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on Business Economics |
| By: | Rune Vejlin; Jonas Maibom; Malthe Elholm; Jesper Bagger |
| Abstract: | Using Using Danish matched employer-employee data from 1980-2019, this paper shows that rising wage sorting - the correlation between worker and firm wage fixed effects - increased from 0.06 to 0.18 and is driven entirely by employment shifting toward firms that consistently form high‑sorting matches. Individual firms' sorting propensities remain stable. Decomposition reveals that 60% of the increase reflects reallocation among surviving firms, while 40% stems from firm entry and exit. Regression analysis highlights firm turnover and industry shifts as the primary drivers, with rising educational attainment contributing through the concentration of educated workers in high‑sorting firms. Job‑to‑job mobility is the main reallocation mechanism. |
| Keywords: | Inequality, sorting, firm dynamics, firm entry, firm exit, matched employer-employee data |
| JEL: | E24 J21 J31 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26095 |
| By: | Giuseppe Pulito; Mariola Pytlikova; Sarah Schroeder; Magnus Lodefalk |
| Abstract: | Using two waves of nationally representative Danish firm surveys linked to employer– employee administrative registers, we study how adoption varies across artificial intelligence (AI) and related advanced technologies. We show that AI adoption is highly technologyspecific. While firm size and digital infrastructure predict adoption broadly, workforce composition operates through distinct channels: STEM-educated workforces predict core AI adoption, whereas non-STEM university-educated workforces are associated with generative AI adoption, indicating different human capital complementarities. The factors associated with adoption differ from those predicting deployment breadth: firm size and digital maturity matter for both, whereas workforce composition primarily predicts adoption alone. Machine learning and natural language processing are deployed across multiple business functions, whereas other advanced technologies remain concentrated in specific operational domains. Individual-level evidence provides a foundation for these patterns, with awareness of workplace AI usage concentrated among managers and high-skilled workers. Self-reported AI knowledge is higher among younger and more educated individuals. Finally, commonly used occupational AI exposure measures vary substantially in their ability to predict observed adoption, with benchmark-based measures outperforming patent-based and LLM-focused alternatives. These findings show that treating AI as a monolithic category obscures economically meaningful variation in who adopts, what they deploy, and how well existing measures capture it. |
| Keywords: | Artificial Intelligence; Technology Adoption; Digitalisation; Human capital; AI Exposure Measures |
| JEL: | D24 J23 J62 O33 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cer:papers:wp818 |
| By: | Tania Babina |
| Abstract: | This paper reviews firm-level data on artificial intelligence and the emerging evidence on AI's economic effects. It argues that measurement is central: different AI datasets capture different objects (including invention versus use, internal capability building versus outsourcing, and realized activity versus investor perceptions) and can therefore lead to different conclusions. The paper develops a framework for choosing among these measures and surveys available data sources on firm AI efforts. It synthesizes evidence on AI's effects on firm growth, valuation, productivity, risk, labor, competition, financial markets and applications. The paper concludes by suggesting some ideas for future research. |
| JEL: | G0 J0 M0 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35123 |
| By: | Jaime Arellano-Bover; Carolina Bussotti; Matteo Paradisi; Liangjie Wu |
| Abstract: | Brand capital-an intangible asset that differentiates a firm's products-has grown in recent decades, alongside the rise of intangible investments and the decline in the labor share. Trademarks are legal claims on brand capital and are actively traded across firms, providing a setting to study how reallocating brand capital reshapes firm behavior and aggregate outcomes. Leveraging a novel link of Italian administrative data on trademark ownership, firms' financial statements, and employer-employee records, we exploit firm-to-firm trademark transactions to identify the effects of brand-capital investments. Guided by a model in which firms combine production labor, expansionary labor, and brand capital, we use an event-study design to estimate firm-level effects and quantify their aggregate implications. Acquiring a trademark increases intangible assets by 19%, sales by 8%, and employment by 6%, while leaving weekly earnings unchanged and reducing the firm-level labor share. Employment gains are concentrated among marketing and sales workers, indicating that brand capital is not skill-neutral. Accounting for both buyers and sellers, trademark transactions reallocate brand capital toward larger firms, raising sales and lowering the labor share. Calibrating the model to our estimates, we find that this reallocation generates a one percentage-point decline in the aggregate labor share in the long run. |
