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on Labour Economics |
| By: | Malcomson, James (University of Oxford); Mavroeidis, Sophocles (University of Oxford) |
| Abstract: | The Mortensen and Pissarides (1994) matching model with all wages negotiated each period is shown inconsistent with macroeconomic wage dynamics in the US. This applies even when heterogeneous match productivities, time to build vacancies and credible bargaining are incorporated. Wage rigidity consistent with micro evidence that wages of job changers are more flexible than those of job stayers allows the model to capture these dynamics and is not inconsistent with parameter calibrations in the literature. Such wage rigidity affects only the timing of wage payments over the duration of matches, so conclusions about characteristics based on calibrations continue to apply. |
| Keywords: | matching frictions, wage bargaining, wage rigidity |
| JEL: | E2 J3 J6 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8806&r=lab |
| By: | Jaanika Meriküll; Pille Mõtsmees |
| Abstract: | This paper will study the gender wage gap in desired wages, realised wages and reservation wages. The notion of desired wages shows workers’ first bet to potential employers during the job-search process. Two datasets are employed, the electronic job-search portal database, where individuals signal their desired wages, and the labour force survey, where realised wages and reservation wages are reported. The Oaxaca-Ransom decomposition is implemented to investigate the contribution of characteristics and coefficients to the gender gap. It is found that: (1) The unexplained gender wage gap is 22–25% in desired and realised wages. (2) The unexplained gender wage gap is much larger in desired wages than in reservation wages for unemployed individuals showing women’s higher disutility from unemployment. (3) Women’s lower desired wages are revised up rather than men’s higher desired wages being revised down on the job. The results suggest that women are more risk averse in wage bargaining and self-select into occupations and industries with stable employment |
| Keywords: | gender wage gap; reservation wage; family, marriage and work; labour market mobility |
| JEL: | J16 J13 D13 J31 |
| Date: | 2015–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:eea:boewps:wp2014-9&r=lab |
| By: | Hernaes, Erik (Ragnar Frisch Centre for Economic Research); Markussen, Simen (Ragnar Frisch Centre for Economic Research); Piggott, John (University of New South Wales); Røed, Knut (Ragnar Frisch Centre for Economic Research) |
| Abstract: | We exploit a comprehensive restructuring of the early retirement system in Norway in 2011 to examine labor supply responses to alternative pension reform strategies relying on improved work incentives (flexibility) or increased access ages (prescription), respectively. We find that increasing the returns to work is a powerful policy tool: The removal of the earnings test at age 63 led to an immediate increase in average annual labor earnings among the affected mature workers by around $14,700 (NOK 90,000). The implied uncompensated labor earnings elasticity (the percentage change in average gross earnings relative to the percentage change in average work-incentives) is around 0.25. |
| Keywords: | early retirement, labor supply, pension reform, program evaluation |
| JEL: | H55 J22 J26 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8812&r=lab |
| By: | Busk, Henna (University of Jyväskylä); Jahn, Elke J. (Institute for Employment Research (IAB), Nuremberg); Singer, Christine (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | This paper evaluates the impact on temporary agency workers’ job satisfaction of a reform that considerably changed regulations covering the temporary help service sector in Germany. We isolate the causal effect of this reform by combining a difference-in-difference and matching approach and using rich survey data. We find that the change of the law substantially decreased agency workers’ job satisfaction while regular workers’ job satisfaction remained unchanged. Further analysis reveals that the negative effect on agency workers’ job satisfaction can be attributed to a decrease in wages and an increase in perceived job insecurity. These results are also robust to the use of different specifications and placebo tests. |
| Keywords: | temporary agency employment, deregulation, job satisfaction |
| JEL: | J28 J41 J88 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8803&r=lab |
| By: | Hirsch, Boris (University of Erlangen-Nuremberg) |
| Abstract: | Fitting duration models on an inflow sample of jobs in Germany starting in 2002-2010, this paper investigates the impact of employers' use of temporary agency work on regular workers' job stability. In line with dual labour market theory, I find that non-temp jobs are significantly more stable if employers utilise temps. The rise in job stability stems mainly from reduced transitions into non-employment suggesting that non-temp workers are safeguarded against involuntary job losses. My findings are robust to controlling for unobserved permanent employer characteristics and changes in the observational window that includes the labour market disruption of the Great Recession. |
