THE WELL‐BEING OF THE ELDERLY AND WAGE ARREARS IN RUSSIA

About one‐third of households with elderly were not paid their wages during the mid‐1990s in Russia. Applying matching estimations to a nationally representative survey, the study shows that wage arrears had detrimental effects on the well‐being of the elderly in these families. Salaries in households with wage arrears dropped by almost two‐thirds, income fell by more than one‐third, and poverty doubled. Behavioral responses were only partly effective. The net revenue loss amounted to five‐sixths of the wage shock for men, and nine‐tenths of the wage shock for women. The elderly cut back on food expenses by reducing food purchases and adjusting their diet towards cheaper calories, economising on expenses equal to around one‐quarter of the wage reduction. Caloric and protein intakes dropped, although less than income, and the nutritional content of food consumption with regard to vitamins and minerals deteriorated. Wage arrears worsened male health more than female health, even though the decline in income was comparable. Functional limitations rose by 8% for men and 3% for women, and self‐rated health declined by 2.5% for men and 0.5% for women. Old‐age men with arrears were almost twice as likely to die before the next survey round, and functional limitations of surviving men rose by more than 10%. By contrast, there was no impact on the next round's health status of old‐age women. A rich data set is used to discount alternative explanations, including feedback from health to income, other economic factors, health service access, health behavior, and environmental conditions. (JEL: I12, I30, J14, J30)     

THE IMPACT OF THE INTRODUCTION OF THE U.K. MINIMUM WAGE ON THE EMPLOYMENT PROBABILITIES OF LOW‐WAGE WORKERS

This paper uses longitudinal data from three contrasting data sets (matched Labor Force Surveys, the British Household Panel Survey, and matched New Earnings Surveys) to estimate the impact of the introduction of the U.K. minimum wage (in April 1999) on the probability of subsequent employment among those whose wages would have needed to be raised to comply with the minimum. A difference‐in‐differences estimator is used, based on position in the wage distribution. No significant adverse employment effects are found for any of the four demographic groups considered (adult and youth, men and women) or in any of the three data sets used. (JEL: J38, J23)     

THE POLITICAL COLOR OF FISCAL RESPONSIBILITY

We propose a dynamic general equilibrium model that yields testable implications about the fiscal policy run by governments of different political color. Successive generations of voters choose taxation, expenditure, and government debt through repeated elections. Voters are heterogeneous by age and by the intensity of their preferences for public good provision. The political equilibrium switches stochastically between left‐ (pro‐public goods) and right‐leaning (pro‐private consumption) governments. A shift to the left (right) is associated with a fall (increase) in government debt, an increase (fall) in taxation, and an increase (fall) in government expenditures. However, left‐leaning governments engage in more debt accumulation during recessions. These predictions are shown to be consistent with the time‐series evidence for the United States in the postwar period, and also with the evidence for a panel of OECD countries. (JEL: D72, E62, H41, H62, H63)     

Employment Decisions of Married Women: Evidence and Explanations

Aggregate evidence has revealed a significant increase in women’s labour market participation (especially among married women) and a decline in male participation, both in Italy and in all the other OECD countries. This paper empirically tests the relationship between the education and employment status of husbands and wives using the Bank of Italy Survey (1995). The results of our analysis show that employed women are likely to be married to employed men with a higher level of education and higher income. The estimates of the labour supply decisions of wives show that the effect of the unemployment status of husbands is mediated by other factors associated with the family’s view of wives working outside home. The response to a husband’s unemployment depends significantly on the employment decisions of parents (mothers and mothers‐in‐law), a proxy for the couple’s attitude towards women’s work.     

The Impact of Income and Employment Status on Leaving Home: Evidence from the Italian ECHP Sample

In this paper we investigate the role economic resources play in the decision of young Italian adults to leave the parental home. This is of particular interest given that, in Italy, young people leave home considerably later than in other European countries. We use the first two waves of the Italian sample of the European Community Household Panel. We use a Heckman selection‐type probit procedure to account for left censoring and unobserved heterogeneity. We find that economic circumstances are important. In particular, we find personal income resources, as well as parental income levels, to be crucial in leaving home. Our results suggest that stable employment is an important prerequisite for men to start their own household. For women, on the other hand, finding a partner seems to the most important factor in becoming independent of their parents.     

