Lifetime employment as a coordination failure

This paper examines welfare implications of lifetime employment—a type of employment protection which arises endogenously. Lifetime employment is viewed as a commitment to assuring job security for a worker who makes effort, regardless of his actual productivity. Two effects arise from this commitment to lifetime employment: (i) it lowers the cost of inducing effort; (ii) it also has an external effect on the average quality of unemployed workers, which significantly affects the prospect of reemployment. The interaction of these two effects generates a type of strategic complementarity which results in multiple equilibria under certain conditions. We argue that the equilibrium in which all firms are committed to lifetime employment tends to be less efficient since inefficient matches are bound to perpetuate in this type of equilibrium.     

Job Satisfaction and Contingent Employment

This paper analyses job satisfaction as an aggregate of satisfaction with several job aspects, with special focus on the influence of contingent-employment contracts. Fixed-effect analysis is applied on a longitudinal sample of Dutch employees in four work arrangements: regular, fixed-term, on-call and temporary agency work. Our results indicate that temporary agency work is the only contingent employment relation that is on average associated with lower job satisfaction compared to regular workers. Decomposition of this gap indicates that the major part is due to the low satisfaction experienced by agency workers regarding the content of their jobs. A lack of job security is also responsible for part of the gap. For fixed-term and on-call workers the negative satisfaction effect originating from the lack of job security and lower wages is compensated by other job aspects and a variant relationship between total job satisfaction and its components. However, male and high educated on-call workers do experience lower job satisfaction.     

A Mismatch Made in Heaven: A Hedonic Analysis of Overeducation and Undereducation

In this paper, a hedonic pairing process is modeled in which some workers may be overeducated or undereducated as an equilibrium outcome of a dynamic labor market. Undereducated workers are those whose abilities and training permit them to move into a job with higher qualifications, whereas overeducated workers are highly qualified workers who select into lower-skill, entry-level jobs that provide the training (or signal) necessary for promotion. The empirical model shows that these pairing types cannot be directly identified in a cross section since all workers are exactly educated during a portion of their career. However, pairing types may be imputed by comparing predicted and observed qualifications of the worker and predicted and observed requirements of the firm. Using a rich cross section and a panel of British working-age males to identify the pairing types, we confirm the predicted career development patterns with regard to on-the-job training, promotion, and wages.     

Labour markets, welfare, and the personal scope of employment law

The issues which confront those concerned with employment law,about the types of workers to whom employment laws apply, arehighly relevant to the subject of labour markets and welfare.The formulation and application of the personal categories ofemployment law is or involves a welfare allocation, often seenas a trade-off between welfare and efficiency. This articledescribe the basic legal framework for determining the personalscope of employment law in the UK, considers some recent adaptationsto that framework, engages in comparison with some continentalEuropean legal systems, examines empirical evidence about theworking of the personal categories of employment law, describesthe debate within the ILO about employment status and 'contractlabour', canvasses some ideas about the growth of complex workrelationships, and concludes by assessing a remaining task offurther refinement of theory in this area.     

Graduated Punishments in Public Good Games

I explain the ubiquitous use of graduated punishments by studying a repeated public good game in which a social planner imperfectly monitors agents to detect shirkers. Agents’ cost of contributing is private information and administering punishments is costly. Using graduated punishments can be optimal for two reasons. It increases the price of future wrongdoing (temporal spillover effect) and it can lead to bad types revealing themselves (screening effect). The temporal spillover effect is always present if graduated punishments prevail, but screening need not occur if agents face a finite horizon. Whether or not a screening effect is exploited has a substantial impact on both outcomes and actual punishments. If the temporal spillover effect is sufficiently strong, then first‐time shirkers are merely warned.     

The minimum wage in an adverse selection economy

This paper examines the welfare implications of minimum wagelegislation in a simple two-sector model, in which greater effortis required to produce in the higher productivity sector andindividual ability is private. An adverse selection distortionarises so that, without a minimum wage, too many workers workin the primary sector because of the high wage based on averageability. These workers produce relatively little, while exertingeffort. The paper shows that a minimum wage, in the low-productivitysector, can correct this distortion but may lower welfare.     

Unintended consequences of China's new labor contract law on unemployment and welfare loss of the workers

China's new Labor Contract Law, which intended to strengthen the labor protection for workers, went into effect on January 1, 2008. The law stipulated that the maximum cumulative duration of successive fixed-term (temporary) labor contracts is 10 years, and employees working for the same employer for more than 10 consecutive years are able to secure an open-ended (permanent) labor contract under the new law, which is highly desirable to employees. However, in order to circumvent the new Labor Contract Law, some employers may have dismissed workers, after the passage of the new law, who had worked in the same firm for more than 10 years. Using data from the 2008 China General Social Survey, we find strong evidence that firms did in fact dismiss their formal-contract employees who have been employed for more than 10 years. Additionally, using a regression discontinuity design based on this exogenous change in unemployment status for this particular group of workers, we show that the dismissed workers suffered significant welfare loss in terms of happiness. Our results are robust to various specifications and placebo tests.     

