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on Labour Economics |
| By: | Montenegro, Claudio E.; Patrinos, Harry Anthony |
| Abstract: | Rates of return to investments in schooling have been estimated since the late 1950s. In the 60-plus year history of such estimates, there have been several attempts to synthesize the empirical results to ascertain patterns. This paper presents comparable estimates, as well as a database, that use the same specification, estimation procedure, and similar data for 139 economies and 819 harmonized household surveys. This effort to compile comparable estimates holds constant the definition of the dependent variable, the set of control variables, the sample definition, and the estimation method for all surveys in the sample. The results of this study show that (1) the returns to schooling are more concentrated around their respective means than previously thought; (2) the basic Mincerian model used is more stable than may have been expected; (3) the returns to schooling are higher for women than for men; (4) returns to schooling and labor market experience are strongly and positively associated; (5) there is a decreasing pattern over time; and (6) the returns to tertiary education are highest. |
| Keywords: | Primary Education,Education For All,Teaching and Learning,Debt Markets,Education Reform and Management |
| Date: | 2014–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7020&r=lab |
| By: | Scott Legree (Department of Economics, University of Waterloo); Tammy Schirle (Department of Economics, Wilfrid Laurier University); Mikal Skuterud (Department of Economics, University of Waterloo) |
| Abstract: | We provide evidence on the potential for reforms in labour law to reverse deunionization trends by relating an index of the favorability to unions of Canadian provincial labour relations statutes to changes in provincial union density rates between 1981 and 2012. The results suggest that shifting every province’s 2012 legal regime to the most union-friendly possible could raise the national union density by up to 7 percentage points in the long run. This effect appears by regulations related to the certification of new bargaining units, the negotiation of first contracts and the recruitment of replacement workers. The effects of reform are largest for women, particularly university-educated women employed as professionals in public services. Overall, the results suggest a limited potential for labour relations reforms to address growing concerns about labour market inequality. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:wat:wpaper:1405&r=lab |
| By: | Elena Pirani (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Silvana Salvini (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze) |
| Abstract: | Working conditions have dramatically changed over recent decades in all the countries of European Union: permanent full-time employment characterized by job security and a stable salary is replaced more and more by temporary work, apprenticeship contracts, casual jobs and part-time work. The consequences of these changes on the general well-being of workers and their health represent an increasingly important path of inquiry. We add to the debate by answering the question: are Italian workers on temporary contracts more likely to suffer from poor health than those with permanent jobs? Our analysis is based on a sample of men and women aged 16-64 coming from the Italian longitudinal survey 2007-2010 of the European Union Statistics on Income and Living Conditions. We use the method of inverse-probability-of-treatment weights to estimate the causal effect of temporary work on self-rated health, controlling for selection effects. Our major findings can be summarized as follows: firstly, we show that the negative association between precarious employment and health is not simply due to a selection of healthier individuals in the group of people who find permanent jobs (selection effect), but it results from a causal effect in the work-to-health direction. Secondly, we find that the temporariness of the working status becomes particularly negative for the individual’s health when it is prolonged over time. Thirdly, whereas temporary employment does not entail adverse consequences for men, the link between precarious work and health is strongly harmful for Italian women. |
| Keywords: | Self-rated health; temporary contracts; Italy; causal inference; gender inequalities |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:fir:econom:wp2014_08&r=lab |
| By: | Victor Ortego-Marti (Department of Economics, University of California Riverside) |
