nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2019‒07‒22
twenty-one papers chosen by
Joseph Marchand
University of Alberta

  1. Questioning the stereotype of the "malingering bureaucrat" absence from work in the public and private sector in Germany By Prümer, Stephanie; Schnabel, Claus
  2. Improving the Accuracy of Economic Measurement with Multiple Data Sources: The Case of Payroll Employment Data By Tomaz Cajner; Leland D. Crane; Ryan A. Decker; Adrian Hamins-Puertolas; Christopher Kurz
  3. What Do Student Jobs on Graduate CVs Signal to Employers? By Van Belle, Eva; Caers, Ralf; Cuypers, Laure; De Couck, Marijke; Neyt, Brecht; Van Borm, Hannah; Baert, Stijn
  6. Skill-biased technological change, endogenous labor supply, and the skill premium By Knoblach, Michael
  7. Training, Soft Skills and Productivity: Evidence from a Field Experiment By Prada, Maria; Rucci, Graciana; Urzua, Sergio
  8. Business Dynamics in the National Establishment Time Series (NETS)/Leland Crane, Ryan Decker By Leland Crane; Ryan Decker
  9. Gender Pay Gap Patterns in Domestic and Foreign-Owned Firms By Magda, Iga; Salach, Katarzyna
  10. The Effects on Employment and Family Income of Increasing the Federal Minimum Wage By Congressional Budget Office
  11. Economic incentives, home production and gender identity norms By Ichino, Andrea; Olsson, Martin; Petrongolo, Barbara; Skogman Thoursie, Peter
  12. Learning Management Through Matching: A Field Experiment Using Mechanism Design By Girum Abebe; Marcel Fafchamps; Michael Koelle; Simon Quinn
  13. Mexican Migration to the United States: Selection, Assignment, and Welfare By BURZYNSKI Michal; GOLA Pawel
  14. Upstreamness, Wages and Gender: Equal Benefits for All? By Gagliardi, Nicola; Mahy, Benoît; Rycx, Francois
  15. Individual Consequences of Occupational Decline By Edin, Per-Anders; Evans, Tiernan; Graetz, Georg; Hernnäs, Sofia; Michaels, Guy
  16. Monopsony Power in Higher Education: A Tale of Two Tracks By Austan Goolsbee; Chad Syverson
  17. Can Smallholder Extension Transform African Agriculture? By Joshua W. Deutschmann; Maya Duru; Kim Siegal; Emilia Tjernström
  18. Skill Complementarity in Production Technology: New Empirical Evidence and Implications By Stoyanov, Andrey; Zubanov, Nick
  20. Talking about Performance or Paying for it? Evidence from a Field Experiment By Manthei, Kathrin; Sliwka, Dirk; Vogelsang, Timo
  21. Ageing and productivity growth in OECD regions: Combatting the economic impact of ageing through productivity growth? By Federica Daniele; Taku Honiden; Alexander C. Lembcke

  1. By: Prümer, Stephanie; Schnabel, Claus
    Abstract: Public sector employees are often said to have excessive rates of absence from work. Using representative survey data for Germany, we indeed find absenteeism of employees to be higher in the public than the private sector. The differences in the incidence and days of absence showing up in descriptive statistics are substantially reduced and partly disappear in our estimates of hurdle regression models controlling for individuals' socio-demographic characteristics, health status, professional activities, and for many workplace-related factors. Nevertheless, the probability of staying home sick at least once a year is still 5.6 percentage points higher in the public sector, ceteris paribus. This finding refutes popular assertions that differences in absence rates between the sectors are mainly due to structural factors like different compositions of the workforce. We show that the same observable factors play a role for absenteeism in the public and private sector, but we cannot rule out that shirking may play a more important role in the public sector. Nevertheless, we conclude that the stereotype of the "malingering bureaucrat" seems to be an exaggeration, at least for Germany.
