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on Labour Economics |
| By: | David Turchick |
| Abstract: | Measures of social mobility provide an extra dimension for testing job search models. The present note tests the dynamic model in [Acemoglu, D., 1999. Changes in unemployment and wage inequality: an alternative theory and some evidence. American Economic Review 89, 1259-1278] with respect to Fields’ mobility-as-an-equalizer-of-longer-term-incomes index. The 1980s in the U.S. were not only a period of raising inequality, but also one of longer-term earnings becoming even more unequal than short-term earnings. We establish that this pattern of social mobility (i) is consistent with Acemoglu's argument pointing to a qualitative change in job composition during this period, and (ii) would not arise had a qualitative change in labor markets equilibrium not taken place. |
| Keywords: | social mobility; longer-term incomes; job search; skill-biased technical change; United States |
| JEL: | D63 J24 J31 J64 |
| Date: | 2014–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2014wpecon16&r=lab |
| By: | Ronald Bachmann; Peggy Bechara; Anica Kramer; Sylvi Rzepka |
| Abstract: | Using harmonized micro data, this paper investigates the effects of the early phase (2008-10) of the recent economic crisis on transitions between labour market states in Europe. Our analysis focuses on individual heterogeneity, on the type of employment contract, and on crosscountry differences. Our analysis shows that specific worker groups, such as men and young persons, were particularly strongly hit by the crisis. Furthermore, more transitions from employment, and especially temporary employment, to unemployment were the main factor behind the rise in unemployment; while reduced unemployment outflows did not contribute substantially to the increase in unemployment during the early phase of the crisis. |
| Keywords: | Recession; labour market transitions; Markov transition matrices; worker heterogeneity |
| JEL: | J6 E24 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0499&r=lab |
| By: | Kai-Uwe Müller; Katharina Wrohlich |
| Abstract: | We apply a structural model of mothers' labor supply and child care choices to evaluate the effects of two childcare reforms in Germany that were introduced simultaneously in August 2013. First, a legal claim to subsidized child care became effective for all children aged one year or older. Second, a new benefit called 'Betreuungsgeld' came into effect that is granted to families who do not use public or publicly subsidized child care. Both reforms target children of the same age group and are unconditional on the parents' income or employment status, yet affect mothers' incentives for labor supply and child care choices in opposite directions. Our model facilitates estimating the joint reform impact as well as disentangling the individual effects of both policies. A comprehensive data set with information on labor supply, the use of and potential access restrictions to various child care arrangements provides the basis for the empirical analysis. We find the overall effect of both reforms to be small but positive as far as mother's labor supply and the use of formal care is concerned. The legal claim's positive impact on mothers' labor supply and the use of formal child care is largely offset by the negative effect on both outcomes resulting from the introduction of the 'Betreuungsgeld'. |
| Keywords: | Family policy, labor supply, child care, policy evaluation, structural model |
| JEL: | J22 J18 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp684&r=lab |
| By: | Federico di Pace (University of St Andrews); Kaushik Mitra (University of St Andrews); Shoujian Zhang (University of St Andrews) |
| Abstract: | It is well known that the standard search and matching model with Rational Expectations (RE) is unable to generate amplification in unemployment and vacancies. We show that relaxing the RE assumption has the potential to provide a solution to this well known unemployment volatility puzzle. A model in which agents use Recursive Least Square algorithms to update their expectations as new information becomes available is presented. Firms choose vacancies by making infinite horizon forecasts over (un)employment rates, wages and interest rates at each point in time. Firms have much greater incentive for vacancy posting because of overoptimism about the discounted value of expected profits at the time a positive TFP shock hits the economy. The model with adaptive learning is able to match the relative volatility of labour market variables in US data and the properties of forecast errors of unemployment rates obtained from the Survey of Professional Forecasters. |
| Keywords: | adaptive learning, bounded-rationality, search and matching frictions |
| JEL: | E24 E25 E32 J64 |
| Date: | 2014–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:san:cdmawp:1408&r=lab |
| By: | Almut Balleer; Britta Gehrke; Christian Merkl |
