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on Labour Economics |
| By: | van den Berg, Gerard J. (University of Groningen); Stephan, Gesine (Institute for Employment Research (IAB), Nuremberg); Uhlendorff, Arne (CREST) |
| Abstract: | Inequality is a dynamic phenomenon, and the relative and absolute positions of individuals are subject to frequent shocks. It is important to know if preventive interventions mitigate adverse inequality effects of labor market shocks. We consider individuals up to three months before the envisaged termination of their employment and we study effects of pre-unemployment participation in active labor market programs (ALMP) on labor market outcomes using a randomized controlled trial (RCT). This complements the vast literature on ALMP for unemployed workers. Policies include signing an integration agreement (IA), preparing an action plan (AP) before the first meeting with a caseworker, and the combination of both. Results suggest that the IA - particularly when combined with the AP - increases the probability of employment around 4 months after registration as soon-to-be unemployed. This is driven by workers with a relatively high unemployment risk following registration. Thus, the policies contribute to reducing societal inequality. |
| Keywords: | inequality, unemployment, work, job-to-job transitions, integration agreements, action plans, randomized controlled trial, job search, monitoring, counseling, machine learning |
| JEL: | J68 J64 C93 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17612 |
| By: | Bermúdez-Barrezueta, Natalia (Ghent University); Desiere, Sam (Ghent University); Tarullo, Giulia (Ghent University) |
| Abstract: | This paper evaluates a hiring subsidy for lower-educated youths in Flanders (Belgium) that reduced labour costs by approximately 13% for a period of two years, starting in 2016. Using a donut Regression Discontinuity Design, we find no evidence that the subsidy improved the job finding rate of eligible job seekers in 2016-19, a period marked by a tight labour market. We then investigate the role of temporary work agencies, which disproportionately employ the target group and obtain 25% to 34% of the subsidies. Using Difference-in-Differences regressions, we demonstrate that agencies did not raise wages of eligible agency workers in response to the policy. Remarkably, despite a 3.3% labour cost reduction, full-time equivalent employment of eligible workers in these agencies decreased by 9.2% over the three years following the reform. Our findings highlight how an active labour market policy affects agency employment. |
| Keywords: | hiring subsidy, temporary work agencies, youth employment, ALMP |
| JEL: | J08 J23 J53 J64 J68 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17616 |
| By: | Diallo, Yaya (McGill University); Lange, Fabian (McGill University); Renée, Laetitia (University of Montreal) |
| Abstract: | This paper examines the impact of paternity leave on the gender gap in labor market outcomes. Utilizing administrative data from Canadian tax records, we analyze the introduction of Quebec's 2006 paternity leave policy, which offers five weeks of paid leave exclusively to fathers. Using mothers and fathers of children born around the reform, we estimate how the policy impacted labor market outcomes up to 10 years following birth. The reform significantly increased fathers' uptake of parental leave and reduced their earnings immediately after the reform. However, in the medium to long-run, we find that the reform did not impact earnings, employment, or the probability of being employed in a high-wage industry for either parent. We for instance find a 95%-CI for the effect on average female earnings 3-10 years following the reform ranging from -2.2 to +1.7%. Estimates of effects on other outcomes and for males are similarly precise zeros. There is likewise no evidence that the reform changed social norms around care-taking and family responsibilities. |
| Keywords: | paternity leave, gender earnings gap |
| JEL: | J13 J16 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17624 |
| By: | Kyle Hancock; Jeanne Lafortune; Corinne Low |
| Abstract: | We document that female breadwinners do more home production than their male partners, driven by “housework” like cooking and cleaning. By comparing to same sex couples, we highlight that specialization within heterosexual households does not appear to be “gender neutral” even after accounting for average earnings differences. One possible explanation would be a large comparative advantage in housework by women, a supposition commonly used to match aggregate labor supply statistics. Using a model, we show that while comparative advantage can match some stylized facts about how couples divide housework, it fails to match others, particularly that men’s housework time is inelastic to relative household wages. Matching these facts requires some gendered wedge between the opportunity cost of housework time and its assignment within the household. We then turn to the implications for household formation. Gendered rigidities in the allocation of household tasks result in lower surplus for couples where women out-earn men than vice versa, providing a micro-founded reason for substantial literature showing that lower relative earning by men decreases marriage rates. We show that our mechanism—allocation of housework, rather than norms about earnings—plays a role by relating marriage rates to the ratio of home production time in US immigrants’ countries of origin. |
