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on Labour Economics |
| By: | Christopher Campos (University of Chicago Booth School of Business); Pablo Muñoz (Universidad de Chile, Department of Economics); Alonso Bucarey; Dante Contreras (Universidad de Chile, Department of Economics) |
| Abstract: | This paper studies how college major choices shape earnings and fertility outcomes. Using administrative data that link students’ preferences, random assignment to majors, and post-college outcomes, we estimate the causal pecuniary and nonpecuniary returns to different fields of study. We document substantial heterogeneity in these returns across majors and show that such variation helps explain gender gaps in labor market outcomes: women place greater weight on balancing career and family in their major choices, and these preference differences account for about 30% of the gender earnings gap among college graduates. Last, we use our causal estimates to evaluate the effects of counterfactual assignment rules that target representation gaps in settings with centralized assignment systems. We find that gender quotas in high-return fields can significantly reduce representation and earnings gaps with minimal impacts on efficiency and aggregate fertility. |
| Keywords: | preferences, returns to majors, gender gaps, centralized assignment |
| JEL: | I24 I26 J01 J16 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-19 |
| By: | Dohmen, Thomas (University of Bonn and Maastricht University); Golsteyn, Bart (Maastricht University); Grönqvist, Hans (Research Institute of Industrial Economics (IFN)); Hertegård, Edvin (SOFI, Stockholm University); Pfann, Gerard (Maastricht University and University of Amsterdam) |
| Abstract: | This study examines how parenting styles predict children’s lifetime outcomes. Using a Swedish dataset which combines rich survey information on parenting styles with administrative records tracking children over five decades, we find that authoritarian parenting is negatively associated with children’s long-term success, especially regarding their educational attainment. The results for other parenting styles are more mixed. Authoritarian parenting remains a robust predictor of adverse outcomes even when accounting for ability and family background. We identify children’s knowledge accumulation and parental educational expectations as key mechanisms explaining these results. |
| Keywords: | Child Rearing; Human Capital; Skill Formation |
| JEL: | I24 J13 J24 R20 |
| Date: | 2026–01–21 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1551 |
| By: | Natalia Khorunzhina (Institute for Fiscal Studies); Jesse Wedewer (Duke University); Runling Wu (Duke University) |
| Date: | 2026–01–21 |
| URL: | https://d.repec.org/n?u=RePEc:ifs:ifsewp:26/09 |
| By: | Cavallo, Mariagrazia; Dhuey, Elizabeth; Fumarco, Luca; Halewyck, Levi; ter Meulen, Simon |
| Abstract: | This article reviews the growing literature on age at school entry (ASE) and its effects across the life course. ASE affects a wide range of outcomes, including education, labor-market performance, health, social relationships, and family formation. We synthesize the evidence using a conceptual framework that distinguishes four empirically intertwined ASE components: starting age, age at outcome, relative age, and time in school. While ASE effects are often substantial and persistent, many studies estimate bundled impacts without isolating specific components. A central lesson from the literature is that most estimated effects reflect bundled timing and institutional mechanisms rather than isolated maturity advantages, with interpretation depending on outcome construction and empirical design. We conclude by highlighting key gaps, particularly around relative age and long-run outcomes, and directions for future research. |
| Keywords: | age at school entry, starting age, age at outcome, relative age, time in school, institutional mechanisms, quasi-experimental methods |
| JEL: | I12 I21 I24 I31 J12 J13 J24 K42 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1707 |
| By: | Ester Faia; Benjamin Lochner; Benjamin Schoefer |
| Abstract: | This paper presents the first direct test of two interlinked predictions at the core of the monopsony theory of the labor market: (i) that firms exploit wage-setting power by marking down wages below the marginal revenue product of labor, and (ii) that exogenous wage constraints, if binding, eliminate markdowns. Our research design revisits the 2015 introduction of a high minimum wage in Germany. Drawing on a monopsony model, we derive an empirically tractable difference-in-differences specification that provides a quantitative benchmark for the firm-level markdown response. Our main result is that empirical markdowns respond only 0–25% as much as the monopsony model would have predicted. Hence, at least for the labor market segment we study, (i) markdowns largely reflect other distortions than monopsony, (ii) markdowns are mismeasured, (iii) minimum wages induce widespread labor shortages, or (iv) the standard monopsony model does not provide a full, realistic account of the labor market. |
| JEL: | E0 J0 L0 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34699 |
| By: | Li, Shurui (Department of Economics, Umeå University) |
| Abstract: | This paper examines how fertility events contribute to the gender pay gap in a framework that integrates a life-cycle model with a search and matching model featuring endogenous job matching and wage bargaining. The model represents four fertility-related life-cycle stages, each of which is associated with distinct labor market behaviors and constraints. This paper highlights the role of first-birth timing, parental leave, and job amenity preferences in shaping gender gaps in human capital accumulation and career trajectories. Counterfactual simulations show that delaying the first birth and shortening parental leave substantially improve women’s trajectories of wages and promotions. Equalizing amenity preferences between genders, though not efficiency-enhancing, significantly raises women’s representation in high-paying jobs and promotes greater structural equality in the labor market. The framework provides a structural lens to assess how demographic shocks interact with search frictions and amenity preferences to produce enduring gender gaps in the labor market. |
| Keywords: | parental leave; gender gap; job amenity; human capital; search and matching |
| JEL: | D91 J13 J16 J24 J64 |
| Date: | 2026–01–19 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:umnees:1042 |
