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on Labour Economics |
| By: | Mullen, Kathleen J.; Staubli, Stefan |
| Abstract: | A key component for estimating the optimal size and structure of disability insurance (DI) programs is the elasticity of DI claiming with respect to benefit generosity. Yet, in many countries, including the United States, all workers face identical benefit schedules, which are a function of one’s labor market history, making it difficult to separate the effect of the benefit level from the effect of unobserved preferences for work on individuals’ claiming decisions. To circumvent this problem, we exploit exogenous variation in DI benefits in Austria arising from several reforms to its DI and old age pension system in the 1990s and 2000s. We use comprehensive administrative social security records data on the universe of Austrian workers to compute benefit levels under six different regimes, allowing us to identify and precisely estimate the elasticity of DI claiming with respect to benefit generosity. We find that, over this time period, a one percent increase in potential DI benefits was associated with a 1.2 percent increase in DI claiming. |
| Keywords: | Benefit Generosity; Claiming Elasticity; Disability Insurance; Labor Force Withdrawal |
| JEL: | H55 J14 J22 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10987&r=lab |
| By: | Ginters Buss (Bank of Latvia) |
| Abstract: | This paper examines, in an estimated, full-fledged New Keynesian DSGE model with Nash wage bargaining, sticky wage and high value of leisure akin to Christiano, Trabandt and Walentin (2011), whether search-and-matching frictions in the labour market can explain aggregate labour market dynamics in Latvia. If vacancies are not observed, the model can, to a reasonable degree, generate realistic variance and dynamics of unemployment and the correlation between unemployment and (latent) vacancies, yet at the expense of too volatile vacancies. As a by-product, one quarter ahead forecasts of hours worked and GDP exhibit less excess volatility and, thus, are more precise compared to a model without search-and-matching frictions. However, if both unemployment and vacancies are observed and a shock to matching efficiency is allowed for, then cyclical behaviour of forecasted vacancies as well as correlation between unemployment and vacancies tend to counter the data (to the advantage of a better fit of vacancy volatility), and the smoothed matching efficiency is counter-intuitively counter-cyclical. Hence the model cannot fit the three statistics – variance of unemployment and vacancies, and correlation between the two, simultaneously. |
| Keywords: | DSGE model, unemployment, small open economy, Bayesian estimation, currency union, forecasting |
| JEL: | E0 E3 F0 F4 G0 G1 |
| Date: | 2015–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:ltv:wpaper:201504&r=lab |
| By: | Cacciatore, Matteo; Duval, Romain; Fiori, Giuseppe; Ghironi, Fabio |
| Abstract: | This paper explores the effects of labor and product market reforms in a New Keynesian, small open economy model with labor market frictions and endogenous producer entry. We show that it takes time for reforms to pay off, typically at least a couple of years. This is partly because the benefits materialize through firm entry and increased hiring, both of which are gradual processes, while any reform-driven layoffs are immediate. Some reforms---such as reductions in employment protection---increase unemployment temporarily. Implementing a broad package of labor and product market reforms minimizes transition costs. Importantly, reforms do not have noticeable deflationary effects, suggesting that the inability of monetary policy to deliver large interest rate cuts in their aftermath---either because of the zero bound on policy rates or because of membership in a monetary union---may not be a relevant obstacle to reform. Alternative simple monetary policy rules do not have a large effect on transition costs. |
| Keywords: | employment protection; firm entry; product market regulation; structural reforms; unemployment benefits |
| JEL: | E24 E32 E52 F41 J64 L51 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10982&r=lab |
| By: | Sarantis Kalyvitis (Athens University of Economics and Business) |
| Abstract: | This study assesses the quality of Greek exports and links the estimates with exporters’ characteristics. Export quality in manufacturing is estimated to have fallen by 1% per year on average for the period 1998-2010, but recovered in 2011 and 2012 when export quality displayed a cumulative rise of 25.7%, yielding a cumulative rise of 9.2% for the entire period 1998-2012. Export quality in agriculture displays a slightly upward trend with the average annual rise over the period 1998-2012 amounting to 1.6%. Linking the quality estimates at the product level with exporting firms in the manufacturing sector shows that higher product quality is associated with firms that have a higher share of their wage bill paid to skilled workers. This positive relationship stems from firms with higher skilled to unskilled employment ratios, rather than higher wage skill premia, and is more pronounced in large and rich destinations. |
