Influence Labor Supply Research Articles

Competences of Career Counsellors in Conditions of Uncertain Future - Context of 4th Industrial Revolution

Current labour market is influenced by uncertainty posed by challenges of occurring trends. Those trends are on the one hand shaped by demographic changes influencing labour supply and on the other hand transformations provided by 4th industrial revolution. Emerging innovative technological development, in addition to demographics and rising inequality, brings widespread automation and irreversible shifts in the structure of jobs giving rise to new opportunities but also creating new areas of uncertainty. The unpredictability of the labour market sets new tasks for the institutions supporting better adjustment of labour supply to demand needs. Crucial institution realizing those tasks are career counsellors who provide their service for different groups of clients. Effective career guidance is determined by comprehensive competences of counsellors. It should be noted that with regard to competences in the context of Industry 4.0, most of the research to date has focused on the analysis of employees' competences rather than on the competences of career counsellors. The development of the future labour market is subject to a hitherto unknown transformation. These premises, as well as the originality and validity of the research, both in the national and European dimension, prompted the authors to conduct innovative qualitative study. The aim of the article is to identify future competences of career counsellors in line with the ongoing trends on the labour market

Taxes and culture of leisure: Impact on labor supply in Europe

This paper uses micro data from the European Social Survey to investigate the impact of culture of leisure and taxes on labor force participation and hours worked of second-generation immigrants who reside in 26 European countries. These individuals are born in Europe, and they have been exposed to institutional, legal and labor market structures of their countries, including the tax rates. Their fathers are first-generation immigrants who migrated from 47 different countries. I construct measures of “taste for leisure” in the country of origin of each immigrant father. I employ average and marginal tax rates for each country of residence, and control for individual characteristics, in addition to a large set of attributes of the country of residence and country of origin. I demonstrate that systematic selection of first-generation immigrants (the fathers of the individuals analyzed) to countries of destination based on the tax rates is unlikely. The results show that for women, both taxes and culture of leisure impact labor force participation and hours worked. For men, taxes influence labor supply both at the intensive and the extensive margins, but culture of leisure has no impact. The results are insensitive to the omission of immigrants from Muslim countries.

2018 KLEIN LECTURE: INDIVIDUAL AND AGGREGATE LABOR SUPPLY IN HETEROGENEOUS AGENT ECONOMIES WITH INTENSIVE AND EXTENSIVE MARGINS

AbstractWe study business cycle fluctuations in heterogeneous agent general equilibrium models featuring intensive and extensive margins of labor supply. A nonlinear mapping from time devoted to work to labor services generates operative extensive and intensive margins. Our model captures the salient features of the empirical distribution of hours worked, including how individuals transit within this distribution. We study how various specifications influence labor supply responses to aggregate technology shocks and find that abstracting from intensive margin adjustment can have large effects on the volatility of aggregate hours even if fluctuations along the intensive margin are small.

Moral Pressures for Women to Stay Home: Incorporating Gender Role Attitudes into a Categorical Labour Supply Model of Couples

This study investigates the importance of gender role attitudes for the labour supply decisions of couples. To account for the interdependence between partners, categorical labour supply models are applied to 2004 and 2014 data of the Swiss Household Panel (SHP). In addition to the standard specification constructed with wages and incomes of the two partners, taxes, child-care costs, and socio-demographic characteristics, we include also gender role attitudes to the model. Results show that labour supply elasticities are close to zero. The only exception is women’s negative cross-wage elasticity, which demonstrates that women react more strongly to their partner’s wage than their own. Most importantly, this study shows that gender role attitudes influence labour supply decisions in two ways. First, women’s and their partner’s attitudes are taste shifters that influence women’s preference to stay home. Second, gender role attitudes alter the reaction to financial incentives. In this sense, we find that labour supply elasticities are more negative for women with home-oriented attitudes. Women’s utility of staying home is also higher in the Italian-speaking part of the country, suggesting that culture matters for women’s labour supply decisions.

Neighborhood Effects, Peer Classification, and the Decision of Women to Work

We examine the influence of neighborhood peer effects on the decision of women to work using panel data that follows clusters of adjacent homes between 1985-1993. Modeling assumptions imply rank order restrictions that enable us to classify individuals into peer groups while identifying peer effects and underlying mechanisms. For women, peer effects influence labor supply in part because women appear to emulate the work behavior of nearby women with similar age children. For men, peer effects are mostly absent, consistent with inelastic work decisions. Geographically concentrated panel data are crucial for these estimates. Our approach could also be applied to other instances in which neighborhood peer effects are important.