    Keywords: absenteeism,public sector,sick leave,Germany
    JEL: I19 J22 H8
    Date: 2019
  2. By: Tomaz Cajner; Leland D. Crane; Ryan A. Decker; Adrian Hamins-Puertolas; Christopher Kurz
    Abstract: This paper combines information from two sources of U.S. private payroll employment to increase the accuracy of real-time measurement of the labor market. The sources are the Current Employment Statistics (CES) from BLS and microdata from the payroll processing firm ADP. We briefly describe the ADP-derived data series, compare it to the BLS data, and describe an exercise that benchmarks the data series to an employment census. The CES and the ADP employment data are each derived from roughly equal-sized samples. We argue that combining CES and ADP data series reduces the measurement error inherent in both data sources. In particular, we infer “true” unobserved payroll employment growth using a state-space model and find that the optimal predictor of the unobserved state puts approximately equal weight on the CES and ADP-derived series. Moreover, the estimated state contains information about future readings of payroll employment.
    JEL: C53 C81 C82 J11 J2
    Date: 2019–07
  3. By: Van Belle, Eva (University of Neuchatel); Caers, Ralf (KU Leuven); Cuypers, Laure (Ghent University); De Couck, Marijke (Free University of Brussels); Neyt, Brecht (Ghent University); Van Borm, Hannah (Ghent University); Baert, Stijn (Ghent University)
    Abstract: Due to the prevalence and important consequences of student work, the topic has seen an increased interest in the literature. However, to date the focus has been solely on measuring the effect of student employment on later labour market outcomes, relying on signalling theory to explain the observed effects. In the current study, we go beyond measuring the effect of student work and we examine for the first time what exactly is being signalled by student employment. We do this by means of a vignette experiment in which we ask 242 human resource professionals to evaluate a set of five fictitious profiles. Whereas all types of student work signal a better work attitude, a larger social network, a greater sense of responsibility, an increased motivation, and more maturity, only student employment in line with a job candidate's field of study is a signal of increased human capital and increased trainability.
    Keywords: student employment, signalling, hiring chances, vignette study
    JEL: C91 I21 J22 J24
    Date: 2019–06
  4. By: Stijn Baert; Dieter Verhaest (-)
    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: 2019–07
  5. By: Stijn Baert; Brecht Neyt; Thomas Siedler; Ilse Toback; Dieter Verhaest (-)
    Abstract: Internships during tertiary education have become substantially more common over the past decades in many industrialised countries. This study examines the impact of a voluntary intra-curricular internship experience during university studies on the probability of being invited to a job interview. To estimate a causal relationship, we conducted a randomised field experiment in which we sent 1,248 fictitious, but realistic, resumes to real job openings. We find that applicants with internship experience have, on average, a 12.6% higher probability of being invited to a job interview.
    Keywords: Internship, hiring, human capital, signalling, field experiment.
    JEL: C93 I21 J23 J24
    Date: 2019–07
  6. By: Knoblach, Michael
    Abstract: The evolution of the U.S. skill premium over the past century has been characterized by a U-shaped pattern. The previous literature has attributed this observation mainly to the existence of exogenous, unexpected technological shocks or changes in institutional factors. In contrast, this paper demonstrates that a U-shaped evolution of the skill premium can also be obtained using a simple two-sector growth model that comprises both variants of skill-biased technological change (SBTC): technological change (TC) that is favorable to high-skilled labor and capital-skill complementarity (CSC). Within this framework, we derive the conditions necessary to achieve a non-monotonic evolution of relative wages and analyze the dynamics of such a case. We show that in the short run for various parameter constellations an educational, a relative substitutability, and a factor intensity effect can induce a decrease in the skill premium despite moderate growth in the relative productivity of high-skilled labor. In the long run, as the difference in labor productivity increases, the skill premium also rises. To underpin our theoretical results, we conduct a comprehensive simulation study.
    Keywords: Skill-Augmenting Technological Change,Capital-Skill Complementarity,Skill Premium,Neoclassical Growth Model
    JEL: E24 J24 J31 O33 O41
    Date: 2019
  7. By: Prada, Maria (University of Maryland); Rucci, Graciana (IADB); Urzua, Sergio (University of Maryland)
    Abstract: This paper examines a training intervention aimed at boosting leadership and communication skills among employees of a large Latin American retailer. The identification exploits an experimental design in the context of a difference-in-difference strategy. Using longitudinal information obtained from the firm and two skills surveys, we document large positive effects of the training on store- and individual- level productivity. The intervention was more effective in boosting leadership than communication skills. Spillovers from trained managers to untrained sales representatives also contribute to the main effects. Our findings confirm the possibility of increasing productivity through training targeting critical soft-skills.
