Essays on Personnel Economics and Gender Issues

This thesis consists of four self-contained essays in economics. Tournaments and unfair treatment. This paper introduces the negative feelings associated with the perception of being unfairly treated into a tournament model and examines the impact of these perceptions on workers’ efforts and their willingness to work overtime. The effect of unfair treatment on workers’ behavior is ambiguous in the model in that two countervailing effects arise: a negative impulsive effect and a positive strategic effect. The impulsive effect implies that workers react to the perception of being unfairly treated by reducing their level of effort. The strategic effect implies that workers raise this level in order to improve their career opportunities and thereby avoid feeling even more unfairly treated in the future. An empirical test of the model using survey data from a Swedish municipal utility shows that the overall effect is negative. This suggests that employers should consider the negative impulsive effect of unfair treatment on effort and overtime in designing contracts and determining on promotions. Late careers in Sweden between 1970 and 2000. In this essay Swedish workers’ late careers between 1970 and 2000 are studied. The aim is to examine older workers’ career patterns and whether they have changed during this period. For example, is there a difference in career mobility or labor market exiting between cohorts? What affects the late career, and does this differ between cohorts? The analysis shows that between 1970 and 2000 the late careers of Swedish workers comprised of few job changes and consisted more of “trying to keep the job you had in your mid-fifties” than of climbing up the promotion ladder. There are no cohort differences in this pattern. Also a large fraction of the older workers exited the labor market before the normal retirement age of 65. During the 1970s and first part of the 1980s, 56 percent of the older workers made an early exit and the average drop-out age was 63. During the late 1980s and the 1990s the share of old workers who made an early exit had risen to 76 percent and the average drop-out age had dropped to 61.5. Different factors have affected the probabilities of an early exit between 1970 and 2000. For example, skills did affect the risk of exiting the labor market during the 1970s and up to the mid-1980s, but not in the late 1980s or the 1990s. During the first period old workers in the lowest occupations or with the lowest level of education were more likely to exit the labor market than more highly skilled workers. In the second period old workers at all levels of skill had the same probability of leaving the labor market. The growth and survival of establishments: does gender segregation matter? We empirically examine the employment dynamics that arise in Becker’s (1957) model of labor market discrimination. According to the model, firms that employ a large fraction of women will be relatively more profitable due to lower wage costs, and thus enjoy a greater probability of surviving and growing by underselling other firms in the competitive product market. In order to test these implications, we use a unique Swedish matched employer-employee data set. We find that female-dominated establishments do not enjoy any greater probability of surviving and do not grow faster than other establishments. Additionally, we find that integrated establishments, in terms of gender, age and education levels, are more successful than other establishments. Thus, attempts by legislators to integrate firms along all dimensions of diversity may have positive effects on the growth and survival of firms. Risk and overconfidence – Gender differences in financial decision-making as revealed in the TV game-show Jeopardy. We have used unique data from the Swedish version of the TV-show Jeopardy to uncover gender differences in financial decision-making by looking at the contestants’ final wagering strategies. After ruling out empirical best-responses, which do appear in Jeopardy in the US, a simple model is derived to show that risk preferences, the subjective and objective probabilities of answering correctly (individual and group competence), determine wagering strategies. The empirical model shows that, on average, women adopt more conservative and diversified strategies, while men’s strategies aim for the greatest gains. Further, women’s strategies are more responsive to the competence measures, which suggests that they are less overconfident. Together these traits make women more successful players. These results are in line with earlier findings on gender and financial trading.

Essays in the Economics of Ageing

In the first paper, I assess if financial incentives may be used as an effective device to induce workers to postpone retirement by evaluating the Italian so called “super bonus” reform. The bonus consisted in economic incentives given for a limited period to private sector workers who had reached the requirements for seniority pension. Crucially for this study, public workers were not entitled to the bonus. Using data from the Bank of Italy Survey on Household Income andWealth, and exploiting the DID-Probit strategy proposed by Blundell et al. (JEEA, 2004), I assess the effect of the bonus on the decision to postpone retirement, by comparing private and public workers before and after the reform. Results suggest a reduction of 12ppt in the proportion of private workers who decided to retire among those qualifying for retirement. Results also suggest, not trivially, that most of the effect of the reform is driven by low-income workers. Finally, I propose an estimate of the extensive margin elasticity of Italian older workers. The second study estimates a structural reduced form of the “option value” model developed by Stock and Wise (1990) using Italian data from the Survey of Health, Ageing and Retirement in Europe (SHARE).Exploiting exogenous changes in social security wealth (SSW) results show a significant effect in the expected direction of SSW and of marginal incentives to retire. Results are robust even after controlling for individual heterogeneity and its correlation with financial incentives. Using detailed information on individuals, the results also highlights the importance of individual and job characteristics, which have been very little explored by this literature, as determinants of retirement. This suggests the potential of “tagging” in the design of social security incentives in order to reduce choice distortions and improve the overall efficiency of the system.

