Testing labour supply and hours constraints

This paper provides empirical evidence that, at a given wage, individuals cannot freely choose the number of hours they work. The novelty relative to the existing literature (e.g. [Altonji, J., Paxson, C., 1986. Job characteristics and hours of work. In: Ehrenberg, R. (Ed.), Research in Labor Economics, vol. 8. Westview Press, Greenwich, 1–55]) is twofold. We use the US data on prime age males from the National Longitudinal Survey of Youth and we account for endogenous switching between jobs. Our results are: (i) the variance of the change in hours worked is more than six times higher for movers than for stayers; (ii) the intertemporal labour supply elasticity is positive and significant for movers and zero for stayers. This is further evidence for the presence of hours constraints. One important implication is that estimates of the labour supply elasticity that ignore these constraints are biased.     

Sectoral labour supply,choice restrictions and functional form

In this paper we discuss a general framework for analysing labour supply behaviour in the presence of complicated budget and quantity constraints, of which some are unobserved. The individual's labour supply decision is viewed as a choice from a set of discrete alternatives (jobs). These jobs are characterized by attributes such as hours of work, sector‐specific wages and other sector‐specific aspects of the jobs. The labour supply model for married women is estimated on Norwegian data. Wage elasticities and the outcome of a tax reform experiment show that overall labour supply is moderately elastic, but these modest overall responses shadow for much stronger inter‐sectoral changes. Our model is compared with a discrete choice model in which the utility is assumed to be a polynomial. We show that our estimated model has a more economically sensible interpretation and fits the data as well as the alternative approach. Copyright © 2006 John Wiley & Sons, Ltd.     

Democracy,labour and development: transforming industrial relations in Africa

Here the authors assess the status of labour development in Africa. The continental constraints of the political context and overall environment of the employment relationships are discussed. They conclude that the longer term role of African unions should be facilitated by greater tripartite concertation and government flexibility.     

Dynamic labour supply effects of childcare subsidies: Evidence from a Canadian natural experiment on low-fee universal child care

This paper shows that a temporary incentive to join the labor market or to work more can also produce substantial life-cycle labour supply effects. On September 1997, a new childcare policy was initiated by the provincial government of Québec, the second most populous province in Canada. Licensed and regulated providers of childcare services began offering day care spaces at the subsidized fee of $5/day/child for children aged 4. In successive years, the government reduced the age requirement, created new childcare facilities and spaces, and paid for the additional costs entailed by this low-fee policy. No such important policy changes for preschool (including kindergarten) children were enacted in the nine other Canadian provinces over the years 1997–2004. Using annual data drawn from Statistics Canada's Survey on Labour and Income Dynamics and a difference-in-differences quasi-experimental methodology, the paper estimates the dynamic labour supply effects of the program. The results demonstrate that the policy had long-term labour supply effects on mothers who benefited from the program when their child was less than 6. A striking feature of the results is that they are driven by changes in the labour supply of less educated mothers.     

Public school availability for two-year olds and mothers' labour supply

French children start public school either the year they turn two or the year they turn three. We evaluate the impact of this unique schooling policy on maternal labour supply. Using a Regression–Discontinuity design, we show that early school availability has a significant employment effect on lone mothers, but no effect on two-parent families. Also we show that the effect grows larger as the child grows older and as the family loses eligibility for child benefits. Finally, we provide some new evidence that school enrolment at the age of two has no adverse effect on children's subsequent educational outcomes.     

Maternal employment,migration, and child development

We analyze the roles of and interrelationships among school inputs and parental inputs in affecting child development through the specification and estimation of a behavioral model of household migration and maternal employment decisions. We integrate information on these decisions with observations on child outcomes over a 13-year period from the National Longitudinal Study of Youth (NLSY). We find that the impact of our school quality measures diminishes by factors of 2 to 4 after accounting for the fact that families may choose where to live in part based on school characteristics and labor market opportunities. The positive statistical relationship between child outcomes and maternal employment reverses sign and remains statistically significant after controlling for its possible endogeneity. Our estimates imply that when parental responses are taken into account, policy changes in school quality end up having only minor impacts on child test scores.     

Identifying interdependent behaviour in an empirical model of labour supply

In this paper we test a particular form of interdependent behaviour, namely the hypothesis that individuals' choices of hours of work are influenced by the average hours of work in a social reference group. There are problems in empirically disentangling the effects of interdependent behaviour and preference variation across groups. We show that panel data or data from several points in time are needed. In the empirical analysis we combine cross-section data from 1973, 1980, and 1990. Our results support the hypothesis of interdependent behaviour. The implication is that conventional tax policy predictions, in which preference interdependencies are neglected, will tend to underestimate the effect of a tax reform on hours of work. Our point estimates suggest that conventional calculations would capture only about a third of the actual change in hours of work. Copyright © 1999 John Wiley & Sons, Ltd.     

Desired and actual labour supply of unmarried men and women in the Netherlands

Desired and actual working hours of unmarried adults are analyzed. A discrete structural neoclassical model is used to explain desired hours, which depend on gross wage rates, tax and benefit rules, other income, and some background variables. The model takes account of fixed costs of working and of prediction errors in wage rates of nonworkers. Actual hours are explained from desired hours and hours restrictions. Deviations between actual and desired hours are used to identify equations for involuntary unemployment and the lack of part-time jobs. The model is estimated using cross-section data from the Dutch Socio-Economic Panel. We find larger wage elasticities of desired hours of work for women than for men. Involuntary unemployment and a lack of part-time jobs appear to be important sources of hours restrictions. Individuals with (potential) wages below the minimum wage have a significantly larger probability of involuntary unemployment than others.     