社会保障制度非商品化的国际比较与战略取向

对安德森社会福利的非商品化度量方法进行改进,增加社会保障模式、公共负担和市场负担等宏观维度指标,从宏观和微观双重维度12个指标度量社会保障制度非商品化程度,并以此对36个国家的社会保障制度的非商品化程度进行度量和比较。研究发现,我国社会保障制度的非商品化程度较低,尤其是社会保障的宏观维度非商品得分较低。我国社会保障的非商品化水平相比于同类型国家略高,但离福利国家之路还较遥远。     

Product market competition, job security, and aggregate employment

Standard economic wisdom generally stresses the benefits ofincreased competition on the product market. This paper proposesa model of monopolistic competition with an endogenous determinationof workers flows in and out of unemployment, where wages aredetermined according to an efficiency wage mechanism. We showthat an increase in product market competition boosts the hiringrate as well as the separation rate thus reducing job security.Hence, the efficiency wage schedule compatible with more competitionshifts upward. An adverse effect on workers' incentive is atwork which pushes real wages up to the point that increasedcompetition may indeed generate employment losses rather thangains.     

最低工资制在完全与不完全市场中的影响——一个理论分析框架

本文通过构建一个包含产品市场和劳动力市场的模型,分析了最低工资制度在社会、经济等方面的影响,并得出以下结论:如果企业是市场工资率的被动接受者,则推行最低工资制度在促进劳动者福利提升的同时,会以减损社会总福利为代价,同时社会总产出水平下降;如果企业对市场工资率有影响能力,则通过最低工资制度提高就业者工资率水平,这不仅会促进劳动者福利的提升,同时也会造成社会总福利的改进,社会总产出水平上升。以此为基础,结合当前中国的社会实际,对于最低工资制度的实施提供了相关的政策建议。     

Fiscal Policy in a Growth Model with Both Altruistic and Nonaltruistic Agents

This paper examines the long-run behavior of an overlapping generations model with a population consisting of altruistic and nonaltruistic agents. It also studies the effect of fiscal policy on aggregate capital accumulation and on the welfare of both types of agents. It shows that an increase in the relative number of nonaltruists is Pareto-improving in the steady state. It also shows that the introduction of public debt or unfunded social security has no effect on the long-run equilibrium but implies a transfer of resources from the nonaltruistic to the altruistic agents. Finally, it indicates that inheritance taxation hurts not only the altruists but also the nonaltruists.     

Alternative Work Arrangements and Job Satisfaction

The pressures of traditional jobs on working families, along with an aging population facing financial need, have contributed to heightened interest in the percentage of workers participating in alternative work arrangements. These include working as an independent contractor or self-employed, and those employed by others on-call, through temp agency, or as contractors. Examining job satisfaction across work arrangements by occupation and gender is one way to investigate a potential increase in the supply of such workers. Higher job satisfaction may indicate that more workers will select into these work arrangements and away from traditional jobs in the future. If this is particularly true for women, it has important implications for firms that would like to retain more women. Moreover, changes in how individuals earn a living may impact the social safety nets of such workers and their families given the nature of how such benefits are provided in the U.S. economy. This study utilizes recent waves of the General Social Survey to explore job satisfaction for workers in disaggregated alternative work arrangements, while controlling for both occupation and gender. The study finds that female workers who are independent contractors and self-employed are more satisfied with their jobs than those in regular salaried jobs, even those in nonprofessional occupations. Job satisfaction for those who work in temp agencies, do on-call work or work for contractors is no different than for those in regular jobs, regardless of occupation and gender.

     

TFP growth slowdown and the Japanese labor market in the 1990s

Unemployment in Japan nearly tripled during the 1990s. Underlying this upsurge lie an increase in the probability of workers to lose their jobs and a decrease in the probability that the unemployed find jobs. This paper analyzes the sources responsible for these labor market changes in Japan in the decade of the 1990s. We build, calibrate, and simulate a neo-classical growth model with search frictions in the labor market. Using actual TFP data, the model is able to reproduce the path of unemployment and the job flows, as well as that of output. We find it to be the decrease in productivity, coupled with the reduction in hours worked, which curtails the profits of firms, inducing a drop in employment and an increase in unemployment.     

Delaying the Normal and Early Retirement Ages in Spain: Behavioural and Welfare Consequences for Employed and Unemployed Workers

In this paper, we explore the links between pension reform, early retirement, and the use of unemployment as an alternative pathway to retirement. We use a dynamic rational expectations model to analyze the search and retirement behaviour of employed and unemployed workers aged 50 or over. The model is calibrated to reproduce the main reemployment and retirement patterns observed between 2002 and 2008 in Spain. It is subsequently used to analyze the effects of the 2011 pension reform in Spain, characterized by 2-year delays in both the early and the normal retirement ages. We find that this reform generates large increases in labour supply and sizable cuts in pension costs, but these are achieved at the expense of very large welfare losses, especially among unemployed workers. As an alternative, we propose leaving the early retirement age unchanged, but penalizing the minimum pension (reducing its generosity in parallel to the cuts imposed on individual pension benefits, and making it more actuarially fair with age). This alternative reform strikes a better balance between individual welfare and labour supply stimulus.     

