Armida Salsiah Alisjahbana, Diana Contreras-Suarez , Pipit Pitriyan (p)

Gender wage gaps are still one of the most relevant problems among labour economist. However, a large amount of the wage gaps is still unexplained. Indonesia as one of emerging countries is not the exception. Shon (2015) finds that the wage gap in waged and self-employed workers is about 30% and that more than 50% of this difference is not explained by differences in productive characteristics. In a similar study, Cameron et al (2016) find that returns to education, the industry of employment or vocational training are different across genders. In particular, industry composition contributes in a large proportion to explain differences in wages between men and women . Both studies fail to account for occupation level, and a large effect of industry composition on the wage gap can be masking differences in occupation, which have been shown important in other studies. However, to our knowledge no study has explore the effect of education-job mismatch. Objectives of this research are: (1) To determine if education mismatches affect differently wages for men and women in Indonesia; (2) To estimate the magnitude of education mismatch as a factor in gender wage gaps. We estimate a wage equation including several socioeconomic characteristics including education level, major, occupational type and mismatch status (we will consider vertical and horizontal mismatch). The data are compiled from the National Labor Force Survey (Sakernas) 2016. The measurement of the mismatch follows a normative-based approach due to data limitation. Three main findings from this study are: (1) men tend to experience education-job mismatch compared women, especially for university graduates; (2) men with mismatch tend to have higher wage compared to women. However there is no evidence that wage differential exist for diploma graduates.

Wade Litt (p)

Nearly a third of all adults and more than half of the bachelor degree holders in the U.S. have borrowed to finance their education, according to recent data from the Federal Reserve. This paper contributes to the growing body of research on how student debt affects labor market outcomes by examining the impact the student loans on the job search process. Prior literature on job search suggests significant theoretical and empirical relationships between net wealth with reservation wages, search effort, and employment probability. I extend this line of research by examining how student debt – a negative component of net wealth – impacts employment and job transitions. Specifically, I incorporate debt into classical job search theory and use the National Survey of College Graduates to examine the effects of student loans on the probability of employment transitions at the extensive and intensive margins. Finally, I discuss regional variations in student loan debt holdings and consequences that the results may have on regional labor markets.

Paolo Malfitano (p)

Previous literature suggests that background characteristics influence labour market outcomes. Moreover, some authors empirically proved the existence of parental role models and their importance for children’s attitudes. The transition to adulthood and the process of family formation represent other crucial aspects for an individuals’ career choice. Given the above, this research aims to explain to what extent individual characteristics and background factors influence working-age individuals’ career trajectories. Previous studies use traditional techniques, mainly focusing on individual’s labour market outcome as a specific (single or repeatable) event, ignoring the dynamics of working paths. In this paper, optimal matching and sequence analyses are applied. These techniques allow considering a unitary and holistic perspective on life-cycle events. Through the application of standard clustering algorithms, five distinctive career paths are identified: fragmented wage-employment, unemployment, wage-employment, transition from unemployment to wage-employment and self-employment. These clusters are used as the dependent variable in a multinomial logit model. The data are taken from a longitudinal study of Swiss individuals from 25 to 65 years old between 2003 and 2016. Covariates are measured at birth, age 15 and in 1999. Preliminary results show that in addition to individual characteristics, also immigrant status, parental education, social class and entrepreneurial attitude are able to explain the deviation from a stable career in wage-employment. From a policy makers’ perspective, this research could be a useful tool for an early intervention, in order to prevent fragmented work trajectories characterised by long unemployment spells or chronic unemployment.

Pablo Mejía-Reyes (p), Víctor Hugo Torres-Preciado

The aim of this paper is to determine the effects of the conventional determinants of employment in the Mexican states. From a subnational macroeconomic perspective and using a New Keynesian Economics framework, it is hypothesized that sticky real wages have a negative effect on employment, while effective demand (as measured by production) affects it positively. The analysis is carried out for manufacturing total, permanent and temporary employment of the 32 Mexican states over the period 2003-2016; it is based on the estimation of fixed effects panel data models, considering the possibility of spatial dependence.
The estimated models suggest that the growth rates of employment respond positively to changes in the manufacturing production, with a greater sensitivity of the temporary employment. Analogously, the effects of real wages are negative and larger in the same case. Given that it represents a high share in total employment, over 85%, the results for permanent and total employment are very similar. In general, our estimates imply that all kinds of manufacturing employment are more sensitive to changes in economic activity than to real wages, which may be interpreted as evidence that the demand of workers is more important that the labor costs in the dynamics of employment in this sector. These results are consistent with most macroeconomic evidence, but interestingly it had not been analyzed for the experience of the Mexican states.
Finally, there seems to be only weak evidence of spatial dependence in the case of temporary employment, which overall supports the view that the manufacturing production works as an “enclave” activity, with low spillovers due to the break of the productive chains, especially since the North America Free Trade Agreement came into force in 1994.