The labor market effects of national health insurance: evidence from Taiwan

This paper investigates the impacts of national health insurance on the labor market, by considering the case of Taiwan, which implemented national health insurance in March 1995. Taiwan’s national health insurance is financed by premiums, which are proportional to an employee’s salary. These premiums may introduce distortions to the labor market. Based on repeated cross-sections of individual data we find that, on average, private sector employees’ work hours declined relative to their public sector counterparts, whereas their relative wage rates were almost unchanged with the introduction of national health insurance. The results suggest that neither private sector employers nor their employees were able to shift their premium burden to each other.      

Immigration,skills and the labor market: International evidence

Using the 1994–1998 International Adult Literacy Survey, this paper compares cognitive skills and employment of immigrants in Canada, New Zealand, Switzerland, and the United States. Immigrants had lower cognitive test scores than natives in each country, with the largest gaps in the US, and small gaps in Canada and New Zealand. Male immigrants in the US were no less likely to work than natives, while in the other countries, male immigrants were less likely to be employed. Female immigrants were less likely in each country to be employed than natives, with an especially large gap for the US.The author thanks Francine D. Blau and two anonymous referees for helpful comments and suggestions and Katsuhide Yamashita for excellent research assistance. Responsible editor: Christoph M. Schmidt.     

Drought and migration: an analysis of the effects of drought on temporary labor and return migration from a migrant-sending area in Nepal

Population and Environment - Although the relationship between drought – a dimension of climate change – and migration has been explored in a number of settings, prior research...     

Ageing and the labor market

Generation size and structure may have substantial effects on the labor market. This perspective is crucial for the German economy which is one of the most rapidly ageing societies. The paper studies the effects of relative cohort size and relative cohort age on unemployment. The time-series analysis employs cointegration techniques to discriminate between short-run and long-run developments. The econometric investigations suggest that in the long-run, there is no sufficient evidence that young cohorts experience higher unemployment rates if their cohort size is relatively high. In the short-run, there is in general a positive impact of relative cohort size and relative cohort age on unemployment.Revised version of Discussion Paper No. 90-25, University of Munich. A first draft of this paper was written, when I was visiting CentER, Tilburg University. I wish to thank Sijbren Cnossen, John De New, Horst Krämer, Walter Krämer, Winfried Schmahl, Christoph M. Schmidt, Bernard M. S. van Praag, Michael R. Veall, Jürgen Wolters, the participants of the ISPE-conference and three referees of this journal for helpful comments, John De New, Lucie Merkle and Martin Milhleisen for able research assistance, and the German Science Foundation (DFG) for financial support. The paper has also benefited from a research visit to Université Catholique de Louvain, Louvain-la-Neuve.     

The effect of immigration on the labor market performance of native-born workers: some evidence for Spain

This paper provides an approximation to the labor market effects of immigrants in Spain, a country where labor market institutions and immigration policy exhibit some peculiarities, during the second half of the 1990s, the period in which immigration flows accelerated. By using alternative data sets, we estimate both the impact of legal and total immigration flows on the employment rates and wages of native workers, accounting for the possible occupational and geographical mobility of immigrants and native-born workers. Using different samples and estimation procedures, we have not found a significant negative effect of immigration on either the employment rates or wages of native workers.

Getting back into the labor market: the effects of start-up subsidies for unemployed females

Low female labor market participation is a problem many developed countries have to face. Beside activating inactive women, one possible solution is to support the re-integration of unemployed women. Due to female-specific labor market constraints (preferences for flexible working hours, discrimination), this is a difficult task, and the question arises whether active labor market policies (ALMP) are an appropriate tool to help. It has been shown that the effectiveness of traditional (ALMP) programs—which focus on the integration in dependent (potentially inflexible) employment—is positive but limited. At the same time, recent evidence for Austria shows that these programs reduce fertility which might be judged unfavorable from a societal perspective. Promoting self-employment among unemployed women might therefore be a promising alternative. Starting their own business might give women more independence and flexibility to reconcile work and family and increase labor market participation. Based on long-term informative data, we find that start-up programs persistently integrate former unemployed women into the labor market, and the impact on fertility is less detrimental than for traditional ALMP programs.     

