Redistributive Taxation and Public Education

This paper examines the relative effectiveness of publicly provided ‘white collar’ professional (university) education versus ‘blue collar’ vocational training in achieving the government's redistributive goals. Although professional education directly benefits high‐skill high‐income workers and vocational training directly benefits low‐skill low‐income workers, we show that either provision of more professional education or less vocational training than in the first‐best allocation is optimal along the second‐best Paretian frontier since this facilitates incentive compatibility in labor supply decisions. Accordingly, the observation that public higher education expenditures in most countries favor universities is not necessarily inconsistent with an optimal redistributive program.     

The dynamics of moonlighting in Russia1

This paper uses the Russian Longitudinal Monitoring Survey (RLMS) to analyse the dynamics of moonlighting by the working‐age population. We find that moonlighting is transitory and that a desire to switch jobs expressed in the past is positively related to moonlighting in the present and to actual job changes in the future. We also find that workers who moonlighted as self‐employed in the past represent 26.5 percent of the new self‐employed. These results suggest that moonlighting in Russia can be seen as an effective incubator for setting up new self‐employed businesses, thereby providing long‐term benefits for the economy.     

Is it all about money? An examination of the motives behind moonlighting

Multiple-job holding is an important labour market phenomenon. In this article, we examine individuals’ motives for multiple-job holding. Specifically, we estimate an empirical model of the motivation for moonlighting assuming that individuals hold a second job for either financial or for nonpecuniary motives. Our results contribute to a better understanding of multiple-job holding. We find that multiple-job holding is used by individuals as a way to deal with the financial difficulties or the increased financial commitments in their household. Individuals are more likely to moonlight for money in the early stages of their adult life. Finally, individuals with more labour market experience are more likely to moonlight for pecuniary than nonpecuniary reasons.     

Teacher moonlighting: evidence from the US Current Population Survey

This article reports new evidence on teacher moonlighting from the US Current Population Survey. I investigate the determinants of teacher moonlighting and examine the effect that the teacher moonlighting has on the number of hours teachers spend on their primary job. I find that male teachers and teachers with advanced degrees are more likely to moonlight, but teacher pay appears to have little or no effect on the propensity to moonlight. I also find that holding a second job reduces the amount of time teachers spend on their primary jobs by about 1?h per week. Thus, teacher moonlighting may have harmful effects on education, though the effect on hours worked is neither trivial nor especially large.     

“Opt out” or kept out? The effect of stigma,structure, selection,and sector on the labor force participation of married women in India

Using the 61st and 68th rounds of National Sample Survey data, we investigate the role of stigma, the economy’s structure, potential selection bias, and sectoral differences in explaining the low labor force participation (LFP) of middle and secondary educated women in India relative to low‐ and high‐educated women (the “U‐shape”). Estimating LFP regressions on a sample of prime‐aged married women, we show that, controlling for background characteristics, if a woman’s husband works in a white‐collar job in a region with a high share of blue‐collar jobs, she is less likely to participate in the labor market (stigma). We also find a positive effect of an increase in an index of white‐collar job growth (structure) on married women’s LFP. These effects are present in both rural and urban sectors but are strongest in the rural sector. However, middle and secondary educated women are still found to have substantially lower LFP than low‐ and graduate‐educated women in both sectors. Indeed, over time, the U‐shape persists in the rural sector and deepens in the urban sector. Because unobservables are quite large in the urban sector, we use the method of instrumental variables and find an increasing return at middle levels but stagnation at higher levels.     

The Impact of Social Comparisons on Reciprocity*

In this paper, we investigate how social comparison information about referent others (i.e., learning what similar others do, and how they are treated) affects reciprocal relationships. Using three‐person gift‐exchange games, we study how employees’ reciprocity towards an employer is affected by pay comparison information (what co‐workers earn) and effort comparison information (how co‐workers perform). We find strong evidence of the effects of effort comparison: employees are more willing to reciprocate by choosing high effort in response to a high wage if they observe others doing so. In our setting, we find somewhat weaker evidence of the effects of pay comparison.     

Optimal Income Taxation and Job Choice

In this paper, we study optimal income taxation when different job types exist for workers of different skills. Each job type has some feasible range of incomes from which workers choose by varying labor supply. Workers are more productive than others in the jobs that suit them best. The model combines features of the classic optimal tax literature with labor variability along the intensive margin, with the extensive‐margin approach where workers make discrete job choices and/or participation decisions. We find that first‐best maximin utility can be achieved in the second‐best, and marginal tax rates below the top can be negative or zero.     

