Empirical essays on the economics of labour supply

Qiao, Ke and Walker, Ian (2021) Empirical essays on the economics of labour supply. PhD thesis, Lancaster University.

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Abstract

This thesis consists of three self-contained essays on the economics of Labour Supply. Chapter 2 surveys the Labours Supply behaviour in the UK over the past four decades (LFS 1975 – 2016) on three different aspects: static labour supply, life cycle labour supply and labour supply in trade unions. Over static and life cycle labour supply, I explore both the intensive margin and the extensive margin across different demographic characteristics: gender, marital status, economic activity, industry, occupation, education, ethnicity and sector. In the context of trade unions, I only explore the intensive margin, since the union premiums are conditional on people having positive working hours/wage. Our results suggest that Education affects working hours, but only for women. Whereas, men`s working hours are hardly different on average across all education levels; Despite the fact that men are much more likely to work full time than women, the proportion of part-timers amongst men has increased dramatically over time; The historically persistent hours gap between single and married workers has been closed in the recent decade due to the steady increase in married women`s working hours; The best remunerated workers are most likely to work a standard full-time working week, those working longer or shorter hours than standard are significantly less well paid. Education`s effects on lifecycle labour supply again are obvious only amongst women, where the higher the educational attainment, the higher the lifecycle profile lies. The effect of marital status on the lifecycle profiles can be understood by the division of labour within a family: it pushes up the lifecycle hours profiles of married men and lowers that of married women. Both union membership and union coverage rates have been falling over time, though the fall in the rates of male workers are more pronounced. The patterns are consistent by education, sector, industry and occupation; The union premiums (wage and hours) are consistent in patterns, with membership premium decreases and coverage premium increases over time. Chapter 3 provides renewed evidence for married couples` labour supply responsiveness to the change in their wages and nonlabour income in the UK. Taking advantage of the time series of reforms, I apply the difference-in-differences techniques to elicit the causal effect of tax and benefit on couples` labour supply behaviour at both margins (intensive and extensive). I find that women are more responsive than men at all margins. and wage changes have larger effects on the decision to work, and smaller effect on hours of work. The fact that women have much larger intertemporal substitution effects than their spouse, implies that women, especially the lowly educated are more prone to smooth their consumption across lifecycle. Union coverage has been declining over the past four decades. However, collective bargaining and trade unions are still of crucial importance concerning the regulation of many issues in labour market, such as wage setting; hours` regulating, especially overtime hours; and fringe benefits. Chapter 4 “Estimating trade union effects on working hours: Evidence from the UK 1996-2016” examines the effects of trade unions on people`s working hours. I explore the effects in three hours` dimensions: total usual hours, standard hours and overtime hours, all in weekly terms. I also differentiate the membership effects from the coverage effects, which proves to be important. There are three primary findings from the analysis. First, there are consistent and significant union effects on working hours, the size of the effects ranges from -6 hours to 6 hours depending on characteristics, such as gender, types of effects, groups of people etc., Secondly, the size of the effects are falling overtime, this may reflect the declining densities of unions. Lastly, our results also suggest that trade unions do use overtime as a means to stabilize working hours and expand membership. And trade unions do alleviate firms` greed on workers in terms of unpaid overtime hours.