Temporary Help Agencies and Occupational Mobility*

This paper analyses the effects of Temporary Help Agencies (THA) on occupational mobility by performing an empirical comparison of the job‐to‐job upgrading chances of agency and regular (non‐agency) workers in Spain. We estimate a switching regression model to allow for self‐selection into agency work because of, for instance, more motivated workers being more likely to search for jobs through a THA. We find evidence in favour of the existence of self‐selection in all qualification groups considered. Concerning mobility, we find that agency workers in intermediate qualification levels are less likely to experience demotions than regular workers. THA increase the probability of high‐skilled workers achieving a permanent contract in Spain.     

Job mobility and the gender wage gap in Italy

This paper investigates the contribution of gender differences in job mobility to the emergence of a gender wage gap in the Italian labour market. We show that over the first 10 years of labour market experience job mobility accounts for up to 30% of total log wage growth for men and only 8.3% for women, and that this difference is mainly due to differences in returns to mobility. The gender mobility gap is robust to the inclusion of individual, job and firm characteristics, to different ways of accounting for individual unobserved heterogeneity, and is mainly found for voluntary job moves. Looking at the characteristics of the jobs and the firms' workers move to, we find that moves to larger firms represent by far the main source of gender differences in returns to mobility. We offer two possible explanations for this finding; one which involves differences in bargaining behaviour and one which relates to the theory of compensating differentials.     

Wage inequality, technology and trade: 21st century evidence

This paper describes and explains some of the principal trends in the wage and skill distribution in recent decades. Increases in wage inequality started in the US and UK at the end of the 1970s, but are now widespread. A good fraction of this inequality trend is due to technology-related increases in the demand for skilled workers outstripping the growth of their supply. Since the early 1990s, labor markets have become more polarized with jobs in the middle third of the wage distribution shrinking and those in the bottom and top third rising. I argue that this is because computerization complements the most skilled tasks, but substitutes for routine tasks performed by middle wage occupations such as clerks, leaving the demand for the lowest skilled service tasks largely unaffected. Finally, I argue that technology is partly endogenous, for example it has been spurred by trade with China. Thus, trade does matter for changes in the labor market, but through a different mechanism than conventionally thought.     

Substitution and complementarity between managers and subordinates: Evidence from British football

We use data on British football managers and teams over the 1994-2007 period to study substitution and complementarity between leaders and subordinates. We find for the Premier League (the highest level of competition) that, other things being equal, managers who themselves played at a higher level raise the productivity of less-skilled teams by more than that of highly skilled teams. This is consistent with the hypothesis that one function of a top manager is to communicate to subordinates the skills needed to succeed, since less skilled players have more to learn. However, we also find that managers with more accumulated professional managing experience raise the productivity of talented players by more than that of less-talented players. This is consistent with the hypothesis that a further function of successful managers in high-performance workplaces is to manage the egos of elite workers. Such a function is potentially more important the more accomplished the workers are-as indicated, in our data, by teams with greater payrolls.     

Performance pay, risk attitudes and job satisfaction

We present a model in which workers with greater ability and greater risk tolerance move into performance pay jobs to capture rents and contrast it with the classic agency model. Estimates from the German Socio-Economic Panel confirm testable implications drawn from our model. First, before controlling for earnings, workers in performance pay jobs have higher job satisfaction, a proxy for on-the-job utility. Second, after controlling for earnings, workers in jobs with performance pay have the same job satisfaction as those not in such jobs. Third, those workers in performance pay jobs who have greater risk tolerance routinely report greater job satisfaction. While these findings support models in which workers capture rent, they would not be suggested by the classic agency model.     

Comparing the effectiveness of employment subsidies

This paper examines the implications of different types of employment subsidies for employment, welfare, and inequality. It investigates how these effects depend on what target groups the subsidies address. Our analysis focuses on policies that are “approximately welfare efficient” (AWE), i.e. policies that (a) improve employment and welfare, (b) do not raise earnings inequality and (c) are self-financing. We construct a microfounded, dynamic model of hiring and separations and calibrate it with German data. The calibration shows that hiring vouchers can be AWE, while low-wage subsidies are not AWE. Furthermore, hiring vouchers targeted at the long-term unemployed are more effective than those targeted at low-ability workers.     