| Keywords: | Brand capital, trademarks, labor share, labor demand, markups |
| JEL: | L25 O34 E25 J23 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26079 |
| By: | Suphanit Piyapromdee; Tasina Tawichsri; Nada Wasi |
| Abstract: | This paper studies Thailand's 2012-2013 nationwide minimum-wage reform, which raised wage floors by over 40 percent. Using matched employer-employee data, we study its effects on earnings, employment dynamics, and worker-firm sorting. We estimate a discrete type model that jointly captures heterogeneity in wages and mobility across workers and firms. Earnings rise sharply at the bottom with spillovers well above the new minimum, while employment effects are modest and concentrated among the long-term non-employed. Simulations imply sizable gains in discounted lifetime earnings, driven mainly by higher wages but amplified by mobility changes for high-turnover workers. The reform also alters career wage profiles: entry wages increase for low- and mid-wage workers, but tenure-based wage growth flattens most for mid-wage workers, generating an intertemporal trade-off between higher starting pay and slower subsequent progression. Finally, assortative matching weakens as lower-type workers move up the firm wage ladder, yet revealed-preference measures show that wage-based upgrading does not always translate into higher-valued jobs. |
| Keywords: | Minimum wage, worker-firm sorting, job mobility, wage dynamics, matched employer- employee data, revealed preferences, lifetime earnings |
| JEL: | J31 J38 J60 J64 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26060 |
| By: | Lauren Falcao Bergquist; Danial Lashkari; Eric Verhoogen |
| Abstract: | This chapter takes stock of what has been learned from the recent micro-development literature about wedges - mechanisms generating dispersion in marginal revenue products of factors across firms, which are commonly interpreted as indicators of misallocation. We present a general theoretical framework that allows us to consider several different types of wedges simultaneously. We argue that it is important to distinguish between between technological wedges, which are present even in the efficient allocation that would be chosen by the social planner, and distortionary wedges, which are present in market equilibrium but not the social planner's allocation. Not all wedges, as we have defined them, are distortionary. We also argue that interactions among wedges are pervasive. We review empirical findings about different types of wedges - taxes, regulations, political connections, corruption, market power, contracting frictions, upgrading investments, and search - focusing on studies that present direct evidence on particular wedges and how they generate dispersion in marginal returns to factors. Throughout, we pay special attention to how wedges vary with firm size and whether the evidence supports the "large firms are constrained'" view of development. We conclude with thoughts about promising directions for the misallocation literature. |
| Keywords: | wedges, misallocation, distortions, direct approach, development |
| JEL: | O11 O12 O14 D21 H25 L11 L51 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26021 |
| By: | Manuel Arellano; Orazio Attanasio; Margherita Borella; Mariacristina De Nardi; Gonzalo Paz-Pardo |
| Abstract: | We develop a new approach to estimating earnings, job, and employment dynamics using subjective expectations data from the NY Fed Survey of Consumer Expectations. These data provide beliefs about future earnings offers and acceptance probabilities, offering direct information on counterfactual outcomes and enabling identification under weaker assumptions. Our framework avoids biases from selection and unobserved heterogeneity that affect models using realized outcomes. First-step fixed-effects regressions identify risk, persistence, and transition effects; second-step GMM recovers the covariance structure of unobserved heterogeneities such as ability, mobility, and match quality. We find lower risk and persistence of the individual productivity component than in prior work, but greater heterogeneity in ability and match quality. Simulations show that reduced-form estimates overstate persistence and volatility on individual-level productivity due to job transitions and sorting. After accounting for heterogeneity, volatility declines and becomes flat across the earnings distribution. These results underscore the value of expectations data. |
| Keywords: | Subjective expectations, earnings dynamics models |
| JEL: | C23 C81 D15 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26098 |
| By: | Guillermo Cruces; Diego Fernández Meijide; Sebastian Galiani; Ramiro H. Gálvez; María Lombardi |
