Regional mismatch and unemployment: theory and evidence from Italy, 1977–1998

We describe the functioning of a two-region economy characterized by asymmetric wage setting. Labour market tightness in the leading-region affects wages in the whole economy. In equilibrium, net labour demand shifts towards the leading region raise unemployment elsewhere and leave regional wages unchanged, causing an increase in aggregate unemployment. Based on SHIW micro-data on earnings, we find strong evidence that wages in Italy only respond to Northern unemployment. We estimate that around 33% of the increase in Italian unemployment during 1977–1998 can be explained by regional mismatch, mainly due to an excess labour supply growth in the South.

The influence of market wages and parental history on child labour and schooling in Egypt

This paper examines the influence of adult market wages and having parents who were child labourers on child labour, when this decision is jointly determined with child schooling, using data from Egypt. The empirical results suggest that low adult market wages are key determinants of child labour; a 10% increase in the illiterate male market wage decreases the probability of child labour by 22% for boys and 13% for girls. The findings also indicate the importance of social norms in the intergenerational persistence of child labour: parents who were child labourers themselves are on average 10% more likely to send their children to work. In addition, higher local regional income inequality increases the likelihood of child labour.

Labour market integration of immigrants: estimating local authority effects

We propose a method for computing indicators of the relative success of local authorities at integrating new immigrants in the labour market, taking account of differences in characteristics of immigrants and local labour markets. The indicator for integration success is based on mean duration from date of residence permit to start of an employment spell. We apply this method to a Danish administrative dataset. Correcting for differences in immigrant characteristics and local labour market conditions has an important impact on the estimated ranking of local authorities. We investigate how robust the ranking is with respect to changes in the specification of criteria for integration success and controls.

Immigrant assimilation pre and post labour market entry: evidence from the UK Labour Force Survey

We estimate models of employment an earnings for a sample of white and non-white male immigrants drawn from the Labour Force Survey between 1993 and 2004. Immigrants who arrived to enter the labour market (labour market entrants) are distinguished from those who arrived to complete their education (education entrants). Diverse patterns of labour market assimilation are found depending on ethnicity and immigrant type. Amongst labour market entrants, whites do better than non-whites, whilst amongst education entrants, highly qualified prime-age non-whites perform as well as their white counterparts. Relative to white natives, labour market outcomes for all immigrant groups have a tendency to decline with age.

Dropping out of post-compulsory education in the UK: an analysis of determinants and outcomes

We analyse the decision to drop out of post-compulsory education over the period 1985–1994 using data from the Youth Cohort Surveys. We show that the dropout rate declined between 1985 and 1994, in spite of the rising participation rate in education, but is still substantial. Dropping out is more or less constant over the period of study, though the risk of dropout does vary with young people’s prior attainment, ethnicity, family background and the state of the labour market. The course of study has a substantial effect on the risk of dropout.

The Extent of Economic Vulnerability in the Canadian Labour Market and Federal Jurisdiction: Is There a Role for Labour Standards?

This paper characterizes vulnerable workers in Canada and the federal jurisdiction, based upon characteristics such as employment status, demographic characteristics, and job characteristics, and identifies areas in which labour standards may have a role. Based on this analysis, the paper evaluates the potential for labour standards to address economic vulnerability, focusing on labour standards policies aimed at wages and benefits, hours, and employment arrangements. In addition, the analysis considers the extent to which labour standards are likely to reach vulnerable workers. The results suggest several potential roles for labour standards and highlights policy implications.

A collective model for female labour supply with non-participation and taxation

This paper presents a collective discrete-choice model for female labour supply. Preferences of females and the intra-household allocation process are both econometrically identified. The model incorporates non-participation and non-linear taxation. It is applied to Belgian micro-data and is used to evaluate two revenue-neutral versions of the 2001 Tax Reform Act. We find small positive behavioural responses to the reforms. The reforms are not unambiguously welfare-improving. Generally, the first revenue-neutral reform (the actual reform and a household lump-sum tax) is more beneficial to females in couples than the second (the actual reform and a proportional decrease of household disposable incomes).

