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on Labour Economics |
| By: | Hervé Boulhol; Patrizio Sicari |
| Abstract: | This paper analyses the age structure of employment rates across OECD countries with a focus on France. The statistical contribution of each age group to total unemployment-rate differentials is also computed. An estimate of the sensitivity of age-specific unemployment rates to the economic cycle is provided for OECD countries. France is one of the OECD countries having the highest dispersion of employment rates across age groups. The “within” component of the 15-29 age group accounts for over half of France’s total unemployment rate differential with best-performing countries. Youth unemployment rate is especially sensitive to cyclical fluctuations in Spain, Belgium and France.<P>Performances du marché du travail par groupes d'âge : La France en point de mire<BR>Cette étude propose une analyse comparée entre pays de l’OCDE de la structure par âge des taux d’emplois. La contribution statistique de chaque groupe d’âge aux écarts totaux de taux de chômage est également calculée. La sensibilité au cycle économique des taux de chômage par classe d’âge est estimée pour les pays de l’OCDE. La France est un des pays de l’OCDE ayant la plus grande dispersion des taux d’emplois par âge. La composante « within » du groupe des 15-29 ans contribue à plus de la moitié de l’écart de taux de chômage total avec les pays les plus performants. Le taux de chômage des jeunes est particulièrement sensible aux variations cycliques en Espagne, en Belgique et en France. |
| Keywords: | unemployment, France, employment, age, youth, Okun’s Law, chômage, France, emploi, âge, jeunes, loi d’Okun |
| JEL: | J21 J22 J64 |
| Date: | 2013–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1027-en&r=lab |
| By: | Magnus Rodin (Swedish Institute for Social Research, Stockholm University and Stockholm University Linnaeus Center for Integration Studies (SULCIS)); Gulay Ozcan (Swedish Institute for Social Research, Stockholm University and Stockholm University Linnaeus Center for Integration Studies (SULCIS)) |
| Abstract: | Using a unique laboratory experiment where subjects are asked to guess the test performance of candidates presented by facial portraits and voice messages, this paper explores the following questions: Are beliefs about performance affected by if a candidate is perceived to have looks that are non-stereotypical for the dominant population and do these beliefs change if the candidate has native-like versus accented speech? The experiment is conducted in Sweden and the results show that candidates not perceived as stereotypically Swedish are considered to be worse performers. These beliefs are found in within-gender but not in cross-gender evaluations and are not eliminated when additional performance-related information about the candidates is provided. When candidates are presented by both looks and speech,differential evaluations based on looks disappear. Instead, we ?nd strong negative beliefs about performance for candidates that speak Swedish with a foreign accent implying that ethnic stereotypes associated with speech override stereotypes associated with appearance. The negative beliefs associated with foreign-accented speech are not supported by corresponding mean differences in the candidates’ actual test performance. |
| Keywords: | Experiment, Appearance, Speech, Beliefs, Performance, Stereotypes |
| JEL: | J71 J15 D03 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:bae:wpaper:009&r=lab |
| By: | Kartik B. Athreya; Janice Eberly |
| Abstract: | Despite a large measured college premium, roughly one-third of all high-school graduates currently do not enroll in any form of college. Moreover, while recent increases in the premium have been accompanied by increases in enrollment, college attainment has remained flat. Our paper studies the roles played by college premia, college costs, and risk, ceteris paribus, for college enrollment and attainment in a simple quantitative model of risky college investment. Our results suggest that most U.S. high-school completers are currently inframarginal with respect to the college premium. We find, however, that the levels of current premia, costs, and uninsurable risks all matter for this. Our results imply that, barring improvements in collegiate preparedness and attrition rates, high and persistent college premia, with high attendant levels of earnings inequality, may accompany the shift in demand towards skilled labor, which recent work (e.g., Autor, Levy, and Murnane (2003)) suggests is under way. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:13-02&r=lab |
| By: | Eckstein, Zvi; Lifshitz, Osnat |