| Keywords: | temporary agency work, job stability, dual labour markets |
| JEL: | J63 J41 J21 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8804&r=lab |
| By: | Feng, Andy (Singapore Ministry of Trade and Industry); Graetz, Georg (Uppsala University) |
| Abstract: | How does measured performance at university affect labor market outcomes? We show that degree class – a coarse measure of student performance used in the UK – causally affects graduates' industry and hence expected wages. To control for unobserved ability, we employ a regression discontinuity design that utilizes rules governing the award of degrees. A First Class (Upper Second) increases the probability of working in a high-wage industry by thirteen (eight) percentage points, and leads to three (seven) percent higher expected wages. The results point to the importance of statistical discrimination, heuristic decision making, and luck in the labor market. |
| Keywords: | high skill wage inequality, regression discontinuity design, statistical discrimination |
| JEL: | C26 I24 J24 J31 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8826&r=lab |
| By: | Carpenter, Jeffrey P. (Middlebury College); Matthews, Peter Hans (Middlebury College); Robbett, Andrea (Middlebury College) |
| Abstract: | The theory of compensating differentials has proven difficult to test with observational data: the consequences of selection, unobserved firm and worker characteristics, and the broader macroeconomic environment complicate most analyses. Instead, we construct experimental, real-effort labor markets and offer an evaluation of the theory in a controlled setting. We study both the wage differentials that evolve between firms with varying degrees of disamenity and how these differentials are affected by worker mobility and therefore selection. Consistent with the theory, we find that riskier firms must pay significantly higher wages to attract workers. Further, when workers are mobile, they sort into firms according to their attitudes towards risk and, as a result, the compensating differential shrinks. Last, we are also able to mimic the biases associated with observational studies. |
| Keywords: | compensating differential, sorting, experiment, real effort, risk aversion, ambiguity aversion, loss aversion |
| JEL: | J31 D01 C92 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8820&r=lab |
| By: | Müller, Kai-Uwe |
| Abstract: | In this paper a labor supply model with demand side rationing is estimated to analyze the economic policies that directly affect incentives to work as well as labor costs. The framework is applied to evaluate the employment effects of a federal minimum wage in Germany and the impact of employer- vs. employee-oriented wage subsidies under a statutory minimum. We extend Laroque and Salani (2002) by modeling the extensive and intensive margin of labor supply on the basis of desired working hours. While previous studies for Germany Bargain et al. (2010) identify the rationing risk primarily from exogenous demand side factors, this paper structurally relates it to individual productivity which is determined in a jointly estimated wage/productivity equation. Unobserved individual factors are allowed to influence preferences and constraints. The variation needed to identify labor supply and demand is generated by the tax and transfer system and labor market regulations defining minimum standards of pay. Simulation exercises prove the value of the model for policy analysis. Differing adjustments at the extensive and intensive margin are revealed that are related to heterogeneous productivities. |
| JEL: | J23 J31 J22 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100471&r=lab |
| By: | Gregory, Terry |
| Abstract: | In this study we investigate the minimum wage (MW) effects for a German sub-construction sector where the MW bites extraordinary hard by international standards. Within a quasiexperiment we estimate the Quantile Treatment Effects of the MW on the conditional and unconditional distribution of earnings. For Eastern Germany, the results indicate significant real (nominal) wage increases that ripple up to about the 0.6th quantile. However, the MW also led to declining real wages (stagnating nominal wages) among upper-decile workers, thus reducing the average pay reward for high-skilled labour in the sector. We provide evidence that a rising labour cost burden for firms together with an increased bargaining power of employers over workers still employed in the sector led to wage moderation at the upper decile, particularly among smaller East German firms. Overall this paper demonstrates how a MW geared towards the lower rank may render unexpected side effects for other workers located higher up in the wage distribution and who are mostly assumed to be unaffected by such policy interventions. |
| Keywords: | unconditional quantile regression,minimum wages,wage effects,wage moderation,labour shortages |