    Keywords: socio-emotional skills, training, productivity, experiments with firms
    JEL: C93 J24 M53 O15
    Date: 2019–06
  8. By: Leland Crane; Ryan Decker
    Abstract: Business microdata have proven useful in a number of fields, but the main sources of comprehensive microdata are subject to significant confidentiality restrictions. A growing number of papers instead use a private data source seeking to cover the universe of U.S. business establishments, the National Establishment Time Series (NETS). Previous research documents the representativeness of NETS in terms of the distribution of employment and establishment counts across industry, geography, and establishment size. But there exists considerable need among researchers for microdata suitable for studying business dynamics---birth, growth, decline, and death. We evaluate NETS in terms of its ability to corroborate key insights from the business dynamics literature with a particular focus on the behavior of new and young firms. We find that NETS microdata exhibit patterns of business dynamics that are markedly different from official administrative sources, limiting the usefuln ess of NETS for studying these topics.
    Keywords: Business Microdata ; Economic Measurement ; Entrepreneurship ; Firm Dynamics ; High-Growth Firms ; Job Flows
    JEL: C81 M13 D22 L26
    Date: 2019–05–13
  9. By: Magda, Iga (Warsaw School of Economics); Salach, Katarzyna (University of Warsaw)
    Abstract: We investigate differences in gender wage gaps between foreign-owned and domestically-owned firms in Poland, a country that has experienced large FDI inflows over the past three decades. In line with the findings of several other studies, we show that according to standard estimates of adjusted gender wage gaps, these differences are much larger in the foreign-owned companies than in the domestic firms. However, we also find that these estimates cannot be trusted because the domestically-owned firms have considerably higher levels of gender segregation, and because the OLS estimates of the adjusted gender wage gaps in this sector are more likely to be biased. Using a matching and decomposition technique (Ñopo 2008) that allows us to capture gender wage differentials over a common support, we find that gender wage gaps in domestically-owned firms are only slightly smaller than those in foreign-owned companies. Our results also indicate that women tend to segregate into low-paid jobs in the domestic sector, whereas there is no evidence of such a pattern in the foreign sector. The analysis furthers shows, however, that foreign-owned companies have much larger within-firm differences in earnings (net out of composition effects), and that these earnings they pay vary less across firms. In sum, we find that the nature of gender wage gaps and the factors that underlie them differ between domestic and foreign-owned companies.
    Keywords: gender wage gaps, domestic ownership, foreign ownership, FDI
    JEL: F23 J16 J31 J71
    Date: 2019–06
  10. By: Congressional Budget Office
    Abstract: The federal minimum wage is $7.25 per hour for most workers. In this report, CBO examines how increasing the federal minimum wage to $10, $12, or $15 per hour by 2025 would affect employment and family income. Increasing the minimum wage would have two principal effects on low-wage workers. For most low-wage workers, earnings and family income would increase, which would lift some families out of poverty. But other low-wage workers would become jobless, and their family income would fall—in some cases, below the poverty threshold.
    JEL: J30 J31 J38 J45
    Date: 2019–07–08
  11. By: Ichino, Andrea; Olsson, Martin; Petrongolo, Barbara; Skogman Thoursie, Peter
    Abstract: We infer the role of gender identity norms from the reallocation of childcare across parents, following changes in their relative wages. By exploiting variation from a Swedish tax reform, we estimate the elasticity of substitution in parental childcare for the whole population and for demographic groups potentially adhering to differently binding norms. We find that immigrant, married and male breadwinner couples, as well as couples with a male first-born, react more strongly to tax changes that induce a more traditional allocation of spouses' time, while the respective counterpart couples react more strongly to tax changes that induce a more egalitarian division of labor.
    Keywords: gender gaps; gender identity; Home Production; taxes
    JEL: D13 H24 J22
    Date: 2019–05
  12. By: Girum Abebe; Marcel Fafchamps; Michael Koelle; Simon Quinn
    Abstract: What is the effect of exposing motivated youth to firm management in practice? To answer this question, we place young professionals for one month in established firms to shadow middle managers. Using random assignment into program participation, we find positive average effects on wage employment, but no average effect on the likelihood of self-employment. Within the treatment group, we match individuals and firms in batches using a deferred-acceptance algorithm. We show how this allows us to identify heterogeneous treatment effects by firm and intern. We find striking heterogeneity in self-employment effects, but almost no heterogeneity in wage employment. Estimates of marginal treatment effects (MTE) are then used to simulate counterfactual mechanism design. We find that some assignment mechanisms substantially outperform random matching in generating employment and income effects. These results demonstrate the importance of treatment heterogeneity for the design of field experiments and the role of matching algorithms in intervention design.
