nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2019‒01‒28
thirty-one papers chosen by
Joseph Marchand
University of Alberta

  1. Dynamism Diminished: The Role of Housing Markets and Credit Conditions By Steven J. Davis; John C. Haltiwanger
  2. Where Does the Minimum Wage Bite Hardest in California? By Even, William E.; Macpherson, David A.
  3. Union Reform, Performance Pay, and New Teacher Supply: Evidence from Wisconsin's Act 10 By E. Jason Baron
  4. The Effect of Minimum Wages on Low-Wage Jobs: Evidence from the United States Using a Bunching Estimator By Doruk Cengiz; Arindrajit Dube; Attila Lindner; Ben Zipperer
  5. Are Professors Worth It? The Value-added and Costs of Tutorial Instructors By Feld, Jan; Salamanca, Nicolas; Zölitz, Ulf
  6. Work Hard or Play Hard? Degree Class, Student Leadership and Employment Opportunities By Baert, Stijn; Verhaest, Dieter
  7. General Equilibrium Feedback Regarding the Employment Effects of Labor Taxes By Minchul Yum
  8. The Returns to Ability and Experience in High School Labor Markets: Revisiting Evidence on Employer Learning and Statistical Discrimination By Xizi Li; Stephen L. Ross
  9. Labor Market Adjustment to Third Party Competition: Evidence from Mexico By Robertson, Raymond; Halliday, Timothy J.; Vasireddy, Sindhu
  10. Taxing Families: The Impact of Child-related Transfers on Maternal Labor Supply By Anne Hannusch
  11. Minimum Wages for Domestic Workers: Impact Evaluation of the Indian Experience By Gudibande, Rohan Ravindra; Jacob, Arun
  12. The changing nature of gender selection into employment over the Great Recession By Juan J. Dolado; Cecilia Garcia-Peñalosa; Linas Tarasonis
  13. Taking Time Use Seriously: Income, Wages and Price Discrimination By Hamermesh, Daniel S.; Biddle, Jeff E.
  14. Peers and productivity: Evidence from an experimental factory By Reyniers, Diane
  15. Skill Biased Management: Evidence from Manufacturing Firms By Andy Feng; Anna Valero
  16. Retirement Choices by State and Local Public Sector Employees: The Role of Eligibility and Financial Incentives By Leslie E. Papke
  17. More insecure and less paid? The effect of perceived job insecurity on wage distribution By Scicchitano, Sergio; Biagetti, Marco; Chirumbolo, Antonio
  18. Investment-Specific Technological Change, Taxation and Inequality in the U.S. By Brinca, Pedro; Oliveira, João; Duarte, João
  19. Who Creates Stable Jobs? Evidence from Brazil By Brummund, Peter; Connolly, Laura
  20. Under Pressure? Assessing the Roles of Skills and Other Personal Resources for Work-Life Strains By Blunch, Niels-Hugo; Ribar, David; Western, Mark
  21. Social Security Incentives in Belgium: An Analysis of Four Decades of Change By Anne-Lore Fraikin; Alain Jousten; Mathieu Lefebvre
  22. It’s a long walk: Lasting effects of maternity ward openings on labour market performance By Lazuka, Volha
  23. From Immigrants to Robots: The Changing Locus of Substitutes for Workers By George J. Borjas; Richard B. Freeman
  24. The rise of the middle class: The income gap between salaried employees and workers in Sweden, 1830-1935 By Bengtsson, Erik; Prado, Svante
  25. The Public Sector and the Misallocation of Labor: Evidence from a Policy Experiment in India By Matthew Baird; A.V. Chari; Shanthi Nataraj; Alexander Rothenberg; Shqiponja Telhaj; L. Alan Winters
  26. Do female managers help to lower within-firm gender pay gaps? Public institutions vs. private enterprises By Iga Magda; Ewa Cukrowska-Torzewska
  27. Knowledge-intensive sectors and the role of collective performance-related pay By Stefania, Cardinaleschi; Mirella, Damiani; Fabrizio, Pompei
  28. Refugees’ Self-selection into Europe: Who Migrates Where? By Cevat Giray Aksoy; Panu Poutvaara
  29. Invisible Geniuses: Could the Knowledge Frontier Advance Faster? By Agarwal, Ruchir; Gaule, Patrick
  30. The role of employee incentive pay in the competitiveness of family and non-family firms By Damiani, Mirella; Pompei, Fabrizio; Ricci, Andrea
  31. Family firms, performance-related pay and the great crisis: evidence from the Italian case By Pompei, Fabrizio; Damiani, Mirella; Andrea, Ricci

  1. By: Steven J. Davis; John C. Haltiwanger
