Klaus F. Zimmermann

A new GLO Discussion Paper decomposes gender bias in China and India.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 497, 2020

Gender Bias and Intergenerational Educational Mobility: Theory and Evidence from China and India – Download PDF
by Emran, M. Shahe & Jiang, Hanchen & Shilpi, Forhad

GLO Affiliate Hanchen Jiang

Author Abstract: We incorporate gender bias against girls in the family, the school and the labor market in a model of intergenerational persistence in schooling where parents self-finance children’s education because of credit market imperfections. Parents may underestimate a girl’s ability, expect lower returns, and assign lower weights to their welfare (“pure son preference”). The model delivers the widely-used linear conditional expectation function (CEF) under constant returns and separability, but generates an irrelevance theorem: parental bias does not affect relative mobility. With diminishing returns and complementarity, the CEF can be concave or convex, and gender bias affects both relative and absolute mobility. We test these predictions in India and China using data not subject to coresidency bias. The evidence rejects the linear CEF, both in rural and urban India, in favor of a concave relation. The girls face lower mobility irrespective of location in India when born to fathers with low schooling, but the gender gap closes when the fathers are college educated. In China, the CEF is convex for sons in urban areas, but linear in all other cases. The convexity for urban sons supports the complementarity hypothesis of Becker et al. (2018), and leads to gender divergence in relative mobility for the children of highly educated fathers. In urban China, and urban and rural India, the mechanisms are underestimation of ability of girls and unfavorable school environment. There is some evidence of pure son preference in rural India. The girls in rural China do not face bias in financial investment by parents, but they still face lower mobility when born to uneducated parents. Gender barriers in rural schools seem to be the primary mechanism, with no convincing evidence of parental bias.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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A new GLO Discussion Paper provides evidence that improved welfare benefits substantially increase internal migration in China.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 498, 2020

Welfare Magnets and Internal Migration in China – Download PDF
by Jin, Zhangfeng

GLO Fellow Zhangfeng Jin

Author Abstract: This study examines the causal effects of welfare benefits on internal migration decisions. Using a quasi-experimental migration reform across 283 Chinese cities from 2002 to 2015, combined with a difference-in-differences setup, I show that improved welfare benefits substantially increase migration. The observed impact is more pronounced for individuals such as the young, women and medium-low-skilled workers. It is relatively smaller in destinations exposed to larger positive demand shocks, suggesting that improved welfare benefits reduce migration costs. And it persists over the long term. All these findings confirm the existence of sizable welfare magnet effects.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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A new GLO Discussion Paper provides evidence that Employer Associations affiliated firms in Portugal exhibit better outcomes concerning sales, employment, productivity, and wages.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 496, 2020

What Do Employers’ Associations Do? – Download PDF
by Martins, Pedro S.

GLO Fellow Pedro S. Martins

Author Abstract: While trade unions have been studied in detail, there is virtually no economics research on employer associations (EAs), trade unions’ counterparts in many countries. However, besides conducting collective bargaining, EAs perform several other activities that can influence economic outcomes, including training and coordination. This paper studies the contributions of EAs by comparing affiliated and non-affiliated firms in terms of sales, employment, productivity, and wages. Using matched employer-employee panel data for Portugal, we find that affiliated firms exhibit better outcomes along most of these dimensions, even when drawing on changes in affiliation status over time; and that this affiliation premium tends to increase with EA coverage (defined as the percentage of workers in the relevant industry/region domain that are employed by affiliated firms). Sectors as a whole also appear to benefit from EA coverage, even if non-affiliated firms do worse.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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A new GLO Discussion Paper finds that vocational education in China provides a wage premium vis-à-vis academic education of over 30%, but this holds only for individuals at the middle of the conditional wage distribution.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 495, 2020

Does vocational education pay off in China? Instrumental-variable quantile-regression evidence – Download PDF
by Dai, Li & Martins, Pedro S.

GLO Fellow Pedro S. Martins

Abstract: As China’s firms upgrade their position in the quality ladder, vocational education may become more important. In this paper, we study returns to secondary vocational education in China paying attention to individual heterogeneity. We use instrumental variables based on geographical and longitudinal changes in enrollment to address the selection between the two types of education. We find that vocational education provides a wage premium vis-à-vis academic education of over 30% but which applies only for individuals at the middle of the conditional wage distribution.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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In recent years, work time in many industries has become increasingly flexible. A new GLO Discussion Paper studies the resulting consequences for intertemporal substitution in individual households.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 493, 2020

Flexible Work Arrangements and Precautionary Behavior: Theory and Experimental Evidence – Download PDF
by  Orland, Andreas & Rostam-Afschar, Davud

GLO Fellow Davud Rostam-Afschar

Abstract: In the past years, work time in many industries has become increasingly flexible opening up a new channel for intertemporal substitution. To study this, we set up a two-period model with wage uncertainty. This extends the standard savings model by allowing a worker to allocate a fixed time budget between two work-shifts or to save. To test the existence of these channels, we conduct laboratory consumption/saving experiments. A novel feature of our experiments is that we tie them to a real-effort style task. In four treatments, we turn on and off the two channels for consumption smoothing: saving and time allocation. Our four main findings are: (i) subjects exercise more effort under certainty than under risk; (ii) savings are strictly positive for at least 85 percent of subjects (iii) a majority of subjects uses time allocation to smooth consumption; (iv) saving and time shifting are substitutes, though not perfect substitutes.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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A new GLO Discussion Paper provides the first study on vulnerability adaptation to subjective well-being using panel data for Russia for the past two decades.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 492, 2020

Life Satisfaction, Subjective Wealth, and Adaptation to Vulnerability in the Russian Federation during 2002-2017 – Download PDF
by  Dang, Hai-Anh H. & Abanokova, Kseniya & Lokshin, Michael M.