The influence of gay and lesbian coupled households on house prices in conservative and liberal neighborhoods

Gays and lesbians perceive themselves to be targets of discrimination in the housing market. Previous research has found that the presence of gays and lesbians is associated with increased housing values. We reconcile the perceived discrimination and research results by classifying neighborhoods as more conservative or liberal according to voting outcomes of the “Defense Of Marriage Act”. Using a data set comprised of over 20,000 house sale observations, we show that an increase in the number of same-sex coupled households is associated with an increase in house prices in more liberal neighborhoods and a decrease in house prices in more conservative neighborhoods. This suggests that gay and lesbian coupled households do experience prejudice in conservative neighborhoods.     

Outsourcing and computers: Impact on urban skill level and rent

Cities in the U.S. with a higher initial share of college graduates have had a greater subsequent increase in this share over the past two decades. Concurrently, housing prices have grown faster in these skilled cities. This paper argues that the diffusion of computers and outsourcing may partly explain these two phenomena. In the presented model, skilled workers are more productive in skilled cities and need unskilled support services. The cities' unskilled workers can perform the support services, but when it is cheaper, such services can be undertaken by computers or outsourced to less-skilled cities. New technologies facilitating computerization and outsourcing can increase the skill share and housing prices in skilled cities relative to less-skilled cities, under reasonable assumptions. The basic economics is that the new technologies diminish the demand for unskilled workers in skilled cities and permit skilled workers to earn higher wages, which in turn increases the supply of skilled workers in skilled cities and drives up housing prices. Empirically, this paper documents five stylized facts that the theory can rationalize. Particularly important is rising skill premium in skilled cities relative to less-skilled cities, which supports a production theory involving shifts in labor demand.     

Women in blue collar and related occupations at the end of the millennium

Electricians, truck drivers, fire fighters, and sewing machine operators are some of today’s blue collar workers. Despite the steady decline in manufacturing, labor force projections suggest that blue collar work will continue to be an important source of employment for women as well as men. Equal opportunity, however, has eluded women in these occupations. Higher paying, more skilled jobs are held by men, while women remain concentrated in less skilled, lower paying jobs. Problems are identified and solutions suggested for integrating women into the nontraditional jobs, as well as for improving the wages and working conditions in traditional jobs.     

Temporary jobs and job search effort in Europe

Using longitudinal data on individuals from the European Community Household Panel (ECHP) for eleven countries during 1995-2001, I investigate temporary job contract duration and job search effort. The countries are Austria, Belgium, Denmark, Finland, France, Greece, Ireland, Italy, the Netherlands, Portugal and Spain. I construct a search model for workers in temporary jobs which predicts that shorter duration raises search intensity. Calibration of the model to the ECHP data implies that at least 75% of the increase in search intensity over the life of a 2+ year temporary contract occurs in the last six months of the contract. I then estimate regression models for search effort that control for human capital, pay, local unemployment, and individual and time fixed effects. I find that workers on temporary jobs indeed search harder than those on permanent jobs. Moreover, search intensity increases as temporary job duration falls, and roughly 84% of this increase occurs on average in the shortest duration jobs. These results are robust to disaggregation by gender and by country. These empirical results are noteworthy, since it is not necessary to assume myopia or hyperbolic discounting in order to explain them, although the data clearly also do not rule out such explanations.     