    Abstract: The Great Recession and its aftermath saw the worst relative performance of young firms in at least 35 years. More broadly, as we show, young-firm activity shares move strongly with local economic conditions and local house price growth. In this light, we assess the effects of housing prices and credit supply on young-firm activity. Our panel IV estimation on MSA-level data yields large effects of local house price changes on local young-firm employment growth and employment shares and a separate, smaller role for locally exogenous shifts in bank lending supply. A novel test shows that house price effects work through wealth, liquidity and collateral effects on the propensity to start new firms and expand young ones. Aggregating local effects to the national level, housing market ups and downs play a major role – as transmission channel and driving force – in medium-run fluctuations in young-firm employment shares in recent decades. The great housing bust after 2006 largely drove the cyclical collapse of young-firm activity during the Great Recession, reinforced by a contraction in bank loan supply. As we also show, when the young-firm activity share falls (rises), local employment shifts strongly away from (towards) younger and less-educated workers.
    JEL: E2 E3 E5 G2 J2
    Date: 2019–01
  2. By: Even, William E. (Miami University); Macpherson, David A. (Trinity University)
    Abstract: This study uses employment data on California county-industry pairs (CIPs) between 1990 and 2016 to test whether minimum wage increases caused employment growth to slow most in the CIPS with a large share of low wage workers. Evidence supports the hypothesis, and we use the estimates to simulate the effect of a 10 percent increase in the minimum wage. The simulations suggest that a 10 percent increase could cause a 3.4 percent employment loss in the average CIP in California. The job loss is projected to be concentrated in two industries: accommodation and food services, and retail. While the most populated counties of California are expected to incur the largest employment loss in terms of the number of workers, the smaller counties generally experience a larger percentage point loss in employment due to the lower wages and the greater number of workers that would be affected by the minimum wage hike. Moreover, there is substantial variation across counties in terms of the percentage of jobs lost within a given industry.
    Keywords: minimum wage, employment, California, labor demand
    JEL: J23 J30 J38
    Date: 2018–11
  3. By: E. Jason Baron (Department of Economics, Florida State University)
    Abstract: Despite the pervasive debate surrounding teachers' unions and their impacts on teacher recruitment, the causal effect of unions on new teacher supply has not been rigorously examined due to a lack of variation in public sector unionism. To fill this gap in the literature, this study exploits recent variation in union strength induced by the enactment of Wisconsin's Act 10, a landmark law that severely reduced the influence of teachers' unions in the state and gave school districts the freedom to redesign their compensation schemes. Immediately following the law, the majority of school districts in Wisconsin eliminated rigid unionized compensation schemes and moved to negotiate salaries with individual teachers based on performance. As a result, the compensation of teachers with high-value-added prior to Act 10 rose more than that of teachers with low-value-added in school districts that switched to flexible compensation. To test whether these changes in compensation impacted the quantity and the quality of new teacher supply, I compare the quantity of individuals completing a teaching degree in Wisconsin institutions before and after Act 10 and relative to those in similar states in a difference-in-differences framework. I find that Act 10 led to a 20\% increase in the number of awarded teaching degrees. This effect was entirely driven by the most selective universities, which suggests that the quality of the prospective teacher pool in Wisconsin increased as a result of the union reform.
