nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2016‒11‒20
nine papers chosen by
Joseph Marchand
University of Alberta

  1. Labour Productivity and the Distribution of Real Earnings in Canada, 1976 to 2014 By James Uguccioni, Andrew Sharpe and Alexander Murray
  2. The Evolution of Multiple Jobholding in the U.S. Labor Market: The Complete Picture of Gross Worker Flows By Lalé, Etienne
  3. House prices, wealth effects and labour supply By Disney, Richard; Gathergood, John
  4. Global Talent Flows By Pekkala Kerr, Sari; Kerr, William; Ozden, Caglar; Parsons, Christopher
  5. Polarization and the growth of low-skill employment in Spanish Local Labor Markets By Davide Consoli; Mabel Sánchez-Barrioluengo
  6. Infant Health, Cognitive Performance and Earnings: Evidence from Inception of the Welfare State in Sweden By Bhalotra, Sonia R.; Karlsson, Martin; Nilsson, Therese; Schwarz, Nina
  7. The Wage Penalty of Dialect-Speaking By Yao, Yuxin; van Ours, Jan C.
  8. Wage Determination in Social Occupations: The Role of Individual Social Capital By Hotchkiss, Julie L.; Rupasingha, Anil
  9. Worker Personality: Another Skill Bias beyond Education in the Digital Age By Eckhardt Bode; Stephan Brunow; Ingrid Ott; Alina Sorgner

