Local Labor Market Conditions Research Articles

Responding to Diversity: Workforce Intermediation in a Transitioning Regional Economy

In this paper I examine workforce intermediation as a tool for regional economic transition. While most studies of workforce intermediation in the United States focus on targeted programs that work with less-advantaged socioeconomic groups, I examine strategies adopted by state-funded community colleges that have a more encompassing or universalistic mandate. Through a case study of North Carolina's BioWork initiative I examine college-level strategies for assisting two distinct groups of job seekers in biopharmaceuticals—those with less education and traditional manufacturing backgrounds and those with college degrees and considerable technology experience. In documenting these strategies I suggest lessons for other regions seeking to influence local labor-market conditions and, in turn, balance the employment needs of diverse socioeconomic groups.

Predictors of employment status change over 2 years in people with schizophrenia living in Europe

To examine the associations of job acquisition and loss in a representative, prospective community sample of people with schizophrenia living in the UK, France and Germany. A representative sample of twelve hundred and eight people with schizophrenia were recruited from selected secondary mental health services in the U.K, France and Germany and followed up for 2 years. Information on demographic details, psychotic symptoms and work status was collected. The odds of getting jobs were increased by being resident in Marseille, Leipzig, Hemer and Heilbronn and by a higher regional general population employment rate. The odds were reduced by living in Lyon, a later illness onset, a longer length of illness, a continuous illness course and more severe negative psychotic symptoms. Previous vocational training reduced the odds of losing employment, whilst living in Lyon or Leipzig, harmful use of alcohol and more positive psychotic symptoms at baseline all increased the odds. In addition to illness related factors, area of residence and local labour market conditions appear to be important in explaining employment status change in people with schizophrenia.

Underemployment and Local Employment Dynamics: New Evidence

Workers in occupations that underutilize their experience, training, and skills are underemployed. Underemployment occurs for various reasons including productivity growth, spousal employment and income, family constraints, spatial restrictions, or personal preferences. Underemployment provides opportunities for selective job creation and economic growth. Using local employment dynamics (LED) and a statewide surve of the employed and nonworkers for 2004 and 2005, we examine the interaction between underemployment and LED. We show that poor local labor market conditions accentuate the perception of underemployment and lead to higher level of underemployment. Gender and ethnic differentials are also revealed in the characteristics of the underemployed.

Developing human capital: what is the impact on nurse turnover?

To investigate the impact that increasing human capital through staff training makes on the voluntary turnover of registered nurses. Healthcare organizations in Canada, the United Kingdom, the United States, and Australia are experiencing turbulent nursing labour markets characterized by extreme staff shortages and high levels of turnover. Organizations that invest in the development of their nursing human resources may be able to mitigate high turnover through the creation of conditions that more effectively develop and utilize their existing human capital. A questionnaire was sent to the chief nursing officers of 2208 hospitals and long-term care facilities in every province and territory of Canada yielding a response rate of 32.3%. The analysis featured a three-step hierarchical regression with two sets of control variables. After controlling for establishment demographics and local labour market conditions, perceptions of nursing human capital and the level of staff training provided were modestly associated with lower levels of establishment turnover. and implications for Nursing Management The results suggest that healthcare organizations that have made greater investments in their nursing human capital are more likely to demonstrate lower levels of turnover of their registered nursing personnel.

The role of the staff MFF in distributing NHS funding: taking account of differences in local labour market conditions

The National Health Service (NHS) in England distributes substantial funds to health-care providers in different geographical areas to pay for the health care required by the populations they serve. The formulae that determine this distribution reflect populations' health needs and local differences in the prices of inputs. Labour is the most important input and area differences in the price of labour are measured by the Staff Market Forces Factor (MFF). This Staff MFF has been the subject of much debate. Though the Staff MFF has operated for almost 30 years this is the first academic paper to evaluate and test the theory and method that underpin the MFF. The theory underpinning the Staff MFF is the General Labour Market method. The analysis reported here reveals empirical support for this theory in the case of nursing staff employed by NHS hospitals, but fails to identify similar support for its application to medical staff. The paper demonstrates the extent of spatial variation in private sector and NHS wages, considers the choice of comparators and spatial geography, incorporates vacancy modelling and illustrates the effect of spatial smoothing.

The Impact of Local Labor Market Conditions on Work and Welfare Decisions: Revisiting an Old Question Using New Data

Using Maryland administrative data between 1996 and 2005, this paper examines the impact of local labor market conditions on work and welfare use among single mothers. Our estimates rely on the new Census Bureau Quarterly Workforce Indicators database, which provides county-level economic indicators filtered by industry, gender, and age-group. We specify a multinomial choice model to estimate the effects of these local labor market variables on the full set of work–welfare combinations. The results indicate that lower unemployment rates and increased new hires and new hires’ earnings in key industries increase the likelihood that women choose alternatives that include work. African American women and those with fewer years of education respond differently to changing economic conditions. Our results are robust to controls for fixed effects, county-specific time trends, and endogenous migration.