An Analysis of Perceptions of Job Insecurity among White and Black Workers in the United States: 1977–2012

While objective measures indicate that the risk of job loss is higher for black workers than for white workers, there is little research on how what workers’ expectations of job loss differ by race. This study looks at how secure black and white workers are feeling about their jobs and how their perceptions of job insecurity have been affected by time trends and regional unemployment rates. I find that perceptions of job security of black male workers, older black workers, and black high school graduates have deteriorated relative to their white counterparts during the period 1977–2012. Among those who attended college, white workers’ perceived job insecurity has increased. Black blue-collar workers’ and construction workers’ perceptions of job insecurity also have increased relative to their white counterparts. Moreover, perceptions of job insecurity among several black groups, such as high school dropouts and old workers, are more sensitive to regional unemployment rates than their white counterparts.     

Job Allocation Rules and Sorting Efficiency: Experimental Outcomes in a Peter Principle Environment

An important issue in personnel economics is the design of efficient job allocation rules. Firms often use promotions both to sort workers across jobs and to provide them with incentives. However, the Peter Principle states that employees' output tends to fall after a promotion. Lazear (2004) suggests that self‐selection may improve job allocation efficiency while preserving incentive effects. We reproduce this Peter Principle in the laboratory and compare the efficiency of a promotion standard with subjects self‐selecting their task. We find no evidence of effort distortion, as predicted by theory. Furthermore, we find that when the Peter Principle is not severe, promotion rules often dominate self‐selection efficiency of task assignment. Results are consistent with imperfect appraisal of transitory ability and a lack of strategic behavior.     

Rebalancing in China: A taxation approach

The rebalancing of the Chinese economy is analyzed through a heterogeneous taxation of various types of firms. Based on a two-country dynamic general equilibrium model, the paper applies tax reforms to raise consumption, reduce some firms' overinvestment (overcapacities) and maintain a high level of welfare.To rebalance consumption and investment, taxation may allow reallocating a part of the labor force to firms that are not overinvesting (via business taxes and social security contributions). Moreover, the correction of distortions in production factor costs (capital and labor) is necessary during certain reforms applied in the model; that is, on the one hand, higher credit costs for firms that face soft budget constraints (via financial transactions taxes) and, on the other hand, a catch-up of foreign firms' wages by domestic firms (via social security contributions).These tax reforms bring welfare benefits to households and stabilize the welfare reaction to productivity shocks. Another interesting result is that in this framework, the rebalancing of the domestic demand in China does not require the readjustment of the external financial position. Indeed, the aggregate savings rate remains high and the supply of domestic assets is reduced.Finally, another model proposes a heterogeneous taxation of consumption across home and foreign goods to enhance consumption.     

新生代农民工社会保障现状及对策

本研究以新生代农民工的社会保障现状为研究主题,对新生代农民工社会保障权益的情况进行调查,发现社会上存在许多新生代农民工缺乏合理的社会保障,很多新生代农民工基本的社会保障权益得不到切实保护,他们社会保险参保率低、社会福利和社会救助难以享受等一系列问题。本文在维护新生代农民工的社会保障权益的问题上提出以下几点建议:加强新生代农民工的自身发展、改变城市社会对新生代农民工的看法,促进企业和员工共同发展以及加强企业维护职工合法权利的意识,加强政府的对社会保障的宣传力度和监督力度,完善社会保障立法,制定适合新生代农民工的合法合理的保障制度。     

Forced Saving,Redistribution, and Nonlinear Social Security Schemes

This paper studies the design of nonlinear social security schemes when individuals differ in productivity and in their degree of myopia. Myopic individuals may not save “enough” for their retirement. The welfare function is paternalistic: The rate of time preference of the farsighted is used for both types. We show that the solution does not necessarily imply forced savings for the myopics: Paternalistic considerations are mitigated by incentive effects. Numerical results suggest that as the proportion of myopic individuals increases, there is less redistribution and more forced saving, and the desirability of social security increases.     

Why is There a Spike in the Job Finding Rate at Benefit Exhaustion?

Putting a limit on the duration of unemployment benefits tends to introduce a “spike” in the job finding rate shortly before benefits are exhausted. Current theories explain this spike from workers’ behavior. We present a theoretical model in which also the nature of the job matters. End-of-benefit spikes in job finding rates are related to optimizing behavior of unemployed workers who rationally assume that employers will accept delays in the starting date of a new job, especially if these jobs are permanent. This gives some workers an incentive to not immediately start working after they have found a job. Instead they wait until their benefits expire. We use a dataset on Slovenian unemployment spells to test this prediction and find supporting evidence. We conclude that the spike in the job finding rate suggests that workers exploit unemployment insurance benefits for subsidized leisure.