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on Labour Economics |
| By: | Alex Clymo; Piotr Denderski; Yusuf Mercan; Benjamin Schoefer |
| Abstract: | Job mobility is risky, workers are risk averse, and insurance markets are incomplete. This paper studies how these features curb and distort job-to-job transitions by making workers excessively cautious: they place too much weight on job safety over wage and productivity gains. We demonstrate this tradeoff by eliciting employed workers’ wage-safety indifference curves in a custom, representative survey. On average, employed US workers require a 1.63% pay raise to accept each additional percentage point of annual unemployment risk in a new job. We assess the macroeconomic consequences of our mechanism by embedding it into a general equilibrium search model. Jobs differ in both wages (productivity) and unemployment risk, and risk-averse workers self-insure against unemployment risk through a non-state-contingent bond while searching on and off the job. We find that a complete markets counterfactual would boost job mobility by 12% and productivity by 0.19%. We also highlight a new role for unemployment insurance: it encourages employed workers to accept risky but high-productivity offers, thereby increasing productivity (by 1.3%) and job creation—as well as job loss and unemployment. |
| JEL: | E24 H20 J2 J62 J64 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35580 |
| By: | Alice Wu |
| Abstract: | How does employer learning affect the allocation of talent and aggregate productivity? I study this question in the labor market for computer science (CS) Ph.D.s, using the job histories and post-Ph.D. publications of 31, 000 graduates from 2000 to 2021. Publishing a CS conference paper raises the probability that a researcher moves to a top tech firm in the following year, especially for workers who start at less productive firms in industry. The increase in upward mobility upon publication is larger for less experienced workers and for scarcer signals, such as first authorship or papers with a matched patent. These patterns are consistent with predictions from an equilibrium search model with public employer learning. Estimating the model, I find that learning from post-Ph.D. publications accounts for 14% of overall CS publications, as it reallocates high-ability researchers to employers that provide more opportunities to publish. This contribution exceeds that of initial sorting, underscoring that much of worker ability is revealed on the job rather than at entry. |
| Keywords: | Learning, Signal, Search, Sorting, Productivity |
| JEL: | J24 J42 J62 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26214 |
| By: | Rigissa Megalokonomou; Juliana Silva-Goncalves; Roel van Veldhuizen |
| Abstract: | We study the role of self-promotion and career advice in sustaining gender differences in labor market outcomes. We conduct a pre-registered experiment in which "advisers" advise "workers" to attempt either a more or a less ambitious task. We find that women promote themselves less than men and, as a result, are 12 percentage points less likely to be advised to choose the more ambitious task. This gender gap in advice persists across both quantitative and qualitative self-assessments and is robust to variation in advisers' information sets-including when advisers observe workers' actual performance-but is eliminated and even reversed when advisers are informed of the gender gap in self-promotion. |
| Keywords: | Advice, Gender, Self-Promotion, Randomized Experiment |
| JEL: | C91 D91 J16 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26189 |
| By: | Gustavo J. Bobonis; Aneta Bonikowska; Philip Oreopoulos; W Craig Riddell; Steven P. Ryan |
| Abstract: | We study the medium- and long-run impacts of the Canada Self-Sufficiency Project (SSP) Plus program, which randomly offered intensive employment support services for up to three years to long-term welfare recipients eligible for temporary earnings subsidies. We examine whether this intervention-designed to address both economic and psychosocial barriers to finding and retaining desirable employment-produced long-run changes in individuals' socioeconomic trajectories. We link study participants to high-frequency survey data and to their federal tax and employer-employee matched records for up to 20 years following random assignment. The intensive services treatment resulted in a 20-27 percent increase in participants' annual earnings over the 20-year period and sustained increases in full-time employment during the first decade post-intervention. As potential mechanisms, treated individuals engaged in more job search and job-to-job transitions and secured employment in higher-wage jobs and at higher-paying firms. |
| Keywords: | Welfare-to-Work Programs, Self-Sufficiency Project, SSP Plus, Temporary Income Subsidies, Counselling and Support, Long Term Impacts |
| JEL: | I30 I38 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26208 |
| By: | Linnea Lorentzen |