| Keywords: | international trade; firm exporting; product quality |
| JEL: | F14 L15 L25 J31 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:201&r=lab |
| By: | Deborah A. Cobb-Clark (Melbourne Institute of Applied Economic and Social Research, University of Melbourne); Julie Moschion (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Brotherhood of St Laurence) |
| Abstract: | This paper analyzes the source of the gender gap in third grade numeracy and reading. We adopt an Oaxaca-Blinder approach and decompose the gender gap in educational achievement into endowment and response components. Our estimation relies on unusually rich panel data from the Longitudinal Survey of Australian Children in which information on child development reported by parents and teachers is linked to each child’s results on a national, standardized achievement test. We find that girls in low- and middle-SES families have an advantage in reading, while boys in highSES families have an advantage in numeracy. Girls score higher on their third grade reading tests in large part because they were more ready for school at age four and had better teacher-assessed literacy skills in kindergarten. Boys’ advantage in numeracy occurs because they achieve higher numeracy test scores than girls with the same education-related characteristics. Classification-J16, I21, I24 |
| Keywords: | Gender gaps, educational achievement, education, Australia |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2015n23&r=lab |
| By: | Céline Carrère; Anja Grujovic; Frédéric Robert-Nicoud |
| Abstract: | We develop a multi-country, multi-sector trade model with labor market frictions and equilibrium unemployment. Trade opening leads to a reduction in unemployment if it raises real wages and reallocates labor towards sectors with lower-than-average labor market frictions. We estimate sector-specific labor market frictions and trade elasticities using employment data from 25 OECD countries and worldwide trade data. We then quantify the potential unemployment and real wage effects of implementing the Transatlantic Trade and Investment Partnership (TTIP) or the Trans-Pacific Partnership (TPP), and of eliminating trade imbalances worldwide The unemployment and real wage effects work in conflicting directions for some countries under some trade regimes, such as the US under TTIP. We introduce a welfare criterion that accounts for both effects and splits such ties. Accordingly, US welfare is predicted to decrease under TTIP and increase under TPP. |
| Keywords: | labor market frictions, unemployment, trade |
| JEL: | F15 F16 F17 J64 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0189&r=lab |
| By: | David Lancaster (Reserve Bank of Australia); Peter Tulip (Reserve Bank of Australia) |
| Abstract: | We find that Okun's law provides a simple and accurate means of understanding and predicting changes in the unemployment rate in Australia. Okun's law also implies a rate of output growth consistent with stable unemployment, called the growth of potential output. Our estimates of potential output growth are imprecise and fluctuate over time. A recent estimate is a bit below 3 per cent a year, with a +/– one standard error band covering the range 2\textonequarter to 3\textthreequarters per cent. This is a percentage point or two below estimates from before the mid 1990s. |
| Keywords: | Okun's law; potential output; unemployment |
| JEL: | E24 E27 J64 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:rba:rbardp:rdp2015-14&r=lab |
| By: | Gobillon, Laurent; Solignac, Matthieu |
| Abstract: | We investigate the difference in homeownership rates between natives and first-generation immigrants in France, and how this difference evolves over the 1975-1999 period, by using a large longitudinal dataset. We find that the homeownership gap is large and has increased. Entries into the territory have a large negative effect on the evolution of homeownership rates for immigrants. Although entrants have on average better education than people staying in the territory for the entire period (i.e. stayers), they are younger and thus at an earlier stage in the wealth accumulation process. They are also located in large cities, where the homeownership rate is lower, and the returns to their characteristics are lower than those for stayers. Leavers have a positive effect on the evolution of homeownership rates for immigrants because they have a low access to homeownership and they exit the country. But this effect is only one-third that of entrants. For stayers, we show that returns to characteristics change in favor of immigrants, which is consistent with assimilation theories. However, among stayers who access homeownership, immigrants end up in owned dwellings that are of lesser quality than natives. |
