April 2013

Volume 52, Issue 2
Pages 419 – 617

Manufacturing Plants' Use of Temporary Workers: An Analysis Using Census Microdata (pages 419–443)
YUKAKO ONO, DANIEL SULLIVAN
Article first published online: 18 MAR 2013

Abstract
Using plant-level data from the plant capacity utilization survey, we explore how manufacturing plants' use of temporary workers is associated with the nature of their output fluctuations and other plant characteristics. We find that plants tend to use temporary workers when their output is expected to fall; this may indicate that firms use temporary workers to reduce costs associated with dismissing permanent employees. In addition, we find that plants whose future output levels are subject to greater uncertainty tend to use more temporary workers. We also examine the effects of wage and benefit levels for permanent workers, unionization rates, turnover rates, seasonal factors, and plant size and age on the use of temporary workers; based on our results, we discuss various views of why firms use temporary workers.

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Does Unemployment Lead to Greater Alcohol Consumption? (pages 444–466)
IOANA POPOVICI, MICHAEL T. FRENCH
Article first published online: 18 MAR 2013

Abstract
Using panel data from Waves 1 and 2 of the NESARC, we estimate gender-specific effects of changes in employment status on overall alcohol consumption, binge-drinking episodes, and a diagnosis of alcohol abuse and/or dependence. We employ various fixed-effects models to address potential bias from unobserved and time-invariant individual heterogeneity. All results show a positive and significant effect of unemployment on drinking behaviors, and the findings are robust to numerous sensitivity tests. Perhaps, macroeconomic policy decisions intended to stimulate the economy during economic downturns should also consider the avoided personal costs and externalities associated with alcohol misuse.

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Unions and Innovation: New Insights From the Cross-Country Evidence (pages 467–491)
HRISTOS DOUCOULIAGOS, PATRICE LAROCHE
Article first published online: 18 MAR 2013

Abstract
We apply meta-regression analysis to the extant econometric studies and find that unions depress investment in innovation at the firm and industry level in all countries considered. However, this adverse effect has been declining over time and is moderated by country differences in industrial relations and regulations: The adverse effect appears to increase with labor market flexibility.

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Unemployment, Labor Market Flexibility, and Absenteeism: A Pan-European Study (pages 492–515)
ILIAS LIVANOS, ALEXANDROS ZANGELIDIS
Article first published online: 18 MAR 2013

Abstract
Using micro-data from the European Union’s Labour Force Survey for 28 countries this study investigates the incidence and intensity of individuals’ sickness-absence behaviour, and assesses the importance of labour market characteristics like unemployment and the extent of atypical contracts and second job-holding on individuals’ sickness absence. The results identify that unemployment affects sickness absence through different pathways, exerting a negative effect on the probability of being absent and a positive effect on the duration of absence. In addition, the degree of second job-holding and part-time contracts in the labour market is found to be negatively related to individuals’ sickness absence.

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Wage Cyclicality Under Different Regimes of Industrial Relations (pages 516–540)
HERMANN GARTNER, THORSTEN SCHANK, CLAUS SCHNABEL
Article first published online: 18 MAR 2013

Abstract
We analyze the effect of collective wage agreements and of works councils on the cyclicality of real wages. Using employer-employee data for western Germany (1995-2004), we find that wage adjustments to positive and negative shocks are generally not symmetric. Wage growth increases in all industrial relations regimes when unemployment is falling, but this inverse relationship is weaker when unemployment is rising. Moreover, in plants with individual-level bargaining, wages do not adjust at all to rising unemployment. Works councils increase wage growth only in firms covered by sectoral agreements, but they do not affect the cyclicality of wages.

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The Wage–Health Insurance Trade-off and Worker Selection: Evidence From the Medical Expenditure Panel Survey 1997 to 2006 (pages 541–581)
JEAN ABRAHAM, STÉPHANIE LLUIS
Article first published online: 18 MAR 2013

Abstract
Key provisions within health care reform will likely further increase the cost of employer sponsored insurance.   Theory suggests that workers pay for their health insurance through a wage offset.  We investigate this issue using data from the Medical Expenditure Panel Survey. GMM estimates aimed at correcting for endogenous worker mobility reveal evidence of a tradeoff for workers who are offered health insurance as the only fringe benefit.  On the other hand, employees in establishments with a more comprehensive set of benefits enjoy higher wages relative to employees in establishments that offer no benefits. Health also affects the wage-health insurance tradeoff.

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Gender Differences in Involuntary Job Loss: Why Are Men More Likely to Lose Their Jobs? (pages 582–608)
ROGER WILKINS, MARK WOODEN
Article first published online: 18 MAR 2013

Abstract
Empirical studies have consistently reported that rates of involuntary job loss are significantly lower among female employees than among males. Only rarely, however, have the reasons for this differential been the subject of detailed investigation. In this paper, household panel survey data from Australia are used that also find higher rates of job loss among men than among women. This differential, however, largely disappears once controls for industry and occupation are included. These findings suggest that the observed gender differential primarily reflects systematic differences in the types of jobs into which men and women select.