WHY DO MOST ITALIAN YOUTHS LIVE WITH THEIR PARENTS? INTERGENERATIONAL TRANSFERS AND HOUSEHOLD STRUCTURE

More than 80% of Italian men aged 18–30 live with their parents. We argue that one contributing factor to this remarkably high rate of cohabitation is parents' tastes for coresidence. In order to investigate the role of parental preferences, we estimate the effect of exogenous changes in parental income on rates of cohabitation in Italy using Survey of Households' Income and Wealth (SHIW) micro data from 1989 to 2000. In order to identify a source of exogenous variation in parental income, we use changes in fathers' retirement age induced by the 1992 reform of the Italian Social Security system as an instrumental variable for parental income. By raising retirement age, this reform forced some fathers to remain in the labor market longer than they would have otherwise, therefore raising their disposable income. We use a two‐sample instrumental variable (TSIV) strategy. Our TSIV estimates indicate that a rise in parents' income significantly raises the children's propensity to live at home: A 10% increase in annual parental income results in approximately a 10% rise in the proportion of men living with their parents. Although we cannot definitely rule out alternative interpretations, these results are consistent with our hypothesis that cohabitation is a normal good for Italian parents. (JEL: J120, J610, H550)     

CROSS‐COUNTRY VARIATION IN THE IMPACT OF INTERNATIONAL MIGRATION: CANADA,MEXICO, AND THE UNITED STATES

Using data drawn from the Canadian, Mexican, and U.S. censuses, we find a numerically comparable and statistically significant inverse relation between immigrant‐induced shifts in labor supply and wages in each of the three countries: A 10% labor supply shift is associated with a 3%–4% opposite‐signed change in wages. Despite the similarity in the wage response, the impact of migration on the wage structure differs significantly across countries. International migration narrowed wage inequality in Canada; increased it in the United States; and reduced the relative wage of workers at the bottom of the skill distribution in Mexico. (JEL: J31, J61)     

Estimation of Benchmark Dose of Lifetime Cadmium Intake for Adverse Renal Effects Using Hybrid Approach in Inhabitants of an Environmentally Exposed River Basin in Japan

The aim of this study is to estimate the reference level of lifetime cadmium intake (LCd) as the benchmark doses (BMDs) and their 95% lower confidence limits (BMDLs) for various renal effects by applying a hybrid approach. The participants comprised 3,013 (1,362 men and 1,651 women) and 278 (129 men and 149 women) inhabitants of the Cd‐polluted and nonpolluted areas, respectively, in the environmentally exposed Kakehashi River basin. Glucose, protein, aminonitrogen, metallothionein, and β₂‐microglobulin in urine were measured as indicators of renal dysfunction. The BMD and BMDL that corresponded to an additional risk of 5% were calculated with background risk at zero exposure set at 5%. The obtained BMDLs of LCd were 3.7 g (glucose), 3.2 g (protein), 3.7 g (aminonitrogen), 1.7 g (metallothionein), and 1.8 g (β₂‐microglobulin) in men and 2.9 g (glucose), 2.5 g (protein), 2.0 g (aminonitrogen), 1.6 g (metallothionein), and 1.3 g (β₂‐microglobulin) in women. The lowest BMDL was 1.7 g (metallothionein) and 1.3 g (β₂‐microglobulin) in men and women, respectively. The lowest BMDL of LCd (1.3 g) was somewhat lower than the representative threshold LCd (2.0 g) calculated in the previous studies. The obtained BMDLs may contribute to further discussion on the health risk assessment of cadmium exposure.     

Does Rent‐sharing Profit Female and Male Workers? Evidence from Israeli Matched Employer–Employee Data

This paper analyses the impact of workplace characteristics on individual wages based on a unique cross‐section matched employer–employee data set for the Israeli private manufacturing sector in 1995. Specifically, we examine the effects of the interaction between profit‐sharing and wages on the gender wage gap. The empirical findings show that individual compensation is significantly and positively correlated with firms’ profits‐per‐employee, even when controlling for all of the following: group effects in the residuals, individual and firms’ characteristics, industry wage differentials and endogeneity of profits. Wage–profit elasticity is found to be 11 per cent and it does not significantly differ between genders. With respect to the overall gender wage gap (on average women earn 28 per cent less than men), the results show that within firms there is no gender discrimination and that 12 per cent of this gap can be explained by the wage–profits profile and by the fact that women are more likely to be employed in less profitable firms than men.     