    Keywords: Teachers' Unions, New Teacher Supply, Performance Pay, Major Selection
    JEL: I20 I28 J24 J31 J45 J51
    Date: 2019–01
  4. By: Doruk Cengiz; Arindrajit Dube; Attila Lindner; Ben Zipperer
    Abstract: We propose a novel method that infers the employment effect of a minimum wage increase by comparing the number of excess jobs paying at or slightly above the new minimum wage to the missing jobs paying below it. To implement our approach, we estimate the effect of the minimum wage on the frequency distribution of hourly wages using 138 prominent state-level minimum wage changes between 1979 and 2016. We find that the overall number of low-wage jobs remained essentially unchanged over five years following the increase. At the same time, the direct effect of the minimum wage on average earnings was amplified by modest wage spillovers at the bottom of the wage distribution. Our estimates by detailed demographic groups show that the lack of job loss is not explained by labor-labor substitution at the bottom of the wage distribution. We also find no evidence of disemployment when we consider higher levels of minimum wages. However, we do find some evidence of reduced employment in tradable sectors. In contrast to our bunching-based estimates, we show that some conventional studies can produce misleading inference due to spurious changes in employment higher up in the wage distribution.
    JEL: J23 J38 J88
    Date: 2019–01
  5. By: Feld, Jan (Victoria University of Wellington); Salamanca, Nicolas (Melbourne Institute of Applied Economic and Social Research); Zölitz, Ulf (University of Zurich)
    Abstract: A substantial share of university instruction happens in tutorial sessions—small group instruction given parallel to lectures. In this paper, we study whether instructors with a higher academic rank teach tutorials more effectively in a setting where students are randomly assigned to tutorial groups. We find this to be largely not the case. Academic rank is unrelated to students' current and future performance and only weakly positively related to students' course evaluations. Building on these results, we discuss different staffing scenarios that show that universities can substantially reduce costs by increasingly relying on lower-ranked instructors for tutorial teaching.
    Keywords: teacher value-added, higher education, instructor rank
    JEL: I21 I24 J24
    Date: 2018–11
  6. By: Baert, Stijn (Ghent University); Verhaest, Dieter (KU Leuven)
    Abstract: We investigated the impact on first hiring outcomes of two main curriculum vitae (CV) characteristics by which graduates with a tertiary education degree distinguish themselves from their peers: degree class and extra-curricular activities. These characteristics were randomly assigned to 2,800 fictitious job applications that were sent to real vacancies in Belgium. Academic performance and extra-curricular engagement both enhanced job interview rates by about 7%. The effect of a higher degree class was driven by female (versus male) candidates and candidates with a master's (versus a bachelor's) degree. We did not find evidence for these CV characteristics to be substitutes or to reinforce each other's effect.
    Keywords: degree class, extra-curricular activities, hiring, field experiment
    JEL: J23 J24 I23 C93
    Date: 2018–11
  7. By: Minchul Yum
    Abstract: A higher labor tax rate increases the equilibrium real interest rate and reduces the equilibrium wage in a heterogeneous-agent model with endogenous savings and indivisible labor supply decisions. I show that these general equilibrium adjustments, in particular of the real interest rate, reinforce the negative employment impact of higher labor taxes. However, the representative-agent version of the model, which generates similar aggregate employment responses to labor tax changes, implies that general equilibrium feedback is neutral. The cross-country panel data reveal that the negative association between labor tax rates and the extensive margin labor supply is significantly and robustly weaker in small open economies where the interest rate is less tightly linked to domestic circumstances. This empirical evidence supports the transmission mechanism of labor tax changes for employment in the heterogeneous-agent model.
    Keywords: labor income tax; labor supply elasticity; general equilibrium; cross-country panel
    JEL: E21 E24 J21 J22
    Date: 2018–12
  8. By: Xizi Li (University of Connecticut); Stephen L. Ross (University of Connecticut)
    Abstract: In this paper, we extend existing models that use the NLSY 79 to document employer screening and learning by showing that the return to education and ability change with experience. Specifically, we test for and document a non-linear relationship between wages and ability as measured by the AFQT score at low levels of potential experience. For high levels of AFQT, wages appear to fall as AFQT increases. As experience increases, the relationship between wages and AFQT returns to a monotonic relationship. As a result much of the observed increase in the return to AFQT as potential experience increases is associated with a change in the shape of the relationship, and the increase in the return to AFQT at lower levels of AFQT is more modest. These results are robust using samples and models from previous papers on the subject, developing a broader sample using all waves of the NLSY 79, and analyzing the question using data from the NLSY 97. Finally, we find evidence that high AFQT workers without four years of college select into occupations that provide more training, perhaps sacrificing initial wages in order to build skills.
