nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2015‒03‒27
nine papers chosen by
Joseph Marchand
University of Alberta

  1. Labor Market Polarization Over the Business Cycle By Christopher L. Foote; Richard W. Ryan
  2. Why are higher skilled workers more mobile geographically?: the role of the job surplus By Michael Amior
  3. The Effect of Cancer on the Employment of Older Males: Attenuating Selection Bias using a High Risk Sample By David Candon
  4. Gender and dynamic agency: theory and evidence on the compensation of top executives By Albanesi, Stefania; Olivetti, Claudia; Prados, María José
  5. Who benefits from state corporate tax cuts? A local labour markets approach with heterogeneous firms By Juan Carlos Suárez Serrato; Owen Zidar
  6. Occupational structure in the Polish territories at the turn of the 20th (1895-1900) century By Piotr Koryś; Maciej Tymiński
  7. IV Quantile Regression for Group-level Treatments, with an Application to the Distributional Effects of Trade By Denis Chetverikov; Bradley Larsen; Christopher Palmer
  8. Ten Facts You Need To Know About Hiring By Samuel Mühlemann; Mirjam Strupler Leiser
  9. The impact of Athena SWAN in UK medical schools By Ian Gregory-Smith

  1. By: Christopher L. Foote; Richard W. Ryan
    Abstract: Job losses during the Great Recession were concentrated among middle-skill workers, the same group that over the long run has suffered the most from automation and international trade. How might long-run occupational polarization be related to cyclical changes in middle-skill employment? We find that middle-skill occupations have traditionally been more cyclical than other occupations, in part because of the volatile industries that tend to employ middle-skill workers. Unemployed middle-skill workers also appear to have few attractive or feasible employment alternatives outside of their skill class, and the drop in male participation rates during the past several decades can be explained in part by an erosion of middle-skill job opportunities. Taken together, these results imply that a formal labor market model relating polarization to middle-skill employment fluctuations should include industry-level employment effects and a labor force participation margin as well as pure job-search considerations. The results thus provide encouragement for a growing literature that integrates "macro-labor" search models with "macro-macro" models featuring differential industry cyclicalities and convex preferences over consumption and leisure.
    JEL: E24 J22 J23 J24 J62 J63 J64
    Date: 2015–03
  2. By: Michael Amior
    Abstract: The skill gap in geographical mobility is entirely driven by workers who report moving for a new job. A natural explanation lies in the large expected surplus accruing to skilled job matches. Just as large surpluses ease the frictions which impede job search in general, they also help overcome those frictions (specifically moving costs) which plague cross-city matching in particular. I reject the alternative hypothesis that mobility differences are driven by variation in the moving costs themselves, based on PSID evidence on self-reported willingness to move. Evidence on wage processes also supports my claims.
    Keywords: internal migration; job search; education; skills
    JEL: J24 J61 J64
    Date: 2015–03
  3. By: David Candon (University College Dublin)
    Abstract: Estimating the unbiased effect of health shocks on employment is an important topic in both health and labour economics. This is particularly relevant to cancer, where improvements in screening and treatments have led to increases in survival for nearly all types of cancer. In order to address the issue of selection bias, I estimate the effect of cancer on employment for a high-risk cancer sample, male workers over the age of 65, thus attenuating the impact of many cancer risk factors. This identification strategy balances the covariates between the cancer and the non-cancer groups in numerous tests. Respondents who are diagnosed with cancer are 13.2 percentage points less likely to work than their non-cancer counterparts. The results also appear insensitive to omitted confounders.
    Keywords: Cancer; Employment; Labour market
    JEL: I10 I18 J21 J26
    Date: 2015–03–20
  4. By: Albanesi, Stefania (Federal Reserve Bank of New York); Olivetti, Claudia; Prados, María José
    Abstract: We document three new facts about gender differences in executive compensation. First, female executives receive a lower share of incentive pay in total compensation relative to males. This difference accounts for 93 percent of the gender gap in total pay. Second, the compensation of female executives displays lower pay-performance sensitivity. A $1 million increase in firm value generates a $17,150 increase in firm-specific wealth for male executives and a $1,670 increase for females. Third, female executives are more exposed to bad firm performance and less exposed to good firm performance relative to male executives. We find no link between firm performance and the gender of top executives. We discuss evidence on differences in preferences and the cost of managerial effort by gender and examine the resulting predictions for the structure of compensation. We consider two paradigms for the pay-setting process, the efficient contracting model and the “managerial power" or skimming view. The efficient contracting model can explain the first two facts. Only the skimming view is consistent with the third fact. This suggests that the gender differentials in executive compensation may be inefficient.
    Keywords: gender differences in executive pay; incentive pay; pay-performance sensitivity
    JEL: G3 J16 J31 J33 M12