GLO Fellow Hai-Anh Dang

Abstract: We offer the first study on vulnerability adaptation to subjective well-being, using rich panel data over the past two decades for Russia. We found no adaption to vulnerability for life satisfaction and subjective wealth, with longer vulnerability spells being associated with more negative subjective welfare. Similar results hold for other outcomes including satisfaction with own economic conditions, work contract, job, pay, and career. Some evidence indicates that despite little differences between urban and rural areas with life satisfaction, rural areas exhibit a stronger lack of adaptation for subjective wealth, particularly for longer durations of vulnerability. Higher education levels generally exhibit a stronger lack of adaptation. The lack of adaptation to vulnerability is, however, similar at different education levels for subjective wealth. We also find a U-shaped relationship between age and durations of vulnerability and disability to have the most negative impacts on life satisfaction and subjective wealth.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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A new GLO Discussion Paper finds that unobserved worker quality accounts for approximately two thirds of the inter-industry wage differentials.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 491, 2020

Unobserved Worker Quality and Inter-Industry Wage Differentials – Download PDF
by Ge, Suqin & Macieira, João

GLO Fellow Suqin Ge

Abstract: This study quantitatively assesses two alternative explanations for inter-industry wage differentials: worker heterogeneity in the form of unobserved quality and firm heterogeneity in the form of a firm’s willingness to pay (WTP) for workers’ productive attributes. We develop an empirical hedonic model of labor demand and apply a two-stage nonparametric procedure to recover worker and firm heterogeneities. In the first stage we recover unmeasured worker quality by estimating market-specific hedonic wage functions nonparametrically. In the second stage we infer each firm’s WTP parameters for worker attributes by using first-order conditions from the demand model. We apply our approach to quantify inter-industry wage differentials on the basis of individual data from the NLSY79 and find that worker quality accounts for approximately two thirds of the inter-industry wage differentials.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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In communities highly dependent on rainfed agriculture for their livelihoods, the common occurrence of climatic shocks can lower the marginal cost of a child and raise fertility. A new GLO Discussion Paper studies this issue using data for Madagascar.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 490, 2020

Climate Shocks and Teenage Fertility – Download PDF
by Dessy, Sylvain & Marchetta, Francesca & Pongou, Roland & Tiberti, Luca

GLO Fellow Luca Tiberti

Abstract: In communities highly dependent on rainfed agriculture for their livelihoods, the common occurrence of climatic shocks can lower the marginal cost of a child and raise fertility. We test this hypothesis using longitudinal data from Madagascar. Exploiting exogenous within-district year-to-year variation in rainfall deficits in combination with individual fixed effects, we find that drought occurring in the agricultural season increases the fertility of young women living in agricultural households. This effect is long-lasting, as it is not reversed within four years after the drought occurrence. Analyzing mechanisms, we find that drought does not affect common factors of high fertility such as marriage timing. It operates mainly through a reduction of female agricultural income. Indeed, agricultural drought reduces the number of hours worked by women in agriculture but not men. It has no effect on the fertility of young women living in non-agricultural households, or in non-agrarian communities. Moreover, it does not affect fertility if it occurs during the non-agricultural season. These findings validate the marginal cost hypothesis whereby drought, by reducing the value of women’s agricultural labor, lowers the marginal cost of a child, thus raising fertility.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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A new GLO Discussion Paper provides evidence that in Latin American countries intergenerational occupational transmissions mainly relate to low skilled jobs, confirming a low degree of social mobility.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 489, 2020

Intergenerational Occupational Mobility in Latin American Economies: An Empirical Approach – Download PDF
by Doruk, Ömer Tuğsal & Pastore, Francesco & Yavuz, Hasan Bilgehan

Author Abstract: Identifying the determinants of intergenerational mobility is an important aim in the development literature. In this article, intergenerational transmission is examined for 6 neglected Latin American Economies (Brazil, Costa Rica, Ecuador, Mexico, Panama and Puerto Rico). We use a multinomial logit model of the determinants of choosing a white-collar job for a child of a father working in farming as compared to a child whose father had a blue- or a white-collar job. Our findings show that, in the studied countries, intergenerational occupation transmission is mainly linked to low skilled jobs. Our analysis confirms the low degree of social mobility typical of Latin America, contributing, in turn, to explain their low growth rate. Our findings help identifying specific target groups – talented young women coming from the agricultural sector – to develop in them soft skills while at primary or low secondary school and work-related skills while at the high secondary school or at the university.

GLO Fellows Francesco Pastore & Hasan Bilgehan Yavuz; GLO Affiliate Ömer Tuğsal Doruk

Related paper: Amelie Constant & Klaus F. Zimmermann, Occupational Choice Across Generations, Applied Economics Quarterly, 49 (2003), 299-317.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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