| Abstract: | Changing social norms, as reflected in the interactions between spouses, are hypothesized to affect the employment rates of married women. A model is built in order to estimate this effect, in which the employment of married men and women is the outcome of an internal household game. The type of the household game is exogenously determined as either Classical or Modern. In the former type of household, the spouses play a Stackelberg leader game in which the wife’s labor supply decision is based on her husband’s employment outcome while the latter type of household is characterized by a symmetric and simultaneous game that determines the spouses’ joint labor supply as Nash equilibrium. Females in Modern households are predicted to have higher employment rates than women in Classical households if they have narrower labor market opportunities and/or higher relative risk aversion. The household type is exogenously determined when the couple gets married and is treated as unobserved heterogeneity. The model is estimated using the Simulated Moments Method (SMM) and data from the Panel Study of Income Dynamics (PSID) survey for the years 1983-93. The estimated model provides a good fit to the trends in employment rates and wages. We estimate that 38 percent of households are Modern and that the participation rate of women in those households is almost 80 percent, which is about 10 higher than in Classical households. Meanwhile, the employment rate among men is almost identical in the two types of household. |
| Keywords: | dynamic discrete choice; household game; household labor supply |
| JEL: | E24 J2 J3 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9258&r=lab |
| By: | Pedro Gonzaga (Faculdade de Economia da Universidade do Porto); António Brandão (Faculdade de Economia da Universidade do Porto); Hélder Vasconcelos (Faculdade de Economia da Universidade do Porto) |
| Abstract: | Despite the major concern of the competition authority to forbid and prosecute formal cartels who cooperatively fix prices, limit production or divide markets, there seems to be little regulation and investigation of collusive practices in the labor market. For that reason, this article analyzes the economic effects of cooperative wage fixing in industries that use one type of labor as the only input, while the other assumptions are kept as general as possible. Under the one input assumption it was found that collusion in the labor market and collusion in the product market have exactly the same results, which include the rise in prices and the fall in output, employment and wages. The higher prices and lower wages in cartelized industries are not only associated with the elimination of the well known business stealing effect, but also with the elimination of the labor force stealing effect. The conclusions in this paper can be generalized to industries that use more than one input, as long as the cartel is able to fix the prices of all the inputs. |
| Keywords: | Collusion, labor market, oligopoly, oligopsony, business stealing effect, labor force stealing effect. |
| JEL: | L11 L13 L41 L44 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:477&r=lab |
| By: | Michelacci, Claudio; Pijoan-Mas, Josep |
| Abstract: | We consider a competitive equilibrium growth model where technological progress is embodied into new jobs that are assigned to workers of different skills. In every period workers decide whether to actively participate in the labor market and if so how many hours to work on the job. Balanced growth requires that the job technology is complementary with the worker’s total labor input in the job, which is jointly determined by his skill and his working hours. Since lower skilled workers can supply longer hours, we show that the equilibrium features positive assortative matching (higher skilled workers are assigned to better jobs) only if differences in consump- tion are small relative to differences in worker skills. When the pace of technological progress accelerates, wage inequality increases and workers participate less often in the labor market but supply longer hours on the job. This mechanism can explain why, as male wage inequality has increased in the US, labor force participation of male workers of different skills has fallen while their working hours have increased. |
| Keywords: | job heterogeneity; participation; wage inequality; working hours |
| JEL: | E24 G31 J31 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9296&r=lab |
| By: | Anna Zaharieva (Bielefeld University) |
| Abstract: | This paper develops a labour market matching model with heterogeneous firms, on-thejob search and referrals. Social capital is endogenous, so that better connected workers bargain higher wages for a given level of productivity. This is a positive effect of referrals on reservation wages. At the same time, employees accept job offers from more productive employers and forward other offers to their unemployed social contacts. Therefore, the average productivity of a referred worker is lower than the average productivity in the market. This is a negative selection effect of referrals on wages. In the equilibrium, wage premiums (penalties) associated with referrals are more likely in labour markets with lower (higher) productivity heterogeneity and lower (higher) worker’s bargaining power. Next, the model is extended to allow workers help each other climb a wage ladder. On-the-job search is then intensified and wage inequality is reduced as workers employed in high paid jobs pool their less successful contacts towards the middle range of the productivity distribution. |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:bie:wpaper:473&r=lab |