| JEL: | J31 J38 C21 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14133&r=lab |
| By: | Francesc Obiols-Homs; Virginia Sánchez-Marcos |
| Abstract: | A relatively low tertiary education wage premium and a large occupational mismatch are two salient features of the Spanish labor market that distinguish it with respect to the labor markets in other developed countries. In this paper we provide an equilibrium model of the labor market with frictions in which workers are heterogeneous in terms of ability and education. We specifically model an education policy as delivering either a particular selection of individuals into the tertiary education system or a higher ability of individuals, or both. Our model economy is calibrated to mimic several of the Spanish labor market statistics together with key aspects of the achievement levels from the Programme for International Student Assessment (PISA) and the Programme for the International Assessment of Adult Competencies (PIIAC). We then explore the implications of alternative education policies on mismatch and tertiary education wage premium. We find that under an education policy able to produce ability levels of tertiary educated workers comparable to the average of the OECD countries a 40% lower fraction of mismatched workers and a 10% higher tertiary education wage premium would be observed in Spain. |
| Keywords: | occupational-mismatch, tertiary education wage premium, ability |
| JEL: | J21 J24 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:807&r=lab |
| By: | Tobias Brändle (Institut für Angewandte Wirtschaftsforschung (IAW), University of Tübingen); Laszlo Goerke (Institute for Labour Law and Industrial Relations in the EU, University of Trier) |
| Abstract: | A large number of articles have analysed ‘the one constant´ in the economic effects of trade unions, namely that union bargaining reduces employment growth by two to four percentage points per year. Evidence is, however, mostly related to Anglo Saxon countries. We investigate whether a different institutional setting might lead to a different outcome, making the constant a variable entity. We use linked-employer-employee data for Germany and analyse the effect of collective bargaining coverage on employment growth in German plants. We find a robust and negative correlation between being covered by a sector-wide bargaining agreement or firmlevel contract and employment growth per annum of about 0.8 percentage points. Using various approaches, however, we cannot establish a causal interpretation of the effects, suggesting that the cross-section results are driven by selection. |
| Keywords: | collective bargaining, employment growth, job flows, trade unions |
| JEL: | J23 J52 J53 J63 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201501&r=lab |
| By: | William J. Carrington |
| Abstract: | After being displaced from their jobs, workers experience reduced earnings for many years and are at greater risks of other problems as well. The ills suffered by displaced workers motivated several recent expansions of government programs, including the unemployment insurance system, and have spurred calls for wage insurance that would provide longer-run earnings replacement. However, while the average size and the individual characteristics associated with the losses are relatively clear, the theory of displacement-induced earnings loss is scattered. Much of the policy discussion appears to |
| JEL: | J3 J6 |
| Date: | 2015–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:wpaper:49908&r=lab |
| By: | Klinger, Sabine; Weber, Enzo |
| Abstract: | Between 1979 and 2009, the German labour market moved along a Beveridge curve with changing slope that used to shift outwards but shifted inwards after severe labour market reforms had come into force. We analyse these dynamics and focus on the macroeconomic outcome of the reforms. For that purpose, we construct a new empirical model that links equilibrium unemployment theory to a flexible unobserved components model: we disentangle permanent and transitory components of matching efficiency and separation rate as well as unemployment and vacancies. Cointegration and identification are addressed. We find that matching efficiency and separation rate each account for about half of the inward shift. Thereby, the increase in trend matching efficiency is extraordinary and testifies to a permanent improvement on the labour market. Its visibility, however, was retarded by an overlay with a structural increase in tightness. |
| JEL: | C32 E24 E32 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100499&r=lab |
| By: | Farber, Henry S. (Princeton University); Rothstein, Jesse (UC Berkeley); Valletta, Robert G. (Federal Reserve Bank of San Francisco) |