| Abstract: | This paper reveals that German firms with working time accounts (WTAs) show a similar separation and hiring behavior in response to revenue changes as firms without WTAs. This finding casts doubt on the popular hypothesis that WTAs were the key driver of the unusually small increase in German unemployment in the Great Recession. One possible explanation is that firms substitute WTAs by short-time work. However, our results show no evidence for this substitution. Firms with WTAs use short-time work more to adjust labor over the cycle than firms without WTAs |
| Keywords: | Working time accounts, short-time work, business cycle |
| JEL: | E20 E24 J20 J30 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1955&r=lab |
| By: | Guillermo Alves (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Gabriel Burdin (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Andres Dean (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | This paper investigates the relationship between workplace democracy and job flows (net job creations, gross job creations and destructions) by comparing the behavior of worker-managed firms (WMFs) and conventional firms. The empirical analysis relies on high frequency administrative firm-level panel data from Uruguay over the period April 1996-July 2009. The main findings of the paper are that (1) WMFs exhibit much more stable job dynamics than CFs; (2) both types of firms have decreasing in age and increasing in size gross job creation profiles; (3) there are heterogeneous employment regimes within WMFs: high job creation and destruction rates of hired workers and low job creation and destruction of members. This paper contributes to the literature on the role of institutions in shaping job flows. Our results have important implications for the understanding of the allocative efficiency effects of worker participation. |
| Keywords: | Job flows, Worker-managed firms |
| JEL: | D21 J54 J63 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-10-14&r=lab |
| By: | Holger Lengfeld; Jessica Ordemann |
| Abstract: | The paper examines the extent to which the prestige value of a retiree's former occupation increases the likelihood that they will make a transition into volunteering after retirement. Following social production function theory, we assume that when a person retires, the prestige value attached to their former occupation fades. The fact that volunteering has the character of a collective good provides the opportunity to gain social prestige to offset the loss of occupational prestige. However, the extent of the incentive to volunteer will be distributed unequally across occupations: the higher the former occupational prestige value, the higher the perceived loss of prestige after retirement. Thus, doing a job with high prestige value increases the incentive to volunteer in retirement. This assumption is tested, using data taken from the German Socio-Economic Panel (SOEP) 1992-2013. The sample contains 1,631 workers and 589 retirees, 278 of whom transitioned into volunteering during the observation window. Based on Kaplan-Meier-Failure-Estimates and complementary log-log hazard models, findings show a positive effect of occupational prestige on the transition into volunteering. Thus, the loss of high occupational prestige can be compensated by the social prestige associated with volunteering. Formal volunteering in retirement follows, albeit to a lesser extent, the logic of the occupational social strata. |
| Keywords: | Social Production Function Theory, retirement, volunteering, occupations |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp686&r=lab |
| By: | Petr Huber (Austrian Institute for Economic Research (WIFO), Arsenal, Objekt 20, 1030 Wien and Faculty of Business and Economics, Mendel University in Brno.); Ulugbek Rahimov (Faculty of Economics, Westminster International University in Tashkent) |
| Abstract: | Analyzing the self-selection of workers into formal and informal sector employment in Tajikistan, a poor transition economy, with higher informal sector than formal sector wages and an informal sector employment share exceeding 50 percent, we find that the selection of formal and informal sector workers is based on comparative advantages rather that labor market segmentation. Furthermore, labor supply to the two sectors reacts rather elastically to relative wages. Policies increasing relative wages in the formal sector could thus be effective in reducing the high informal sector employment share in this country. |
| Keywords: | formal/informal sector wages, self selection, segmentation |
| JEL: | J31 J42 J21 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:48_2014&r=lab |
| By: | Sandra Poncet; Florian Mayneris; Tao Zhang |
| Abstract: | We study how the 2004 reform of minimum wage rules in China has affected the survival, average wage, employment and productivity of local firms. To identify the causal effect of minimum wage growth, we use firm-level data for more than 160,000 manufacturing firms active in 2003 and complement the triple difference estimates with an IV strategy that builds on the institutional features of the 2004 reform. We find that the increase in city-level minimum wages resulted in lower survival probability for firms that were the most exposed to the reform. For surviving firms, wage costs increased without negative repercussions on employment. The main explanation for this finding is that productivity significantly improved, allowing firms to absorb the cost shock without hurting their employment nor their profitability. At the city-level, our results show that higher minimum wages fostered aggregate productivity growth thanks to productivity improvements of incumbent firms and net entry of more productive ones. Hence, in a fast-growing economy like China, there is a cleansing effect of labor market standards. Minimum wage growth allows more productive firms to replace the least productive ones and forces incumbent firms to strengthen their competitiveness, these two mechanisms boosting the aggregate efficiency of the economy. |
