nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2018‒08‒20
twenty-six papers chosen by
Joseph Marchand
University of Alberta

  1. The Long-run Effects of Teacher Collective Bargaining By Michael Lovenheim; Alexander Willén
  2. The Relative Skill Demand of Superstar Firms and Aggregate Implications By Akerman, Anders
  3. Misperceived Social Norms: Female Labor Force Participation in Saudi Arabia By Leonardo Bursztyn; Alessandra L. González; David Yanagizawa-Drott
  4. Flexible Work Organization and Employer Provided Training: Evidence from German Linked Employer-Employee Data By Campaner, Annika; Heywood, John S.; Jirjahn, Uwe
  5. Labor Market and Distributional Effects of an Increase in the Retirement Age By Geyer, Johannes; Haan, Peter; Hammerschmid, Anna; Peters, Michael
  6. Financial Incentives and Earnings of Disability Insurance Recipients: Evidence from a Notch Design By Philippe Ruh; Stefan Staubli
  7. How (Not) to Make Women Work? By Tyrowicz, Joanna; van der Velde, Lucas; Goraus-Tanska, Karolina
  8. Boosting productivity and preparing for the future of work in Germany By Naomitsu Yashiro; Stephanie Lehmann
  9. Incarceration, Recidivism, and Employment By Bhuller, Manudeep; Dahl, Gordon B.; Loken, Katrine Vellesen; Mogstad, Magne
  10. When It Rains It Pours: The Long-run Economic Impacts of Salt Iodization in the United States By Achyuta Adhvaryu; Steven Bednar; Anant Nyshadham; Teresa Molina; Quynh Nguyen
  11. Ageing labour: How does demographic change affect regional human capital? By Paula Prenzel; Simona Iammarino
  12. How Much Does Your Boss Make? The Effects of Salary Comparisons By Zoë Cullen; Ricardo Perez-Truglia
  13. Relative age effects in political selection By Tukiainen, Janne; Takalo, Tuomas; Hulkkonen, Topi
  14. The age pay gap and labor market heterogeneity: A new empirical approach using data for Italy By Töpfer, Marina
  15. Knocking on parents’ doors: regulation and intergenerational mobility By Sauro Mocetti; Giacomo Roma; Enrico Rubolino
  16. "But For" Percentages for Economic Development Incentives: What percentage estimates are plausible based on the research literature? By Timothy J. Bartik
  17. Demography, Unemployment, Automation, and Digitalization: Implications for the Creation of (Decent) Jobs, 2010–2030 By David E. Bloom; Mathew McKenna; Klaus Prettner
  18. Collateral Damage? Labour Market Effects of Competing with China - at Home and Abroad By Pedro S. Martins; João Pereira dos Santos; Mariana Tavares; Sónia Cabral
  19. Will the U.S. Keep the Best and the Brightest (as Post-docs)? Career and Location Preferences of Foreign STEM PhDs By Ina Ganguli; Patrick Gaulé
  20. Unintended Consequences of Eliminating Tax Havens By Juan Carlos Suárez Serrato
  21. Labor Market Effects of Credit Constraints: Evidence from a Natural Experiment By Kumar, Anil; Liang, Che-Yuan
  22. Discrimination Without Taste - How Discrimination Can Spillover and Persist By Rajesh RAMACHANDRAN; Christopher RAUH
  23. Defining and Measuring Workforce Development in the United States in a Post-Bipartisan Era By Holland, Brian
  24. Using Social Network Activity Data to Identify and Target Job Seekers By Ebbes, Peter; Netzer, Oded
  25. Academics’ Motives, Opportunity Costs and Commercial Activities Across Fields By Wesley M. Cohen; Henry Sauermann; Paula Stephan
  26. Termination Risk and Agency Problems: Evidence from the NBA By Alma Cohen; Nadav Levy; Roy Sasson

  1. By: Michael Lovenheim; Alexander Willén
    Abstract: Teacher collective bargaining is a highly debated feature of the education system in the US. This paper presents the first analysis of the effect of teacher collective bargaining laws on long-run labor market and educational attainment outcomes, exploiting the timing of passage of duty-tobargain laws across cohorts within states and across states over time. Using American Community Survey data linked to each respondent’s state of birth, we examine labor market outcomes and educational attainment for 35-49 year olds, separately by gender. We find robust evidence that exposure to teacher collective bargaining laws worsens the future labor market outcomes of men: in the first 10 years after passage of a duty-to-bargain law, male earnings decline by $2,134 (or 3.93%) per year and hours worked decrease by 0.42 hours per week. The earnings estimates for men indicate that teacher collective bargaining reduces earnings by $213.8 billion in the US annually. We also find evidence of lower male employment rates, which is driven by lower labor force participation. Exposure to collective bargaining laws leads to reductions in the skill levels of the occupations into which male workers sort as well. Effects are largest among black and Hispanic men. Estimates among women are often confounded by secular trend variation, though we do find suggestive evidence of negative impacts among nonwhite women. Using data from the 1979 National Longitudinal Survey of Youth, we demonstrate that collective bargaining laws lead to reductions in measured non-cognitive skills among young men.