| By: | Grossman, Gene |
| Abstract: | In this paper, I survey the recent theoretical literature that incorporates heterogeneous labor into models of international trade. The models with heterogeneous labor have been used to study how talent dispersion can be a source of comparative advantage, how the opening of trade affects the full distribution of wages, and how trade affects industry productivity and efficiency via its impact on sorting and matching in the labor market. Some of the most recent contributions also introduce labor market frictions to study the effects of trade on structural unemployment and on mismatch between workers and firms. |
| Keywords: | heterogeneous labor; international trade; matching; productivity; sorting; wage distribution |
| JEL: | F11 F16 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9341&r=lab |
| By: | Shigeru Fujita; Makoto Nakajima |
| Abstract: | This paper studies the quantitative properties of a multiple-worker firm matching model with on-the-job search where heterogeneous firms operate decreasing-returns-to-scale production technology. We focus on the model's ability to replicate the business cycle features of job flows, worker flows between employment and unemployment, and job-to-job transitions. The calibrated model successfully replicates (i) countercyclical worker flows between employment and unemployment, (ii) procyclical job-to-job transitions, and (iii) opposite movements of job creation and destruction rates over the business cycle. The cyclical properties of worker flows between employment and unemployment differ from those of job flows, partly because of the presence of job-to-job transitions. We also show, however, that job flows measured by net employment changes differ significantly from total worker separation and accession rates, because separations also occur at firms with positive net employment changes, and similarly firms that are shrinking on net may hire workers to partially offset attritions. The presence of job-to-job transitions is the key to producing these differences. |
| Keywords: | Employment ; Unemployment |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:13-09&r=lab |
| By: | Anita Wölfl |
| Abstract: | The unemployment rate among young people has reached painfully high levels, in particular among those young people with low levels of education. There are two crucial policy priorities to improve employment prospects for youth in Spain. First, in the very short term, there is need for quick action to target welldesigned active labour market programmes to the most disadvantaged youth and provide more job-search assistance and guidance for all youth experiencing difficulties in finding a job in the current labour market. Second, the current crisis is an opportunity to tackle some of the structural weaknesses in the Spanish youth labour market. This implies in particular reforms to prevent youth from dropping out of education at a very early stage and to improve the school to work transition of young people. Key issues are to better match skills acquired in education to those asked for by businesses, as well as to establish an effective system of vocational education, and to reduce remaining demand side barriers, notably labour market duality and a rigid collective bargaining system, which both have prevented an efficient allocation of labour resources in the past and a flexible adjustment during the crisis. This Working Paper relates to the 2012 OECD Economic Survey of Spain (www.oecd.org/eco/surveys/spain).<P>Améliorer les perspectives d'emploi des jeunes actifs en Espagne<BR>Le taux de chômage des jeunes atteint des niveaux douloureusement élevés, notamment chez les jeunes peu qualifiés. Deux actions prioritaires sont essentielles pour améliorer les perspectives d’emploi des jeunes en Espagne. En premier lieu, et à très court terme, il faut prendre des mesures actives du marché du travail spécialement conçues pour les jeunes qui ont le plus de difficultés et offrir à tous les jeunes qui ont du mal à trouver un travail une aide plus efficace à la recherche d’emploi. Deuxièmement, la crise actuelle peut être l’occasion de corriger certaines des faiblesses structurelles du marché du travail des jeunes en Espagne. En particulier, il est essentiel d’engager des réformes visant à empêcher les jeunes de quitter l’école trop tôt et facilitant le passage à la vie active. Plusieurs difficultés doivent être surmontées : faire mieux correspondre les compétences acquises à l’école et celles demandées par les entreprises, établir un système d’enseignement professionnel efficace et réduire les obstacles qui subsistent du côté de la demande, notamment le dualisme du marché du travail et la rigidité du système de négociation collective, qui ont empêché une répartition efficace des ressources de main-d’oeuvre par le passé et un ajustement souple face à la crise. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de l’Espagne, 2012 (www.oecd.org/eco/etudes/espagne). |