| Abstract: | This paper studies how the 2014 collapse in Brent Crude Oil prices propagated through the Norwegian labor market via worker reallocation. Using Norwegian panel data, I show that workers in non-tradable sectors more exposed to inflows of displaced oil workers experienced significant earnings declines and higher rates of sector exit, documenting a key propagation channel that extends the reach of sectoral shocks beyond the directly affected sector. To quantify the full network of equilibrium adjustments, I estimate a multisector Roy model with correlated sectoral skills and mobility costs. Counterfactual simulations show that non-tradable sector wages declined by up to 32% of the oil sector's wage loss. The magnitude of net worker reallocation between non-oil sectors was equivalent to 63% of the net outflow from the oil sector in the median commuting zone. The model shows how a single sectoral shock can trigger economy-wide labor market adjustment through worker movements. The simulations further reveal that the domino reallocation acts as an equalizing force: shutting it down amplifies both mean wage spillovers and wage dispersion within and across commuting zones. |
| Keywords: | Sectoral shocks, Reallocation, Local labor markets, Wages, Inequality |
| JEL: | F16 F62 F66 E24 J24 J31 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26172 |
| By: | Erling Barth; Maria Forthun Hoen; Sari Pekkala Kerr; William R. Kerr |
| Abstract: | We study long-run career consequences of initial employment in an occupation that subsequently declines. Linking the 2000 Decennial Census to US administrative employment and earnings records through 2020, we follow more than 2.4 million workers. Employment in an occupation that contracts by at least 25 percent is associated with about 5 percent lower cumulative earnings despite slightly more quarters worked. The earnings differential closely matches evidence from Sweden and Norway, although employment adjustment differs. Occupational mobility is substantial but incomplete, while children’s later occupational destinations are much less tied to their household heads’ 2000 occupational-growth categories. |
| JEL: | J24 J31 J62 O33 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35614 |
| By: | Michael A. Clemens |
| Abstract: | Governments traditionally use quotas to limit immigration, but the US government has recently proposed taxes on immigration, focused on high-skill foreign workers. The effects of a high-skill immigration tax hinge on price elasticities of demand and supply that the literature has rarely measured. I estimate key response elasticities to evaluate the effects of a $100, 000 tax on Optional Practical Training (OPT) work permits, the largest single channel through which high-skill immigrants enter the US economy. Depending on the incidence of the tax, evaluation requires estimating the price elasticity of demand for US university degrees with the OPT option, the price elasticity of the supply of OPT placements by universities, or the price elasticity of US employers' demand for OPT workers. In all incidence scenarios OPT starts for a given level of international enrollment fall by roughly a fifth or more, and by as much as four fifths under university incidence. The resulting decline in OPT opportunities would reduce international student enrollment at universities, costing them hundreds of millions to over four billion dollars a year in net margin. I illustrate the need for further research on the relevant response elasticities by showing that plausible parameters yield a zero or even negative net fiscal impact of an expanded $100, 000 tax on H-1B workers. The need for better models and estimates will grow with the prevalence of immigration taxes. |
| Keywords: | Optional Practical Training, H-1B, immigration, immigrant, labor, tax, fee, payment, duty, tariff, skill, talent, foreign, student, graduate, college, higher ed, university, demand, supply, elasticity, STEM |
| JEL: | F22 H22 I23 J61 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26217 |
| By: | Santiago Campos-Rodríguez; David Neumark |
| Abstract: | Gender disparities in becoming a CEO are pronounced, and women who become CEOs, especially of large firms, are less likely to have children or be married. We study the effects of children and marriage on becoming a CEO, using longitudinal administrative data covering the universe of tax-registered firms in Costa Rica, matched to universal civil registry records that provide the timing of childbirth and marriage. We find that first childbirth is followed by a persistent decline in women’s probability of becoming a CEO, but no comparable decline for men and some evidence that CEO attainment rises. Marriage displays a different but still divergent pattern: it is associated with higher subsequent CEO attainment for men, but little change for women. Changes around childbirth account for a substantial share of the overall gender difference in CEO rates. Finally, we find evidence consistent with household specialization as a potential mechanism. Around marriage and first childbirth, women’s formal employment, earnings, and share of household earnings decline, while men become more central to household earnings as their partners reduce formal employment. |
| JEL: | J16 J30 J4 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35616 |
| By: | Mimosa Distefano; Lorenzo Incoronato; Anna Raute |
| Abstract: | Women often struggle to re-enter employment after career breaks, possibly because employers are uncertain about their productivity. We study whether hiring subsidies help firms overcome this uncertainty and hire from this group. Exploiting an Italian policy that temporarily cut payroll taxes for women hired from non-employment, we find that firms persistently hire more women with career breaks, including mothers, following subsidy adoption. Consistent with employer learning about target-group productivity, firms with better initial matches later hire more from this group. Subsidized workers also show stronger labor-market attachment. These findings suggest demand-side interventions can complement supply-side policies in addressing gender gaps. |
