Essays in labour economics

Resum

This thesis consists of an introduction, three self-contained essays of labour economics and a final chapter with the main conclusion. The first essay studies the association between technological change, employment polarization and over-education. It analyses the incidence of over-education and its change across skill-based and task-based job categories in four countries of Europe – Germany, Spain, Sweden and the United Kingdom. It also compares countries with different employment change patterns – mainly upgrading (rise in high-skill jobs) and polarizing (rise in low-skill and high-skill jobs at the expense of middle-skill jobs)– to establish a link between employment polarization and over-education. The analysis shows that countries with polarizing employment patterns have more incidence of over-education, which is particularly prevalent in low-skill jobs. The results remain unchanged in a job fixed effects regression. The second essay investigates if job polarization has occurred in the labour market of India for a period spanning almost three decades, 1984 to 2012. It also analyses the implications of job polarization for increasing wage inequality in India. Using data from the National Sample Survey Organisation (NSSO), I find evidence of job polarization (employment growth in low- and high-skill jobs, and reduction in the middle) in urban India during the 1990s and the 2000s. However, the reduction in middle-skill jobs does not seem to be the consequence of only technological change and automation of routine jobs. Mechanisation along with the growing self-employment in India’s informal sector has contributed to the U-shaped pattern of employment change. Wage dynamics are consistent with the employment change during this period. The final essay of the thesis explores the factors determining employment transitions of women in India. Using a nationally representative panel data set and correcting for selection bias due to initial employment and panel attrition, I show that women are not only participating less in the labour force, they are also dropping out of employment at an alarming rate. I find that an increase in income of other members of the household leads to lower entry and higher exit probabilities of women. Moreover, having a newborn child has a detrimental effect on women’s employment, indicating that provision of childcare facilities can be an important policy instrument in this context. I also find that the National Rural Employment Guarantee Scheme, a large public workfare program, has a significant effect on women’s labour force transition probabilities.