| By: | Silvia Matalone; Michele Belloni; Ludovico Carrino; Elena Meschi |
| Abstract: | This paper estimates the causal effect of job quality on the physical and mental health of older European workers. We combine longitudinal data from the Survey of Health, Ageing and Retirement in Europe (SHARE) with occupation- and country-level job-quality measures from the European Working Conditions Survey (EWCS) for 14 European countries. To address endogenous occupational sorting, we focus on workers who remain within the same 3-digit ISCO occupation across waves, and estimate individual fixed-effects models that exploit exogenous within-occupation changes in working conditions over time. We find that deteriorations in job quality significantly worsen health outcomes. In particular, higher work intensity, poorer working time quality, and weaker job prospects reduce mental health and selected physical health outcomes. Pronounced gender heterogeneity emerges: women’s mental health is more sensitive to changes in work intensity and working time quality, while men’s health is more consistently affected by job discretion, including cardiovascular risk. Institutional context further moderates these effects, with smaller health penalties in countries with stronger healthcare capacity, stricter employment protection, and more comprehensive occupational health and safety regulation. Overall, the findings highlight the role of labour market conditions as causal determinants of health and the importance of integrated policy responses in ageing societies. |
| Keywords: | Working conditions, physical and mental health, healthcare systems and institutions |
| JEL: | I1 J01 J28 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:mib:wpaper:567 |
| By: | Egshiglen Batbayar (University of Bonn); Christoph Breunig (University of Bonn); Peter Haan (DIW Berlin , FU Berlin); Boryana Ilieva (DIW Berlin, European Central Bank) |
| Abstract: | We propose a new approach to estimate selection-corrected quantiles of the gender wage gap. Our method employs instrumental variables that explain variation in the latent variable but, conditional on the latent process, do not directly affect selection. We provide semiparametric identification of the quantile parameters without imposing parametric restrictions on the selection probability, derive the asymptotic distribution of the proposed estimator based on constrained selection probability weighting, and demonstrate how the approach applies to the Roy model of labor supply. Using German administrative data, we analyze the distribution of the gender gap in full-time earnings. We find pronounced positive selection among women at the lower end, especially those with less education, which widens the gender gap in this segment, and strong positive selection among highly educated men at the top, which narrows the gender wage gap at upper quantiles. |
| Keywords: | quantile regression; sample selection; roy model; rank invariance; semiparametric inference; gender wage gap; wage inequality; |
| JEL: | C14 C31 C36 J16 J21 J31 |
| Date: | 2026–01–09 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:560 |
| By: | David Autor; B. N. Kausik |
| Abstract: | A central socioeconomic concern about Artificial Intelligence is that it will lower wages by depressing the labor share - the fraction of economic output paid to labor. We show that declining labor share is more likely to raise wages. In a competitive economy with constant returns to scale, we prove that the wage-maximizing labor share depends only on the capital-to-labor ratio, implying a non-monotonic relationship between labor share and wages. When labor share exceeds this wage-maximizing level, further automation increases wages even while reducing labor's output share. Using data from the United States and eleven other industrialized countries, we estimate that labor share is too high in all twelve, implying that further automation should raise wages. Moreover, we find that falling labor share accounted for 16\% of U.S. real wage growth between 1954 and 2019. These wage gains notwithstanding, automation-driven shifts in labor share are likely to pose significant social and political challenges. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.06343 |
| By: | Francisco J. Cabrera-Hernández; Andrew Dustan; Daniel Osuna Gomez; María Padilla-Romo |
| Abstract: | We estimate the long-run effects of marginal admission to elite public high schools on students' labor supply in the context of Mexico City's centralized high school admission system. Using a regression discontinuity approach, we compare students whose placement exam scores are just above and just below the elite admission threshold. We find that five and ten years after the admission exam, marginally admitted students are less likely to be employed in the formal private sector, and, if employed, they earn lower wages. However, these employment and wage gaps close after 15 years. Moreover, we find that marginal admission to elite high schools leads to delayed entry into the formal labor market, and, at least in the short run, students in elite high schools seem to sort into lower-productivity firms and industries. |
| JEL: | I25 I26 J24 O17 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34706 |
| By: | Brian Marein (Wake Forest University Department of Economics) |
| Abstract: | Recent studies document persistent racial wealth inequality in the United States, often attributing modern disparities to historical differences. But inferring the determinants of long-run racial wealth inequality with aggregated data is complicated by the fact that 30 million European immigrants arrived in the late 19th and early 20th centuries with no direct claim to the wealth accumulated by earlier generations of Americans. Drawing on government data, I find that immigrants arrived with few assets, far behind the native-born population. Yet survey evidence reveals that by the late 20th century, their descendants achieved wealth parity with earlier arriving white ethnic groups. Using a stylized model, I show that this rapid convergence can be explained mostly by immigrants' income growth and plausibly higher savings rates. These findings indicate that initial differences in wealth matter less for long-run outcomes than previously suggested. The results also underscore the central role of race in shaping inequality, consistent with faster economic convergence within than across racial groups. |
| Keywords: | wealth inequality; intergenerational wealth transmission; immigration |
| JEL: | D31 J15 N11 N12 |
| Date: | 2026–01–22 |
| URL: | https://d.repec.org/n?u=RePEc:ris:wfuewp:022126 |