| JEL: | D13 J12 J22 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33393 |
| By: | Hamid Noghanibehambari; Jason Fletcher |
| Abstract: | In the presence of segregation and discrimination during the late 19th and early 20th century, many African American men changed their racial identity and “passed” for white. Previous studies have suggested that this activity was associated with increases in income and socioeconomic status despite the costs associated with cutting ties with their black communities. This study adds to this literature by evaluating the long-run effects of passing on old-age longevity. We construct longitudinal data of black families in historical censuses (1880-1940) linked to their male children’s Social Security Administration death records (1975-2005). We use family fixed effects to demonstrate that individuals passing as white live approximately 9.4 months longer, on average, than their non-passing siblings. Additional analyses suggest substantial improvements in education and occupational standing scores as well as differential parental investments as potential pathways. |
| JEL: | I1 I14 J1 J15 N0 N32 N33 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33394 |
| By: | Leanne Nam |
| Abstract: | Unemployment leads to large and persistent income losses for workers. Higher unemployment in the labor market therefore has spillover effects on the housing market. This paper studies such spillover effects from both empirical and theoretical perspectives. Using data from the Current Population Survey (CPS), I show that a 1 percentage point increase in the unemployment rate leads to a 1.55% decline in housing prices. Theoretically, I develop an overlapping generations model with a housing market. The calibrated model replicates the empirically observed spillover effect for the U.S. economy. Higher income uncertainty is the main driver of the spillover effect, rather than actual income losses. The spillover effect transmits one-third of the welfare losses of workers due to higher unemployment in the labor market to older, retired households by reducing their housing wealth. Younger workers benefit in part by buying houses at depressed prices. The magnitude of the spillover effect is shaped by the demographic structure of the population and the specific age groups affected by unemployment shocks. I find that increasing the generosity of unemployment insurance stabilizes the housing market, although it only partially mitigates the spillover effect. |
| Keywords: | Unemployment, Housing demand, Portfolio choice, Overlapping generations |
| JEL: | G11 R21 E21 E24 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_636 |
| By: | Michael Smart; Matthew Kronberg; Josip Lesica; Huju Liu |
| Abstract: | We estimate causal effects of a pandemic-era wage subsidy in Canada on job losses and business closures. Our estimates use administrative microdata and a regression discontinuity strategy to estimate the effects of marginal changes in the wage subsidy rate. The estimated net wage elasticity of employment was 0.05 to 0.22, implying a small employment effect of the program and an estimated fiscal cost per job saved of more than $185, 000 per year. Subsidy payments caused a small but persistent reduction in business closure rates during subsequent waves of the pandemic, and increased earnings of existing employees. In all, our results suggest the subsidies did little to preserve job matches, but played a greater role in the overall social insurance response to the pandemic. |
| Keywords: | Canada Emergency Wage Subsidy, COVID-19, incrementality |
| JEL: | H25 E32 |
| Date: | 2025–01–28 |
| URL: | https://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-796 |
| By: | Henning Hermes; Marina Krauß; Philipp Lergetporer; Frauke Peter; Simon Wiederhold |
| Abstract: | This field experiment investigates the causal impact of mothers’ perceptions of gender norms on their employment attitudes and labor-supply expectations. We provide mothers of young children in Germany with information about the prevailing gender norm regarding maternal employment in their city. At baseline, over 70% of mothers incorrectly perceive this gender norm as too conservative. Our randomized treatment improves the accuracy of these perceptions, significantly reducing the share of mothers who misperceive gender norms as overly conservative. The treatment also shifts mothers’ own labor-market attitudes towards being more liberal—and we show that specifically the shifted attitude is a strong predictor of mothers’ future labor-market participation. Consistently, treated mothers are significantly more likely to plan an increase in their working hours one year ahead. |
| Keywords: | gender norms, maternal employment, gender equality, randomized controlled trial |
| JEL: | J16 J18 J22 C93 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1216 |
| By: | Schnabel, Claus (University of Erlangen-Nuremberg) |