| Keywords: | homeownership; immigrants; longitudinal data |
| JEL: | J15 R21 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10975&r=lab |
| By: | Sandrine Cazes; Alexander Hijzen; Anne Saint-Martin |
| Abstract: | This paper presents the OECD Framework for Measuring and Assessing Job Quality developed jointly by the Employment, Labour and Social Affairs Directorate and the Statistics Directorate of the OECD as part of a broader EU-supported project1 and describes its links to the broader well-being agenda pursued by the OECD. The approach to job quality taken is explicitly multi-dimensional and defined in terms of earnings quality, labour market security and quality of working environment. The paper then discusses measurement choices and indicators selected for each of the three dimensions of job quality, highlighting the main limitations on the data front. Finally, the paper documents job quality across OECD and non OECD countries as well as across socio-economic groups for which data are available.<BR>Ce document présente le nouveau cadre de mesure et d’évaluation de la qualité de l’emploi, développé conjointement par la Direction de l’Emploi, du Travail et des Affaires Sociales et la Direction des Statistiques de l’OCDE. Ce travail s’inscrit dans un projet plus large sur la qualité de l’emploi, financé par l’Union Européenne. La qualité de l’emploi y est décrite en relation avec l’agenda plus global de l’OCDE sur le bien-être. L’approche choisie pour définir la qualité de l’emploi est explicitement multidimensionnelle et retient la qualité des revenus du travail, la sécurité sur le marché du travail et la qualité de l’environnement professionnel comme les trois dimensions fondamentales. Le papier discute ensuite les choix méthodologiques et les indicateurs proposés dans le cadre de mesure, en en soulignant les possibles limites. Enfin, le papier présente un portrait statistique de la qualité de l’emploi, entre pays (OCDE et non OCDE) mais aussi par groupes sociodémographiques. |
| JEL: | I31 J28 J65 J81 |
| Date: | 2015–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:174-en&r=lab |
| By: | Lajos Tamás Szabó (Magyar Nemzeti Bank (the Central Bank of Hungary)) |
| Abstract: | Labour market tightness, that is the ratio of jobs to the unemployed, has an impact on wage setting, which also affects inflation. Among other things, the unemployment gap, which is the difference between unemployment rate and non-accelerating inflation rate of unemployment (NAIRU), is used to measure inflationary pressure from the labour market. This paper examines which of the NAIRU estimation methods described in the literature can be applied to Hungary. In evaluating the results, the revisional property of the NAIRU is also examined, as well as the forecast capacity of the unemployment gap with regard to wages. Based on these, the model containing the tightness indicator performs the best. This is notable from a forecasting perspective, because the vast majority of estimates in the literature use wages to provide an estimate of the unemployment gap. Therefore, an indicator which does not use wages at all to estimate the unemployment gap performs the best in forecasting wage growth. Based on the estimation the NAIRU has decreased in recent years. Of the factors affecting the NAIRU, the variables describing the general macro environment (total factor productivity, long-term unemployed, number of persons employed in construction, risk premium) have considerablely contributed to the decrease in the NAIRU, which may have been complemented by changes in labour market institutions. Based on the literature, the latter may be useful when explaining the differences between countries. For the estimation of these factors’ effects (e.g. decrease in the tax wedge, transformation of the unemployment benefit system etc.) further research is necessary. Within the framework of the sensitivity analysis, if the groups which are loosely linked to the labour market (e.g. discouraged workers) are also regarded as part of the free labour force capacity, the view of the tightness of the labour market (the unemployment gap) does not change. However, the results are sensitive to the assumption made about the labour market status of fostered workers. |
| Keywords: | NAIRU, unemployment, wages, vacancies |
| JEL: | E24 J21 J69 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2015/5&r=lab |
| By: | Shoshana Dobrow Riza; Yoav Ganzach; Yihao Liu |