The impact of relative residence times on the distribution of heavy drinkers in highly distinct environments

Alcohol consumption is a function of social dynamics, environmental contexts, individuals' preferences and family history. Empirical surveys have focused primarily on identification of risk factors for high-level drinking but have done little to clarify the underlying mechanisms at work. Also, there have been few attempts to apply nonlinear dynamics to the study of these mechanisms and processes at the population level. A simple framework where drinking is modeled as a socially contagious process in low- and high-risk connected environments is introduced. Individuals are classified as light, moderate (assumed mobile), and heavy drinkers. Moderate drinkers provide the link between both environments, that is, they are assumed to be the only individuals drinking in both settings. The focus here is on the effect of moderate drinkers, measured by the proportion of their time spent in “low-” versus “high-” risk drinking environments, on the distribution of drinkers.A simple model within our contact framework predicts that if the relative residence times of moderate drinkers are distributed randomly between low- and high-risk environments then the proportion of heavy drinkers is likely to be higher than expected. However, the full story even in a highly simplified setting is not so simple because “strong” local social mixing tends to increase high-risk drinking on its own. High levels of social interaction between light and moderate drinkers in low-risk environments can diminish the importance of the distribution of relative drinking times on the prevalence of heavy drinking.     

Are contingent jobs dead ends or stepping stones to regular jobs? Evidence from a structural estimation

The proportion of part-time, dispatch, and temporary workers has increased in many developed economies in recent years. These workers receive lower average wages and benefits, and are subject to lower employment stability. This paper analyzes the effects of initially taking such jobs on the employment careers of young workers. We build an on-and-off-the-job search model, using Japanese data to perform a structural estimation of the model parameters and simulate career paths, in order to study the effects of the initial choice of employment on the probability of having a regular job in the future and on the welfare of the worker. We find that although contingent jobs are neither stepping stones towards regular employment nor dead ends, starting a career in a contingent job has a lasting effect on the welfare of the individual in Japan.     

Preferences,Comparative Advantage,and Compensating Wage Differentials for Job Routinization*

I attempt to explain why there is not much evidence on compensating wage differentials for job disamenities. I focus on the match between workers’ preferences for routine jobs and the variability in tasks associated with the job. Using data from the Wisconsin Longitudinal Study, I find that mismatched workers earn lower wages and that both male and female workers in routinized jobs earn, on average, 5.5% and 7% less than their counterparts in non‐routinized jobs. However, once preferences and mismatch are accounted for, this difference decreases to 2% for men, and 4% for women, not statistically significant in both cases.     

Supply of skilled labour and organizational change

The paper develops a model where the structure of organizations is a choice variable for firms and depends on conditions in the labour market. It shows that an increase in the supply of skilled labour may lead firms to adopt organizations with less hierarchical levels. This organizational change increases firms' demand for skilled agents and qualitatively modifies their jobs (i.e. the set of tasks assigned to skilled employees) thus increasing the skilled wage premium.     

Managing the well-being of temporary skilled migrants

The war for talent, whereby skilled workers move between countries, continues to remain a global issue. This paper is informed by the human resource management (HRM) literature on global careers of skilled migrants and their cross-cultural adjustment and well-being. These literatures draw on human capital theory to understand skilled migration. In this paper, a case study of Western Australia's answer to addressing skills shortages by employing skilled migrant workers through temporary skilled migration schemes (employer-sponsored) situates the discussion within the role of HRM. Temporary skilled migrants are vulnerable in that they can experience a number of stressors, including long periods of separation from their loved ones, commencing a new job in an alien environment and resettlement tasks. The paper makes a contribution in utilising Al Ariss and Syed's (2011) model of human capital drawing on social, cultural, economic and symbolic forms of currency for temporary skilled migrants. This group is not homogenous in that they all draw on these aspects of human capital in varying ways. By addressing the gaps, HRM can add value in providing assimilation strategies for temporary migrant workers that supports retention and ensures improved worker well-being.     