| Abstract: | Trade unions and employers' associations play an important role in Germany not only in wage setting, but also in social policy and labour market regulation. While the majority of companies are organised in employers' associations, less than one fifth of employees are still members of a trade union. Union density has declined substantially over the last decades whereas on the employers' side density has fallen to a lesser extent as most employers' associations have introduced the option of bargaining-free membership. At the same time, the collective bargaining coverage of companies and employees has been reduced drastically. Nowadays, less than half of employees in Germany are formally covered by collective agreements. Nevertheless, collective agreements are still directly or indirectly relevant for three out of four employees, and they are an important anchor for wage setting in the entire economy. The erosion of (multi-employer) bargaining coverage has manifold reasons and has been associated with an increased heterogeneity in wage setting over the last decades. The ongoing falls in both bargaining coverage and union density have prompted a controversial discussion of how to stabilise the system of industrial relations in Germany. |
| Keywords: | trade union, employers' association, collective bargaining, bargaining coverage, Germany |
| JEL: | J51 J52 J53 J58 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17615 |
| By: | Elif Bodur |
| Abstract: | I investigate how media images, particularly advertisements, shape audiences’ aspirations. Utilizing the natural experiment in East Germany, I demonstrate that exposure to Western TV during the formative years of childhood and adolescence increases the income aspirations of males. Additionally, through an online experiment, I highlight that advertisements not only elevate income aspirations but also diminish the desire to have children among male adolescents. The latter particularly holds when the advertisements portray equal sharing of childcare responsibilities within couples. Notably, the effects of media exposure vary depending on their mothers’ labor market status. These findings underscore the pivotal role of media in perpetuating and reinforcing stereotypical gender roles. |
| Keywords: | media, advertisements, gender, aspirations, choice scenarios, beliefs |
| JEL: | J16 J22 L82 M3 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_627 |
| By: | Korpela, Heikki |
| Abstract: | I study the potential effects of introducing experience rating for the unemployment insurance tax in Finland. I simulate an array of potential rating systems using register data for all wages and unemployment from 2001 to 2021. Under the current tax regime, about half of all unemployment costs are attributable to employers who pay less than 10% of the UI tax. All the simulated systems would significantly reduce this discrepancy but also differ markedly from each other. The choices in designing the system are reflected in its administrative burden, how strongly it incentivises hirings and discourages dismissals, and how quickly it responds to employment changes. |
| Keywords: | unemployment insurance, experience rating, Labour markets and education, D22, H25, H71, J32, J38, J65, fi=Sosiaaliturva|sv=Social trygghet|en=Social security|, fi=Työmarkkinat|sv=Arbetsmarknad|en=Labour markets|, fi=Verotus|sv=Beskattning|en=Taxation|, |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:fer:wpaper:173 |
| By: | Mavisakalyan, Astghik; Palmer, Michael; Salazar, Silvia |
| Abstract: | Self-promotion plays a significant role in both the labor market and society; however, its prevalence and effects remain difficult to quantify. This paper leverages the unique setting of professional surfing to examine the causal impact of self-promotion-proxied by the act of "claiming" a wave-on performance outcomes. Utilizing data from over 5, 500 waves in the World Surf League and employing an instrumental variables approach, we find that self-promotion provides substantial benefits, increasing wave scores by approximately 0.8 standard deviations, or 1.6 points out of a maximum score of 10. Notably, female surfers are significantly less likely than their male counterparts to engage in self-promotional behaviors, as reflected by a lower ferquency of claiming, yet they receive comparable benefits when they do claim. These findings offer valuable insights into the rewards of self-promotion in competitive, high-stakes environments and underscore the potential for women to improve outcomes by more frequently adopting such behaviors. |
| Keywords: | Self-promotion, Performance evaluation, Professional surfing, Gender differences, Instrumental variables |
| JEL: | J24 J16 Z22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1561 |
| By: | Adhikari, Shisham |
| Abstract: | Successfully transitioning to a low-carbon economy by 2050 necessitates not only technological advancements but also the swift reallocation of the workforce. Existing policies, such as the Inflation Reduction Act (IRA), focus on firm subsidies while overlooking critical labor market coordination frictions. Workers face high entry costs and uncertainty about green job opportunities, while firms hesitate to invest without a reliable labor supply. This creates a coordination problem: workers are reluctant to enter the green sector without job guarantees, and firms delay expansion without sufficient workers. This paper extends the Diamond-Mortensen-Pissarides (DMP) model to incorporate these coordination frictions, calibrating it to U.S. labor market data. By evaluating subsidies targeted at firms, workers, and a combined strategy, the analysis shows that while individual subsidies can achieve the green employment target of 14% by 2030, a combined approach is far more efficient. It aligns incentives, reduces unemployment, and minimizes fiscal costs, highlighting the necessity of addressing coordination frictions to ensure a cost-effective and equitable green transition. |
