MULTIPLE THRESHOLDS IN THE NEXUS BETWEEN WORKING HOURS AND PRODUCTIVITY

Changes in working hours may have two contrasting effects on productivity: a “fatigue effect” and a “learning effect.” An increase in working hours may lead to the accumulation of workers' proficiency and skill in his or her job, while it may cause the level of workers' fatigue to increase. Our estimation results find multiple thresholds in the linkage between working time and productivity, supporting the existence of learning effect as well as fatigue effect from working time extension. The results of our study provide some implications for the recent discussion on reform of the working time system: for example, (i) the overall effects of changes in working time depend upon a variety of factors, such as the initial level of working hours and the features of the industry concerned; and (ii) job sharing may induce employers to substitute part‐timers for full‐time workers, thereby hindering workers' accumulation of skills. (JEL J24, D24, D92, O47)     

Idiosyncratic risk and aggregate employment dynamics

This paper studies how idiosyncratic productivity risk impacts aggregate employment dynamics when there is a trade-off between workers' productivity and costs of job creation and destruction. In our analysis, increasing idiosyncratic risk induces a producer to move workers out of structured jobs that are costly to create and destroy and towards less productive but more flexible unstructured positions. This substitution leaves the producer's total employment more responsive to both idiosyncratic and aggregate disturbances. If all of an industry's producers respond to heightened idiosyncratic risk in this way, then industry-wide employment can respond more to a given aggregate shock. We apply this insight to connect differences between young and old manufacturing plants' aggregate employment dynamics with their corresponding differences in idiosyncratic variability.     

Where to go? Workers' reasons to quit and intra- vs. interindustry job mobility

We show that workers' reasons for quitting their job affect their decision to stay in or leave their industry, using survey data among public sector employees in the Netherlands. Workers quitting for e.g. pay, work pressure, or job duties move relatively often to another industry, in contrast to workers quitting for commuting time or the atmosphere at work. This suggests that workers use their experience in the initial job to update their expectations on other jobs in the industry, as the first set of job aspects is more likely to be related among jobs within an industry than the latter. Furthermore, it is shown that workers' reasons to quit fully explain the differences in wage growth between intra- and interindustry job movers. Lastly, we find that workers who quit for pay or management often leave the public sector altogether.     

THE IMPACT OF INTERNATIONAL OUTSOURCING ON LABOUR MARKET DYNAMICS IN GERMANY

Using an administrative data set containing daily information on individual workers' employment histories, we investigate how workers' labour market transitions are affected by international outsourcing. In order to do so, we estimate hazard rate models for match separations, as well as for worker flows from employment to another job, to unemployment, and to nonparticipation. Outsourcing has a positive but small impact on overall job stability in the manufacturing sector, and considerably increases job stability in the service sector. However, the effect of outsourcing varies strongly across skill levels and age groups, with negative effects for some workers. This is especially the case in the manufacturing sector, where the hazard of transiting to nonemployment rises with international outsourcing for medium‐skilled and older workers.     

Tournament incentives and match outcomes in women's professional tennis

Our research examines the effect of prize money differentials in women's professional tennis tournaments on the probability that the favoured player wins the match. This study adds to the existing literature on tournament theory through its focus on Rosen's (1986) elimination-style, match play tournament model. We estimate a standard probit model using a unique data set containing detailed information on prize money, player-specific characteristics, and match play outcomes for all tournaments played during the 2004 tour sponsored by the Women's Tennis Association (WTA). Our results support predictions by Rosen's tournament model. Larger prize money differentials have a positive, statistically significant effect on the favoured player's probability of winning the match. In addition, the number of stages remaining has a significant, negative effect on winning, consistent with tournament theory predictions associated with the number of contestants in a tournament.     

Job Security,Financial Security and Worker Well‐being: New Evidence on the Effects of Flexible Employment

This paper uses panel data drawn from the Household, Income and Labour Dynamics in Australia (HILDA) survey to provide new evidence of the links between unemployment, wages, job security, financial security and workers' well‐being for workers in flexible employment. Our findings indicate that workers in flexible employment encounter more unemployment and experience increased job insecurity; unemployment is associated with wage penalties. Lower wages, job insecurity and financial insecurity affect well‐being. However, these negative outcomes are mitigated by longer job tenure. Our results have implications for moves towards a flexicurity model of employment     

Job matching and the distribution of producer surplus

We study wage determination in the Jovanovic model of matching, relaxing the standard assumption that wages continuously adjust to reflect on-the-job performance and studying aggregation of ex-ante heterogeneous career paths. We assume that workers have no bargaining power and consider an equilibrium where individual workers' age-earnings profiles are piecewise constant, reflecting their outside earning opportunities at each point in time. Turnover results from employers' firing decisions rather than from workers' quitting decisions, and the equilibrium delivers realistic cross-sectional and time-series implications. Employees receive only a portion rather than the whole of the ex-ante producer's surplus from established matches, and have individual incentives to lobby for increased job security. Inefficiently low aggregate turnover may result if such lobbying efforts are successful.     

