Job Mobility in Ireland

This paper investigates the factors that determine job-to-job mobility in Ireland over the period 1995 to 2001. It finds that labour market experience, working in the public sector, human capital, whether a person is overskilled and the sector they work in are important determinants of job change. In addition, the paper finds the rate of job mobility in Ireland practically doubled over the period. The sample is divided into two time periods and a decomposition technique is applied to ascertain how much of the increase in mobility is attributable to compositional changes and how much is due to other factorsJob Mobility

Estimating the Impact of Immigration in Ireland

The core objective of this paper is to review the research which has been undertaken on estimating the economic impacts of immigration in Ireland. By way of providing context, the paper begins with an overview of Ireland’s recent experience of immigration and of the research which has been conducted on the associated issues such as the characteristics and experiences of immigrants. As the approach taken to estimating the impacts of immigration is based on simulations using a model of Ireland’s labour market, details of the model are provided. Results from two studies are then presented. One study tended to show unambiguously positive outcomes, such as increased national output and reduced earnings inequality. However, a second study called into question the earlier findings on earnings inequality. While immigrants in Ireland are generally high-skilled, many were found to be working in occupations below their skill levels. Hence, high-skilled immigrants may be competing in the labour market with low-skilled natives. Accounting for this in the simulation exercises showed how immigration may have negatively impacted upon the earnings of low-skilled workers in Ireland.Immigration, Ireland, wages

Job Changes and Wage Changes: Estimation with Measurement Error in a Binary Variable*

Many studies of labour market dynamics use survey data so it is valuable to know about the quality of the data collected. This paper investigates job transitions in Ireland over the period 1995 to 2001, using the Living in Ireland Survey, the Irish component of the European Community Household Panel. In applied work on job mobility, researchers often have to rely on self-reported accounts of tenure to determine whether or not a job change has taken place. There may be measurement error in these responses and consequently observations may be misclassified. The paper finds that there are substantial inconsistencies or measurement error in the responses used to determine job changes so there is a risk of misclassifying cases as being job changes when truly they are job stays and vice versa. The paper explores the impact of misclassification in a model of job change using an estimator developed by Hausman, Abrevaya and Scott-Morton (1998). It finds that ignoring misclassification may substantially underestimate the true number of job changes and it can lead to diminished covariate effects. The paper then investigates the relationship between job mobility and wage growth. Misclassification in a binary explanatory variable causes attenuation in OLS estimates. A two-step approach to controlling for misclassification in job changes is adopted to estimate the wage effects of job mobility. The paper finds that controlling for misclassification has a substantial impact on the estimated effect of changing jobs on wage growth

Job Changes and Wage Changes: Estimation with Measurement Error in a Binary Variable*

Many studies of labour market dynamics use survey data so it is valuable to know about the quality of the data collected. This paper investigates job transitions in Ireland over the period 1995 to 2001, using the Living in Ireland Survey, the Irish component of the European Community Household Panel. In applied work on job mobility, researchers often have to rely on self-reported accounts of tenure to determine whether or not a job change has taken place. There may be measurement error in these responses and consequently observations may be misclassified. The paper finds that there are substantial inconsistencies or measurement error in the responses used to determine job changes so there is a risk of misclassifying cases as being job changes when truly they are job stays and vice versa. The paper explores the impact of misclassification in a model of job change using an estimator developed by Hausman, Abrevaya and Scott-Morton (1998). It finds that ignoring misclassification may substantially underestimate the true number of job changes and it can lead to diminished covariate effects. The paper then investigates the relationship between job mobility and wage growth. Misclassification in a binary explanatory variable causes attenuation in OLS estimates. A two-step approach to controlling for misclassification in job changes is adopted to estimate the wage effects of job mobility. The paper finds that controlling for misclassification has a substantial impact on the estimated effect of changing jobs on wage growth

JOB MOBILITY IN IRELAND. ESRI Research Bulletin 2009/2/5

The movement of workers from one job to another allows workers and firms to adapt to changing economic and personal circumstances. Job mobility contributes to the efficient working of the labour market; as workers can seek out new jobs in which they can be more productive and for which they will be better rewarded. Internationally, changing jobs appears to be an important part of worker’s experience in the labour market. However, little is known about job mobility in an Irish context. Recent research by Adele Bergin helps to establish the prevalence of job changing in Ireland, how it has changed over time, and the types of worker most likely to switch jobs

