nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2017‒06‒25
thirteen papers chosen by
Joseph Marchand
University of Alberta

  1. Job quality, health and at-work productivity By Iris Arends; Christopher Prinz; Femke Abma
  2. Social Comparisons in Oligopsony By Goerke, Laszlo; Neugart, Michael
  3. The effect of age and gender on labor demand – evidence from a field experiment By Carlsson, Magnus; Eriksson, Stefan
  4. Training Contracts, Employee Turnover, and the Returns from Firm-Sponsored General Training By Hoffman, Mitchell; Burks, Stephen V.
  5. Differences in positions along a hierarchy: Counterfactuals based on an assignment model By Laurent Gobillon; Dominique Meurs; Sébastien Roux
  6. Marriage and Housework By Cristina Borra; Martin Browning; Almudena Sevilla
  7. The gender wage gap in developed countries By Kunze, Astrid
  8. The value of reference letters By Martin Abel; Rulof Burger; Patrizio Piraino
  9. Women Make Houses, Women Make Homes By Akbulut-Yuksel, Mevlude; Khamis, Melanie; Yuksel, Mutlu
  10. The Economic Value of Breaking Bad: Misbehavior, Schooling and the Labor Market By Papageorge, Nicholas W.; Ronda, Victor; Zheng, Yu
  11. International Emigrant Selection on Occupational Skills By Patt, Alexander; Ruhose, Jens; Wiederhold, Simon; Flores, Miguel
  12. An Advisor Like Me? Advisor Gender and Post-Graduate Careers in Science By Gaule, Patrick; Piacentini, Mario
  13. Economy Wide Spillovers From Booms: Long Distance Commuting and the Spread of Wage Effects By Green, David; Morissette, Rene; Sand, Benjamin M.

  1. By: Iris Arends; Christopher Prinz; Femke Abma
    Abstract: Many countries invest considerable resources into promoting employment and the creation of jobs. At the same time, policies and institutions still pay relatively little attention to the quality of jobs although job quality has been found to be a major driver of employee wellbeing and may be an important factor for work productivity. Eventually, job quality might also influence labour supply choices and lead to higher employment. Providing robust evidence for the relationship between job quality and worker productivity could make a strong case for labour market policies directed at the improvement of job quality. This paper reviews existing evidence on the relationship between the quality of the work environment and individual at-work productivity, defined as reduced productivity while at work, and assesses the effect of health on this relationship. After screening 2 319 studies from various fields and disciplines, including economics and medicine, 48 studies are reviewed. Strong evidence is found for a negative relationship between job stress or job strain and individual at-work productivity and for a positive relationship between job rewards and productivity. Moderate evidence is found for a negative relationship between work-family conflict and at‑work productivity and for a positive relationship between fairness at work and social support from co-workers and productivity. Health influences the relationship between the quality of the work environment and productivity. Specifically, the relationship is stronger for people in good health. Job quality needs a more prominent place in labour market policy. More attention needs to be paid to workers’ perceptions of the quality of their work environment and how policies and practices at both the level of the worker and the work environment may influence this. Furthermore, as health‑related factors significantly influence the relationship between job quality and productivity, multidisciplinary approaches are needed to support at‑work productivity.
    JEL: I1 J2 J8
    Date: 2017–06–22
  2. By: Goerke, Laszlo (IAAEU, University of Trier); Neugart, Michael (Darmstadt University of Technology)
    Abstract: A large body of evidence suggests that social comparisons matter for workers' valuation of the wage they receive. The consequences of social comparisons in imperfectly competitive labor markets are less well understood. We analyze an oligopsonistic model of the labor market where workers derive (dis-) utility from comparing their own wage with wages paid at other firms. As social comparisons become more prevalent all workers are paid higher wages, the wage distribution becomes more equal, and employment shifts to high productivity firms. Moreover, the total wage bill and output increase, while aggregate profits decline. Overall welfare rises. Our theoretical results have implications for estimating the elasticity of the labor supply curve facing a firm.
    Keywords: social comparisons, status seeking, oligopsony, wage distribution, functional income distribution, welfare
    JEL: D62 J22 J42
    Date: 2017–06
  3. By: Carlsson, Magnus (Linnaeus University); Eriksson, Stefan (Department of Economics, Uppsala University)
    Abstract: In most countries, there are systematic age and gender differences in labor market outcomes. Older workers and women often have lower employment rates, and the duration of unemployment increases with age. These patterns may reflect age and gender differences in either labor demand (i.e. discrimination) or labor supply. In this study, we investigate the importance of demand effects by analyzing whether employers use information about a job applicant’s age and gender in their hiring decisions. To do this, we conducted a field experiment, where over 6,000 fictitious resumes with randomly assigned information about age (in the interval 35-70) and gender were sent to employers with a vacancy and the employers’ responses (callbacks) were recorded. We find that the callback rate starts to fall substantially early in the age interval we consider. This decline is steeper for women than for men. These results indicate that age discrimination is a widespread phenomenon affecting workers already in their early 40s in many occupations. Ageism and occupational skill loss due to aging are unlikely explanations of these effects. Instead, our employer survey suggests that employer stereotypes about three worker characteristics – ability to learn new tasks, flexibility/adaptability, and ambition – are important. We find no evidence of gender discrimination against women on average, but the gender effect is heterogeneous across occupations and firms. Women have a higher callback rate in female-dominated occupations and firms, and when the recruiter is a woman. These results suggest that an in-group bias affects hiring patterns, which may reinforce the existing gender segregation in the labor market.
