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.

Effects of Sexual Preferences on Earnings in the Netherlands

Abstract: A small literature suggests that bisexual and homosexual workers earn less than their heterosexual fellow workers and that a discriminating labor market is partly to blame. In this paper we examine whether sexual preferences affect earnings in the beginning of working careers in the Netherlands. We find (i) that young and highly educated gay male workers earn about 3 percent less than heterosexual men; (ii) that similarly qualified lesbian workers earn about 4 percent more than their heterosexual female coworkers; (iii) that in terms of earnings, bisexual workers are more comparable to heterosexual workers; and (iv) that among homosexual workers the gender gap is not observed. From this we conclude that the Dutch labor market does not discriminate on the basis of both sexual orientation and gender in entry level jobs.

Wage Rigidity and Job Creation

Abstract: Shimer (2005) and Hall (2005) have documented the failure of standard labor market search models to match business cycle fluctuations in employment and unemployment. They argue that it is likely that wages are not adjusted as regularly as suggested by the model, which would explain why employment is more volatile than the model predicts. We explore whether this explanation is consistent with the data. The main insight is that the relevant wage data for the search model are not aggregate wages, but wages of newly hired workers. Our results show that wages for those workers are much more volatile than aggregate wages and respond one-for-one to changes in labor productivity. Thus, we find no evidence for wage rigidity.

Panel Data Estimates of the Production Function and Product and Labor Market Imperfections

Abstract: Consistent with two models of imperfect competition in the labor market, the efficient bargaining model and the monopsony model, we provide two extensions of a microeconomic version of Hall's framework for estimating price-cost margins. We show that both product and labor market imperfections generate a wedge between factor elasticities in the production function and their corresponding shares in revenue, that can be characterized by a "joint market imperfections parameter". Using an unbalanced panel of 10646 French firms in 38 manufacturing industries over the period 1978-2001, we can classify these industries into six different regimes depending on the type of competition in the product and the labor market. By far the most predominant regime is one of imperfect competition in the product market and efficient bargaining in the labor market (IC-EB), followed by a regime of imperfect competition in the product market and perfect competition or right-to-manage bargaining in the labor market (IC-PR), and by a regime of perfect competition in the product market and monopsony in the labor market (PC- MO). For each of these three predominant regimes, we assess within-regime firm differences in the estimated average price-cost mark-up and rent-sharing or labor supply elasticity parameters, following the Swamy methodology to determine the degree of true firm dispersion. As a way to assess the plausibility of our findings in the case of the dominant regime (IC-EB), we also relate our industry and firm-level estimates of price-cost mark-up and relative extent of rent sharing to industry characteristics and firm-specific variables respectively.

Lying and Team Incentives

Abstract: We investigate the influence of two widespread compensation schemes, individual piece-rates and team incentives, on participants' inclination to lie, by adapting the experimental setup of Fischbacher and Heusi (2008). Lying turns out to be more pronounced under team incentives than under individual piece-rates, which highlights a so far fairly neglected feature of these compensation schemes.