Child labor versus educational attainment: some evidence from Latin America

The paper addresses the issue of child labor in relation to the educational attainment of working children. The empirical analysis is based on household surveys in Bolivia and Venezuela. It was found that labor force participation is non-trivial among those below the legal working age or supposed to be in school. Working children contribute significantly to total household income. The fact that a child is working reduces his or her educational attainment by about 2 years of schooling relative to the control group of non-working children. Grade repetition, a common phenomenon in Latin America, is closely associated with child labor. JEL classification: J13, J21, I21 Received May 2, 1996/Accepted August 14, 1996     

Pension reform and labor market incentives

This paper investigates how parametric reform in a pay-as-you-go pension system with a tax–benefit link affects retirement and work incentives of prime-age workers. We find that postponed retirement tends to harm incentives of prime-age workers in the presence of a tax–benefit link, thereby creating a policy trade-off in stimulating aggregate labor supply. We show how several popular reform scenarios are geared either towards young or old workers or, indeed, both groups under appropriate conditions. We characterize the excess burden of pension insurance and show how it depends on the supply elasticities of both decision margins and the effective tax rates.     

Interregional migration and labor market imbalances

This paper investigates the effects of internal migration in developed countries on widening wage inequality and high unemployment, and it addresses the geographical dimension of both problems. A two-region dynamic model is developed, which accounts for the skill composition of recent internal migration flows; it also innovates on the existing literature on migration by introducing capital-skill complementarity in the production function. The main conclusion is that migration can actually aggravate labor market imbalances. In a competitive set-up, migration temporarily amplifies the geographical dispersion of unskilled workers wages and raises the average wage premium of the economy. When wage rigidities are introduced, labor mobility increases regional dispersion of unskilled workers employment. In the short-run it may even reduce the total employment of the economy.A previous version of this paper circulated with the title Migration Flows and Interregional Labor Market Disequilibrium. I would like to thank Samuel Bentolila, Federico Biagi, Fabio Canova, Alessandra Casarico, Rosa Maria Fernandez, Juan Francisco Jimeno, Adriana Kugler, Javier Ortega, Ferdinando Regalia, Gilles Saint-Paul, Etsuro Shioji, Marco Vannini, two anonymous referees, participants at UPF Macro Workshop, 1997 ASSET meeting, Marseille, 1998 ESPE Annual Conference, Amsterdam, and 1999 Winter Meeting of the European Econometric Society, Rotterdam, for helpful comments and suggestions; Alix Beith for her friendly help. The usual disclaimer applies. Responsible editor: Allessandro Cigno.     

Oppositional identities and the labor market

We develop a model in which nonwhite individuals are defined with respect to their social environment (family, friends, and neighbors) and their attachments to their culture of origin (religion or language), and in which jobs are mainly found through social networks. We find that depending on how strong peer pressures are, nonwhites choose to adopt “oppositional” identities because some individuals may identify with the dominant culture and others may reject that culture, even if it implies adverse labor market outcomes.      

The new labor market: Immigrants and wages after IRCA

We examine the effect of the Immigration Reform and Control Act (IRCA) on migrants' wages using data gathered in 39 Mexican communities and their U.S. destination areas. We examine changes in the determinants of wages before and after the passage of IRCA, as well as the effects of its massive legalization program. Migrants' wages deteriorated steadily between 1970 and 1995, but IRCA did not foment discrimination against Mexican workers per se. Rather, it appears to have encouraged greater discrimination against undocumented migrants, with employers passing the costs and risks of unauthorized hiring on to the workers. Although available data do not permit us to eliminate competing explanations entirely, limited controls suggest that the post-IRCA wage penalty against undocumented migrants did not stem from an expansion of the immigrant labor supply, an increase in the use of labor subcontracting, or a deterioration of the U.S. labor market.     

The substitutability of labor between immigrants and natives in the Canadian labor market: circa 1995

This paper examines the substitutability or complementarity between Canadian-born and immigrant workers. These are examined by estimating a set of wage equations using a generalized Leontief production function. The paper finds that, in general, there is no displacement of Canadian-born workers by immigrants. Recent immigrants affect the native-born positively, while older immigrants are neither substitute nor complement for natives. However, the effects differ across industries. Overall, the evidence that immigrants harm the opportunities of native-born workers is scant.

Gender-specific labor market conditions and family formation

Slack labor market conditions for women relative to men increase the marriage rate in the USA. This paper examines the long-term consequences of such marriages. Despite the significant effect on marriage timing, labor market conditions experienced in youth do not affect the probability that a woman will marry by the age of 30. Further, labor market conditions at the time of marriage are uncorrelated with the probability of divorce, spouses?? characteristics, or the number of children. These findings suggest that labor market fluctuations induce only intertemporal adjustments for marriage timing without affecting reservation match quality or total fertility.     