    Date: 2015–03–01
  5. By: Juan Carlos Suárez Serrato (Duke University); Owen Zidar (The University of Chicago,Booth School of Business)
    Abstract: This paper estimates the incidence of state corporate taxes on the welfare of workers, landowners, and firm owners using variation in state corporate tax rates and apportionment rules. We develop a spatial equilibrium model with imperfectly mobile firms and workers. Firm owners may earn profits and be inframarginal in their location choices due to differences in location-specific productivities. We use the reduced-form effects of tax changes to identify and estimate incidence as well as the structural parameters governing these impacts. In contrast to standard open economy models, firm owners bear roughly 40% of the incidence, while workers and landowners bear 30-35% and 25-30%, respectively.
    JEL: H22 H25 H32 H71 R30 R23 R58 J32 F22 F23
    Date: 2015
  6. By: Piotr Koryś (Faculty of Economic Sciences, University of Warsaw); Maciej Tymiński (Faculty of Economic Sciences, University of Warsaw)
    Abstract: Authors present the occupational structure of Polish lands at the turn of 20th century on the basis of censuses carried out in Germany (1895), Russia (1897) and Austria (1900). Our research provides corrections to the errors of the censuses, to a considerable extent. As a result, we present an occupational structure that allows a more complete the picture of the economic situation in the Polish territories at the end of the 19th century. The conducted research has created an opportunity to partially verify the assumption, which is common in Polish economical historiography, that a technological turning point and an industrial revolution occurred in Polish lands already in the 1870s and 1880s. Revised census data demonstrated that the extent of industrialization in Polish lands was still very limited in 1900.
    Keywords: economic history, Polish lands, occupational structure, industrialization, backwardness
    JEL: N33 J22 J43 J44
    Date: 2015
  7. By: Denis Chetverikov; Bradley Larsen; Christopher Palmer
    Abstract: We present a methodology for estimating the distributional effects of an endogenous treatment that varies at the group level when there are group-level unobservables, a quantile extension of Hausman and Taylor (1981). Because of the presence of group-level unobservables, standard quantile regression techniques are inconsistent in our setting even if the treatment is independent of unobservables. In contrast, our estimation technique is consistent as well as computationally simple, consisting of group-by-group quantile regression followed by two-stage least squares. Using the Bahadur representation of quantile estimators, we derive weak conditions on the growth of the number of observations per group that are sufficient for consistency and asymptotic zero-mean normality of our estimator. As in Hausman and Taylor (1981), micro-level covariates can be used as internal instruments for the endogenous group-level treatment if they satisfy relevance and exogeneity conditions. An empirical application indicates that low-wage earners in the US from 1990--2007 were significantly more affected by increased Chinese import competition than high-wage earners. Our approach applies to a broad range of settings in labor, industrial organization, trade, public finance, and other applied fields.
    JEL: C21 C31 C33 C36 F16 J30
    Date: 2015–03
  8. By: Samuel Mühlemann (University of Munich & IZA Bonn); Mirjam Strupler Leiser (University of Bern)
    Abstract: This paper provides new empirical evidence on the magnitude and the determinants of a firm's costs to fill a vacancy. We establish empirical facts about hiring costs based on representative establishment-level data from Switzerland. In 2009, average costs to fill a vacancy for a skilled worker in Switzerland amount about 16 weeks of wage payments. The main components of vacancy costs are initially low productivity and formal instruction of a new hire (53 percent), disruption costs that arise due to informal instruction of new hires (26 percent) and search costs (21 percent). Furthermore, hiring costs are associated with labor market tightness: a one standard deviation increase in the growth rate of the vacancy-unemployment ratio is associated with a 11 percent increase in average hiring costs for small firms.
    Keywords: hiring costs, search costs, adaptation costs, disruption costs, vacancy-unemployment ratio
    JEL: J32 J63 M53
    Date: 2015–03
  9. By: Ian Gregory-Smith (Department of Economics, University of Sheffield)
    Abstract: This paper examines the impact of the Athena SWAN initiative on female careers in UK medical schools by exploiting two natural experiments. The first is the introduction of Athena SWAN charter in 2005, whereby twelve UK institutions selected into the charter. The second is the announcement in 2011 by the NIHR, to only shortlist medical schools with a ‘silver’ Athena SWAN award for certain research grants going forward. This second change potentially impacts schools that are further away from silver status than those that were already close in 2011. While there is a marked improvement of women succeeding in medical schools during the sample period, early Athena SWAN adopters have not increased female participation by more than other schools whose institution signed up later. In addition, tying funding to Athena SWAN silver status has yet to have an impact on female careers, although medical schools have invested in efforts to achieve silver status.
    Keywords: child poverty; Athena SWAN; Gender; Labour
    JEL: J16 J78 I18
    Date: 2015–03

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