nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2014‒10‒22
eleven papers chosen by
Joseph Marchand
University of Alberta

  1. "State Minimum Wage Changes and the Employment of Low-Wage Workers: New Evidence from 2011-2014" By Saul D. Hoffman; Wai-Kit (Ricky) Shum
  2. Heterogeneous Couples, Household Interactions and Labor Supply Elasticities of Married Women By Kaya, Ezgi
  3. Natural Selection: Earnings and Employment in Foreign-owned Firms By David C. Maré; Lynda Sanderson; Richard Fabling
  5. On the Robustness of Minimum Wage Effects: Geographically-Disparate Trends and Job Growth Equations By John T. Addison; McKinley L. Blackburn; Chad D. Cotti
  6. Change and Persistence in the Economic Status of Neighborhoods and Cities By Stuart S. Rosenthal; Stephen L. Ross
  7. Can selective immigration policies reduce migrants' quality? By Simone BERTOLI; Vianney Dequiedt; Yves Zenou
  9. Agglomeration and innovation By Carlino, Gerald A.; Kerr, William R.
  10. Trade, Migration, and the Place Premium: Mexico and the United States By Davide Gandolfi; Timothy Halliday; Raymond Robertson
  11. Housework share between partners: Experimental evidence on gender identity By Katrin Auspurg; Maria Iacovou; Cheti Nicoletti

  1. By: Saul D. Hoffman (Department of Economics,University of Delaware); Wai-Kit (Ricky) Shum (Department of Economics,University of Delaware)
    Abstract: Although the Federal minimum wage has been constant since July 2009, many states have increased their own minimum wages since then. We use those increases to compare employment changes across the two groups of states, using a variety of difference methods. Our data come from the Current Population Survey for March through May of 2011 and 2014. We find no evidence that these minimum wage increases had an adverse effect on the employment of two groups heavily represented among minimum wage workers—teens not in college and adults with less than a high school education. We speculate that the findings may reflect a small decrease in unfilled job slots and in the number of workers engaged in full-time job search, so that the observed wage-employment combination lies closer to the maximum employment potentially available at that wage.
    Keywords: Minimum Wage
    JEL: J08 J21 J38
    Date: 2014
  2. By: Kaya, Ezgi (Cardiff Business School)
    Abstract: This paper estimates labor supply elasticities of married men and women allowing for heterogeneity among couples (in educational attainments of husbands and wives) and explicitly modeling how household members interact and make labor supply decisions. We find that the labor supply decisions of husbands and wives are interdependent unless both spouses are highly educated (college or above). Couples with high education, the labor supply decisions of husband and wife are jointly determined only if they have pre-school age children. We also find that labor supply elasticities differ greatly between households. The participation own-wage elasticity is largest (0.77) for women with low education married to men with low education, and smallest (0.03) for women with high education married to men with low education. The participation own-wage elasticities for women with low education married to highly educated men and for women with high education married to highly educated men are similar and fall between these two extremes (about 0.30 for each). For all types of couples, participation non-labor family income elasticity is small. We also find that participation cross-wage elasticities for married women are relatively small (less than -0.05) if they are married to men with low education and larger (-0.37) if they are married to highly educated men. Allowing for heterogeneity across couples yields an overall participation wage elasticity of 0.56, a cross wage elasticity of -0.13 and an income elasticity of -0.006 for married women. The analysis in this paper provides a natural framework to study how changes in educational attainments and household structure affect aggregate labor supply elasticities.
