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on Labor Markets - Supply, Demand, and Wages |
| By: | Dustmann, Christian; Schönberg, Uta; Stuhler, Jan |
| Abstract: | By exploiting a commuting policy that led to a sharp and unexpected inflow of Czech workers to areas along the German-Czech border, we examine the impact of an exogenous immigration-induced labor supply shock on local wages and employment of natives. On average, the supply shock leads to a moderate decline in local native wages and a sharp decline in local native employment. These average effects mask considerable heterogeneity across groups: while younger natives experience larger wage effects, employment responses are particularly pronounced for older natives. This pattern is inconsistent with standard models of immigration but can be accounted for by a model that allows for a larger labor supply elasticity or a higher degree of wage rigidity for older than for young workers. We further show that the employment response is almost entirely driven by diminished inflows of natives into work rather than outflows into other areas or non-employment, suggesting that "outsiders" shield"insiders" from the increased competition. |
| Keywords: | Immigration; internal migration; labor supply elasticity; wage effects |
| JEL: | J21 J22 J61 R23 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11436&r=lma |
| By: | Stefan Pichler; Nicolas R. Ziebarth |
| Abstract: | This paper provides an analytical framework and uses data from the US and Germany to test for the existence of contagious presenteeism and negative externalities in sickness insurance schemes. The first part exploits high-frequency Google Flu data and the staggered implementation of U.S. sick leave reforms to show in a reduced-from framework that population-level influenza-like disease rates decrease after employees gain access to paid sick leave. Next, a simple theoretical framework provides evidence on the underlying behavioral mechanisms. The model theoretically decomposes overall behavioral labor supply adjustments ('moral hazard') into contagious presenteeism and noncontagious absenteeism behavior and derives testable conditions. The last part illustrates how to implement the model exploiting German sick pay reforms and administrative industry-level data on certified sick leave by diagnoses. It finds that the labor supply elasticity for contagious diseases is significantly smaller than for noncontagious diseases. Under the identifying assumptions of the model, in addition to the evidence from the U.S., this finding provides indirect evidence for the existence of contagious presenteeism. |
| JEL: | I12 I13 I18 J22 J28 J32 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22530&r=lma |
| By: | Manoli, Dayanand (University of Texas at Austin); Weber, Andrea (Vienna University of Economics and Business) |
| Abstract: | We present quasi-experimental evidence on the effects of increasing the Early Retirement Age (ERA) on older workers' retirement decisions. The analysis is based on social security reforms in Austria in 2000 and 2004, and administrative data allows us to distinguish between pension claims and job exits. Using a Regression Kink Design, we estimate that, within a birth cohort, a 1.0 year increase in the ERA leads to a 0.4 year increase in the average job exiting age and a 0.5 year increase in the average pension claiming age. When the ERA increases, many older workers remain in their jobs longer. |
| Keywords: | retirement, early retirement age, pension reform, life cycle labor supply, regression kink design |
| JEL: | H55 J21 J22 J26 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10154&r=lma |
| By: | Matthew Wiswall; Basit Zafar |
| Abstract: | This paper studies how individuals "believe" human capital investments will affect their future career and family life. We conducted a survey of high-ability currently enrolled college students and elicited beliefs about how their choice of college major, and whether to complete their degree at all, would affect a wide array of future events, including future earnings, employment, marriage prospects, potential spousal characteristics, and fertility. We find that students perceive large "returns" to human capital not only in their own future earnings, but also in a number of other dimensions (such as future labor supply and potential spouse's earnings). In a recent follow-up survey conducted six years after the initial data collection, we find a close connection between the expectations and current realizations. Finally, we show that both the career and family expectations help explain human capital choices. |
| JEL: | D81 D84 I21 I23 J10 J12 J13 J16 J24 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22543&r=lma |
| By: | Patric Diriwächter; Elena Shvartsman (University of Basel) |