| Abstract: | This paper studies wage dispersion among identical workers in a random matching search model in which workers lose human capital during unemployment. Wage dispersion increases, as workers accept lower wages to avoid long unemployment spells. The model is an important improvement over baseline search models. It explains between a third and half of the observed residual wage dispersion. When adding on-the-job search, the model accounts for all of the residual wage dispersion and generates substantial dispersion even for high values of non-market time. The paper thus addresses the trade-off between explaining frictional wage dispersion and the cyclical behavior of unemployment. |
| Keywords: | Job search; search and matching; wage dispersion; unemployment history |
| JEL: | E2 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ucr:wpaper:201402&r=lab |
| By: | Anna Baranowska-Rataj (Institute of Statistics and Demography, Warsaw School of Economics); Iga Magda (Institute of Statistics and Demography, Warsaw School of Economics) |
| Abstract: | In this paper we identify the determinants of the gap in job stability between young and prime-age workers. Using recently developed decomposition techniques and the panel dimension of data from the Polish Labor Force Survey, we examine to what extent age heterogeneity in job stability is shaped by differences in the composition of young and prime-age workers with respect to individual and job-related characteristics, and to what extent it is driven by different effects of those characteristics on the risk of job separation. Our results show that while differences in education and experience between young and prime-age workers are important, these differences explain only one-third of the gap in job stability. A substantial part of the gap is related to the propensity of young people to work in the most volatile segments of the labor market. Young workers are more likely than prime-age workers to work under a fixed-term contract in a small firm in the private sector, and in an industry that has high rates of both job creation and destruction. Because large numbers of young people have a job in this relatively narrow segment of the labor market, their employment opportunities are very sensitive to changing economic conditions. We also find that the public sector offers prime-age workers a higher level of employment protection than the private sector, but that young people who work at state-owned firms are at higher risk of losing their job than their counterparts who are employed by private firms. This asymmetric effect of public sector employment substantially increases the gap in job stability levels between young and prime-age workers in Poland. |
| Keywords: | youth; job stability; job separations; structural perspective |
| JEL: | J21 J24 J63 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:isd:wpaper:73&r=lab |
| By: | Badi Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Bartlomiej Rokicki (University of Illinois) |
| Abstract: | This paper reconsiders the Polish wage curve using individual data from the Polish Labor Force Survey (LFS) at the 16 NUTS2 level allowing for spatial spillovers between regions. In addition it estimates the total and gender-specific regional unemployment rate elasticities on individual wages. The paper finds significant spatial unemployment spillovers across Polish regions. In addition, it finds that the results for the Polish wage curve are sensitive to genderspecific regional unemployment rates. This is especially true for women. |
| Keywords: | Wage Curve; Fixed Effects; Spatial Spillovers; Regional Labor Markets |
| JEL: | C26 J30 J60 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:171&r=lab |
| By: | Figura, Andrew (Board of Governors of the Federal Reserve System (U.S.)); Barnichon, Regis (CEPR) |
| Abstract: | This paper presents estimates of the effect of emergency and extended unemployment benefits (EEB) on the unemployment rate and the labor force participation rate using a data set containing information on individuals likely eligible and ineligible for EEB back to the late 1970s. To identify these estimates, we examine how exit rates from unemployment change across different points of the distribution of unemployment duration when EEB is and is not available, controlling for changes in labor demand and demographic characteristics. We find that EEB increased the unemployment rate by about one-third percentage point in the most recent recession but did not affect the participation rate. In previous recessions, the effect of EEB on the unemployment rate was even smaller. |
| Keywords: | Unemployment benefits extensions; unemployment rate; labor force participation rate |
| Date: | 2014–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2014-65&r=lab |
| By: | Kodama, Naomi; Inui, Tomohiko; Kwon, Hyeogug |
