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on Labour Economics |
| By: | Hoen, Maria F. (Ragnar Frisch Centre for Economic Research); Markussen, Simen (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research) |
| Abstract: | Using Norwegian administrative data, we examine how exposure to immigration over the past decades has affected natives' relative prime age labor market outcomes by social class background. Social class is established on the basis of parents' earnings rank. By exploiting variation in immigration patterns over time across commuting zones, we find that immigration from low‐income countries has reduced social mobility and thus steepened the social gradient in natives' labor market outcomes, whereas immigration from high‐income countries has leveled it. Given the large inflow of immigrants from low-income countries to Norway since the early 1990s, this can explain a considerable part of the relative decline in economic performance among natives with lower class background, and also rationalize the apparent polarization of sentiments toward immigration. |
| Keywords: | immigration, intergenerational mobilty |
| JEL: | J62 J15 J24 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11904&r=lab |
| By: | William J. Collins; Ariell Zimran |
| Abstract: | The repeated failure of Ireland's potato crop in the late 1840s led to a major famine and a surge in migration to the US. We build a dataset of Irish immigrants and their sons by linking males from 1850 to 1880 US census records. For comparison, we also link German and British immigrants, their sons, and males from US native-headed households. We document a decline in the observable human capital of famine-era Irish migrants compared to pre-famine Irish migrants and to other groups in the 1850 census, as well as worse labor market outcomes. The disparity in labor market outcomes persists into the next generation when immigrants’ and natives’ sons are compared in 1880. Nonetheless, we find strong evidence of intergenerational convergence in that famine-era Irish sons experienced a much smaller gap in occupational status than their fathers. The disparities are even smaller when the Irish children are compared to those from observationally similar native white households. A descriptive analysis of mobility for the famine-era Irish sons indicates that more Catholic surnames and birth in Ireland were associated with less upward mobility. Our results contribute to literatures on immigrant assimilation, refugee migration, and the Age of Mass Migration. |
| JEL: | F22 J61 J62 N31 O15 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25287&r=lab |
| By: | Gerard, Francois (Columbia University); Lagos, Lorenzo (Columbia University); Severnini, Edson R. (Carnegie Mellon University); Card, David (University of California, Berkeley) |
| Abstract: | A growing body of research shows that firms' employment and wage-setting policies contribute to wage inequality and pay disparities between groups. We measure the effects of these policies on racial pay differences in Brazil. We find that nonwhites are less likely to work at establishments that pay more to all race groups, a pattern that explains about 20% of the white-nonwhite wage gap for both genders. The pay premiums offered by different employers are also compressed for nonwhites relative to whites, contributing another 5% of the overall gap. We then ask how much of the under-representation of nonwhites at higher-paying workplaces is due to the selective skill mix at these establishments. Using a counterfactual based on the observed skill distribution at each establishment and the nonwhite shares in different skill groups in the local labor market, we conclude that assortative matching accounts for about two-thirds of the under-representation gap for both men and women. The remainder reflects an unexplained preference for white workers at higher-paying establishments. The wage losses associated with unexplained sorting and differential wage setting are largest for nonwhites with the highest levels of general skills, suggesting that the allocative costs of race-based preferences may be relatively large in Brazil. |
| Keywords: | assortative matching, discrimination, firm policies, racial wage differences, Brazil |
| JEL: | E24 J15 J31 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11923&r=lab |
| By: | Lens, Dries (University of Antwerp); Marx, Ive (University of Antwerp); Vujic, Suncica (University of Antwerp) |
