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.

Contractual Wages and the Wage Cushion under Different Bargaining Settings

Abstract: How does a typically European bargaining system, with collective bargaining and national minimum wage, coexist with low unemployment and high wage flexibility? A unique data set on workers, firms, and collective bargaining contracts in Portugal is used to analyze the determinants of both the contractual wage and the wage cushion (difference between contractual and actual wages). The results indicate that the wage cushion stretches the returns to worker and firm attributes, whereas it shrinks the returns to union power. Therefore, firm‐specific arrangements partly offset collective bargaining, granting firms certain freedom when setting wages. Contractual wages reflect trade unions' egalitarian policy.

Public Sector Labor Markets

Abstract: This paper provides a critical survey of the literature dealing with public sector labor markets. It discusses the research by economists on wage determination in the state and local sector (including the effects of unions), on the estimation of compensating wage differentials for pecuniary and nonpecuniary job characteristics, on the effects of unions on productivity, on the estimation of public/private pay differentials, and on gender and race discrimination in the public sector. Numerous suggestions for future research are offered.

Evaluating Preschool Programs When Length of Exposure to the Program Varies: A Nonparametric Approach

Abstract: This paper uses a large, nonexperimental data set to evaluate the effects of a preschool enrichment program in a developing country on cognitive, psycho-social, and anthropometric outcomes. Outcomes are shown to be highly dependent on age and duration of exposure to the program. To minimize the impact of distributional assumptions, program impacts are estimated nonparametrically as a function of age and duration. A generalized version of the method of matching is developed and used to control for nonrandom selectivity into the program or into alternative program durations. The estimates obtained using this method reveal a different pattern of program impacts with respect to age and duration than does a parametric model under more restrictive functional form assumptions. The estimates based on matching show a greater dependence of test score impacts on duration of exposure to the program and show larger impacts for the anthropometric measures for a range of durations. Impact estimates are based on three different comparison groups: children in the same communities in which the program was introduced who were not in the program, children in similar communities in which the program had not yet been introduced, and children who were in the program for a month or less. The average impact estimates for test score outcomes are robust to the three alternative comparison groups. The preschool program is found to increase cognitive and psycho-social test scores, but only for children who participated in the program for at least seven months. The anthropometric results for weight differ substantially depending on which comparison group is used, suggesting that estimates based on the first two comparisons are contaminated by important unobserved characteristics related to program entry. The preferred estimates based on the third comparison group indicate that the program tends to improve the anthropometric outcomes, again with initially increasing effects as the duration of program participation increases. Cost-benefit analysis based on these estimates and other assumptions indicate fairly high rates of return for this program.

Labour Market Mismatch Among UK Graduates: An Analysis Using Reflex Data

Abstract: There is much disagreement in the literature over the extent to which graduates are mismatched in the labour market and the reasons for this. In this paper we utilise the Flexible Professional in the Knowledge Society (REFLEX) data set to cast light on these issues, based on data for UK graduates. REFLEX examines the labour market status of graduates five years after graduation and distinguishes between first and current job, vertical and horizontal mismatch, over/underqualification and over/underskilling as well as including a range of questions on the nature of work organisation and individual competences. We find substantial pay penalties for over-education for both sexes and for overskilling in the case of men only. When both education and skill mismatch variables are included together in the model only overskilling reduces job satisfaction consistently for both sexes. Using job attributes data it appears that the lower wages of the overqualified may in part simply represent a compensating wage differential for positive job attributes, while for men at least there are real costs to being overskilled.

Is Universal Child Care Leveling the Playing Field? Evidence from Non-Linear Difference-in-Differences

Abstract: Advocates of a universal child care system offer a two-fold argument: Child care facilitates children's long-run development, and levels the playing field by benefiting in particular disadvantaged children. Therefore, a critical element in evaluating universal child care systems is to measure the impact on child development in a way that allows the effects to vary systematically over the outcome distribution. Using non-linear DD methods, we investigate how the introduction of large-scale, publicly subsidized child care in Norway affected the earnings distribution of exposed children as adults. We find that mean impacts miss a lot: While child care had a small and insignificant mean impact, effects were positive over the bulk of the earnings distribution, and sizable below the median. This is an important observation since previous empirical studies of universal child care have focused on mean impacts. We further demonstrate that the essential features of our empirical findings could not have been revealed using mean impact analysis on typically defined subgroups. This is because the intragroup variation in the child care effects is relatively large compared to the intergroup variation in mean impacts.