| Abstract: | In the 1990s and the 2000s, the average nominal wage in Japan declined continuously. This is a sharp contrast to wage trends in other developed countries in the same period. This study seeks to provide new quantitative evidence on the possible factors contributing to the nominal wage decline in Japan’s so-called “two lost decades” employing the Blinder-Oaxaca decomposition method using data from the Basic Survey on Wage Structure for 1993-2008. We find that half of the decline of the average wage in the total economy is due to the growing employment share of low-wage industries. Further, we decompose changes in average wages at the industry level for three subperiods representing different phases of the business cycle in Japan. Controlling for worker characteristics, we find the wages of workers in the manufacturing, wholesale, and medical, health care, and welfare industries declined between 1998 and 2003. Further, our results show that 1997 was the turning point in terms of changes in the wage structure. In addition, we find that wages for workers with the same characteristics continued to decline in the 2000s, albeit at a slower pace, and the main factor responsible for the wage decline was changes in the composition of the workforce in the wholesale, retail, and medical, health care, and welfare industries. |
| Keywords: | nominal wage decline, deflation, changes in industrial structure, trade and labor market interactions |
| JEL: | J31 E24 E32 F16 L80 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:hit:cisdps:631&r=lab |
| By: | Andi Sukmana (Graduate School for International Development and Cooperation, Hiroshima University); Ichihashi Masaru (Graduate School for International Development and Cooperation, Hiroshima University) |
| Abstract: | The labor market in Indonesia cannot absorb all of the labor force available, which allows employers to have greater bargaining power over employees. To protect and to increase labor welfare, the government issued minimum wages regulation. Although the purposes of the minimum wage policy were widely accepted, there is great disagreement about whether the minimum wage is effective in achieving its objectives. We found that the minimum wage policy in Indonesia has a positive impact on the average wage. 1 percent of the increase of the minimum wage will increase the average wage by 0.71-0.98 percent. The minimum wage has a negative impact on employment to the working age population ratio. 1 percent of the increase of the minimum wage will decrease the employment to population ratio by 0.62?0.76 percent. The minimum wage only affects total investment. Total investment will decrease 0.09% if the minimum wage increases by 1%. |
| Keywords: | Average Wage, Employment, Investment, Labor, Minimum Wage |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:hir:idecdp:4-6&r=lab |
| By: | Etienne Wasmer (Département d'économie); Alexandre Janiak (Departamento de Ingenieria Industrial (DII)) |
| Abstract: | Employment protection (EPL) has a well known negative impact on labor flows as well as an ambiguous but often negative effect on employment. In contrast, its impact on capital accumulation and capital-labor ratio is less well understood. The available empirical evidence suggests a non-monotonic relation between capital-labor ratios and EPL: positive at very low levels of EPL, and then negative. We explore the theoretical effects of EPL on physical capital in a model of a firm facing labor frictions. Under standard assumptions, theory always implies a motononic negative link between capital-labor ratios and EPL. For a positive link to arise, a very specific pattern of complementarity between capital and workers protected by EPL (senior workers, as opposed to unprotected new entrants, or junior workers) has to be assumed. Further, no standard production technology is able to reproduce the inverted U-shape pattern of the data. Instead, endogenous specific skills investment leads to an inverted U-shape pat- tern: EPL protects and therefore induces investments in specific skills. We develop such a model and calibrate the returns to seniority by using estimates from the em- pirical literature. Under complementarity between capital and specific human capital, physical capital and senior workers having accumulated specific human capital are de facto complement production factors and EPL may increase capital demand at the firm level. The paper concludes that labor market institutions may sometimes favor physical and human capital investments in second-best environments. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/2a53rsm0o89kn9vjs4dhjqnvn5&r=lab |
| By: | Brindusa Anghel; Sara De la Rica; Aitor Lacuesta |