Worker flows, job flows and firm wage policies

Like many transition economies, Slovenia is undergoing profound changes in the workings of the labour market with potentially greater flexibility in terms of both wage and employment adjustment. To investigate the impact of these changes, we use unique longitudinal matched employer‐employee data that permits measurement of employment transitions and wages for workers and enables links of the workers to the firms in which they are employed. We can thus measure worker flows and job flows in a comprehensive and integrated manner. We find a high pace of job flows in Slovenia especially for young, small, private and foreign‐owned firms and for young, less educated workers. While job flows have approached the rates observed in developed market economies, the excess of worker flows above job flows is lower than that observed in market economies. A key factor in the patterns of the worker and job flows is the determination of wages in Slovenia. A base wage schedule provides strict guidelines for minimum wages for different skill categories. However, firms are permitted to offer higher wages to an individual based upon the success of the worker and/or the firm. Our analysis shows that firms deviate from the base wage schedule significantly and that the idiosyncratic wage policies of firms are closely related to the observed pattern of worker and job flows at the firm. Firms with more flexible wages (measured as less compression of wages within the firm) have less employment instability and are also able to improve the match quality of their workers. JEL Classifications: J23, J31, J41, J61, P23, P31.     

‘Employability-miles’ and worker employability awareness

This article studies the use and impact of a (‘Employability-miles’) voucher scheme. These vouchers could be used for participation in a restricted number of training courses, which all aim to stimulate employees to develop a more active attitude towards their own employability. Using data from two surveys of one firm’s workforce, we find that voucher use is related to various personality traits and personal characteristics. In particular, a worker’s ambition, goal setting and education level are positively related to voucher use. In addition, workers with longer tenure spend their vouchers more often. Conversely, workers with a more positive self-image as well as those who are negatively reciprocal spend their vouchers less often. The negative relation between voucher use and negative reciprocity suggests that workers who are more negatively reciprocal perceive the voucher as an HR tool for outplacement. Further, we find that voucher use positively affects worker employability awareness and willingness to train. Remarkably, participation in non voucher training shows little relation to personality traits. From a human resources (HR) perspective, this finding suggests that by employing a voucher scheme, the firm makes training participation more dependent on employee personality and individual characteristics instead of the HR development strategy of the firm.     

Job satisfaction and quit intentions of offshore workers in the UK North Sea oil and gas industry

The North Sea oil and gas industry currently faces recruitment and retention difficulties because of a shortage of skilled workers. One means of retaining existing employees is to improve workers’ job satisfaction. In this paper, we investigate the determinants of job satisfaction and intentions to quit within this industry sector. We find that individuals in good financial situations, those whose skills are closely related to their job and those who received training reported higher levels of job satisfaction. Furthermore, we establish the importance of job satisfaction, promotion prospects and training opportunities in determining workers’ intentions to quit their job.     

Regional service clusters and networks. Two approaches to empirical identification and development: the case of logistics in the German port city‐states Hamburg and Bremen

This article discusses two approaches to the identification and measurement of regional clusters and its networks in ‘cross‐sectoral’ services which are not available through official industrial statistics. The first approach is a ‘secondary‐statistical’ one consisting of a firm‐based blending of two separate official statistical data‐sets, industrial and ‘functional’ (that is, the professions practised within firms). Thus, a service ‘cross‐sector’ is identified across manufacturing and service industries. In the matrices resulting, weights are attached in an expert survey to the numbers of employees to aggregate the ‘real’ logistics ‘cross‐sector’. This is applied to the two German port city‐states, Hamburg and Bremen. The second approach is ‘primary‐statistical’, based on a small firms survey which generated data on ‘functional’ supplier relations (the cluster) and on project‐based ‘strategic’ cooperations (the networks within that cluster). This follows a two‐stage model of emerging clusters and ‘its’ networks. This data‐set is combined with the firms’ affiliations to branches, firm size, age and sales growth classes, in order to connect information with the industry statistics. Also, the net densities and centrality structures are calculated. The combined information provides indications of the relevance of the service cluster and its networks as factors of future regional development. The latter approach is applied to the State of Bremen only. Two results appear to be transferable beyond the German cases: first, the two approaches improve the knowledge about policy‐relevant ‘cross‐sectors’, clusters and networks; and second our knowledge about service, namely logistics, clusters and networks (for which port regions are prominent nodes) is improved. Finally, some implications for regional cluster strategies are discussed.     

The Effects of Marginal Employment on Subsequent Labour Market Outcomes

Abstract. Unemployed workers in Austria do not lose their unemployment benefits (UI) if they work in a job where their earnings are below a certain threshold [‘marginal employment’ (ME)]. ME might improve their labour market status by signalling effort, or worsen it through reduced job‐search effort. Those who work in ME while claiming UI have less employment and lower earnings afterwards than those who do not. The penalty lessens over time but is still present after three years.     

Does Outsourcing Always Benefit Skilled Labor?

This paper builds a dynamic product cycle model with three kinds of labor inputs—scientists, white‐collar workers, and blue‐collar workers—and producer heterogeneity to find an explanation for why outsourcing did not cause wage inequality in the 1970s. According to the theoretical model, outsourcing decreases the wages of white‐collar workers and the relative wages of white‐collar workers to blue‐collar workers in the outsourcing home country if outsourcing industries are blue‐collar worker intensive compared with non‐outsourcing industries. Scientists who conduct research and development always benefit from outsourcing.     