Labor Market Conditions, Political Events, and Palestinian Suicide Bombings

This paper analyzes the relationship between Palestinian suicide bombings and economic and political conditions. Labor market conditions can affect the frequency of attacks because when the economy worsens, the opportunity cost of being a terrorist decreases. An alternative explanation is that suicide bombings are responses to changes in the political environment. This paper examines these alternative explanations by estimating count data regression models of the occurrence of Palestinian terrorist attacks from 1993 to 2004. Contrary to the previous literature, this paper finds that economic conditions are correlated with suicide terrorism. Specifically, deteriorating local labor market conditions during the al-Aqsa Intifada account for nearly half of the increase in suicide bombings during that time.

Earnings Dynamics and Inequality Among Men Across 14 EU Countries, 1994-2001: Evidence from ECHP

This paper analyses the dynamic structure of individual earnings across 14 EU countries over the period 1994-2001 using ECHP. Understanding wage mobility and its link with the evolution of cross-sectional earnings inequality is important from a welfare perspective, particularly given the large variety in national cross-sectional wage inequality. This is highly relevant in the context of the changes that took place in the EU labour market policy framework after 1995 under the incidence of the 1994 OECD Jobs Strategy, which recommend policies to increase wage flexibility, lower non-wage labour costs and allow relative wages to better reflect individual differences in productivity and local labour market conditions. What is the source of earnings variation? Did the increase in cross-sectional wage inequality observed in some countries result from greater transitory fluctuations in earnings and individuals facing a higher degree of earnings mobility? Or is this rise reflecting increasing permanent differences between individuals with mobility remaining constant or even falling? Are there common trends in earnings inequality and mobility across countries? Equally weighted minimum distance methods are used to estimate the covariance structure of earnings, decompose earnings into a permanent and a transitory component and conclude about their evolution. As expected, a notable change was an increased country heterogeneity, which translated itself in the level and evolution of the cross-sectional earnings inequality components. The decrease in cross-sectional inequality was accompanied by an increase in mobility, and therefore a decrease in the importance of the permanent component relative to the transitory component in Denmark, Belgium and Spain, and by a decrease in earnings mobility in Germany, France, UK, Ireland and Austria. In Luxembourg, Italy, Greece, Portugal, and Finland, the increase in cross-sectional inequality was accompanied by a decrease in mobility, whereas in Netherlands by an increase.

Modeling migration attempts and the role of gender in Albania

This paper uses the 2002 Albanian Living Standards Measurement Survey to model whether an individual has attempted to migrate conditional on having previously considered migrating. The study addresses the methodological concerns that arise from potential selection bias and empirical issues associated with gender differences. We test for the presence of selection bias using a bivariate probit and apply an Oaxaca-style decomposition technique to analyze gender differentials in the conditional probability of attempted migration. We focus on the roles an individual's living standard, geographic location and local labour market conditions exert on the attempt to migrate. Our empirical findings suggest that there are significant differences in both the conditional probability of attempting to migrate and the relative importance of determining factors across gender.

Neighborhood matters: The impact of location on broad based stock option plans

We find that fixed effects related to the location of firms’ headquarters explain variation in broad based option grants after controlling for industry effects and firm characteristics traditionally known to affect option granting. Location matters because of local labor market conditions and social interaction with neighboring firms. Broad based option grants are higher: (i) when a firm's stock prices co-move more with stock prices of other firms located in that Metropolitan Statistical Area (MSA); (ii) in states that are less likely to enforce non-compete agreements; and (iii) in MSAs where employees prefer options because stocks there experience abnormally high returns.

Homelessness among At‐Risk Families with Children in Twenty American Cities

This article uses data from the Fragile Families and Child Wellbeing study to explore the characteristics and determinants of homelessness among families with children. These unique data permit the examination of a large set of individual‐, household‐, and city‐level risk factors that may influence homelessness. Results suggest that homelessness is strongly linked to informal and institutional social support. It is only modestly associated with local housing and labor market conditions. These results suggest that the greatest potential for reducing family homelessness lies in interventions, such as low‐income housing assistance, that are designed to strengthen informal and institutional social support among low‐income mothers. Policies designed to alter local housing and labor market conditions are unlikely to reduce substantially the risk of this pressing social problem.

Employment Behaviour of Marginal Workers: The Roles of Preferences and Opportunities

Abstract. We use structural estimation techniques to analyse labour supply effects of changes in economic incentives for individuals who have just finished vocational rehabilitation in Norway. The complicated and sometimes non‐convex budget sets for this group of marginal workers are accounted for. We also focus on the limitation in the choice sets this group faces. Parametric bootstrap and simulation techniques are applied to construct confidence intervals for the predicted impacts of changes in the economic environment. The results show that there is a small to moderate effect of changes in economic incentives on the chance of vocational rehabilitation bringing individuals back to employment. We also find that individual health status and local labour market conditions are the most important factors affecting the transition from rehabilitation to work.

