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The second European Summer Symposium in Labor Economics (September 26-30, 2000) was again held at the excellently situated Deutsche Post Management Center in Buch at lake Ammersee, Bavaria. The Centre for Economic Policy Resesarch (CEPR) and IZA invited 32 participants, among them leading international experts in the field of labor economics as well as up-and-coming young researchers, to discuss recent research findings in a relaxed atmosphere and to establish contacts for future cooperation.
Andrea Ichino (European University Institute, IZA, CEPR) presented empirical evidence on the decision of judges. He used data from a big Italian firm, which clearly showed that most cases taken to court were judged in favor of the firm. However, his analysis found that judges are actually biased in favor of the employees, and that for many potential cases the firm decided not to go to court because the probability of losing was too high. In the second lecture Luigi Pistaferri (Stanford University, CEPR) showed that anticipated wage profiles do not have an impact on the development of working hours over time, while unexpected permanent changes in the wage have a small but clearly positive impact on working hours. IZA research director Torben M. Andersen (University of Aarhus, IZA, CEPR) presented a clear analysis that globalization can affect low-wage workers negatively and high-wage workers positively. Francis Kramarz (CREST-INSEE, IZA, CEPR) provided evidence of the negative employment effects of product market regulations in the French retailing industry. Robert Wright (University of Stirling, IZA, CEPR) established evidence that in the UK the return to private schooling does not differ from the return to public schooling. As private schools are better than public schools, he concludes from this result that the quality of schooling has a relatively small impact on the rate of return to schooling.
IZA research director Dennis J. Snower (Birkbeck College, IZA, CEPR) discussed the positive impact of labor turnover costs, such as the costs of hiring, training, and firing, on employee bargaining power over their employers. Gerard Pfann (BIRC at Maastricht University, IZA, CEPR) showed evidence on substantial learning of employers with regard to productivity and outside opportunities of employees for a large Dutch firm that went bankrupt in 1996. Rob Euwals (IZA, CEPR) presented a method to induce the restrictions on working hours in a job, and provided evidence of these restrictions in the Dutch labor market.
Ernst Fehr (University of Zurich, IZA, CEPR) first defended the use of controlled experiments in economic science as a tool to test theories. Afterwards he showed some remarkable results of several of his experiments on the existence of the so-called Homo Reciprocitus, a man who is willing to put efforts into punishing uncooperative men without any possibility of being rewarded for this. For economic science the existence of such behavior might have a substantial impact as it might change the predictions derived from many theories. Donatella Gatti (WZB), showed that increasing product market competition does not necessarily improve employment, and that it increases fluctuation in employment. Fabrizio Zilibotti (Stockholm University, CEPR) showed that under majority voting the welfare state guarantees the survival of the welfare state. Pietro Garibaldi (Bocconi University, CEPR) stated that the distinction between unemployment and non-participation is important: It leads to differences in wages for individuals who after losing their job become unemployed and those who would leave the labor market.
The lecture given by Richard Blundell (UCL, IFS, IZA) dealt with the impact of employee subsidies for low-wage workers and some of the methods for the evaluation of this impact. He discussed a model for labor supply behavior and working hours, and using this model he predicted that the impact of the currently implemented employee subsidies will be small. Barbara Petrongolo (University of Madrid, CEPR) gave a survey of the literature on matching of unemployed and vacancies, and concluded that currently used theoretical tools are accurate. Simon Burgess (Bristol University, IZA, CEPR) criticized the common belief that unemployment rates are mainly determined by the outflow rates, and showed in an empirical study that the inflow rates are actually more important. Jörn-Steffen Pischke (London School of Economics, IZA, CEPR) provided evidence that, despite increased return to schooling, enrollment has not risen. The explanation for this observation is that the income of poor families has fallen, which explains the increased return to schooling, and which also explains why enrollment did not increase.
Patrick Francois (Tilburg University) argued that due to the division of tasks within the household and due to the overrepresentation of men in full-time work, firms choose to hire women at lower wages than men. The predictions from his theoretical model are supported by U.S. data. Next, Josef Zweimüller (University of Zurich, IZA, CEPR) provided Austrian evidence that an increase in unemployment benefit extension has a strong impact on the probability of leaving unemployment. The analysis of the impact of the extended benefit period corrects for the fact that the extension was implemented because of the decreased labor market prospects for certain groups of individuals. Per-Anders Edin (Uppsala University, CEPR) analyzed the labor market prospects of refugee immigrants in Sweden resulting from the Swedish policy at the end of the 1980s to distribute immigrants more equally over the country. His main conclusion is that for immigrants it pays off to live in an enclave. Melanie Ward (IZA) discussed the problems in the British labor market for nurses and analyzed their job satisfaction and their intentions to quit. Finally, Alison Booth (University of Essex, IZA, CEPR) analyzed the differences in training investments and wages between full-time and part-time workers. According to her analysis the observed full-time male-female wage gap actually underestimates the true male-female wage gap.
Many further discussions and lectures on labor market topics rounded off this second ESSLE conference. The event once again proved to be an ideal forum for labor economists, whose discipline is often given short shrift at the larger economic conferences. ESSLE 2001 will be held at the same place from April 24-28, 2001.
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