    Keywords: Labor supply elasticity; household labor supply; household interactions; educational homogamy
    JEL: J22 D10 C30
    Date: 2014–10
  3. By: David C. Maré (Motu Economic and Public Policy Research and the University of Waikato); Lynda Sanderson (The Treasury); Richard Fabling (Motu Economic and Public Policy Research)
    Abstract: This paper examines remuneration and labour mobility patterns among workers in foreign-owned firms operating in New Zealand. By tracking workers as they move across jobs in different types of firms, we document the extent of the “foreign wage premium”, distinguishing between compositional factors (e.g., differences in industry and employment composition across foreign and domestic firms) and remaining differences in wage levels and growth rates. We find that much of the average earnings gap between foreign- and domestically-owned firms is due to compositional factors -- foreign firms tend to be larger and employ workers who would have received relatively high wages regardless of where they worked. However, even among apparently similar workers and firms, we find a two to four percent earnings gap between workers in domestic and foreign-owned firms. This gap is primarily associated with a wage increase of around two percent on moving from a domestic to a foreign firm, augmented by higher wage growth among foreign-owned firms. However, these premia appear to be specific to foreign-firm employment, as workers who return to domestically-owned firms do not appear to retain the additional earnings associated with foreign-firm employment into their subsequent jobs. We then consider whether foreign-owned firms source workers differently from other New Zealand firms and whether there are systematic differences in the destinations of departing employees by firm ownership. Although foreign-owned firms do not appear to preferentially hire recent immigrants, employees of foreign owned firms are more geographically mobile within New Zealand than comparable workers in domestically owned firms, and are more likely to emigrate within a year of leaving their job.
    Keywords: Foreign Direct Investment (FDI); Earnings; Labour mobility
    JEL: D22 F23 J31
    Date: 2014–10
  4. By: Henry R. Hyatt; James R. Spletzer
    Abstract: Statistics on hires, separations, and job tenure have historically been tabulated from survey data. In recent years, these statistics are increasingly being produced from administrative records. In this paper, we discuss the calculation of hires, separations, and job tenure from quarterly administrative records, and we present these labor market statistics calculated from the U.S. Census Bureau’s Longitudinal Employer-Household Dynamics (LEHD) program. We pay special attention to a phenomenon that survey data is ill-suited to analyze: single quarter jobs, which we define as jobs in which the hire and separation occur in the same quarter. We explore the trends of hires, separations, tenure, and single quarter jobs in the United States for the years 1998-2010. We discuss issues associated with creating these statistics from quarterly earnings records, and we identify the challenges that remain.
    Keywords: hires; separations; tenure; administrative records
    Date: 2014–09
  5. By: John T. Addison (University of South Carolina, Durham University, GEMF-University of Coimbra, and IZA Bonn); McKinley L. Blackburn (University of South Carolina); Chad D. Cotti (University of Wisconsin-Oshkosh and University of Connecticut)
    Abstract: Recent attempts to incorporate spatial heterogeneity in minimum-wage employment models have been attacked for using overly simplistic trend controls, and for neglecting the potential impact on employment growth. We investigate whether such considerations call into question our earlier findings of statistically insignificant employment effects for the restaurant-and-bar sector. We find that a focus on employment levels is still appropriate, and nonlinear trend controls do not dislodge our limited support for the existence of minimum-wage effects.
    Keywords: minimum wages, employment, employment change, spatial controls.
    JEL: J23 J38
    Date: 2014–09
  6. By: Stuart S. Rosenthal (Syracuse University); Stephen L. Ross (University of Connecticut)
    Abstract: This paper reviews recent literature that considers and explains the tendency for neighborhood and city-level economic status to rise and fall. A central message is that although many locations exhibit extreme persistence in economic status, change in economic status as measured by various indicators of per capita income is common. At the neighborhood level, we begin with a set of stylized facts, and then follow with discussion of static and dynamic drivers of neighborhood economic status. This is mirrored at the metropolitan level. Durable but slowly decaying housing, transportation infrastructure, and self-reinforcing spillovers, all influence local income dynamics, as do enduring natural advantages, amenities and government policy. Three recurring themes run throughout the paper: (i) Long sweeps of time are typically necessary to appreciate that change in economic status is common; (ii) history matters; and (iii) a combination of static and dynamic forces ensure that income dynamics can and do differ dramatically across locations but in ways that can be understood.
    Keywords: Neighborhood income dynamics; city income dynamics; durable housing; transportation infrastructure; spillovers; persistence, path dependence, and cycles.