| Abstract: | Unemployment Insurance benefit durations were extended during the Great Recession, reaching 99 weeks for most recipients. The extensions were rolled back and eventually terminated by the end of 2013. Using matched CPS data from 2008-2014, we estimate the effect of extended benefits on unemployment exits separately during the earlier period of benefit expansion and the later period of rollback. In both periods, we find little or no effect on job-finding but a reduction in labor force exits due to benefit availability. We estimate that the rollbacks reduced the labor force participation rate by about 0.1 percentage point in early 2014. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2015-03&r=lab |
| By: | Rzepka, Sylvi; Tamm, Marcus |
| Abstract: | The new training literature suggests that in a monopsonistic market employers will not only pay for firm-specific training but also for general training if the risk of poaching is limited. This implies that training participation should decrease when competition for employees is higher among firms. Using worker level data for Germany we find that the hypothesis is supported empirically. Specifi cally, we find that employees are significantly less likely to participate in training if the density of firms in a sector is higher within the local labor market. |
| JEL: | I20 J24 J42 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100344&r=lab |
| By: | Fritsch, Michael (University of Jena); Kritikos, Alexander S. (University of Potsdam, DIW Berlin); Sorgner, Alina (University of Jena) |
| Abstract: | Germany experienced a unique rise in the level of self-employment in the first two decades following unification. Applying the non-linear Blinder-Oaxaca decomposition technique, we find that the main factors driving these changes in the overall level of self-employment are demographic developments, the shift towards service sector employment, and a larger share of population holding a tertiary degree. While these factors explain most of the development in self-employment with employees and the overall level of self-employment in West Germany, their explanatory power is much lower for the stronger increase of solo self-employment and of self-employment in former socialist East Germany. |
| Keywords: | self-employment, non-linear Blinder-Oaxaca decomposition technique, entrepreneurship, Germany |
| JEL: | L26 D22 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8818&r=lab |
| By: | Alfonso Arpaia; Aron Kiss; Balazs Palvolgyi; Alessandro Turrini |
| Abstract: | This paper assesses the role of labour mobility in the EU as an adjustment mechanism. It presents stylised facts on mobility and migration at national and sub-national level, analyses the determinants of mobility flows by means of gravity equations, and studies the dynamic response of mobility to asymmetric demand shocks by means of vector auto regression (VAR) analysis in the vein of Blanchard and Katz (1992). It is found that EU membership increases mobility significantly. Membership in the euro area, while not raising the magnitude of mobility flows per se, is associated with a stronger reaction of labour mobility to unemployment differences across countries. The dynamics of labour mobility in response to asymmetric demand shocks is analysed on country-level data on a panel of EU countries. Results indicate that mobility absorbs about a quarter of the shock within 1 year and about 60 per cent after 10 years. The analysis also shows that the response of migration to shocks has been growing over time, becoming almost twice as important after EMU completion. A version of the VAR model allowing for the analysis of the response of wages indicates that the response of real wages to asymmetric demand shocks has also increased after EMU. |
| JEL: | C22 C53 E37 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:euf:ecopap:0539&r=lab |
| By: | K. Galušcák; G. Kátay |
| Abstract: | This paper investigates the extent to which cross-country differences in aggregate participation rates can be explained by divergence in tax-benefit systems. We take the example of two countries, the Czech Republic and Hungary, which – despite a lot of similarities – differ markedly in labour force participation rates. We first replicate for Czech household-level data the labour supply estimation for Hungary presented in Benczúr et al. (2014) and use the two perfectly comparable estimates to simulate how the aggregate participation rate would change in one country if the other country’s tax and social welfare system were adopted. Our estimation results yield similar labour supply elasticities for both countries, suggesting that individual preferences are essentially identical. The simulation results show that about one-half of the total difference in the participation rates of the 15–74 years old population can be explained by differences in the tax-benefit systems. The highest response is obtained for married women or women of childbearing age. This is related to the more generous maternity benefit system in place in Hungary as compared to the Czech Republic. |
| Keywords: | Cross-country comparison, labour supply, microsimulation, participation rate, tax-benefit systems. |
| JEL: | C63 H24 I38 J22 P50 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:536&r=lab |
| By: | Bernhard Boockmann; Tobias Brändle |