Unemployment and Workers' Control

The relationship between democratic workers' control and unemployment is explored. When unemployment arises from labor market distortions, market imperfections, or from information imperfections, labor-managed firms are superior to capitalist firms. The firm's governance and decision making structures then play an instrumental role in the level of unemployment. However, when involuntary unemployment arises from effective demand failures, then workers' control may not be able to maintain or to restore full employment. In such cases, collective and coordinated efforts are needed to reduce the level of involuntary unemployment.     

Profit-sharing versus interest-taking in the Kaldor–Pasinetti theory of income and profit distribution

Abstract

This paper reformulates the Kaldor–Pasinetti model of income and profit distribution by introducing the interest rate from the very outset of the model but maintaining other Kaldor–Pasinetti assumptions intact. It is shown that the profit rate and the share of profits in national income are not independent from either the capitalists' or workers' propensity to save. Many contributors to the theory of income and profit distribution have erred in attributing a potentially positive impact of the interest rate upon profits. The interest rate is always and everywhere a tax on functional and personal incomes together. This result explains Schumpeter's observation that ‘Interest acts as a tax upon profit.’ In an alternative model, workers receive a share of profits instead of fixed contractual interest. It is shown that the profit rate and share are not independent from either propensity to save. Furthermore, the workers' share of profits has a positive impact on the rate and share of profits. This implies that a profit sharing regime could be more conducive to capital accumulation and job creation. It is found that Pasinetti's Cambridge Equation is more akin to a profit sharing regime.     

An equilibrium search model with optimal wage-experience contracts

The objective of this paper is to study equilibrium in a labour market, in which workers search on the job and firms offer wage contracts conditional upon workers' experience and employment status. In this environment, the optimal contract can be described by a promotion contract. The distribution of contract offers is dispersed within and across experience levels. As workers stay longer in the market and promotion dates get closer, the option value of holding a job increases. Firms offer early promotions to attract more experienced workers. A positive relation between experience and earnings can arise purely from firms' optimal response to labour market competition brought about by workers' on-the-job search. We characterise the offer distribution for each experience level and show how these change with labour market conditions.     

DOES SIZE MATTER? THE INFLUENCE OF FIRM SIZE ON WORKING CONDITIONS,JOB SATISFACTION AND QUIT INTENTIONS

Using a detailed survey on Spanish workers, this paper investigates the relationship between firm size and working conditions, the extent to which firm size differences in workers' job satisfaction can be accounted for by differences in their work environment and the impact of firm size on workers' quit intentions. The results indicate that: (1) employees in larger firms face a worse work environment; (2) working in large firms significantly reduces job satisfaction when no controls for working conditions are included, but taking them into account makes differentials across size categories statistically insignificant; and (3) no systematic differences exist in intentions to quit across firm size categories, irrespective of conditioning on wages.     

DO STATE EMPLOYMENT ELIGIBILITY VERIFICATION LAWS AFFECT JOB TURNOVER?

State laws requiring employers to verify workers' employment eligibility may reduce employment and earnings among unauthorized workers and make it difficult for them to switch jobs. Using data from the 2005–2014 Quarterly Workforce Indicators, we find evidence of a reduction in employment and job turnover among Hispanics as a whole in states that require all employers to verify employment eligibility. These adverse effects become larger as the share of likely unauthorized Hispanic workers falls. The drop in job turnover may be due to the laws trapping some Hispanic workers in their jobs. There is little effect on employment or job turnover among non‐Hispanic whites or blacks. There is no effect on average pay for all groups of workers. (JEL J15, J61, J68)     

Sectoral Changes in Employment: An eclectic perspective on ‘good’ jobs and ‘poor’ jobs

The linkage Keynes established between the volume of employment that business firms require to make a particular number of jobs available provides an operational perspective about the way in which labor markets work. The aggregate supply or Z function is, in fact, a job offer curve. The most significant insight to derive from this curve is that job offers are inseparable from the economy's aggregate expenditure (or demand) level. This interdependency of aggregate supply and aggregate demand is necessary to understand the functioning of labor markets in the real world. This paper argues that a disaggregated model which encapsulates the economy's price-taking and price-making sectors offers a promising analytical tool to gain perspective about ‘good jobs’ and ‘poor jobs’ in post-Fordist economies. It is maintained that the sectoral deployment of workers reflects whether employing firms, as price-makers, can capture the increasing returns inherent in modern technology.     

