Labor Market Outcomes in Transition Countries
Sunday, Jan. 8, 2017 1:00 PM – 3:00 PM
Sheraton Grand Chicago, Michigan AB
- Chair: Richard Pomfret, University of Adelaide
Poland in an Integrated European Economy: Are Foreign Language Skills Valued by Employers in the Polish Labor Market?
AbstractIt seems evident that the ability to speak a foreign language would be an economically valuable skill in many labor market situations Previous work has identified a significant positive wage effect for immigrants fluent in the language of their new country, but less attention has been paid to labor market advantages from mastery of a foreign language by workers remaining in their home country. Yet an increasingly integrated global economy would suggest that effective knowledge of English, as the lingua franca of global commerce, would be a valuable skill for those living and working in non-English speaking countries. And for workers in Poland and other new EU members, knowledge of European languages might also be expected to enhance labor market outcomes.
We present an empirical study of the effect of foreign language ability on the base wage of full time workers in Poland in 2014 using a unique data set with survey responses from over 100,000 individuals. Controlling for a large number of worker and firm characteristics we find a statistically significant and quantitatively important effect of self-described language ability on wages. Wage levels are substantially higher for those with advanced or intermediate ability in English. Smaller but still robust positive wage returns are also seen for those with ability in German or French. On the other hand knowledge of Italian, Russian or Spanish has no robust effect on wages. The wage effect is stronger for those in sectors of the economy more closely integrated with international trade and FDI and for workers at higher job levels.
Co-Residence With Elderly Parents and Female Labor Force Participation
AbstractThis paper examines the role of family structure, specifically the co-residence with
parents-in-law, for female labour supply. We apply an instrumental variable approach
to account for the endogeneity of co-residence. We make use of a tradition
in Central Asia, namely that the youngest son of a family with his wife is expected
to live with his parents. Hence, we instrument co-residence with being married to the
youngest son. We use data from Kyrgyzstan and show that co-residence does not seem
to increase female labour supply. This is in contrast to the previous literature, which
has found substantial positive effects.
The Effect of Pension Tax Reductions on Labor Supply
AbstractThis study quantifies the effects of Russia’s 1964 and 1970 pension law amendments on old-age labor supply. The amendments gradually reduced the tax rate of employed pensioners from 84 to 50, to 25 and finally to 0 percent. Prior studies have focused on national reforms, on tax reductions smaller in magnitude, and on pension taxes that were actuarially adjusted for the person to receive a higher pension once they stopped working. My contribution is to study a large tax reform that was implemented differentially by region and by pension type. Furthermore, taxes on pensions were not actuarially adjusted which allows me to identify a pure tax effect. The roll-out of the amendments allows me to estimate the effect of reducing pension taxes on labor supply in several ways. First, I exploit that the tax rate was reduced to 25% in some regions and to 50% in others within a differences-in-differences framework. Reducing the pension tax rate from 50 to 25 percent results in a 24 percent increase in old-age employment rates five years after the amendment. Second, I exploit that only old-age pensions were eligible for a tax reduction in a differences-in-differences framework. Reducing the pension tax rates across the country resulted in a 62 percent increase in employment rates five years after the amendment.
University of Massachusetts-Amherst
University of Guelph
University of Bologna
- J2 - Demand and Supply of Labor