    Keywords: age; gender; discrimination; field experiment; labor market
    JEL: J23 J71
    Date: 2017–06–15
  4. By: Hoffman, Mitchell (University of Toronto); Burks, Stephen V. (University of Minnesota, Morris)
    Abstract: Firms may be reluctant to provide general training if workers can quit and use their gained skills elsewhere. "Training contracts" that impose a penalty for premature quitting can help alleviate this inefficiency. Using plausibly exogenous contractual variation from a leading trucking firm, we show that two training contracts significantly reduced post-training quitting, particularly when workers are approaching the end of their contracts. Simulating a structural model, we show that observed worker quit behavior exhibits aspects of optimization (for one of the two contracts), and that the contracts increased firm profits from training and reduced worker welfare relative to no contract.
    Keywords: training contract, firm-sponsored general training, organizations, trucking, truck driver, truckload
    JEL: J24 M53 J41
    Date: 2017–06
  5. By: Laurent Gobillon; Dominique Meurs; Sébastien Roux
    Abstract: We propose an assignment model in which positions along a hierarchy are attributed to individuals depending on their characteristics. Our theoretical framework can be used to study differences in assignment and outcomes across groups and we show how it can motivate decomposition and counterfactual exercises. It constitutes an alternative to more descriptive methods such as Oaxaca decompositions and quantile counterfactual approaches. In an application, we study gender disparities in the public and private sectors with a French exhaustive administrative dataset. Whereas females are believed to be treated more fairly in the public sector, we find that the gender gap in propensity to get job positions along the wage distribution is rather similar in the two sectors. The gender wage gap in the public sector is 13:3 points and it increases by only 0:7 percentage points when workers are assigned to job positions according to the rules of the private sector. Nevertheless, the gender gap at the last decile in the public sector increases by as much as 3:6 percentage points when using the assignment rules of the private sector.
    Keywords: assignment, distributions, counterfactuals, wages, gender, public sector.
    JEL: C51 J31 J45
    Date: 2017
  6. By: Cristina Borra (Universidad de Sevilla); Martin Browning (Nuffield College Oxford); Almudena Sevilla (Queen Mary University of London)
    Abstract: This paper provides insights into the welfare gains of forming a couple by estimating how much of the difference in housework time between single and married individuals is causal and how much is due to selection. Using longitudinal data from Australia, UK and US, we find that selection into marriage by individuals with a higher taste for home-produced goods can explain about half of the observed differences in housework documented in the cross-sectional data. There remains a genuine two-hour increase in housework time for each partner upon marriage, with women specializing in routine, and men specializing in non-routine housework tasks.
    Keywords: Marriage, time use, Home Production
    JEL: D13 J12 J22
    Date: 2017–06
  7. By: Kunze, Astrid (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: Despite the increased attachment of women to the labour force in nearly all developed countries, a stubborn gender pay gap remains. This chapter provides a review of the economics literature on the gender wage gap, with an emphasis on developed countries. We begin with an overview of the trends in the gender differences in wages and employment rates. We then review methods used to decompose the gender wage gap and the results from such decompositions. We discuss how trends and differences in the gender wage gap across countries can be understood in light of non-random selection and human capital differences. We then review the evidence on demand-side factors used to explain the existing gender wage gap and then discuss occupational segregation. The chapter concludes with suggestions for further research.
    Keywords: Wages; gender wage gap; wage differentials; labor force participation; discrimination; human capital investment; non-random selection; developed countries
    JEL: J16 J24 J31 J71
    Date: 2017–06–12
  8. By: Martin Abel (Faculty of Arts and Sciences, Harvard University); Rulof Burger (Department of Economics, Stellenbosch University); Patrizio Piraino (School of Economics, University of Cape Town)
    Abstract: We show that reference letters from former employers alleviate information asymmetries about workers’ skills and improve both match quality and equity in the labor market. A resume audit study finds that using a reference letter in the application increases callbacks by 61%. Women disproportionately benefit. Letters are effective because they provide valuable information about workers’ skills that employers use to select applicants of higher ability. A second experiment, which encourages job seekers to obtain and use a reference letter, finds consistent results. In particular, employment rates for women who obtain letters double, fully closing the gender gap in our sample.
