Labor Market Participation Rates Research Articles

Hypothesis tests when decomposing differences in the first moment

Recently the Oaxaca decomposition for wage differentials has been extended to study the differences in the first moment. For example, this type of decomposition can be used to study differences in labor market participation rates by race, where the participation equation may be estimated by logit or probit. This paper develops a simple test for the significance of characteristics and coefficients effects in a decomposition analysis of differences in the first moment at aggregate and individual variable levels. In order to derive the test statistics, the asymptotic variances of the characteristics and coefficients effects at both aggregate and individual variable levels are calculated using the well-known delta method. The significance test for the Oaxaca decomposition is incorporated as a special case of this proposed test.

The Commodification of Lone Mothers' Labor: A comparison of US and German Policies

Drawing on Gøsta Esping-Andersen's concept of commodification of labor, as well as on its feminist critiques, this paper looks at policy effects on lone mothers in the US and in Germany. With increasing labor market participation rates among lone mothers in the US following welfare reform and in Germany following unification, the authors conclude that the changes derive from different policies and incentive structures related to the state of commodification of labor in each country. In the former East Germany, the policy regime of generous childcare benefits enabled the commodification of women's labor, while in West Germany, the established policy regime was dominated by a strong, voluntary commodification of women's labor, particularly that of lone mothers. In contrast, US policy has been characterized by its greater degree of precommodification of women's labor, which was followed, after the welfare reform of 1996, by the enforced commodification of women's labor.

The gender gap in labor market participation and employment: A cohort analysis for West Germany

Labor market participation rates of West German females have risen during the last decades, whereas participation rates of males have declined or remained stable. Nevertheless, differences in aggregate gender specific participation rates remain. The purpose of this paper is to compare life-cycle participation and employment profiles of West German males and females of different skill levels. Going beyond the descriptive cross tabulations of participation and employment rates by year, skill level, and sex, this paper uses a model which simultaneously takes into account the effects of time, age,␣and birth cohort membership. The estimation results allow for the construction and comparison of gender and skill specific life cycle participation and employment profiles. Even though the gap in average participation and employment rates has narrowed over time, the results confirm a␣persistent gender gap in the pattern of labor market participation and employment over the life-cycle.

Traditional Institutions Meet the Modern World: Caste, Gender, and Schooling Choice in a Globalizing Economy

This paper addresses the question of how traditional institutions interact with the forces of globalization to shape the economic mobility and welfare of particular groups of individuals in the new economy. We explore the role of one such traditional institution—the caste system—in shaping career choices by gender in Bombay using new survey data on school enrollment and income over the past 20 years. We find that male working-class—lower-caste—networks continue to channel boys into local language schools that lead to the traditional occupation, despite the fact that returns to nontraditional white-collar occupations rose substantially in the 1990s, suggesting the possibility of a dynamic inefficiency. In contrast, lower-caste girls, who historically had low labor market participation rates and so did not benefit from the network, are taking full advantage of the opportunities that became available in the new economy by switching rapidly to English schools.

Traditional Institutions Meet the Modern World: Caste, Gender and Schooling Choice in a Globalizing Economy

This paper addresses the question of how traditional institutions interact with the forces of globalization to shape the economic mobility and welfare of particular groups of individuals in the new economy. We explore the role of one such traditional institution--the caste system--in shaping career choices by gender in Bombay using new survey data on school enrollment and income over the past 20 years. Bombay's labor market was historically organized along rigid caste lines; such restrictions on mobility can be welfare enhancing when network externalities are present. But there was a dramatic change in the returns to different occupations in the 1990s. We find that male working class--lower caste--networks continue to channel boys into local language schools that lead to the traditional occupation, despite the fact that returns to non-traditional white collar occupations rose substantially, suggesting the possibility of a dynamic inefficiency. In contrast, lower caste girls, who historically had low labor market participation rates and so did not benefit from the network, are taking full advantage of the opportunities that became available in the new economy by switching rapidly to English schools. Thus, caste continues to play a particular role in shaping schooling choices in the new economy of the 1990s. But the overall increase in English schooling in recent years and the growing mismatch in education choices and hence occupational outcomes between boys and girls in the same caste, suggest that the remarkably resilient caste system might finally be starting to disintegrate.

