This article studies the trend in wage discrimination in Spain from 1995 to 2002, when the third plan for equal opportunities for men and women was in action. To account for the criticism of Heckman et al. (J Hum Cap 2:1–31, 2008), we first introduce a novel approach to the analysis of wage discrimination with methods that are robust to model (mis-) specification. Following their idea, we apply semiparametric methods for the Oaxaca-Blinder decomposition of wage differentials between men and women. We extend the methodology to semiparametric quantile estimation. The study is completed by some descriptive analysis, also based on nonparametric techniques. We find that, while the wage gap has diminished from 1995 to 2002 this is mainly due the smaller gap in returns of endowments for wages above the median, and due to the endowments of women for lower and particularly high wages. Respective the quantiles, in contrast to other EU member states, the Spanish wage gap is widest for low wages but almost U-shaped in 2002 whereas this was not that evident in 1995.
This paper studies the impact of a liquidity constraint shock on the job search behavior and outcomes among rural-to-urban migrant workers in China. A negative liquidity constraint shock significantly reduces job search duration and increases the job finding hazard rate for female migrant workers. A negative liquidity constraint shock also lowers the subsequent job match quality, including a lower hourly wage, longer working hours, a higher probability of on-the-job searches and lower quality in terms of subsidy. We find little effect on the job search process and post match quality for male migrant workers. From the policy perspective, we show evidence that rural medical insurance, namely, the New Cooperative Medical Scheme (NCMS), can actually ease the impact of a liquidity constraint shock for female migrant workers.
This paper examines China’s changing internal labor migration patterns between 1990 and 2005 as its household registration (hukou) system evolves. We document a drastic increase in the size of the migrant population, along with significant composition shifts in migrants’ characteristics, and geographic and employment distributions. Recent migrants are on average older, more educated, more likely to be female, more likely to be married, and more likely to have an urban hukou. Regression analysis shows that migration rates increased substantially during this period for all individuals regardless of their education, gender, age, marital or hukou status. By employing a simple migration location choice model, we investigate the relationship between hukou policy and migration behavior. We find that larger and more developed cities are more attractive to migrants but tend to set more stringent hukou restrictions. Rural migrants are significantly more deterred by hukou restrictions relative to urban migrants. These findings suggest that institutional factors, such as the hukou system, are important for understanding the observed patterns in China’s labor migration.
Using unique matched employer-employee data from China, we discover that migrant workers in the manufacturing industry who are proficient in the local dialect earn lower wages than those who are not. We also find that workers with better dialect skills are more likely to settle for lower wages in exchange for social insurance. We hypothesize that they are doing so in the hope of obtaining permanent residency and household registration status (Hukou) in the host city where they work. Further tests show that the phenomenon of “exchanging wages for social insurance participation” is more pronounced among workers employed in smaller enterprises. Moreover, migrant workers with better language skills have a stronger desire to stay in the host city. Our conclusions are robust to different specifications, even after addressing the endogeneity issue for language acquisition. The present study provides a new perspective on the impact of language fluency on social integration among migrants, one of the most disadvantaged groups in developing countries.
This paper examines China's changing internal labor migration patterns between 1990 and 2005 as its household registration (hukou) system evolves. We document a drastic increase in the size of the migrant population, along with significant composition shifts in migrants' characteristics, and geographic and employment distributions. Recent migrants are on average older, more educated, more likely to be female, more likely to be married, and more likely to have an urban hukou. Regression analysis shows that migration rates increased substantially during this period for all individuals regardless of their education, gender, age, marital or hukou status. By employing a simple migration location choice model, we investigate the relationship between hukou policy and migration behavior. We find that larger and more developed cities are more attractive to migrants but tend to set more stringent hukou restrictions. Rural migrants are significantly more deterred by hukou restrictions relative to urban migrants. These findings suggest that institutional factors, such as the hukou system, are important for understanding the observed patterns in China's labor migration.