Earnings mobility among Italian low-paid workers

This paper uses Italian panel data to analyse low pay transitions since the early 1990s. Results indicate that having more human capital reduces the probability of falling into low pay, but there is little impact on raising exit rates from low pay. Human capital effects are found to be larger for women than for men. There is considerable state dependence: the experience of low pay raises the probability of subsequent low pay episodes. Also, there is substantial unobserved heterogeneity associated with factors such as initial conditions, mobility out of the earnings distribution and educational attainment.

The impact of the labour market on the timing of marriage and births in Spain

This paper investigates how education and the labour market affect Spanish individual decisions on the timing of marriage and births, using a Cox hazard approach. It disentangles men and women, and two groups, Cohort 1945–1960 and Cohort 1961–1977. Results show that female employment delays marriage in Cohort 1945–1960, but it has a reverse effect in Cohort 1961–1977. We also find evidence that employment is a barrier for family formation since employed women postpone births in both cohorts. The precarious Spanish labour markets, captured by female unemployment rates, delay family formation, especially by putting off marriage. Male unemployment, at the individual level, impacts negatively on fertility only through delaying marriage.

The Parental Leave Benefit Reform in Germany: Costs and Labour Market Outcomes of Moving towards the Nordic Model

Germany is known to have one of the lowest fertility rates among Western European countries and also relatively low employment rates of mothers with young children. Although these trends have been observed during the last decades, the German public has only recently begun discussing these issues. In order to reverse these trends, the German government recently passed a reform of the parental leave benefit system in line with the model practiced in Nordic countries. The core piece of the reform is the replacement of the existing means-tested parental leave benefit by a wage-dependent benefit for the period of one year. In this paper we simulate fiscal costs and expected labour market outcomes of this reform. Based on a micro-simulation model for Germany we calculate first-round effects, which assume no behavioural changes and second-round effects, where we take labour supply changes into account. Our results show that on average all income groups, couples and single households, benefit from the reform. The calculation of overall costs of the reform shows that the additional costs are moderate. As far as the labour market behaviour of parents is concerned, we find no significant changes of labour market outcomes in the first year after birth. However, in the second year, mothers increase their working hours and labour market participation significantly. Our results suggest that the reform will achieve one of its aims, namely the increase in the labour market participation of mothers with young children.

Parental time and working schedules

This paper investigates the effects of working schedules and of other characteristics (including family composition) on the time devoted by mothers and fathers to different activities with children in Canadian households, by using 1992 and 1998 Canadian Time Use Surveys. Switching regression models and models with selection allow us to simultaneously model labour market participation, type of work schedules and allocation of parental time. Working time has a negative and very significant effect on parental time. Hours worked during the day or at night exert a similar effect on parental time, but the impact of hours worked in the evening is by far larger. Time worked in the evening mainly decreases leisure and social activities with children.

Post-migration investments in education and job search: a family perspective

This paper examines post-migration investments in schooling and job search of immigrant families using new longitudinal data for Australia. Higher education levels at the time of arrival are associated with a greater probability of enrolling in school after migration. In households where the visa category would suggest that post-migration investments might be important, we find higher rates of school enrolment and job search. Traditional gender roles appear to dictate which partner makes the investments in formal schooling. However, labour market advantage, captured by principal applicant status, appears to dictate which partner makes greater investments in job search.

Role of Parental Education in Schooling and Child Labour Decision: Urban India in the Last Decade

This paper uses household level data from National Sample Survey Organization (NSSO) of India, the 55th (1999–2000) and the 61st (2004–05) rounds, to show that even with a significant wage incentive for schooling of urban children, the school drop out rate and child labour incidence are not small over this period. The parents’ level of education plays an important role in reducing this tendency; thus establishing the linkage between social and human capital outcomes in the family. We also look at the incidence of harmful and manual occupations among the child labour. Mother’s education appears as the more important factor in the recent round in curbing the manual work incidences; supporting earlier findings that women’s empowerment (one important indicator of which would be female educational level) is indeed becoming instrumental in increasing parental awareness. Using a pooled data set, we have also analysed the changes in the impact of parental education on these decisions between 1999–2000 and 2004–05.