| Abstract: | This article analyzes changes in the occupational employment share in Spain for the period 1997-2012 and the way particular sociodemographic groups adapt to those changes. There seems to be clear evidence of employment polarization between 1997 and 2012 that accelerates over the recession. Changes in the composition of the labour supply cannot explain the increase in the share of occupations at the low end of the wage distribution. Sector reallocation may have partially contributed to explain the polarization process in Spain during the years of expansion (1997-2007) but it is a minor factor during the recession. The polarization of occupations within sectors observed, especially during the recession, appears to be related to a decline in routine tasks which is compensated by an increase in occupations with non-routine service contents, which are found both in the low and high end of the wage distribution. Instead, jobs with a higher degree of abstract contents do not appear to increase their share in total employment during these 15 years. The paper finds that this process has affected males more strongly than females because of their higher concentration in occupations more focused on routine tasks. Among males, for workers under 30 years old, we find a decrease in the share of occupations with more routine tasks which turns into increases in those with more abstract content and particularly with more non-routine service content. Instead, male workers over 30 years old seem to remain in declining occupations to a greater extent. Females of different ages are not affected by the abovementioned changes. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaeee:eee2014-09&r=lab |
| By: | Groh, Matthew; McKenzie, David; Shammout, Nour; Vishwanath, Tara |
| Abstract: | Unemployment rates for tertiary-educated youth in Jordan are high, as is the duration of unemployment. Two randomized experiments in Jordan were used to test different theories that may explain this phenomenon. The first experiment tested the role of search and matching frictions by providing firms and job candidates with an intensive screening and matching service based on educational backgrounds and psychometric assessments. Although more than 1,000 matches were made, youth rejected the opportunity to even have an interview in 28 percent of cases, and when a job offer was received, they rejected this offer or quickly quit the job 83 percent of the time. A second experiment built on the first by examining the willingness of educated, unemployed youth to apply for jobs of varying levels of prestige. Youth applied to only a small proportion of the job openings they were told about, with application rates higher for higher prestige jobs than lower prestige jobs. Youth failed to show up for the majority of interviews scheduled for low prestige jobs. The results suggest that reservation prestige is an important factor underlying the unemployment of educated Jordanian youth. |
| Keywords: | Labor Markets,Tertiary Education,Disability,Labor Policies,Labor Management and Relations |
| Date: | 2014–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7030&r=lab |
| By: | Carlos Carillo-Tudela (University of Essex, CESifo and IZA ), Bart Hobijn (Federal Reserve Bank of San Francisco), Powen She (University of Essex) and Ludo Visschers (The University of Edinburgh, Universidad Carlos III and CESifo) |
| Abstract: | Using quarterly data for the U.K. from 1993 through 2012, we document that in economic downturns a smaller fraction of unemployed workers change their career when starting a new job. Moreover, the proportion of total hires that involves a career change for the worker also drops in recessions. Together with a simultaneous drop in overall turnover, this implies that the number of career changes declines during recessions. These results indicate that recessions are times of subdued reallocation rather than of accelerated and involuntary structural transformation. We back this interpretation up with evidence on who changes careers, which industries and occupations they come from and go to, and at which wage gains. |
| Keywords: | Labour market turnover, occupational and industry mobility, wage growth. |
| JEL: | J63 J64 G10 |
| Date: | 2014–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:edn:esedps:246&r=lab |
| By: | Schnepel, Kevin |
| Abstract: | I estimate the impact of employment opportunities on recidivism among 1.7 million offenders released from a California state prison between 1993 and 2009. The institutional structure of the California criminal justice system as well as location-, skill-, and industry-specific job accession data provide a unique framework to identify a causal effect of labor demand on criminal behavior. I find that increases in construction and manufacturing employment opportunities at the time of release are associated with significantly lower recidivism rates. Other types of employment opportunities, including those typically accessible to individuals with criminal records but characterized by much lower wages, do not influence recidivism rates. My results illustrate the importance of considering job quality when estimating the impact of employment opportunities on crime and when designing programs to help former inmates successfully reenter noninstitutionalized society. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:syd:wpaper:2014-10&r=lab |
| By: | Salvatori, Andrea |
