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Working hours, childcare support, wage inequality and windfall gains.

Sila, Urban (2010) Working hours, childcare support, wage inequality and windfall gains. PhD thesis, London School of Economics and Political Science (United Kingdom).

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Abstract

This work analyses working hours, childcare support, wage inequality and windfall gains. In Chapter I, I test whether family-support policies play a role in explaining variation in working hours across countries. I analyse childcare subsidies and family cash benefits and I distinguish between people with children and people without children. Childcare subsidies should increase working hours in the economy and these effects should differ between parents and nonparents. I test this using household data for a set of European countries and the US. Empirical analysis, however, does not support the family-policy explanation. The effects of the policies on working hours are weak and insignificant. Furthermore, I do not find evidence for the expected differences between parents and nonparents. I conclude that family policies are not helpful in explaining the variation in working hours across countries. In Chapter II, I argue that rising inequality in offered wages lowers average working hours. If the labour supply is concave in wages, the aggregate effect of the decrease in working hours of low- paid workers is greater than the increase in working hours of high-paid workers. Furthermore, due to low market opportunities, some of the low-paid workers may leave the labour force and become inactive. Using the CPS-MORG data for prime-age men I find evidence in support of this explanation. After controlling for the average wage, wage inequality has a negative effect on the labour supply. In Chapter III, I investigate whether workers adjust hours of work in response to windfall gains using data from the European Household Panel. The results suggest that unexpected variation in income has a small negative effect on working hours. Furthermore, the empirical findings show that the impact of windfall gains is more important for young and old individuals, is most negative for married individuals with young children, but can be positive for single individuals at the age of 40.

Item Type: Thesis (PhD)
Uncontrolled Keywords: Economics, Labor
Sets: Collections > ProQuest Etheses
Departments > Economics
URI: http://etheses.lse.ac.uk/id/eprint/2769

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