The effect of education-job mismatch on net income: evidence from a developing country

This paper explores the impact of education-job mismatch on the net income of workers in the context of Bosnia-Herzegovina. We used an OLS linear regression method on data from the Measure BiH Youth Survey. A log-transformation of the dependent variable created the left-side semilog functional form, which is typically used in models of the earnings of individuals. Our findings strongly support the statement that education-job mismatch has a significant effect on net income. Workers can expect net income differences between 13% and 15% if their level of education does not match that required for their job. However, our results show that the impact of education-job mismatch depends on the level of schooling and age of respondents. Results regarding education- job mismatch vary across studies, but our study is the first to examine the effect of education-job mismatch on net income in the context of Bosnia-Herzegovina. Second, the effect of education- job mismatch might depend on the choice of estimation method for incidences of overeducation and undereducation. Third, we emphasise the importance of understanding interactions, and fourth, we introduce new variables to understand how they influence earnings. These include religiousness, and the importance of belonging to a family, or a particular city

Working Inflow, Outflow, and Churning

Linked employer-employee data from the Finnish business sector is used in an analysis of worker turnover. The data is an unbalanced panel with over 219 000 observations in the years 1991-97. The churning (excess worker turnover), worker inflow (hiring), and worker outflow (separation) rates are explained by various plant and employee characteristics in type 2 Tobit models where the explanatory variables can have a different effect on the probability of the flow rates to be non-zero and on the magnitude of the flow rate when it is positive. Most of the characteristics are defined as 5-group categorical variables defined for each industry separately in each year. We compare the Tobit results to OLS estimates, and also use weighting by plant employment. It turns out that weighted OLS results are fairly close to Tobit results. The probabilities of observing non-zero churning, inflow, and outflow rates increase with plant size. The magnitudes of the non-zero churning and inflow rates depend positively on size, but the magnitude of outflow rate negatively. High-wage plants have low turnover, whereas plants with large within-plant variation in wages have high turnover. Average tenure of employees has a negative impact on turnover. High plant employment growth increases churning and separation but reduces hiring in the next year. We also control various other plant and average employee characteristics like average age and education, shares of women and homeowners, foreign ownership, ownership changes, and regional unemployment.http://deepblue.lib.umich.edu/bitstream/2027.42/39997/3/wp611.pd

Job flows in Italian SMEs: a longitudinal analysis of growth, size and age

The paper proposes an empirical investigation of job flows for continuing manufacturing firms in Italy from 1996 to 2004 using high quality data on work forces and other characteristics of the firm. The magnitude of the job flows for small and medium-sized limited liability companies in Italy is lower than what observed in Anglo-Saxon countries, but it is still in line with evidence for firms in the Euro area. Second, the magnitude of job flows significantly shrunk in the aftermath of the economic downturn in 2001. Firms fared worse than in the late nineties and the labour market became less efficient in allocating job flows. Third, gross job creation and gross job destruction decrease as firm get larger, but when added to compute an indicator of net employment growth, size does not seem to affect firms’ expansion. On the contrary, age significantly hinges on the growth opportunities of small and medium-sized enterprises. The econometric analysis corroborates the major findings of our descriptive investigation referring to the role of size and age. In particular, it shows that classification methods used to define size classes strongly influence the estimated relationship between growth and size industrial regimes play a role in shaping job flows. Our result show that firms in supplier dominated industries fared significantly lower than enterprises in other sectors during the sample period

The People\u27s Republic of China\u27s Potential Growth Rate: The Long-Run Constraints

We estimate the People’s Republic of China’s (PRC’s) potential growth rate in 2012 at 8.7% and at 9.2% for the average of 2008–2012, about the same as the average actual growth rate for this period. This rate is the natural growth rate, that is, the rate consistent with a constant unemployment rate and stable inflation. The PRC’s natural growth rate displays a downward trend since 2006, when it peaked at 11.1%. Probably the Great Recession has been an important factor, although we argue that there are other factors. We show that the PRC’s potential growth rate is not demand constrained, in particular by the balance of payments. The PRC’s potential growth rate is determined by the supply side of the economy, in particular by: (i) changes in the structure of the economy, in particular in the share of industrial employment; (ii) the working-age population; (iii) the share of net exports in gross domestic product (GDP); (iv) export growth; (v) the share of foreign direct investment (FDI) in GDP; and (vi) human capital accumulation

Job Creation, Destruction and Transition in Poland, 1988-1998: Panel Evidence

Longitudinal data from interviews with Poles of working age conducted in 1988, 1993 and 1998 present a detailed view of the transition from a state dominated to a market economy. Job loss in state firms and job creation in new private firms are the dominant employment change, other than retirements from the labor force. In the Polish case, a significant proportion of this movement over the 1988 to 1998 period involves a period of unemployment or exit from the labor force before obtaining a private sector job. A second feature of the Polish transition is considerable job competition between workers leaving the state sector and those who were out of the labor force at the beginning of the transition. The likelihood of moving to the private sector was higher for the better educated and for residents of regions with a robust de novo economy, suggesting that the supply of jobs in the private sector combined with higher levels of human capital lead to faster and smoother transitions. Lastly, wage differences between the state sector and the de novo sector appear to have little association with mobility, suggesting that movement is not strongly related to the opportunity to find a higher paying job.http://deepblue.lib.umich.edu/bitstream/2027.42/39887/3/wp502.pd

Transition on the Shop Floor - The Restructuring of a Weaving Mill, Hungary 1988-97

While a variety of studies analysed the benign effects of privatisation on firm performance under post-socialist transition using financial data very little is known about how the apparent productivity gains were achieved. This paper follows a weaving mill from 1998 to 1997 on its way of becoming a capitalist enterprise and gives a detailed account of the sources and limits of productivity growth. The data suggests that the factory was not far from the competitive optimum given the size of ‘plant and equipment’ - efficiency gains were mostly achieved by plant size reduction and asset stripping. The gains from this sort of initial restructuring helped many former state enterprises stay on the market but they did not necessarily indicate high levels of adaptability, capacity to innovate and ability to attract outside investors. In economies with many `seemingly restructured` privatised enterprises the elimination of the former state sector jobs is likely to continue within the private sector. The process may last for years after privatisation as a legal act had been fully accomplished.http://deepblue.lib.umich.edu/bitstream/2027.42/40031/3/wp645.pd

A Bayesian semiparametric latent variable model for mixed responses

In this article we introduce a latent variable model (LVM) for mixed ordinal and continuous responses, where covariate effects on the continuous latent variables are modelled through a flexible semiparametric predictor. We extend existing LVM with simple linear covariate effects by including nonparametric components for nonlinear effects of continuous covariates and interactions with other covariates as well as spatial effects. Full Bayesian modelling is based on penalized spline and Markov random field priors and is performed by computationally efficient Markov chain Monte Carlo (MCMC) methods. We apply our approach to a large German social science survey which motivated our methodological development

Globalization of IT Services and White Collar Jobs: The Next Wave of Productivity Growth

Businesses throughout the US economy continue to transform even after the technology boom has faded. The key sources of this continuing transformation are investment in the information technology (IT) package (hardware, software, and business-service applications) and reorientation of business activities and processes to use both information and technology effectively.