| Abstract: | Job search assistance and intensified counseling have been found to be effective for labor market integration by a large number of studies, but the evidence for older and hard-to-place unemployed individuals more specifically is mixed. In this paper we present key results from the evaluation of “Perspektive 50plus”, a large-scale active labor market program directed at the older unemployed in Germany. To identify the treatment effects, we exploit regional variation in program participation. Based on survey evidence, we argue that participation of regions is not endogenous in the vast majority of cases. We use a combination of different evaluation estimators to check the sensitivity of the results to selection, substitution and local labor market effects. We find large positive effects of the program in the range of five to ten percentage points on integration into unsubsidized employment. However, there are also substantial lock-in effects, such that program participants have a higher probability of remaining on public welfare benefit receipt for up to one year after commencing the program. |
| Keywords: | active labor market programs, evaluation, long-term unemployment, older unemployed |
| JEL: | J68 J14 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iaw:iawdip:115&r=lab |
| By: | Klaus Nowotny |
| Abstract: | This paper investigates the economic, labor market and institutional factors that make regions and countries attractive for highly skilled migrants vis-`a-vis lowskill migrants. Based on micro-data for 11 EU countries, a discrete choice model estimated at the NUTS-2 level shows that location decisions are not only determined by factors related to earnings opportunities, distance, networks, common language and colonial relationships, but also by institutional factors such as migration policy, the income tax system, or labor market institutions; it also lends some support to the welfare magnet hypothesis: a higher unemployment replacement rate increases the attractiveness of a country. The empirical analysis however reveals only minor differences in the effects of institutions on location decisions by skill level, limiting the scope for policy makers to affect the skill composition of migration. |
| Keywords: | Highly skilled migration, regional location decisions, institutions, migration policy |
| JEL: | F22 R23 C35 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2015:m:1:d:0:i:78&r=lab |
| By: | Federico Biagi (European Commission – JRC - IPTS); Smaranda Pantea (European Commission – JRC - IPTS); Anna Sabadash (European Commission – Eurostat) |
| Abstract: | This paper examines whether ICT substitute labour and reduce the demand for labour. We used firm-level comparable data separately for firms in manufacturing, services and ICT-producing sectors from seven European countries. We adopted a common methodology and applied it to a unique dataset provided by the ESSLait Project on Linking Microdata. We controlled for unobservable time-invariant firm-specific effects and we found no evidence of a negative relationship between intensity of ICT use and employment growth. We read this as an indication that ICT use is not reducing employment among ICT using firms. |
| Keywords: | Labour Demand, Technological Change, ICT |
| JEL: | J23 J24 O33 L86 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:decwpa:2014-07&r=lab |
| By: | María Laura Alzúa (CONICET-CEDLAS-UNLP); Guillermo Cruces (CONICET-CEDLAS-UNLP-IZA); Carolina Lopez (CONICET-CEDLAS-UNLP) |
| Abstract: | Youth training programs and their evaluations are ubiquitous, yet there is relatively little evidence on the mechanisms through which they operate and their effect on outcomes beyond the labor market. This is the motivation of our study of entra21 , a job training program for low income youth in Cordoba, Argentina. The program included life-skills and vocational training, as well as internships with private sector employers. Participants were allocated by means of a public lottery. We rely on detailed monthly administrative records for program participants, from which we construct a panel dataset including formal employment status, employment spells, earnings and welfare participation. These administrative records allow us to establish the effects of the program in the short term (18 months), but also – exceptionally for programs of this type in Latin America – in the medium term (36 months). The results indicate sizable gains of about 8 percentage points in formal employment in the short term (about 32% higher than the control group), although these effects tend to dissipate in the medium term. Contrary to what has been found for similar programs in the region, the effects of entra21 are substantially stronger for men, for whom the effects persist in the medium run. A dynamic analysis of employment transitions indicates that the program operates through an increase in the persistence of formal employment rather than from more frequent entries into employment. Program participants also exhibit earnings up to 50% higher than those in the control group, and an analysis of bounds indicates that these