| Keywords: | employment protection legislation, Spain, wage bargaining, skills, vocational education, labour market, education systems, youth unemployment, dual labour market, marché du travail, Espagne, dualisme, négociation salariale, formation professionnelle, système scolaire, législation pour la protection de l’emploi, taux de chômage des jeunes, compétences |
| JEL: | I20 I21 I22 I23 J20 J24 J52 J65 J68 |
| Date: | 2013–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1040-en&r=lab |
| By: | Joanne Lindley (University of Surrey) |
| Abstract: | Despite the recent financial crisis the UK financial pay premium has continued to rise. To some extent this is a consequence of increased skill intensity in the finance sector, but this paper shows that finance workers have higher cognitive skills, on average, and this partly explains their higher wages. These are significant across all post-secondary education groups and not just those at the top. However, after controlling for unobserved heterogeneity we still find unexplainable rents to finance sector workers which are largely a consequence of bonuses. Though we also show that finance workers are more likely to be insecure about their job especially those that receive higher bonuses. In keeping with the existing literature on inequality we estimate demand and supply models to explain increasing inequality between finance workers vis-à-vis other workers. We find that finance workers are not perfect substitutes for non-finance workers in production, which is consistent with them having higher cognitive skills. Finally, we find relative demand shifts in favour of finance sector workers which are partially correlated with increased financial innovation and technical change, but most importantly we find that these demand shifts are slowing down. |
| JEL: | J20 J31 I24 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:sur:surrec:0313&r=lab |
| By: | Thomas van Huizen; Janneke Plantenga |
| Abstract: | This paper examines theoretically and empirically the effects of time preferences on job search behaviour of the unemployed. The aim of the study is to test the exponential versus the hyperbolic discounting model within a labour market context. The theoretical relations between patience on the one hand and job search intensity, reservation wages and the exit rate to employment on the other hand depend on whether exponential or hyperbolic discounting is assumed. Assessing these relations empirically therefore provides a test of the two alternative models of discounting. We make use of the DNB Household Survey, a large Dutch longitudinal survey containing various indicators of job search effort, reservation wages and detailed information on individual time preferences. The results are in line with the hyperbolic discounting model. |
| Keywords: | time preferences; unemployment; job search; hyperbolic discounting |
| JEL: | D03 J64 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:1303&r=lab |
| By: | Matthias Giesecke; Michael Kind |
| Abstract: | This study examines an increase in the early retirement age from 60 to 63 for the group of older unemployed men in Germany. As consequence of this policy reform, the time to retirement is increased from the perspective of recently unemployed individuals and therefore serves as a source of exogenous variation. We estimate continuous time hazard models for individuals at risk of leaving the state unemployment into employment or into early retirement due to exceptional rules. We find a positive impact of an increase in the early retirement age on the reemployment probability whereas the probability to retire early due to exceptional rules is not affected. |
| Keywords: | Labour supply; retirement behaviour; old age unemployment; duration analysis |
| JEL: | J14 J26 J64 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0410&r=lab |
| By: | Pavoni, Nicola; Setty, Ofer; Violante, Giovanni L |
| Abstract: | Some existing welfare programs (“work-first”) require participants to work in exchange for benefits. Others (“job search-first”) emphasize private job-search and provide assistance in finding and retaining a durable employment. This paper studies the optimal design of welfare programs when (i) the principal/government is unable to observe the agent’s effort, but can assist the agent’s job search and can mandate the agent to work, and (ii) agents’ skills depreciate during unemployment. In the optimal welfare program, assisted search is implemented between an initial spell of private search (unemployment insurance) and a final spell of pure income support where search effort is not elicited. To be effective, job-search assistance requires large reemployment subsidies. The optimal program features compulsory work activities for low levels of program’s generosity (i.e., its promised utility or available budget). The threat of mandatory work acts like a punishment that facilitates the provision of search incentives without compromising consumption smoothing too much. |
