Due to a tax law implemented in 1998, Dutch employers can claim an extra tax deduction when they train employees aged 40 years or older. This causes a discontinuity in a firm's cost of training an employee. We exploit this discontinuity to identify two effects: the effect of the tax deduction on...

We examine how much of the observed wage dispersion among similar workers can be explained as a consequence of a lack of coordination among employers. To do this, we construct a directed search model with homogenous workers but where firms can create either good or bad jobs, aimed at either...

In this paper, we study the return to human capital variables for wages of workers observed in Tunisian matched worker-firm data in 1999. This tells us how returns to human capital in a Less Developed Country like Tunisia differ from the industrial countries usually studied with matched data. We...

I study the consequences of heterogeneity of skills for the design of an optimal unemployment insurance, using a principal-agent set-up with a risk neutral insurer and infinitely lived risk averse agents. Agents, who are characterised by different productivities or skills, are employed by firms...

Using Finnish panel data, we study how entrepreneurs differ from workers in education and income dynamics. We find that workers have higher median income in all educational groups. Without additional controls, entrepreneurs have higher average income with all but undergraduate level of...

I estimate a life cycle model of consumption choice with unemployment risk. Employed individuals face the risk of losing their job. Unemployed agents receive job random offers of different quality, which they can accept or reject. Following the loss of a job and during unemployment, an agent’s...

In this paper, we examine the determinants of low-wage employment in Portugal. For this purpose, we use a data file of the European Community Household Panel (ECHP) for the years 1998 and 1999. In order to take into account unobserved heterogeneity in the data, a random-parameter logit model is...

This paper focuses on instrument choice while consistently estimating the returns to education in Vietnam. Using data culled from the 2 rounds of the Vietnam Living Standards Survey (VLSS), we explore different sets of exogenous instruments that rely on demand and supply side sources of...

This paper shows that in the Baltic countries, commuting reduces urban- rural wage and employment disparities and increases national output. To quantify the effect of commuting on wage differentials, two sets of earnings functions are estimated (based on Estonian, Latvian, and Lithuanian Labor...