Institute for the Study of Labor

About: Institute for the Study of Labor is a nonprofit organization based out in Bonn, Germany. It is known for research contribution in the topics: Wage & Unemployment. The organization has 2039 authors who have published 13475 publications receiving 439376 citations.

Do 'High-Performance' Work Practices Improve Establishment-Level Outcomes?

Abstract: Studies of how different work practices affect organizational performance have suffered from methodological problems Especially intractable has been the difficulty of establishing whether observed links are causal or merely reflect pre-existing differences among firms This analysis uses a national probability sample of establishments, measures of work practices and performance that are comparable across organizations, and, most important, a unique longitudinal design incorporating data from a period prior to the advent of high-performance work practices The conclusion most strongly supported by the evidence is that work practices transferring power to employees, often described as "high-performance" practices, raise labor costs per employee, suggesting that they may raise employee compensation Higher compensation is a cost to employers, although some statistically weak evidence points to these practices raising productivity The authors find little effect of high-performance work practices on overall labor efficiency, which they measure as the output per dollar spent on labor

Trends of School Effects on Student Achievement: Evidence from NLS:72, HSB:82, and NELS:92

Abstract: The impact of schools on student achievement has been of great interest for the last four decades. This study examines trends of school effects on student achievement employing three national probability samples of high school seniors: NLS:72, HSB:82, and NELS:92. Hierarchical linear models are used to investigate school effects. The findings reveal that the substantial proportion of the variation in student achievement lies within schools not between schools. There is also considerable between school variation in achievement, which becomes larger over time. Schools are more diverse and more segregated in the 1990s than in the 1970s. In addition, school characteristics such as school region, school SES, and certain characteristics of the student body of the school, such as students' daily attendance, students in college preparatory classes, and high school graduates enrolled in colleges are important predictors of average student achievement. The school predictors explained consistently more than 50% of the variation in average student achievement across surveys. We also find considerable teacher heterogeneity in achievement within schools, which suggests important teacher effects on student achievement. Teacher heterogeneity in student achievement was larger than school heterogeneity, which may indicate that teacher effects have a relatively larger impact on mathematics and science student achievement than school effects.

Myth and Reality of Flat Tax Reform: Micro Estimates of Tax Evasion Response and Welfare Effects in Russia

Abstract: Using micro-level data, we examine the effects of Russia's 2001 flat rate income tax reform on consumption, income, and tax evasion. We use the gap between household expenditures and reported earnings as a proxy for tax evasion with data from a household panel for 1998-2004. Utilizing difference-in-difference and regression-discontinuity-type approaches, we find that large and significant changes in tax evasion following the flat tax reform are associated with changes in voluntary compliance and cannot be explained by changes in tax enforcement policies. We also find the productivity response of taxpayers to the flat tax reform is small relative to the tax evasion response. Finally, we develop a feasible framework to assess the deadweight loss from personal income tax in the presence of tax evasion based on the consumption response to tax changes. We show that because of the strong tax evasion response the efficiency gain from the Russian flat tax reform is at least 30% smaller than the gain implied by conventional approaches.

Biological Gender Differences, Absenteeism and the Earning Gap

Abstract: In most Western countries illness-related absenteeism is higher among female workers than among male workers. Using the personnel dataset of a large Italian bank, we show that the probability of an absence due to illness increases for females, relative to males, approximately 28 days after a previous illness. This difference disappears for workers age 45 or older. We interpret this as evidence that the menstrual cycle raises female absenteeism. Absences with a 28-day cycle explain a significant fraction of the male-female absenteeism gap. To investigate the effect of absenteeism on earnings, we use a simple signaling model in which employers cannot directly observe workers' productivity, and therefore use observable characteristics - including absenteeism - to set wages. Since men are absent from work because of health and shirking reasons, while women face an additional exogenous source of health shocks due to menstruation, the signal extraction based on absenteeism is more informative about shirking for males than for females. Consistent with the predictions of the model, we find that the relationship between earnings and absenteeism is more negative for males than for females. Furthermore, this difference declines with seniority, as employers learn more about their workers' true productivity. Finally, we calculate the earnings cost for women associated with menstruation. We find that higher absenteeism induced by the 28-day cycle explains 11.8 percent of the earnings gender differential.

Insider Power in Wage Determination

Abstract: The paper argues that wage determination is best seen as a kind of rent sharing in which workers' bargaining power is influenced by conditions in the external labour market. It uses British establishment data from 1984 to show that pay depends upon a blend of insider pressure (including the employer's financial performance and oligopolistic position) and outsider pressure (including external wages and unemployment). Lester's feasible 'range' of wages appears typically to be between 8% and 22% of pay. Estimates of the unemployment elasticity of the wage lie in a narrow band around -0.1.