Opting Out and Leaning In: The Life Course Employment Profiles of Early Baby Boom Women in the United States.

Most literature on female employment focuses on the intersection between women's labor supply and family events such as marriage, divorce, or childbearing. Even when using longitudinal data and methods, most studies estimate average net effects over time and assume homogeneity among women. Less is known about diversity in women's cumulative work patterns over the long run. Using group-based trajectory analysis, I model the employment trajectories of early Baby Boom women in the United States from ages 20 to 54. I find that women in this cohort can be classified in four ideal-type groups: those who were consistently detached from the labor force (21 %), those who gradually increased their market attachment (27 %), those who worked intensely in young adulthood but dropped out of the workforce after midlife (13 %), and those who were steadily employed across midlife (40 %). I then explore a variety of traits associated with membership in each of these groups. I find that (1) the timing of family events (marriage, fertility) helps to distinguish between groups with weak or strong attachment to the labor force in early adulthood; (2) external constraints (workplace discrimination, husband's opposition to wife's work, ill health) explain membership in groups that experienced work trajectory reversals; and (3) individual preferences influence labor supply across women's life course. This analysis reveals a high degree of complexity in women's lifetime working patterns, highlighting the need to understand women's labor supply as a fluid process.

Government Policy and Labor Supply with Myopic or Targeted Savings Decisions

A central justification for social insurance and for other policies aimed at retirement savings is that individuals may fail to make adequate provision during their working years. Much research has focused on myopia and other behavioral limitations. Yet little attention has been devoted to how these infirmities, and government policies to rectify them, influence labor supply. This linkage could be extremely important in light of the large preexisting distortion due to income and consumption taxation and income-based transfer programs. For example, might myopic individuals, as a first approximation, view payroll taxes and other withholding to fund retirement savings as akin to an income tax, while largely ignoring the distant future retirement benefits that they fund? If so, the distortion of labor supply may be many times higher than otherwise, making savings-promotion policies much more costly than appreciated. Or consider what may be the labor supply implications for an individual who is defaulted into higher savings and, as a consequence, sees concomitantly lower take-home pay. This essay offers a preliminary, conceptual exploration of these questions. In most of the cases considered, savings policies do not act purely like a tax despite individuals’ nonoptimizing savings behavior, and in some cases labor supply actually is raised, not lowered, in which event policies that boost savings may be significantly more welfare-enhancing than recognized. Accordingly, there is a compelling need for empirical exploration of the interaction between nonoptimal savings behavior and labor supply.

Does Religion Affect Economic Growth and Happiness? Evidence from Ramadan

We study the economic effects of religious practices in the context of the observance of Ramadan fasting, one of the central tenets of Islam. To establish causality, we exploit variation in the length of the fasting period due to the rotating Islamic calendar. We report two key, quantitatively meaningful results: 1) longer Ramadan fasting has a negative effect on output growth in Muslim countries, and 2) it increases subjective well-being among Muslims. We then examine labor market outcomes, and find that these results cannot be primarily explained by a direct reduction in labor productivity due to fasting. Instead, the evidence indicates that Ramadan affects Muslims' relative preferences regarding work and religiosity, suggesting that the mechanism operates at least partly by changing beliefs and values that influence labor supply and occupational choices beyond the month of Ramadan itself. Together, our results indicate that religious practices can affect labor supply choices in ways that have negative implications for economic performance, but that nevertheless increase subjective well-being among followers.

EMPLOYMENT EFFECTS OF HEALTH SHOCKS: THE ROLE OF FRINGE BENEFITS

This paper examines whether health shocks influence labour supply. Estimates rely on detailed health measures that not only are more homogeneous than commonly-used self-reported health measures, but they also can be interpreted as plausibly exogenous with respect to labour supply. Further, this paper investigates the unique role that certain fringe benefits, namely health insurance and paid sick leave, play in the link between health shocks and subsequent employment activity. Results show that, compared to commonly-used self-reported measures of health, health problems defined by the US government as ‘priority’ conditions correlate with smaller labour supply shifts, but non-work-related injuries lead to larger shifts. Second, the arrival of a health shock appears to reduce the probability of remaining employed full time, while also increasing the likelihood of quitting work. Relatively few full-time workers who acquire health problems switch to part-time employment. Third, in the event of a health shock, sick leave appears to facilitate reductions in employment activities, while employer-provided insurance appears to hinder such adjustments.