A model of labour supply with job offer restrictions

We specify a model of labour supply with job offer restrictions. A job offer is defined by a wage rate and working hours. The number of job offers is restricted, and follows a Poisson distribution. Individuals choose the alternative with the highest utility level. Three specifications are estimated: a basic specification, a specification in which the number of job offers depends on characteristics, and a specification in which the wage rate depends on working hours. Although the properties of the sample distribution of hours observed are replicated well for all of the specifications, the implications for the underlying behaviour are different.     

Participation and division of labour: a West German case study

Motivation and productivity were increased when the traditional division of labour and surplus was modified to give workers extended tasks and profit-shares in firm Z. In X, traditional division of labour combined with worker-shareholding and formal, representative participation failed to improve motivation.     

Legislation to combat child labour: an international perspective

Child labour persists in alarming proportions in third world countries inspite of the adoption of elaborate legislative measures to combat it. here the author attempts to delineate the reasons for the poor performance of these measures and suggests ways in which the process of combating child labour might be hastened.     

Migrant wages,remittances and recipient labour supply in a moral hazard model

This paper analyzes the interaction between migrants’ income and remittances and between remittances and the labour supply of residents. The model is cast as a two-period game with imperfect information about the residents’ real economic situation. Residents subject to a good economic situation may behave as if they were in a poor economic situation only in order to manipulate remitters’ expectations. The latter, being aware of this risk, reduce the remitted amount accordingly. Therefore, in the equilibrium, residents who really are victims of the bad economic outlook are penalized as compared to the perfect information set-up. In some circumstances, they can signal their type by drastically cutting working hours, thus further enhancing their precarity right when their economic situation is the worst.     

The impact of welfare reform on labour supply behaviour in New Zealand

New Zealand recently implemented sweeping reforms to its social welfare programmes by cutting benefits and tightening eligibility criteria. Regression analysis is used in this paper to isolate the effects of these reforms on several dimensions of labour supply behaviour. Overseas research in this area has often been hindered by the difficulty of boiling complex work disincentives down to a manageable set of regressors, or the lack of true variation in programme parameters. The structure of the benefit system and the nature of the reforms in New Zealand provide a unique opportunity to identify these behavioural responses. Quarterly random samples of individuals between 1985:4 and 1995:4 are used to isolate the effects of these policies, while controlling for a wide variety of other influences. This study finds compelling evidence that these reforms increased aggregate labour supply in this country.     

A note on bride kidnapping and labour supply behaviour of Kyrgyz women

Using data from the 2011 and 2016 Life in Kyrgyzstan surveys, we examine Kyrgyz women’s labour supply elasticities at the extensive margin. We use Heckman’s two-step approach to predict earnings for the non-participating women and then use these predictions to estimate the participation equation. We find that women’s labour supply decision is not influenced by their earnings. We also show that there exists a significant gap in employment propensities among ethnic Kyrgyz women in consensual or arranged marriages compared to women in kidnapped-based marriages. This finding suggests that the practice of bride abduction adversely affects women’s probability of employment and might have negative consequences on their economic well-being.     

Flexible work practices in South Africa: economic,labour relations and regulatory considerations

Here the author reviews flexible work practices in South Africa (SA) using Blyton's typology of functional, numerical, temporal and wage flexibility. Workplace flexibility implications for SA labour market and increased use of numerical flexibility are discussed. The article identifies factors limiting the introduction of flexible work practices.     

How far can reduced childcare prices push female labour supply?

Exploiting exogenous variation in childcare prices stemming from a childcare price reform, this paper estimates effects of reductions in childcare costs on female labour supply. The reform introduced a cap on childcare prices, and lead to considerable reductions in prices depending on family type and region of residence. Since the price is determined by a handful of observed characteristics, we are able to match households that are similar in all relevant aspects, but experienced quite different price changes. Our difference-in-differences regression matching estimates are very precise, and close to zero.     

Information and communication technology adoption and unemployment in West Africa Monetary Zone

This study examined the impact of information and communication technology (ICT) on unemployment among the countries in West Africa Monetary Zones (WAMZ) for the period 2005–2020. The study engaged the data sourced from World Bank Development Indicators (WDI), International labour organisation (ILO) and International Telecommunication Union (ITU). The study estimated the fixed and random effect models and pooled mean group estimators. The results indicate a negative and significant effect of ICT adoption on unemployment among countries of WAMZ. On the other hand, the magnitude of the effects differs, depending on the indicator of ICT being examined.     

Indeterminacy and nonlinear dynamics in an OLG growth model with endogenous labour supply and inherited tastes

This study analyses the dynamics of a two-dimensional overlapping generations economy with endogenous labour supply à la Reichlin (J Econ Theory 40(1):89–102, 1986) and aspirations. We show that the degree of nonlinearity of consumption externality in individual utility is responsible for the existence of either one steady state or two steady states. In addition, some interesting global dynamic properties, such as cyclical behaviour and/or global indeterminacy, emerge depending on the relative importance of aspirations in utility.