nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2017‒06‒18
eleven papers chosen by
Joseph Marchand
University of Alberta

  1. The Effects of Scientists and Engineers on Productivity and Earnings at the Establishment Where They Work By Erling Barth; James C. Davis; Richard B. Freeman; Andrew J. Wang
  2. Genes, Education, and Labor Market Outcomes: Evidence from the Health and Retirement Study By Nicholas W. Papageorge; Kevin Thom
  3. Innovation, Skill, and Economic Segregation By Florida, Richard; Mellander, Charlotta
  4. Alma Mat(t)er(s): Determinants of Early Career Success in Economics By Sascha Baghestanian; Sergey V. Popov
  5. Non-Work at Work, Unemployment and Labor Productivity By Burda, Michael C; Genadek, Katie R.; Hamermesh, Daniel S.
  6. Dutch Disease Resistance: Evidence from Indonesian Firms By James Cust; Torfinn Harding; Pierre-Louis Vezina
  7. Planning for Retirement? The Importance of Time Preferences By Robert L. Clark; Robert G. Hammond; Christelle Khalaf; Melinda Sandler Morrill
  8. Occupational Choice with Endogenous Spillovers By Facundo Albornoz; Antonio Cabrales; Esther Hauk
  9. Trade and labour adjustment in Europe: What role for the European Globalization Adjustement Fund? By Cernat, Lucian; Mustilli, Federica
  10. Maimonides Rule Redux By Joshua D. Angrist; Victor Lavy; Jetson Leder-Luis; Adi Shany
  11. Sorting when firms have size By GORYUNOV, Maxim