| Keywords: | minimum wages;firm-level performance;aggregate TFP;China |
| JEL: | F10 F14 O14 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2014-16&r=lab |
| By: | Xin Jin (Department of Economics, University of South Florida) |
| Abstract: | This article studies the negative signals associated with non-promotion. I first show theoretically that, when workers’ productivity rises little with additional years on the same job level, the negative signal associated with non-promotion leads to wage decreases. On the other hand, when additional job-level tenure leads to a sizable increase in productivity, workers’ wages increase. I test my model’s predictions using the personnel records from a large US firm from 1970-1988. I find a clear hump-shaped wage-job-tenure profile for workers who stay in the same job level, which supports my model’s prediction. |
| Keywords: | Asymmetric Information, Human Capital Accumulation, Signaling, Promotion, Wages |
| JEL: | J24 J31 M51 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:usf:wpaper:0314&r=lab |
| By: | Alejandra Mizala (Universidad de Chile); Hugo Ñopo (Inter-American Development Bank) |
| Abstract: | How much are teachers paid in comparison to those in other professions in Latin America? How have these differences evolved at the turn of the 20th century? This paper documents the extent to which teachers are underpaid vis-à-vis workers in other professional and technical occupations in thirteen Latin-American countries circa 2007. It also analyses the evolution of the earnings gaps between circa 1997 and circa 2007. After controlling the earnings differentials by observable characteristics linked to productivity, using the methodology developed in Ñopo (2008), we find that teachers are underpaid vis-à-vis other professionals and technicians in Latin America in both periods: circa 1997 and circa 2007. This has been the case for hourly earnings gaps at the main and secondary jobs. However, the analysis performed provides evidence that the earnings gap decreased during the decade of analysis, most of the drop is attributed to a general trend in earnings gap reduction rather than as a result of teachers’ improvements on their observable characteristics. The earnings gap shows important heterogeneities, across countries and along the earnings distributions. |
| Keywords: | education, wage differentials, professional labor markets, national and international labor standards, Latin America, Caribbean |
| JEL: | I2 J31 J44 J8 O54 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:apc:wpaper:2014-015&r=lab |
| By: | Christina DePasquale |
| Abstract: | In this paper, I estimate the labor market outcomes of two types of hospital consolidation: mergers and system-joinings. The effects of hospital consolidation on prices have received much attention from researchers over the past 25 years. These studies, however, largely ignore the possible effects of system-joinings. I use a difference-in- differences approach and propensity-score weighting to correct for selection bias in order to estimate labor market outcomes of hospital consolidation for the years 1983-2009. I find large employment decreases following a hospital merger, but much smaller decreases following a system-joining. I find that the merger effects on employment levels persist even five years after a merger, but the effect of system-joining completely disappears after year three. I also find zero wage effect from either type of consolidation. I conclude that this result is consistent with the employment decreases being driven by eciency gains rather than an increase in monopsony power. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:1413&r=lab |
| By: | Ana Maria Takahashi (Graduate School of Economics, Kobe University) |
| Abstract: | We examine the role of income relative deprivation, hours worked for different tasks, and children in the job-related stress experienced by academics. Malesf job-related stress increases when their incomes are lower than that of their peersf, but females are not susceptible to such income comparisons. Job-related stress decreases with hours spent on research provided the hours are not excessive, but hours spent in teaching and on administrative tasks always increase job-related stress. The presence of young children increases job-related stress only for females, and children largely explain the observed gender differences in job-related stress. |
| Keywords: | job-related stress, relative deprivation |
| JEL: | J28 J81 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1424&r=lab |
| By: | Yukiko Asai; Ryo Kambayashi; Shintaro Yamaguchi |
