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.

Performance Pay and Productivity

Abstract: What happens when a firm switches from paying hourly wages to paying piece rates? The theory developed below predicts that average productivity rises, that the firm will attract a more able work force and that the variance in output across individuals at the firm will rise as well. The theory is tested with data from a large autoglass company that changed compensation structures between 1994 and 1995. All theoretical predictions are borne out. In the firm examined, the productivity effects are extremely large, amounting to anywhere from about 20% to 36% of output, depending on what is held constant. About half of the worker-specific increase in productivity is passed on to workers in the form of higher wages.

Child Labor and Household Wealth: Theory and Empirical Evidence of an Inverted-U

Abstract: Some studies on child labor have shown that greater land wealth leads to higher child labor, thereby casting doubt on the hypothesis that child labor is caused by poverty. This paper argues that the missing ingredient is an explicit modeling of the labor market. We develop a simple model which suggests an inverted-U relationship between land holdings and child labor. A unique data set from India that has child labor hours information confirms this hypothesis. It is shown that the turning point beyond which more land leads to a decline in child labor occurs at 3.6 acres of land per household, which is well below the observed maximum value of land-holding.

Evidence of Returns to Schooling in Africa from Household Surveys: Monitoring and Restructuring the Market for Education

Abstract: Wage-differentials by education of men and women are examined from African household surveys to suggest private wage returns to schooling. It is commonly asserted that returns are highest at primary school levels and decrease at secondary and postsecondary levels, whereas private returns in six African countries are today highest at the secondary and post secondary levels, and rates are similar for women as for men. The large public subsidies for postsecondary education in Africa, therefore, are not needed to motivate students to enroll, and those who have in the past enrolled in these levels of education are disproportionately from the better-educated families. Higher education in Africa could be more efficient and more equitably distributed if the children of well-educated parents paid the public costs of their schooling, and these tuition revenues facilitated the expansion of higher education and financed fellowships for children of the poor and less educated parents.

Education for Growth: Why and For Whom?

Abstract: This paper tries to reconcile evidence from the microeconometric and empirical macro growth literatures on the effect of schooling on income and GDP growth. Much microeconometric evidence suggests that education is an important causal determinant of income for individuals within countries. At a national level, however, recent studies have found that increases in educational attainment are unrelated to economic growth. This finding appears to be a spurious result of the extremely high rate of measurement error in first-differenced cross-country education data. After accounting for measurement error, the effect of changes in educational attainment on income growth in cross-country data is at least as great as microeconometric estimates of the rate of return to years of schooling. Another finding of the macro growth literature - that economic growth depends positively on the initial stock of human capital - is shown to result from imposing linearity and constant-coefficient assumptions on the estimates. These restrictions are often rejected by the data, and once either assumption is relaxed the initial level of education has little effect on economic growth for the average country.

Are Muslim Immigrants Different in Terms of Cultural Integration

Abstract: Using the UK Fourth National Survey of Ethnic Minorities, we explore the determinants of religious identity for Muslims and non-Muslims. We find that Muslims integrate less and more slowly than non-Muslims. A Muslim born in the UK and having spent there more than 50 years shows a comparable level of probability of having a strong religious identity than a non-Muslim just arrived in the country. Furthermore, Muslims seem to follow a different integration pattern than other ethnic and religious minorities. Specifically, high levels of income as well as high on-the-job qualifications increase the Muslims' sense of identity. We also find no evidence that segregated neighborhoods breed intense religious and cultural identities for ethnic minorities, especially for Muslims. This result casts doubts on the foundations of the integration policies in Europe.