    JEL: J24 J45 J51
    Date: 2018–07
  2. By: Akerman, Anders (Dept. of Economics, Stockholm University)
    Abstract: This paper proposes a new reason for why the relative demand for skilled workers has increased over past decades. I suggest that increases in market concentration and the rise of superstar firms may be important causes for the rise in demand for skill. I use detailed employer-employee data for the Swedish manufacturing sector between 1997 and 2014 to validate my hypothesis. My analysis demonstrates a strong correlation between firm size and the skilled share of a firm’s worker mix. The slope of this relationship is at its steepest in the right tail of the size distribution. I also, as Autor et al. (2017b), find a substantial rise in market concentration in Swedish manufacturing, both in the aggregate and across sub-sectors. The rise in market concentration is strongly correlated with a rise in the relative usage of skilled workers. Furthermore, a majority of the change in skill usage is due to between-firm variation, a reallocation of production across firms. This supports the notion that market concentration, rather than a general skill upgrading across all firms, has caused the rise in skill demand. Finally, the reallocation of production was most pronounced in industries characterized by large increases in market concentration. I estimate that about a tenth of the rise in the usage of skilled labor in Swedish manufacturing is due to the increasing importance of the largest firms.
    Keywords: Relative Skill Demand; Skill Premium; Market Concentration; Superstar Firms
    JEL: D22 D33 D43 J24 J31 L13 L40
    Date: 2018–07–31
  3. By: Leonardo Bursztyn; Alessandra L. González; David Yanagizawa-Drott
    Abstract: Through the custom of guardianship, husbands typically have the final word on their wives’ labor supply decisions in Saudi Arabia, a country with very low female labor force participation (FLFP). We provide incentivized evidence (both from an experimental sample in Riyadh and from a national sample) that the vast majority of young married men in Saudi Arabia privately support FLFP outside of home from a normative perspective, while they substantially underestimate the level of support for FLFP by other similar men – even men from their same social setting, such as their neighbors. We then show that randomly correcting these beliefs about others increases married men’s willingness to let their wives join the labor force (as measured by their costly sign-up for a job-matching service for their wives). Finally, we find that this decision maps onto real outcomes: four months after the main intervention, the wives of men in our original sample whose beliefs about acceptability of FLFP were corrected are more likely to have applied and interviewed for a job outside of home. Together, our evidence indicates a potentially important source of labor market frictions, where job search is underprovided due to misperceived social norms.
    JEL: C90 D83 D91 J22 Z10
    Date: 2018–06
  4. By: Campaner, Annika; Heywood, John S.; Jirjahn, Uwe
    Abstract: We examine the hypothesis that flexible work organization involves greater skill requirements and, hence, an increased likelihood of receiving employer provided training. Using unique linked employer-employee data from Germany, we confirm that employees are more likely to receive training when their jobs are characterized by greater decision-making autonomy and task variety, two essential elements of flexibility. Critically, the training associated with workplace flexibility does not simply reflect technology. Skill-biased organizational change plays its own role. Moreover, we show that the training associated with workplace flexibility is disproportionately oriented toward employees with a greater formal education. Our results also provide modest evidence of an age bias of workplace flexibility. However, the link between workplace flexibility and training does not appear to differ by gender.
