nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2018‒01‒01
ten papers chosen by
Joseph Marchand
University of Alberta

  1. Employment Adjustment and Part-time Work: Lessons from the United States and the United Kingdom By Daniel Borowczyk-Martins; Etienne Lalé
  2. Inferring Inequality with Home Production By Boerma, Job; Karabarbounis, Loukas
  3. Human Capital, Firm Capabilities, and Innovation By Ajay Bhaskarbhatla; Deepak Hegde; Thomas (T.L.P.R.) Peeters
  4. Raising and mobilising skills to boost productivity and inclusiveness in Belgium By Vincent Vandenberghe; Lilas Demmou; Manav Frohde
  5. Tat will tell: Tattoos and time preferences By Bradley Ruffle, Anne Wilson
  6. Income redistribution through taxes and transfers across OECD countries By Orsetta Causa; Mikkel Hermansen
  7. The employment consequences of SMEs’ credit constraints in the wake of the Great Recession By Cornille, David; Rycx, François; Tojerow, Ilan
  8. The power of percentage: Quantitative framing of pension income By Henriëtte Prast; Federica Teppa
  9. Do Boys Benefit from Male Teachers in Elementary School? Evidence from Administrative Panel Data By Puhani, Patrick A.
  10. Labor Market Regulations and Growth By Oleg Badunenko;

