IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp2242.html
   My bibliography  Save this paper

Do Wages Compensate for Anticipated Working Time Restrictions? Evidence from Seasonal Employment in Austria

Author

Listed:
  • Del Bono, Emilia

    (ISER, University of Essex)

  • Weber, Andrea

    (Central European University)

Abstract

In this paper we investigate the existence of compensating wage differentials across seasonal and non seasonal jobs, which arise due to anticipated working time restrictions. We build on a theoretical model by Abowd and Ashenfelter (1981), which links the compensating wage differential to variation in individual unemployment through the effect of the unemployment insurance and the compensated labor supply elasticity. Since the Austrian labor market is characterized by an unusually high share of seasonal employment, our data provides the ideal setting in which to empirically test this model. We use the very rich information contained in the Austrian administrative records to derive a flexible definition of seasonal employment based on observed regularities in employment patterns. We find that employers pay on average a positive wage differential of about 11% for seasonal jobs and that the unemployment insurance system contributes a similar amount.

Suggested Citation

  • Del Bono, Emilia & Weber, Andrea, 2006. "Do Wages Compensate for Anticipated Working Time Restrictions? Evidence from Seasonal Employment in Austria," IZA Discussion Papers 2242, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp2242
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp2242.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alfred Stiglbauer & Florian Stahl & Rudolf Winter-Ebmer & Josef Zweimüller, 2003. "Job Creation and Job Destruction in a Regulated Labor Market: The Case of Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(2), pages 127-148, June.
    2. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521818728, December.
    3. Li, Elizabeth H, 1986. "Compensating Differentials for Cyclical and Noncyclical Unemployment: The Interaction between Investors' and Employees' Risk Aversion," Journal of Labor Economics, University of Chicago Press, vol. 4(2), pages 277-300, April.
    4. Lalive, Rafael, 2003. "Did We Overestimate the Value of Health?," Journal of Risk and Uncertainty, Springer, vol. 27(2), pages 171-193, October.
    5. John M. Abowd & Orley C. Ashenfelter, 1981. "Anticipated Unemployment, Temporary Layoffs, and Compensating Wage Differentials," NBER Chapters, in: Studies in Labor Markets, pages 141-170, National Bureau of Economic Research, Inc.
    6. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521524131, December.
    7. Assaad, Ragui & Tunali, Insan, 2002. "Wage formation and recurrent unemployment," Labour Economics, Elsevier, vol. 9(1), pages 17-61, February.
    8. Nicole M. Fortin, 2006. "Higher-Education Policies and the College Wage Premium: Cross-State Evidence from the 1990s," American Economic Review, American Economic Association, vol. 96(4), pages 959-987, September.
    9. Hamermesh, Daniel S & Wolfe, John R, 1990. "Compensating Wage Differentials and the Duration of Wage Loss," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 175-197, January.
    10. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521818742, December.
    11. Whitney K. Newey & James L. Powell & Francis Vella, 1999. "Nonparametric Estimation of Triangular Simultaneous Equations Models," Econometrica, Econometric Society, vol. 67(3), pages 565-604, May.
    12. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521524117, December.
    13. Rosen, Sherwin, 2007. "Studies in Labor Markets," National Bureau of Economic Research Books, University of Chicago Press, number 9780226726304, March.
    14. Richard Blundell & James L. Powell, 2001. "Endogeneity in nonparametric and semiparametric regression models," CeMMAP working papers 09/01, Institute for Fiscal Studies.
    15. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    16. Moretti, Enrico, 2000. "Do Wages Compensate for Risk of Unemployment? Parametric and Semiparametric Evidence from Seasonal Jobs," Journal of Risk and Uncertainty, Springer, vol. 20(1), pages 45-66, January.
    17. Helmut Hofer & Karl Pichelmann & Andreas-Ulrich Schuh, 2001. "Price and quantity adjustments in the Austrian labour market," Applied Economics, Taylor & Francis Journals, vol. 33(5), pages 581-592.
    18. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521818735, December.
    19. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521524124, December.