| Keywords: | Moral Hazard; Recursive Contracts; Search; Welfare Program; Work |
| JEL: | D82 H21 J24 J64 J65 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9389&r=lab |
| By: | Kleven, Henrik; Landais, Camille; Saez, Emmanuel; Schultz, Esben |
| Abstract: | This paper analyzes the effects of income taxation on the international migration and earnings of top earners using a Danish preferential foreigner tax scheme and population-wide Danish administrative data. This scheme, introduced in 1991, allows new immigrants with high earnings to be taxed at a preferential flat rate for a duration of three years. We obtain three main results. First, the scheme has doubled the number of highly paid foreigners in Denmark relative to slightly less paid ineligible foreigners, which translates into a very large elasticity of migration with respect to the net-of-tax rate on foreigners, between 1.5 and 2. Hence, preferential tax schemes for highly paid foreign workers could create severe tax competition between countries. Second, we find compelling evidence of a negative effect of scheme-induced increases in the net-of-tax rate on pre-tax earnings at the individual level. This finding cannot be explained by the standard labor supply model where pay equals marginal productivity, but it can be rationalized by a matching frictions model with wage bargaining where there is a gap between pay and marginal productivity. Third, we find no evidence of positive or negative spillovers of the scheme-induced influx of high-skilled foreigners on the earnings of highly paid natives. |
| Keywords: | International Migration; Taxation; Wage Bargaining |
| JEL: | H22 H31 J61 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9410&r=lab |
| By: | Bénabou, Roland; Tirole, Jean |
| Abstract: | This paper analyzes the impact of labor market competition and skill-biased technical change on the structure of compensation. The model combines multitasking and screening, embedded into a Hotelling-like framework. Competition for the most talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort away from less easily contractible tasks such as long-term investments, risk management and within-firm cooperation. Under perfect competition, the resulting efficiency loss can be larger than that imposed by a single firm or principal, who distorts incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete more aggressively, the monopsonistic underincentivization of low-skill agents first decreases, then gives way to a growing overincentivization of high-skill ones. Aggregate welfare is thus hill-shaped with respect to the competitiveness of the labor market, while inequality tends to rise monotonically. Bonus caps and income taxes can help restore balance in agents' incentives and behavior, but may generate their own set of distortions. |
| Keywords: | adverse selection; bonuses; competition; contracts; executive compensation; Hotelling; incentives; inequality; moral hazard; performance pay; screening; work ethic |
| JEL: | D31 D82 D86 J31 J33 L13 M12 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9419&r=lab |
| By: | Paula Herrera-Idárraga; Enrique López-Bazo; Elisabet Motellón |
| Abstract: | In this paper, we explore the connection between labor market segmentation in two sectors, a modern protected formal sector and a traditional- unprotected-informal sector, and overeducation in a developing country. Informality is thought to have negative consequences, primarily through poorer working conditions, lack of social security, as well as low levels of productivity throughout the economy. This paper considers an aspect that has not been previously addressed, namely the fact that informality might also affect the way workers match their actual education with that required performing their job. We use micro-data from Colombia to test the relationship between overeducation and informality. Empirical results suggest that, once the endogeneity of employment choice has been accounted for, formal male workers are less likely to be overeducated. Interestingly, the propensity of being overeducated among women does not seem to be closely related to the sector choice. |
| Date: | 2013–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:col:000416:010675&r=lab |
| By: | Kevin E. Cahill (Sloan Center on Aging and Work at Boston College); Michael D. Giandrea (U.S. Bureau of Labor Statistics); Joseph F. Quinn (Boston College) |