The Improving Relative Status of Black Men

Using data from the Current Population Survey, we examine recent trends in the relative economic status of black men. Our findings point to gains in the relative wages of black men (compared to whites) during the 1990s, especially among younger workers. In 1989, the average black male worker (experienced or not) earned about 69 percent as much per week as the average white male worker. In 2001, the average younger black worker was earning about 86% percent as much as an equally experienced white male; black males at all experience levels earned 72 percent as much as the average white in 2001. Greater occupational diversity and a reduction in unobserved skill differences and/or labor market discrimination explain much of the trend. For both younger and older workers, general wage inequality tempered the rate of wage convergence between blacks and whites during the 1990s, although the effects were less pronounced than during the 1980s.

Challenges and Opportunities in Managing the Aging Workforce: An Investigation of the Federal Emergency Management Agency

The aging workforce is becoming the majority of the working population in the United States. Although the literature on the aging workforce is sizable, little exists on how public agencies use the older workers. This capstone project examines the challenges and opportunities related to the employment of older workers as seen through a case study of the Federal Emergency Management Agency (FEMA). Knowledge gained from a synthesis of the literature review with survey data collected and analyzed will enable HR professionals to better understand the demographic, economic, regulatory, and intellectual influences of the aging workforce. The results from the survey of FEMA employees suggest a basis to plan and implement successful hiring and retention policies related to the aging workforce.

Salud y condiciones de trabajo en trabajadores mayores

Introducción: En los últimos años, la población española ha experimentado un crecimiento acelerado de personas mayores. Las previsiones demográficas a corto-medio plazo describen un importante predominio de trabajadores mayores en el mercado laboral. Objetivos: Identificar las diferencias según dos grupos de edad (<55 años y ≥55 años) en la percepción de las condiciones de trabajo y salud de la población trabajadora española. Metodología: Las diferencias entre los dos grupos de edad se analizaron a partir de indicadores de condiciones de trabajo y de salud pertenecientes a la VII Encuesta Nacional de Condiciones de Trabajo del Instituto de Seguridad e Higiene en el Trabajo (VII_ENCT). El análisis consistió en el cálculo de las prevalencias y la odds ratio cruda-ORc y ajustada por sexo con su correspondiente intervalo del confianza al 95% Resultados: El grupo de trabajadores más jóvenes presentan más riesgo de exposición a seis de los siete indicadores relacionados con las condiciones de trabajo (ruido, vibraciones, carga física, carga mental, autonomía y motivación). No obstante los trabajadores mayores tienen una peor percepción de su estado de salud (ORa= 2,06 [1,75-2,42]) y presentan en mayor medida problemas de salud que si bien les conducen a la visita médica más frecuentemente los relacionan menos con su actividad laboral. Conclusiones: A tenor de los resultados, los trabajadores de 55 años y más refieren tener menos quejas respecto a sus condiciones laborales e incluso se sienten más autónomos y motivados. Es el deterioro físico y mental la principal limitación que encuentran estos trabajadores a la hora de ejercer sus tareas. Sería recomendable establecer políticas de promoción de la salud dentro de las empresas para mejorar los indicadores de salud y promover el envejecimiento activo de la población trabajadora española.

Unemployment is the scourge, not youth unemployment per se. The misguided policy preoccupation with youth. CEPS Policy Brief No. 294, 26 June 2013

This Policy Brief argues that too much effort and political capital is being spent by the Commission and member states on being seen to be doing something quickly about youth unemployment when, in fact, the structural measures proposed will only have long-term effects. Expectations of immediate relief are running well above what can be delivered, especially at the EU level. Given the macroeconomic situation, no policy option will deliver a significant dent in either youth unemployment or unemployment in general. The EU policies on the table that are supposed to have an immediate effect, such as increased lending from the European Investment Bank to SMEs for the hiring of young people, will only have a very marginal impact on youth unemployment. Moreover, this impact will come mostly to the detriment of older unemployed persons excluded from such a scheme. Given the perceived need to ‘be seen to be doing something’, we fear that policies subsidising young workers de facto at the expense of older workers or, even worse, policies that subsidise older workers for not taking young people’s jobs, will proliferate. In fact, it is not at all clear that young people suffer more from being unemployed than older people, or even disproportionately more than older unemployed individuals. In particular, it is not clear that the much-publicised notion of a ‘lost generation’ with permanent ‘scars’ is relevant only to the young generation. The paper ends by highlighting the much-neglected policy option of encouraging labour mobility within the internal market. Although the Commission is ‘upgrading and modernising’ its tools, much more could be done in this area – to the benefit of the individuals concerned, the member states, and European integration in general.

