Firm-sponsored Work-Related Training in Frictional Labour Markets: An empirical analysis for Switzerland

Work-related training is considered to be very important for providing the workforce with the necessary skills for maintaining and enhancing the competitiveness of the firms and the economy. According to the classical human capital theory general training is entirely financed by workers. This prediction is at odds with the empirical evidence. This observation inspired new theoretical models with frictional labour markets aiming at explaining the empirical evidence. These frictions create incentives for firms to invest in general training. Most important from a policy point of view is that the amount of training in this frictional world is below the optimal first-best solution achieved in the classical human capital model. Instruments to increase investment in training depend on the dominating kind of friction. This paper tries to identify the sources of frictions in the Swiss labour market. The results indicate that internal wage guarantees (minimum wages set in labour contracts) may play an important roleTraining; Wages; Market Imperfections; Mobility

Work-Related Training and Wages: An empirical analysis for male workers in Switzerland

Work-related training is considered to be very important for providing the workforce with the necessary skills for maintaining and enhancing the competitiveness of the firms and the economy. On the individual level, the primary effect of training should be an increased productivity of the trained workers. This paper provides estimates of the effects of training on wages which can be seen as a lower bound for the effects on productivity. Based on panel data from the Swiss Labour Force Survey (SLFS) I estimate these effects using nonparametric matching methods. Training is measured either as firm-sponsored training or as any work-related training. The data show that multiple participation in work-related training is not a rare event. This complicates the analysis considerably because the evaluation of dynamic treatments is not yet fully developed. As a solution to this problem a heuristic difference-in-differences approach to estimate the incremental effect of further training events is used. The results clearly indicate that it is important to account for multiple training events. Taken together, there are significant effects of work-related training on wages of roughly 2% for each training event. There is some evidence that workers who already have high earnings profit more from continuous work-related trainingTraining; Wages; Nonparametric Matching

The Economies of Scale of Living Together and How They Are Shared: Estimates Based on a Collective Household Model

How large are the economies of scale of living together? And how do partners share their resources? The first question is usually answered by equivalence scales. Traditional estimation and application of equivalence scales assumes equal sharing of income within the household. This paper uses data on financial satisfaction to simultaneously estimate the sharing rule and the economy of scale parameter in a collective household model. The estimates indicate substantial scale economies of living together, especially for couples who have lived together for some time. On average, wives receive almost 50% of household resources, but there is heterogeneity with respect to the wives' contribution to household income and the duration of the relationship.collective household models, sharing rule, equivalence scale, subjective data

Does subsidised temporary employment get the unemployed back to work? An econometric analysis of two different schemes

Subsidised employment is one tool of active labour market policies to improve the chances of the unemployed to find permanent employment. Using informative individual data coming from various administrative sources we investigate the effects of two different schemes of subsidised temporary employment implemented in Switzerland. One scheme operates as a non-profit employment programme (EP), whereas the other is a subsidy for temporary jobs (TEMP) in firms operating in competitive markets. Using econometric matching methods we find that TEMP is considerably more successful in getting the unemployed back into work than TEMP. We also find that compared to nonparticipation both programmes are unsuccessful for unemployed that find job easily anyway as well for those with short unemployment duration. For unemployed with potentially long unemployment duration and for actual long term unemployed, both programmes may have some positive effect, but the effect of TEMP is much larger.Subsidised temporary job; employment programme; temporary work contracts; active labour market policies; matching on the propensity score; Switzerland

Work-Related Training and Wages: An empirical analysis for male workers in Switzerland

Work-related training is considered to be very important for providing the workforce with the necessary skills for maintaining and enhancing the competitiveness of the firms and the economy. On the individual level, the primary effect of training should be an increased productivity of the trained workers. This paper provides estimates of the effects of training on wages which can be seen as a lower bound for the effects on productivity. Based on panel data from the Swiss Labour Force Survey (SLFS) I estimate these effects using nonparametric matching methods. Training is measured either as firm-sponsored training or as any work-related training. The data show that multiple participation in work-related training is not a rare event. This complicates the analysis considerably because the evaluation of dynamic treatments is not yet fully developed. As a solution to this problem a heuristic difference-in-differences approach to estimate the incremental effect of further training events is used. The results clearly indicate that it is important to account for multiple training events. Taken together, there are significant effects of work-related training on wages of roughly 2% for each training event. There is some evidence that workers who already have high earnings profit more from continuous work-related training

Contracts as Rent Seeking Devices: Evidence from German Soccer

Recent theoretical research has identified many ways how contracts can be used as rent seeking devices vis-à-vis third parties, but there is no empirical evidence on this issue so far. To test some basic qualitative properties of this literature, we develop a theoretical and empirical framework in the context of European professional soccer where (incumbent) clubs and players sign binding contracts which are, however, frequently renegotiated when other clubs (entrants) want to hire the player. Because they weaken entrants in renegotiations, long term contracts are useful rent seeking devices for the contracting parties. From a social point of view, however, they lead to allocative distortions in the form of deterring efficient transfers. Since incumbent clubs tend to benefit more from long term contracts in renegotiations than players, these must be compensated ex ante by a higher wage when agreeing to a long term contract. Using data from the German "Bundesliga", our model predictions are broadly confirmed. In particular, our analysis supports the concerns expressed in the theoretical literature about detrimental effects of strategic contracting on allocative inefficiency.strategic contracting, rent seeking, empirical contract theory, long-term contracts, breach of contract, sports economics

Wirkung der aktiven Arbeitsmarktpolitik der Schweiz auf die individuellen Beschäftigungschancen von Arbeitslosen (Effect of active labour market policy in Switzerland on the individual employment prospects of unemployed people)

"The aim of this microeconometric study is to estimate the effects of the Swiss employment and training measures on the individual employment probabilities of potential participants on the basis of administrative data from the unemployment insurance and the pension insurance. A large number of the employment and training measures are studied altogether, taking into account their heterogeneous programme structure. For this reason the measures were divided up into eight different groups each with similar types of programme. People who did not take part in any measure were brought in as a further control group. The results show a very differentiated picture of the effectiveness of the individual programmes, which can be reduced to the following denominators in summary: the earnings top-up is the only scheme to have a clearly positive effect on the chances of returning to employment, whereas the programmes aimed at temporary employment have a negative effect at least in the short term, but probably also in the medium term. No such clear results can be found for the remaining elements of the employment and training measures." (Author's abstract, IAB-Doku) ((en))arbeitsmarktpolitische Maßnahme - Erfolgskontrolle, Arbeitsmarktchancen, Arbeitslose, berufliche Reintegration, Schweiz

Nonparametric bounds on the effect of deductibles in health care insurance on doctor visits: Swiss evidence

We evaluate the effect of the size of deductibles in the basic health insurance in Switzerland on the probability of a doctor visit. We employ nonparametric bounding techniques to minimise statistical assumptions. In order to tighten the bounds we consider three further assumptions: mean independence of an instrument, monotone treatment response, and monotone treatment selection. Under the first two assumptions we are able to bound the treatment effect of high deductibles compared to low deductibles below zero. Adding the third assumption allows to tighten the bounds further. We conclude that there is a negative treatment effect