| Keywords: | gender employment gap; mothers; hiring subsidies; employer learning; firm hiring behavior |
| JEL: | J16 J23 H25 D83 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26211 |
| By: | Randall Akee; Jimmy Chin; Daniel L. Crown |
| Abstract: | In this paper, we characterize trends in the earnings assimilation of immigrant workers from 1981 to 2021. We use administrative longitudinal data that contain the earnings of workers beginning in their first year of residence in the United States and in each year thereafter, allowing us to identify immigrants who eventually leave the United States (referred to here as return migrants). We use those data to produce the first examination of trends in earnings assimilation over a 41-year period and to estimate earnings assimilation separately for return migrants versus those who stay in the United States. We document several new facts about immigrants who arrived between 1981 to 2010. First, roughly one-fifth to one-third of immigrants return migrate from the United States within 10 years after arrival. Second, return migrants have entry earnings similar to those of permanent migrants but experience slower rates of earnings growth. Third, earnings assimilation occurs relatively quickly for cohorts arriving since the mid-1990s: The earnings of permanent immigrants converge, or come close to converging, with those of native-born people within 10 years after arrival. Migrants from earlier arrival cohorts experience significant earnings growth but generally do not converge to that of the native born. We discuss how changes in the labor market quality of immigrant cohorts (measured by their relative earnings upon entry) and selective return migration play an important role in determining whether repeated cross-sectional data over- or underestimate earnings assimilation. |
| JEL: | F22 J31 J61 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35582 |
| By: | Ran Abramitzky; Leah Boustan; Ahmet Gulek; Jens Hainmueller |
| Abstract: | We study the effects of H-1B immigration on U.S. industries that employ H-1B workers and their trading partners. Using a novel cross-industry design and the 1999--2003 expansion of the H-1B visa cap for identification, we find that H-1B exposure raised incomes for natives and pre-existing immigrants, with gains concentrated in non-STEM occupations. Income gains propagate forward through supply chains to downstream industries but not backward to upstream industries, consistent with a productivity shock rather than a labor supply shock. We find no direct effect on patenting, suggesting that productivity gains arise from better task execution rather than patentable invention. |
| Keywords: | H-1B, High-skilled immigration, Synthetic control, Input-output networks, Task complementarity |
| JEL: | J15 J24 J61 L14 O31 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26213 |
| By: | Asbjoern Juul Petersen (Department of Economics, University of Copenhagen); Jacob Richard Strabo (Department of Economics, University of Copenhagen) |
| Abstract: | We investigate how performance variability is associated with long run labor market outcomes. Using administrative data on complete grade distributions for all general high-school graduates from 2001 to 2006, we measure within-student grade variability as the standard deviation of final grades and relate it to long-run labour market income. Conditional on identical GPA and a long list of background controls, a one standard deviation increase in grade variability predicts a 4.8 percent lower income. The income differences are primarily driven by both extensive and intensive labor supply. Our results are robust in various specifications and even in a twin fixed effects analysis. In the second part of the paper, we further investigate potential mechanisms. We conjecture that performance stability is an underlying trait which impacts sorting behaviour into different higher education- and career tracks: Individuals with higher performance instability tend to sort into programmes and professions where instability is not punished or even rewarded but where the income trajectories are much more volatile. This differential sorting behaviour, especially into different fields and industries, can explain most of the income differences. |
| Keywords: | grade variance, performance stability, education, human capital, income |
| JEL: | I26 J24 J31 I21 C23 |
| Date: | 2026–08–03 |
| URL: | https://d.repec.org/n?u=RePEc:kud:kucebi:2615 |
| By: | Paul Gregg; Yuyan Jiang; Lindsey Macmillan; Nikki Shure; Gill Wyness |
| Abstract: | This paper provides new evidence on intergenerational income persistence for a recent UK cohort. Using Next Steps, a longitudinal study of people born in England in 1989-90 linked to administrative education records, we estimate the association between parental income in adolescence and sons' earnings at age 32, compare the results with the 1970 British Cohort Study, and decompose persistence by early cognitive skills, noncognitive traits and educational attainment. Our preferred estimates show an intergenerational income elasticity of 0.214 and a rank-rank coefficient of 0.287. The rank-rank estimate is almost identical to the comparable estimate for the 1970 cohort, suggesting little change in relative income persistence across cohorts, although age-32 elasticities are likely to understate lifetime persistence. Education is the main observed mechanism: GCSE attainment, A-level attainment and degree completion account for a substantial share of persistence, while measured noncognitive traits explain little once education is included. The findings show that, despite educational expansion, family-income gradients in attainment remain central to the intergenerational transmission of economic advantage. |
