Reciprocal fairness and gift exchange practices in the labor

We aim at investigating to what extent reciprocal considerations, exhibited by employers and employees, should lead to stable gift exchange practices in the labor contract, giving rise to non- compensating wage differentials among industries. We use the concept of Sequential Reciprocity Equilibrium developed by Dufwenberg & Kirchsteiger (1998) to incorporate players’ preferences for reciprocity in their utility function. We model the labor relation through a one shot sequential gift giving game between an employer who proposes a wage given the employee’s profitability level as exogenous and an employee who chooses his level of effort. We show that successful gift exchange practices may arise if both players are actually motivated by reciprocity. Even though intentions act as a catalyst of opportunistic behaviors, the respect of the equity norm makes mutual cooperation more likely. We propose a direct evaluation of the determinants of gift exchange practices between French employers and employees, estimating the probabilities to observe productivity increases following upon the settlement of rent-sharing agreements in the firm. Whether we estimate the probability for the employer to propose a rent-sharing agreement or the probability for the employees to raise their effort, we show that there exists an endogeneity bias related to the variable chosen as proxy to express the agents’ perception of their opponent’s fairness. This result gives support to the hypothesis that French employers and employees’ decisions are directly influenced by reciprocity concerns. Our results give support to the Akerlof & Yellen’s fair wage effort hypothesis as an explanation of the persistence of non-compensating wage differentials.employment relationship, gift exchange game, reciprocity, rent sharing

Do Migrants succeed in the Australian Labour Market? Furher Evidence on Job Quality

While the Coalition Government was in power in Australia from 1996 to 2007, new immigrants have had to face tougher selection criteria and increased financial pressure. Most studies so far have overlooked the issue of the quality of the jobs obtained by new immigrants to Australia and whether the policy change has contributed to improve or worsen job quality among immigrants and their ability to move upward. Job quality is thought to be related to the channels of information used by immigrants in their job search. Some studies suggest that jobs found via networks of same origin migrants are of lower quality. The aim of this paper is twofold. First, we investigate the effect of time since settlement on the ability of migrants to better their labour market outcomes. Second, we quantify the relationships between job quality and migrants’ job search methods and test whether they were affected by the policy changes. Using the Longitudinal Survey of Immigrants to Australia (LSIA), we estimate the probabilities for immigrants to find “good jobs”, controlling for their initial employability upon arrival in Australia. We test several models involving various definitions of “good job”, from objective conditions, based on the nature and status of the occupation, to more subjective conditions based on job satisfaction. We show that the sole effect of being a second cohort migrant is beneficial for the probability to both find a job and a “good job” within the first year and half after settlement. After this time, cohort two migrants who still have not found a good job experience more difficulty to improve. Moreover, informal channels of information on job prospects have been slightly more efficient in enabling second cohort migrants to find good jobs, even though they still provide individuals with a disadvantage compared to formal channels.migrants; job quality; immigration policy; migrant networks; bivariate probit

Do Migrants succeed in the Australian Labour Market? Furher Evidence on Job Quality

While the Coalition Government was in power in Australia from 1996 to 2007, new immigrants have had to face tougher selection criteria and increased financial pressure. Most studies so far have overlooked the issue of the quality of the jobs obtained by new immigrants to Australia and whether the policy change has contributed to improve or worsen job quality among immigrants and their ability to move upward. Job quality is thought to be related to the channels of information used by immigrants in their job search. Some studies suggest that jobs found via networks of same origin migrants are of lower quality. The aim of this paper is twofold. First, we investigate the effect of time since settlement on the ability of migrants to better their labour market outcomes. Second, we quantify the relationships between job quality and migrants’ job search methods and test whether they were affected by the policy changes. Using the Longitudinal Survey of Immigrants to Australia (LSIA), we estimate the probabilities for immigrants to find “good jobs”, controlling for their initial employability upon arrival in Australia. We test several models involving various definitions of “good job”, from objective conditions, based on the nature and status of the occupation, to more subjective conditions based on job satisfaction. We show that the sole effect of being a second cohort migrant is beneficial for the probability to both find a job and a “good job” within the first year and half after settlement. After this time, cohort two migrants who still have not found a good job experience more difficulty to improve. Moreover, informal channels of information on job prospects have been slightly more efficient in enabling second cohort migrants to find good jobs, even though they still provide individuals with a disadvantage compared to formal channels

Do Migrants succeed in the Australian Labour Market? Furher Evidence on Job Quality