  1. By: James Uguccioni, Andrew Sharpe and Alexander Murray
    Abstract: Canadian labour is more productive than ever before, but there is a pervasive sense among Canadians that the living standards of the 'middle class' have been stagnating. Indeed, between 1976 and 2014, median real hourly earnings grew by only 0.09 per cent per year, compared to labour productivity growth of 1.12 per cent per year. We decompose this 1.03 percentage-point growth gap into four components: rising earnings inequality; changes in employer contributions to social insurance programs; rising relative prices for consumer goods, which reduces workers' purchasing power; and a decline in labour's share of aggregate income. Our main result is that rising earnings inequality accounts for half the 1.03 percentagepoint gap, with a decline in labour's income share and a deterioration of labour's purchasing power accounting for the remaining half. Employer social contributions played no role. Further analysis of the inequality component reveals that real wage growth in recent decades has been fastest at the top and at the bottom of the earnings distribution, with relative stagnation in the middle. Our findings are consistent with a 'hollowing out of the middle' story, rather than a 'super-rich pulling away from everyone else' story.
    Keywords: Productivity, Wages, Income Distribution, Labour Productivity, Canada, Income, Inequality
    JEL: J24 J31 O38 O47 O51
    Date: 2016–11
  2. By: Lalé, Etienne (University of Bristol)
    Abstract: The U.S. labor market experienced a more than 20 percent reduction in the share of workers holding multiple jobs over the past 20 years. While this substantial trend is receiving increasing attention, the literature lacks a comprehensive picture of the gross worker flows that underlie the evolution of multiple jobholding. In this paper, first we construct new estimates of worker transitions into and out of multiple jobholding based on a Markov chain model that addresses several measurement issues. In particular, we show that time-aggregation bias cannot be ignored, as has been done in previous studies: workers typically hold a second job for a short period of time, which imparts a large bias in the estimates of transition probabilities. We go on to conduct a decomposition of the downward trend in multiple jobholding into the evolution of the underlying worker flows. This decomposition indicates that the trend is overwhelmingly explained by the dwindling propensity of full-time workers to take on a second job. We view the decrease in multiple jobholding as another manifestation of the changing labor supply behavior of U.S. workers observed during the past decades.
    Keywords: multiple jobholding, worker flows, trend decomposition
    JEL: E24 J21 J22 J60
    Date: 2016–11
  3. By: Disney, Richard; Gathergood, John
    Abstract: We examine the impact of house prices on labour supply decisions using UK micro data. We combine household survey data with local level house price measures and controls for local labour demand. Our micro data also allows us to control for individual level income expectations. We find significant house price effects on labour supply, consistent with leisure being a normal good. Labour supply responses to house prices are concentrated among young married female owners and older owners. This finding suggests house prices affect the decisions of marginal workers in the economy. Our estimates imply house prices are economically important for the participation decisions for these workers.
    Keywords: Labour supply,Wealth effects,House prices
    JEL: D12 E21 J22
    Date: 2016
  4. By: Pekkala Kerr, Sari (Wellesley College); Kerr, William (Harvard Business School); Ozden, Caglar (World Bank); Parsons, Christopher (University of Western Australia)
    Abstract: The global distribution of talent is highly skewed and the resources available to countries to develop and utilize their best and brightest vary substantially. The migration of skilled workers across countries tilts the deck even further. Using newly available data, we first review the landscape of global talent mobility, which is both asymmetric and rising in importance. We next consider the determinants of global talent flows at the individual and firm levels and sketch some important implications. Third, we review the national gatekeepers for skilled migration and broad differences in approaches used to select migrants for admission. Looking forward, the capacity of people, firms, and countries to successfully navigate this tangled web of global talent will be critical to their success.
    Keywords: migration, talent, diaspora
    JEL: F15 F22 J15 J31 J44 L14 L26 O31 O32 O33
    Date: 2016–10
  5. By: Davide Consoli; Mabel Sánchez-Barrioluengo
    Abstract: This paper analyses the long-term transformations of local labor markets in fifty Spanish provinces to identify the extent and the drivers of employment polarization. We find that the decline of ‘routine’ mid-skill jobs is strongly driven by technology adoption and, also, that it is a strong predictor of the expansion of low-skill service employment. These results are not specific to large metropolitan areas, and are robust to various controls and instrumental variables that account for long-term industry specialisation. We also find a positive, albeit small, local multiplier effect of high-skilled workers on the demand for non-tradable service jobs.
    Keywords: Local labor market, Polarization, Multiplier
    JEL: J23 J24 R23
    Date: 2016–11
  6. By: Bhalotra, Sonia R. (University of Essex); Karlsson, Martin (University of Duisburg-Essen); Nilsson, Therese (Lund University); Schwarz, Nina (University of Duisburg-Essen)
    Abstract: We estimate impacts of exposure to an infant health intervention trialled in Sweden in the early 1930s using purposively digitised birth registers linked to school catalogues, census files and tax records to generate longitudinal microdata that track individuals through five stages of the life-course, from birth to age 71. This allows us to measure impacts on childhood health and cognitive skills at ages 7 and 10, educational and occupational choice at age 16-20, employment, earnings and occupation at age 36-40, and pension income at age 71. Leveraging quasi-random variation in eligibility by birth date and birth parish, we estimate that an additional year of exposure was associated with improved reading and writing skills in primary school, and increased enrolment in university and apprenticeship in late adolescence. These changes are larger and more robust for men, but we find increases in secondary school completion which are unique to women. In the longer run, we find very substantial increases in employment (especially in the public sector) and income among women, alongside absolutely no impacts among men. We suggest that this may be, at least in part, because these cohorts were exposed to a massive expansion of the Swedish welfare state, which created more jobs for women than for men.
    Keywords: infant health, early life interventions, cognitive skills, education, earnings, occupational choice, programme evaluation, Sweden
    JEL: I15 I18 H41
    Date: 2016–11
  7. By: Yao, Yuxin (Tilburg University); van Ours, Jan C. (Erasmus University Rotterdam)
    Abstract: Our paper studies the effects of dialect-speaking on job characteristics of Dutch workers, in particular on their hourly wages. The unconditional difference in median hourly wages between standard Dutch speakers and dialect speakers is about 10.6% for males and 6.7% for females. If we take into account differences in personal characteristics and province fixed effects male dialect speakers earn 4.1% less while for females this is 2.8%. Using the geographic distance to Amsterdam as an instrumental variable to dialect-speaking, we find that male workers who speak a dialect earn 11.6% less while for female workers this is 1.6%. Our main conclusion is that for male workers there is a significant wage penalty of dialect-speaking while for female workers there is no significant difference.
    Keywords: dialect-speaking, wage penalty, job characteristics
    JEL: J24 I2
    Date: 2016–10
  8. By: Hotchkiss, Julie L. (Federal Reserve Bank of Atlanta); Rupasingha, Anil (U.S. Department of Agriculture)
    Abstract: We make use of predicted social and civic activities (social capital) to account for selection into "social" occupations. Individual selection accounts for more than the total difference in wages observed between social and nonsocial occupations. The role that individual social capital plays in selecting into these occupations and the importance of selection in explaining wage differences across occupations is similar for both men and women. We make use of restricted data from the 2000 decennial census and the 2000 Social Capital Community Benchmark Survey. Individual social capital is instrumented by distance-weighted surrounding census tract characteristics.
    Keywords: social capital; wage differentials; occupational choice; switching regression; nonpublic data; factor analysis
    JEL: C34 J24 J31
    Date: 2016–11–01
  9. By: Eckhardt Bode (Kiel Institute for the World Economy); Stephan Brunow (Institute for Employment Research, Nürnberg); Ingrid Ott (Karlsruhe Institute of Technology and Kiel Institute for the World Economy); Alina Sorgner (Friedrich-Schiller-University Jena)
    Abstract: We present empirical evidence suggesting that technological progress in the digital age will be biased not only with respect to skills acquired through education but also with respect to noncognitive skills (personality). We measure the direction of technological change by estimated future digitalization probabilities of occupations, and noncognitive skills by the Big Five personality traits from several German worker surveys. Even though we control extensively for education and experience, we find that workers characterized by strong openness and emotional stability tend to be less susceptible to digitalization. Traditional indicators of human capital thus measure workers' skill endowments only imperfectly.
    Keywords: Worker personality, Noncognitive skills, Digital transformation, Direction of technical change, Germany
    JEL: C25 J24 O33
    Date: 2016–11–15

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