    Keywords: Unemployment, references, South Africa, active labor market policies
    JEL: D83 J24 M51
    Date: 2017
  9. By: Akbulut-Yuksel, Mevlude (Dalhousie University); Khamis, Melanie (Wesleyan University); Yuksel, Mutlu (Dalhousie University)
    Abstract: This paper examines the persistent effects of historical labor market institutions and policies on women's long-term labor market outcomes. We quantify these enduring effects by exploring quasi-experimental variation in Germany's post-World War II mandatory reconstruction policy, which compelled women to work in the rubble removal and reconstruction process. Using difference-in-differences and instrumental variable approaches, we find that mandatory employment during the postwar era generated persistent adverse effects on women's long-term labor market outcomes. An increase in marriage and fertility rates in the postwar era and a physical and mental exhaustion associated with manual labor are some of the direct and indirect channels potentially explaining our results.
    Keywords: historical institutions, female labor supply, occupational choice
    JEL: J16 J24 N34
    Date: 2017–06
  10. By: Papageorge, Nicholas W. (Johns Hopkins University); Ronda, Victor (Johns Hopkins University); Zheng, Yu (City University of Hong Kong)
    Abstract: Prevailing research argues that childhood misbehavior in the classroom is bad for schooling and, presumably, bad for adult outcomes. In contrast, we argue that childhood misbehavior represents some underlying non-cognitive skills that are valuable in the labor market. We follow work from psychology and categorize observed classroom misbehavior into two underlying latent factors. We then estimate a model of educational attainment and earnings outcomes, allowing the impact of each of the two factors to vary by outcome. We find one of the factors, labeled in the psychological literature as externalizing behavior (and linked, for example, to aggression), reduces educational attainment yet increases earnings. Unlike most models where non-cognitive skills that increase human capital through education also increase labor market skills, our findings illustrate how some non-cognitive skills can be productive in some economic contexts and counter-productive in others. Policies designed to promote human capital accumulation could therefore have mixed effects or even negative economic consequences, especially for policies that target non-cognitive skill formation for children or adolescents which are aimed solely at improving educational outcomes.
    Keywords: labor, education, non-cognitive skills
    JEL: J10 J20 I20
    Date: 2017–06
  11. By: Patt, Alexander (Catholic University of Eichstätt-Ingolstadt); Ruhose, Jens (Leibniz University of Hannover); Wiederhold, Simon (Ifo Institute for Economic Research); Flores, Miguel (EGAP Tecnológico de Monterrey CEM)
    Abstract: We present the first evidence that international emigrant selection on education and earnings materializes through occupational skills. Combining novel data from a representative Mexican task survey with rich individual-level worker data, we find that Mexican migrants to the United States have higher manual skills and lower cognitive skills than non-migrants. Conditional on occupational skills, education and earnings no longer predict migration decisions. Differential labor-market returns to occupational skills explain the observed selection pattern and significantly outperform previously used returns-to-skills measures in predicting migration. Results are persistent over time and hold within narrowly defined regional, sectoral, and occupational labor markets.
    Keywords: international migration, selection, skills, occupations
    JEL: F22 O15 J61 J24
    Date: 2017–06
  12. By: Gaule, Patrick (CERGE-EI); Piacentini, Mario (OECD)
    Abstract: We investigate whether having an advisor of the same gender is correlated with the productivity of PhD science students and their propensity to stay in academic science. Our analysis is based on an original dataset covering nearly 20,000 PhD graduates and their advisors from U.S. chemistry departments. We find that students with an advisor of the same gender tend to be more productive during the PhD and more likely to become professors themselves. We suggest that the under-representation of women in science and engineering faculty positions may perpetuate itself through the lower availability of same-gender advisors for female students.
    Keywords: gender, PhD, postgraduate careers, science
    JEL: J24 J16 I23 O31
    Date: 2017–06
  13. By: Green, David; Morissette, Rene; Sand, Benjamin M.
    Abstract: Since 2000, US real average wages have either stagnated or declined while Canadian average wages increased by almost 10%. We investigate the role of the Canadian resource boom in explaining this difference. We construct a model of wage setting that allows for spillover effects of a resource boom on wages in non-resource intensive locations and formulate an empirical specification based on that model. A key feature of this (and other) resource booms was the prevalence of long distance commuting - working in a resource location but residing in another community. The core idea in our model is that the expansion of the value of the commuting option during the boom allowed non-commuters to bargain higher wages. We find that wages do rise in areas with more long distance commuting. Combining these spillover effects with bargaining spillover effects in resource boom locations, we can account for 49% of the increase in the real mean wage in Canada between 2000 and 2012. We find similar effects of long distance commuting on wages in the US but the resource boom was less salient in the US and the effect on wages was one-tenth of that in Canada. Our results have implications for other papers measuring the impacts of resource booms on wages in surrounding areas. Our main finding is that long-distance commuting can integrate regions in a way that spreads the benefits and costs of a boom across the economy.
    Keywords: Wages, Resource Boom, Inequality
    JEL: J30
    Date: 2017–06–21

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