Extending Working Lives: The Case of Denmark. CEPS Working Document No. 404, 17 February 2015

Extending working lives has been a key item on the political agenda in Denmark for at least two decades now. This study details recent and prospective reforms to the voluntary early retirement scheme and the pension age, as well as current policy initiatives to keep older workers in employment. Other aspects central to a long working life, such as health, lifelong learning, age management practices in companies, and elderly workers’ motivation are discussed in depth. Overall, Denmark is in a relatively good state when it comes to older workers’ labour market participation and related job satisfaction. This impacts positively on the public finance challenge linked to population ageing which, given agreed reforms, should be manageable. Ongoing reform implementation is likely to substantially increase the employment of those aged 60 and over. Nevertheless, surveys point to age discrimination as a potential problem and people who fall into unemployment at a late stage of their careers still face challenges to reemployment.

Old-age and survivors insurance program analysis.

Report 2-3 published by Federal Security Agency, Social Security Administration, Bureau of Old-Age and Survivors Insurance, Division of Program Analysis.

An interim report /

Retirement income.--Tax policy.--Treatment of spouses.--Universal social security coverage.--Disability retirement.--Retirement ages.--Employment of older workers.--The ownership and control of pension fund assets.

[Aging; selected references. Seven pamphlets from the Library of The National Council on the Aging.

A general bibliography on aging, by the Library of the National Committee on the Aging. Recent publications on aging, 1962; a supplement to "A general bibliography on aging". Friendly visiting; selected references. Guardianship and protective services; selected references. Housing for the aged; selected references. Retirement planning; selected references. Rev. ed. The implications of automation and technological development for the employment of older workers: a preliminary selected bibliography, by Norman Sprague.

Career development: A project for the 21st century

This article reports of the papers present at the International Symposium 2006 'Shaping the future: connecting career development and workforce development'. The International Symposium 2006 provided an opportunity to move the project forward by considering career development in relation to the workforce development issues of human capital, labour supply, employability skills and older workers. In addition to these specific issues, it examined the broader issues of how career development services might contribute to workforce development and the career development information base needed to support public policy making. By way of background to this special issue on the International Symposium 2006, this paper briefly examines the context and the reasons behind career development's rise to a more prominent position on the public policy arena. Following this, the process of the International Symposium 2006 that resulted in the writing of the documents contained in the special issue are briefly outlined.

International symposium on career development and public policy: Synthesis of country papers

During the conference, country teams were asked to select and address selection of six themes: human capital, labour supply, employability skills, carer development services for workforce development, older workers or evidence based research. This synthesis of country papers covers the conceptual links between these themes. It then goes on to cover three reframed themes focusing on career development policies and services, but distinguishing three levels of such policies and services: workforce preparation, workforce adaptability and workforce re-integration.

Journey to work:exploring difficulties, solutions and the impact of aging

A study was conducted in the UK, as part of the New Dynamics of Ageing Working Late project, of the journey to work among 1215 older workers (age groups 45-49, 50-55, 56-60 and 60 + ). The aim was to identify problems or concerns that they might have with their commute, strategies that have been adopted to address them, and the role that employers can play to assist them. Follow-up interviews with 36 employees identified many strategies for assisting with the problems of journeys to work, ranging from car share and using public transport to flexible working and working some days from home. Further interviews with a sample of 12 mainly larger companies showed that employers feel a responsibility for their workers’ commute, with some offering schemes to assist them, such as adjusting work shift timings to facilitate easier parking. The research suggests that the journey to work presents difficulties for a significant minority of those aged over 45, including issues with cost, stress, health, fatigue and journey time. It may be possible to reduce the impact of these difficulties on employee decisions to change jobs or retire by assisting them to adopt mitigating strategies. It does not appear that the likelihood of experiencing a problem with the journey to work increases as the employee approaches retirement; therefore, any mitigating strategy is likely to help employees of all ages. These strategies have been disseminated to a wider audience through an online resource at www.workinglate.org.

Employee absence and organizational commitment:moderation effects of age

This study examined the relations of organizational commitment and demographic factors with objectively measured absence frequency data of 106 staff at a UK school, collected over a 1-year period. We found significant associations of commitment and absenteeism, with high affective and normative commitment, and low continuance commitment being associated with lower levels of absence. Age moderated two of these associations, with low normative commitment and high continuance commitment predicting absence most strongly for older workers. Our findings help practitioners and researchers to understand how commitment may interact with other factors to predict absence. Interaction effects in our data showed that absence frequencies tended to be highest for older workers who felt a lower sense of obligation to their organization, or a lack of alternatives to their present employment. © 2012 Hogrefe Publishing.

Strategies for Tomorrow's Hospitality Workforce

The hospitality industry has been facing serious labor shortages, especially in the food service area. As the proportion of younger workers shrinks, alternative sources of employees have to be sought to alleviate the labor shortage. The authors review alternative sources for facing the labor shortage and discuss strategies to attract the largest and potentially viable segment for the hospitality industry - the older worker.