Patterns and impact of longitudinal measurement error for welfare receipt
30 November 2016
Measurement error is a common phenomenon in the empirical sciences. Longitudinal data can especially be affected by it, as measurement error can influence measures of change, which is one of the primary reasons for collecting longitudinal data in panel surveys. However, measurement error in longitudinal data is rarely analysed.
In this series of papers, the measurement error for welfare receipt is analysed for up to five consecutive panel waves by linking panel survey data with administrative data on the individual level. Results from all four studies suggest that measurement error for welfare receipt is highly differential. The measurement error for welfare receipt is not based on a random process, but based on personal characteristics and the welfare histories of the respondents.
Cohort size and youth labour-market outcomes: the role of measurement error
31 October 2016
Using data from 49 European regions covering 2005-2012, this paper finds that the estimated effect of cohort size on employment and unemployment outcomes is very sensitive to the age range of the sample. We argue that this is because the identifica-tion strategy commonly used in this literature is unable to eliminate the bias caused by measurement error in the cohort-size variable. The latter arises because large shares of the young choose to acquire education and consequently the size of an age group provides a poor measure of age-specific labour supply. In our view older age groups provide a more suitable sample to test the implications of cohort crowd-ing since the former will have largely entered the labour market. Using a sample aged 25–29, which has relatively low rates of participation in education, we find ro-bust evidence that an increase in cohort size increases employment and reduces unemployment.
IAB-Discussion Paper 37/2016
The EU Gender Earnings Gap: Job Segregation and Working Time as Driving Factors
25 October 2016
This paper estimates size and impact factors of the gender pay gap in Europe. It adds to the literature in three aspects. In addition, the fact that part-time positions are more frequent among women notably contributes to the gap. We conclude that policies aiming at closing the gender pay gap should focus more on the sector level than on the aggregate economy.
IAB-Discussion Paper 36/2016
Overeducation - New evidence for 25 European countries
24 October 2016
This study investigates the incidence of overeducation among workers in the EU and its underlying factors based on the most recent wave of the European Labor Force Survey (EU-LFS 2013). Its main purpose is to shed light on the interplay of so far neglected explanatory factors such as household characteristics and field of study as well as to reveal country differences in the impact of these factors.
IAB-Discussion Paper 35/2016
The migration of professionals within the EU: any barriers left?
20 October 2016
Despite the effort at EU level to harmonize the process of recognition of foreign educational qualifications, the European states differ in their propensity to accept high-school and academic certificates obtained in other EU member states. In turn, a country’s higher degree of recognition of foreign qualifications might be an attractor of non-native skilled workers. We provide evidence on this issue using new data on the outcome of the recognition process in every EU country. Estimating different panel data gravity models, we find that the migration rate to a given destination country is positively affected by its propensity to recognize foreign educational qualifications.
IAB-Discussion Paper 34/2016
Management Practices and Productivity in Germany
17 October 2016
Based on a novel dataset, the “German Management and Organizational Practices” (GMOP) Survey, we calculate establishment specific management scores following Bloom and van Reenen as indicators of management quality. We find substantial heterogeneity in management practices across establishments in Germany, with small firms having lower scores than large firms on average. We show a robust positive and economically important association between the management score and establishment level productivity in Germany. This association increases with firm size. Comparison to a similar survey in the US indicates that the average management score is lower in Germany than in the US. Overall, our results point towards lower management quality being at least in part to blame for the differences in aggregate productivity between Germany and the US.
IAB-Discussion Paper 32/2016
Side effects of the new German minimum wage on (un-)employment
13 October 2016
In Germany, decreasing collective bargaining coverage and rising wage inequality led to the introduction of a new statutory minimum wage of EURO 8.50 per hour of work. We analyze the relationship between the bite of the minimum wage and employment/ unemployment growth using regional data of the Federal Employment Agency for prime age individuals. We use difference-in-differences type of specifications using a panel of region-age-sex cells. The results do not provide evidence in favor of a reduced employment growth for the analysed groups, nor do they provide evidence for an increase in unemployment growth due to the minimum wage. However, we find an increase in growth of regular employment at the expense of marginal employment.
IAB-Discussion Paper 31/2016
Cognitive Skills, Non-Cognitive Skills, and Family Background: Evidence from Sibling Correlations
11 October 2016
This paper estimates sibling correlations in cognitive and non-cognitive skills to evaluate the importance of family background for skill formation. Based on a large representative German dataset including IQ test scores and measures of non-cognitive skills, a restricted maximum likelihood model indicates a strong relationship between family background and skill formation. Sibling correlations in non-cognitive skills range from 0.22 to 0.46; therefore, at least one-fifth of the variance in these skills results from shared sibling-related factors. Sibling correlations in cognitive skills are higher than 0.50; therefore, more than half of the inequality in cognition can be explained by shared family background. Comparing these findings with those in the intergenerational skill transmission literature suggests that intergenerational correlations capture only part of the influence of family on children’s cognitive and non-cognitive skills, as confirmed by decomposition analyses and in line with previous findings on educational and income mobility.
IAB-Discussion Paper 30/2016
History Dependence in Wages and Cyclical Selection: Evidence from Germany
06 October 2016
Using administrative data from Germany, this paper analyzes the relation between wages and past and current labor market conditions. Specifically, it explores whether the data is more consistent with implicit contract models (Beaudry/DiNardo, 1991) or a matching model with on-the-job search and cyclical selection (Hagedorn/Manovskii, 2013). The data suggests that wages are related to past labor market conditions as contract theories postulate. However, past labor market conditions also affect contemporaneous wages through the evolution of the match qualities over a worker’s job history -the main hypothesis of the selection model. Refining the selection model by taking into account within company job regrading, we find that wages of workers who switched employers and occupations at the same time respond stronger to the cycle than wages of job stayers. In contrast, wages of workers who only switch employers or occupations are not more cyclical than wages of workers who stay at their previous employer and in their previous occupation.
IAB-Discussion Paper 29/2016
Natives and Migrants in Home Production: The Case of Germany
05 October 2016
In this paper, we assess the impact of international migration, and the induced home-care service labour supply shock, on fertility decisions and labour supply of native females in Germany. Specifically, we consider individual data of native women from the German Socio-Economic Panel and we merge them with the data on the share of female immigrants and other regional labour market characteristics. We find that an increase of the share of female immigrants at the local level induces women to work longer hours and positively affects the probability to have a child. This effect strengthens for (medium) skilled women and, among them, for women younger than 35 years of age. The negative change in household work attitude confirms the behavioural validity of our results.
IAB-Discussion Paper 28/2016