Showing papers in "Labour in 2007"

Immigrants in a Booming Economy: Analysing Their Earnings and Welfare Dependence

Abstract: Ireland’s exceptional economic growth in recent years has led to an influx of immigrants. Given the favourable economic climate into which these immigrants are arriving, it is interesting to ask how their earnings and welfare dependence compare with the native population. To the extent that strong economic growth produces good labour market opportunities for immigrants, earnings disadvantages may be lessened and any tendency towards welfare dependence may be reduced. Data from a nationally representative sample drawn in 2004 are used to assess the earnings of immigrants in Ireland relative to the native population and also the rate of welfare receipt across the two groups. Immigrants are found to earn 18 percent less than natives, controlling for education and years of work experience. However, this single figure hides differences across immigrants from English-speaking and non-English speaking countries. We also find evidence of a wage gap for immigrants with third level educations, relative to comparable natives. On average, immigrants are half as likely to have been in receipt of social welfare payments in the previous twelve months relative to natives. A difference in welfare participation remains when we control for the higher education attainment of immigrants.

An empirical analysis of the decision to train apprentices

Abstract: It is a widely held belief that apprenticeship training represents a net investment for training firms, the cost of which needs to be recouped after the training period. A new firm-level data set for Switzerland reveals large variation in net costs across firms and, remarkably, negative net costs for 60 per cent of all firms. We use these data to estimate the effect of net costs on the number of apprentices hired by a firm. The results show that the costs have a significant impact on the training decision but no significant influence on the number of apprentices, once the firm has decided to train. For policy purposes, these results indicate that subsidies for firms that already train apprentices would not boost the number of available training places.

The Cost of Flexibility at the Margin. Comparing the Wage Penalty for Fixed-term Contracts in Germany and Spain using Quantile Regression

Abstract: . Germany and Spain are typically regarded as ‘rigid’ economies, yet both have had different experiences of fixed-term jobs. Using quantile regression we find that in West Germany the earnings of permanent and fixed-term workers are most similar among high earners and most dissimilar among low earners. In Spain, the wage penalty shows little variation across the distribution of wages. This pattern was also found for different occupational groups, although there are clear differences in the absolute wage penalty across occupations. In conclusion we caution against generalizing findings from Spain to other ‘rigid’ European labour markets.

The Public–Private Job Satisfaction Differential in Italy

Abstract: . This paper uses Italian survey data for 1995 to study the differences in satisfaction for six non-pecuniary job attributes between public and private sector workers. Results indicate that public employees differ from private employees in the way they evaluate satisfaction with job security, consideration by colleagues, and safety and health job features, whereas there are no differences in their assessment of satisfaction with effort levels and interest for the job. In particular, we find that the premium for public employees is quantitatively higher, especially in the case of satisfaction with employment losses. Moreover, there are significant differences in the determinants of satisfaction across sectors.

Do Benefit Hikes Damage Job Finding? Evidence from Swedish Unemployment Insurance Reforms

Abstract: In 2001 and 2002, Sweden introduced several unemployment insurance reforms. A major innovation in the first reform was the introduction of a two-tiered benefit structure for some unemployed individ ...

PhD Graduates with Post-doctoral Qualification in the Private Sector: Does It Pay Off?

Abstract: In this paper, we address the question of the early careers of French PhD graduates in science and engineering sciences in 1996 Post-doctoral training was initially developed for PhD graduates wishing to embark on a career in the public sector However, a large proportion of post-doctorate graduates turn to the private sector, and in particular to occupations that do not involve research The question we raise is that of the wage premium on post-doctoral training To control for selection bias arising in the case where unobservable elements are correlated between participation and wages, we first estimate a treatment effect model The main finding is that when selection bias is not controlled for, post-doctoral participation increases earnings; however, when selection bias is controlled for, the participation in a post-doctoral programme has no positive effect With regards to this finding we show that post-doctoral programmes play much more the role of a signal in the first stage of a career This finding is also reinforced when we use a bivariate selection rule to control for the endogenous nature of having been recruited in the private sector

Dynamic Efficiency of Supervisory Board Codetermination in Germany

Abstract: . The aim of this paper is to consider the implications of structural changes, e.g. changing skill composition of the labour force, on the economic advantages and disadvantages of supervisory board codetermination in Germany. Theoretical considerations and an overview of the empirical literature on supervisory board codetermination are given in the first section of the paper. The second section deals with the empirical evidence of the theoretical effects. The basic idea is to compare the long-term differences in productivity and profitability of companies with quasi-parity codetermination to companies that are only obliged to give one-third of their supervisory board seats to labour representatives. Interestingly, the switch from one-third to parity codetermination seems to increase both productivity and profits. In the longer term, the productivity effect does not seem to change, whereas the profit effect shows an improving path.