| Abstract: | Despite being one of the most prolific spenders on active labour market policies, and investing heavily in civic integration programmes, family policies and career and diversity plans, the native-migrant employment gap in Belgium is still one of the largest among EU and OECD countries. Past research has shown that even after controlling for human capital and other socio-demographic factors a large unexplained gap (often called ethnic gap or penalty) remains. This paper investigates how the motive for migrating to Belgium contributes to the native-migrant employment gap. Based on data from the 2014 Belgian LFS Ad Hoc Module on the labour market situation of migrants and their immediate descendants, we compare the employment outcomes of labour migrants (with and without a job prior to migration), family reunion migrants, student migrants and refugees with those of the native-born. In line with previous studies, we establish that refugees and family reunion migrants' employment likelihood is lower when compared to labour migrants and natives. Refugees who do work tend to do so in temporary jobs and in jobs that are below their skill levels. However, temporary employment is also prevalent among labour migrants without a job prior to migration and over qualification is a specific challenge for male student migrants. |
| Keywords: | immigration, reason for migration, employment outcomes |
| JEL: | F22 J15 J61 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11906&r=lab |
| By: | Wolfgang Keller; Hâle Utar |
| Abstract: | This paper shows that globalization has far-reaching implications for the economy’s fertility rate and family structure because they influence work-life balance. Employing population register data on new births, marriages, and divorces together with employer-employee linked data for Denmark, we show that lower labor market opportunities due to Chinese import competition lead to a shift towards family, with more parental leave taking and higher fertility as well as more marriages and fewer divorces. This pro-family, pro-child shift is driven largely by women, not men. Correspondingly, the negative earnings implications of the rising import competition are concentrated on women, and gender earnings inequality increases. We show that the choice of market versus family is a major determinant of worker adjustment costs to labor market shocks. While older workers respond to the shock rather similarly whether female or not, for young workers the fertility response takes away the adjustment advantage they typically have–if the worker is a woman. We find that the female biological clock–women have difficulties to conceive beyond their early forties–is central for the gender differential, rather than the composition of jobs and workplaces, as well as other potential causes. |
| JEL: | F16 J12 J13 J16 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25247&r=lab |
| By: | Carnicelli, Lauro |
| Abstract: | This article studies the effects of financial shocks on the labor market when participation in the labor force is endogenous. Previous research concerning endogenous participation produced models that generated a counterfactually procyclical unemployment rate and a positively sloped Beveridge curve. This paper shows that collateral constraints alone are not able to produce correlations in line with the data. However, financial shocks, that change the collateral requirements, are responsible for most of the movements on the labor market and generate a countercyclical unemployment and a negatively slopped Beveridge curve. |
| Keywords: | Endogenous participation; Financial shocks |
| JEL: | E32 E44 J63 J64 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90254&r=lab |
| By: | Arnaud Herault (GRANEM, University of Angers); Eva Moreno Galbis (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE); Francois-Charles Wolff (LEMNA, University of Nantes and INED) |
| Abstract: | There is a large consensus in the literature on the major role of social networks as a helpful instrument to find a job. In this paper, we study the social network matching rate along the economic cycle both from a theoretical and empirical perspective. Using the French Labor Force Survey for the period 2003-2012, we find that the relationship between the network matching rate based on direct ties and the job finding rate is decreasing and convex as predicted by our theoretical setup. Results are completely modified when we consider a measure of the network matching rate based on indirect ties related to the share of peers in a job. In this case, we find a linearly increasing relation between the network matching rate and the job finding rate. This underlines not only the heterogeneous ways through which network membership may influence the individuals’ performance on the labor market, but also the different behaviors of these driving factors along the economic cycle. |
| Keywords: | employment, network matching rate, direct and indirect ties, job finding rate, immigrants |
| JEL: | J24 J61 J15 A14 D85 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1832&r=lab |
| By: | Catherine Laffineur (University of Nice Sophia Antipolis, GREDEG); Eva Moreno Galbis (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE); Jeremy Tanguy (University Savoie Mont Blanc, IREGE); Ahmed Tritah (Le Mans University, GAINS-TEPP) |
