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1 – 10 of over 3000Wasanthi Thenuwara and Bryan Morgan
The purpose of this paper is to investigate the connection between labour supply and the wages of married women of different ages in Toronto using data from the 2010 Labour Force…
Abstract
Purpose
The purpose of this paper is to investigate the connection between labour supply and the wages of married women of different ages in Toronto using data from the 2010 Labour Force Survey of Canada.
Design/methodology/approach
The authors employ three econometric techniques, ordinary least square, 2 stage least square and the Heckman two-step method to estimate the supply elasticities. The first two focus on the wage rate and hours conditional on the subjects being employed whereas the third method controls for sample selectivity bias by including the unemployed. Bootstrap test statistics are produced when the normality assumption for the error terms is found to be violated.
Findings
The aggregate labour supply elasticity for married women in Toronto is estimated to be 0.053 which similar to value found for Canada for a whole in a previous study even though Toronto is much more diverse culturally than average. The labour supply elasticities for 25-34 year old and 35-44 year old married are estimated to be 0.108 and 0.079, respectively. The supply elasticity for married women aged 45-59 is not significantly different from 0.
Originality/value
The paper shows that younger married women in Toronto are more responsive to an increase in wages than older women. The estimation procedure and the testing of the significance of coefficients are more rigorous than previous studies.
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The purpose of this paper is to critically review the literature to assess the relevance of the S‐shaped model of family labor supply for industrialized countries.
Abstract
Purpose
The purpose of this paper is to critically review the literature to assess the relevance of the S‐shaped model of family labor supply for industrialized countries.
Design/methodology/approach
Studies use a wide variety of methodologies and therefore are not readily comparable, but instead they cover a wide range of relevant factors such as historical trends, fringe benefits and home mortgages, ethnic differences, farm labor, low‐income households, child care, the impact of welfare benefits, and the problem of the measurement of work hours.
Findings
In spite of welfare systems that blur somewhat the predicted income effect at lower wage levels (forward falling segment primarily for women), this model appears to still bear some relevance for these countries, in particular in the face of declining real wages. Families have generally moved up higher along that curve, with less differentiated gender roles, women's stronger labor force attachment, and assortative mating of educated women.
Originality/value
The model is mostly relevant for LDCs and has far‐reaching practical consequences, while the review highlights the complexity of labor supply in industrialized countries.
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This paper seeks to study gender wage differentials in Italy using first‐order predictions of monopsony‐search models. It compares empirical predictions of these models against…
Abstract
Purpose
This paper seeks to study gender wage differentials in Italy using first‐order predictions of monopsony‐search models. It compares empirical predictions of these models against other competing ones of wage determination in non‐competitive settings.
Design/methodology/approach
The paper looks at the empirical relevance of the model in terms of third degree wage discrimination among men and women by estimating the labour supply elasticity to the individual firm. It also tests the monopsony model using a “natural” experiment. Italian administrative longitudinal data from INPS are used.
Findings
Women have lower elasticity of labour supply to the individual firm: employer size regressions indicate larger effects (and consequently lower elasticity) for women as predicted by the monopsony model. Using the theoretical dynamic monopsony‐search model of Burdett and Mortensen, wage elasticity of separations and recruits confirm this result. Using relative men/women employment effects resulting from institutional changes in wage indexation mechanism (Scala Mobile), it is found that relative male employment responded differently in the two periods to the exogenous relative increase in the wage differential, as predicted by the monopsony model. Search frictions explain about 50 per cent of the gender differential.
Research limitations/implications
No role for discrimination. Better controls for rents and union status would be needed. More rich firm data would be needed.
Originality/value
The paper is one of the few attempts of testing implications of monopsony models in unionised labour markets, such as Italy, after some important reforms in wage bargaining agreements. The change in institutional agreements is an interesting test for different theories of wage determination.
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Traditionally, the Laffer effect has been discussed in the context of endogenous growth models or in the case of the labor market with respect to willingness to supply more labor…
Abstract
Purpose
Traditionally, the Laffer effect has been discussed in the context of endogenous growth models or in the case of the labor market with respect to willingness to supply more labor given a tax incentive on wages. The paper adopts an inductive approach to discuss it in the context of a product's market, say automobile industry in Turkey.
