Labour and education economics

A significant proportion of the department’s staff work in this field, therefore the range of topics we are researching is large. Much of this work is applied, and the group have an extensive knowledge of large-scale data sets, from both the UK and abroad. In addition, the most up-to-date econometric techniques appropriate for large cross-section and panel data sets are widely used.

Much of the work undertaken has direct policy relevance, and so the group have close links with government departments, in particular the Department for Education and Skills, and the Department for Work and Pensions. In addition, the group co-ordinate the Work Pensions and Labour Economics Study Group (WPEG), sponsored by DWP, which helps to disseminate research in this area to a wide audience of national and international academics and policy-makers, through regular seminars and an annual conference.

Specific research areas:

Labour and Education

Job insecurity
The quality of jobs
The impact of the National Minimum Wage
Evaluation of labour market interventions
Risk preferences and how they affect labour market choices
Labour supply decisions
Labour market discrimination
Immigration
Higher Education (costs, drop-out)
The labour market returns to education
The match between the supply of and demand for skills
The provision of training

Current and recent projects in this area include:

Labour and Education
Title	People	Description	Funder / Sponsor
Education and risk preference	Sarah Brown, Aurora Ortiz and Karl Taylor	This project explores the relationship between attitudes towards risk and educational attainment using data from the US Panel Study of Income Dynamics. Brown, S., Ortiz, A. and K. Taylor (2006) 'Education Attainment and Risk Preference.' Sheffield Economics Research Paper 2006002 Brown, S., Garino, G. and K. Taylor (2006) 'Returns to Education and Risky Financial Investment.' Sheffield Economics Research Paper 2006012	Leverhume Trust
Reservation wages, unemployment and job search: A microeconomic analysis	Sarah Brown and Karl Taylor	We explore the determinants of the reservation wages of individuals who are unemployed and out of the labour market using data from the BHPS. We also explore the implications of reservation wage setting for future employment and the duration of unemployment. Brown, S, J. Roberts and K. Taylor ‘Reservation Wages, Labour Market Participation and Health.’ Sheffield Economics Research Paper 2008002 Brown, S. and K. Taylor (2008) ‘Reservation Wages, Expected Wages and Labour Market Outcomes: Analysis of Individual Level Panel Data.’ Sheffield Economics Research Paper, 2008008 Brown, S. and K. Taylor (2009) ‘Reservation Wages, Expected wages and the Duration of Unemployment: Evidence from British Panel Data.’ Sheffield Economics Research Paper, 2009001	ESRC
Self-employment and risk preference	Sarah Brown, Mike Dietrich, Aurora Ortiz and Karl Taylor	Explores the relationship between risk preference and self-employment, focusing on the incidence, type and success of self-employment. Sheffield Economics Research Paper 2007008.
Intergenerational mobility in basic skills	Sarah Brown, Steven McIntosh and Karl Taylor	This paper investigates the relationship between the reading and maths test scores, taken at age 7, of a cohort of individuals born in 1958, and the test scores of their children measured in 1991. We investigate whether the relationship observed is due to nature or nurture (genetics or upbringing) and find that upbringing is mainly responsible for the inter-generational relationship in reading, while genetic effects are more relevant to maths.
Household finances and attitudes towards risk	Sarah Brown and Karl Taylor (with Gaia Garino, University of Leicester)	We explore the relationship between household finances (namely the level of unsecured debt and savings) and attitudes towards risk from both a theoretical and an empirical perspective. Our empirical analysis uses household level data from the US Panel Study of Income Dynamics. Brown, S., G. Garino and K. Taylor ‘Household Finances and Attitudes towards Risk’ University of Sheffield Sheffield Economics Research Paper, 2008005
Modelling charitable donations at the household level	Sarah Brown and Karl Taylor (with Mark N. Harris, Monash University)	We explore the determinants of donations to charity at the household level using data from the U.S. Panel Study of Income Dynamics. Brown, S., M. Harris and K. Taylor ‘Modelling Charitable Donations to an Unexpected Natural Disaster: Evidence from the US Panel Study of Income Dynamics’ University of Sheffield Sheffield Economics Research Paper, 2009015
Parental qualifications and child poverty in 2020	Andy Dickerson and Jo Lindley	We examine the potential pay-off for child poverty of a general rise in skills levels in the adult population as outlined in the Leitch Review. Higher skill levels are associated with greater employment levels and better jobs, and this can all help to reduce child poverty. We estimate that the impact of achieving the Leitch ambitions could contribute to between a 2 and 5 percentage point reduction in the incidence of child poverty by 2020. http://www.jrf.org.uk/publications/parental-qualifications-and-child-poverty-2020	Joseph Rowntree Foundation
