565 research outputs found
Myths and Facts Regarding the Portuguese Labour Market - the Tragic Fate of College Graduates
U.S. Unemployment Duration: Has Long Become Longer or Short Become Shorter?
The U.S. labor market has been experiencing unprecedented high average unemployment duration. The shift in the unemployment duration distribution can be traced back to the early nineties. In this study, censored quantile regression methods are employed to analyze the changes in the U.S. unemployment duration distribution. We explore the decomposition method proposed by Machado and Mata (2005) to disentangle the contribution of the changes generated by the covariate distribution and by the conditional distribution. The data used in this inquiry are taken from the nationally representative Displaced Worker Surveys of 1988 and 1998. We provide evidence that the change in the unemployment duration distribution is mainly produced by the opposing effects of a sharp rise in job-to-job transition rates and an increased sensitivity of unemployment duration to unemployment rates. Compositional changes in the labor force played a limited role. We rationalize our findings by arguing that improved screening technology is likely to be the relevant underlying mechanism at work.Quantile Regression, Duration Analysis, Unemployment Duration, Counterfactual Decomposition.
Why Do Firms Use Fixed-Term Contracts?
This paper investigates the reasons why firms use fixed-term contracts.Two distinctive features of these contracts - reduced firing costs and the prohibition of contract rollover - are highlighted. Firms' decision related to temporary contracts - the choice of the contract on offer and contract conversion - are modeled within standard adjustment costs and matching settings. Regression analysis is performed on the stock of fixed-term contracts and the flows of temporary workers to permanent positions. Results from a beta-binomial regression model indicate that screening workers for permanent positions is the single most important reason why firms use this type of contract.Fixed-Term Contracts, Adjustment Costs, Temporary Employment
Workers' Flows and Real Wage Cyclicality
This study investigates real wage cyclicality in Portugal for the years of 1986-98, addressing the heterogeneity in wages responses to aggregate labor market conditions for workers' hirings and separations. The results exhibit a moderate procyclical behavior of real wages for continuously employed workers, in particular, for job stayers. For workers' accessions a strongly procyclical behavior in wages was observed, which is consistent with the idea that entry wages are much more procyclical than current wages. This empirical evidence suggests that even micro-data estimates of real wage cyclicality may conceal a strong procyclical wage behavior, when heterogeneity on wages responses to aggregate conditions between employed workers and hirings and separations is not taken into account.
Patterns of Entry, Post-Entry Growth and Survival: A Comparison Between Domestic and Foreign Owned Firms
This study compares the patters of entry, survival and growth of domestic and foreign owned firms. We show that the post-entry behavior of foreign owned firms is quite different from that of their domestic counterparts. Among foreign entrants, we were able to distinguish between those which proceed by creating a new firm and those that acquire an already existing business. Our evidence reveals that the choice of the mode of entry in foreign markets exerts an impact upon the performance of firms that persist long after the moment of entry. As a consequence, our work clearly indicates that there is much to be gained in the understanding of the process of entry in foreign markets by studying the behavior of entrants over their first years in these markets.
The Survival of New Domestic and Foreign Owned Firms
We compare the survival of new domestic and foreign owned firms. We analyze the determinants of the survival of new firms and investigate whether foreigness accounts for significant differences in the survival of new foreign and new domestic firms. We find survival to be determined by ownership advantages, size and growth strategies, the internal organization of firms, and by industry characteristics such as economies of scale, and industry entry and growth.
After controlling for these characteristics, we find that domestic and foreign firms do not exhibit different chances of survival, that they respond in similar fashions to the determinants of survival and display identical time patterns of exit.
Labor Adjustment Costs in a Panel of Establishments: A Structural Approach
This paper estimates a structural model of the employment decision of the firm. Our establishment level data displays an extreme degree of rigidity in that employment levels are largely constant throughout our sample. This can be due to the fact that establishments face large shocks but also large adjustment costs, or alternatively that they incur no adjustment costs but that shocks are negligible. Given our identifying assumptions, we find that rigidity is due to adjustment costs and not to the shock process. We further find that these costs reduce the value of the firm as much as 5%. Finally, small fixed costs of adjustment have a large impact on entry and exit job flows.
Spatial and Temporal Aggregation in the Estimation of Labor Demand Functions
The consequences of aggregation, temporal or spatial, for the estimation of demand models are theoretically well-known, but have not been documented empirically with appropriate data before. In this paper we conduct a simple, but instructive, exercise to fill in this gap, using a large quarterly dataset at the establishment-level that is increasingly aggregated up to the 2-digit SIC industry and the yearly frequency. We only obtain sensible results with the quadratic adjustment cost model at the most aggregated levels. Indeed, the results for quadratic adjustment costs confirm that aggregation along both dimensions works to produce more reasonable estimates of the parameters of interest. The fixed adjustment cost model performs remarkably well with quarterly, but also with yearly, data. We argue that is may be one more consequence of the unusually high labor adjustment costs in the Portuguese labor market.
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