| Abstract: | This paper analyses how individual job satisfaction is affected by wage changes. In order to account for potential dynamic effects of wage changes on job satisfaction, we include lead and lag effects of income changes in our analysis. Furthermore, we examine the role of social comparisons, i.e. how an individual’s job satisfaction is driven not only by changes in his wages, but also by the size of these changes relative to wage changes within his reference group. Results from an individual fixed effects regression indicate that wage increases have a statistically significant positive effect on job satisfaction. This effect exhibits a dynamic pattern. We observe an anticipation effect of a positive wage change, i.e. individuals are more satisfied with their job one year ahead of the wage increase. Also, we find statistically significant positive, but declining effects on job satisfaction four years after the wage increase, i.e. partial adaptation. We find that an additional increase in job satisfaction is obtained when the individual’s wage increase exceeds the average wage increase for his reference group. However, this effect does not appear to persist, as it is only statistically significant in the first period after the wage change. |
| Keywords: | wage change, job satisfaction, anticipation and adaptation |
| JEL: | J28 M50 M52 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2016/03&r=lma |
| By: | Pérez, Javier J.; Aouriri, Marie; Campos, Maria M.; Celov, Dmitrij; Depalo, Domenico; Papapetrou, Evangelia; Pesliakaitė, Jurga; Ramos, Roberto; Rodríguez-Vives, Marta |
| Abstract: | This paper examines the overall macroeconomic impact arising from reform in government wages and employment, at times of fiscal consolidation. Reform of these two components of the government wage bill appeared necessary for containing the deterioration of the public finances in several EU countries, as a consequence of the financial crisis. Such reforms entailed in some instances, but not always, the implementation of cost-cutting measures affecting the government wage bill, as part of broader consolidation packages that typically hinged more heavily on other fiscal instruments, like public investment. While such measures have adverse short-term macroeconomic effects, public wage bill restraining policy changes present the idiosyncrasy that they can yield medium- to longer-term benefits due to possible competitiveness and efficiency gains through their impact on labour market dynamics. This paper provides some evidence of such medium- to long-run effects, based on a wealth of micro and macro data in the euro area and the EU. It concludes that appropriately designed government wage bill moderation could indeed produce positive dividends to the economy, which depend on certain country-specific conditions. These gains can be reinforced by relevant fiscal-structural reforms. JEL Classification: H50, E62, J45 |
| Keywords: | fiscal consolidation, fiscal policies, labour market, public employment, public wages |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:2016176&r=lma |
| By: | Gallen, Yana |
| Abstract: | While a large literature is devoted to understanding the impact of maternity leave on children's outcomes and the careers of women, less is known about the consequences of maternity leave at the workplace. This paper studies the effects of maternity leave on firms and coworkers by examining a 2002 Danish reform which increased the length of parental leave by 22 weeks. The timing of the policy change gives random variation in the length of leave available to women who gave birth around the time of the reform. I find no detectable effect of the reform on the earnings or promotions of coworkers in any of the five years after the reform (point estimates are about $100) and can reject differences in yearly earnings larger than $425 overall and differences larger than $280 for female coworkers. While there are some costs for coworkers in the same occupation as women who give birth in the sample period, these costs are 1-1.5 percent of earnings. I also find evidence that the reform increases the probability of firm shut-down by about two percentage points five years after the reform, concentrated among relatively small firms. Conditional on survival, I find no impact of the reform on firm value added. |
| Keywords: | Maternity leave, employee absence, coworkers |
| JEL: | J24 J32 J38 L23 |
| Date: | 2016–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73284&r=lma |
| By: | Emilio Depetris-Chauvin (Pontificia Universidad Católica de Chile); Ömer Özak (Southern Methodist University) |
| Abstract: | This research explores the deep historical roots and persistent effects of the division of labor in pre-modern societies. It advances the hypothesis, and establishes empirically that population diversity had a positive causal effect on the division of labor. Based on a novel ethnic level dataset combining geocoded ethnographic, linguistic and genetic data, this research exploits the exogenous variation in population diversity generated by historical migratory patterns to causally establish that higher levels of population diversity were conducive to economic specialization (of labor) and the emergence of trade-related institutions that, in turn, translated into differences in pre-modern comparative development. Additionally, this research provides suggestive evidence that regions historically inhabited by pre-modern societies with higher levels of economic specialization have higher levels of contemporary occupational heterogeneity, economic complexity and development. |
