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Article
Publication date: 6 July 2015

Claudia Cigagna and Giovanni Sulis

The purpose of this paper is to analyse the effect of unemployment and labour institutions such as employment protection legislation, coverage of unemployment benefits…

Abstract

Purpose

The purpose of this paper is to analyse the effect of unemployment and labour institutions such as employment protection legislation, coverage of unemployment benefits, minimum wages (MW), union power and tax wedge on migration flows. The authors allow for interactions of these institutions with migration entry laws, as both affect equilibrium wages and employment in destination countries, influencing mobility decisions of immigrants.

Design/methodology/approach

The authors use data on migration flows for a sample of 15 OECD countries over the period 1980-2006. The relationship between flows and labour institutions is analysed using OLS techniques and including destination and origin-by-year fixed effects. The coefficients of interest are identified through within country variation. The authors test the robustness of the results to different specifications using, among others, dynamic models for panel data.

Findings

The authors find strong and negative effects of unemployment, employment protection and migration policy on flows. The negative effect of migration policy on flows is larger in countries with high than in countries with low employment protection. The authors find positive effects for MW, unemployment benefits and union power. The authors show heterogeneous effects depending on the group of countries of origin and destination.

Research limitations/implications

While the identification strategy allows us to estimate the effects of interest, the baseline estimates may suffer from endogeneity problems in terms of omitted variable bias and reverse causality. The sensitivity checks provide mixed results and show that baseline estimates are not always robust to different specifications. Further work is needed to better address the problem of endogeneity.

Originality/value

The paper adds to the previous literature on the determinants of immigration flows by explicitly considering the labour market environment in destination countries. The results provide insights into potential interaction effects and coordination of reforms in labour markets and immigration policies.

Details

International Journal of Manpower, vol. 36 no. 4
Type: Research Article
ISSN: 0143-7720

Keywords

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Article
Publication date: 12 July 2011

Giovanni Sulis

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…

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.

Details

International Journal of Manpower, vol. 32 no. 4
Type: Research Article
ISSN: 0143-7720

Keywords

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Book part
Publication date: 14 August 2015

Abstract

Details

Gender in the Labor Market
Type: Book
ISBN: 978-1-78560-141-5

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