Deborah A. Cobb-Clark

Locus of Control and Job Search Strategies

Standard job search theory assumes that unemployed individuals have perfect information about the effect of their search effort on the job offer arrival rate. In this paper, we present an alternative model which assumes instead that each individual has a subjective belief about the impact of his or her search effort on the rate at which job offers arrive. These beliefs depend in part on an individuals locus of control, i.e., the extent to which a person believes that future outcomes are determined by his or her own actions as opposed to external factors. We estimate the impact of locus of control on job search behavior using a novel panel data set of newly-unemployed individuals in Germany. Consistent with our theoretical predictions, we find evidence that individuals with an internal locus of control search more and that individuals who believe that their future outcomes are determined by external factors have lower reservation wages.

Two Economists' Musings on the Stability of Locus of Control

Empirical studies of the role of non-cognitive skills in driving economic behavior often rely heavily on the assumption that these skills are stable over the relevant time frame. We analyze the change in a specific non-cognitive skill, i.e. locus of control, in order to directly assess the validity of this assumption. We find that short- and medium-run changes in locus of control are rather modest on average, are concentrated among the young or very old, do not appear to be related to the demographic, labor market, and health events that individuals experience, and are unlikely to be economically meaningful. Still, there is no evidence that locus of control is truly time-invariant implying that the use of lagged measures results in an errors-in-variables problem that could downward bias the estimated wage return to locus of control by as much as 50 percent. Those researchers wishing to analyze the economic consequences of non-cognitive skills should consider (i) restricting their analysis to the working-age population for whom there is little evidence of systematic change in skill levels and (ii) accounting for error in the skill measures they employ.

IRCA's Impact on the Occupational Concentration and Mobility of Newly-Legalized Mexican Men

Abstract. We examine the occupational concentration and mobility of a group of unauthorized Mexican men who received amnesty under IRCA to shed light on the role of legal status in the assimilation process. Initially these men are concentrated in a small number of traditional migrant jobs. Although their occupational mobility rate is high, it partly represents churning through these same occupations. When we consider the direction – either upward or downward – of occupational change, we find that English language ability and the characteristics of the occupation, itself, are strongly correlated with mobility before legalization. After legalization, few characteristics surpass in importance the common experience of having received amnesty.

Occupational Segregation and the Gender Wage Gap in Private- and Public-Sector Employment: A Distributional Analysis

We use HILDA data from 2001 - 2006 to analyse the source of the gender wage gap across public- and private-sector wage distributions in Australia. We are particularly interested in the role of gender segregation within sector-specific occupations in explaining relative wages. We find that, irrespective of labour market sector, the gender wage gap among low-paid, Australian workers is more than explained by differences in wage-related characteristics. The gender wage gap among high-wage workers, however, is largely unexplained in both sectors suggesting that glass ceilings (rather than sticky floors) may be prevalent. Gender differences in employment across occupations advantage (rather than disadvantage) all women except those in high-paid, private-sector jobs, while disparity in labour market experience plays a much more important role in explaining relative private-sector wages. Finally, disparity in educational qualifications and demographic characteristics are generally unimportant in explaining the gender wage gap.

Leaving Home: What Economics Has to Say About the Living Arrangements of Young Australians

Like their counterparts elsewhere, more young Australians than ever are delaying the move to establish residential independence from their parents. This paper reviews the developing economics literature surrounding young people’s decisions to continue living in their parents’ homes in order to begin to assess the causes and consequences of this decision. In particular, co-residence with parents appears to be an important form of intergenerational support for young adults. It is important to understand the extent to which young people rely on this form of support as they complete their education, enter the labour market, and establish themselves as independent adults. Specific attention is paid to the ways in which Australian income-support, education, and housing policies may influence these patterns.

The Wealth of Mexican Americans

This paper analyzes the sources of disparities in the relative wealth position of Mexican Americans. Results reveal that—unlike the racial wealth gap—Mexican Americans’ wealth disadvantage is in large part not the result of differences in wealth distributions conditional on the underlying determinants of wealth. Rather, Mexican Americans’ wealth disadvantage is attributable to the fact that these families have more young children and heads who are younger. Mexican Americans’ low educational attainment also has a direct effect in producing a wealth gap relative to other ethnic groups even after differences in income are taken into account. Income differentials are important, but do not play the primary role in explaining the gap in median net worth. Finally, geographic concentration is generally unimportant, but does contribute to narrowing the wealth gap between wealthy Mexican Americans and their white and black counterparts.

The Longitudinal Survey of Immigrants to Australia

This article sets out the advantages and limitations of the Longitudinal Survey of Immigrants to Australia data for undertaking immigration research.

Immigration Reform: The Effects of Employer Sanctions and Legalization on Wages

The Immigration Reform and Control Act of 1986 (IRCA) represents an attempt to use labor market regulation to control illegal migration into the United States by imposing fines on employers who hire unauthorized workers. Sanctions lower wages directly because they act as a tax on hiring additional workers. In addition, IRCA legalized many longtime illegal aliens. Legalization affects wages by changing the relative supply of authorized and unauthorized workers. This study estimates IRCAs impact on wages of manufacturing production workers in metropolitan areas and finds small but statistically significant effects: sanctions lower wages, while legalization raises them.

Migrant Youths‘ Educational Achievement: The Role of Institutions

The authors use 2009 Programme for International Student Assessment (PISA) data to link institutional arrangements in OECD countries’ to disparities in reading, math, and science test scores for migrant and native-born students. The authors find that achievement gaps are larger for migrant youths who arrive at older ages and for those who do not speak the language of the PISA test at home. Institutional arrangements often serve to mitigate the achievement gaps of some migrant students while leaving unaffected or exacerbating those of others. For example, earlier school starting ages help migrant youths in some cases but by no means in all. Limited tracking of students by ability appears to be beneficial for migrants’ relative achievement, while complete tracking and the presence of a large private school sector appear to be detrimental. Migrant students’ achievement, relative to their native-born peers, suffers as educational spending and teachers’ salaries increase, but it improves when teacher evaluation includes an examination component.

Assisting the Long-Term Unemployed: Results from a Randomised Trial

Welfare reform in Australia centres on the concept of both economic and social participation. The policy concern is that people who fail to participate in economic and social life may become entrenched in disadvantage. In 2000 - 2001, a randomized trial was conducted by the Department of Family and Community Services in order to assess whether an intensive interview with successive follow-ups would result in increased economic and social participation for unemployed individuals who had been on income support for more than five years. We find evidence that participation in the trial led to a reduction in average weekly hours of work, but increased the amount of hours spent in study or training programs and the proportion of individuals engaged in such programs. We also find evidence of increased social integration associated with participation in the trial.