| Keywords: | Economic Specialization, Division of Labor, Trade, Comparative Development, Economic Development, Human Capital, Skill-Bias, Population Diversity, Genetic Diversity, Linguistic Diversity, Cultural Diversity, Persistence, Serial Founder Effect |
| JEL: | D74 F10 F14 J24 N10 O10 O11 O12 O40 O43 O44 Z10 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:1610&r=lma |
| By: | Murphy, Anne L. |
| Abstract: | In 1965 Sidney Pollard published The Genesis of Modern Management, an extended discussion of the problems, during Britain's initial period of industrialisation, of the 'internal management' of the firm. But, in his focus on industry, Pollard ignored one of the largest, most significant and most innovative of the enterprises of the late-eighteenth- and early-nineteenth centuries: The Bank of England. This paper focuses on the Bank as a site of precocious managerial development. It first establishes that the Bank, by the latter part of the eighteenth century, encompassed the complexities of a large-scale industrial enterprise. It employed a workforce of several hundred. Its workers operated in specialised and coordinated capacities. Its managerial hierarchy was diffuse and dependent on employed men, rather than the elected directorate. The Bank, therefore, warrants comparison with the types of enterprises identified by Pollard. Focusing on the 1780s, the paper then explores the Bank's organisational and management structure against Pollard's four aspects of management: 'the creation and training of a class of managers; 'the recruitment, training, disciplining and acculturation of labour'; the use of 'accountancy, and other information ... in the rational determination of their decisions' and finally the question of whether there emerged a 'theory and practice of "management"'. It will demonstrate that, although not always applied effectively, the Bank's senior men did show managerial innovation and skill in training and organising the workforce and were able to make informed decisions which had the potential to improve some of the Bank's processes. |
| Keywords: | Bank of England,managerial development,organisational structure,banking history |
| JEL: | N00 N83 L2 J24 J50 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eabhps:1602&r=lma |
| By: | Liang, Zhe (University of Nottingham); Appleton, Simon (University of Nottingham); Song, Lina (University of Nottingham) |
| Abstract: | We empirically deconstruct informal employment in China into private business owners and casual workers without job contracts. Survey data from 2007 and 2013 document a rise in informal employment to the point where it exceeds formal employment, potentially an unintended consequence of the 2008 New Labour Contract Law. Compared with formal employees and business owners, casual workers report the lowest monetary and subjective wellbeing although business owners work longer hours with less social protection. Descriptive statistics and multivariate modelling reveal formal employees tend to have more favoured characteristics, often being educated, male, healthy and able bodied. Casual workers are more likely to have the characteristics of vulnerable groups, so the growth of casual employment is particularly concerning. There are indications that running small business is not always a sign of vulnerability and it may provide job flexibility for those with dependents to care for. |
| Keywords: | informal employment, determinants, human capital, China |
| JEL: | D03 J46 O15 P23 P36 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10139&r=lma |
| By: | Lommatzsch, Kirsten; Silgoner, Maria; Ramskogler, Paul |
| Abstract: | It has been argued that the increasing importance of global value chains necessitates a modification of conventional competitiveness measures. We compile a broad dataset including value added trade, gross exports and conventional and value added based real exchange rates. To sharply focus on external competitiveness, a new price competitiveness indicator is introduced, the TWULC (Trade Weighted Unit Labour Cost indicator). It weights sector-specific cost trends according to sector shares in exports. Econometric tests for a panel of 38 countries show that the focus on value added trade generally improves the explanatory power of export equations. Value added exports’ sensitivity towards real exchange rates is up to four times higher than that of gross exports. Real effective ex-change rates focusing on exporting industries and on value added weights yield more robust results across the specifications, but do not systematically outperform the more conventional measures of price of cost competitiveness. JEL Classification: F14, J30 |
| Keywords: | competitiveness, external trade, labour costs |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20161936&r=lma |