| Abstract: | How have post-career transitions into and out of self-employment been impacted by the Great Recession? Research from the 1990s and 2000s has shown that the prevalence of self employment increases substantially later in life, partly because self employment provides older workers with opportunities and flexibility not found in wage-and-salary jobs. Post-career transitions into and out of self employment have also been identified as an important pathway to retirement among older Americans. This paper examines post-career self-employment transitions during the recent recession that began in late 2007 and during the ensuing lackluster recovery. We utilize the Health and Retirement Study (HRS), a nationally-representative longitudinal dataset of older Americans, to investigate the role of self-employment in the retirement transitions of HRS Core respondents over nearly two decades, from 1992 to 2010, with particular emphasis on the most recent years. We find that post-career transitions into and out of self employment remain common in the face of the Great Recession, and that health status, occupation, and financial variables continue to be important determinants of switches from wage-and-salary career employment to self-employed bridge jobs. The latest evidence confirms that self employment continues to be an important pathway to retirement even during recessionary times. |
| Keywords: | Economics of Aging, Partial Retirement, Self Employment |
| JEL: | J26 J14 J32 H55 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec130030&r=lab |
| By: | Juan J. Dolado; Marcel Jansen; Florentino Felgueroso; Andrés Fuentes; Anita Wölfl |
| Abstract: | This paper provides both descriptive and empirical evidence about the main youth labour market problems in Spain. Using the experiences of other EU economies as a benchmark, we document the performance of Spain as regards a wide set of youth labour market dimensions. These include employment and unemployment rates, youth wages, decisions to work and study, youth mobility, type of employment contract, time to find a first job, skill mismatch, etc. Cross-country econometric evidence from different micro-datasets is reported to understand the role played by several underlying supply/demand factors which might explain the difficulties faced by the Spanish youth labour market (www.oecd.org/eco/surveys/Spain).<P>L'insertion des jeunes sur le marché du travail espagnol : résultats et facteurs déterminants - une perspective microéconomique<BR>Le présent document apporte des éléments descriptifs et empiriques sur les problèmes principaux auxquels sont confrontés les jeunes sur le marché du travail en Espagne. Nous comparons les résultats de l'Espagne avec ceux d’autres États membres de l’UE au regard de multiples indicateurs de l’emploi des jeunes, notamment les taux d’emploi et de chômage, le salaire des jeunes actifs, les décisions relatives au travail et aux études, la mobilité des jeunes, les types de contrat de travail, la durée nécessaire pour trouver un premier emploi, l’inadéquation des compétences, etc. Des données économétriques internationales, tirées de plusieurs micro-bases de données, sont utilisées pour mieux comprendre le rôle joué par plusieurs facteurs sous-jacents de l’offre et de la demande pouvant expliquer les difficultés du marché du travail des jeunes en Espagne (www.oecd.org/eco/etudes/Espagne). |
| Keywords: | Spain, youth employment, youth unemployment, youth labour market youth mobility, overqualification, skill mismatch, job search, duality, Espagne, emploi des jeunes, chômage des jeunes, marché du travail des jeunes, surqualification, inadéquation des compétences, recherche d'emploi, dualité |
| JEL: | J20 J30 J40 J60 |
| Date: | 2013–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1039-en&r=lab |
| By: | Mary C. Daly; Bart Hobijn |
| Abstract: | We show that the existence of downward nominal wage rigidities bends the short-run wage Phillips curve. We introduce a model of monetary policy with downward nominal wage rigidities and show that both the slope and curvature of the Phillips curve depend on the level of inflation and the extent of downward nominal wage rigidities. This is true for the both the long-run and the short-run Phillips curve. Comparing simulation results from the model with data on U.S. wage changes since the onset of the Great Recession, we show that downward nominal wage rigidities have likely played a role in shaping the dynamics of unemployment and wage growth from 2006 through 2012. |
| Keywords: | Wages ; Phillips curve |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2013-08&r=lab |
| By: | Philipp vom Berge; Hanna Frings; Alfredo R. Paloyo |
| Abstract: | We estimate the effects on wage and employment growth rates of the introduction and subsequent increases of a substantial minimum wage in the main construction industry of Germany. Using a regional dataset constructed from individual employment histories, we exploit the spatial dimension and border discontinuities of the regional data to account for spillovers between districts and unobserved heterogeneity at the local level. The results indicate that the minimum wage increased the wage growth rate for East Germany but did not have a significant impact on the West German equivalent. The estimated eff ect on the employment growth rate reveals a contraction in the East of about 2.6 to 3.1 percentage points for a one-standard-deviation increase in the minimum-wage bite, amounting to roughly half of the overall decline in the growth rate, but no significant change is observed for the West. |
| Keywords: | Construction sector; Germany; minimum wage; spatial heterogeneity; spatial panel data |
| JEL: | J31 J38 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0408&r=lab |
