nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2015‒05‒09
nine papers chosen by
Joseph Marchand
University of Alberta

  1. Career Technical Education and Labor Market Outcomes: Evidence from California Community Colleges By Ann Huff Stevens; Michal Kurlaender; Michel Grosz
  2. Military Retention Incentives: Evidence from the Air Force Selective Reenlistment Bonus By Justin Joffrion; Nathan Wozny
  3. Good Firms, Worker Flows and Local Productivity By Michel Serafinelli
  4. Slack Time and Innovation By Ajay Agrawal; Christian Catalini; Avi Goldfarb
  5. The effect of schooling vouchers on higher education enrollment and completion of teachers: A regression discontinuity analysis By Marc van der Steeg; Roel van Elk
  6. Does Exposure to Economics Bring New Majors to the Field? Evidence from a natural Experiment. By Hans Fricke; Jeffrey Grogger; Andreas Steinmayr
  7. Revisiting the Role of Home Production in Life-Cycle Labor Supply By Faberman, R. Jason
  8. Productivity, Safety, and Regulation in Coal Mining: Evidence from Disasters and Fatalities By Gautam Gowrisankaran; Charles He; Eric A. Lutz; Jefferey L. Burgess
  9. Measuring Income and Wealth at the Top Using Administrative and Survey Data By Bricker, Jesse; Henriques, Alice M.; Krimmel, Jacob; Sabelhaus, John