gains result from both higher employment levels and higher wages. The higher persistence and higher earnings suggest that the program was successful in increasing the human capital of participants rather than (or in addition to) providing contacts or formal intermediation. With respect to results beyond employment, women selected for the program exhibit lower levels of welfare dependency – younger participants (aged 18 to 24) are less likely to receive child-related public cash transfers over the whole period of analysis. Finally, we present original evidence on the relationship between formal employment and consumer credit use. Program participants exhibit a higher probability of having requested consumer credit, and a higher probability of holding bank debts in good standing. These results indicate that training and internship programs directed at disadvantaged youth can provide other indirect benefits that are not usually accounted for in existing evaluations. |
| JEL: | J08 J24 J68 O15 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0177&r=lab |
| By: | Peter Huber |
| Abstract: | I analyse the importance of national migration policy and labour market institutions for immigrants’ labour market integration. Results indicate that the sending country structure of immigrants to a country, its ethnic diversity and its wage bargaining institutions as well as product market regulation are the most important national institutions impacting immigrants’ labour market integration. Variables related to the generosity of the welfare state and tax progressivity are, by contrast, only important in selecting migrants with high employment probabilities and migration policy variables remain unimportant altogether. Countries with more centralized wage bargaining, stricter product market regulation and countries with a higher union density, have worse labour market outcomes for their immigrants relative to natives even after controlling for compositional effects. Immigrants with better chances for labour market integration on account of observable characteristics self-select to countries with more centralised wage bargaining and higher minimum wages but a lower coverage rate by collective agreements. Liberal product market regulation, less centralised wage bargaining and ensuring inclusive trade unions thus assist the integration of immigrants in host countries’ labour markets most strongly. |
| Keywords: | Immigrant Integration, Migration Policy, Labour Market Institutions |
| JEL: | J15 J61 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2015:m:1:d:0:i:77&r=lab |
| By: | Friese, Max |
| Abstract: | The paper shows the effect of demographic change on per capita burden of financing a PAYG social security system in the standard OLG model with frictional labor markets. Rising longevity and decreasing fertility both induce a rise in the employment level via increased capital accumulation and job openings. Simulations of the theoretical model show that this labor market effect indirectly crowds out part of the initial demographic shock's direct impact on per capita financing burden. This holds true for the generation at the period of impact as well as for the following generations. |
| Keywords: | OLG,demographic change,frictional labor market,PAYG social security,per capita burden of financing social security |
| JEL: | E24 H55 J64 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:roswps:138&r=lab |
| By: | David Card (UC Berkeley, NBER, and IZA); Zhuan Pei (Brandeis University); Andrew Johnston (University of Pennsylvania); Pauline Leung (Princeton University); Alexandre Mas (Princeton University, NBER, and IZA) |
| Abstract: | We provide new evidence on the effect of the unemployment insurance (UI) weekly benefit amount on unemployment insurance spells based on administrative data from the state of Missouri covering the period 2003-2013. Identification comes from a regression kink design that exploits the quasi-experimental variation around the kink in the UI benefit schedule. We find that UI durations are more responsive to benefit levels during the recession and its aftermath, with an elasticity between 0.65 and 0.9 as compared to about 0.35 pre-recession.Length: 29 pages |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:brd:wpaper:82&r=lab |
| By: | Fossen, Frank M. (Free University of Berlin); König, Johannes (Freie Universität Berlin) |