  1. By: Daniel Borowczyk-Martins; Etienne Lalé
    Abstract: We document that fluctuations in part-time employment play a major role in movements in hours per worker during cyclical swings in the labor market. Building on this result, we develop a stock-flow framework to describe the dynamics of part-time employment. The evolution of part-time employment is predominantly explained by cyclical changes in transitions between full-time and part-time employment. Those transitions occur overwhelmingly at the same employer, entail sizable changes in individuals’ working hours and are associated with an increase in involuntary part-time work. Our findings provide a novel understanding of the cyclical dynamics of labor adjustment on the intensive margin.
    Keywords: Employment,Hours,Part-time Work,Business Cycles,Demand and Supply of Labor,
    JEL: E24 E32 J21 J23
    Date: 2017–12–11
  2. By: Boerma, Job (Federal Reserve Bank of Minneapolis); Karabarbounis, Loukas (Federal Reserve Bank of Minneapolis)
    Abstract: We revisit the causes, welfare consequences, and policy implications of the dispersion in households' labor market outcomes using a model with uninsurable risk, incomplete asset markets, and a home production technology. Accounting for home production amplifies welfare-based differences across households meaning that inequality is larger than we thought. Using the optimality condition that households allocate more consumption to their more productive sector, we infer that the dispersion in home productivity across households is roughly three times as large as the dispersion in their wages. There is little scope for home production to offset differences that originate in the market sector because productivity differences in the home sector are large and the time input in home production does not covary with consumption expenditures and wages in the cross section of households. We conclude that the optimal tax system should feature more progressivity taking into account home production.
    Keywords: Home production; Labor supply; Consumption; Inequality
    JEL: D10 D60 E21 J22
    Date: 2017–12–22
  3. By: Ajay Bhaskarbhatla (Erasmus School of Economics, ERIM); Deepak Hegde (New York University); Thomas (T.L.P.R.) Peeters (Erasmus School of Economics, ERIM; Tinbergen Institute, The Netherlands)
    Abstract: Are differences in inventor productivity due to differences in inventors’ skills or differences in the capabilities of the firms they work for? We analyze a 37-year panel that tracks the patenting of U.S. inventors and find strong evidence for serial correlation in inventors’ productivity. We apply an econometric technique developed by Abowd, Kramarz, and Margolis (1999) to decompose the contributions of inventors’ human capital and firm capabilities for productivity. Our estimates suggest human capital is 4-5 times more important than firm capabilities for explaining the variance in inventor productivity. High human capital inventors work for firms that have (i) other high human capital inventors, (ii) superior financial performance, and (iii) weak firm-specific invention capabilities. On the margins, managers should emphasize selecting talent rather than training workers to enhance innovation performance.
    Keywords: Human Capital; Capabilities; Innovation; Matching; Competitive Advantage
    JEL: O30 O31 O32 J24
    Date: 2017–12–08
  4. By: Vincent Vandenberghe; Lilas Demmou; Manav Frohde
    Abstract: A highly educated and skilled workforce has been an important driver of productivity performance and prosperity in Belgium. This paper examines skills policies that could help improve productivity and inclusiveness. An increased focus on lifelong learning, improved and more flexible working conditions for older workers, and a more efficient allocation of students and skills would benefit productivity growth. Improving inclusiveness requires increasing access and participation in tertiary education, especially for students with disadvantaged backgrounds. Digitalisation holds the promise of large gains in labour productivity, but is disrupting the nature of employment relationships. It calls for measures that encourage information and communication technology (ICT) upskilling and for adapting tax and benefit systems to the rise of on-demand jobs linked to the use of e-platforms.
    Keywords: Belgium, digitalisation, equity in education, human capital, integration policies, labour market participation of seniors, lifelong learning, on-demand jobs, tertiary education
    JEL: I2 J24 J26 J40
    Date: 2017–12–15
  5. By: Bradley Ruffle, Anne Wilson (Wilfrid Laurier University)
    Abstract: Forty percent of Americans under the age of 40 have at least one tattoo. Yet survey and experimental evidence suggests that the tattooed are viewed negatively and may face discrimination in the labor market and in commercial transactions. In view of the potentially adverse economic consequences of a tattoo, the decision to get one may be regarded as shortsighted and impulsive. We collect numerous measures of time preferences and impulsivity of tattooed and non-tattooed subjects and find broad-ranging and robust evidence that those with tattoos, especially visible ones, are more short-sighted and impulsive than the non-tattooed. Almost nothing mitigates these results, neither the motive for the tattoo, nor the time contemplated before getting tattooed, nor the time elapsed since the most recent tattoo. Even the expressed intention to get a(nother) tattoo predicts increased short-sightedness and helps to pin down the direction of causality between tattoos and short-sightedness.
    Keywords: experimental economics, tattoo, time preferences, impulsivity
    JEL: C91 Z10
    Date: 2017–12–01
  6. By: Orsetta Causa; Mikkel Hermansen
    Abstract: This paper produces a comprehensive assessment of income redistribution to the working-age population, covering OECD countries over the last two decades. Redistribution is quantified as the relative reduction in market income inequality achieved by personal income taxes, employees’ social security contributions and cash transfers, based on household-level micro data. A detailed decomposition analysis uncovers the respective roles of size, tax progressivity and transfer targeting for overall redistribution, the respective role of various categories of transfers for transfer redistribution; as well as redistribution for various income groups. The paper shows a widespread decline in redistribution across the OECD, both on average and in the majority of countries for which data going back to the mid-1990s are available. This was primarily associated with a decline in cash transfer redistribution while personal income taxes played a less important and more heterogeneous role across countries. In turn, the decline in the redistributive effect of cash transfers reflected a decline in their size and in particular by less redistributive insurance transfers. In some countries, this was mitigated by more redistributive assistance transfers but the resulting increase in the targeting of total transfers was not sufficient to prevent transfer redistribution from declining.
    Keywords: income inequality, progressivity, redistribution, taxes, transfers
    JEL: D31 H23 H53 I38
    Date: 2017–12–21
  7. By: Cornille, David; Rycx, François; Tojerow, Ilan
    Abstract: This article takes advantage of access to confidential matched bank-firm data relative to the Belgian economy to investigate how employment decisions of small- and medium-sized enterprises (SMEs) have been affected by credit constraints in the wake of the Great Recession. Variability in banks’ financial health is used as an exogenous determinant of firms’ access to credit. Estimates suggest that SMEs borrowing money from pre-crisis less healthy banks were significantly more likely to be affected by a credit constraint and, in turn, to adjust their labour input downwards than pre-crisis clients of more healthy banks. Yet, findings also indicate that employment consequences of credit shortages have been essentially detrimental for SMEs experiencing a negative demand shock or facing severe product market competition. Finally, results show that credit-constrained SMEs adjusted their workforce significantly more at the extensive margin than their non-constrained counterparts, but also that they relied more intensively on temporary layoff schemes. JEL Classification: D22, G01, G21, J21, J23
    Keywords: Belgium, credit constraints, employment, matched bank-firm data, Wage Dynamics Network (WDN)
    Date: 2017–12
  8. By: Henriëtte Prast; Federica Teppa
    Abstract: We investigate whether the quantitative frame used to communicate future pension income to plan members matters for perceived pension income adequacy. We allocate plan members randomly to one of four pension income framing conditions: annual pension income, monthly pension income, pension income as percentage of current income, pension income as decimal of current income. We find that expressing projected pension income as a percentage (decimal) of current income significantly increases (decreases) the probability that a plan member perceives the pension income as too low. This effect is robust to adding retirement savings attitude. In addition, we find significant and intuitive effects of household wealth, income, age and education on perceived pension income adequacy. We discuss our findings against the backdrop of previous studies on the effect of numeric frames on perceptions, provide suggestions for further research and draw conclusions for pension communication and survey design.
    Keywords: framing effects; pension income; perceived adequacy
    JEL: C5 C9 D12 G11
    Date: 2017–12
  9. By: Puhani, Patrick A.
    Abstract: With girls having overtaken boys in many education indicators, the “feminization” of elementary school teaching is causing debates about disadvantages for male students. Using administrative panel data on the universe of students, teachers and schools for a German state, I exploit within school and within teacher variation to determine teacher characteristics’ effects on students’ tracking outcomes. Germany tracks students at age 10 into more or less academic school types. I find hardly any effects of teacher’s gender, age, pay level, qualifications, or working hours on boys’ or girls’ school track recommendations or school choice. Even when following students into middle school, no effects of elementary-school teacher gender on school type change or grade repetition can be detected.
    Keywords: Education, gender, identification, fixed effects, teacher quality
    JEL: I21 J45 J71 J78
    Date: 2017–12
  10. By: Oleg Badunenko (Portsmouth Business School);
    Abstract: This chapter builds a model in which labor market regulations influence labor productivity growth through labor market. The proposed model decomposes labor productivity growth into components attributable to (i) change in efficiency, (ii) technological change, (iii) physical capital deepening, (iv) human capital accumulation, and (v) labor market regulations change. The empirical analysis using data from the Penn World Tables and Economic Freedom of the World Data is performed for 1970-1995 and 1995-2014. The findings can be summarized as follows. First, physical capital deepening is the major driving force behind productivity growth over the entire period. Labor market regulations change contributing next to nothing during 1970-1995, becomes second most important force of economic growth after 1995. Second, relatively rich nations benefit more from labor market regulations change than relatively poor nations. Finally, the contribution of labor market regulations change to growth is stronger for countries with less liberalized labor markets.
    Keywords: Data Envelopment Analysis, Efficiency, Economic Freedom of the World Data, Economic Growth, Income Distribution, Labor Market, Labor Market Regulations, Penn World Tables, Physical capital, Productivity
    JEL: D24 C14 O47 J21
    Date: 2017–12–19

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