The German labor market after the Great Recession: successful reforms and future challenges

The reaction of the German labor market to the Great Recession 2008/09 was relatively mild – especially compared to other countries. The reason lies not only in the specific type of the recession – which was favorable for the German economy structure – but also in a series of labor market reforms initiated between 2002 and 2005 altering, inter alia, labor supply incentives. However, irrespective of the mild response to the Great Recession, there are a number of substantial future challenges the German labor market will soon have to face. Female labor supply still lies well below that of other countries and a massive demographic change over the next 50 years will have substantial effects on labor supply as well as the pension system. In addition, due to a skill-biased technological change over the next decades, firms will face problems of finding employees with adequate skills. The aim of this paper is threefold. First, we outline why the German labor market reacted in such a mild fashion, describe current economic trends of the labor market in light of general trends in the European Union, and reveal some of the main associated challenges. Thereafter, the paper analyzes recent reforms of the main institutional settings of the labor market which influence labor supply. Finally, based on the status quo of these institutional settings, the paper gives a brief overview of strategies to combat adequately the challenges in terms of labor supply and to ensure economic growth in the future.

The German Labor Market after the Great Recession: Successful Reforms and Future Challenges

The reaction of the German labor market to the Great Recession 2008/09 was relatively mild – especially compared to other countries. The reason lies not only in the specific type of the recession – which was favorable for the German economy structure – but also in a series of labor market reforms initiated between 2002 and 2005 altering, inter alia, labor supply incentives. However, irrespective of the mild response to the Great Recession, there are a number of substantial future challenges the German labor market will soon have to face. Female labor supply still lies well below that of other countries and a massive demographic change over the next 50 years will have substantial effects on labor supply as well as the pension system. In addition, due to a skill-biased technological change over the next decades, firms will face problems of finding employees with adequate skills. The aim of this paper is threefold. First, we outline why the German labor market reacted in such a mild fashion, describe current economic trends of the labor market in light of general trends in the European Union, and reveal some of the main associated challenges. Thereafter, the paper analyzes recent reforms of the main institutional settings of the labor market which influence labor supply. Finally, based on the status quo of these institutional settings, the paper gives a brief overview of strategies to combat adequately the challenges in terms of labor supply and to ensure economic growth in the future.

The Effect of Non-Pecuniary Job Attributes on Labour Supply

The aim of this paper is to analyse the effect of non-pecuniary job attributes on labour supply. We develop a discrete choice model of labour supply where the choice alternatives are characterised by bundles of hours of work and job insecurity. The parameters of the utility function are obtained using maximum simulated likelihood with Halton sequences to account for unobserved heterogeneity in preferences. We compare the predictive power and labour supply elasticities obtained with our model to those of a more traditional model where only discrete hours choices characterise a job. The results show that once job insecurity is included in the discrete choice alternatives, the predictive power of the model improves significantly. Labour supply elasticities are lower than those obtained by a traditional discrete hours model, but not significantly different. Finally, a decrease of job insecurity at work has a positive and significant effect on participation, implying that policies aimed at improving working conditions could be used to influence labour supply decisions.

'Beg-thy-Neighbour' or 'Benefit-thy-Neighbour?' A Simple Discussion on the Welfare Effects of the Currency Appreciation in an Open Economy

Using an extended form of the New Open-Economy macroeconomics in this paper we find that, first, the expansionary home monetary policy increase the economic growth of home country; second, whether an expansionary monetary policy has a Beg-thy-neighbour or Benefits-thy-neighbour effect in open economy, depends on the ratio of the consumption growth and monetary growth in its economic structure; third, the appreciation of home currency has an positive home welfare effects. Given the assumption of one-period wage stickiness and the equilibrium conditions, the following conclusions can be obtained: the monetary policy can influence labour supply and thereby affecting the equilibrium of labour market in the short run; the spill over effects of monetary policy imply an important international transmission channel in terms of equilibrium relationship between home and foreign countries.

Still a distinctive southern European employment model?