Human Capital Spillovers within the Workplace: Evidence for Great Britain*

In this paper, we use a unique matched worker–workplace data set to estimate the effect on own earnings of co‐workers’ education. Our results, using the 1998 GB Workplace Employee Relations Survey, show significant effects. An independent, significantly positive effect from average workplace education is evident; own earnings premia from years of education fall only slightly when controlling for workplace education. This result suggests that the social returns to education are strongly positive – working with colleagues who each had 1.2 years (1 standard deviation) of more education than the average worker, boosts own earnings by 11.1%. An additional year of any single co‐worker's education is worth about 3.2% of an additional own year of education. We also test for interactions between own and co‐worker education levels and for ‘skills incompatibility’ when worker education levels are heterogeneous. The interactions appear negative: own education is not much valued at workplaces where co‐workers’ education levels are already high. There is no evidence that workplace heterogeneity in worker education levels adversely affects own earnings. This result runs counter to theoretical predictions, and suggests that workers compete in tournaments for high‐paying jobs.     

‘McJobs’, ‘good jobs’ and skills: job‐seekers' attitudes to low‐skilled service work

This article focuses on unemployed job‐seekers' attitudes towards entry‐level jobs in three areas of the service sector – retail, hospitality and call‐centre work. The article examines whether job‐seekers are reluctant to pursue these opportunities, and provides an analysis of the motives of those ruling out service work. A range of potential barriers is discussed, including the extent to which job‐seekers perceive the service economy as offering only so‐called ‘McJobs’– low‐skilled, low‐paid jobs with few opportunities for development. However, the article also focuses on perceived skills mismatches, with some job‐seekers arguably over‐qualified for entry‐level service jobs, while others consider themselves to lack the necessary ‘soft’ skills. The analysis is based on interviews with 220 unemployed people in Glasgow. The article concludes that policy action may be required to encourage job seekers to consider a broader range of vacancies and to provide tailored training in partnership with service employers. On the demand side, service employers must address the need for entry‐level positions that offer realistic salaries, decent work conditions and opportunities for progression and development.     

Technological and organizational changes as determinants of the skill bias: evidence from the Italian machinery industry

Recent empirical literature has introduced the ‘Skill Biased Organizational Change’ (SBOC) hypothesis, according to which organizational change can be considered as one of the main causes of the skill bias (increase in the number of highly skilled workers) exhibited by manufacturing employment in developed countries. This paper focuses on the importance of the SBOC with respect to the more traditional ‘Skill Biased Technological Change’ in driving the skill composition of workers in the Italian machinery sector. A dynamic panel data analysis is proposed which uses a unique firm‐level dataset. The results show that both skilled and unskilled workers are negatively affected by technological change, while organizational change—which in turn may be linked to new technologies—is positively linked to skilled workers. Copyright © 2005 John Wiley & Sons, Ltd.     

Effect of Immigrant Nurses on Labor Market Outcomes of US Nurses

We study the effect of immigration of foreign-trained, registered nurses (RNs) on the employment and wages of US-trained RNs. We use the “area” approach and study effects of immigration in labor markets defined by the state. We find substantial evidence that immigration by foreign-trained nurses increases the supply of nurses and that this increase in supply is associated with a decrease in annual earnings. Estimates suggest that a 10% increase in supply due to immigration is associated with a 1-4% decrease in annual earnings, although most estimates were not statistically significant and we did not find a similar association between an increase in supply and wages.     

Returns to Skills and the Distribution of Wages: Spain 1995–2010

In contrast to the pattern observed in other developed countries, the Spanish wage distribution compressed between 1995 and 2006 and became more disperse afterwards, so that in 2010 wage inequality was roughly similar to 1995. In this paper, we analyze the role of supply and demand factors when accounting for these facts. We start by decomposing observed wage changes into changes in the composition of the labour force and changes in the returns of workers' and jobs' characteristics. The results indicate that the compression of the wage distribution between 1995 and 2006 is largely explained by changes in returns, and particularly, by a decrease in the returns to education. We show that both the increase in the supply of high‐skilled workers and the increasing weight of low‐skilled occupations are related to the decreasing trend in the skill premium over this period. In contrast, the widening of the wage distribution after 2006 is largely explained by an increase in the relative demand for high‐skilled workers generating an increase in the school premium.