    Keywords: Wages, Human Capital, Ability, Screening, Signaling, Learning, Statistical Discrimination, AFQT, Education, Compensating Differential, Training, Occupation, NLSY
    JEL: D82 D83 I24 J24 J31
    Date: 2019–01
  9. By: Robertson, Raymond (Texas A&M University); Halliday, Timothy J. (University of Hawaii at Manoa); Vasireddy, Sindhu (University of Hawaii at Manoa)
    Abstract: China's exports reduce wages in importing countries, but few studies have looked at competition in third party markets. We examine labor market outcomes in Mexico's apparel and textile sectors associated with U.S. apparel and textile imports from China. Using data on U.S. imports in conjunction with quarterly Mexican labor force surveys, we show that U.S. imports from China are associated with a reduction of employment in Mexico's textile and apparel sectors. These effects are the most pronounced for the least educated. Wages were not impacted on net except for the poorest indicating stronger local labor market ties in the left tail of the wage distribution. Notably, reductions in labor demand due to reduced textile imports had spill-overs beyond these sectors. Finally, the effects of trade-induced demand shocks dissipate after about two quarters indicating low firm-level adjustment costs.
    Keywords: apparel, China, Mexico, trade, wages, inequality
    JEL: F16 J31
    Date: 2018–11
  10. By: Anne Hannusch
    Abstract: Childbirth causes persistent gender differences in labor force participation and the difference in employment rates of married women with and without pre-school children varies substantially across countries. To what extent can child-related transfers account for this differential? To answer this question, I develop a life-cycle model of joint labor supply, in which female human capital evolves endogenously and a fraction of households has access to informal childcare. I calibrate the model to the US and Denmark, two countries in which the gap in employment rates of women with and without pre-school children differs in sign and magnitude: the gap is 13.2% in the US and -3.7% in Denmark. After taking the labor income tax treatment of married couples and variation in childcare fees into account, I find that child-related transfers are key to explaining the positive gap in the US and the negative gap in Denmark. I show that this mechanism is quantitatively important to account for variation in the maternal participation gap across other European countries as well.
    Keywords: Maternal Labor Supply, Two-earner Households, Family Transfers, Taxation
    JEL: E62 H31 J12 J22
    Date: 2019–01
  11. By: Gudibande, Rohan Ravindra; Jacob, Arun
    Abstract: The paper explores the labor market effect of minimum wage legislations in the informal sector for a developing country. The paper conducts an impact evaluation of the minimum wage legislation for domestic workers introduced in four states in India over the period of 2004-2012. Combining matching procedures with difference-in-difference, the paper estimates both the short-run and the long-run impact of the legislation on real wages and employment opportunities. Results show a positive impact of the legislation on real wages in the short-run, with no significant impact in the long-run. Further, the legislation did not seem to have had any impact on the extensive margin in terms of employment opportunities or the probability of being employed as a domestic worker over the entire period. Available evidence, in line with theoretical predictions, point towards a weak enforcement of the legislation as the driving factor of observed results.
    Keywords: wages,minimum wages,domestic workers,unemployment,informal sector
    JEL: J16 J31 J33 J38
    Date: 2018
  12. By: Juan J. Dolado (European University Institute); Cecilia Garcia-Peñalosa (Aix-Marseille University, EHESS, CNRS, Central Marseille & AMSE); Linas Tarasonis (Vilnius University & Bank of Lithuania)
    Abstract: The Great Recession has strongly influenced employment patterns across skill and gender groups. This paper analyzes how the resulting changes in non-employment have affected selection into jobs and hence gender wage gaps. Using data for the European Union, we show that male selection into the labour market, traditionally disregarded, has become positive. This is particularly so in Southern Europe, where dramatic drops in male unskilled employment have taken place during the crisis. As regards female selection, traditionally positive, we document two distinct effects. An added-worker effect has increased female labour force participation and hence reduced selection in some countries. In others, selection has become even more positive as a result of adverse labour demand shifts in industries which are intensive in temporary work, a type of contract in which women are over-represented. Overall, our results indicate that selection has become more important among men and less so among women, thus changing traditional gender patterns and calling for a systematic consideration of male non-employment when studying gender wage gaps.