    JEL: J24 O1 O15
    Date: 2019–07
  13. By: BURZYNSKI Michal; GOLA Pawel
    Abstract: This paper quanti fies the effects of Mexican migration to the United States on individual welfare along the continuous distribution of skills in both countries. We develop a model that focuses on the sorting of workers within and across national labor markets. Mexican workers self-select into migration, and then, within each country, all workers match with productivity-differentiated fi rms. Firms operate in monopolistically competitive international markets, which they can freely enter or exit. These features of the model ensure that workers with similar skills are substitutes and dissimilar workers are complements. Thus, migration redistributes welfare in the source and host country. In particular, the observed Mexican immigration to the United States depresses the wages of below-median local workers. However, the welfare losses in the United States are modest in scope: A $1.70 per day lump-sum tax on Mexican immigrants is sufficient to fi nance a compensating transfer for all U.S. citizens.
    Keywords: Migration; matching; selection; welfare
    JEL: C68 C78 F22 J24
    Date: 2019–07
  14. By: Gagliardi, Nicola (Free University of Brussels); Mahy, Benoît (University of Mons); Rycx, Francois (Free University of Brussels)
    Abstract: This paper provides first evidence on the impact of a direct measure of firm-level upstreamness (i.e. the steps before the production of a firm meets final demand) on workers' wages. It also investigates whether results vary along the earnings distribution and by gender. Findings, based on unique matched employer-employee data relative to the Belgian manufacturing industry for the period 2002-2010, show that workers earn significantly higher wages when employed in more upstream firms. Yet, the gains from upstreamness are found to be very unequally shared among workers. Unconditional quantile estimates suggest that male top-earners are the main beneficiaries, whereas women, irrespective of their earnings, appear to be unfairly rewarded. Quantile decompositions further show that these differences in wage premia account for a substantial part of the gender wage gap, especially at the top of the earnings' distribution.
    Keywords: upstreamness, global value chains, wages, gender
    JEL: J16 J31
    Date: 2019–06
  15. By: Edin, Per-Anders (IFAU); Evans, Tiernan (CEP, London School of Economics); Graetz, Georg (Uppsala University); Hernnäs, Sofia (Uppsala University); Michaels, Guy (London School of Economics)
    Abstract: What are the earnings and employment losses that workers suffer when demand for their occupations declines? To answer this question we combine forecasts on occupational employment changes, which allow us to identify unanticipated declines; administrative data on the population of Swedish workers, spanning several decades; and a highly detailed occupational classification. We find that, compared to similar workers, those facing occupational decline lost about 2-5 percent of mean cumulative earnings from 1986-2013. But workers at the bottom of their occupations' initial earnings distributions suffered considerably larger losses. These earnings losses are partly accounted for by reduced employment, and increased unemployment and retraining.
    Keywords: technological change, occupations, inequality
    JEL: O33 J24 J62
    Date: 2019–06
  16. By: Austan Goolsbee; Chad Syverson
    Abstract: This paper tests for and measures monopsony power in the U.S. higher education labor market. It does so by directly estimating the residual labor supply curves facing individual four-year colleges and universities using school-specific labor demand instruments. The results indicate that schools have significant monopsony power over their tenure track faculty. Its magnitude is monotonic in rank, being greatest over full professors and smaller for associate and assistant professors. For non-tenure track faculty, however, universities do not seem to have any monopsony power and instead face perfectly elastic residual labor supply curves. Universities’ market power over tenure track faculty does not differ between public and private schools nor between female and male faculty. Monopsony power is greater for larger universities, and the geographic market for faculty seems to be national rather than local. Monopsony power is also larger at higher-status institutions as measured by Carnegie classifications, average test scores of the undergraduate student body, or initial salary rankings. The results also suggest that monopsony power has contributed to the trend toward non-tenure track faculty in U.S.