| Abstract: | We estimate the causal effects of childcare availability on the maternal employment rate using prefecture panel data constructed from the Japanese quinquennial census 1990-2010. We depart from previous papers on Japan by controlling for prefecture fixed effects, without which the estimates can be severely biased upward. Contrary to popular belief, childcare availability is uncorrelated with maternal employment when prefecture fixed effects are controlled. Evidence suggests that this is because households shift from using informal childcare provided by grandparents to the accredited childcare service, as more and more households do not live with grandparents. If this change of the household structure did not occur, the growth of childcare availability would have increased the maternal employment rate by two percentage points, which accounts for about 30% of the growth in the maternal employment rate from 1990 to 2010. |
| Keywords: | childcare, female labor supply, maternal employment, nuclear family, three-generation family |
| JEL: | J13 J21 J22 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2014-08&r=lab |
| By: | G.A. Meagher; R.A.Wilson; E.Yerushalmi |
| Abstract: | In recent years, a series of European labour market forecasts have been produced on behalf of, and have been published by, the European Centre for the Development of Vocational Training (Cedefop). These forecasts were generated using a modular modelling approach containing two major components, a multi-sector macroeconomic model (E3ME) for 29 European countries, and a labour market extension (WLME). The countries are treated as an integrated system in E3ME but the extension is applied to each country separately. Forecasts of employment by industry are determined by E3ME; forecasts of employment by occupation and qualification are determined by the extension. Both components rely mainly on time series econometric techniques to generate their forecasts. Meagher et al.(2014) describe how the WLME can be replaced with an alternative extension (MLME) which uses computable general equilibrium (CGE) modelling techniques. Compared to the WLME, the MLME relies less on time series analysis and more on explicitly modelled economic behaviour, based on theoretical considerations. In this paper, the design of the hybrid E3ME-MLME model is advanced in two ways. Firstly, MLME is configured such that, in the absence of any shocks and assuming that the occupational labour markets clear, it reproduces the forecasts derived using WLME. In that case, the MLME forecasts can be regarded as providing enhanced information about the WLME forecasts. In particular, MLME provides forecasts of changes in relative wage rates which can be used to identify structural pressures in the markets for labour, pressures which remain only implicit in the WLME employment forecasts produced for Cedefop. Secondly, when suitably configured, MLME can be used to determine the deviations to the WLME employment forecasts which would result if some of the conditions (either explicit or implicit) under which they were derived are relaxed. In particular, MLME is used to determine how the forecasts would be different if wage rates are not sufficiently flexible to clear the occupational labour markets. The attendant surpluses and shortages revealed by MLME provide corroborative evidence on the underlying structural pressures in the Cedefop forecasts. Results are reported for the United Kingdom, Greece and the Netherlands. |
| Keywords: | Forecasting, CGE models, hybrid models, labour markets, structural imbalances |
| JEL: | C53 C58 D58 E27 J23 O41 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-249&r=lab |
| By: | Verme, Paolo; Barry, Abdoul Gadiry; Guennouni, Jamal |
| Abstract: | Female labor participation in the Arab world is low compared with the level of economic development of Arab countries. Beyond anecdotal evidence and cross-country studies, there is little evidence on what could explain this phenomenon. This paper uses the richest set of panel data available for any Arab country to date to model female labor participation in Morocco. The paper finds marriage, household inactivity rates, secondary education, and gross domestic product per capita to lower female labor participation rates. It also finds that the category urban educated women with secondary education explains better than others the low level of female labor participation. These surprising findings are robust to different estimators, endogeneity tests, different specifications of the female labor participation equations, and different sources of data. The findings are also consistent with previous studies on the Middle East and North Africa region and on Morocco. The explanation seems to reside in the nature of economic growth and gender norms. Economic growth has not been labor intensive, has generated few jobs, and has not been in female-friendly sectors, resulting in weak demand for women, especially urban educated women with secondary education. And when men and women compete for scarce jobs, men may have priority access because of employers'and households'preferences. |
| Keywords: | Population Policies,Primary Education,Housing&Human Habitats,Labor Markets,Teaching and Learning |
| Date: | 2014–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7031&r=lab |