Labour Market Policies, Strategies and Statistics for People with Disabilites

In addition to describing different countries' labour market policies for people with disabilities, this study attempts to establish some initial benchmarks for comparing national policies in this respect for a number of OECD countries. The report systematically compares the countries in order to provide answers as to how they differ with respect to: (1) the target group's labour force participation and employment rate; (2) what labour market programmes are applied and to what degree; (3) to what extent the regular policy and institutional framework is used to integrate persons with disabilities into the labour market (the degree of mainstreaming). The study is based on a questionnaire to national government departments in all the OECD-countries in 1999. Of the 21 countries which are compared, Sweden, New Zealand, Germany and France have high labour market participation rates, while Spain, Ireland, Poland, Greece and Italy are all below average. Eleven countries provided sufficient information for a thorough cross-national comparison which among other things includes detailed descriptions of each country's labour market programmes and statistics on the number of participants with disabilities and disability pension recipients. Despite similar labour force participation figures in Great Britain, Australia, Finland, Norway and Austria, the latter two countries have a substantially higher proportion of people in labour market programmes. Likewise, labour force participation in New Zealand is about the same as in Sweden, despite fewer participants in programmes. The proportion of participants with disabilities in various types of programmes specially targeted for people with disabilities and general programmes are compared. In Sweden, almost half the participants with disabilities in labour market programmes are employees with long-term wage subsidies. Almost half the participants in labour market programmes in Finland and Norway are undergoing training. Labour market training is also important in English-speaking countries and so are work experience programmes and, in principle, there are no long-term wage subsidies. Both the proportion of disability pension recipients and the proportion of programme participants are limited in Australia and the United Kingdom, while both proportions are substantial in Sweden and Ireland.

The effect of child care and part time opportunities on participation and fertility decisions in Italy

Economic models of household behavior typically yield the prediction that increases in schooling levels and wage rates of married women lead to increases in their labor supply and reductions in fertility. In Italy, low labor market participation rates of married women are observed together with low birth rates. Our explanation involves the Italian institutional structure, particularly as reflected in rigidities and imperfections in the labor market and characteristics of the publicly-funded child care system. These rigidities tend to simultaneously increase the costs of having children and to discourage the labor market participation of married women. We analyze a model of labor supply and fertility, using panel data. The empirical results show that the availability of child care and part time work increase both the probability of working and having a child.

The Effect of Child Care and Part Time Opportunities on Participation and Fertility Decisions in Italy

Economic models of household behavior typically yield the prediction that increases in schooling levels and wage rates of married women lead to increases in their labor supply and reductions in fertility. In Italy, as well as in other Southern European countries, low labor market participation rates of married women are observed together with low birth rates. Our proposed explanation for this apparent anomaly involves the Italian institutional structure, particularly as reflected in rigidities and imperfections in the labor market and characteristics of the publicly-funded child care system. These rigidities tend to simultaneously increase the costs of having children and to discourage the labor market participation of married women. We analyze a model of labor supply and fertility, using panel data from the Bank of Italy which have been merged with regional data describing the available opportunities in each sample household's environment. The empirical results show that the availability of child care and part time work increase both the probability of working and having a child. Policies which would provide more flexible working hours choices and greater child care availability would aid in reducing the financial burden of children.