| Keywords: | intergenerational income mobility, socioeconomic inequality, education, skills |
| Date: | 2026–08–12 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2206 |
| By: | Lorenzo Navarini; Dieter Verhaest |
| Abstract: | Returns to higher education vary substantially between and within fields of study. This paper studies whether occupational sorting at labor market entry contributes to this heterogeneity in early-career realized returns. We estimate a generalized sequential Roy model of yearly higher education enrollment choices, skill mismatch at entry, and subsequent labor market outcomes. Identification combines persistent latent heterogeneity with exclusion restrictions based on distance to programs and residual variation in graduation timing. Individuals with a higher probability of enrolling in higher education obtain higher returns, but also experience the largest losses in realized returns when they start in mismatched occupations. In counterfactual decompositions, entry mismatch accounts for a substantial share of low, and in some cases negative, early-career realized wage returns. |
| Keywords: | Returns to higher education; fields of study; skill mismatch; occupational sorting; heterogeneous returns. |
| JEL: | I23 I26 J24 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26196 |
| By: | Axana Dalle; Senne Jaques; Stijn Baert; ; |
| Abstract: | Although job-hopping has become more prevalent, its implications for recruitment appear to be less favourable. Drawing on a scenario experiment with professional recruiters, this study examines the threshold at which job-hopping is penalised, the underlying perceptual mechanisms, and the factors that moderate these effects. The results indicate that substantial negative effects emerge from three prior employers within a five-year period and intensify as the number of prior employers increases. Moreover, contrary to expectations of potential benefits, job-hopping elicits exclusively negative perceptions across four theoretically derived clusters: work attitudes (perseverance, responsibility, motivation, and accuracy), career dynamics (loyalty, bore-out risk, and adaptability), human capital (past performance, in-depth experience, and willingness to learn), and social capital (team spirit, interpersonal problems, and communicative skills). Among these, the hiring penalty is most strongly associated with negative perceptions of perseverance, in-depth experience and interpersonal conflicts. |
| Keywords: | Job-hopping, Hiring chances, Signalling, Scenario experiment |
| JEL: | J24 J62 M51 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:26/1149 |
| By: | Michael Graber; Morten Håvarstein; Magne Mogstad; Gaute Torsvik; Ola L. Vestad (Statistics Norway) |
| Abstract: | The elasticity of taxable income (ETI) parameter is a key quantity in empirical analysis of tax policy and labor supply. We examine when a commonly applied class of ETI estimands can be used to learn about individuals’ ETI parameters and their (un)compensated elasticities of labor supply. We begin by providing necessary and sufficient conditions for these estimands to be given a causal interpretation as a positively weighted average of heterogeneous ETI parameters. We then apply these results to empirically analyze a reform of the Norwegian tax system that reduced the marginal tax rates on middle and high incomes. The estimated ETI parameters increase steadily with income, meaning high income individuals are more responsive to tax changes than middle-income individuals. Next, we show how (un)compensated elasticities of labor supply can be bounded directly from the ETI estimands, or point identified by combining these estimands with estimates of earnings responses to lottery winnings. The results suggest an (un)compensated elasticity of 0.1 (0.0) for middle-income individuals. The (un)compensated elasticity estimates increase steadily with income to around 0.45 (0.3) for high-income individuals. These findings imply a substantial excess burden of taxation, and that reducing top-income tax rates would increase tax revenue. Our findings are also informative about how the intertemporal elasticity of substitution and the Frisch elasticity vary across the income distribution. |
| Keywords: | C20; D15; H20; J22 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ssb:dispap:1037 |
| By: | Øystein Hernæs; Andreas Ravndal Kostøl |
| Abstract: | This paper uses data on the universe of private-sector employment in Norway up to February 2026 to examine whether AI exposure has contributed to a widening employment gap across occupations with varying AI exposure. Since October 2022, the month before ChatGPT's release, employment in the most exposed occupations has grown by 0.1 percent, against 0.3 percent in the least exposed occupations. We track this number on a monthly basis on the public dashboard kiindeksen.no. The dashboard updates the full-distribution comparison each month as new administrative data arrives, allowing differential employment growth by AI exposure to be tracked over time. We also show that when we compare young workers by complete occupation quintiles of exposure, the relative decline of the most exposed quintile is estimated as an imprecise zero. |