| Keywords: | Green transition, Policy misalignment, Coordination friction, Unemployment, Fiscal efficiency, Search-match model |
| JEL: | E61 J2 J6 J64 |
| Date: | 2025–01–20 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123479 |
| By: | Herbert Schuetze (Department of Economics, University of Victoria); Jen Baggs (Department of Economics, University of Victoria) |
| Abstract: | The earnings outcomes of recent immigrants to Canada are considerably below those of similarly skilled native-born workers and these gaps rarely fully dissipate over time. A few recent studies examine the importance of unobserved firm-level wage premiums in explaining immigrant-native wage gaps. These studies find that the sorting of immigrants into low wage establishments explains a significant portion of the initial earnings gap between immigrants and native-born workers and that movements to higher wage firms over time partially explains why immigrant wages catch up to those of the native born. Likely due to a lack of detailed information on firm attributes, very little is known about the role of observed firmlevel characteristics in immigrant wage outcomes. This paper focuses on the relationship between observable establishment-level characteristics and the relative wage outcomes of immigrants using linked Canadian employee-employer data from Statistics Canada’s Workplace and Employment Survey (WES) for 2005. We augment a human capital model with a rich set of observed establishment-level characteristics to identify the precise establishment attributes driving firm-specific wage premiums and the establishment characteristics associated with unobserved worker-firm match quality across immigrants and the native born. We find that, while several observed establishment characteristics are associated with firm pay premia, the average skill level of employees at a firm plays a particularly important role in the sorting of immigrants across establishment. Recent arrivals to Canada are sorted into establishments with lower average skill levels, which is associated with lower wages. Such sorting is concentrated among immigrants from non-traditional source countries. With time in Canada, immigrants move to establishments with higher average skill levels. JEL Classification: J15 J31 J62 |
| Keywords: | Immigrant, wage differential, firm characteristics |
| Date: | 2024–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:vic:vicddp:2406 |
| By: | Elghafiky Bimardhika; Firman Witoelar |
| Abstract: | We study the causal effects of a labor law that governs child workers on labor market outcomes and the well-being of individuals. We exploit the timing of the national legislation to identify the causal effects of child labor reform using the Regression Discontinuity Design. We find that individuals who entered adulthood after the reform are less likely to have participated in the labor market during childhood. The reform also lowers the likelihood of poor health and improves the probability of working in paid jobs when children have reached adulthood. Our heterogeneity analysis highlights the importance of complementing regulation with enforcement and support programs to minimize unintended consequences that plagued many similar reforms. |
| JEL: | C21 J08 J80 I15 I25 J21 O15 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pas:papers:2025-04 |
| By: | Lucie Schmidt; Lara Shore-Sheppard; Tara Watson |
| Abstract: | Though Social Security is typically considered a program to support retirees, nearly one in ten children live in a home with Social Security income. Children are substantially more likely to live with an older adult than they were two decades ago, and they are twice as likely to report Social Security income in their household as traditional cash welfare. We use the sharp increase in eligibility for Social Security benefits at age 62 to investigate the role played by the Social Security program in childhood economic resources among children who live with their grandparents. We do not find that Social Security eligibility increases household income on average, but it is associated with a shift towards Social Security income and reductions in deep poverty. We also see increased availability of household members’ time for home production. |
| JEL: | H55 I38 J1 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33381 |
| By: | Titan Alon; Natalie Cox; Minki Kim |
| Abstract: | In the presence of credit frictions, student debt may prevent graduates from realizing the full returns to a college education by distorting their occupation choice and subsequent early career investments in human capital. This paper quantifies the aggregate size of these labor market distortions by computing the effect of large-scale student debt forgiveness policies. The model’s predictions are disciplined by new empirical evidence showing that more student debt leads to higher initial earnings, but lower returns-to-experience. The quantitative results suggest that rising student debt is having a substantial adverse effect on aggregate labor productivity and the occupational composition of employment. |