| Abstract: | Over the period 1994-2012, immigrants’ wage growth in France has outperformed that of natives on average by more than 14 percentage points. This striking wage growth performance occurs despite similar changes in employment shares along the occupational wage ladder. In this paper we investigate the sources of immigrants’ relative wage performance focusing on the role of occupational tasks. We first show that immigrants’ higher wage growth is not driven by more favorable changes in general skills (measured by age, education and residence duration), and then investigate to what extent changes in task-specific returns to skills have contributed to the differential wage dynamics through two different channels: different changes in the valuation of skills (“price effect†) and different occupational sorting (“quantity effect†). We find that the wage growth premium of immigrants is not explained by different changes in returns to skills across occupational tasks but rather by the progressive reallocation of immigrants towards tasks whose returns have increased over time. Immigrants seem to have taken advantage of ongoing labor demand restructuring driven by globalization and technological change. In addition im- migrants’ wages have been relatively more affected by minimum wage increases, due to their higher concentration in this part of the wage distribution. |
| Keywords: | wage dynamics, tasks, immigrants, skills |
| JEL: | J15 J24 J31 J61 O33 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1833&r=lab |
| By: | Alex Xi He (Department of Economics, MIT); John Kennes (Department of Economics and Business Economics, Aarhus University, Denmark); Daniel le Maire (University of Copenhagen) |
| Abstract: | We use a directed search model to develop estimation procedures for the identification of worker and rm rankings from labor market data. These methods allow for a general specication of production complementarities and the possibility that higher ranked workers are not more productive in all firms. We also offer conditions for a positive/negative assortative matching that incorporate the possibility of a stochastic job ladder with on-the-job search. Numerical simulations relate the implications of the model to the implications of fixed effect regressions and give further insights into the performance of our estimation procedures. Finally, we evaluate evidence for Denmark using our methods and we show that workers are highly sorted and that higher type workers are less productive than lower type workers while employed in lower type jobs. |
| Keywords: | Directed search, sorting, wage dynamics, auctions |
| JEL: | J64 J63 E32 |
| Date: | 2018–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2018-10&r=lab |
| By: | Hartung, Benjamin; Jung, Philip; Kuhn, Moritz |
| Abstract: | A key question in labor market research is how the unemployment insurance system affects unemployment rates and labor market dynamics. We revisit this old question studying the German Hartz reforms. On average, lower separation rates explain 76% of declining unemployment after the reform, a fact unexplained by existing research focusing on job finding rates. The reduction in separation rates is heterogeneous, with long-term employed, high-wage workers being most affected. We causally link our empirical findings to the reduction in long-term unemployment benefits using a heterogeneous-agent labor market search model. Absent the reform, unemployment rates would be 50% higher today. |
| Keywords: | endogenous separations; labor market flows; Unemployment insurance |
| JEL: | E24 J63 J64 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13328&r=lab |
| By: | Lens, Dries (University of Antwerp); Marx, Ive (University of Antwerp); Vujic, Suncica (University of Antwerp) |
| Abstract: | This paper examines the labor market trajectories of refugees who arrived in Belgium between 2003 and 2009. Belgium has offered relatively easy formal labor market access to refugees but they face many other barriers in its strongly regulated and institutionalized labor market. Using the Belgian Labour Force Survey linked to longitudinal administrative data, we estimate event history models to compare refugees' entry into and exit out of the first employment, contrasting their outcomes with family and labor migrants of the same arrival cohort. The analysis shows that refugees take significantly longer to enter their first employment as compared to other migrant groups. They also run a greater risk of exiting out of their first employment into unemployment and (back) into social assistance. The results suggest that quick formal access clearly does not suffice for sustainable integration in the labor market. Additional education and labor market measures appear needed to enhance a more durable integration. |
| Keywords: | refugees, family migrants, labor migrants, labor market transitions, event history analysis |
| JEL: | F22 J15 J61 J68 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11905&r=lab |
| By: | Riphahn, Regina T. (University of Erlangen-Nuremberg); Schrader, Rebecca (University of Erlangen-Nuremberg) |
