Frank Cörvers

Immigration can alleviate the ageing problem

This paper analyses the way immigration can help to alleviate the burden aging presents for the welfare states of most Western Economies. We develop a macroeconomic framework which deals with the impact of both aging and immigration on economic growth. This is combined with a detailed model of the labor market, to include the interaction with unemployment, while distinguishing between low- and high-skilled labor. The empirical relevance of some crucial model assumptions are shown to hold for the Netherlands, 1973-2005. The conclusions are that immigration will help to alleviate the aging problem, as long as the immigrants will be able to find work. Moreover, the better educated the immigrants are or become, the higher their contribution to growth will be.

Explaining trade in industrialized countries by country-specific human capital endowments

This paper simultaneously incorporates, for the first time, three different country-specific human capital endowments to analyse the impact of human capital on trade performance. Within a Heckscher-Ohlin-Vanek model, the factor endowments of intermediate and highly-skilled labour and technological knowledge are distinguished to explain the trade performance of 14 industrialized countries. Contrary to previous empirical studies, the results show that the Heckscher-Ohlin-Vanek model is still of value for explaining international trade flows. The estimation results suggest that an abundance of highly-skilled labour and technological knowledge in a country indicates a comparative advantage for the technology-intensive sectors, and a comparative disadvantage for the labour-intensive sectors.

The Impact of Negatively Reciprocal Inclinations on Worker Behavior: Evidence from a Retrenchment of Pension Rights

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Training and retirement patterns

Life-cycle theory predicts that employers enter into implicit contracts with newly hired employees to ensure rent-sharing and to decrease turnover after firm-specific training investments. Typically, these implicit contracts would include both upward sloping earning profiles and mandatory retirement. In this article, we empirically test the prediction that workers with firm-specific skills are restrained in their options to continue working. Therefore, they are more likely to retire at common mandatory retirement dates than those with general skills. Using the US National Longitudinal Survey of Older Men, we find that workers who participated in firm-specific training in their early careers do indeed retire earlier than those with general skills. The results show that compulsory retirement plans force these older workers to retire when they reach the common mandatory retirement age of 65. The results presented in this article are highly relevant for public policies in European and other industrialized countries that aim to increase labour force participation of the elderly. As our study demonstrates, the effectiveness of institutional arrangements to postpone retirement will also depend on training policies of employers and the type of skills workers acquired in the past.

How Do Education, Cognitive Skills, Cultural and Social Capital Account for Intergenerational Earnings Persistence? Evidence from the Netherlands

This study analyzes four different transmission mechanisms, through which father’s earnings affect son’s earnings: the educational attainment, cognitive skills, the cultural capital of the family and the social capital in the neighborhood. Using a unique data set that combines panel data from a birth cohort with earnings data from a large nationwide income survey and national tax files, our findings show that cognitive skills and schooling of the son account for 50% of the father-son earnings elasticity. Education by far accounts for the largest part, while cognitive skills mainly work indirectly through educational attainment. Social capital of the neighborhood and cultural capital of the parents account for an additional 6% of the intergeneration income persistence. From these two additional mechanisms, social capital appears to play a stronger role than the cultural capital of the parents. This means that 44% of the intergenerational persistence is due to other unobserved characteristics for example personality traits or spillover effects of family assets.

High and Steady or Low and Rising? Life-Cycle Earnings Patterns in Vocational and General Education

In this paper, we compare experience-earnings profiles of employees with vocational and general education background in Germany, the Netherlands and the United Kingdom, three countries with fundamentally different education systems. Using Mixed-Effects Linear Regression Models we show that earnings of vocationally educated employees are higher in the initial phase of their career. However, those with a general education background catch up over time in the labor market. Life-cycle differences in earnings are more pronounced in Germany than in the United Kingdom and the Netherlands.

Entry into working life: Internal migration and the job match quality of higher-educated graduates

We estimate the impact of internal migration on job-match quality for recent Dutch university and college graduates. We find positive yet modest wage returns. After controlling for the self-selection of migrants with an IV approach, this effect is no longer significant for university graduates and all graduates from peripheral areas. We also find that, for our alternative job-match measures, where there is evidence of migrant self-selection, controlling for self-selection strongly reduces the effect of internal migration on job-match quality. In some cases, the returns on internal migration are found to be negative, which may signal forced migration.

Resilient Labour Markets and Demographic Change in Selected Regions of the Netherlands

Although the population of the Netherlands is increasing, the population growth rate, even if fluctuating considerably, has been declining since the 1960s. The age structure of the Netherlands since the 1960s has also experienced change, declining youth (under 20 years old), growth and then decline in the 20–40 year-old age cohort, a significant increase in the 40–65 age cohort, and gradual increases in the 65–80+ cohort. As a result of the changing demography, the workforce will be older and this will impact upon the labour market, increasing the number of older workers and reducing the number of new entrants. The case study of the Netherlands revealed the different responses to demographic challenges occurring within the selected regions; with each region (Groningen/Drenthe, Limburg and Zeeland) experiencing different issues associated with its socio-economic situation, localised population shrinkage, population ageing, migration, labour shortages and skill gaps.