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Over the period 1994–2012, immigrants’ wage growth in France outperformed that of natives. We investigate to what extent changes in task-specific returns to skills contributed to this wage dynamics differential through two channels: changes in the valuation of skills (price effect) and occupational sorting (quantity effect). We find that the wage growth premium of immigrants is mainly explained by the progressive reallocation of immigrants toward tasks whose returns increase over time. Immigrants seem to have taken advantage of labor demand restructuring driven by globalization and technological changes.
Immigrants are newcomers in a labor market. As a consequence, they lack host-country-specific labor market knowledge and other country-specific and not directly productive valuable assets affecting their relative bargaining position with employers. We introduce this simple observation into a search and matching model of the labor market and show that immigrants increase the employment prospects of competing natives. To test the predictions of our model, we exploit yearly variations between 1998 and 2004 in the share of immigrants within occupations in 13 European countries. We identify the impact of immigrants on natives׳ employment rate using an instrumental variable strategy based on historical settlement patterns across host countries and occupations by origin country. We find that natives׳ employment rate increases in occupations and sectors receiving more immigrants. Moreover, we show that this effect varies depending on immigrants׳ characteristics and on host country labor market institutions which affect relative reservation wages.
The progressive diffusion of ICT explains the raise in the number of highly paid jobs but has difficulties in justifying that of low-paid jobs. Classifying occupations according to their median wage in 1993, we analyze their employment growth until 2010, which is highest both in the top and in the bottom of the distribution, and lowest in the middle. Low-paid personnel services arise as the main factor responsible for the increase in the proportion of employment at the bottom of the wage distribution. We argue that population aging can explain the increased demand for personal services and thus the rise of employment in low-paid positions. Our argument goes as follows: goods and personal services are complementary for seniors. The decrease in the relative price of goods, induced by the progressive replacement of labor input in routine tasks by machines, is then associated with an increased demand for personal services if the proportion of seniors is increasing. We thus complement the existing literature on employment polarization by showing that demographic trends also play first order role.
This paper investigates the role of productivity as a determinant of the worker’s retirement intentions. Using an overlapping generation framework, we analyze the retirement decision of a cohort of workers being ability heterogeneous. The labor market is endogenously segmented between workers having the required ability level to occupy jobs where the productivity is indexed to the technological state via on-the-job training (complex jobs) and the rest of workers, who are employed in positions where productivity is relatively deteriorated in case of technological change due to the absence of on-the-job training (simple jobs). In case of technological change, workers in complex jobs delay their retirement date, whereas workers in simple positions will not modify their retirement decision unless taxes change. Using data from France, we find that after a technological change, older workers who benefit from a skill upgrading training program have a higher intended retirement age.
This paper seeks to gain insights on the relationship between growth and employment when considering heterogeneous agents in terms of their working horizon. Using an OECD database, our empirical estimations suggest that growth positively influences the employment rate of workers having a long working horizon (young workers) while negatively influences the employment rate of workers having a short working horizon (senior workers). We then provide theoretical foundations to this result by means of an endogenous job destruction framework à laMortensen and Pissarides (1998) where we introduce life cycle features. We show that, under the assumption of homogeneous productivity among workers, growth negatively affects the employment rate of workers having a short working horizon before retirement (senior workers) while it positively affects the employment rate of workers having a long working horizon (young workers). Numerical simulations confirm these results, however a non-standard calibration is required to reproduce the elasticity values obtained in our empirical estimations.
This paper seeks to gain insights into the relationship between growth and unemployment in a setting with heterogeneous skills, human capital accumulation, on-the-job training and capital-skill complementarity. We use an endogenous job destruction framework in the style of Mortensen and Pissarides (1998) with directed search. We show that when growth accelerates, a larger share of unskilled workers seeks training, increasing firms’ incentives to update job-specific technology (rather than destroying it). By magnifying the impact of growth on employment, the introduction of human capital issues allows the model to more closely match the estimated sensitivity of unemployment with respect to growth. When calibrated, the model manages to reproduce the aggregate capitalization effect estimated using OECD data. We find that growth reduces unemployment for individuals receiving training, while it increases the unemployment rate of unskilled workers without training (creative destruction effect).
Abstract The introduction of information and communication technologies in firms over recent decades has engendered a process of internal workplace reorganization in order to maximize performance. Using a two-stage optimal control technique, this paper provides analytical solutions for the conditions under which a firm adopts a new organizational regime characterized by multitasking and an horizontal hierarchical structure (holistic organization). We consider two flexibility options: (a) the possibility that only a part of the labor force is switched to the new organization and, (b) the possibility that any loss of productivity is not permanent. In all cases we conclude that the new organization is adopted if, and only if, the productivity gains in the capital-goods sector compensate both the loss of expertise suffered by workers and the drop in consumption.
Using individual data from the French Labour Force Survey and the Complementary Survey on Working Conditions for 1998, we analyse earnings inequalities along the wage distribution between workers using novel Information and Communication Technologies (ICT) at their job and those not using them. We estimate quantile regressions with technological dummies and carry out a decomposition analysis, both at the aggregate level and by occupations. At the aggregate level, most of the wage gap between both populations is explained by the divergence in their labour characteristics. In jobs where ICT are not very diffused, the technological premium is larger than in jobs characterized by a large presence of novel technologies. Whereas in the former type of jobs, the technological premium is mainly justified by a divergence in the labour market characteristics between ICT users and nonusers, in positions characterized by a wide presence of novel technologies the technological premium responds rather to a divergence in the returns to identical characteristics.
Our paper seeks to gain insights into the effects of labor-market institutions on the dynamics of the labor market, during the diffusion process of new technologies. Because these institutions differ between Europe and the United States, we expect the dynamics of the labor market to also diverge between both areas. We propose an endogenous job-destruction matching framework, with heterogeneous workers, where the segmentation of the labor market between workers having the required ability to do a technological job and the rest of the workers is endogenous. We show that the dynamics of this segmentation depends on the generosity of the unemployment-benefit system. When the system is generous, we obtain a U-shaped path of the labor-market segmentation, implying that workers that previously had access to technological positions may be excluded from them at a given moment of time. The presence of firing costs tends to improve job stability, but its final effect on the market tightness and unemployment rates is minor.
Si de nombreux travaux se sont intéressés à l’impact des nouvelles technologies sur les inégalités salariales entre les travailleurs qualifiés et peu qualifiés, on sait en revanche peu de chose sur le rôle de ces nouvelles technologies sur les inégalités de revenu entre les hommes et les femmes. La présente étude cherche à en mesurer l’impact en France en prenant en compte l’ensemble de la distribution des salaires. Depuis quelques années, plusieurs études empiriques ont souligné que le différentiel de salaire ne restait pas constant le long de la distribution. L’écart de salaire entre les hommes et les femmes s’avère beaucoup plus élevé en haut de la distribution que pour les bas niveaux de rémunération, un phénomène connu sous le nom de plafond de verre. Ce constat a été notamment observé en Suède, en Allemagne, au Danemark ou bien encore en Espagne. Dans le cas de la France, le différentiel salarial estimé est de l’ordre de 16 % en moyenne, et il s’avère également plus important dans le haut que dans le bas de la distribution des salaires.