| Abstract: | In 2002, the United Kingdom implemented the EU directive mandating equal treatment of fixed-term and permanent workers. This paper uses eleven years of data from the Labour Force Survey to assess whether the new legislation has led to a decrease in the average wage gap between fixed-term and permanent workers. For women, there is no evidence of that. For men, the wage gap appears to have closed after 2002. However, this gap was falling even before 2002 and some evidence of changes in the selection of workers after the implementation of the Directive cast doubts on the extent to which the closing of the gap can be ascribed to the new legislation. |
| Date: | 2014–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2014-21&r=lab |
| By: | Ryunosuke Sonoda |
| Abstract: | This study estimates two types of Phillips curves––the price Phillips curve and nominal wage Phillips curve––for the Japanese economy and analyses the institutional structure of the dynamics of effective demand and income distribution in each period from 1977 to 2007. The estimated results allow us to make the following four findings. First, the Japanese economy was a profit-led regime and a counter-cyclical wage share regime until the 1990s. Second, although the combination of regimes can make the dynamics of effective demand and income distribution unstable, such dynamics were actually stable until the 1980s because wage share was sufficiently regulated by labour–management cooperation. Third, however, during the 1990s, the dynamics became unstable, because this regulation mechanism was weakened by a proportional increase in non-regular workers who were not members of labour unions. Finally, after the 2000s, the dynamics restabilized because Japanese firms quickened their speeds of employment adjustment and the distributive regime in Japan switched from a counter-cyclical wage share one to a pro-cyclical wage share regime. |
| Keywords: | price Phillips curve, nominal wage Phillips curve, income distribution, demand regime, Kaleckian model |
| JEL: | E12 J53 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:kue:dpaper:e-14-009&r=lab |
| By: | Daniel Arnold; Tobias Brändle; Laszlo Goerke |
| Abstract: | Using both household and linked employer-employee data for Germany, we assess the effects of non-union representation in the form of works councils on (1) individual sickness absence rates and (2) a subjective measure of personnel problems due to sickness absence as perceived by a firm's management. We find that the existence of a works council is positively correlated with the incidence and the annual duration of absence. We observe a more pronounced correlation in western Germany which can also be interpreted causally. Further, personnel problems due to absence are more likely to occur in plants with a works council. |
| Keywords: | Absenteeism, LIAB, personnel problems, sickness absence, SOEP, works councils |
| JEL: | J53 I18 M54 |
| URL: | http://d.repec.org/n?u=RePEc:iaw:iawdip:107&r=lab |
| By: | Jara Tamayo, Holguer Xavier; Sutherland, Holly |
| Abstract: | In this paper we explore the potential of a new unemployment insurance benefit at EMU level to improve the income protection available to the unemployed and their families. The benefit is designed to be additional to existing national provision where this falls short in terms of eligibility (coverage) and the amount payable. The “EMU-UI†has a common design across countries, which is intended to reduce the extent of current gaps in coverage where these are sizeable due to stringent eligibility conditions, to increase generosity where current unemployment benefits are low relative to earnings and to extend duration where this is shorter than 12 months. Our analysis compares the extent of the effect of these improvements across selected countries from the Monetary Union (Germany, Estonia, Greece, Spain, France, Italy, Latvia, Austria, Portugal and Finland) using EUROMOD to simulate entitlement to the national and EMU-UIs and to calculate the effect on household disposable income. We find that the EMU-UI reduces the risk of poverty for the new unemployed and has a positive effect on income stabilisation. The extent of these effects varies in size across countries for two main reasons: notable differences in design of national unemployment insurance schemes and differences in labour force characteristics across countries, mainly in the proportion of self-employed workers who are typically not covered by national schemes. In countries such as France and Finland there is little effect of EMU-UI on poverty risk and stabilisation, while Greece, Italy and Latvia benefit the most, in particular from the EMU proportional scheme. Our analysis highlights potential areas of future research in terms of improving the design of the EMU-UI and accounting for national or EMU level ways of financing, as well as refinements to the methodology used to assess the effects of transitions to unemployment. |
| Date: | 2014–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:ese:emodwp:em5-14&r=lab |
| By: | Uhrig, S.C. Noah; Watson, Nicole |