| Abstract: | We estimate the impact of a differential treatment of paid employees versus self-employed workers in a public health insurance system on the entry rate into entrepreneurship. In Germany, the public health insurance system is mandatory for most paid employees, but not for the self-employed, who usually buy private health insurance. Private health insurance contributions are relatively low for the young and healthy, and until 2013 also for males, but less attractive at the other ends of these dimensions and if membership in the public health insurance allows other family members to be covered by contribution-free family insurance. Therefore, the health insurance system can create incentives or disincentives to starting up a business depending on the family's situation and health. We estimate a discrete time hazard rate model of entrepreneurial entry based on representative household panel data for Germany, which include personal health information, and we account for non-random sample selection. We estimate that an increase in the health insurance cost differential between self-employed workers and paid employees by 100 euro per month decreases the annual probability of entry into self-employment by 0.38 percentage points, i.e. about a third of the average annual entry rate. The results show that the phenomenon of entrepreneurship lock, which an emerging literature describes for the system of employer provided health insurance in the USA, can also occur in a public health insurance system. Therefore, entrepreneurial activity should be taken into account when discussing potential health care reforms, not only in the USA and in Germany. |
| Keywords: | health insurance, entrepreneurship lock, self-employment |
| JEL: | L26 I13 J2 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8816&r=lab |
| By: | Gary Charness (Department of Economics, University of California, Santa Barbara, 2127 North Hall, Santa Barbara, CA 93106-9210); David Masclet (CREM, CNRS, University of Rennes, 7 place Hoche, 35000 Rennes, France, and CIRANO, Montreal, Canada); Marie Claire Villeval (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France) |
| Abstract: | Unethical behavior within organizations is not rare. We investigate experimentally the role of status-seeking behavior in sabotage and cheating activities aiming at improving one’s performance ranking in a flat-wage environment. We find that average effort is higher when individuals are informed about their relative performance. However, ranking feedback also favors disreputable behavior. Some individuals do not hesitate to incur a cost to improve their rank by sabotaging others’ work or by increasing artificially their own performance. Introducing sabotage opportunities has a strong detrimental effect on performance. Therefore, ranking incentives should be used with care. Inducing group identity discourages sabotage among peers but increases in-group rivalry. |
| Keywords: | Status, ranking, feedback, sabotage, doping, competitive preferences, experiment |
| JEL: | C91 C92 M54 D63 J28 J31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1431&r=lab |
| By: | Robert Beyer; Michael Stemmer |
| Abstract: | We analyze the distribution of regional unemployment in Europe over the last three decades using non-parametric kernel densities and stochastic kernels. In addition, we employ a multi-level factor model to separate European, country, and region-specific unemployment fluctuations. Three phases of distributional change of EU relative unemployment rates are detected: they polarized from 1986 to 1996, converged after the introduction of the Euro and have been polarizing again since the outbreak of the financial crisis, having reached the highest levels ever. We find that European fluctuations account for roughly two fifths of the total variance confirming the existence of a European unemployment cycle. Country fluctuations are equally important, which leaves one fifth to be explained by region-specific movements. German regions are found to respond negatively to the European factor and country movements cause diverse responses in particular in Italy and England. The convergence prior to 2007 can be attributed to country affects and the divergence thereafter both to country and region-specific factors. Finally, we also discuss within country heterogeneity. |
| Keywords: | unemployment; European regions; distribution dynamics; multi-level factor model |
| JEL: | R12 R23 C14 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:458&r=lab |
| By: | Victor Lavy; Edith Sand |
| Abstract: | In this paper, we estimate the effect of primary school teachers’ gender biases on boys’ and girls’ academic achievements during middle and high school and on the choice of advanced level courses in math and sciences during high school. For identification, we rely on the random assignments of teachers and students to classes in primary schools. Our results suggest that teachers’ biases favoring boys have an asymmetric effect by gender— positive effect on boys’ achievements and negative effect on girls’. Such gender biases also impact students’ enrollment in advanced level math courses in high school—boys positively and girls negatively. These results suggest that teachers’ biased behavior at early stage of schooling have long run implications for occupational choices and earnings at adulthood, because enrollment in advanced courses in math and science in high school is a prerequisite for post-secondary schooling in engineering, computer science and so on. This impact is heterogeneous, being larger for children from families where the father is more educated than the mother and larger on girls from low socioeconomic background. |
| JEL: | J16 J24 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20909&r=lab |