    Keywords: Delegation,Multitasking,Skill-Biased Organizational Change,Training
    JEL: J24 L00 M53
    Date: 2018
  5. By: Geyer, Johannes (DIW Berlin); Haan, Peter (DIW Berlin); Hammerschmid, Anna (DIW Berlin); Peters, Michael (DIW Berlin)
    Abstract: We evaluate the labor market and distributional effects of an increase in the early retirement age (ERA) from 60 to 63 for women. We use a regression discontinuity design which exploits the immediate increase in the ERA between women born in 1951 and 1952. The analysis is based on the German micro census which includes about 370,000 households per year. We focus on heterogeneous labor market effects on the individual and on the household level and we study the distributional implications using net household income. In this respect we extend the previous literature which mainly studied employment effects on the individual level. Our results show sizable labor market effects which strongly differ by subgroups. We document larger employment effects for women who cannot rely on other income on the household level, e.g. women with a low income partner. The distributional analysis shows on average no significant effects on female or household income. This result holds as well for heterogeneous groups: Even for the most vulnerable groups, such as single women, women without higher education, or low partner income, we do not find significant reductions in income. One reason for this result is program substitution.
    Keywords: retirement age, pension reform, labor supply, early retirement, distributional effects, spillover effects, household
    JEL: J14 J18 J22 J26 H31
    Date: 2018–06
  6. By: Philippe Ruh; Stefan Staubli
    Abstract: Most countries reduce Disability Insurance (DI) benefits for beneficiaries earning above a specified threshold. Such an earnings threshold generates a discontinuous increase in tax liability—a notch—and creates an incentive to keep earnings below the threshold. Exploiting such a notch in Austria, we provide transparent and credible identification of the effect of financial incentives on DI beneficiaries’ earnings. Using rich administrative data, we document large and sharp bunching at the earnings threshold. However, the elasticity driving these responses is small. Our estimate suggests that relaxing the earnings threshold reduces fiscal cost only if program entry is very inelastic.
    JEL: H53 H55 J14 J21
    Date: 2018–07
  7. By: Tyrowicz, Joanna (University of Warsaw); van der Velde, Lucas (GRAPE); Goraus-Tanska, Karolina (University of Warsaw)
    Abstract: Women in developed economies have experienced an unparalleled increase in employment rates, to the point that the gap with respect to men was cut in half. This positive trend has often been attributed to changes in the opportunity costs of working (e.g. access to caring facilities) and the opportunity costs of not-working (notably, relative growth in wages in positions more frequently occupied by women, improved educational attainment). Meanwhile, the gender employment gaps were stagnant in transition economies. Admittedly, employment equality among genders was initially much higher in transition countries. We exploit this unique evidence from transition and advanced countries, to analyze the relationship between the institutional environment and the (adjusted) gender employment gaps. We estimate comparable gender employment gaps on nearly 1500 micro databases from over 40 countries. Changes in both types of the opportunity costs exhibited strong correlation with gender employment equality where the gap was larger, i.e. advanced economies. We provide some evidence that these results are not explained away by transition-related phenomena. We argue that the ob-served divergence in time trends reflects a level effect: the lower the gender employment gap, the lower the strength of the relationship between gender employment equality and the opportunity costs of working. An implication from our study is that the existing instruments might be insufficient to further reduce the gender employment gap.
    Keywords: employment, gender gaps, opportunity cost of working, transition, non-parametric estimates
    JEL: J2 J7
    Date: 2018–06
  8. By: Naomitsu Yashiro; Stephanie Lehmann
    Abstract: This paper reviews policies to strengthen Germany’s productivity growth and prepare for changes in labour markets brought about by new technologies. This paper also discusses how social protection and the bargaining framework should be reformed for the future of work. Germany enjoys a relatively high labour productivity level but productivity growth has been modest in recent years. There is room to boost productivity growth by accelerating the diffusion of new technologies throughout the economy. Vigorous entrepreneurship and innovation by small and medium enterprises are key for such technology diffusion while strong broadband and mobile networks widen the scope of data-intensive technologies that can be exploited to increase productivity. Widespread use of new technologies will bring about significant changes in skill demand and work arrangements. As in many countries, Germany saw a decline in the share of middle-skilled jobs in employment. A relatively high share of jobs is expected to be automated or undergo significant changes in task contents as a result of technological change. New technologies are also likely to increase individuals engaging in new forms of work, such as gig work intermediated by digital platforms. Such workers are less covered by public social safety nets such as unemployment insurance than regular employment.