Job Mobility and Measurement Error

This thesis consists of essays investigating job mobility and measurement error. Job mobility, captured here as a change of employer, is a striking feature of the labour market. In empirical work on job mobility, researchers often depend on self-reported tenure data to identify job changes. There may be measurement error in these responses and consequently observations may be misclassified as job changes when truly no change has taken place and vice versa. These observations serve as a starting point for this thesis. Chapter 3 explores the level and determinants of job mobility in Ireland, using the Living in Ireland Survey, the Irish component of the European Community Household Panel. One of the findings is that the rate of voluntary (i.e. employee initiated) job mobility in Ireland trebled over the period 1995 to 2000. A decomposition technique indicates that composition changes only explain around one-fifth of the increase, while the remainder reflects changes in operation of the labour market. Chapter 4 uses Monte Carlo simulation techniques to investigate the performance of a modified probit estimator developed by Hausman, Abrevaya and Scott-Morton (1998) that controls for misclassification in a dependent variable. An analysis of the data indicates that there is the possibility of substantial measurement error which may make it difficult to capture job changes. The Hausman et al. (1998) estimator is used to formally control for measurement error in models of job change for Ireland (Chapter 5) and other European countries (Chapter 6). The main findings are that the true rates of job change are being severely undercounted in several countries and also that similar factors are important in determining job changes across countries. Finally, Chapter 7 contributes to the existing literature that examines the impact of job mobility on wage growth. It finds that by controlling for measurement error in job changes, the effect of job mobility on wage growth is larger than prevailing estimates suggest

The Labour Market Characteristics and Labour Market Impacts of Immigrants in Ireland

The purpose of this paper is twofold. We first produce a labour market profile of non- Irish immigrants who arrived in Ireland in the ten years to 2003. We then go on to use the labour market profile in estimating the impact of immigration (non-Irish) on the Irish labour market. Immigrants are shown to be a highly educated group. However, they are not all employed in occupations that fully reflect their education levels. The model of the labour market that we use to simulate the impact of immigration differentiates between low-skilled and high-skilled labour. This allows us to estimate the impact of immigrants (a) if they were employed at a level fitting their education and (b) if they were employed in occupations below their educational level. Our results show that under scenario (a) immigrants who arrived between 1993 and 2003 increased GNP by between 3.5 and 3.7 per cent, largely by lowering skilled wages by around 6 per cent and increasing Ireland’s competitiveness. Under scenario (b), the increase in GNP is reduced to 3 per cent because the impact on skilled wages is lower. If we assume that immigration is primarily unskilled, the impact on earnings inequality found under (a) and (b) is reversed.

Estimating the Impact of Immigration on the Wages in Ireland

We estimate the impact of immigration on the wages of natives in Ireland applying the technique proposed by Borjas (2003). Under this method, the labour market is divided into a number of skill cells, where the cells are defined by groups with similar ages and levels of education (or age and occupation). Regression analysis is then employed to assess whether the average wages of natives across skill cells is affected by the share of immigrants across cells. When the cells are based on education/age, our results suggest a negative relationship between native wages and immigrant shares. However, the opposite appears to hold when the cells are based on occupation/age. These contradictory findings suggest that care should be exercised when applying this method as inaccurate impressions of the impact of immigration on wages may arise.

Overeducation in Europe: Trends, Convergence and Drivers

This paper examines patterns in overeducation between countries using a specifically designed panel dataset constructed from the quarterly Labour Force Surveys of 28 EU countries over a twelve to fifteen year period. It is not the case that overeducation has been rising rapidly over time in all countries and where overeducation has grown the trend has been very gradual. Furthermore, overeducation rates were found to be static or falling in approximately fifty percent of the 28 EU countries. The evidence points towards convergence in overeducation at a rate of 3.3 percent per annum. In terms of the determinants of overeducation we find evidence to support policies aimed at improving effective female participation, labour market flexibility and the practical aspects of educational provision as a means of reducing the incidence of overeducation within countries