    Keywords: Sample selection, gender wage gaps, gender employment gaps
    JEL: J31
    Date: 2019–01–14
  13. By: Hamermesh, Daniel S. (Barnard College); Biddle, Jeff E. (Michigan State University)
    Abstract: The American Time Use Survey 2003-15, the French Enquête Emploi du Temps, 2009-10, and the German Zeitverwendungserhebung, 2012-13, have sufficient observations to allow examining the theory of household production in much more detail than ever before. We identify income effects on time use by non-workers, showing that relatively time-intensive commodities—sleep and TV-watching—are inferior. For workers we identify income and substitution effects separately, with both in the same direction on these commodities as the income effects among non-workers. We rationalize the results by generalizing Becker's (1965) "commodity production" model, allowing both substitution between time and goods in household production and substitution among commodities in utility functions. We then use the evidence of price discrimination in product markets against minorities in the U.S. and immigrants in France to motivate an extension of the model that predicts how household production differs between members of these groups and the majority. We find the predicted results—minorities engage in more time-intensive activities, sleep and TV-watching, than otherwise identical majority-group members.
    Keywords: time use, racial discrimination, sleep, television-watching
    JEL: J22 J15
    Date: 2018–11
  14. By: Reyniers, Diane
    Abstract: Workplace peer effects are well documented, but why they arise remains a puzzle. This paper investigates the issue experimentally. Subjects are brought together to perform a real-effort task in a simulated factory environment. Varying the returns to effort by altering free-riding incentives or piece rates does not affect productivity but psychological factors do matter. Even though there are no technological complementarities, co-workers’ productivity levels are highly correlated. Three psychological mechanisms which can generate these correlations are examined: (a) workers’ desire to conform to a work norm, (b) inequity aversion and (c) concern about relative performance. Subjects’ enjoyment of the task depends on their relative performance and not on how close their productivity is to the norm or on the inequity of outcomes. This finding suggests that peer effects arise because of intrinsic competitiveness. Subjects hate to do worse than their co-workers and love to do better.
    Keywords: Peer Effects, Job satisfaction, Relative Performance Concerns, Social Norms
    JEL: C9 C91 C92 D23 J24
    Date: 2018–11
  15. By: Andy Feng; Anna Valero
    Abstract: This paper investigates the link between management practices and workforce skills in manufacturing firms, exploiting geographical variation in the supply of human capital. Skills measures are constructed using newly compiled data on universities and regional labour markets across 19 countries. Consistent with management practices being complementary with skills, we show that firms further away from universities employ fewer skilled workers and are worse managed, even after controlling for a rich set of observables and fixed effects. Analysis using regional skill premia suggests that variation in the price of skill drives these relationships.
    Keywords: management practices, human capital, universities, complementarities
    JEL: I23 J24 L2 M2
    Date: 2019–01
  16. By: Leslie E. Papke
    Abstract: I analyze the effects of state public pension parameters on the retirement of public employees. Using a panel data set of public sector workers from 12 waves of the Health and Retirement Study, I model the probability of retirement as a function of pension wealth at early and normal retirement eligibility and Social Security coverage in the public sector job. I find that becoming eligible for early retirement, or receiving an early-out offer, significantly increases the probability of retiring. I do not find any effect of retirement wealth levels; instead the findings are consistent with the literature on default options in defined contribution plans. These findings suggest that state legislative action to affect retirement decisions and reduce future pension costs may be most effective operating through plan eligibility rules and early-out incentives.
    JEL: H72 H75 J26 J45 J82
    Date: 2019–01
  17. By: Scicchitano, Sergio; Biagetti, Marco; Chirumbolo, Antonio
    Abstract: This article employs a Counterfactual Decomposition Analysis (CDA) using both a semi-parametric and a non-parametric method to examine the pay gap, over the entire wage distribution, between secure and insecure workers on the basis of perceived job insecurity. Using the 2015 INAPP Survey on Quality of Work, our results exhibit a mirror J-shaped pattern in the pay gap, with a significant sticky floor effect, i.e. the job insecurity more relevant at the lowest quantiles. This pattern is mainly due to the characteristics effect, while the relative incidence of the coefficient component accounts roughly for 22 up to 36% of the total difference, being more relevant at the bottom of the wage distribution.