| Keywords: | Student debt, occupation choice, wage profiles, credit constraints, misallocation of talent, college, higher education, labor productivity. |
| JEL: | E0 E2 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_635 |
| By: | FUKAI Taiyo; KONDO Ayako |
| Abstract: | This study examines the impact of childbirth on parental earnings in Japan, using newly available local tax records from multiple municipalities. By applying an event study specification, we estimate the “child penalty†—the percentage reduction in women’s income relative to men’s after childbirth. Our results reveal that women’s income declines by 60–80% immediately after childbirth and remaining 50% below pre-childbirth levels even four years postpartum, while men experience modest income growth. Moreover, the study also identifies significant heterogeneity in income trajectories, particularly among higher-earning women, some of whom recover their earnings close to their pre-birth levels, whereas others earnings remain significantly below pre-birth levels. Additionally, women with pre-birth earnings were lower than the median tend to exit the workforce or adjust their income below the threshold for dependent spouses. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25012 |
| By: | Raquel Carrasco; Ana Nuevo-Chiquero |
| Abstract: | This paper examines differences in occupational task content among women based on their sexual orientation. Using data from the American Community Survey, we find that women in same-sex couples are more likely to be employed in occupations characterized by more abstract and manual tasks, and fewer routine components. These occupations are traditionally associated with greater flexibility, accommodating career interruptions, and minimizing skill depreciation. These differences are not explained by individual or partner characteristics or by prejudice at the occupational level. Furthermore, our findings hold even after controlling for self-selection into the labor force. Heterogeneous effects by age and parental status suggest that these choices reflect long-term strategies rather than shortterm responses to childbearing. This points to a complex relationship between occupational choice and fertility, influenced by the probability of labour force exit and re-entry. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:fda:fdaddt:2025-01 |
| By: | Tim Bayer; Lenard Simon; Jakob Wegmann |
| Abstract: | To collect income taxes, almost all countries require employers to withhold monthly tax prepayments which are then fully credited against the őnal income tax liabilities of their employees. Despite being a fundamental component of income taxation systems worldwide, the impact of these withholding taxes on labor supply is poorly understood. We investigate their importance in the context of married couples in Germany where the withholding tax liability can be redistributed between spouses. We exploit a reform that reduced the withholding tax for some marriedwomen more than for others, while inducing no differences in income taxes. Using administrative data for the full population of German taxpayers, we estimate an elasticity of labor income with respect to the withholding tax eight years after the reform of 0.14. Additional evidence from a self-conducted survey suggests imperfect understanding of the tax system and limited pooling of resources within the household as the main mechanisms. As the majority of couples shift parts of the withholding tax liability from the husband to the wife, our results suggest that the increased withholding tax liability of married women contributes to their low labor supply. This highlights the need for governments to be aware of the distortion of labor supply incentives when the design of withholding taxes does not match actual income tax incentives. |
| Keywords: | Withholding Taxes, Income Taxation, Gender, Labor Supply |
| JEL: | H21 H31 J16 J20 K34 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_631 |
| By: | Sergio E. Barrera; Andreas Ferrara; Price V. Fishback; Misty L. Heggeness |
| Abstract: | We analyze the impact of World War II service on income and mobility among male Army and Army Airforce veterans from various racial and ethnic groups, using linked 1940 Census, WWII enlistment, and 1969 administrative tax return data. The dataset includes non-Hispanic White, Black, Hispanic, Asian, and Native American men, providing insight into underexplored groups. Ordinary Least Squares estimates indicate that, compared to non-Army men within their groups, Army veterans earned higher incomes and were less likely to migrate across counties between 1940 and 1969, particularly among non-Hispanic Whites, Blacks, and Hispanics. To address potential selection bias, we applied a fuzzy regression discontinuity design, comparing men just eligible for service to those slightly too young. These estimates revealed that, in 1969, Army veterans generally had lower adjusted gross incomes than non-Army counterparts among non-Hispanic Whites, Blacks, and Asians, while Hispanic and Native American veterans earned slightly more. Income effects varied by type of income. Veterans also showed lower rates of county migration, particularly among non-Hispanic Whites, Asians, and Native Americans. Migration differences were minor for Blacks and Hispanics. These findings highlight nuanced outcomes of WWII service across diverse racial and ethnic groups. |