Design/methodology/approach
The author revisits the ad valorem tax model on a product and investigates how the elasticities of demand and supply and the tax rate are related to the Laffer effect. The author considers a special case where demand curve is non-linear and the supply curve is completely elastic. This specific model fits the practical case where the Turkish government expected the auto sellers to pass fully the temporary partial tax concession onto the consumers during the global crisis in 2009.
Findings
The author showed that the demand elasticitiy must be calculated neither at the intersection of the initial equilibrium nor that of the final equilibrium points, but somewhere else. The author defined a pass-through coefficient which was different from the classical burden of tax concept, calculating the degree of pass-through of a tax decrease from firms to consumers. Moreover, the author found a one-way relationship between the overall tax revenues of the government and a single sector.
Research limitations/implications
The case of tax revenues where both the demand and supply curves are non-linear and non-extreme must be solved.
Practical implications
The author showed that the government's dual expectation of both boosting the economy, increasing employment and raising its tax revenues can sometimes be consistent given a usual upward sloping supply curve. In the case of a perfectly elastic supply curve, the tax revenues can even be higher with a higher level of equilibrium quantity.
Social implications
The Turkish government aiming to support the production and employment in this leading export industry, may have expected this temporary tax decrease to be passed completely onto the consumers by the producers. However, this did not happen as producers’ prices to the consumers did not decrease as much as the amount of tax. This paper shows that the after tax elasticities and the current level of tax rate must have been compared.
Originality/value
The author pointed out to the importance of being clear in explicitly indicating at which points the elasticities derived from some function (tax revenue function) of equilibria variables (price and quantity) must be interpreted. In this paper, doing many numerical calculations allowed us to notice the proper point of calculation of the demand elasticity, which is the after-tax price along the “no tax demand curve”. Moreover, a pass-through coefficient is defined which is different from the classical burden of tax concept.
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Paul S. Jones and Muhammad Ali Nasir
This purpose of the study is to examine the labour supply decisions with respect to earnings and considers whether we are willing or indeed able to work less. The authors…
Abstract
Purpose
This purpose of the study is to examine the labour supply decisions with respect to earnings and considers whether we are willing or indeed able to work less. The authors specifically focus on the three points of time, i.e. beginning of the sample, pre and post Global Financial Crisis.
Design/methodology/approach
The study regression analysis by utilises microdata from the UK Labour Force Survey (LFS) regarding individual hours worked in three separate survey periods: 1994q2, 2007q2 and 2015q2
Findings
The results suggest that we are far from income-satiated. The elasticity of hours worked with respect to earnings is stubbornly inelastic and for some demographic cohorts positive, implying the desire to work more. The authors find that job flexibility matters in facilitating reduced hours of work, but that jobs are not becoming more flexible. The authors also do see a secular reduction in hours worked, accompanied by a shift to working later in life, but these appear to be down to factors other than higher wages.
Research limitations/implications
The study has important research implications in terms of understanding the dynamics of the labour market on the whole and in the pre and post global financial crisis periods.
Practical implications
The research has profound policy implication in terms of labour and employment policy.
Social implications
There are important social implications, particularly in terms of household labour supply decisions and substitution between work and leisure.
Originality/value
The study has significant element of originality in terms of understanding the changing dynamics of labour market. This is the first study which has investigated the labour market in the light of empirical evidence and in the various time periods.
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Andrew Grodner and Thomas J. Kniesner
Our econometric research allows for a possible response of a person's hours worked to hours typically worked by members of a multidimensional labor market reference group that…
Abstract
Our econometric research allows for a possible response of a person's hours worked to hours typically worked by members of a multidimensional labor market reference group that considers demographics and geographic location. Instrumental variables estimates of the canonical labor supply model expanded to permit social interactions pass a battery of specification checks and indicate positive and economically important spillovers for adult men. Ignoring or incorrectly considering social interactions in male labor supply can misestimate the response to tax reform by as much as 60%.