Welfare programs and labor supply in developing countries: experimental evidence from Latin America

This study looks at the effect of welfare programs on work incentives and the adult labor supply in developing countries. The analysis builds on the experimental evaluations of three programs implemented in rural areas: Mexico’s Programa Nacional de Educación, Salud y Alimentación (PROGRESA), Nicaragua’s Red de Protección Social, and Honduras’ Programa de Asignación Familiar. Comparable results for the three countries indicate that the effects that the programs have had on the labor supply of participating adults have been mostly negative but are nonetheless small and not statistically significant. However, the evidence does point to the presence of other effects on labor markets. In the case of PROGRESA, there is a small positive effect on the number of hours worked by female beneficiaries and a sizeable increase in wages among male beneficiaries and a resulting increase in household labor income. Moreover, PROGRESA seems to have reduced female labor-force participation in ineligible households. These results imply that large-scale interventions may have broader equilibrium effects.     

Asian-born scientists and engineers: their immigration flow and labor market adjustment

"This paper examines the flow of Asian-born scientists and engineers and their labor market adjustment. First, main elements to affect their immigration flow are described: supply, demand, and institution....The scarcity of domestic workers is the most important factor affecting demand of immigration. Institution, such as immigration policies, is another element to influence the immigration flow....Second, by using the 1980 U.S. Census data set, their labor market adjustment is explored in terms of hourly wages. Compared to the native-born white, there is no evidence that Asian-born scientists and engineers receive lower wages or lower return on human capital."     

The dynamics of immigrant welfare and labor market behavior

This paper analyzes transitions into and out of social assistance, unemployment, and employment. We estimate a dynamic multinomial logit model, controlling for endogenous initial condition and unobserved heterogeneity, using a large representative Swedish panel data set. The empirical results suggest that particularly refugee immigrants display a greater degree of “structural” state dependence than natives. The high welfare participation rates among refugee immigrants may be due to the existence of a “welfare trap”, while participation among natives and non-refugee immigrants is largely due to permanent unobserved characteristics. These results suggest that welfare reforms may have differential effects on refugee immigrants and natives.

Salary differentials or sex discrimination? Evidence from the academic labor market

This study uses data from two national faculty surveys to estimate the extent of salary discrimination by sex in the academic labor market. Following the Oaxaca method, discrimination is measured as a residual, subtracting salary differences due to individual characteristics from total male/female salary differences. Several estimates are derived while controlling for various personal and professional characteristics including: publications, academic discipline, rank, and characteristics of the employing institution. From 1968 to 1977 there is a substantial reduction in measured discrimination, although a small salary difference remains after controlling for all available qualifications in 1977.     

Grandparental availability for child care and maternal labor force participation: pension reform evidence from Italy

In this paper, we exploit pension reform-induced changes in retirement eligibility requirements to assess the role of grandparental childcare availability in the labor force participation of women with children under 15. Our analysis shows that, among the women studied, those whose own mothers are retirement eligible have a 11% higher probability of being in the labor force than those whose mothers are ineligible. The pension eligibility of maternal grandfathers and paternal grandparents, however, has no significant effect on the women’s labor force participation. We also demonstrate that the eligibility of maternal grandmothers mainly captures the effect of their availability for childcare. Hence, pension reforms, by potentially robbing households of an important source of flexible, low-cost childcare, could have unintended negative consequences for the employment rates of women with young children.     

Time series analysis of fertility and female labor market behavior

Cointegration methods are employed to investigate relations among total fertility, female wages, labor force participation, educational attainment, and male relative cohort size. Two long run relations among the series are found, and these are identified as a fertility and a labor supply equation. All covariates enter into these relations with significant coefficients and theoretically plausible signs. Innovation analysis shows that both fertility and female labor force participation respond to changes in relative cohort size in directions consistent with the Easterlin hypothesis. Female labor force participation responds significantly to fertility shocks, but reverse effects are insignificant.All correspondence to Robert McNown. The authors wish to thank Cristobal Ridao-Cano, Kenneth Land, Alessandro Cigno, and an anonymous referee for comments on an earlier draft of this paper. Responsible editor: Alessandro Cigno.