ABSTRACTCurrent similarities among the four southern European EU Member States—Greece, Italy, Portugal and Spain—with respect not only to labour market characteristics but also to the institutional arrangements that influence labour supply, utilisation and demand corroborate the concept of a distinctive southern European employment model. Its origins go back to common features in the pattern of socio‐economic development and the political history of these countries. In the past 20 years or so, national differences in the pace and content of institutional change have increased diversity within the model and eroded some of its components. They have not, however, destroyed its unity and distinctiveness.

Employment Expectations and Labour Force Participation in Canada

This paper incorporates a role for expectations in the short-run behavior of labour supply decision, presents a theory introducing labour market expectations as a variable influencing labour supply, and discusses the relative merits of the expectations model vis-à-vis the traditional model using the empirical results derived in this work.

Addressing Nurse Shortages: What can Policy Makers Learn from the Econometric Evidence on Nurse Labour Supply?

This paper provides a detailed review of the international studies that have used formal econometric models to investigate the labour supply decision of Registered Nurses (RNs). The main finding is that, at least in the short-run, RN labour supply appears to be fairly unresponsive to wage changes. Consequently, even large wage increases are unlikely to be successful in tackling current and predicted nurse shortages. This finding points to the importance of non-pecuniary job aspects in influencing labour supply. However, the paper concludes by arguing that these empirical findings should be viewed with some caution given both theoretical and econometric limitations.

Taxes, female labour supply and household income: differences between the Netherlands and the Federal Republic of Germany

The article investigates the effect of taxes and social premiums on female labour supply and household income. A comparison is made between labour supply and household income between the Netherlands and the Federal Republic of Germany in 1992. A discrete choice model for labour supply is used in which taxes and social premiums are implicitly incorporated. As male labour supply is highly inelastic an individual, male chauvinist model is used. The estimated models are used to simulate the effect of the differences in the tax and social premium system on the differences in labour supply and income between both countries. The results indicate that labour force participation is higher the more individualized the system. The German system leads to a lower tax burden compared to the Dutch system. It is concluded that differences in the tax and social premium system between both countries have hardly any influence on the differences in the inequality of net household labour income. There is evidence that the German system leads to a slightly more unequal distribution of household income. It is also concluded that although the tax and social premium system does influence labour supply and income, it can be doubted whether these effects are substantial.

Taxes, female labour supply and household income: differences between the Netherlands and the Federal Republic of Germany

The article investigates the effect of taxes and social premiums on female labour supply and household income. A comparison is made between labour supply and household income between the Netherlands and the Federal Republic of Germany in 1992. A discrete choice model for labour supply is used in which taxes and social premiums are implicitly incorporated. As male labour supply is highly inelastic an individual, male chauvinist model is used. The estimated models are used to simulate the effect of the differences in the tax and social premium system on the differences in labour supply and income between both countries. The results indicate that labour force participation is higher the more individualized the system. The German system leads to a lower tax burden compared to the Dutch system. It is concluded that differences in the tax and social premium system between both countries have hardly any influence on the differences in the inequality of net household labour income. There is evidence that the German system leads to a slightly more unequal distribution of household income. It is also concluded that although the tax and social premium system does influence labour supply and income, it can be doubted whether these effects are substantial.

Nordic labour market policies in transition

This article provides an overview of the Nordic labour market policies targeted to promote employment and reduce open unemployment since the early 1980s. Applying a disentangled approach, the goal is to analyse the policies of stimulating employment, the policies of influencing labour supply and, finally, active and passive labour market policies. It is argued that the employment crises of the early 1990s were mainly caused by domestic factors and, partly as a way to react to the challenge, the Nordic countries learned to use labour force supply as a policy instrument to combat unemployment. Additionally, the Nordic countries choose different ways to adapt to the imperatives of the globalised economy, hence, at the beginning of the new millennium, Nordic labour market policies are in flux.

INTERTEMPORAL SUBSTITUTION AND CONSTRAINTS ON LABOR SUPPLY: EVIDENCE FROM PANEL DATA

This paper tests an intertemporal labor supply model for workers who say they face quantity constraints on their hours and for workers who say they do not. The data reject the model for the first group but not for the second. I conclude from this evidence that employment fluctuations result mainly from changes in the severity of constraints—that is, changes in involuntary unemployment—rather than intertemporal substitution. It also appears that liquidity constraints influence labor supply. Finally, the paper proposes a new approach to identifying intertemporal labor supply equations.