Matching Efficiency and Labour Market Reform in Italy: A Macroeconometric Assessment

Abstract: . A matching theory approach is used to assess the impact on the Italian labour market of the 1997 Treu Act (legge Treu), which considerably eased the regulation of temporary work and favoured its growth in Italy. We re-parameterize the matching function as a Beveridge Curve and estimate it as a production frontier, finding huge differences in matching efficiency between the South and the rest of the country. The Treu Act appears to have improved matching efficiency in the North of the country, particularly for skilled workers, but also to have strengthened competition among skilled and unskilled workers, especially in the South.

Exploring Job Satisfaction in Private and Public Employment: Empirical Evidence from Greece

Abstract: . This paper analyses subjective job satisfaction (JS) responses by employees in the public and private sectors of the Greek labour market. Panel data covering the period 1995–2001 and a random effects ordered probit model are used for estimation purposes. The results of the econometric estimation show that a substantial JS differential exists between the two sectors, in every JS domain and always in favour of public employment. A typical ordered decomposition analysis indicates that about one-third of the difference in expected JS can be explained by differences in employee characteristics and two-thirds by unobserved sector-specific inbuilt features. The comparison of wage reductions, which a representative employee will be prepared to endure in order to avoid employment in the private sector, reveals that the regularity of working schedules is appreciated more than any other facet of JS. The obtained results enhance the existing apparatus for evaluating government policies in the labour market.

The Educated Russian's Curse: Returns to Education in the Russian Federation during the 1990s

Abstract: . This paper uses a representative sample of the Russian Federation, the Russian Longitudinal Monitoring Survey, to estimate the returns to education in this ex-communist country. We tackle this classic issue in labor economics with the realistic expectation of obtaining results for Russia comparable in quality and reliability to those available in developed countries and other economies in transition. Using standard regression techniques we find that the returns to education in Russia are quite low compared with those reported in the literature on countries throughout the world, in almost no specification reaching higher than 5 per cent. Moreover, there is virtually no improvement in returns to education in the 1992–99 period, a result somewhat at odds with other studies using Russian data from similar time periods. When we instrument our main regressor using policy experiments from the 1960s, we find comparable results. We also perform a selectivity correction and discover even lower returns to education for men, although they become slightly higher for women. Additionally, we find extremely low returns to tenure, which can even become negative in certain specifications.

The Gender Wage Gap in the Turkish Labor Market

Abstract: . This paper examines the sources of the gender wage gap in the Turkish labor market by using matched employer–employee data and the standard wage regression estimations as well as the Oaxaca decomposition method. The extensive number of variables in the data set enables a thorough quantitative analysis of the role of various individual- as well as firm-related factors leading to wage differentials between men and women, namely human capital endowments including job tenure, occupational and industrial segregation, private/public sector location, coverage of the workplace under collective labor bargaining, and firm size. It also examines the extent of gender-based industry and occupational segregation within the confines of data set and computes the Duncan & Duncan segregation index. We find that a large portion of the gender wage gap is attributable to women's considerably lower levels of work experience and job tenure. Other important variables that lead to pay differentials are women's lower concentration in jobs covered by collective labor bargaining and a substantial degree of occupational and industrial segregation. The differential rates of return to many of the wage determinant variables are also found to be significant in the formation of the gender wage gap.

Social Capital and Wages: An Econometric Evaluation of Social Networking's Effects

Abstract: . The goal of this paper is to get an econometric evaluation of the effects of the social network's mobilization, as a job search strategy, on wages. We make use of switching regression models to deal simultaneously with an endogenous selection issue in the network's choice and the existence of two different regimes of wage determination. Econometric estimates provide evidence for the existence of a selection effect on the choice of network but, after correcting the selection bias on the wage equations, the effect of social network on wages is negative.

Firm Size or Firm Age? The Effect on Wages Using Matched Employer–Employee Data

Abstract: This paper uses matched employer-employee data set for Sweden to study the relationship between firm age and wages, systematically addressing a variety of possible explanations for observing a firm age-wage effect. Results show considerable heterogeneity across years, along segments of the firm age distribution and across industries. For 1995, a positive relationship is found between firm age and wages. This relationship is robust to inclusion of variables that might affect results. Taking into account that larger firms are also older firms, results show that inclusion of firm age does not alter the positive effect of firm size on wages.