  1. By: Erling Barth; James C. Davis; Richard B. Freeman; Andrew J. Wang
    Abstract: This paper uses linked establishment-firm-employee data to examine the relationship between the scientists and engineers proportion (SEP) of employment, and productivity and labor earnings. We show that: (1) most scientists and engineers in industry are employed in establishments producing goods or services, and do not perform research and development (R&D); (2) productivity is higher in manufacturing establishments with higher SEP, and increases with increases in SEP; (3) employee earnings are higher in manufacturing establishments with higher SEP, and increase substantially for employees who move to establishments with higher SEP, but only modestly for employees within an establishment when SEP increases in the establishment. The results suggest that the work of scientists and engineers in goods and services producing establishments is an important pathway for increasing productivity and earnings, separate and distinct from the work of scientists and engineers who perform R&D.
    JEL: D24 J21 J31 O3
    Date: 2017–06
  2. By: Nicholas W. Papageorge (Johns Hopkins University); Kevin Thom (New York University)
    Abstract: Recent advances have led to the discovery of specific genetic variants that predict educational attainment. We study how these variants, summarized as a genetic score variable, are associated with human capital accumulation and labor market outcomes in the Health and Retirement Study (HRS). We demonstrate that the same genetic score that predicts education is also associated with higher wages, but only among individuals with a college education. Moreover, the genetic gradient in wages has grown in more recent birth cohorts, consistent with interactions between technological change and labor market ability. We also show that individuals who grew up in economically disadvantaged households are less likely to go to college when compared to individuals with the same genetic score, but from higher socioeconomic status households. Our findings provide support for the idea that childhood socioeconomic status is an important moderator of the economic returns to genetic endowments. Moreover, the finding that childhood poverty limits the educational attainment of high-ability individuals suggests the existence of unrealized human potential.
    Keywords: Human capital, inequality, education, genes
    JEL: I24 J24
    Date: 2017–05
  3. By: Florida, Richard (University of Toronto); Mellander, Charlotta (Jönköping University & Centre of Excellence for Science and Innovation Studies (CESIS))
    Abstract: Our research examines the role of innovation and skill on the level economic segregation across U.S. metro areas. On the one hand, economic and urban theory suggest that more innovative and skilled metros are likely to have higher levels of economic segregation. But on the other hand, theory also suggests that more segregated metros are likely to become less innovative over time. We examine the connection between innovation and economic segregation this via OLS regressions informed by a Principal Component Analysis to distill key variables related to innovation, knowledge and skills, while controlling for other key variables notably population size. Our findings are mixed. While we find evidence of an association between the level of innovation and skill and the level of economic segregation in 2010, we find little evidence of an association between the level of innovation and skill across metros and the growth of economic segregation between 2000 and 2010.
    Keywords: Economic segregation; inequality; innovation; high-tech; skill; talent; human capital
    JEL: J24 O30 R23
    Date: 2017–06–07
  4. By: Sascha Baghestanian; Sergey V. Popov
    Abstract: We study 6000 author-publication observations to investigate predictors of early career success in six fields of Economics. To minimise the effects of ability heterogeneity on publication success chance, we concentrate on top researchers and focus on the start of their careers to minimise distortions from reputation feedback. The rank of an author’s Alma Mater turns out to be significant in 4 out of 6 subfields of Economics; first placement is significant only in one subfield. Numerically, our insights suggest that a counterfactual descent in the Alma Mater of a star author who graduated from a top 10 university by as little as 10 to 20 ranks, significantly reduces by 13 percentage points his probability of getting a top 5 publication. Lowering the ranking of his Alma Mater by another 80 ranks reduces his chances of getting a top publication by a factor of three.
    Keywords: Academia; Publishing; Journals; Alma Mater; Affiliation
    JEL: A11 I23 I24 J44
    Date: 2017–06
  5. By: Burda, Michael C; Genadek, Katie R.; Hamermesh, Daniel S.
    Abstract: We use the American Time Use Survey (ATUS) 2003-2012 to estimate time spent in non-work on the job. Non-work is substantial and varies positively with local unemployment. Time spent in non-work conditional on any positive amount rises, while the fraction of workers reporting positive values declines with unemployment. Both effects are economically important, and are consistent with a model in which heterogeneous workers are paid efficiency wages. That model correctly predicts the relationship between the incidence of non-work and unemployment benefits in state data linked to the ATUS, and is consistent with estimated occupational differences in non-work incidence and intensity, as well as the cyclical behavior of aggregate labor productivity.
    Keywords: efficiency wages; labor productivity; non-work; time use
    JEL: E24 J22
    Date: 2017–06
  6. By: James Cust; Torfinn Harding; Pierre-Louis Vezina
    Abstract: Oil and gas extraction may lead to the Dutch disease, i.e. the crowding ot of the manufacturing sector due to rising wages when labor is drawn to the expanding extraction and services sectors. In this paper we exploit the fact that oil and gas discoveries contain an element of chance as well as oil price fluctuations to capture random variation in oil and gas windfalls across Indonesia and identify their effects on manufacturing firms. We find that oil and gas windfalls cause wage growth but that the firm exit rate is unaffected. Firms’ output and labor productivity increase along with wages suggesting where firms are able to respond to booming local demand, and raise productivity in response to upward wage pressures, they can overcome the crowding-out effects from resource windfalls.
    Keywords: Dutch disease, firm level, Indonesia, manufacturing firms, oil and gas
    JEL: O13 O14 Q32
    Date: 2017
  7. By: Robert L. Clark; Robert G. Hammond; Christelle Khalaf; Melinda Sandler Morrill
    Abstract: Ensuring retirement income security is a priority for individuals, employers, and policymakers. Using merged administrative and survey data for public sector workers in North Carolina, we explore how workers’ characteristics and preferences are associated with planning and saving for retirement. We then assess the “quality” of a retirement plan and whether retirement behavior is consistent with these plans. The findings indicate that the way that individuals discount future consumption is associated with the extent of their retirement planning and preparedness. We find that individuals who engage in retirement planning are better prepared to meet their retirement goals upon leaving their career jobs.
    JEL: J32
    Date: 2017–06
  8. By: Facundo Albornoz; Antonio Cabrales; Esther Hauk
    Abstract: We study a model that integrates productive and socializing ef- forts with occupational choice in the presence of endogenous spillovers. Among other results, we show that more talented individuals work harder and contribute more to the emergence of externalities, but also have incentives to segregate. Average socializing increases in the average productivity of the occupation. Also, the size of an occupation grows in its network synergies. Turning to efficiency, we show that individuals underinvest in productive and socializing effort, and sort themselves inefficiently into occupations. We derive the optimal subsidy to achieve efficient effort within occupations and show that efficient sorting into occupations can always be achieved by a linear tax. We illustrate the importance for the government to intervene on both margins, as solving only the within occupation investment problem can exacerbate misallocations due to network choice and may even reduce welfare in presence of congestion costs.
    Keywords: occupational choice, Social interactions, endogenous spillovers, optimal taxation
    JEL: D85 H21 H23 J24
    Date: 2017–06
  9. By: Cernat, Lucian (DG Trade); Mustilli, Federica (DG Trade)
    Abstract: Trade agreements have become a growing source of concerns due to potential job losses that some sectors can incur as a result of increased competition. Although the economic literature shows that the overall results of trade liberalization are positive, some sectors may be adversely affected, leading to job losses and adjustment costs. One instrument designed to deal with such adjustment costs is the European Globalization Adjustment Fund (EGF), established by the European Commission in 2006. By jointly funding with EU Member States active labour market policies, the EGF is a tool that supports workers who lost their jobs due to globalisation. Despite the relevance of the EGF as trade adjustment mechanism, the existing evidence suggests that its use is still limited compared to its potential. The paper tries to review some of the constraining factors identified in the latest mid-term evaluation by the European Commission and suggest several avenues for further improvement.
    Keywords: European Globalization Adjustment Fund (EGF); labour market policies; international trade
    JEL: F16
    Date: 2017–06–12
  10. By: Joshua D. Angrist; Victor Lavy; Jetson Leder-Luis; Adi Shany
    Abstract: We use the discontinuous function of enrollment known as Maimonides Rule as an instrument for class size in large Israeli samples from 2002-2011. As in the 1991 data analyzed by Angrist and Lavy (1999), Maimonides Rule still has a strong first stage. In contrast with the earlier Israeli estimates, however, Maimonides-based instrumental variables estimates using more recent data show no effect of class size on achievement. The new data also reveal substantial enrollment sorting near Maimonides cutoffs, with too many schools having enrollment values that just barely produce an extra class. A modified rule that uses data on students’ birthdays to compute statutory enrollment in the absence of enrollment manipulation also generates a precisely estimated zero. In older data, the original Maimonides Rule is unrelated to socioeconomic characteristics, while in more recent data, the original rule is unrelated to socioeconomic characteristics conditional on a few controls. Enrollment manipulation therefore appears to be innocuous: neither the original negative effects nor the recent data zeros seem likely to be manipulation artifacts.
    JEL: C22 C26 C36 I21 I26 J24
    Date: 2017–06
  11. By: GORYUNOV, Maxim
    Abstract: In this paper, I study the sorting of workers to firms, when firm size is explicitly taken into account. I develop a method to non-parametrically identify the match production function from data on workers' wages and firms' revenues and posted job vacancies. Under the proposed identification procedure, ordering of workers and firms is identified independently, and can therefore be achieved using potentially different data sets. The model sheds light on the question of the exporter wage premium: exporters pay higher wages because they are larger, and higher wages are required to support a larger firm size.
    Keywords: Matching, Sorting, Wage determination, Firm size
    JEL: C78 E24 J31 L11
    Date: 2017

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