| Abstract: | Does generative artificial intelligence (AI) reinforce or reduce productivity differences across workers? Existing evidence largely studies AI within firms and occupations, where organizationalselectioncompresseseducationalheterogeneity, leavingunclearwhetherAI narrows productivity gaps across individuals with substantially different levels of formal education. Weaddressthisquestionusingarandomizedonlineexperimentconductedoutside firms, in which1, 174 adults aged 25–45 with heterogeneous educational backgrounds complete an incentivized, workplace-style business problem-solving task. The task is a general (not domain-specific) exercise, and participants perform it either with or without access to a generative-AI assistant. Unlike prior work that studies heterogeneity within relatively homogeneous worker samples, our designtargets the between–education-group productivity gap as the primary estimand. We find that AI increases productivity for all participants, with substantially larger gains for lower-education individuals. In the absence of AIaccess, higher-education participants outperform lower-education participants by0.548standarddeviations; withAIaccess, thisgapfallsto0.139standarddeviations, implying that generative AI closes three-quarters of the initial productivity gap. We interpret this pattern as evidence that generative AI narrows effective productivity differences in task execution by relaxing constraints that are more binding for lower-education individuals, even though underlying skill differences remain, as reflected in persistent education gaps in task performance and in a follow-up exercise without AI assistance. |
| Keywords: | Productivity, artificial intelligence, education, human capital, inequality |
| JEL: | J24 O33 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:udt:wpgobi:wp_gob_2026_03 |
| By: | Estefan, Alejandro (University of Notre Dame); Gerhard, Roberto (Secretaría del Trabajo y Previsión Social); Kaboski, Joseph (University of Notre Dame, CEPR, NBER); Kondo, Illenin (Federal Reserve Bank of Minneapolis); Qian, Wei (Haverford College) |
| Abstract: | Using Mexican economic census data from 1994 to 2019, we document a rising trend in domestic outsourcing, particularly among large firms, and a negative association between outsourcing and labor compensation, including profit sharing and social security. We leverage higher-frequency data from a manufacturing panel survey, matched employer-employee data, and a ban on domestic outsourcing in 2021 to show that the ban reduced outsourcing, increased labor's share, and reduced markdowns without raising total labor costs or affecting employment, output, or productivity. We propose a theoretical model in which corporate fiscal incentives drive outsourcing and account for the observed empirical patterns. |
| Keywords: | markdowns, monopsony, outsourcing, developing countries |
| JEL: | J38 J42 J81 M55 O15 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18566 |
| By: | Esteban Méndez-Chacón (Department of Economic Research, Central Bank of Costa Rica); Diana Van Patten (Yale University and NBER); Sake Bigio (UCLA and NBER) |
| Abstract: | This paper introduces an endogenous network of payment chains into a business cycle model. Motivated by evidence of linked payments across firms in Costa Rica, we develop a framework where production orders form bilateral relations: some payments are executed immediately, while others—chained payments—are delayed until upstream payments are received. These chains capture real-world situations in which firms must wait to be paid before paying their own suppliers, leaving resources temporarily idle even when demand and capacity exist. In equilibrium, agents choose the amount of chained payments given interest rates and access to internal funds or credit lines. This choice determines the payment-chain network and aggregate total-factor productivity (TFP). The paper characterizes equilibrium dynamics and pecuniary externalities when agents internalize their own payment delays but not the delays imposed on others. *** Resumen: Este artículo introduce una red endógena de cadenas de pagos en un modelo de ciclo económico. Motivados por evidencia de pagos vinculados entre empresas, desarrollamos un marco en el que las órdenes de producción generan relaciones bilaterales: algunos pagos se ejecutan de manera inmediata, mientras que otros —pagos encadenados— se retrasan hasta que se reciben los pagos de etapas anteriores. Estas cadenas capturan situaciones del mundo real en las que las empresas deben esperar a cobrar antes de pagar a sus propios proveedores, lo que deja recursos temporalmente inactivos incluso cuando existe demanda y capacidad productiva. En equilibrio, los agentes eligen la cantidad de pagos encadenados dados los tipos de interés y el acceso a fondos internos o líneas de crédito. Esta elección determina la red de cadenas de pagos y la productividad total de los factores agregada. El artículo caracteriza la dinámica de equilibrio y las externalidades pecuniarias cuando los agentes internalizan sus propios retrasos en los pagos, pero no los retrasos que imponen a otros. |
| Keywords: | Payments; Networks; Business Cycles, Pagos, Redes, Ciclos económicos |
| JEL: | E32 E42 G01 O16 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:apk:doctra:2601 |
| By: | Alexander Ahammer; Martin Halla; Pia Heckl; Rudolf Winter-Ebmer |
| Abstract: | Long-term unemployment among older workers is particularly difficult to overcome. We study the impacts of a large-scale job guarantee program that offered up to two years of fully subsidized employment to long-term unemployed individuals aged 50 and above. Using a sharp age-based discontinuity in eligibility, we find that participation increased regular, unsubsidized employment by 43 percentage points two years after the program ended. The gains are driven by transitions into new firms and industries, rather than continued subsidized employment, and we find no evidence of displacement effects for non-participants or spillovers to family members. The program had no measurable short-run health effects. |