    JEL: R0 R1 R2 R3 R4
    Date: 2014–09
  7. By: Simone BERTOLI (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Vianney Dequiedt (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Yves Zenou (Stockholm University - Stockholm University - Stockholm University)
    Abstract: Destination countries have been resorting to selective immigration policies to improve migrants' quality. We propose a model that analyzes the effects of selective immigration policies on migrants' quality, measured by their wages at destination. Screening potential migrants on the basis of observable characteristics also influences their self-selection on unobservables that influences their wages. We show that the prevailing pattern of selection on unobservables influences the effect of an increase in selectivity, which can reduce migrants' quality when migrants are positively self-selected.
    Keywords: selective policies; self-selection; migrants' quality
    Date: 2014–09–23
  8. By: John M. Abowd; Kevin L. McKinney
    Abstract: We use the bipartite graph representation of longitudinally linked em-ployer-employee data, and the associated projections onto the employer and em-ployee nodes, respectively, to characterize the set of potential statistical summar-ies that the trusted custodian might produce. We consider noise infusion as the primary confidentiality protection method. We show that a relatively straightfor-ward extension of the dynamic noise-infusion method used in the U.S. Census Bureau’s Quarterly Workforce Indicators can be adapted to provide the same confidentiality guarantees for the graph-based statistics: all inputs have been modified by a minimum percentage deviation (i.e., no actual respondent data are used) and, as the number of entities contributing to a particular statistic increases, the accuracy of that statistic approaches the unprotected value. Our method also ensures that the protected statistics will be identical in all releases based on the same inputs.
    Date: 2014–09
  9. By: Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Kerr, William R. (Harvard University, Bank of Finland, and NBER)
    Abstract: Draft chapter for the forthcoming Handbook of Regional and Urban Economics, Vols. 5A and 5B This paper reviews academic research on the connections between agglomeration and innovation. The authors first describe the conceptual distinctions between invention and innovation. They then discuss how these factors are frequently measured in the data and note some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and the authors discuss important findings from the literature about why this is so. The authors highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and they discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance).
    Keywords: Agglomeration; Clusters; Innovation; Invention; Entrepreneurship
    JEL: J2 J6 L1 L2 L6 O3 R1 R3
    Date: 2014–08–01
  10. By: Davide Gandolfi (Macalester College); Timothy Halliday (University of Hawaii at Manoa and UH Economic Research Organization); Raymond Robertson (Macalester College)
    Abstract: Large wage differences between countries ("place premiums") are well documented. Neoclassical trade theory suggests that factor price convergence should follow increased commercial integration. Rising commercial integration, foreign direct investment, and migration followed the 1994 North American Free Trade Agreement between the United States and Mexico. This paper evaluates the degree of wage convergence between Mexico and the United States between 1988 and 2011. We match survey and census data from Mexico and the US to estimate the change in wage differentials for observationally identical workers over time. We find no evidence of long-run wage convergence among cohorts characterized by low migration propensities although this was, in part, due to large macroeconomic shocks. On the other hand, we do find some evidence of convergence for workers with high migration propensities. Finally, we find evidence of convergence in the border of Mexico vis-à-vis its interior in the 1990s but this was reversed in the 2000s. We conclude that the place premium is largely stable, even following large reductions to trade and investment barriers and high migration.
    Keywords: Migration, Labor-market Integration, Factor Price Equalization
    JEL: F15 F16 J31 F22
    Date: 2014–09
  11. By: Katrin Auspurg; Maria Iacovou; Cheti Nicoletti
    Abstract: Using an experimental design, we investigate the reasons behind the gendered division of housework within couples. In particular, we assess whether the fact that women do more housework may beexplained by differences in preferences deriving from differences in gender identity between men and women. We find little evidence of any systematic gender differences in the preference for housework, suggesting that the reasons for the gendered division of housework lie elsewhere.
    Keywords: Gender, housework, unpaid work, division of labor, experiment
    JEL: J16 J22 C35
    Date: 2014–10

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