| Abstract: | Test-retest reliability assessments rarely investigate whether reliability itself is stable or whether change in reliability affects findings from substantive models. Research across the social sciences often recognises that measurement error could influence results, yet it rarely applies established error correction methods. Focusing on gender wage inequality, we address two questions. First, to what extent does reliability vary over time, across genders and across measurement protocols? Second, does correcting for measurement error influence substantive conclusions about gender wage inequality? Comparing British and Australian panel data, we find little temporal variability in reliability; however measurement error effects are variable and sometimes substantial. |
| Date: | 2014–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2014-24&r=lab |
| By: | Xin Jin (Department of Economics, University of South Florida) |
| Abstract: | This article studies the consequences of firm delayering on wages and the wage distribution inside firms. I consider a job-assignment model with asymmetric information and a slot constraint. The model predicts that more efficient firms are not necessarily larger than less efficient firms if firms are allowed to adjust their internal organizational structure through delayering. After delayering, wages at all levels increase and the wage distribution becomes more unequal. These predictions match a set of empirical findings in recent studies that are not well explained by existing theories. |
| Keywords: | Delayering, asymmetric information, wage distribution, slot constraint |
| JEL: | J31 M51 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:usf:wpaper:0414&r=lab |
| By: | Francesco Furlanetto; Nicolas Groshenny |
| Abstract: | We investigate the macroeconomic consequences of fluctuations in the effectiveness of the labor-market matching process with a focus on the Great Recession. We conduct our analysis in the context of an estimated medium-scale DSGE model with sticky prices and equilibrium search unemployment that features a shock to the matching efficiency (or mismatch shock). We find that this shock is not important for unemployment fluctuations in normal times. However, it plays a somewhat larger role during the Great Recession when it contributes to raise the actual unemployment rate by around 1.3 percentage points and the natural rate by around 2 percentage points. The mismatch shock is the dominant driver of the natural rate of unemployment and explains part of the recent shift of the Beveridge curve. |
| Keywords: | Search and matching frictions, unemployment, natural rates |
| JEL: | E32 C51 C52 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2014-57&r=lab |
| By: | Joan Llull (MOVE Universitat Autonoma de Barcelona) |
| Abstract: | This paper estimates the effect of immigration on native wages at the national level taking into account the endogenous allocation of immigrants across skill cells. Time-varying exogenous variation across skill cells for a given country is provided by interactions of push factors, distance, and skill cell dummies: distance mitigates the effect of push factors more severely for less educated and middle experienced. Because the analysis focuses on the United States and Canada, I propose a two-stage approach (Sub-Sample 2SLS) that estimates the fiist stage regression with an augmented sample of destination countries, and the second stage equation with the restricted sub-sample of interest. I derive asymptotic results for this estimator, and suggest several applications beyond the current one. The empirical analysis indicates a substantial bias in estimated OLS wage elasticities to immigration. Sub-sample 2SLS estimates average - 1:2 and are very stable to the use of alternative instruments. |
| Keywords: | Immigration, Wages, Sub-Sample Two Stage Least Squares |
| JEL: | J31 J61 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1436&r=lab |
| By: | Haroon Bhorat; Karmen Naidoo; Derek Yu (Development Policy Research Unit; Director and Professor) |
| Abstract: | This paper provides a historical overview of the South African trade union movement, followed by a brief discussion of the labour market legislation and institutions formed since 1994. Thereafter, a detailed evaluation of the impact of trade unions, legislation, and institutions on labour market outcomes in South Africa is provided, and it is found that despite a long history, trade union membership levels, their impact on average wage levels, and their pursuit of strike action, has resulted in relatively benign economic impacts within country and relative to other economies around the world. The political-economy effects shaping the country’s employment relations are then discussed. |
| Keywords: | Trade unions, labour market efficiency, wage premium, strikes, political economy, South Africa |
| JEL: | F50 J30 J51 J52 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctw:wpaper:201402&r=lab |