Local labor market fluctuations and health: Is there a connection and for whom?

We examine the relationship between local labor market conditions and several measures of health and health behaviors for a sample of working-aged men living in the 58 largest metropolitan areas in the United States. We find evidence of procyclical relationships for weight-related health and mental health for men with low ex ante employment probabilities. Separate estimates suggest worsening labor market conditions lead to weight gains and reduced mental health among African-American men and lower mental health among less-educated males. Among our findings, those related to mental health are most pronounced.

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.

Wage Policies of a Russian Firm and the Financial Crisis of 1998: Evidence from Personnel Data - 1997 to 2002

We use a rich personnel data set from a Russian firm for the years 1997 to 2002 to analyze how the firm adjusts wages and employment during this period in which local labor market conditions changed in the aftermath of the financial crisis in 1998. We relate the development of turnover and wages for various employment categories to alternative models of wage and employment determination. We argue that the firm’s behavior is consistent with the predictions of efficiency wage models of the shirking and turnover type.

The Polish wage inequality explosion1

AbstractThis paper presents and analyses the sharp increase in hourly wage inequality after 1998 in Poland. The increase was similar in magnitude to the much‐studied increase in British wage inequality during the 1980s. Using data from the Polish Labour Force Survey, we find this increase to be associated with rising wage differentials and within‐group variances at both the upper and lower ends of the wage distribution. These increases are associated with differences in wage‐setting patterns between the public and private sector as well as with the rapid increase in demand for educated labour. One important difference between the sectors is the lack of an impact of local labour market conditions, or wage curve, clearly evident in private sector wages, on public sector wages.

Fairness and Freight-Handlers: Local Labor Market Conditions and Wage-Fairness Perceptions in a Trucking Firm

The authors draw on an internal attitude survey conducted yearly from 1996 to 2000 in the freight-handling terminals of a unionized trucking firm to investigate the effect of local labor market conditions on employee wage-fairness perceptions. Their research design exploits the fact that local managers had no discretion to vary wage rates in response to local labor market conditions; local economic shocks thus generated exogenous variation in the attractiveness of the wage paid by the firm relative to employees' options in the outside labor market. The authors find robust associations between the wage-fairness perceptions of employees in the firm and two indicators of local conditions—the rate of unemployment and the wages of similar workers in the outside market. They argue that these correlations reflect a causal relationship: an increase in unemployment or a decrease in outside wages led workers to perceive their wage to be more fair.

PUBLIC SECTOR PAY AND REGIONAL COMPETITIVENESS. A FIRST LOOK AT REGIONAL PUBLIC–PRIVATE WAGE DIFFERENTIALS IN ITALY*

In this paper we investigate regional public–private wage differentials in Italy. Following the recent wave of reforms that significantly changed wage setting and employment relations in both sectors—increasing decentralization in collective bargaining and enforcing a ‘privatization’ of public sector employment contracts—we present new estimates of the public–private wage gap by geographical location. We report both ‘standardized’ public–private wage differentials and estimates obtained using geographically weighted regression methods. We show that significant differences exist in public–private wage differentials across Italian regions, and that the latter can be partly explained by local labour market conditions affecting the private sector and only marginally the public sector. Differences in public–private wage differentials across regions are expected to determine several imbalances in terms of ‘wait’ unemployment and recruitment problems in the different areas.

The Impact of Cohort Size and Local Labor Market Conditions on Human Capital Accumulation in Europe

Recent studies emphasize the impact of macroeconomic factors on educational attainment. They show that although individual factors like the educational level of one's parents play a decisive role in determining the human capital accumulation of the children, the cohort size as well as the local labor market seem to have a significant impact, too. This paper analyzes the impact of birth cohort size as well as unemployment on educational attainment in Europe using the European Community Household Panel. Estimation results suggest that neither the size of the birth cohort nor the local unemployment rate induces a change in the individual's schooling decision.

Black and White Women's Employment Rates: Disaggregated Decomposition in Probit and Linear Probability Models

The working age populations of black and white women in the US differ substantially in terms of their demographic characteristics and in the ways these characteristics relate to employment. The effects of these differences on the probability of employment have not been quantified in the context of nonlinear models. This paper applies Yun's (2004) decomposition technique to probit analysis and estimates the components of employment rate differentials disaggregated by specific characteristics. These components are also estimated by a linear probability model and compared to the probit estimates. Controls for cost of living differences, local labour market conditions and state minimum wages are introduced. Both probits and linear probability models point to educational attainment, minimum wages and unmeasured characteristics as the main determinants of the employment differential.