Wages in Managed Markets: An Explanation of the Gender Wage Gap?

Over the last decade or so in Australia, relative wages have declined in some female‐dominated occupations, notably in the care industries. This article argues that the strong growth in labour force participation of mature‐aged women has allowed wages to remain low in these ‘managed’ industries. Limited mobility across industries and occupations, at least in part due to preferences for part‐time work, and an institutional wage‐setting mechanism also play a role. Growing demand for workers in the care industries, rising skill levels of women, and slowing growth in participation as rates converge with those of men will contribute to stronger wage growth in the future.     

The participation of Russian households in the informal economy: Evidence from the VTsIOM data

This study presents the size and structure of secondary employment in Russia, analyses the determinants of Russian informal secondary employment, and discusses differences between job qualifications in a main job and those in a secondary job. We estimate that 27 percent of Russia’s GDP was produced in the informal economy during 1997–98 and informal secondary employment amounts to about 20 percent of value added produced in the informal economy. We found that the probability of holding an informal secondary job as opposed to a formal one is positively associated with higher wage rates and lower education. However, there is little evidence that low income is correlated with holding an informal secondary job. We also found evidence that an informal secondary job requires lower job qualifications as compared to a formal one. Again, low income is not significant in determining differences between job qualifications in a main job and those in a secondary job. JEL classification: J22, J24, O17, P20.     

Two separated effects of employer-provided health insurance on job mobility

We estimate the effect of employer-provided health insurance (EPHI) on job mobility via a dynamic model of joint employment and health insurance decision in the presence of uncertainty about wage rate and health status transitions. The model is based on a Markov decision process in which a hedonic wage approach provides an economic rationale for the different choices and health insurance serves as an input to the health production process. Including health transitions in the model helps us to understand how the availability of EPHI (positive job characteristic) and holding EPHI (the wage-health insurance trade-off) enter into the individuals’ decisions. The model is estimated using the 1999–2000 Medical Expenditure Panel Survey panel 4, and the results show that the ‘pure’ effects of holding EPHI are negligible, the ‘full’ effects of EPHI are significant and the degrees of the inefficiency vary between 14% and 25% across different states.     

Employment Protection Versus Flexicurity: On Technology Adoption in Unionised Firms*

We analyse how different labour‐market institutions – employment protection versus ‘flexicurity’– affect technology adoption in unionised firms. We consider trade unions’ incentives to oppose or endorse labour‐saving technology and firms’ incentives to invest in such technology. Increased flexicurity – interpreted as less employment protection and a higher reservation wage for workers – unambiguously increases firms’ incentives for technology adoption. If unions have some direct influence on technology, a higher reservation wage also makes unions more willing to accept technological change. Less employment protection has the opposite effect, as this increases the downside (job losses) of labour‐saving technology.     

The effect of taxation on labour supply: the case of moonlighting

The authors provide a simple test of supply-side economics by estimating the responsiveness of moonlighting labour supply to changes in the marginal tax rate and the wage rate. While standard theory teachers that changes in taxes and wage should have opposite and equal effects on labour supply, taxes affect the entire asset position of the household. In the short run, an adjustment of hours in the second job may be the only option available to an individual in responding to a tax change. Thus, analyses based on after-tax wages may understate supply-side effects. To estimate these effects a tobit procedure is employed. The empirical results suggest a backward-bending supply curve over thet range of moonlighting hours. Data consist of a subsample of male blue-collar workers from the 1978 cross-section of the Panel study of Income Dynamics.     

Active ageing beyond the labour market: evidence on the role of intrinsic and extrinsic rewards at work

‘Active Ageing’ strategies aim to foster the participation of seniors in the society. Although economic literature has extensively studied the incentives for seniors to increase their labour supply, little is known about the motivations for older people to complement labour with other forms of social participation. This article provides empirical evidence of the role of intrinsic and extrinsic rewards received at work in the supply of formal and informal productive activities of 50- to 65-year-old workers. The results show that workers with higher levels of intrinsic rewards received at work, such as skill development opportunities and decision latitude, are more likely to participate in social activities outside the labour market. Extrinsic rewards on the other hand, like advancement perspectives, job security and pay, appear independent from both formal and informal social participation.     

Multiple job holding in the United Kingdom: evidence from the British Household Panel Survey

This article examines the determinants of multiple job holding in the UK. We address these issues using data from the first 11 waves of the British Household Panel Survey (BHPS), which covered the period from 1991 to 2001. Evidence from the BHPS does not support the hypotheses of main job hours constrained and main job insecurity. We argue that the incentive for moonlighting in the UK is due to financial pressures and the desire for heterogeneous jobs. The empirical work is carried out separately for men and women.