Regional Differences in Labour Market Participation of Young People in the European Union

The passage from education to employment is one of a number of ‘transitions’ experienced by young people. There was a tendency in the 1980s and 1990s for youth transitions to lengthen and become more diverse. It is now the norm for young people to undergo further education/training after the end of compulsory education. As a result, labour market entry has often been delayed, and has become more protracted and complex. Labour market participation is moulded by a number of interrelated factors, including: the demographic and economic context, the organization and structure of the labour market and of education and training systems, the role of the state in shaping labour supply and the organization of the family economy. Using the economic activity rate, together with other measures constructed from the European Labour Force Survey for 1993-7, this paper is concerned with describing, exploring and tentatively explaining labour market participation rates of young people in NUTS 2 regions across the European Union. A range of exploratory data analysis and multivariate regression analysis techniques are employed, and the implications of the findings for understanding current and future regional variations in labour market activity are addressed.

What Is Happening in the Youth Labour Market in Canada?

This paper analyzes the evolution of the labour market participation rate of men and women age 15 to 24 from 1976 to 1998. The main question being asked is why youth participation rates fell precipitously during the 1990s? We look at two dimensions of this decline: changes in the fraction of youth who participate in the labour market but do not attend school (non-student participation rate) and changes in the employment rate among students. We find that the decline in the non-student participation rate is a consequence of two factors: (i) the overall bad state of the labour market in Canada during the 1990s and (ii) the large increase in school enrolment rates induced by factors other than the state of the labour market. One important finding is that demographic change (baby boom versus baby bust) is a key explanation behind the steep increase in enrolment rates during the 1980s and 1990s. The only components of youth outcomes in the 1990s which we are unable to reasonably explain is the fall in the employment rate of students age 15 to 19.

Active population growth and immigration hypotheses in Western Europe.

The paper examines, in respect of 12 Western European countries over a period of 20 years, the widely held view that any decline in their working population should be offset by greater reliance on immigrant labor. This research, based on demographic projections and forecasts regarding labor market participation rates by age and sex for each of the countries concerned, focuses on the two most likely scenarios. It appears that only Italy will be faced with a fall in its working population. All other western countries will either maintain the same level or, more generally, see their workforce grow substantially. Accordingly, the authors may safely assert that there is no risk of a shortage of workers between now and the year 2020, and that an increasing supply of labor will render reliance on a greater influx of immigrant workers unnecessary. The second part analyses changes in the structure of the demand for labor. The authors deal chiefly with the phenomenon of the concentration of foreign manpower in each sector, its flexibility and mobility in a context of unemployment, as well as the impact of new technologies and globalization on the main determinants of international migration of labor.

Decomposition Analysis for a Binary Choice Model

This paper introduces a new and simple decomposition method for a binary choice model that is equivalent to the Blinder-Oaxaca decomposition analysis for wage differentials. The decomposition method is first developed for a single probit model and later generalized to a simultaneous equations model. Using Taylor expansion, we approximate the differences in the probabilities of choosing option 1 over option 0 between two groups in order to find the effects of the differences in each individual characteristic and the differences in each coefficient. We implement this decomposition analysis studying the racial gap in female labor market participation rates. The racial gap of participation rates among women can be almost exclusively explained by the differences in the coefficients.

Integrating GB and US Census Microdata for studying the impact of family migration on partnered women's labour market status

This paper investigates the problems in integrating different data sets for social science research. A cross-national analysis of the effects of family migration on labor market participation rates for female partners was used as an example to concretize these problems. The data used in the cross national analysis came from the 1991 British Census Sample of Anonymised Records and the 1990 United States Public Use Microdata Sample. The problems addressed were the following: data collection; manipulation and reliability; question type and definition; and measurement of individual and family variables. As part of the analysis, some empirical findings were also presented. Significant overall differences between the US and Great Britain (GB) samples were observed, particularly concerning graduate qualifications, marital and employment status, and ethnic group. There were higher numbers of married partners and full-time workers in the US sample, while female partners undertaking part-time employment were greater in GB. Furthermore, the US sample had more couples with a female graduate as compared with the GB sample who had a higher proportion of nongraduate couples. Finally, this paper recognized the importance of cross- national research in the evaluation of national ideological and institutional structures.