    Keywords: automation, digital platform, entrepreneurship, Productivity, self-employment, technology diffusion
    JEL: J23 J24 J29 O33 O38 O43 O52
    Date: 2018–08–17
  9. By: Bhuller, Manudeep (University of Oslo); Dahl, Gordon B. (University of California, San Diego); Loken, Katrine Vellesen (Norwegian School of Economics); Mogstad, Magne (University of Chicago)
    Abstract: Understanding whether, and in what situations, time spent in prison is criminogenic or preventive has proven challenging due to data availability and correlated unobservables. This paper overcomes these challenges in the context of Norway's criminal justice system, offering new insights into how incarceration affects subsequent crime and employment. We construct a panel dataset containing the criminal behavior and labor market outcomes of the entire population, and exploit the random assignment of criminal cases to judges who differ systematically in their stringency in sentencing defendants to prison. Using judge stringency as an instrumental variable, we find that imprisonment discourages further criminal behavior, and that the reduction extends beyond incapacitation. Incarceration decreases the probability an individual will reoffend within 5 years by 29 percentage points, and reduces the number of offenses over this same period by 11 criminal charges. In comparison, OLS shows positive associations between incarceration and subsequent criminal behavior. This sharp contrast suggests the high rates of recidivism among ex-convicts is due to selection, and not a consequence of the experience of being in prison. Exploring factors that may explain the preventive effect of incarceration, we find the decline in crime is driven by individuals who were not working prior to incarceration. Among these individuals, imprisonment increases participation in programs directed at improving employability and reducing recidivism, and ultimately, raises employment and earnings while discouraging further criminal behavior. For previously employed individuals, while there is no effect on recidivism, there is a lasting negative effect on employment. Contrary to the widely embraced 'nothing works' doctrine, these findings demonstrate that time spent in prison with a focus on rehabilitation can indeed be preventive for a large segment of the criminal population.
    Keywords: crime, employment, incarceration, recidivism
    JEL: K42 J24
    Date: 2018–06
  10. By: Achyuta Adhvaryu; Steven Bednar; Anant Nyshadham; Teresa Molina; Quynh Nguyen
    Abstract: In 1924, The Morton Salt Company began nationwide distribution of iodine-fortified salt. Ac- cess to iodine, a key determinant of cognitive ability, rose sharply. We compare outcomes for cohorts exposed in utero with those of slightly older, unexposed cohorts, across states with high versus low baseline iodine deficiency. Income increased by 11%; labor force participation rose 0.68 percentage points; and full-time work went up 0.9 percentage points due to increased iodine availability. These impacts were largely driven by changes in the economic outcomes of young women. In later adulthood, both men and women had higher family incomes due to iodization.
    JEL: I15 I18 J24 N32
    Date: 2018–07
  11. By: Paula Prenzel; Simona Iammarino
    Abstract: Human capital investments are frequently suggested as policy measure to cope with smaller and older labour forces caused by demographic change across Europe. However, the availability and composition of human capital is fundamentally intertwined with demographic structures, especially at a regional level. This paper analyses how ageing is related to the regional composition of human capital for 332 German regions between 1996 and 2010. The findings show that labour force ageing is associated with lower educational attainment, and that older labour forces have higher shares of traditional vocational degrees. On a national level, education expansion still sufficiently compensates for the effects of population ageing, but regional human capital composition shows distinct trends.
    Keywords: demographic change, human capital, regional labour markets, regional development
    JEL: R10 R12 R23 J21 J24
    Date: 2018–08
  12. By: Zoë Cullen; Ricardo Perez-Truglia
    Abstract: We study how employees learn about the salaries of their peers and managers and how their beliefs about those salaries affect their own behavior. We conducted a field experiment with a sample of 2,060 employees from a multi-billion dollar corporation. We combine rich data from surveys and administrative records with data from the experiment, which provided some employees with accurate information about the salaries of others. First, we document large misperceptions about salaries and identify some of their sources. Second, we find that perceived peer and manager salaries have a significant causal effect on employee behavior. These effects are different for horizontal and vertical comparisons. While higher perceived peer salary decreases effort, output, and retention, higher perceived manager salary has a positive effect on those same outcomes. We provide suggestive evidence for the underlying mechanisms. We conclude by discussing implications for pay inequality and pay transparency.
