nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2015‒08‒07
nine papers chosen by
Joseph Marchand
University of Alberta

  1. Weak Markets, Strong Teachers: Recession at Career Start and Teacher Effectiveness By Markus Nagler; Marc Piopiunik; Martin R. West
  2. Bargaining, Sorting, and the Gender Wage Gap: Quantifying the Impact of Firms on the Relative Pay of Women By David Card; Ana Rute Cardoso; Patrick Kline
  3. On the response of Italian wages to the unemployment rate By Alfonso Rosolia
  4. Aggregating Elasticities:\ Intensive and Extensive Margins of Female Labour Supply (4197 / 9169) By Attanasio, Orazio; Levell, Peter; Low, Hamish; Sánchez-Marcos, Virginia
  5. If You Don’t Snooze You Lose Health and Gain Weight Evidence from a Regression Discontinuity Design By Osea Giuntella; Fabrizio Mazzonna
  6. Hiring and Escalation Bias in Subjective Performance Evaluations: A Laboratory Experiment By Andrej Angelowski; Jordi Brandts; Carles Solà
  7. Benchmarking Metis Economic and Social Development By Jasmin Thomas
  8. Early Math Coursework and College Readiness: Evidence from Targeted Middle School Math Acceleration By Shaun Dougherty; Joshua Goodman; Darryl Hill; Erica Litke; Lindsay C. Page
  9. Economics of modern energy boomtowns: do oil and gas shocks differ from shocks in the rest of the economy? By Tsvetkova, Alexandra; Partridge, Mark

