Klaus F. Zimmermann

A new GLO Discussion Paper indicates that introducing a hypothetical wage penalty for discriminatory choice behavior lowers discrimination and that higher penalties have a greater effect.

GLO Discussion Paper No. 856, 2021

Loss aversion in taste-based employee discrimination: Evidence from a choice experiment – Download PDF
by Lippens, Louis & Baert, Stijn & Derous, Eva

GLO Fellow Stijn Baert

Author Abstract: Using a choice experiment, we test whether taste-based employee discrimination against ethnic minorities is susceptible to loss aversion. In line with empirical evidence from previous research, our results indicate that introducing a hypothetical wage penalty for discriminatory choice behaviour lowers discrimination and that higher penalties have a greater effect. Most notably, we find that the propensity to discriminate is significantly lower when this penalty is loss-framed rather than gain-framed. From a policy perspective, it could therefore be more effective to financially penalise taste-based discriminators than to incentivise them not to discriminate.

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.

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.

Ends;

A new GLO Discussion Paper reviews employers’ violations of the wage contracts of workers on H-1B temporary work visas to the US; higher labor market power is associated with fewer violations, higher unemployment rates and subcontractor firms are associated with more.

GLO Discussion Paper No. 855, 2021

Wage Theft, Economic Conditions, and Market Power: The Case of H-1B Workers – Download PDF
by DeVaro, Jed & Norlander, Peter

GLO Fellow Peter Norlander

Author Abstract: This study explores what determines employers’ violations of the wage contracts of workers on H-1B temporary work visas, which occur when firms pay those workers below the promised prevailing or “market” wage. A theoretical framework is proposed that predicts more violations during economic downturns, fewer violations when firms have more labor-market power, and more violations by subcontractor firms. Empirical analysis is based on a firm-level matched dataset of wage and hour violations and the firms that sponsor H-1Bs. Higher labor market power, measured by the Herfindahl-Hirschman Index, is associated with fewer violations. Higher unemployment rates and subcontractor firms are associated with more violations. The effects of the unemployment rate and labor market power are amplified in subcontractor firms.

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.

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.

Ends;

A new GLO Discussion Paper finds that there is no significant difference between valuations of a private good and various versions of a public good as long as the good itself is the same.

GLO Discussion Paper No. 853, 2021

Willingness to pay for private and public improvements of vulnerable road users’ safety – Download PDF
by Andersson Järnberg, Linda & Andrén, Daniela & Hultkrantz, Lars & Rutström, E. Elisabet & Vimefall, Elin

GLO Fellows Linda Andersson Järnberg and Daniela Andrén

Author Abstract: A frequent finding in the empirical literature on cost-benefit analysis of traffic safety measures is that valuations of public goods are lower than valuations of private goods, contrary to theory predictions. This study elicits the willingness to pay for publicly and privately provided safety improvement benefiting cyclists and pedestrians, a relatively neglected group in this literature. Our results suggest that there is no significant difference between valuations of a private good and three versions of a public good as long as the good itself is the same, in our case a mobile phone app. The public good versions differ in attributes such as mandatory or voluntary use and private or public provision institutions. . This finding is consistent with the simultaneous presence of both financial altruism and safety altruism, or neither. Public institutions are preferred to private ones in the provision of the public goods, and voluntary participation is preferred to mandated regulation. We also find evidence that attitudes that favor using taxes to fund traffic safety projects, and public responsibility for traffic safety are associated with a higher willingness to pay.

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.

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.

Ends;

A new GLO Discussion Paper finds that tenure exhibits an inverted-U-shaped relationship with respect to productivity, but its impact differs widely across workforce and firm dimensions.

GLO Discussion Paper No. 852, 2021

Can You Teach an Old Dog New Tricks? New Evidence on the Impact of Tenure on Productivity – Download PDF
by Gagliardi, Nicola & Grinza, Elena & Rycx, François

GLO Fellow François Rycx

Author Abstract: In this paper, we explore the impact of workers’ tenure on firm productivity, using rich longitudinal matched employer-employee data on private Belgian firms. We estimate a production function augmented with a firm-level measure of tenure. We deal with endogeneity, which arises from unobserved firm heterogeneity and reverse causality, by applying a modified version of Ackerberg et al.’s (2015) control function method, which explicitly removes firm fixed effects. Consistently with recent theoretical predictions, we find that tenure exhibits an inverted-U-shaped relationship with respect to productivity. The existence of decreasing marginal returns to tenure is corroborated in our analysis on the tenure composition of the workforce. We also find that the impact of tenure differs widely across workforce and firm dimensions. Tenure is particularly beneficial for productivity in contexts characterized by a certain degree of routineness and lower job complexity. Along the same lines, our findings indicate that tenure exerts stronger (positive) impacts in industrial and high capital-intensive firms, as well as in firms less reliant on knowledge- and ICT-intensive processes.

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.

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.

Ends;

A new GLO Discussion Paper finds that a light-touch intervention can increase socioeconomic and racial diversity in undergraduate economics.

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. 851, 2021

A Simple Nudge Increases Socioeconomic Diversity in Undergraduate Economics – Download PDF
by Pugatch, Todd & Schroeder, Elizabeth

GLO Fellow Todd Pugatch

Author Abstract: We assess whether a light-touch intervention can increase socioeconomic and racial diversity in undergraduate Economics. We randomly assigned over 2,200 students a message with basic information about the Economics major; the basic message combined with an emphasis on the rewarding careers or financial returns associated with the major; or no message. Messages increased the proportion of first generation and underrepresented minority (URM) students majoring in Economics by five percentage points. This effect size was sufficient to reverse the gap in Economics majors between first generation/URM students and students not in these groups. Effect sizes were larger and more precise for better-performing students and first generation students. Extrapolating to the full sample, the treatment would double the proportion of first generation and underrepresented minority students majoring in Economics.

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.

Ends;

A new GLO Discussion Paper finds that bad economic conditions when young can significantly predict higher entrepreneurship in later life.

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. 850, 2021

Macroeconomic Contractions during Impressionable Years and Entrepreneurship in Later Adulthood – Download PDF
by Sotirakopoulos, Panagiotis & Guven, Cahit & Ulker, Aydogan & Graham, Carol

GLO Fellows Cahit Guven and Carol Graham

Author Abstract: We argue that past events experienced during the critical ages of 18-25 can influence an individual’s future entrepreneurship based on the “impressionable years hypothesis”. Accordingly, we empirically investigate the relationship between bad economic conditions during youth and later-life entrepreneurship using Gallup from 2009 to 2014. The identification is achieved through variations across 77 countries and age cohorts born between 1954 and 1989. Our findings indicate that bad economic conditions when young can significantly predict higher entrepreneurship in later life. For example, experiencing at least one economic contraction during youth increases future self-employment/business ownership propensities by about 6/10% at the outcome means. Graduating from college and entering the job market in a bad economy cannot explain our results. Findings are robust to numerous methods of measuring economic contractions and controlling for behavioural measures as well as economic shocks experienced before and after the impressionable years.

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.

Ends;