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

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Author Info
Emilia Del Bono () (ISER, University of Essex and IZA Bonn)
Andrea Weber () (University of California, Berkeley, Institute for Advanced Studies, Vienna and IZA Bonn)

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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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2242.

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Length: 55 pages
Date of creation: Aug 2006
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Handle: RePEc:iza:izadps:dp2242

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Related research
Keywords: seasonal employment; wage differentials; labor supply elasticity; fixed effects panel estimation;

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Find related papers by 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

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hofer, Helmut & Pichelmann, Karl & Schuh, Andreas-Ulrich, 2001. "Price and Quantity Adjustments in the Austrian Labour Market," Applied Economics, Taylor and Francis Journals, vol. 33(5), pages 581-92, April. [Downloadable!] (restricted)
  2. Assaad, Ragui & Tunali, Insan, 2002. "Wage formation and recurrent unemployment," Labour Economics, Elsevier, vol. 9(1), pages 17-61, February. [Downloadable!] (restricted)
  3. 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 S175-97, January. [Downloadable!] (restricted)
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  4. Richard Blundell & James Powell, 2001. "Endogeneity in nonparametric and semiparametric regression models," CeMMAP working papers CWP09/01, Centre for Microdata Methods and Practice, Institute for Fiscal Studies. [Downloadable!]
  5. Lalive, Rafael, 2003. " Did We Overestimate the Value of Health?," Journal of Risk and Uncertainty, Springer, vol. 27(2), pages 171-93, October. [Downloadable!] (restricted)
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  6. 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. [Downloadable!] (restricted)
  7. 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. [Downloadable!] (restricted)
  8. 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.
  9. 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. [Downloadable!] (restricted)
  10. Alfred Stiglbauer & Florian Stahl & Rudolf Winter-Ebmer & Josef Zweimüller, 2002. "Job Creation and Job Destruction in a Regulated Labor Market: The Case of Austria," Working Papers 78, Oesterreichische Nationalbank (Austrian Central Bank). [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. David Card & Raj Chetty & Andrea Weber, 2007. "The Spike at Benefit Exhaustion: Leaving the Unemployment System or Starting a New Job?," IZA Discussion Papers 2590, Institute for the Study of Labor (IZA). [Downloadable!]
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