Unemployment Determinants for Women in Spain

Spain has one of the highest rates of unemployment among OECD countries. Some explanations for this stress the importance of unemployment duration compared with entry rates to the unemployment pool. Long‐term unemployment rates are particularly high among women in Spain. The object of this paper is to investigate the determinants of unemployment duration among women. It will consider personal characteristics (education and age), family background, socio‐economic variables (the number of household earners and household income) and the effect of unemployment benefits, using data from the Household Expenditure Survey 1990–91.     

Public Sector Wage Premium in Canada: Evidence from Labour Force Survey

Although previous research has pointed to a public/private sector wage gap for men and women in Canada, the extent of this gap has not been measured in recent years. Using data from the Canadian Labour Force Survey for September 2008, and using an endogenous switching regression framework to control for self‐selection, I find that both men and women earn a wage premium in the public sector in Canada, although the premium is higher for women. The pure wage premium or economic rent that public sector workers receive relative to their counterparts in the private sector is $1.09, or 5.4 per cent for men and $3.15, or 20 per cent for women. An analysis of selection in the pubic/private sector reveals that public sectors workers are ‘positively selected’ on observables and consist of the ‘cream of the crop’.     

UNEMPLOYMENT INSURANCE IN EUROPE: UNEMPLOYMENT DURATION AND SUBSEQUENT EMPLOYMENT STABILITY

This paper provides evidence on the effect of unemployment insurance on unemployment and subsequent employment duration in Europe using individual data from the European Community Household Panel. Country‐specific estimates based on a multivariate discrete‐time duration model, which takes into account dynamic selection issues and the endogeneity of benefit receipt, suggest that although receiving benefits has an adverse effect in the sense of increasing unemployment duration, there is also a positive effect associated with the increased duration of subsequent employment. This beneficial effect of unemployment insurance on employment stability is pronounced in countries with relatively generous benefit systems, and for recipients who have remained unemployed for at least six months. These findings are in line with theories that suggest a matching effect of unemployment insurance. (JEL: J64, J65, C41)     

The Educated Russian's Curse: Returns to Education in the Russian Federation during the 1990s

Abstract. This paper uses a representative sample of the Russian Federation, the Russian Longitudinal Monitoring Survey, to estimate the returns to education in this ex‐communist country. We tackle this classic issue in labor economics with the realistic expectation of obtaining results for Russia comparable in quality and reliability to those available in developed countries and other economies in transition. Using standard regression techniques we find that the returns to education in Russia are quite low compared with those reported in the literature on countries throughout the world, in almost no specification reaching higher than 5 per cent. Moreover, there is virtually no improvement in returns to education in the 1992–99 period, a result somewhat at odds with other studies using Russian data from similar time periods. When we instrument our main regressor using policy experiments from the 1960s, we find comparable results. We also perform a selectivity correction and discover even lower returns to education for men, although they become slightly higher for women. Additionally, we find extremely low returns to tenure, which can even become negative in certain specifications.     

THE PRIVATE AND FISCAL RETURNS TO SCHOOLING IN THE EUROPEAN UNION

We present estimates of the private and fiscal returns to schooling in 14 European Union countries. Estimates of the private returns to post‐compulsory formal education take into account the effects of schooling on wages and employment probabilities and allow for academic failure rates, the direct and opportunity costs of education, and the impact of personal taxes, social security contributions, and unemployment and pension benefits on lifetime earnings. Estimates of fiscal returns capture the long‐term effects of a marginal increase in average educational attainment on public finances under conditions that approximate general equilibrium. (JEL: I20, J31, H60).     

DOES THE ILO DEFINITION CAPTURE ALL UNEMPLOYMENT?