The Effect of Child Care Subsidies: A Critique of the Rosen Model

In an influential article, Sherwin Rosen (1997) argues that Swedish subsidies of child care services lead to a substantial misallocation of resources that slows economic growth. We offer two major reasons why Rosen's approach is flawed. First and foremost, he ignores the positive externalities of increasing the quality of child care, despite their clear relevance to his general equilibrium model. Second, he overlooks distributional impacts, despite evidence that child care subsidies redistribute the costs of children between men and women, rich and poor, young and old. By exploring these and a number of smaller problems with Rosen's model we hope to encourage the development of more systematic efforts to explore the effects of state support for child rearing.     

WORKERS'CO-OPERATION

The first draft of this paper was put forward for consideration within the Labour Movement in April 1975 and was amended as a result of subsequent discussion. The paper examines the present movement for workers' co-operation in the light of the historical development of producers' co-operation in Britain. It concludes that the relative failure of producers' co-operation in the past has been due to the unfavourable economic environment in which it has tried to function – and that as a result it has been unable to compete with aggressive entrepreneurial capitalism in the accumulation of capital. Producers' co-operation has already demonstrated undoubted advantages. It is potentially more efficient in the use of labour and less socially divisive; it provides a model for the future transformation of industry in which workers can play a full part as equal partners rather than hired hands; it may also assist in maintaining existing, and creating new employment. In the present changed circumstances in which the free market economy is breaking down under accelerating inflation and major firms are turning to the government to solve their liquidity problems, it is suggested that workers' co-operation has an important part to play in the regeneration of British industry and that it should be encouraged as a matter of public policy. There are two major requirements for the growth of the producers' co-operative sector: 1. There must be a demand for, and ideological commitment to workers' co-operation on the shop floor. While this can be helped by government action it must develop primarily by the self-education of workers through their trade unions. 2. The state must create a climate favourable to workers' co-operation in the economy by the provision of capital, advice and specialist educational and technical assistance.     

The Unequal Distribution of Job Insecurity, 1966-86

In the first half of this paper the evidence concerning the costs of job insecurity is presented. There is now sufficient good research data to conclude that job insecurity is damaging to psychological health, marriages and employee motivation, and contributes to 'cycles of disadvantage'. In the second half of this paper, flows out of secure and insecure jobs are analysed using a work-histories dataset. Not only is it the case that flows from secure to insecure jobs were more common in the 1980s than in the 1970s and 1960s, but it is also apparent that the risk of a transition from a secure job into an insecure job is much greater for those in less advantaged jobs. The negative consequences of this further polarisation of the UK labour market are discussed.     

Preferences and demand for local public spending

In this paper we present logit estimation results for individual demand equations for local public spending. Our data are derived from a large-scale survey, organized by a Belgian municipality. Respondents were informed that the results of the survey would influence actual decisions and the questions covered very specific projects and their immediate tax consequences. Sociological variables are dominant in the explanation of the willingness-to-pay for specific projects, while the explanatory value of income is limited. We also analyse the global choice between public and private spending: here income and education are the most important variables, and both have a positive effect on the demand for public spending. Fiscal ignorance is widespread but does not lead to a higher demand for public spending.     

Deriving values for the ecological support function of wildlife: An indirect valuation approach

We describe a method that combines economic willingness-to-pay estimates for higher trophic-level species with basic information available about ecosystem relationships to derive estimates of partial willingness-to-pay for lower level species that might be of direct policy interest. This method is intended as a quasi-benefit transfer method for use in benefit–cost analysis. Our method makes it possible to establish partial willingness-to-pay estimates for the large number of species of immediate or potential policy interest using only data available in non-market valuation and biology and ecology literature. We provide a partial estimation of indirect values for the predator–prey relationships that support golden eagles in the Snake River Bird of Prey area as an example of how to operationalize our approach.     

Product Diversity under Monopoly: Two High Quality Results

A mild relaxation of Mussa and Rosen's (1978) preference assumption implies that, contrary to their result, a monopoly selling a line of vertically differentiated goods may include higher-quality varieties than would a competitive industry.     

The Theory of Differential Overqualification: Does it Work?

The theory of differential overqualification, developed by Robert Frank (1978),claims that married women in smaller labour markets have a higher risk of workingin jobs for which they are overqualified. This stems from the problem of dual jobsearch for couples which is much more difficult to optimize than single job search.Here, for several reasons husbands tend to first optimize their individual job search.Their wives are `tied movers' or `tied stayers' in the sense that their job search isundertaken under the condition that the job search of their husbands is optimized.This leads especially in smaller labour markets to a higher risk of a mismatchbetween formal qualifications and job requirements. The only specific empiricaltest of this theory, until now, has been performed by McGoldrick and Robst (1996) . Their results, using US data, do not support the theory. Using Germanpanel data (GSOEP), we also test the theory of differential overqualification.Unlike previous studies we control for commuting distances and our own resultsprovide some mixed support for the differential overqualification hypothesis.