Hidden unemployment in disability insurance in the Netherlands; an empirical analysis based on employer data

Abstract: In this paper, we construct and estimate a (semi-) structural model, so as to uncover the fraction of hidden unemployment in the Disability Insurance (DI) enrolment rate. For this purpose, we use longitudinal administrative data of Dutch employers for 1994-2003. We find the (average) fraction of hidden unemployment in DI enrolment to amount to about 11%. This corresponds to 2.6% of the `true? unemployment insurance (UI) enrolment rate of employers. Over the years, we observe a strong decrease in this fraction, from 5.4% in 1995, to 0.7% in 2003. In addition, our estimates suggest that most of correlation that is observed between the UI and DI enrolment rates can be explained by substitution effects, and not by `true? correlation between the schemes that is exogenous to the firm.

From Welfare to Work: Evaluating a Tax and Benefit Reform Targeted at Single Mothers in Sweden

Abstract: In this paper we propose a tax and benefit reform to increase the working hours and to decrease the welfare participation of single mothers in Sweden. We have access to high-quality tax and income data, and use a detailed tax-benefit program to generate precise budget-sets. We formulate and estimate a structural, static model of labor supply and welfare participation. The results suggest that labor supply among single mother households in Sweden is quite elastic, and that there is self-selection into welfare. The proposed reform would generate welfare-gains for virtually everyone in the sample, yet would be revenue neutral

The Effect of Family Background on Occupational Choice

Abstract: . In this paper, individual data from the Keio Household Panel Survey (KHPS) are used to investigate the effect of father's occupation and parents’ years of schooling on the children's occupational choice in Japan. The estimation results indicate that children tend to choose the same occupation as their father with this being especially true for males. Parents’ education does not affect children's occupational choice directly, but appears to have an indirect effect on children's occupational choice through children's education.

Intra-household Allocation of Time to Household Production Activities: Evidence from Swedish Household Data

Abstract: Intra-household Allocation of Time to Household Production Activities: Evidence from Swedish Household Data

A Stock–Flow Matching Approach to Evaluation of Public Training Programme in a High Unemployment Environment

Abstract: . Monthly panel (1998–2003) data from regional labour offices in Latvia are used to analyse the matching process in a high unemployment–low labour demand environment and to evaluate the impact of active labour market policy programmes on outflows from unemployment. Results suggest that the hiring process is driven by a stock–flow rather than by a traditional matching function: the stock of unemployed at the beginning of the month and flow of vacancies arriving during the month are the key determinants of outflows from unemployment to employment, whereas stock of vacancies and inflow of unemployed do not play any significant role. We find positive and significant effect of training programmes on outflows from unemployment to employment, thus providing strong evidence against cuts in training expenditures.

The Impact of Technological and Organizational Changes on Labor Flows. Evidence on French Establishments

Abstract: This paper investigates the effect of organizational and technological changes on job stability of different occupations in France. We first develop a basic matching model with endogenous job destruction. It provides a structure to the empirical analysis, where we extensively exploit a unique data set on a representative sample of French establishments. The adoption of information technologies is positively correlated to labor flows of blue collar workers while most of the new workplace organizational practices positively influence the managers' turnover.

Shadow Employment and Labor Productivity Dynamics

Abstract: This paper offers theoretical and empirical insights on the anecdotal ‘buffer hypothesis’, ie the view that the shadow employment functions as an improper tool for increasing the labor market flexibility Official data for Italy support the premise Although the contemporaneous correlation between Hodrick–Prescott-detrended shadow labor and output is positive and significant, as time passes their association looses momentum The opposite is found for the regular employees Because of their lower productivity level, the cyclical response of the hidden workers affects the short-term profile of the overall labor productivity It adds new hints on the still puzzling 1990s productivity dynamics

The Transition from Temporary to Permanent Employment: Evidence from Tuscany

Abstract: . In this paper, by distinguishing between the decisions made by the workers and those made by the firms, we provide a probabilistic evaluation of the transition from temporary to permanent employment in a regional context. Specifically, by exploiting a multinomial nested logit strategy of estimation, we find that the transition to a permanent job is far from certain, especially for women and older workers.

Do Satisfactory Working Conditions Contribute to Explaining Earning Differentials in Italy? A Panel Data Approach

Abstract: . The aim of the present paper is to analyse the wage differentials associated with non-pecuniary working conditions using objective and subjective data. In some situations a worker can be compensated for unsatisfactory working conditions via a higher wage; conversely, in the presence of segmented labor markets, higher wages can be associated with favorable non-monetary working conditions. Moreover, a positive correlation between wages and satisfactory working conditions exists when there is efficient union bargaining regarding both wages and working conditions. In the present study, we estimate a wage equation with variables that capture workers’ subjective views regarding their current non-pecuniary working conditions, allowing for unobserved individual heterogeneity. Our results reveal a positive wage differential associated with satisfactory non-pecuniary working conditions. This result supports the segmentation labor market hypothesis. The focus of the study is on Italian workers, but we compare the core results the those obtained for other Mediterranean countries.