    Keywords: Job (in)security,Counterfactual distribution,Semi-parametric methodology,Nonparametric methodology,Wage gap,Blinder/Oaxaca,Quantile regression,Italy
    JEL: J31 J82 C14
    Date: 2018
  18. By: Brinca, Pedro; Oliveira, João; Duarte, João
    Abstract: Since 1980 the U.S. economy has experienced a large increase in income inequality. To explain this phenomenon we develop a life-cycle, overlapping generations model with uninsurable labor market risk, a detailed tax system and investment-specific technological change (ISTC). We calibrate our model to match key characteristics of the U.S. economy and study how ISTC, shifts in taxation, government debt and employment have contributed to the rise in income inequality. We find that these structural changes can account for close to one third of the observed increase in the post-tax income Gini. The main mechanisms in play are the rise in the wage premium of non-routine workers, resulting from capital-non-routine complementarity, as well as a reduction of the progressivity of the labor income tax schedule, which increases post-tax inequality. We show that ISTC alone accounts for roughly 15% of the change observed in post-tax income Gini, while the reduction in progressivity accounts for 16%.
    Keywords: Income Inequality, Taxation, Automation
    JEL: E21 H21 J31
    Date: 2019
  19. By: Brummund, Peter (University of Alabama); Connolly, Laura (University of Alabama)
    Abstract: Recent research shows that start-ups are important for job creation, but these firms are also inherently volatile. We use linked employer-employee data to examine the relative importance of firm age and firm size for job creation and destruction in Brazil. Firm age is a more important determinant of job creation in Brazil than firm size; young firms and start-ups create a relatively high number of jobs. However, young firms are also more likely to exit the market and have higher levels of employment volatility. We, therefore, condition the job creation analysis on job stability. Young firms and large firms create relatively more stable jobs in Brazil.
    Keywords: job creation, job stability, Brazilian labor market
    JEL: L25 J23 J63
    Date: 2018–11
  20. By: Blunch, Niels-Hugo; Ribar, David; Western, Mark
    Abstract: Many working parents struggle to balance the demands of their jobs and family roles. Although we might expect that additional resources would ease work-family constraints, theory and evidence regarding resources have been equivocal. This study uses data on working mothers and fathers—as well as their cohabiting partners/spouses—from the Household, Income, and Labour Dynamics in Australia survey to investigate how personal resources in the form of skills, cognitive abilities, and personality traits affect work-life strains. It considers these along with standard measures of economic, social, and personal resources, and estimates seemingly unrelated regression (SUR) models of work-life strains for employed mothers and fathers that account for correlations of the couple’s unobserved characteristics. The SUR estimates indicate that computer skills reduce work-life strains for mothers, that math skills reduce strains for fathers, and that the personality traits of extraversion, conscientiousness, and emotional stability reduce strains for both parents. However, the estimates also indicate that better performance on a symbol look-up task, which tests attention, visual scanning acuity, and motor speed, increases fathers’ work-life strains.
    Keywords: Work-family strains and gains,cognitive abilities,skills,household resources,Australia,HILDA survey
    JEL: I1 I31 J24 J81
    Date: 2018
  21. By: Anne-Lore Fraikin; Alain Jousten; Mathieu Lefebvre
    Abstract: The paper traces labor market reforms over the last four decades. It provides estimates of retirement incentives for a selected set of typical worker profiles across time and socioeconomic groups and links these series to the labor market performance in Belgium. The results show that the numerous retirement and social security program reforms have had a marked impact on incentives at the micro level. At the aggregate level, results are less clear-cut given the extreme diversity of programs and features in the Belgian institutional context.
    JEL: H55 J26
    Date: 2018–12
  22. By: Lazuka, Volha (Department of Economic History, Lund University)
    Abstract: Studies showing that large-scale public health interventions in early life have lasting economic consequences are still scarce and rarely disclose the mechanisms. Being born in a hospital versus having a traditional birth attendant at home represents the most common early life policy change worldwide. Knowing the consequences of this policy is also important given the ongoing enlargement of maternity hospitals. In 1931–1946, the Swedish state subsidized the opening of new maternity wards, which led to the gradual decline of home deliveries assisted by midwives. Maternity wards offered improved conditions for mothers and newborns, including hygiene, surgical proficiency and medications, and health monitoring. By applying a difference-in-differences approach and geocoding techniques to register-based individuallevel data on the total population, observed from birth until the age of 65, this paper explores the long-term economic effects of access to better health services at birth using the opening of maternity wards throughout the country as an early life quasi-experiment. The paper first finds that the reform substantially reduced neonatal mortality in the short term by 19.0–26.5 deaths per 1000. Capturing survivors of the affected cohorts at the ages of 47–64, it then shows sizable long-term effects of the introduction of maternity wards on labour income (2.4–4.7 per cent) and disability pensions (4.4–11.9 per cent). The effects run directly through better health and indirectly through higher levels of schooling. Small-scale local maternity wards yield a larger social rate of return than large-scale hospitals, stemming from the treatment of normal births.