| Abstract: | The relationship between job satisfaction and time is a fundamental question in organizational behavior. Yet, given inconsistent results in the literature, the nature of this relationship has remained unresolved. Scholars' understanding of this relationship has been limited because studies have generally not simultaneously considered the two primary time metrics in job satisfaction research – age and tenure – and have instead relied on cross-sectional research designs. In this study, we develop and test an empirical model to provide a more definitive answer to the question of how age and tenure relate to job satisfaction. Our analyses draw on longitudinal data from 21,670 participants spanning a total of 34 waves of data collection across 40 years in two nationally representative samples. Multilevel analyses indicate that people became less satisfied as their tenure within a given organization increased, yet as people aged – and transitioned from organization to organization – their satisfaction increased. We also found that job rewards, as exemplified by pay, mediated these relationships. We discuss empirical, theoretical and practical implications of our findings. |
| Keywords: | job satisfaction; time; age; tenure; pay; longitudinal study |
| JEL: | R14 J01 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64664&r=lab |
| By: | Bruno Jeandidier; Helen Lim |
| Abstract: | The French civil code relating to divorce makes reference to the economics of marriage in specifying that in fixing alimony payments, judges should take into account the professional choices made by each spouse during the marriage for the sake of the union or for the children. According to the theory, traditional gender role specialisation results in men accumulating market human capital whilst women accumulate family-oriented human capital. Wage data in many countries indeed indicates that men tend to enjoy a marriage wage premium whilst women suffer a wage penalty. A corollary of this is that in the event of divorce, men are not penalised financially whereas women are. This paper analyses the empirical justification for alimony payments. An extensive review of the literature suggests that part of the premium observed for men is explained by a selection effect, and possibly other factors such as the effect of responsibility, or employer bias. In the case of women, it is motherhood and not marriage per se that has a clearly negative impact on wages. |
| Keywords: | Family wage gap, marriage, divorce, compensatory alimony payment. |
| JEL: | J12 J16 J31 K36 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2015-30&r=lab |
| By: | Glaser, Darrell; Rahman, Ahmed |
| Abstract: | This paper examines the effects of engineer-oriented and technical experience on job mobility during an era known for its rapid technological innovation and capital advancements: the late nineteenth and early twentieth centuries. We first develop an on-the-job search model to help us understand factors leading to job switching under rigid payment systems. Then, using longitudinal data on British and American naval officer- and engineer-careers, we demonstrate how ceteris paribus earnings-increases through promotions can decrease the probability of job switching. We also show how different forms of technical experience affect probabilities of job switching. Combining both insights and following a Topel and Ward (1992) based empirical framework, we find various rates of return to engineering and technical experience comparable to rates of return found today. To our knowledge these are the earliest historic estimates of returns to any type of technical skill. |
| Keywords: | human capital; job mobility; search theory; technological change; military personnel; naval history; skill premium |
| JEL: | J45 J6 J62 N3 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68351&r=lab |
| By: | Marie-Louise Leroux; Dario Maldonado; Pierre Pestieau |
| Abstract: | We consider a political economy model in which agents have the possibility to hide part of their earnings in order to avoid taxation. Taxation is exclusively used to finance a pension system. If the pension system is implemented, agents in their old age receive a benefit which includes both a Bismarkian and a Beveridgian component. We show that in the absence of compliance costs, agents are indifferent to the tax rate level as in response, they can perfectly adapt their level of compliance. The public pension system is found to be at least partially contributory in order to increase compliance and thus to increase the tax base. When compliance costs are introduced, perfect substitutability between compliance and taxation breaks down. Depending on the relative returns from public pensions and private savings as well as on the elasticity of compliance to income, we obtain that the preferred tax rate should be increasing or decreasing in income. The majority voting tax rate is more likely to be positive when the median income is low and when the return from public pensions dominates that of private savings. The level of the Bismarkian pillar will now be chosen so as to account for increased political support, for increased direct redistribution toward the worst-off agent, and increased tax base. |
| Keywords: | Compliance costs, majority voting, public pensions, tax evasion, |
| JEL: | H55 I13 D91 |
| Date: | 2015–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2015s-52&r=lab |