  1. By: Markus Nagler; Marc Piopiunik; Martin R. West
    Abstract: How do alternative job opportunities affect teacher quality? We provide the first causal evidence on this question by exploiting business cycle conditions at career start as a source of exogenous variation in the outside options of potential teachers. Unlike prior research, we directly assess teacher quality with value-added measures of impacts on student test scores, using administrative data on 33,000 teachers in Florida public schools. Consistent with a Roy model of occupational choice, teachers entering the profession during recessions are significantly more effective in raising student test scores. Results are supported by placebo tests and not driven by differential attrition.
    JEL: E32 H75 I20 J24
    Date: 2015–07
  2. By: David Card; Ana Rute Cardoso; Patrick Kline
    Abstract: There is growing evidence that firm-specific pay premiums are an important source of wage inequality. These premiums will contribute to the gender wage gap if women are less likely to work at high-paying firms or if women negotiate (or are offered) worse wage bargains with their employers than men. Using longitudinal data on the hourly wages of Portuguese workers matched with income statement information for firms, we show that the wages of both men and women contain firm-specific premiums that are strongly correlated with simple measures of the potential bargaining surplus at each firm. We then show how the impact of these firm-specific pay differentials on the gender wage gap can be decomposed into a combination of sorting and bargaining effects. We find that women are less likely to work at firms that pay higher premiums to either gender, with sorting effects being most important for low- and middle-skilled workers. We also find that women receive only 90% of the firm-specific pay premiums earned by men. Importantly, we find the same gender gap in the responses of wages to changes in potential surplus over time. Taken together, the combination of sorting and bargaining effects explain about one-fifth of the cross-sectional gender wage gap in Portugal.
    JEL: J16 J31 J71
    Date: 2015–07
  3. By: Alfonso Rosolia (Banca d'Italia)
    Abstract: In this paper I assess the responsiveness of Italian wage rates to labor market conditions and show that the specific wage measure considered has important consequences for the results. The cyclical response of wages measured by National Accounts is dampened by a number of measurement issues; on the contrary, both wage rate changes negotiated at the central level and salary items set at the firm level are found to respond more strongly to unemployment. I conclude that the observed weak response of wage measures based on National Accounts does not reflect the lack of wage flexibility but rather the staggered and uncoordinated nature of wage negotiations.
    Keywords: unemployment, wages, centralised wage bargaining
    JEL: E24 J01 J31 J5
    Date: 2015–07
  4. By: Attanasio, Orazio; Levell, Peter; Low, Hamish; Sánchez-Marcos, Virginia
    Abstract: There is a renewed interest in the size of labour supply elasticities and the discrepancy between micro and macro estimates. Recent contributions have stressed the distinction between changes in labour supply at the extensive and the intensive margin. In this paper, we stress the importance of individual heterogeneity and aggregation problems. At the intensive margins, simple specifications that seem to fit the data give rise to non linear expressions that do not aggregate in a simple fashion. At the extensive margin, aggregate changes in participation are likely to depend on the cross sectional distribution of state variables when a shock hits and, therefore, are likely to be history dependent. We tackle these aggregation issues directly by specifying a life cycle model to explain female labour supply in the US and estimate its various components. We estimate the parameters of different component of the model. Our results indicate that (i) at the intensive margin, Marshallian and Hicksian elasticities are very heterogeneous and, on average, relatively large; (ii) Frisch elasticities are, as implied by the theory, even larger; (iii) aggregate labour supply elasticities seem to vary over the business cycle, being larger during recessions.
    Keywords: aggregation; heterogeneity; labour supply elasticities; non-separability
    JEL: D91 J22
    Date: 2015–07
  5. By: Osea Giuntella (University of Oxford); Fabrizio Mazzonna (Università della Svizzera Italiana (USI))
    Abstract: Sleep deprivation is increasingly recognized as a public health challenge. While several studies provided evidence of important associations between sleep deprivation and health outcomes, it is less clear whether sleep deprivation is a cause or a marker of poor health. This paper studies the causal effects of sleep on health status and obesity exploiting the relationship between sunset light and circadian rhythms and using time-zone boundaries as an exogenous source of variation in sleep duration and quality. Using data from the American Time Use Survey, we show that individuals living in counties on the eastern side of a time zone boundary go to bed later and sleep less than individuals on the opposite side of the time zone boundary. These findings are driven by individuals whose biological schedules and time use are constrained by social schedules (i.e., work schedules, school starting times). Exploit- ing these discontinuities, we find evidence that sleep deprivation increases the likelihood of reporting poor health status and the incidence of obesity. Our results suggest that the increase in obesity is explained by both changes in eating behavior and a decrease in physical activity.
    Keywords: Health, Obesity, Sleep Deprivation, Time Use, Regression Discontinuity
    JEL: I12 J22 C31
    Date: 2015–07
  6. By: Andrej Angelowski; Jordi Brandts; Carles Solà
    Abstract: In many organizations the measurement of job performance can not rely on easily quantifiable information. In such cases, supervising managers often use subjective performance evaluations. We use laboratory experiments to study whether the way employees are assigned to a manager affects managers’ and co-employees’ subjective evaluations of employees. Employees can either be hired by the manager, explicitly not hired by him and nevertheless assigned to him or exogenously assigned to him. We present data from four different treatments. For all four treatments we find escalation bias by managers. Managers exhibit a positive bias towards those employees they have hired or a negative one towards those they have explicitly not hired. For three treatments we find that managers’ and employees’ biases are connected. Exogenously assigned employees are biased in favor of employees hired by the manager and against those explicitly not hired.
    Keywords: escalation bias, hiring, performance evaluations, experiments
    JEL: C92 D83 J63
    Date: 2015–07
  7. By: Jasmin Thomas
    Abstract: This is a report on the socio-economic development of the Metis in Canada. The report identifies appropriate indicators to benchmark Metis socio-economic development against non-Aboriginal socio-economic development, while establishing a benchmark against which future progress can be gauged. Quite briefly, there have been strong gains in Metis socio-economic development, especially concerning income and education. In particular, Metis median income reached 86.7 per cent of non-Aboriginal median income in 2010, up from 72.9 per cent in 2000. In terms of education, the share of the Metis with a college, CEGEP or other non-university certificate or diploma as their highest degree actually surpassed the share of the non-Aboriginal population in similar areas by 2011. However, there are still a number of gaps that remain. For example, the Metis continue to have poorer indicators of health, especially concerning smoking. Furthermore, the Metis still have lower levels of suitable housing than the non-Aboriginal population. One of the most interesting findings of the report is the large gaps that exist <i>within</i> the Metis Nation between provinces. The report concludes that concerted efforts, determined cooperation, and substantial participation from Metis leaders and Metis organizations at both the provincial and national level will be required to close the remaining gaps between provinces within the Metis Nation and between the aggregate Metis and non-Aboriginal populations.
    Keywords: Metis, Socio-Economic Development, Social Development, Canada, Provinces, Economic Development, Aboriginal Canadians, Education, Health, Poverty, Entrepreneurship, Governance, Land and Resources, Benchmarking
    JEL: D30 H10 H79 J19 J29 J49 J69 R59 Z13
    Date: 2015–07
  8. By: Shaun Dougherty; Joshua Goodman; Darryl Hill; Erica Litke; Lindsay C. Page
    Abstract: To better prepare students for college-level math and the demands of the labor market, school systems have tried to increase the rigor of students’ math coursework. The failure of universal “Algebra for All” models has led recently to more targeted approaches. We study one such approach in Wake County, North Carolina, which began using prior test scores to assign middle school students to an accelerated math track culminating in eighth grade algebra. The policy has reduced the role that income and race played in course assignment. A regression discontinuity design exploiting the eligibility threshold shows that acceleration has no clear effect on test scores but lowers middle school course grades. Acceleration does, however, raise the probability of taking and passing geometry in ninth grade by over 30 percentage points, including for black and Hispanic students. Nonetheless, most students accelerated in middle school do not remain so by high school and those that do earn low grades in advanced courses. This leaky pipeline suggests that targeted math acceleration has potential to increase college readiness among disadvantaged populations but that acceleration alone is insufficient to keep most students on such a track.
    JEL: I20 I24 J24
    Date: 2015–07
  9. By: Tsvetkova, Alexandra; Partridge, Mark
    Abstract: The U.S. shale boom has intensified interest in how the expanding oil and gas sector affects local economic performance. Research has produced mixed results and has not compared how energy shocks differ from equal-sized shocks elsewhere in the economy. What emerges is that the estimated impacts of energy development vary by region, empirical methodology, as well as the time horizon that is considered. This paper captures these dimensions to present a more complete picture of energy boomtowns. Utilizing U.S. county data, we estimate the effects of changes in oil and gas extraction employment on total employment growth as well as growth by sector. We compare this to the effects of equal-sized shocks in the rest of the economy to assess whether energy booms are inherently different. The analysis is performed separately for nonmetropolitan and metropolitan counties using instrumental variables. We difference over 1-, 3-, 6-, and 10-year time periods to account for county fixed effects and to assess responses across different time horizons. The results show that in nonmetro counties, energy sector multiplier effects on total county employment first increase up to 6-year horizons and then decline for 10-year horizons. In metro counties, 1-year differences analysis suggests crowding out though the multipliers are insignificant in longer horizons. We also observe positive spillovers to the nontraded goods sector, while spillovers are small or negative for traded goods. Yet, equal-sized shocks in the rest of the economy produce more jobs on average than oil and gas shocks, suggesting that policymakers should seek more diversified development.
    Keywords: employment growth, job multipliers, energy boom effects, instrumental variable approach
    JEL: O13 Q33 R11
    Date: 2015–07–16

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