| JEL: | J15 J7 N0 N42 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33382 |
| By: | Miller, Jason W. (Michigan State University); Phares, Jonathan (Iowa State University); Burks, Stephen V. (University of Minnesota Morris) |
| Abstract: | Studying employment dynamics (i.e., rates at which firms add or shed workers) of small- and medium-sized enterprises (SMEs) like trucking firms is critical to inform labor market theory and public policy. We examine U.S. trucking firm employment dynamics during the highly expansive period of March 2020 – March 2021, when the COVID-19 pandemic delivered an exogenous shock that upended established freight networks and sharply expanded demand. We extend the supply chain management (SCM) literature on motor carrier growth and Penrose's theory of the growth of the firm (TGF), focusing on the mechanisms most likely to be involved. We test our hypotheses using Business Dynamics data from the Census Bureau for the population of trucking firms with at least one employee. Fitting mixed effects models, we find that both the increase in job gains and decrease in job losses during March 2020 – March 2021 were greater for younger as compared to older firms, and the effect on job losses was greater in absolute magnitude. Our work modifies TGF with regard to SMEs that make up the bulk of firms in industries traditionally viewed as central to SCM, and it adds to evidence against a long-term or systematic shortage of truck drivers. |
| Keywords: | labor demand, driver shortage, motor carrier, trucking, public policy |
| JEL: | J21 L92 R41 J63 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17627 |
| By: | Grover, Arti (World Bank); Viollaz, Mariana (CEDLAS-UNLP) |
| Abstract: | This paper provides evidence on the nature of financial constraints faced by women entrepreneurs, especially in contexts of stringent social norms. Using micro-data from the World Bank Enterprise Surveys for 61 countries, the analysis shows that formal firms managed by women do not face credit constraints on the extensive margin. They are equally likely to apply for credit as their male counterparts and experience lower rates of credit rejection, with a higher likelihood of opening credit lines. However, on the intensive margin, firms managed by women receive lower credit amounts, indicating signs of credit constraints. This disparity in access to credit cannot be explained by gender differences in risk profiles, profitability, or productivity. However, firms managed by women have lower sales per worker, suggesting challenges in accessing product and labor markets. The paper finds suggestive evidence of capital misallocation based on gender, particularly in countries with more restrictive gender and cultural norms. Firms managed by women demonstrate a 15 percent higher average return on capital compared to firms managed by men, indicating the potential benefits of increased access to credit for women-led businesses. These findings emphasize the importance of addressing gender-specific constraints to accessing finance and promoting gender-inclusive policies to enhance firm growth and reduce capital misallocation. |
| Keywords: | firms, credit, capital misallocation, gender, social and cultural norms |
| JEL: | D22 D24 J16 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17630 |
| By: | Victor Couture; Jonathan I. Dingel; Allison E. Green; Jessie Handbury |
| Abstract: | We study how preferences over the demographic composition of co-patrons affects income segregation in shared spaces. To distinguish demographic preferences from tastes for other venue attributes, we study venue choices within business chains. We find two notable regularities: preferences for high-income co-patrons are similar across racial groups, and racial homophily does not vary by income. These demographic preferences are economically large, explain much of the cross-group variation in exposure to high-income co-patrons, and correlate with movers' neighborhood choices. |
| JEL: | C55 D12 J1 L8 R2 R4 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33386 |
| By: | Nicholas Bloom; Mihai A. Codreanu; Robert A. Fletcher |
| Abstract: | We partner with a large US payment-processing company to run a 5-year, 10 wave panel survey of incentivized quarterly sales forecasts on over 6, 000 firms. We match firm predictions to proprietary revenue data to assess accuracy. We find firms forecast poorly, with issues of inaccuracy, over-optimism, predictable errors and over-precision. To assess the causes of these forecasting issues we run experiments on: (i) data use, (ii) incentives, (iii) forecasting skill, and (iv) contingent thinking. We find greater data use primarily decreases noise and reduces over-precision, while higher incentives moderate over-optimism. Both moderately increase accuracy. The other two treatments have no impact. These results suggest forecasting biases can be reduced but are hard to eliminate. In a simple simulation model, we show these biases change firm responsiveness to changes in taxes and productivity, highlighting their macro importance. |
| JEL: | J0 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33384 |