| Abstract: | We investigate whether a cut in unemployment benefit payout periods affected older workers' labor market transitions. We apply rich administrative data and exploit a difference-in-differences approach. We compare the reference group of 40-44 year olds with constant benefit payout periods to older treatment groups with reduced payout durations. For the latter job exit rates declined, job finding rates increased, the propensity to remain employed increased, and the propensity to remain unemployed declined after the reform. These patterns suggest that the reform of unemployment benefits may be one of the reasons behind the recent incredible rise in old age employment in Germany. |
| Keywords: | labor force participation, employment, unemployment insurance, retirement |
| JEL: | J14 J26 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11931&r=lab |
| By: | Dibeh, Ghassan (American University of Beirut); Fakih, Ali (Lebanese American University); Marrouch, Walid (Lebanese American University) |
| Abstract: | Irregular migration became an alarming issue over the last decade for both developed and developing countries. A prevailing assumption in migration policy is that labor market and institutional characteristics play a crucial role in pushing people to leave their home countries in search for better life prospects. This paper examines this hypothesis using a unique dataset covering young people aged 15 to 29 from five major MENA countries from the year 2016. Using a probit model, the paper finds that labor market drivers (unemployment, job sector, social security, contract type) are of great importance for the decision to migrate irregularly amongst the youth in the MENA region and that the quality of institutions matters. In addition, the lack of wealth and economic opportunities enhance their willingness to engage in irregular migration. |
| Keywords: | irregular migration, youth, labor markets, institutions, Arab Spring |
| JEL: | J61 O17 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11903&r=lab |
| By: | Oliver Krebs |
| Abstract: | This paper quantifies the surprisingly large heterogeneity of real income and employment effects across German counties in response to local productivity shocks. Using a quantitative model with imperfect mobility and sector-specific labor market frictions together with an outstanding data set of county level goods shipments, I identify the sources of the heterogeneity in Germany’s complex interregional linkages. I find that population mobility reduces the magnitude of local employment rate responses by a striking 70 percent on average. In all but a few counties, changes in the sectoral composition of production have a much milder effect on employment elasticities. National employment rates are less dependent on mobility with worker in- and outflows in individual counties partially cancelling out effects. For productivity shocks affecting individual sectors across all regions the composition effect is substantially magnified, the mobility effect reduced. In line with recent real world observations I find that real income and employment effects, while correlated, do not need to be of the same sign. Finally, the spatial propagation of real income effects closely follows trade linkages whereas employment effects are more complex to predict. |
| Keywords: | Quantitative spatial analysis, unemployment, migration, search and matching, labor market frictions |
| JEL: | F16 F17 R13 R23 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:bav:wpaper:183_krebs&r=lab |
| By: | Andreas I. Mueller; Johannes Spinnewijn; Giorgio Topa |
| Abstract: | This paper analyses job seekers' perceptions and their relationship to unemployment outcomes to study heterogeneity and duration-dependence in both perceived and actual job finding. Using longitudinal data from two comprehensive surveys, we document (1) that reported beliefs have strong predictive power of actual job finding, (2) that job seekers are over-optimistic in their beliefs, particularly the long-term unemployed, and (3) that job seekers do not revise their beliefs downward when remaining unemployed. We then develop a reduced-form statistical framework, where we exploit the joint observation of beliefs and ex-post realizations, to disentangle heterogeneity and duration-dependence in true job finding rates while allowing for elicitation errors and systematic biases in beliefs. We find a substantial amount of heterogeneity in true job finding rates, accounting for more than half of the observed decline in job finding rates over the spell of unemployment. Moreover, job seekers' beliefs are systemically biased and under-respond to differences in job finding rates both across job seekers and over the unemployment spell. Finally, we show theoretically and quantify in a calibrated model of job search how these biases in beliefs contribute to the slow exit out of unemployment. The biases jointly explain about 15 percent of the high incidence of long-term unemployment. |