| Keywords: | Long-term unemployment, temporary job guarantee, subsidized employment, health status. |
| JEL: | J64 J08 J78 I14 H51 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:25160 |
| By: | Todd Morris; Stefan Staubli; Benoit Dostie |
| Abstract: | We evaluate the welfare effects of five provincial mandatory retirement bans in Canada from 2005 to 2009 using linked employer-employee tax data. The bans sharply reduce retirements at age 65, with sizable announcement effects and heterogeneity across industries. Post-65 employment and earnings rise at least 14%, with gains comparable to a two-year increase in pension-eligibility ages. Older workers save more and spouses postpone retirement, benefiting public finances, with no observable effects on mortality or younger workers. Highly exposed firms reduce payroll costs via hiring adjustments while maintaining worker productivity and profitability. Our results suggest that protecting older workers was welfare-improving. |
| JEL: | H55 J26 J78 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35111 |
| By: | Jennie Bai; Luc Laeven; Yaojun Ke; Hong Ru |
| Abstract: | We study the global footprint and real effects of Chinese overseas corporate ownership. By assembling a comprehensive micro-level dataset of 161, 773 firms across 159 countries (2012–2021), we independently reconstruct multi-layered ownership chains to trace capital through offshore tax havens to its ultimate origin. This approach reveals a global footprint substantially broader than official FDI statistics. Chinese-controlled foreign assets expanded at 20% annually, reaching $2.1 trillion or roughly 3% of global corporate assets by 2021. Chinese investors—particularly state-owned enterprises (SOEs)—strategically target R&D-intensive and supply-chain-linked firms. Following acquisition, target firms increase capital stock and R&D expenditures, yet these inputs fail to generate higher patent output and are accompanied by a significant decline in profitability. We document a novel 'innovation spillback' mechanism: while target innovation remains stagnant, Chinese parent firms experience a sharp acceleration in granted patents following their first developed-economy acquisition. Furthermore, a greater Chinese presence crowds out R&D at non-target peer firms, though aggregate industry-level innovation remains unchanged. China thus represents a distinctively state-driven model of global ownership that accepts weaker near-term performance to internalize technological capacity at home. |
| JEL: | F3 G32 G34 O3 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35106 |
| By: | Jesper Akesson; Kush Amlani; Raul Cepeda Suarez; Emily Chissell; Stefan Hunt; Michael Luca; Gemma Petrie |
| Abstract: | Can active choice mitigate the effects of preset defaults? We study this question using a difference-in-differences design around the rollout of the EU’s Digital Markets Act, which required iOS and Android to display browser choice screens under certain conditions. We find large effects, with notable differences across platforms: from 15 months after the mandate onward, Firefox usage was 113 percent higher on iOS and 12 percent higher on Android relative to a no-mandate counterfactual. This gap is consistent with rollout differences, as Android showed choice screens primarily on new devices, whereas iOS also showed them on existing devices. |
| JEL: | D03 K0 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35112 |
| By: | Bilge Erten; Joseph E. Stiglitz; Eric Verhoogen |
| Abstract: | The CHIPS and Science Act, enacted in August 2022, is a key element of the revival of U.S. industrial policy. We examine the short-term employment effects of the act. Drawing on quarterly industry-by-county data from the Quarterly Census of Employment and Wages (QCEW), we implement two county-level difference-in-difference designs, the first comparing counties with pre-existing semiconductor facilities to other counties with high-tech industries and the second comparing counties with semiconductor fabrication facilities (which were targeted for the bulk of the CHIPS funding) to counties with non-fabrication semiconductor facilities. Using both approaches, we find robust, positive employment impacts in affected counties. The effects began at the time of the passage in the Senate of a precursor bill, in anticipation of the signing of the CHIPS Act. Our preferred estimates suggest an increase of 110 jobs per affected county in the first design and 180 jobs per affected county in the second design. We also find robust positive impacts on local construction employment. Evidence on total employment and GDP at the county level, as well as on employment in upstream input sectors, is mixed. Simple back-of-the-envelope calculations (which come with caveats) suggest national direct employment effects of approximately 15, 000-16, 000 jobs in the core semiconductor sector and indirect effects of 28, 000-35, 000 jobs in related sectors. |
| Keywords: | industrial policy, semiconductors, employment |
| JEL: | L52 L63 J2 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:25166 |