    20. Garen, John, 1988. "Compensating Wage Differentials and the Endogeneity of Job Riskiness," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 9-16, February.
    21. Topel, Robert H, 1984. "Equilibrium Earnings, Turnover, and Unemployment: New Evidence," Journal of Labor Economics, University of Chicago Press, vol. 2(4), pages 500-522, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aassve, Arnstein & Arpino, Bruno, 2008. "Estimation of causal effects of fertility on economic wellbeing: evidence from rural Vietnam," ISER Working Paper Series 2007-27, Institute for Social and Economic Research.
    2. Peter C.B. Phillips & Liangjun Su, 2009. "Nonparametric Structural Estimation via Continuous Location Shifts in an Endogenous Regressor," Cowles Foundation Discussion Papers 1702, Cowles Foundation for Research in Economics, Yale University.
    3. Richard Blundell & Martin Browning & Ian Crawford, 2008. "Best Nonparametric Bounds on Demand Responses," Econometrica, Econometric Society, vol. 76(6), pages 1227-1262, November.
    4. Richard Blundell & Monica Costa Dias, 2009. "Alternative Approaches to Evaluation in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    5. Andrew Chesher, 2004. "Identification of sensitivity to variation in endogenous variables," CeMMAP working papers CWP10/04, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    6. Richard Blundell & Xiaohong Chen & Dennis Kristensen, 2003. "Nonparametric IV estimation of shape-invariant Engel curves," CeMMAP working papers CWP15/03, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    7. Victor Chernozhukov & Roberto Rigobon & Thomas M. Stoker, 2009. "Set identification with Tobin regressors," CeMMAP working papers CWP12/09, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    8. Joel L. Horowitz & Sokbae Lee, 2007. "Nonparametric Instrumental Variables Estimation of a Quantile Regression Model," Econometrica, Econometric Society, vol. 75(4), pages 1191-1208, July.
    9. Martin Huber, 2012. "Identification of Average Treatment Effects in Social Experiments Under Alternative Forms of Attrition," Journal of Educational and Behavioral Statistics, , vol. 37(3), pages 443-474, June.
    10. Luke Taylor & Taisuke Otsu, 2019. "Estimation of nonseparable models with censored dependent variables and endogenous regressors," Econometric Reviews, Taylor & Francis Journals, vol. 38(1), pages 4-24, January.
    11. Ge, Suqin & Macieira, João, 2020. "Unobserved Worker Quality and Inter-Industry Wage Differentials," GLO Discussion Paper Series 491, Global Labor Organization (GLO).
    12. Andrea Weber & Christine Zulehner, 2014. "Competition And Gender Prejudice: Are Discriminatory Employers Doomed To Fail?," Journal of the European Economic Association, European Economic Association, vol. 12(2), pages 492-521, April.
    13. Philippe Aghion & Richard Blundell & Rachel Griffith & Peter Howitt & Susanne Prantl, 2009. "The Effects of Entry on Incumbent Innovation and Productivity," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 20-32, February.
    14. Vanhems, Anne & Van Keilegom, Ingrid, 2011. "Semiparametric transformation model with endogeneity: a control function approach," LIDAM Discussion Papers ISBA 2011011, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    15. Gutknecht, Daniel, 2012. "Do Reservation Wages Decline Monotonically? A Novel Statistical Test," Economic Research Papers 270635, University of Warwick - Department of Economics.
    16. Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2003. "Evaluating the impact of education on earnings in the UK: Models, methods and results from the NCDS," IFS Working Papers W03/20, Institute for Fiscal Studies.
    17. Frolich, Markus, 2007. "Nonparametric IV estimation of local average treatment effects with covariates," Journal of Econometrics, Elsevier, vol. 139(1), pages 35-75, July.
    18. Van Keilegom, Ingrid & Vanhems, Anne, 2011. "Semiparametric transformation model with endogeneity: a control function approach," TSE Working Papers 11-243, Toulouse School of Economics (TSE).
    19. Florens, Jean-Pierre & Simoni, Anna, 2012. "Nonparametric estimation of an instrumental regression: A quasi-Bayesian approach based on regularized posterior," Journal of Econometrics, Elsevier, vol. 170(2), pages 458-475.
    20. Koster, Hans R.A. & Rouwendal, Jan, 2013. "Agglomeration, commuting costs, and the internal structure of cities," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 352-366.

    More about this item

    Keywords

    labor supply elasticity; wage differentials; seasonal employment; fixed effects panel estimation;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp2242. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.