| JEL: | E24 J6 J64 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25294&r=lab |
| By: | Kory Kroft; Fabian Lange; Matthew J. Notowidigdo; Matthew Tudball |
| Abstract: | We compare patterns of unemployment and joblessness between Canada and the U.S. during the Great Recession. Similar to previous findings for the U.S. in Kroft et al. [2016], we document a rise in long-term unemployment in Canada. This increase is not accounted for by changes in the observable composition of the unemployed. We then extend the matching model in Kroft et al. [2016] to exploit the restricted-access panel data from the Canadian Labor Force Survey which contains information on the time since the last job (“joblessness duration”) for both unemployed individuals and non-participants. This allows us to model duration dependence in all labor force flows involving either unemployment or non-participation. To calibrate the extended matching model, we create a new historical vacancy series for Canada based on relative employment in “recruiting industries”, allowing us to construct a monthly Beveridge curve for Canada. We find that the calibrated model matches the time series of unemployment fairly well, but does less well matching non-participation. Our results also indicate that allowing for duration dependence in flows between unemployment and non-participation is crucial for explaining overall levels in long-term joblessness, and that changes in the duration distribution among the unemployed and non-participants contributed less to the deterioration of labor market conditions in Canada, relative to the U.S. In part, this difference comes from the fact that the U.S. recession was much more severe. |
| JEL: | E24 J64 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25236&r=lab |
| By: | Edoardo Di Porto (Università di Napoli Federico II, CSEF and INPS); Enrica Maria Martino (INED and CHILD (Collegio Carlo Alberto)); Paolo Naticchioni (Università di Roma Tre, AIEL, IZA, and INPS) |
| Abstract: | This paper provides a firm and individual level analysis of the impact on labor market outcomes of regularizing undocumented migrant workers. Using unique administrative data released by the Italian Social Security Institute, we evaluate Italy's largest ever regularization process. We employ an unexpected quasi-random auditing program to deal with firms' self-selection into treatment. Our results show that regularization has only a short-run positive impact on firm employment and no effect on firm-level wages. Nonetheless, 73.5% of regularized migrants remains within the formal Italian labor market, and we find also that legalized migrant coworkers were not affected (negatively) by the reform. Our findings highlight that high mobility of migrants to other firms, provinces and industries is an important driver of our results. |
| Keywords: | Migration, Legalization, Shadow Economy, Tax Compliance, Policy Evaluation |
| JEL: | J6 H26 O17 |
| Date: | 2018–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:517&r=lab |
| By: | Elira Kuka (Southern Methodist University) |
| Abstract: | While the Unemployment Insurance (UI) program is one of the largest safety net programs in the U.S., research on its benefits is limited. This paper exploits plausibly exogenous changes in state UI laws to empirically estimate whether UI generosity mitigates any of the previously documented negative health effects of job loss. The results show higher UI generosity increases health insurance coverage and utilization, with stronger effects during periods of high unemployment rates. During such periods, higher UI generosity also leads to improved self-reported health. Finally, I find no effects on risky behaviors nor on health conditions. |
| Keywords: | Unemployment Insurance, health |
| JEL: | I1 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:1808&r=lab |
| By: | Aparicio Fenoll, Ainoa (Collegio Carlo Alberto); Kuehn, Zoë (Universidad Autónoma de Madrid) |
| Abstract: | This paper studies whether individuals tend to migrate to countries where their skills are scarce or abundant. Focusing on English language skills, we test whether immigrants who are proficient in English choose to move to countries where many or few individuals speak English. We use the introduction of English classes into compulsory school curricula as an exogenous determinant for English proficiency of migrants of different ages, and we consider cohort data on migration among 29 European countries, where English is not the official language and where labor mobility is essentially free. Our estimation strategy consists of refined comparisons of cohorts, and we control for all variables traditionally included in international migration models. We find that immigrants who are proficient in English move to countries where fewer individuals speak English, and where hence their skills are scarce. We also show that similar results hold for general skills. |
| Keywords: | migration, English language skills, choice of destination country |