We investigate the effect of English language proficiency on the wages of native full-time employees in Poland. Using a unique data set with information on over 600,000 survey respondents polled over the five-year period from 2013 to 2017, we employ an IV approach founded on a natural experiment - namely, the reform of foreign language instruction in Polish schools. Our preferred estimates indicate that monthly wages for those individuals with ‘good’ or ‘very good’ knowledge of English exceeded the wages of those with ‘no English’ (or those with just a conversational proficiency) by nearly 60% for men and more than 50% for women. The estimates are statistically significant for both genders, and suggest quantitatively relevant wage returns for proficiency in English.
Amid the aging workforce, a better understanding of the retirement transition patterns of older workers has implications for public policy. Such transitions are often characterized as complex trajectories involving multiple stages and alternative pathways which, in turn, depend on labor market regulations. This study investigates the factors affecting bridge employment and partial retirement and their subsequent effects on health, well-being and financial security, using micro-level data from a national healthy aging survey and augmented with personal income tax records. The analysis exploits policy-induced changes in retirement status arising from the elimination of mandatory retirement rules in Canada—which occurred at different times across provinces—in an instrumental variables design. The results indicate, first, that mandatory retirement is not used often by employers even when it is permissible: only approximately 7% of current retirees report that their first retirement occurred for this reason. This finding is consistent with limited international evidence on how employers use these rules. Second, we find supportive evidence that the elimination of mandatory retirement reduced the likelihood of individuals being retired by approximately 7–16% but raised the likelihood of subjective partial retirement by 5–6%. Most notably, the reforms reduced the incidence of work after retirement as workers become permitted to stay in their incumbent jobs longer, this finding being very robust across several statistical estimators commonly used in the related literature. No discernible effects are observed on individuals’ health, well-being or future financial security. These findings suggest that costs of mandatory retirement are limited to adjustment frictions among individuals searching for new work or entering retirement earlier than desired under the prevailing wage.
Using five cycles of a large nationally representative Canadian health survey, covering 2008 to 2012, the present paper examines the extent of labour earnings and household income gaps among gays, lesbians, and heterosexuals. The data used in this paper has the advantage of allowing for a direct classification of sexual orientation, through respondent self-identification. In accord with previous reports, this paper finds that homosexual females holding fulltime employment earn statistically significantly above comparable heterosexual females. Homosexual males with fulltime employment, on the other hand, are found no different in their earnings, from otherwise identical heterosexual males. When household income is considered, data reveal that lesbian households have statistically significantly lower incomes compared with otherwise identical gay households, who outearn heterosexuals as well. This pattern, not previously reported for Canada but observed in some other countries, is likely due to the combined effects of the general gender wage gap, the fading of homosexual males’ wage penalty, and the existence of two male income earners in a gay male household.
The purpose of this paper is to simultaneously investigate whether the active labour market programmes (ALMPs) and the imposition of benefit sanctions help unemployed insured workers in Denmark to find a job sooner than those who do not get any activation. Earlier studies have modelled ALMPs and benefit sanctions separately, which may have resulted in over- or underestimation of the true effect. As part of our empirical methodology, we used a multivariate mixed proportional hazard model and optimally selected the number of support points for the specification of unobserved heterogeneity distribution in our sample. Our results revealed that the impositions of both benefit sanctions and employment subsidies in the private sector have a positive impact on reducing unemployment duration. Some policy implications are drawn.
The rise in the productivity of inexperienced young workers suggests a positive partial equilibrium effect of youth training programs on employment. However, in a general equilibrium context, displacement effects that impact other groups of workers could also arise. We build a directed search model to study the unintended displacement effects of youth training programs. We calibrate the model to match data from the US labor market. The model is then used to simulate a policy experiment that resembles a training program that raises the productivity of a targeted group of low-skilled and inexperienced agents. Our counterfactual analysis shows that the policy indeed triggers displacement effects. Consequently, these unintended displacement effects must be taken into account in the evaluation of youth training programs.
Ensuring retirement income security is a priority for individuals, employers, and policymakers. To achieve this, employers and policymakers sponsor and subsidize retirement saving plans and provide educational interventions. The effectiveness of these tools will depend on individuals’ interest and willingness to engage in planning and preparing for retirement. Using merged administrative and survey data for public sector workers in North Carolina, we find that individuals who more heavily discount the future are less likely to plan and save for retirement. Further, retirement planning behavior is measured both subjectively and objectively, and time preferences have an association with subjectively measured retirement planning but not with objectively measured retirement planning. Finally, individuals’ retirement timing is associated with time preferences but only among individuals with a retirement plan. In total, our results highlight the important role of time preferences in determining retirement planning and preparedness.