    Keywords: early life; maternity ward; labour income; efficency; Sweden
    JEL: I18 I38 J24 N34
    Date: 2019–01–14
  23. By: George J. Borjas; Richard B. Freeman
    Abstract: Increased use of robots has roused concern about how robots and other new technologies change the world of work. Using numbers of robots shipped to primarily manufacturing industries as a supply shock to an industry labor market, we estimate that an additional robot reduces employment and wages in an industry by roughly as much as an additional 2 to 3 workers and by 3 to 4 workers in particular groups, which far exceed estimated effects of an additional immigrant on employment and wages. While the growth of robots in the 1996-2016 period of our data was too modest to be a major determinant of wages and employment, the estimated coefficients suggest that continued exponential growth of robots could disrupt job markets in the foreseeable future and thus merit attention from labor analysts.
    JEL: J20 J61 O33
    Date: 2019–01
  24. By: Bengtsson, Erik (Department of Economic History, Lund University); Prado, Svante (Department of Economy and Society, University of Gothenburg)
    Abstract: We present the first comprehensive, long run salary information on Swedish middle-class employees before the twentieth century. Our data include school teachers, professors, clerks, policemen and janitors in Stockholm 1830–1935. We use the new data to compare the annual earnings of these middle-class employees with the annual earnings of farm workers and manufacturing workers. The results show that the income gap between the middle class and the working class widen drastically from the mid-nineteenth century to a historically high level during the 1880s and 1890s. The differentials then decreased during the first four decades of the twentieth century. The bulging earnings advantage of middle-class employees vis-à-vis unskilled workers chimes with Kocka’s depiction of the latter half of the nineteenth century as the era of the bourgeoisie.
    Keywords: wages; salaries; income inequality; middle class; Sweden
    JEL: J31 N13 N33
    Date: 2019–01–14
  25. By: Matthew Baird; A.V. Chari; Shanthi Nataraj; Alexander Rothenberg; Shqiponja Telhaj; L. Alan Winters
    Abstract: State-owned enterprises are often thought to represent a distortion in the labor market, but the implied efficiency losses have not been carefully estimated. This paper presents the first rigorous quantification of the aggregate productivity effects of privatization of public sector enterprises. We study historical episodes of privatization of public sector firms in India over the period 1991-2005, and find evidence of reallocation of labor away from the public sector following privatization. In turn, this reallocation appears to result in a substantial improvement in aggregate productivity and output.
    Keywords: labor, public sector, India
    JEL: J2
    Date: 2019–01
  26. By: Iga Magda (Institute for Structural Research (IBS), Warsaw School of Economics); Ewa Cukrowska-Torzewska (Institute for Structural Research (IBS); University of Warsaw, Faculty of Economic Sciences)
    Abstract: We analyze the link between the presence of female managers and the size of the firm-level gender pay gap, looking separately at the private and public sector. Using a large linked employer-employee dataset for Poland and a non-parametric and parametric decompositions, we find that higher presence of female managers is associated with more pay advantage towards women in selected types of public sector units: the ones in which remunerations of women and men are already equal, and a large share of the workforce is tertiary-educated. The effects are, however, relatively small in size. In private establishments, lower gender wage inequality is associated with higher shares of female workers, but not female managers.