| Keywords: | Artificial intelligence, labor market, employment, AI exposure, Norway |
| JEL: | J23 O33 J21 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26179 |
| By: | Sydnee Caldwell; Arindrajit Dube; Suresh Naidu |
| Abstract: | The literature on imperfect competition in labor markets has expanded rapidly in recent years. This article provides a guide to the field, focusing on the firm-specific ("residual") labor supply elasticity as the definition of a firm's labor market power. We present a general framework showing how this elasticity nests the three widely studied sources of monopsony power: search frictions, preference heterogeneity, and employer concentration. We summarize the empirical estimates of the elasticity of labor supply, highlighting sources of possible heterogeneity. We emphasize that it is difficult to infer elasticities from markdowns (and vice versa) due to the diversity of firm wage-setting practices, illustrating this point using the interaction between monopsony and efficiency wages. We discuss how policy issues in antitrust, labor market regulation, immigration, and macroeconomics interact with monopsony and conclude by listing several areas for future research. |
| JEL: | J3 J30 J42 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35608 |
| By: | Adolfo Jose Montesa (School of Economics, University of the Philippines Diliman); Vincent Ramos (School of Economics, University of the Philippines Diliman & Heidelberg University); Judy Padillon (School of Economics, University of the Philippines Diliman); Carlos Harry De Taza (School of Economics, University of the Philippines Diliman); Edgar Suguitan (School of Economics, University of the Philippines Diliman); Rexian Irlandez (School of Economics, University of the Philippines Diliman) |
| Abstract: | Since 1989, minimum wages in the Philippines have been set by regional tripartite wage boards, producing a patchwork of statutory floors whose levels, timing, and bite vary across the country. This article presents novel descriptive patterns of minimum wages, price levels, and employment using pooled Labor Force Survey microdata and the Occupational Wages Survey. We foreground three key findings. First, the real value of the minimum wage has been eroded by inflation since 1989 across all regions except NCR. Second, the minimum wage has a high bite of up to 1.2 times the median wage of the covered sector. This arguably reflects both a highly compressed wage distribution and the presence of exemption channels for smaller enterprises. Finally, in quarters succeeding wage orders, we find a reallocation pattern to wage bins just above the new wage floor, with no conclusive evidence of any immediate large-scale “displacement†of employment. Reflecting on these patterns, we lay out why unbiased estimates of employment effects remain challenging in the Philippine context and how a more holistic analysis of wage setting is complicated by the lack of transparency in and predictability of the existing wage-setting regime. We close with proposals for the path forward. |
| Keywords: | minimum wages; stacked event-study design; reallocation; Philippines |
| JEL: | J31 J08 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:phs:dpaper:202608 |
| By: | Hector Blanco; Lorenzo Neri |
| Abstract: | We study how neighborhood change shapes local business demographics and employment. We use the regeneration of London public housing into mixed-income housing as a natural experiment that led to a large influx of more affluent households. In a difference-in-differences design comparing nearby businesses to those located farther away, we find that regenerations shift business composition – in both counts and employment – away from small local shops and toward larger general retail establishments and dining services that cater to the new residents. While we find no effect on total local employment on average, employment does increase in the areas most disadvantaged at baseline, suggesting that neighborhood change can expand local employment opportunities in these areas. |
| Keywords: | mixed-income housing, gentrification, businesses, employment |
| JEL: | E24 I38 R12 R38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12891 |
| By: | Lukas Delgado-Prieto; Manudeep Bhuller; Linnea Lorentzen; Santiago Hermo |
| Abstract: | This paper investigates how institutional wage-setting constraints, such as a national minimum wage or collectively bargained wages, affect firm responses to demand shocks. We develop a framework to interpret heterogeneous shock responses that depend on the constraints firms face, and provide empirical evidence on the relevance of these constraints in shaping firm behavior across three countries with different institutional settings: Portugal, Norway, and Colombia. We discuss the implications of our findings for conventional measures of employer wage-setting power and rent-sharing. |
| Keywords: | Demand Shocks, Wage Constraints, Firm Heterogeneity, Rent-Sharing, Monopsony Power, Minimum Wages, Wage Floors, Collective Bargaining. |
| JEL: | D22 J31 J42 J51 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26180 |