Integrating GB and US census microdata for studying the impact of family migration on partnered women's labour market status.

This paper investigates the problems in integrating different data sets for social science research. A cross-national analysis of the effects of family migration on labor market participation rates for female partners was used as an example to concretize these problems. The data used in the cross national analysis came from the 1991 British Census Sample of Anonymised Records and the 1990 United States Public Use Microdata Sample. The problems addressed were the following: data collection; manipulation and reliability; question type and definition; and measurement of individual and family variables. As part of the analysis some empirical findings were also presented. Significant overall differences between the US and Great Britain (GB) samples were observed particularly concerning graduate qualifications marital and employment status and ethnic group. There were higher numbers of married partners and full-time workers in the US sample while female partners undertaking part-time employment were greater in GB. Furthermore the US sample had more couples with a female graduate as compared with the GB sample who had a higher proportion of nongraduate couples. Finally this paper recognized the importance of cross- national research in the evaluation of national ideological and institutional structures.

Work and Crime: The Effects of Labor Stratification

This article uses the National Longitudinal Survey of Youth to test the hypothesis that young adults employed in what dual labor market theory describes as secondary sector jobs are more likely to engage in crime than those in more stable jobs. The results indicate that time out of the labor force is positively related to criminal involvement, and that when workers expect their current employment to be of longer duration, they are less likely to engage in crime. We also find that the interaction between the amount of time that workers spend out of the labor force and the labor market participation rate of the population in their county of residence is significantly related to criminality.

Go Directly to Jail and Do Not Collect? A Long-Term Study of Recidivism, Employment, and Earnings Patterns among Prison Releasees

Traditional human capital models suggest that age, race, and education affect individual labor market opportunities and levels of participation in crime. A unique data set containing 17 years of criminal activity and 9 years of earnings records for 1,176 men released from Georgia prisons was used to examine which demographic and criminal history characteristics affect labor market patterns among prison releasees. The examination yielded 3 main results. First, labor market participation rates and earnings levels were extremely low. Second, traditional findings on the effects of race and education on earnings levels were supported for this criminally active subset of the population. However, race and education did not affect employment rates. Employment rates of older individuals were especially low, even after controlling for characteristics expected to affect labor market attachment. Third, the amount of time incarcerated did not significantly affect earnings in the community, conditional on any employment.

Are Scandinavians lazy or hard-working?

The popular image of work and working in Scandinavia is highly contradictory. One discourse stresses the strict work ethic of Scandinavian people and the participation of the whole population in wage labor. Another discourse says that welfare states have undermined the motivation of people in Scandinavian to work. This article explores the argumentation of both discourses and compares the industry of people in Finland, Norway and Sweden with the situation in other OECD countries. The picture that unfolds is contradictory: Scandinavia has a high labor market participation rate, but Norwegian people nonetheless work only comparatively few hours, Finnish people work long hours, while Swedish people fall somewhere in-between. Overall, the people of Scandinavia are certainly not the most hard-working in the world, but the amount of work does not seem to correlate directly with the national standard of living.

A Comparison of the Labour Market Position of Women in Spain and the UK with Reference to the `Flexible' Labour Debate

This compares women's employment in Spain and the UK in the context of very different historical and institutional developments in each country. A number of key variations in women's labour market position, for example, participation rates, part-time, temporary work and unemployment rates, are examined and in each area it is found that there are substantial differences in the patterns of women's economic activity. A contribution is also made to the debate on the non-standard or flexible workforce by focusing on the issue of recent changes in labour market deregulation in the two countries and the importance of the informal economy in Spain. In both countries the state has pursued policies of deregulation of the labour market to produce a more flexible workforce. Employers have drawn on a hidden labour supply of married women who in turn have been incorporated into the economy through forms of non-standard work, in the UK this has been part-time work and in Spain either temporary work or irregular or illegal forms of work in the informal economy. It is argued that these developments may have negative consequences for both countries with respect to training, skill and wage levels.