    JEL: J31 J38 M12 M52 Z13
    Date: 2018–07
  13. By: Tukiainen, Janne; Takalo, Tuomas; Hulkkonen, Topi
    Abstract: We exploit a regression discontinuity design to provide causal evidence of the relative age effect (RAE) on a long-run adult age outcome: Political selection. We find strong evidence of the RAE in politics in Finland. However, the effect is heterogeneous: We find that male candidates born early in the calendar year have a significantly higher probability of getting elected to the parliament but no similar RAE applies to female candidates nor to municipal elections. Moreover, this effect only takes place in the most competitive parliamentary districts and is present only for some parties. We also find that in all the groups where the RAE does not exist, early-born candidates are under-represented suggesting attrition of talent in the candidate placement. Overall, our results show that seemingly artificial cutoffs imposed by the government have persistent consequences even on the selection to the highest positions of power within a society.
    JEL: C21 D72 J13 J16 J24
    Date: 2018–08–08
  14. By: Töpfer, Marina
    Abstract: Using Italian microdata over the period 2005-2016, this paper studies the difference in pay between elderly (55-64) and adult (34-54) workers in Italy along the wage distribution. The estimation strategy consists in using a three-way fixed effects wage model and adjusting the wage gap for (observed and unobserved) labor market heterogeneity. The estimation relies on OLS as well as on unconditional quantile regressions. The analysis beyond the mean shows substantial differences in the age pay gap along the wage distribution and finds particularly pronounced gaps at the top. The fixed effects of interest (individual, job and industry) are estimated via a partitioned procedure. Adjusting the gap for labor market heterogeneity reduces the gap almost to zero. The results suggest that individual differences between the cohorts both observed and unobserved are the main driver of the gap.
    Keywords: Age Pay Gap,Three-Way Fixed Effects Model,Decomposition,Italy
    JEL: J7 J14 J31
    Date: 2018
  15. By: Sauro Mocetti (Bank of Italy); Giacomo Roma (Bank of Italy); Enrico Rubolino (University of Essex)
    Abstract: We exploited two major reforms in the regulation of professional services implemented in Italy since the 2000s in order to examine the impact on the intergenerational transmission of occupations. We built an OECD-style indicator of strictness of regulation for 14 occupations and three different cohorts (i.e. before and after each reform). Then, using a difference-in-differences strategy, we exploited the differential effect of regulation on the occupations considered compared with employees in similar occupations, before and after each reform. We found that the progressive liberalization of professional services affected the allocation of individuals across occupations, leading to a substantial decrease in the propensity to follow the same career as one’s parents. The impact of regulation on the likelihood of being employed in the same occupation as one’s parents is greater in soft sciences and in areas where the demand for professional services is higher; at individual level, it is greater for less able individuals.
    Keywords: regulation, intergenerational mobility, occupational choice
    JEL: J62 J44 J24
    Date: 2018–07
  16. By: Timothy J. Bartik (W.E. Upjohn Institute for Employment Research)
    Abstract: This paper reviews the research literature in the United States on effects of state and local “economic development incentives.” Such incentives are tax breaks or grants, provided by state or local governments to individual firms, that are intended to affect firms’ decisions about business location, expansion, or job retention. Incentives’ benefits versus costs depend greatly on what percentage of incented firms would not have made a particular location/expansion/retention decision “but for” the incentive. Based on a review of 34 estimates of “but for” percentages, from 30 different studies, this paper concludes that typical incentives probably tip somewhere between 2 percent and 25 percent of incented firms toward making a decision favoring the location providing the incentive. In other words, for at least 75 percent of incented firms, the firm would have made a similar decision location/expansion/retention decision without the incentive. Many of the current incentive studies are positively biased toward overestimating the “but for” percentage. Better estimates of “but for” percentages depend on developing data that quantitatively measure diverse changes in incentive policies across comparable areas.
    Keywords: Tax incentives, business location decisions, local economic development
    JEL: R30 R12 H71
    Date: 2018–07
  17. By: David E. Bloom; Mathew McKenna; Klaus Prettner
    Abstract: Globally, an estimated 734 million jobs will be required between 2010 and 2030 to accommodate recent and ongoing demographic shifts, account for plausible changes in labour force participation rates, and achieve target unemployment rates of at or below 4 percent for adults and at or below 8 percent for youth. The facts that i) most new jobs will be required in countries where “decent” jobs are less prevalent and ii) workers in many occupations are increasingly subject to risks of automation further compound the challenge of job creation, which is already quite sizable in historical perspective. Failure to create the jobs that are needed through 2030 would put currently operative social security systems under pressure and undermine efforts to guarantee the national social protection floors enshrined in the Sustainable Development Goals (SDGs).