    JEL: I23 J42
    Date: 2019–07
  17. By: Joshua W. Deutschmann; Maya Duru; Kim Siegal; Emilia Tjernström
    Abstract: Agricultural productivity in Sub-Saharan Africa (SSA) lags far behind all other regions of the world. A long list of policy experiments has yielded more evidence on what fails than on what works. We analyze a randomized control trial of a rare scaled-up success story: One Acre Fund’s small farmer program. Much like anti-poverty "graduation" interventions, the program aims to relax multiple constraints to productivity simultaneously. We show that participation causes statistically and economically significant increases in output, yields, and profits. In our preferred specification, maize production increases by 24% and profits by 16%. We find little evidence of heterogeneous treatment effects on yields, but observe some attenuation of impacts on total output and profits at the top end of the distribution.
    JEL: O12 O13 Q12
    Date: 2019–07
  18. By: Stoyanov, Andrey (York University, Canada); Zubanov, Nick (University of Konstanz)
    Abstract: Matched worker-firm data from Danish manufacturing reveal that 1) industries differ in within-firm worker skill dispersion, and 2) the correlation between within-firm skill dispersion and productivity is positive in industries with higher average skill dispersion. We argue that these patterns are a manifestation of technological differences across industries: firms in the "skill complementarity" industries profit from hiring workers of similar skill level, whereas firms in the "skill substitutability" industries benefit from hiring workers of different skill levels. An empirical method we devise produces a robust classification of industries into the distinct complementarity and substitutability groups. Our study unveils hitherto unnoticed technological heterogeneity between industries within the same economy, and demonstrates its importance. Specifically, we show through simulations on a simple general equilibrium model that failing to take technological heterogeneity into account results in large prediction errors.
    Keywords: skill dispersion, complementarity, production technology, firm productivity
    JEL: D24 D58 J2
    Date: 2019–06
  19. By: Aleksandra Kordalska (Gdansk University of Technology, Gdansk, Poland); Magdalena Olczyk (Gdansk University of Technology, Gdansk, Poland)
    Abstract: This study examines labour productivity performance and its determinants in Eastern European and Central Asian (EECA) firms using micro-level data. We find significant differences in labour productivity among members of the European Union in Eastern Europe and other Eastern European and Central Asian countries. We also confirm the important impact of foreign ownership, exporter status, and highly skilled workers on productivity levels. However, we reveal a non-linear relationship between firm age and their labour productivity. Additionally, significant differences in labour productivity determinants between the services and manufacturing are found. The productivity of service firms, unlike manufacturing firms, is much more sensitive to changes in productivity factors.
    Keywords: Eastern Europe and Central Asia, firm-level analysis, labour productivity
    JEL: C21 J24 O52 O53
    Date: 2019–07
  20. By: Manthei, Kathrin (RFH Koeln); Sliwka, Dirk (University of Cologne); Vogelsang, Timo (University of Cologne)
    Abstract: We investigate the causal effect of conversations about performance and performance pay implementing a 2x2 field experiment in a retail chain. In the performance pay treatments, managers receive a bonus for profit increases. In the performance review treatments, managers have regular meetings with their supervisors discussing their activities to increase profits. We find that review conversations raise profits by 7%-8%. However, when additionally receiving performance pay this effect vanishes. Analyzing an extension of Bénabou and Tirole (2006), we rationalize this effect formally and provide empirical evidence that the use of performance pay changes the nature of conversations undermining their value.
    Keywords: performance pay, performance reviews, monitoring, feedback, field experiment, management practices
    JEL: J3 L2 M5 C93
    Date: 2019–06
  21. By: Federica Daniele; Taku Honiden; Alexander C. Lembcke
    Abstract: OECD countries and their regions are ageing fast. In principle, the negative impact of ageing on the growth rate of per capita gross domestic product could be offset by increases in productivity. However, for many regions, productivity growth required to maintain per capita GDP levels constant has been higher than the actual growth rates they recorded in the past years. One reason for this is that ageing also has a direct negative impact on productivity growth, with the effect being concentrated in urban areas. One possible explanation is that cities specialise in sectors, such as tradable services, where the content of tasks makes it difficult to automate stages of the production process and where business dynamism, negatively affected by demographic change, is a more solid driver of productivity growth. Finally, ageing seems to be associated with a redistribution of revenues away from workers and towards capital and firm owners.
    Keywords: ageing,, cities, productivity growth, regions,
    JEL: J11 J24 R11
    Date: 2019–07–18

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