Fears and realisations of job insecurity	Andy Dickerson and Francis Green (Kent)	We investigate the validity of subjective data on expectations of job loss and on the probability of re-employment consequent on job loss, by examining associations between expectations and realisations. We find that subjective expectations data reveal private information about subsequent realisations of both job loss and of subsequent re-employment. On average, employees overestimate the chance of losing their job; while they underestimate the difficulty of finding another job as good as the currently-held one. We recommend that survey items on employment insecurity should utilise a cardinal probability scale with discrete numerical descriptors. Sheffield Economics Research Paper 2009016	Fears and realisations of job insecurity
Post-16 education choices in rural areas	Andy Dickerson and Steven McIntosh	With the increase in the school leaving age to age 18 by 2015, it is important to know what barriers affect participation in post-16 education today. We investigate the role of rural location to see whether this has a discouraging influence on participation, perhaps because of the extra distances involved in travelling to school or college as compared to living in urban areas. We find that, on average, participation rates are approximately 3 percentage points higher in rural areas as compared to urban areas. When trying to account for this difference, the results are less clear cut – there is some evidence that differences in the characteristics of residents of rural and urban areas may account for this higher participation, but this finding is not replicated in all the data sets that we examine. (DEFRA forthcoming)	Post-16 education choices in rural areas
Workplace training and job turnover	Andy Dickerson and David Morris	We investigate the impact of job training on labour mobility using the latest Labour Force Survey data. Individuals receiving training are marginally less likely to leave the firm in the subsequent period, suggesting that ‘poaching’ is not a problem in the modern UK labour market. We also examine whether individuals’ characteristics have an effect on the link between training and turnover. The paper also illustrates the current state of the labour market by outlining the key variables that affect the receipt of training and briefly looks at what types of training types and funding methods are dominant.	Workplace training and job turnover
Educational Attainment	Pamela Lenton	Exploring the educational attainment at age 18 of those individuals who performed poorly at age 16. Lenton P (2006) ‘Where should I go and what should I do? Routes through Further education.’ Sheffield Economics Research Paper 2006014
Over-education of UK graduates	Jo Lindley (with Arnaud Chevalier, Royal Holloway)	During the early 1990s, the proportion of UK graduates doubled over a very short period of time. This projects investigates the effect of the expansion on the labour market experience of recent UK graduates.
Occupational mobility of ethnic minorities	Jo Lindley (with Shirley Dex, Institute of Education)	Investigates to what extent ethnic minority men and women are discriminated against in the UK labour market in terms of occupational mobility and earnings.
Over-education of ethnic minorities	Jo Lindley (with Shirley Dex, Institute of Education)	Devises a new method for determining whether or not an individual is over-educated for the job that they do, and applies this to the situation of ethnic minority groups in the UK. Dex, S. and Lindley, J. (2007) `Labour Market Job Matching for UK Minority Ethnic Groups,´ Discussion Papers in Economics, University of Sheffield, Working Paper 2007003
Panel data analysis of over-education	Jo Lindley and Steven McIntosh	Uses panel data from the British Household Panel Survey to investigate the issue of over-education, in particular considering the impact of unobserved characteristics on the likelihood of being over-educated, and the duration of over-education spells. Lindley, J. and McIntosh, S. (2008) ‘A Panel Data Analysis of the Incidence and Impact of Over-Education.’ Sheffield Economics Research Paper 2008009
The social costs and benefits of apprenticeships in England	Steven McIntosh	Calculates the total costs of apprenticeships to the government, employers and apprentices, and compares to benefits in terms of higher productivity, to determine a social rate of return to apprenticeship. McIntosh, S. (2007) `A Cost-Benefit Analysis of Apprenticeships and Other Vocational Qualifications,´ DfES Research Report 834	Department for Education and Skills