  1. By: Ann Huff Stevens; Michal Kurlaender; Michel Grosz
    Abstract: This paper estimates the earnings returns to vocational, or career technical, education programs in the nation’s largest community college system. While career technical education (CTE) programs have often been mentioned as an attractive alternative to four-year colleges for some students, very little systematic evidence exists on the returns to specific vocational certificates and degrees. Using administrative data covering the entire California Community College system and linked administrative earnings records, this study estimates returns to CTE education. We use rich pre-enrollment earnings data and estimation approaches including individual fixed effects and individual trends, and find average returns to CTE certificate and degrees that range from 12 to 23 percent. The largest returns are for programs in the healthcare sector; among non-health related CTE programs estimated returns range from five to ten percent.
    JEL: I24
    Date: 2015–04
  2. By: Justin Joffrion (U.S. Air Force Academy); Nathan Wozny (U.S. Air Force Academy)
    Abstract: The limited lateral entry and rigid pay structure for U.S. military personnel present challenges in retaining skilled individuals who have attractive options in the civilian labor market. One tool the services use to address this challenge is the Selective Reenlistment Bonus (SRB), which offers eligible personnel with particular skills a substantial cash bonus upon reenlistment. However, the sequential nature of the bonus offer and reenlistment process limits the ability to adjust manpower quickly, raising interest in research that estimates the effect of the SRB on retention. While this literature has acknowledged challenges including potential endogeneity of bonus levels, attrition, and reenlistment eligibility, many studies do not address these concerns adequately. This paper uses a comprehensive panel data set on Air Force enlisted personnel to estimate the effect of the SRB on retention rates. We exploit variation in bonus levels within skill groups, control for civilian labor market conditions, and model reenlistment eligibility to avoid common assumptions that lead to biased impact estimates. We find substantial heterogeneity in the effect of the bonus, with the largest effects on first-term service members and those whose skills have not historically received a substantial bonus. We also find evidence that the bonus affects the timing of reenlistment decisions in addition to their frequency.
    Keywords: Selective reenlistment bonus, Retention, Reenlistment, Timing effect, Labor supply
    JEL: F14 F16 J6
    Date: 2015–04
  3. By: Michel Serafinelli
    Abstract: A clear consensus has emerged that agglomeration economies are an important factor explaining why firms cluster next to each other. Yet, because of non-trivial measurement challenges, disagreement remains over the sources of these agglomeration effects. This paper is the first to present direct evidence showing how localized knowledge spillovers arise from workers changing jobs within the same local labor market. Specifically, I assess the extent to which firm-to-firm labor mobility enhances the productivity of firms located near highly productive firms. Using a unique dataset combining Social Security earnings records and balance sheet information for Veneto, a region in Italy with many successful industrial clusters, I first identify a set of highly productive firms, then show that hiring workers with experience at these firms significantly increases the productivity of other firms. To address identification threats arising from both contemporaneous and future unobservable firm-level productivity shocks correlated with hiring, I use control function methods drawn from the productivity literature and a novel instrumental variable strategy, which exploits downsizing events at highly productive firms. My findings imply that worker flows can explain around 10 percent of the productivity gains experienced by incumbent firms when new highly productive firms are added to a local labor market.
    Keywords: productivity, agglomeration economies, local knowledge spillovers, linked employer-employee data, labor mobility, instrumental variable.
    JEL: R10 D24 J31 J60
    Date: 2015–04–29
  4. By: Ajay Agrawal; Christian Catalini; Avi Goldfarb
    Abstract: The extant literature linking slack time to innovation focuses on how slack time facilitates creative activities such as ideation, experimentation, and prototype development. We turn attention to how slack time may enable activities that are less creative but still important for innovation, namely mundane, execution-oriented tasks. First, we document the main effect: a sharp rise in innovative projects posted on a major crowdfunding platform when colleges are on break. Next, we report timing and project type evidence consistent with the causal interpretation that slack time drives innovation. Finally, we present a series of results consistent with the mundane task mechanism but not with the traditional creativity-related explanations. We do not rule out the possibility that creativity benefits from slack time. Instead, we introduce the idea that mundane, execution-oriented tasks, such as those associated with launching a crowdfunding campaign (e.g., administration, planning, promotion), are an important input to innovation that may benefit significantly from slack time.
    JEL: J22 L26 O31
    Date: 2015–04
  5. By: Marc van der Steeg; Roel van Elk
    Abstract: This paper investigates the effects of education vouchers for teachers. We study effects on enrollment and completion of higher education programs, and on the retention of teachers in the education sector. We do this by exploiting a fuzzy regression discontinuity design. Read also the accompanying <a href="">Background Document</a> (only in Dutch). The discontinuity in the probability of being assigned a voucher arises due to budget constraints in the first application period. Our estimates suggest that effects of voucher assignment on both higher education enrollment and completion rates are in the order of 10 to 20 percentage points as measured five and a half years after application. Relative to a baseline enrollment rate of 77 percent and a baseline completion rate of 54 percent (i.e. of applicants that were not assigned a voucher), these effect estimates correspond to a 12 to 29 percent higher enrollment and to a 17 to 42 percent higher completion. Effects on enrollment and completion are relatively small for shorter studies (up to one year) and for teachers that had already started at the time of application. The teacher voucher crowds out both funding by schools out of their regular professional development budgets as well as financial contributions by teachers themselves. Our results suggest small positive effects of voucher assignment on retention in education as measured four years after application.
    JEL: C26 I22 H43 J24 M53
    Date: 2015–04
  6. By: Hans Fricke; Jeffrey Grogger; Andreas Steinmayr
    Abstract: This study investigates how being exposed to a field of study influences students’ major choices. We exploit a natural experiment at a Swiss university where all first-year students face largely the same curriculum before they choose a major. An important component of the first-year curriculum that varies between students involves a multi-term research paper in business, economics, or law. Due to oversubscription of business, the university assigns the field of the paper in a standardized way that is unrelated to student characteristics. We find that being assigned to write in economics raises the probability of majoring in economics by 2.7 percentage points, which amounts to 18 percent of the share of students who major in economics.
    JEL: A20 I20 I23
    Date: 2015–04
  7. By: Faberman, R. Jason (Federal Reserve Bank of Chicago)
    Abstract: This paper examines the role of home production in estimating life-cycle labor supply. I show that, consistent with previous studies, ignoring an individual’s time spent on home production when estimating the Frisch elasticity of labor supply biases its estimate downwards. I also show, however, that ignoring other ways a household can satisfy the demand for home production biases its estimate upwards. Changes in this demand over the life-cycle have an income effect on labor supply, but the effect can be mitigated through purchases in the market and through the home production of other household members. When accounting all factors related to home production, I find that the "micro" Frisch elasticity is about 0.4 and the "macro" Frisch elasticity, which accounts for extensive margin adjustments, is about 0.9. If I only account for an individual's own home production effort, I find that the "macro" elasticity is about 1.6.
    Keywords: Labor; Home production; Frisch elasticity of labor supply; life-cycle time use
    JEL: D13 D91 J22
    Date: 2015–05–03
  8. By: Gautam Gowrisankaran; Charles He; Eric A. Lutz; Jefferey L. Burgess
    Abstract: Coal mining is a dangerous occupation where safety is an important output. Fatalities and disasters may change future accident costs at or near a mine. We use this variation to understand the tradeoffs between mineral output and safety. We find that government inspections and penalties increase after fatalities and less-severe accident rates decrease by 10%. For mines in the state of a disaster, less-severe accident rates decrease by 23%, and fatalities by 68%, representing up to $2 per hour worked, with limited evidence that mineral productivity falls up to $14 per hour worked and that managers employed increases by 11%.
    JEL: D24 I18 J28 L72
    Date: 2015–04
  9. By: Bricker, Jesse (Board of Governors of the Federal Reserve System (U.S.)); Henriques, Alice M. (Board of Governors of the Federal Reserve System (U.S.)); Krimmel, Jacob (Board of Governors of the Federal Reserve System (U.S.)); Sabelhaus, John (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: Administrative tax data indicate that U.S. top income and wealth shares are substantial and increasing rapidly (Piketty and Saez 2003, Saez and Zucman 2014). A key reason for using administrative data to measure top shares is to overcome the under-representation of families at the very top that plagues most household surveys. However, using tax records alone restricts the unit of analysis for measuring economic resources, limits the concepts of income and wealth being measured, and imposes a rigid correlation between income and wealth. The Survey of Consumer Finances (SCF) solves the under-representation problem by combining administrative and survey data (Bricker et al, 2014). Administrative records are used to select the SCF sample and verify that high-end families are appropriately represented, and the survey is designed to measure comprehensive concepts of income and wealth at the family level. The SCF shows high and rising top income and wealth shares, as in the ad ministrative tax data. However, unadjusted, the levels and growth based on administrative tax data alone appear to be substantially larger. By constraining the SCF to be conceptually comparable, we reconcile the differences, and show the extent to which restrictions and rigidities needed to estimate top income and wealth shares in the administrative data bias up levels and growth rates.
    Keywords: Administrative data; survey data; top income shares; top wealth shares
    JEL: D31 D63 H20
    Date: 2015–04–28

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