    JEL: J1 J11 J2 J23 J89
    Date: 2018–07
  18. By: Pedro S. Martins; João Pereira dos Santos; Mariana Tavares; Sónia Cabral
    Abstract: The increased range and quality of China's exports is a major ongoing development in the international economy with potentially far-reaching effects. In this paper, we examine the impact of the China's integration in international trade in the Portuguese labour market. On top of the direct effects of increased imports from China studied in previous research, we focus on the indirect labour market effects stemming from increased export competition in third markets. Our findings, based on matched employer-employee data in the 1991-2008 period, indicate that workers' earnings and employment are significantly negatively affected by China's competition, but only through the indirect 'market-stealing' channel. In contrast to evidence for other countries, the direct effects of Chinese import competition are mostly non-significant. The results are robust to a number of checks, and the negative impacts of indirect competition are found to be stronger for women, older and less educated workers, and workers in domestic firms.
    JEL: F14 F16 J31
    Date: 2018
  19. By: Ina Ganguli; Patrick Gaulé
    Abstract: We estimate the career and location preferences of students in U.S. doctoral programs in a major STEM field – chemistry. Our analysis is based on novel survey conducted in 2017 of 1,605 current Chemistry doctoral students enrolled in the top 54 U.S. research intensive universities. First, we estimate the career preferences of foreign and U.S. STEM students for different types of post-graduation jobs – postdocs, industry, or teaching positions – using both hypothetical choice methods and more standard Likert measures of preferences for different careers. We find that foreign students are generally more interested in academic careers than U.S. students, even when controlling for ability and comparing students from similar subfields and programs. Next, we estimate students’ location preferences using a hypothetical choice method: we ask respondents to choose between two postdoc job offers, where one offer is in the U.S. and one is abroad. We find that foreign students have a stronger preference for U.S. locations even after controlling for ability and career preferences. Our results suggest the U.S. is managing to retain talented foreign graduate students for postdoc positions.
    JEL: J24 J6 O3
    Date: 2018–07
  20. By: Juan Carlos Suárez Serrato
    Abstract: We show that eliminating firms’ access to tax havens has unintended consequences for economic growth. We analyze a policy change that limited profit shifting for US multinationals, and show that the reform raised the effective cost of investing in the US. Exposed firms respond by reducing global investment and shifting investment abroad — which lowered their domestic investment by 38% — and by reducing domestic employment by 1.0 million jobs. We then show that the costs of eliminating tax havens are persistent and geographically concentrated, as more exposed local labor markets experience declines in employment and income growth for over 15 years. We discuss implications of these results for other efforts to limit profit shifting, including new taxes on intangible income in the Tax Cuts and Jobs Act of 2017.
    JEL: F23 H25 H26 H32 J23
    Date: 2018–07
  21. By: Kumar, Anil (Federal Reserve Bank of Dallas); Liang, Che-Yuan (Uppsala University)
    Abstract: We exploit the 1998 and 2003 constitutional amendment in Texas—allowing home equity loans and lines of credit for non-housing purposes—as natural experiments to estimate the effect of easier credit access on the labor market. Using state-level as well as county-level data and the synthetic control approach, we find that easier access to housing credit led to a notably lower labor force participation rate between 1998 and 2007. We show that our findings are remarkably robust to improved synthetic control methods based on insights from machine-learning. We explore treatment effect heterogeneity using grouped data from the basic monthly CPS and find that declines in the labor force participation rate were larger among females, prime age individuals, and the college-educated. Analysis of March CPS data confirms that the negative effect of easier home equity access on labor force participation was largely concentrated among homeowners, with little discernible impact on renters, as expected. We find that, while the labor force participation rate experienced persistent declines following the amendments that allowed access to home equity, the impact on GDP growth was relatively muted. Our research shows that labor market effects of easier credit access should be an important factor when assessing its stimulative impact on overall growth.
    Keywords: Credit Constraints and Labor Supply; Synthetic Control with Machine Learning
    JEL: E24 E65 J21 R23
    Date: 2018–08–01
  22. By: Rajesh RAMACHANDRAN; Christopher RAUH
    Abstract: We introduce coordination failures driven by beliefs regarding the presence of taste discriminators as a channel of discrimination in productive activities requiring the input of multiple agents. We show that discrimination can persist under perfectly observable ability, when taste for discrimination has died out, and under absence of discriminatory social norms. Empirically we analyze the market for self-employment - an activity commonly requiring inputs from multiple agents. Consistent with the theoretical predictions, beliefs about discrimination are a significant correlate of self-employment rates, as well as the cost and success of establishing productive relations for blacks in the US.