| JEL: | F22 I20 J24 J61 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11907&r=lab |
| By: | Klaas de Vos; Arie Kapteyn; Adriaan Kalwij |
| Abstract: | There have been a vast number of social security reforms aimed at increasing employment at older ages over the last two decades in the Netherlands. These reforms mainly lead to more stringent eligibility criteria for, and reduced generosity of, social security programs. Our empirical evidence suggests that these reforms are likely to have contributed to individuals working longer, but it is difficult to pinpoint which reforms have been most effective. Furthermore, we show that the recent increase in the state pension eligibility age is likely to further increase employment at older ages. |
| JEL: | H55 J08 J26 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25250&r=lab |
| By: | Maestas, Nicole (RAND); Mullen, Kathleen (RAND); Powell, David (RAND); Wachter, Till von (University of California, Los Angeles); Wenger, Jeffrey |
| Abstract: | This paper documents variation in working conditions among workers in the United States, presents new estimates of how workers value these conditions, and assesses the impact of working conditions on estimates of the wage structure and inequality. We use evidence from a series of stated preference experiments to estimate workers' willingness-to-pay for a broad set of job characteristics, which we validate with actual job choices. We find that working conditions vary substantially across workers, play a significant role in job choice decisions, and are central components of the compensation received by workers. Preferences vary by demographic groups and throughout the wage distribution. We find that accounting for differences in preferences for working conditions often exacerbates wage differentials by race, age, and education, and intensifies measures of wage inequality. |
| Keywords: | working conditions, wages, compensating differentials, stated preferences |
| JEL: | J13 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11925&r=lab |
| By: | de Graaff, Thomas (Vrije Universiteit Amsterdam); Ozgen, Ceren (University of Birmingham); Roth, Duncan (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | We assess how changes in youth cohort sizes effect employment rates in German labour market regions. Replicating the conventional approach, we estimate that a percentage increase in the youth share reduces regional employment rates by −0.2%. We challenge the assumption that cohort size effects are homogenous across space and find robust evidence that the negative effect of youth cohort size is more pronounced in the labour markets of metropolitan regions. These results suggest an upward pressure on urban regional employment rates as a result of the projected decrease in the size of the German youth share. |
| Keywords: | employment rate, youth share, Germany, regional heterogeneity |
| JEL: | J1 J2 R1 R2 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11932&r=lab |
| By: | J. Malte Zoubek |
| Keywords: | optimal taxation, urban wage premium, commuting, deduction, local labour markets, spatial taxation, regional inequality, multi-dimensional screening |
| JEL: | H21 R12 R23 R51 C61 J61 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:sie:siegen:187-18&r=lab |
| By: | Patrick Kline; Neviana Petkova; Heidi Williams; Owen Zidar |
| Abstract: | This paper analyzes how patent-induced shocks to labor productivity propagate into worker compensation using a new linkage of US patent applications to US business and worker tax records. We infer the causal effects of patent allowances by comparing firms whose patent applications were initially allowed to those whose patent applications were initially rejected. To identify patents that are ex-ante valuable, we extrapolate the excess stock return estimates of Kogan et al. (2017) to the full set of accepted and rejected patent applications based on predetermined firm and patent application characteristics. An initial allowance of an ex-ante valuable patent generates substantial increases in firm productivity and worker compensation. By contrast, initial allowances of lower ex-ante value patents yield no detectable effects on firm outcomes. Patent allowances lead firms to increase employment, but entry wages and workforce composition are insensitive to patent decisions. On average, workers capture roughly 30 cents of every dollar of patent-induced surplus in higher earnings. This share is roughly twice as high among workers present since the year of application. These earnings effects are concentrated among men and workers in the top half of the earnings distribution, and are paired with corresponding improvements in worker retention among these groups. We interpret these earnings responses as reflecting the capture of economic rents by senior workers, who are most costly for innovative firms to replace. |
| JEL: | J01 O3 O34 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25245&r=lab |