    Keywords: gender wage gap, wage inequalities, public sector, female managers, Ñopo decomposition, Oaxaca- Blinder decomposition
    JEL: J16 J31 J45
    Date: 2019
  27. By: Stefania, Cardinaleschi; Mirella, Damiani; Fabrizio, Pompei
    Abstract: The main contribution of this study is showing that the efficiency effects of collective performance-related pay (CPRP) are more pronounced in knowledge-intensive service sectors (KISs) than in other sectors. The hypothesis is that human resource practices such as CPRP are particularly useful for enhancing firm performance when innovation-supporting knowledge is distributed among multiple skill sets and employee creativity, knowledge creation and knowledge sharing are key success factors for the firm. Cross-sectional estimates obtained for a national sample of approximately 3,800 Italian firms confirm this prediction. These results are validated by adopting a treatment effect approach to solve the self-selection problem.
    Keywords: Collective bargaining, performance-related pay, firm performance
    JEL: D23 J33
    Date: 2018–12–28
  28. By: Cevat Giray Aksoy; Panu Poutvaara
    Abstract: About 1.4 million refugees and irregular migrants arrived in Europe in 2015 and 2016. We model how refugees and irregular migrants are self-selected. Using unique datasets from the International Organization for Migration and Gallup World Polls, we provide the first large-scale evidence on reasons to emigrate, and the self-selection and sorting of refugees and irregular migrants for multiple origin and destination countries. Refugees and female irregular migrants are positively self-selected with respect to education, while male irregular migrants are not. We also analyze how border controls affect destination country choice.
    Keywords: Refugees, self-selection, human capital, predicted income
    JEL: J15 J24 O15
    Date: 2019
  29. By: Agarwal, Ruchir (International Monetary Fund); Gaule, Patrick
    Abstract: The advancement of the knowledge frontier is crucial for technological innovation and human progress. Using novel data from the setting of mathematics, this paper establishes two results. First, we document that individuals who demonstrate exceptional talent in their teenage years have an irreplaceable ability to create new ideas over their lifetime, suggesting that talent is a central ingredient for the production of knowledge. Second, such talented individuals born in low- or middle-income countries are systematically less likely to become knowledge producers. Our findings suggest that policies to encourage exceptionally-talented youth to pursue scientific careers - especially those from lower income countries - could accelerate the advancement of the knowledge frontier.
    Keywords: talent, knowledge frontier, innovation, IMO, mathematics
    JEL: O31 J24 I25
    Date: 2018–11
  30. By: Damiani, Mirella; Pompei, Fabrizio; Ricci, Andrea
    Abstract: Insufficient attention has been paid to the different roles of wage incentives in the competitiveness of family and non-family firms. This paper addresses this issue and uses a sample of listed and non-listed Italian firms for 2007 and 2010 to show that family firms that adopt incentive wages obtain greater gains in competitiveness with respect to non-family firms. Unlike what occurs in non-family firms, the efficiency enhancing effect of incentive wages more than compensates for the premiums paid to employees and enables family firms to achieve significant gains in terms of competitiveness.
    Keywords: Family firms Performance-related pay Labour productivity Wages Competitiveness
    JEL: D24 G32 J33
    Date: 2018–11–15
  31. By: Pompei, Fabrizio; Damiani, Mirella; Andrea, Ricci
    Abstract: This article analyses how Italian family firms (FFs) have acted during the global great crisis in comparison to their nonfamily counterparts using a sample of almost 4500 firms for 2007 and 2010. We study whether family control affects labor productivity, labor costs, and competitiveness and how family and nonfamily firm (NFFs) have responded to the great crisis. Furthermore, we test whether the adoption of performance-related pay (PRP) for employees offers an efficacious strategy to mitigate the effects of the crisis. Quantile regression techniques have been used to test the heterogeneous role of PRP, and its possible endogeneity has been taken into account in the empirical investigation. After the outbreak of the crisis, the distance in terms of the competitiveness of FFs in relation to their nonfamily counterparts increased. However, we also find that FFs may take advantage of the adoption of incentive schemes, such as PRP, to encourage commitment and motivation from their employees more than NFFs do. The positive role of PRP on labor productivity, coupled with a moderate influence of these schemes on wage premiums, enables them to regain competitiveness. In addition, for FFs located in industrial districts in which social rules prevail on formal rules, the adoption of PRP has exerted additional positive effects under hostile pressures, such as those characterizing the strong global crisis.
    Keywords: Family firms, performance-related pay, quantile regressions, productivity
    JEL: D24 G32 J33
    Date: 2018–12–06

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