This paper examines the extent to which children enter into occupations that are different from their father’s occupation, but require similar skills, which we call task following. We consider the possibility that fathers are able to transfer task-specific human capital either through investments or genetic endowments to their children. We show that there is indeed substantial task following, beyond occupational following and that task following is associated with a wage premium of around 5% over otherwise identical workers employed in a job with the same primary task. The size of the premium is similar in magnitude to the size of the premium associated with occupational following. The wage premium is robust to controls for industry, occupation categories and occupation characteristics.
This paper uses a high quality administrative longitudinal dataset to assess the impact of an active labour market intervention consisting of referral for interview plus job search assistance with the public employment service in the Republic of Ireland. During the period of the interventions, both job search monitoring and sanctions were virtually non-existent in the country. We found that, relative to a control group that received no public employment service assistance, unemployed individuals that received the interview letter and participated in job search assistance were 11.2 percentage points less likely to have exited to employment prior to 12 months. This result holds when tested against the influences of both sample selection and unobserved heterogeneity bias. The negative treatment impact is attributed to individuals lowering their job search intensity on learning through the activation interview of the lax nature of the activation process in Ireland at that time. The research finds job search assistance being less effective unless combined with other key aspects of the activation process, such as regular job search monitoring and sanctions for non-compliance.
Policy makers as well as entrepreneurs pay much attention to the success of firms. This is because the performance of firms can promote directly and indirectly the economic growth in a country. For instance, after financial crisis in 1997, the Korean economy experienced the rapid recovery. It is recognized that the improvement of firm performance has played a crucial role in such recovery. We focus on the determinants of improving the Korean firm total factor productivity (TFP) because TFP can explain performance not explained by inputs a firm employs. This paper suggests management practices as one of crucial factors to improve firm TFP. For empirical analysis, we use an instrumental variable approach by using a set of four firm-level instrumental variables including motivations for organizational change, large-scale organizational change, empowerment, and IT investment during the past organizational change. The results of the instrumental variable estimation show that better management practice leads to a higher level of firm TFP, statistically significantly; whereas the effect of management practices is statistically insignificant in the ordinary least square estimation.
The gender gap in promotions literature typically uses survey to survey imputed hourly wage changes to measure the earnings effects of promotions alone. By distinction, we study raises with and without promotions using data within surveys that uniquely identify both the current and most recent wages of hourly workers separate from salary workers. In cross-section estimates we identify a gender gap in raise magnitude favoring men only among hourly workers who achieve promotions, but this result vanishes in fixed effects estimates. No gender gaps emerge in any other instance, including for salary workers and raises absent of promotion. We further contribute to the literature by uniquely controlling for natural ability and risk preferences of the workers, the time passed since earning the raise, and also whether the responsibility of the worker’s job changed with the raise.
The literature on the self-employed hypothesizes two different paths to self-employment. On the one hand, self-employment is associated with entrepreneurship and a motivation to pursue an opportunity. On the other hand, previous research indicates that people also become self-employed because of limited opportunities in the wage sector. Using a unique set of data that links the American Community Survey to Form 1040 and W-2 records, this paper extends the existing literature by examining self-employment duration for five consecutive entry cohorts, including two cohorts who entered self-employment during the Great Recession. Severely limited labor market opportunities may have driven many in the recession cohorts to enter self-employment, while those entering self-employment during the boom may have been pursuing opportunities under favorable market conditions. To more explicitly test the concept of “necessity” versus “opportunity” self-employment, we also examine the pre-entry wage labor attachment of entrants. Specifically, we ask whether an association exists between wage labor attachment and the duration of self-employment. We also explore whether the demographic/socio-economic characteristics and self-employment exit behavior of the cohorts are different, and if so, how. We find evidence consistent with the existence of “necessity” vs. “opportunity” self-employment types. Even when controlling for local economic conditions and the demographic/socio-economic characteristics of the self-employed, entrants with a more tenuous connection to the wage labor market exit self-employment earlier, and are more likely to transition from self-employment to unemployment.