary of Occupational Titles and the PSID. The main empirical finding is that men have more motor skills than women, but the returns to motor skills have dropped significantly, accounting for more than 40% of the narrowing gender wage gap. |
| Keywords: | Roy model, task-based approach, occupational choice, skill-biased technological change, soft skills |
| JEL: | J24 J31 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd12-275&r=lab |
| By: | Lundborg, Per (Stockholm University Linnaeus Center for Integration Studies - SULCIS) |
| Abstract: | Most empirical studies on wage effects of immigration disregard common labour market institutions like the requirement of job offer before entry to the host country and wage bargaining. The model presented here accounts for these institutions and finds a rationale for the empirical studies’ treatment of the migrant share as a determinant of natives’ wages. A higher migrant share is shown to lower the native’s wage but only temporarily. After assimilation the wage subsequently returns to its original level. The results suggest that empirical studies of wage effects of immigration should focus on unassimilated immigrants having low reservation wages. |
| Keywords: | Immigration; bargaining; institutions |
| JEL: | J53 J61 |
| Date: | 2013–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sulcis:2013_002&r=lab |
| By: | Nabanita Datta Gupta (Department of Economics and Business, Aarhus University); Lene Kromann (CBS, Copenhagen, Denmark) |
| Abstract: | Using a search model for Danish labor market entrants, we are one of the first studies to test whether second-generation immigrants have the same job-offer arrival and layoff rates as ethnic Danes have. We contribute to the search literature by incorporating matching as a way to ensure sub-sample homogeneity. Thus, we match second-generation immigrants to their ethnic Danish twins on the basis of parental characteristics and informal network quality. There are big differences before matching, but after matching, second-generation immigrants perform as well or better than their ethnic Dane counterparts do on the labor market, though not with respect to layoffs. This result is mainly driven by the group of high school graduates and those with a primary school education only. Second generation immigrants with vocational education, males in particular, face both significantly lower arrival rates when unemployed and significantly higher layoff rates than those of their ethnic Danish twins. |
| Keywords: | J15, J61, J71 |
| Date: | 2013–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2013-04&r=lab |
| By: | Diego Amador; Raquel Bernal; Ximena Peña |
| Abstract: | Colombia has experienced a secular increase in the labor participation of urban women, going from nearly 47% in 1984 to 65% in 2006. We decompose the evolution of participation into changes in the composition of the population and changes in the participation rates by groups (defined according to the variables that appear most relevant: educational attainment, fertility and marital status). The increase in participation is driven by the increase in the participation rate of married or cohabiting women and women with low educational attainment. Fertility status appears to be less important. Changes in the population composition by educational attainment are also relevant in explaining the increase in participation. However, changes in composition by marital status or fertility are second order effects. |
| Date: | 2013–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:010551&r=lab |
| By: | David Bardey; Fernando Jaramillo; Ximena Peña |
| Abstract: | We study the effect of UI benefits in a typical developing country where the informal sector is sizeable and persistent. In a partial equilibrium environment we characterize the stationary equilibrium of an economy where policyholders may be employed in the formal sector, short-run unemployed receiving UI benefits and long-run unemployed without UI benefits. We perform comparative static exercises to understand how UI benefits affect unemployed workers’effort to secure a formal job, their labor supply in the informal sector and leisure time. Our model reveals that an increase in UI benefits generates two opposing effects for the short-run unemployed. First, since search efforts cannot be monitored it generates moral hazard behaviours that lower effort. Second, it generates an income effect as it reduces the marginal cost of searching for a formal job and increases effort. The overall effect is ambiguous and depends on the relative strength of these two effects. Additionally, we show that an increase in UI benefits increases the efforts of long-run unemployed workers. Using data from Brazil to calibrate the parameters of the model we provide a simple simulation exercise which suggests that the income effect pointed out is not necessarily of second-order importance in comparison with moral hazard strength: An increase in UI benefits may increase unemployed workers efforts to secure a job in the formal sector, instead of increasing informal-sector work. This result softens the widespread opinion that the presence of dual labor markets is an obstacle to providing UI in developing countries. |
| Date: | 2013–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:010496&r=lab |
| By: | Charlot, Olivier (THEMA, University of Cergy-Pontoise); Malherbet, Franck (CREST, Ecole Polytechnique, IZA and fRDB); Ulus, Mustafa (Galatasaray University Economic Research Center) |
| Abstract: | This paper studies the effects of the introduction of unemployment compensation (UC) in countries characterized by pervasive informality. We provide a simple framework to analyze the impact of UC on the allocation of workers between formal and informal activities, as well as the allocation of workers between sectors featuring different incentives to go informal. We show that a reasonable amount of UC may reduce informality, while larger amounts of UC induce large disincentives to go formal because of the level of taxation involved. We also argue that the financing of UC should be part and parcel of a well- conceived UC system. We show that UC finance based on payroll taxes is likely to entail an excess level of informality resulting from cross-subsidies between heterogenous sectors. The introduction of a simple layoff tax meant to finance the UC system is then shown to reduce informality, hence highlighting how a well-designed financing scheme may be used as a supplementary instrument to curb informality. |
| Keywords: | Informality; Labor Market Imperfections; Unemployment Insurance |
| JEL: | E24 E26 J60 L16 O10 |
| Date: | 2013–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:ris:giamwp:2013_003&r=lab |