Non-certified learning	Steven McIntosh (with Francis Green, University of Kent)	Examines the extent of non-certified learning in the UK, how it compares to other countries, and how if affects wages and productivity. Green, F., and McIntosh, S. (2006) `Non-Certified Learning and Skills: Variation Across Sectors and Countries and Links To Productivity.´ DTI Research Report 06/1670.	Department of Trade and Industry
Evaluation of the Want2Work pilots in Wales	Steven McIntosh, Jo Lindley and Jennifer Roberts (with Richard Edlin and Carolyn Czoski-Murray, HEDS)	Does the Want2work programme help to get people off incapacity benefit and back into the labour market, and what are the effects on their health? Research Report	Welsh Assembly
Gender differentials in Mexico	Gurleen Popli	The project looks at the issue of gender pay gaps in both the formal and the informal sector of the economy. This research attempts to identify the effects of free trade on women in developing countries. An earlier working paper is available as Sheffield Economics Research Paper 2007001.	University of Sheffield, Social Sciences Devolved Fund
Liberalisation and income distribution	Gurleen Popli	Examines the impact of trade liberalisation on inequality and poverty in both formal and informal sectors of the economy. “Trade Liberalization and the Self-Employed in Mexico,” (G Popli). Forthcoming World Development “Minimum Wages and Wage Structure in Mexico,” (D. Fairris, G. Popli and E. Zepeda). Review of Social Economy, 2008, vol. LXVI, no.2, June, pp. 181-208. “The Rising Wage Inequality in Mexico, 1984-2000: A Distributional Analysis,” (G. Popli). Journal of Income Distribution, 2007, vol. 16, no. 2, pp. 49-67.
Gender and labour markets	Gurleen Popli	Investigates the effects of free trade on the labour market outcomes for women in developing countries. • ‘Gender and Wage Discrimination in Mexico: A Distributional Approach’. Mimeo 2007.
Skill formation in early childhood	Gurleen Popli	Explores the role of parental investment in skill formation in very young children.
Health and retirement in the UK and in Germany	Jennifer Roberts (with Nigel Rice and Andrew Jones (University of York)	Examining the effect of health on the probability of early retirement in the context of the different pension and benefit systems. See Sheffield Economics Research Paper 2007002 (forthcoming in Economic Modelling) See Sheffield Economics Research Paper 2008012 Final report available here.	Anglo German Foundation for the Study of Industrial Society
Older people and part-time work in Britain and Ireland	Jennifer Roberts (with Brenda Gannon Irish Centre for Social Gerontology, National University of Ireland, Galway)	Considering the impact of health on the decision to work full-time or part-time for people aged over 50 in Britain and Ireland. See Sheffield Economics Research Paper 2008013
FDI and labour market outcomes	Karl Taylor (with Nigel Driffield, Sourafel Girma and Michael Henry)	This project extends the existing literature on FDI and wage inequality. We do this in two ways. Firstly, we incorporate more precise measures of inward investment into the model, by allowing for differences in the effects between horizontal and vertical FDI. Secondly, after establishing the effects that inward investment has on wage inequality, we then analyse the reasons for this in terms of the wages paid to skilled and unskilled workers, and the effect that inward investment has on this. We illustrate the important differences that horizontal and vertical FDI have on both wages and wage inequality, and the importance of allowing for regional differences in the results. FDI nationally tends to increase wage inequality, while the local, effects are opposite. FDI into assisted areas tends to increase wage inequality nationally, when the MNEs purchase inputs in the local region.	ESRC
The impact of macroeconomic shocks on education	Christine Valente (with Sonia Bhalotra, University of Bristol)	This research analyses the effect of exposure to macroeconomic shocks on educational attainment for a large number of developing countries.
The cognitive gender gap in Africa	Christine Valente (with Paul Atherton, Institute of Education)	This research shows that girls perform significantly worse than boys in standardised tests in primary schools in Africa, and explores underlying mechanisms.
Evaluation of an early intervention project to raise aspirations and reduce risky behaviour	Christine Valente and Andy Dickerson (with Richard Disney, University of Nottingham)	This research aims at evaluating the impact of an intervention in primary schools in Nottingham on subsequent school outcomes, antisocial behaviour, and teenage parenthood.	Early Intervention Programme, Nottingham City Council.

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For more information on our work in Labour and Education Economics please contact Steven McIntosh:

email: Steven McIntosh

For more information on our work in Family and Household please contact Dr Tarja Viitanen:

email: Dr Tarja Viitanen