    Keywords: discrimination, coordination failure, beliefs, inequality
    JEL: C73 D83 J71
    Date: 2018
  23. By: Holland, Brian
    Abstract: The bipartisan acceptance of a federal role in workforce development policy is no longer in play as a result of ideological differences in the definition of workforce development which arise from a lack of coherent and misunderstood outcomes. My attempt here is to posit a new definition for workforce development that explains what these activities actually are and to raise three criteria for outcome metrics that can be used to evaluate the success of workforce investment under this new definition. By suggesting the process of workforce development and by proposing metric criteria which we can use to measure progress, I believe that a new bipartisan consensus can re-emerge, while recognizing the limitations of federal public expenditure. This consensus can, then, be used to generate a more appreciative role of active labor market policy at the national level using a process-evaluation model.
    Keywords: Workforce development,employability,public policy,outcomes framework,process-evaluation
    JEL: J68 J24 I38 I32
    Date: 2018
  24. By: Ebbes, Peter; Netzer, Oded
    Abstract: An important challenge for many firms is to identify the life transitions of its customers, such as job searching, being pregnant, or purchasing a home. Inferring such transitions, which are generally unobserved to the firm, can offer the firm opportunities to be more relevant to its customers. In this paper, we demonstrate how a social network platform can leverage its longitudinal user data to identify which of its users are likely job seekers. Identifying job seekers is at the heart of the business model of professional social network platforms. Our proposed approach builds on the hidden Markov model (HMM) framework to recover the latent state of job search from noisy signals obtained from social network activity data. Specifically, our modeling approach combines cross-sectional survey responses to a job seeking status question with longitudinal user activity data. Thus, in some time periods, and for some users, we observe the “true” job seeking status. We fuse the observed state information into the HMM likelihood, resulting in a partially HMM. We demonstrate that the proposed model can not only predict which users are likely to be job seeking at any point in time, but also what activities on the platform are associated with job search, and how long the users have been job seeking. Furthermore, we find that targeting job seekers based on our proposed approach can lead to a 42% increase in profits of a targeting campaign relative to the approach that was used at the time of the data collection.
    Keywords: Hidden Markov Models; Data Fusion; Targeting; Customer Analytics
    JEL: C10 J20 J40 M30
    Date: 2018–06–01
  25. By: Wesley M. Cohen; Henry Sauermann; Paula Stephan
    Abstract: Scholarly work seeking to understand academics’ commercial activities often draws on abstract notions of the institution of science and of the representative scientist. Few scholars have examined whether and how scientists’ motives to engage in commercial activities differ across fields. Similarly, efforts to understand academics’ choices have focused on three self-interested motives – recognition, challenge, and money – ignoring the potential role of the desire to have an impact on others. Using panel data for a national sample of over 2,000 academics employed at U.S. institutions, we examine how the four motives are related to patenting activities. We find that all four motives predict patenting, but their role differs systematically between the life sciences, physical sciences, and engineering. These field differences are consistent with differences in the payoffs from commercial activities, as well as with differences in the opportunity costs of time spent away from “traditional” research, reflecting the degree of overlap between traditional and commercializable research. We discuss implications for future research on the scientific enterprise as well as for policy makers, administrators, and managers.
    JEL: J24 M5 O3
    Date: 2018–06
  26. By: Alma Cohen; Nadav Levy; Roy Sasson
    Abstract: When organizational structures and contractual arrangements face agents with a significant risk of termination in the short term, such agents may under-invest in projects whose results would be realized only in the long term. We use NBA data to study how risk of termination in the short term affects the decision of coaches. Because letting a rookie play produces long-term benefits on which coaches with a shorter investment horizon might place lower weight, we hypothesize that higher termination risk might lead to lower rookie participation. Consistent with this hypothesis, we find that, during the period of the NBA’s 1999 collective bargaining agreement (CBA) and controlling for the characteristics of rookies and their teams, higher termination risk was associated with lower rookie participation and that this association was driven by important games. We also find that the association does not exist for second-year players and that the identified association disappeared when the 2005 CBA gave team owners stronger incentives to monitor the performance of rookies and preclude their underuse.
    JEL: D20 J44 K00 L83
    Date: 2018–06

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