| By: | Navarra, Cecilia (University of Namur); Tortia, Ermanno (University of Trento) |
| Abstract: | We argue that in a capitalist enterprise the need to fix wages is crucially influenced by the asymmetric distribution of decision-making power, which can entail the use of private information and authority in favour of the strongest contractual party (the employer), and against the weaker contractual party (the employee). The capitalist entrepreneur can take decisions whose negative consequences are borne by workers in terms of lower wages and more intensive work-pace. Excessive wage reductions in the face of negative exogenous shocks, and of too risky investment decision represent the main instances of such opportunistic behaviour. Fixed wages can be thought as workers’ best response to the emerging risk of the employers’ moral hazard, but this implies a heightened risk of lay-off since wages and employment levels cannot be fixed at one and the same time. As a counterexample, we observe worker cooperatives, which depart from the framework of the interaction between a principal and an agent in the presence of contrasting interests and private information. Indeed, several empirical studies show greater employment stability and wage flexibility in worker cooperatives vis à vis capitalist firms. |
| Keywords: | employment contract; wage rigidity; risk aversion; moral hazard; worker cooperative |
| JEL: | J54 J64 J83 |
| Date: | 2013–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:aiccon:2013_117&r=lab |
| By: | Ruist, Joakim (Department of Economics, University of Gothenburg) |
| Abstract: | This study estimates labor market effects of refugee immigration in Sweden 1999–2007. The setting is particularly suitable for using spatial variation within the country to estimate labor market effects of immigration. Bias from endogenous immigrant settlement is likely to be smaller when estimating the effect of only refugee immigration. Bias from internal migration of previous inhabitants is reduced by using data where the same individuals are identified over time. No significant effect of refugee immigration on total unemployment is found, but there is a large effect on the unemployment of previous immigrants from low- and middle-income countries, indicating that newly arrived refugee immigrants are substantially more easily substituted for this group than for natives in production. |
| Keywords: | unemployment; refugee immigration |
| JEL: | J23 J61 J64 |
| Date: | 2013–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sulcis:2013_001&r=lab |
| By: | Schneck, Stefan |
| Abstract: | This paper descriptively analyzes the nexus between income comparisons and perceptions of unfair pay. A German household survey reveals that individuals who perceive their wages as unfair earn significantly lower wages than fairly paid individuals with similar characteristics. This suggests that unfairness perceptions with respect to wages are based on sound income comparisons with peers. When asked about a subjectively fair amount in Euros, individuals tend to claim much higher wages than fairly paid individuals with identical characteristics. -- |
| Keywords: | Fairness,Wages |
| JEL: | J30 J31 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:70096&r=lab |
| By: | Nicholas Bloom; James Liang; John Roberts; Zhichun Jenny Ying |
| Abstract: | About 10% of US employees now regularly work from home (WFH), but there are concerns this can lead to "shirking from home." We report the results of a WFH experiment at CTrip, a 16,000-employee, NASDAQ-listed Chinese travel agency. Call center employees who volunteered to WFH were randomly assigned to work from home or in the office for 9 months. Home working led to a 13% performance increase, of which about 9% was from working more minutes per shift (fewer breaks and sick-days) and 4% from more calls per minute (attributed to a quieter working environment). Home workers also reported improved work satisfaction and experienced less turnover, but their promotion rate conditional on performance fell. Due to the success of the experiment, CTrip rolled-out the option to WFH to the whole firm and allowed the experimental employees to re-select between the home or office. Interestingly, over half of them switched, which led to the gains from WFH almost doubling to 22%. This highlights the benefits of learning and selection effects when adopting modern management practices like WFH. |
| Keywords: | working from home, organization, productivity, field experiment, and China |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1194&r=lab |
| By: | Kahanec, Martin |
| Abstract: | This study evaluates European Union (EU) experience of the mobility of skilled labor migrants after the 2004 and 2007 EU enlargements and from the European Neighborhood Policy (ENP) countries. The study concludes that migration generally improves the allocated efficiency of labor markets and there is little if any evidence of statistically significant or economically relevant negative aggregate effects of migration on receiving labor markets. While outflow of young and skilled workers may pose risks to sending countries'economic prospects and public finance, circular migration, brain gain, and remittances attenuate such risks, and have the potential to become powerful engines of convergence. Obstructive legislation and ill-designed migration policies impede migration and deprive sending and receiving of such potential benefits. |
| Keywords: | Population Policies,Labor Markets,Labor Policies,Health Monitoring&Evaluation,Voluntary and Involuntary Resettlement |
| Date: | 2013–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:hdnspu:75529&r=lab |
| By: | Jäntti, Markus (Swedish Institute for Social Research); Pirttilä, Jukka (School of Management); Selin, Håkan (Uppsala Center for Fiscal Studies) |
| Abstract: | We utilise repeated cross sections of micro data from several countries, available from the Luxembourg Income Study, LIS, to estimate labour supply elasticities, both at the intensive and extensive margin. The benefit of the data is that it spans over four decades and includes a large number of tax reform episodes, with tax rate variation arising both from cross-sectional and country-level differences. Using these data, we investigate whether micro and macro estimates differ in a systematic way. The results do not provide clear support to the view that elasticities at the macro level would be higher than corresponding micro elasticities. |
| Keywords: | Labour supply; earnings; taxation; cross-country comparisons |
| JEL: | E24 H21 J22 |
| Date: | 2013–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uufswp:2013_001&r=lab |