Socioeconomic Indicators for Analyzing Convergence: The Case of Greece: 1960–2004

The purpose of this paper is to use socioeconomic indicators for analyzing convergence within Greece at regional (NUTS II) and prefecture levels (NUTS III) since 1960. We use two alternative approaches. The first one is based on the coefficient of variation and the second one on quality of life rankings. We confirm the decline of regional inequalities in Greece, with the exclusion of the 1980s. Regions with increased tourist and trade activity are also regions with high quality of life. Border regions are usually the laggards of social and economic development.

Information and racial exclusion

We present several economic models of racial segregation and income inequality. The use of race as a signal arises from imperfect information about the return to transactions with particular agents. In a search framework, signaling supports not simply a discriminatory equilibrium, but a pattern of racially segregated transactions, which in turn perpetuates the informational asymmetries. Equilibrium income disparities depend on the relative size of the minority group and on the informational “distance” between races. Under some circumstances, minority agents will self-segregate since they face an adverse selection of majority agents who are willing to trade with them.

Sacrificing Their Careers for Their Families? An Analysis of the Penalty to Motherhood in Europe

This paper examines the extent of and the mechanisms behind the penalty to motherhood in six European countries. Each country provides different levels of support for maternal employment allowing us to determine institutional effects on labour market outcome. While mothers tend to earn less than non-mothers, the penalty to motherhood is considerably lower in countries with policy support for working mothers. The paper establishes the United Kingdom and West Germany to have the least policy support for working mothers as well as the largest penalties to motherhood.

Job loss and family adjustments in work and schooling during the Mexican peso crisis

We use individual data from a panel of families during the depth of the peso crisis in Mexico to investigate whether the transition of the male household head from employment into unemployment affects the labor force participation of his spouse and children. We find that significant added-worker effects are in operation especially for adult females (wives), but no evidence that the labor force participation, the school attendance, and the likelihood of advancing to the next school grade of teenage males are influenced by the event of unemployment of the household head. The head's unemployment is significantly associated with a higher probability that teenage females do not attend school. However, lower attendance does not appear to impede their advancement to the next grade.

The determinants and consequences of child care subsidies for single mothers in the USA

This paper provides an analysis of child care subsidies under welfare reform in the USA. We used data from the 1999 National Survey of America's Families to analyze the determinants of receipt of a child care subsidy and the effects of subsidy receipt on employment, school attendance, unemployment, and welfare participation. Ordinary least-squares estimates that treat subsidy receipt as exogenous show an effect of subsidy receipt on employment of about 13 percentage points. Two-stage least-squares estimates that treat subsidy receipt as endogenous and use county dummies as identifying instruments show an effect of 33 percentage points on employment, 20 percentage points on unemployment, and no effects on schooling and welfare receipt.

How much does income matter in neighborhood choice?

There is a substantial literature on the residential mobility process itself and a smaller contribution on how households make neighborhood choices, especially with respect to racial composition. We extend that literature by evaluating the role of income and socioeconomic status in the neighborhood choice process for minorities. We use individual household data from the Los Angeles Family and Neighborhood Study to investigate the comparative choices of white and Hispanic households in the Los Angeles metropolitan area. We show that income and education are important explanations for the likelihood of choosing neighborhoods. But at the same time, own race preferences clearly play a role. While whites with more income choose more white neighborhoods, Hispanics with more income choose less Hispanic neighborhoods. One interpretation is that both groups are translating resources, such as income and education, into residence in whiter and ostensibly, higher status neighborhoods.

Determinants of recent immigrants’ location choices: quasi-experimental evidence

This paper exploits a Danish spatial dispersal policy on refugees, which can be regarded as a natural experiment to investigate the influence of regional factors on recent immigrants’ location choices. The main push factors are lack of co-nationals and immigrants. Additional push factors are lack of rental, including social, housing and lack of institutions for qualifying education, which explain why recent immigrants are attracted to large cities. Finally, placed refugees tend to leave locations with relatively high regional unemployment, and there is indirect evidence of welfare seeking.