Wages and Hours Laws: What Do We Know? What Can Be Done?

August 22, 2019
By: Charles C. BrownDaniel S. Hamermesh
Abstract: We summarize recent research on the wage and employment effects of minimum wage laws in the U.S. and infer from non-U.S. studies of hours laws the likely effects of unchanging U.S. hours laws. Minimum wages in the U.S. have increasingly become a province of state governments, with the effective minimum wage now closely related to a state’s wage near the lower end of its wage distribution. Original estimates demonstrate how the 45-year failure to increase the exempt earnings level for salaried workers under U.S. hours laws has raised hours of lower-earning salaried workers and reduced their weekly earnings. The overall conclusion from the literature and the original work is that wages and hours laws in the U.S. have produced impacts in the directions predicted by economic theory, but that these effects have been quite small.
JEL: J23 J38
URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:25942&r=ltv

Wages, Experience and Training of Women over the Lifecycle

August 22, 2019
By: Richard Blundell (University College London); Monica Costa Dias (Institute for Fiscal Studies, Centre for Economics and Finance); David Goll (University College London); Costas Meghir (Yale University)
Abstract: We investigate the role of training in reducing the gender wage gap using the UK-BHPS which contains detailed records of training. Using policy changes over an 18 year period we identify the impact of training and work experience on wages, earnings and employment. Based on a lifecycle model and using reforms as a source of exogenous variation we evaluate the role of formal training and experience in defining the evolution of wages and employment careers, conditional on education. Training is potentially important in compensating for the effects of children, especially for women who left education after completing high school.
Keywords: gender gap, wage gap, Earnings
JEL: J16 J31
URL: http://d.repec.org/n?u=RePEc:hka:wpaper:2019-040&r=ltv

The welfare implications of addictive substances: a longitudinal study of life satisfaction of drug users

August 22, 2019
By: Moschion, JuliePowdthavee, Nattavudh
Abstract: This paper provides an empirical test of the rational addiction model, used in economics to model individuals’ consumption of addictive substances, versus the utility misprediction model, used in psychology to explain the discrepancy between people’s decision and their subsequent experiences. By exploiting a unique data set of disadvantaged Australians, we provide longitudinal evidence that a drop in life satisfaction tends to precede the use of illegal/street drugs. We also find that the abuse of alcohol, the daily use of cannabis and the weekly use of illegal/street drugs in the past 6 months relate to lower current levels of life satisfaction. This provides empirical support for the utility misprediction model. Further, we find that the decrease in life satisfaction following the consumption of illegal/street drugs persists 6 months to a year after use. In contrast, the consumption of cigarettes is unrelated to life satisfaction in the close past or the near future. Our results, though only illustrative, suggest that measures of individual’s subjective wellbeing should be examined together with data on revealed preferences when testing models of rational decision-making
Keywords: Life satisfaction Rational addiction Drugs Homeless Australia Happiness
JEL: I12 I18 I30
URL: http://d.repec.org/n?u=RePEc:ehl:lserod:86479&r=ltv

Commuting, Migration and Local Joblessness

August 22, 2019
By: Michael AmiorAlan Manning
Abstract: Britain suffers from persistent spatial disparities in employment rates. This paper develops an integrated framework for analyzing two forces expected to equalize economic opportunity across areas: commuting and migration. Our framework is applicable to any level of spatial aggregation, and we use it to assess their contribution to labor market adjustment across British wards (or neighborhoods). Commuting offers only limited insurance against local shocks, because commutes are typically short and shocks are heavily correlated spatially. Analogously, migration fails to fully equalize opportunity because of strong temporal correlation in local demand shocks.
Keywords: spatial inequality, commuting, migration
JEL: J21 J61 J64 R23
URL: http://d.repec.org/n?u=RePEc:cep:cepdps:dp1623&r=ltv

The Measurement of Health Inequalities: Does Status Matter?

August 22, 2019
By: Costa-Font, Joan (London School of Economics); Cowell, Frank A. (London School of Economics)
Abstract: Approaches to measuring health inequalities are often problematic in that they use methods that are inappropriate for categorical data. The approach here focuses on “pure” or univariate health inequality (rather than income-related or bivariate health inequality) and is based on a concept of individual status that allows a consistent treatment of such data. We use several versions of the status concept and apply methods for treating categorical data to examine self-assessed health inequality for the countries contained in the World Health Survey; we also use regression analysis on the apparent determinants of these health inequality estimates. Our findings indicate major differences in health-inequality rankings depending on the status concept. We find evidence that health inequalities vary with median health status alongside indicators of institutional performance.
Keywords: health inequality, categorical data, entropy measures, health surveys, upward status, downward status
JEL: D63 H23 I18
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp12390&r=ltv

Discrimination in Hiring Based on Potential and Realized Fertility: Evidence from a Large-Scale Field Experiment

August 22, 2019
By: Sascha O. BeckerAna FernandesDoris Weichselbaumer
Abstract: Due to conventional gender norms, women are more likely to be in charge of childcare than men. From an employer’s perspective, in their fertile age they are also at “risk” of pregnancy. Both factors potentially affect hiring practices of firms. We conduct a large-scale correspondence test in Germany, Switzerland, and Austria, sending out approx. 9,000 job applications, varying job candidate’s personal characteristics such as marital status and age of children. We find evidence that, for part-time jobs, married women with older kids, who likely finished their childbearing cycle and have more projectable childcare chores than women with very young kids, are at a significant advantage vis-à-vis other groups of women. At the same time, married, but childless applicants, who have a higher likelihood to become pregnant, are at a disadvantage compared to single, but childless applicants to part-time jobs. Such effects are not present for full-time jobs, presumably, because by applying to these in contrast to part-time jobs, women signal that they have arranged for external childcare.
Keywords: Fertility, discrimination, experimental economics
JEL: C93 J16 J71
URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1039&r=ltv

Education Quality and Teaching Practices

August 22, 2019
By: Marina Bassi (World Bank); Costas Meghir (Cowles Foundation, Yale University, NBER, IZA, CEPR, and Institute for Fiscal Studies); Ana Reynoso (Department of Economics, University of Michigan)
Abstract: Improving school quality with limited resources is a key issue of policy. It has been suggested that instructing teachers to follow specific practices together with tight monitoring of their activities may help improve outcomes in under-performing schools that usually serve poor populations. This paper uses an RCT to estimate the e?ectiveness of guided instruction methods as implemented in under-performing schools in Chile. The intervention improved performance substantially and by equal amounts for boys and girls. However, the effect is mainly accounted for by children from relatively higher income backgrounds and not for the most deprived. Based on the CLASS instrument we document that quality of teacher-student interactions is positively correlated with the performance of low income students; however, the intervention did not affect these interactions. Guided instruction can improve outcomes, but it is a challenge to reach the most deprived children.
URL: http://d.repec.org/n?u=RePEc:cwl:cwldpp:2181&r=ltv