| By: | Emin Dinlersoz; Henry Hyatt; Sang Nguyen |
| Abstract: | This paper explores the evolution of average wage paid to employees along the life-cycle of a manufacturing plant in U.S. Average wage starts out low for a new plant and increases along with labor productivity, as the plant survives and ages. As a plant experiences productivity decline and approaches exit, average wage falls, but more slowly than it rises in the case of surviving new plants. Moreover, average wage declines slower than productivity does in failing plants, while it rises relatively faster as productivity increases in surviving new plants. These empirical regularities are studied in a dynamic model of labor quality and quantity choice by plants, where labor quality is reflected in wages. The model’s parameters are estimated to assess the costs a plant incurs as it alters its labor quality and quantity in response to changes in its productivity over its life-cycle. |
| Keywords: | Wage dynamics; plant productivity; firm dynamics; plant life-cycle; employment dynamics; manufacturing. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:11-24r&r=lab |
| By: | Olivier Bargain (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS, and IZA); Andreas Peichl (IZA, U. of Cologne, CESifo and ISER) |
| Abstract: | This note provides an extensive survey of studies estimating steady-state labor supply elasticities for Western Europe and the US. Differences are driven by the heterogeneity in work preferences across countries and by methodological difference across studies (data, selection or model estimation and specification). While the former exists but is shown to be relatively small (Bargain et al., 2013), we focus here on modeling choices: Large elasticities are mainly found in studies estimated in the 1980s and relying on the Hausman approach. More recent estimates based on discrete-choice models with tax-benefit simulations show smaller and more similar estimates across countries. While we confirm that elasticities decline over time in the US, there is some evidence that both time effect and modeling choices affect estimates for Europe. |
| Keywords: | household labor supply, elasticity, taxation, Europe, US. |
| JEL: | C25 C52 H31 J22 |
| Date: | 2013–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1322&r=lab |
| By: | Combes, Pierre-Philippe; Démurger, Sylvie; Li, Shi |
| Abstract: | We evaluate the role that cities play on individual productivity in China. First, we show that location explains a large share of nominal wage disparities. Second, even after controlling for individual and firms characteristics and instrumenting city characteristics, the estimated elasticity of wage with respect to employment density is about three times larger than in Western countries. Land area and industrial specialisation also play a significant role whereas the access to external markets does not. Therefore, large agglomeration economies prevail in China and they are more localised than in Western countries. Third, we find evidence of a large positive impact of the local share of migrants on local workers' wages. Overall, these results strongly support the productivity gains that can be expected from further migration and urbanisation in China. |
| Keywords: | agglomeration economies; China; migration; urban development; wage disparities |
| JEL: | J31 O18 O53 R12 R23 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9352&r=lab |
| By: | PF Blaauw, I Botha, R Schenck and C Schoeman |
| Abstract: | Past research provided evidence of the negative effect that individual unemployment can have on subjective well-being. The persistent high levels of unemployment and poverty in South Africa have been well documented. Many people are forced into the informal economy, where they engage in a variety of survivalist activities such as day labouring. As no previous study has been conducted on the well-being of day labourers, the aim of this paper is to investigate the determinants of the well-being of South African day labourers. Objective and subjective functions are compared to determine the role of income and other variables in the well-being of day labourers. The determinants are categorised according to economic, comparison and attitudinal variables. The objective function uses income and the subjective function uses the binary measure of ‘experiencing a good week in terms of wages’ as dependent variables. The results showed that comparison variables are important determinants for the subjective measure of well-being, and attitudinal variables are important for the objective measure of well-being. The economic variables were important in both functions. The findings of this paper confirm other research findings showing that personal income is important for well-being in a poor community. The difference between these functions indicates that the subjective and objective measures of well-being both capture valuable characteristics of SWB in a poor community. |
| Keywords: | Day labouring, Well-being, Happiness, Informal economy |
| JEL: | J21 J24 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:337&r=lab |