The labour market status of many nonworking persons is at the boundary between unemployment and inactivity. Like the unemployed, they seek and are available for work; unlike them, their last search action was not recent enough to meet the International Labour Office definition of unemployment. In this paper we examine by nonparametric tests how the transition probabilities of these out‐of‐the‐labour‐force job seekers differ from those of the unemployed as well as the other nonparticipants. First, using data from the European Community Household Panel, we show that in most EU countries these job seekers constitute a distinct labour market state. Second, we rely on information available only in the Italian Labour Force Survey to derive a measure of search intensity that we use to break down the out‐of‐the‐labour‐force job seekers. On the basis of their transition probabilities, the most active are indistinguishable from the unemployed. (JEL: J64, J22, R23)     

Exploring the Dynamics of Incongruent Beliefs about Women and Leaders

People tend to have similar beliefs about leaders and men but dissimilar beliefs about leaders and women. A decrease in this perceived incongruity between beliefs about women and leaders might follow from perceived changes in either or both of these stereotypes. In two experiments we investigated the dynamics of this stereotype incongruity by examining cross‐temporal perceptions of change in women's roles and leadership demands. In Experiment 1 , participants judged a target group (leaders, men, or women) in a specified year in the past, the present and the future with regard to gender‐stereotypic traits. In Experiment 2 , participants evaluated the same target groups in a future society in which the role distribution between the sexes was described as traditional, same‐as‐today, or equal. Altogether our findings indicate that the perceived incongruity between the leader stereotype and the female stereotype is a dynamic phenomenon. Participants' beliefs indicated erosion of the perceived incongruity between leaders and women because of a perceived change in women's roles. We discuss the implications of these beliefs for future social change.     

UNDER PRESSURE: GENDER DIFFERENCES IN OUTPUT QUALITY AND QUANTITY UNDER COMPETITION AND TIME CONSTRAINTS

Gender gaps in the workplace are widespread. One explanation for gender inequality stems from the effects of the interaction between competition and two pressure sources, namely, task stereotypes and time constraints. This study uses a laboratory experiment to find that the gender gap in performance under competition and preferences for competition can be partly explained by the differential responses of men and women to the above pressures. In particular, while women underperform the men in a high‐pressure math‐based tournament, women greatly increase their performance levels and their willingness to compete in a low‐pressure verbal environment, such that they actually surpass the men. This effect appears largely due to the fact that extra time in a verbal competition improves the quality of women’s work, reducing their mistake share. On the other hand, men use this extra time to increase only the quantity of work, which results in a greater relative number of mistakes. A labor market study suggests that the nature of the job and the stress level are correlated with the gender gap in the labor market in a manner consistent with the results of my experiment.     

Marriage,Labor Supply,and Home Production

We develop a search model of marriage where men and women draw utility from private consumption and leisure, and from a non‐market good that is produced in the home using time resources. We condition individual decisions on wages, education, and an index of family attitudes. A match‐specific, stochastic bliss shock induces variation in matching given wages, education, and family values, and triggers renegotiation and divorce. Using BHPS (1991–2008) data, we take as given changes in wages, education, and family values by gender, and study their impact on marriage decisions and intrahousehold resource allocation. The model allows to evaluate how much of the observed gender differences in labor supply results from wages, education, and family attitudes. We find that family attitudes are a strong determinant of comparative advantages in home production of men and women, whereas education complementarities induce assortative mating through preferences.     

GENDER DIFFERENCES IN RESPONSE TO BIG STAKES

It is commonly perceived that increasing incentives improves performance. However, the reaction to increased incentives might differ between men and women, leading to gender differences in performance. In a natural experiment, we study the gender difference in performance resulting from changes in stakes. We use detailed information on the performance of high‐school students and exploit the variation in the stakes of tests, which range from 5% to 27% of the final grade. We find that female students outperform male students in all tests—but to a relatively larger degree when the stakes are low. The gender gap disappears in tests taken at the end of high school, which count for 50% of the university entry grade. (JEL: D03, J16, I21, C30)     

Women’s Employment Status and Hours Employed in Urban Brazil: Does Husbands’ Presence Matter?

The determinants of hours worked for employed women in developing countries is a little‐studied topic. We compare the determinants of employment with the determinants of hours worked for prime‐aged urban Brazilian women with and without husbands present. Given employment status, we find systematic differences for women in couple‐headed and female‐headed households. For the former, the same variables that affect employment do a good job of explaining hours worked. In contrast, our model generally fails to capture determinants of variation in hours worked for women who are sole heads of households. Sample selectivity functions in opposite directions for the two groups.