While the Coalition Government was in power in Australia from 1996 to 2007, new immigrants have had to face tougher selection criteria and increased financial pressure. Most studies so far have overlooked the issue of the quality of the jobs obtained by new immigrants to Australia and whether the policy change has contributed to improve or worsen job quality among immigrants and their ability to move upward. Job quality is thought to be related to the channels of information used by immigrants in their job search. Some studies suggest that jobs found via networks of same origin migrants are of lower quality. The aim of this paper is twofold. First, we investigate the effect of time since settlement on the ability of migrants to better their labour market outcomes. Second, we quantify the relationships between job quality and migrants’ job search methods and test whether they were affected by the policy changes. Using the Longitudinal Survey of Immigrants to Australia (LSIA), we estimate the probabilities for immigrants to find “good jobs”, controlling for their initial employability upon arrival in Australia. We test several models involving various definitions of “good job”, from objective conditions, based on the nature and status of the occupation, to more subjective conditions based on job satisfaction. We show that the sole effect of being a second cohort migrant is beneficial for the probability to both find a job and a “good job” within the first year and half after settlement. After this time, cohort two migrants who still have not found a good job experience more difficulty to improve. Moreover, informal channels of information on job prospects have been slightly more efficient in enabling second cohort migrants to find good jobs, even though they still provide individuals with a disadvantage compared to formal channels

A Model of Reciprocal Fairness: Application to the Labour Contract

We investigate to what extent reciprocal considerations, exhibited by employers and employees, lead to stable gift exchange practices in the labour contract giving rise to non-compensating wage differentials among industries. We use the concept of 'sequential reciprocity equilibrium' developed by Dufwenberg and Kirchsteiger (1998, 2004) to incorporate players' preferences for reciprocity in their utility function. We model the labour relation through a one shot sequential gift giving game between an employer who proposes a wage given the employee's profitability level as exogenous and an employee who chooses his level of effort. We show that successful gift exchange practices may arise if both players actually care for reciprocity. Even though intentions act as a catalyst for opportunistic behaviours, the respect of the equity norm makes mutual cooperation more likely. We propose a direct evaluation of the determinants of gift exchange practices between French employers and employees, estimating the probabilities to observe productivity increases following upon the settlement of rent-sharing agreements in the firm. Whether we estimate the probability for the employer to propose a rent-sharing agreement or the probability for the employees to raise their effort, we show that there exists an endogeneity bias related to the variable chosen as a proxy to express the agents' perception of their opponent's fairness. This result supports the hypothesis that French employers' and their employees' decisions are influenced by reciprocity concerns. Our results concur with Akerlof and Yellen's fair wage effort hypothesis as an explanation of the persistence of non-compensating wage differentials.35 page(s

Do Migrants Get Good Jobs? New Migrant Settlement In Australia

21 page(s

Labour market success and skill acquisition in the host country: effects on the duration and the labour force status of Moroccan, Algerian and Tunisian migrants returning home from the European Union

22 page(s

Modelling house prices across Sydney

This article models median house prices in 626 suburbs across Sydney, using three spatial hedonic models, and obtains high overall levels of explanation. Access to the central business district and the coast, as well as house and lot sizes, are predictably positive factors. Violent crime significantly depresses house values. Access to rail and high-frequency bus services is weakly significant only when access is generally poor. However, neither access to a sub-centre nor housing density was found to have a separate impact on house prices. Research using unit record data could refine the findings of this suburb-level analysis.17 page(s

NILS Working paper no 181. Modelling house prices across Sydney with estimates for access, property size, public transport, urban density and crime

This paper examines the structure of house prices across the city, in this case Sydney, as an aid to urban development strategy and in particular to determine the potentially positive effects of public transport and negative effects of residential density on property prices. We model median house prices in 626 suburbs and achieve a high level of explanation. Distances from the CBD and from the coast are dominant factors in explaining house prices in Sydney. Predictably house and lot size are also highly significant factors. On the other hand a high propensity for violent crime significantly reduces property values. Over the whole city distance to rail station is not a statistically significant variable, but in suburb groups that are poorly served by other modes, median house prices fall significantly with increased distances to station. We found a similar but weaker result for access to high frequency buses. Contrary to expectation we found that higher density is marginally associated with higher median prices. However as the density variable is correlated (negatively) with median land area and, to a lesser extent, with distance to CBD, we would be cautious about concluding that density has no negative effect on house prices