nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2020‒01‒13
ten papers chosen by
Joseph Marchand
University of Alberta

  1. What Does a Job Candidate’s Age Signal to Employers? By Hannah Van Borm; Ian Burn; Stijn Baert
  2. Automation, offshoring, and the role of public policies By Schmidpeter, Bernhard; Winter-Ebmer, Rudolf
  3. Coordinated Work Schedules and the Gender Wage Gap By German Cubas; Chinhui Juhn; Pedro Silos
  4. On the Evolution of Multiple Jobholding in Canada By Olena Kostyshyna; Etienne Lalé
  5. The Unintended Consequences of Meritocratic Government Hiring By Athanasios Geromichalos; Ioannis Kospentaris
  6. Can too many cooks spoil the broth? Coordination costs, fatigue, and performance in high-intensity tasks By Bastian Kordyaka; Mario Lackner; Hendrik Sonnabend
  7. Agricultural credits and agricultural productivity: Cross-country evidence By Seven, Unal; Tumen, Semih
  8. Institutions and the Productivity Challenge for European Regions By Andrés Rodríguez-Pose; Roberto Ganau
  9. A general framework for studying contests By Bastani, Spencer; Giebe, Thomas; Gürtler, Oliver
  10. Labor Demand in the Past, Present, and Future By Georg Graetz

  1. By: Hannah Van Borm; Ian Burn; Stijn Baert (-)
    Abstract: Research has shown that hiring discrimination is a barrier for older job candidates in many OECD countries. However, little research has delved into why older job candidates are discriminated against. Therefore, we have conducted an online scenario experiment involving recruiters to empirically investigate 15 potential stigma related to older age drawn from a systematic review of the literature. We found that older age particularly signals to recruiters that the applicant has lower technological skill, flexibility, and trainability levels. Together, these perceptions explain about 41% of the effect of age on the probability of being invited to a job interview. In addition, we found that the negative association between age and invitation probability is smaller when recruiters work for firms with a higher percentage of older employees.
    Keywords: hiring, statistical discrimination, age, stereotypes
    JEL: J71 J14 J24 J23
    Date: 2019–12
  2. By: Schmidpeter, Bernhard; Winter-Ebmer, Rudolf
    Abstract: We provide comprehensive evidence on the consequences of automation and offshoreability on the career of unemployed workers and the role of public policies. Using almost two decades of administrative data for Austria, we find that risk of automation is reducing the job finding probability; a problem which has increased over the past years. We show that this development is associated with increasing re-employment wages and job stability. Taken together, our findings imply a trade off between quantity and quality in these jobs. Provided training is beneficial in counteracting the negative impact of automation on the job finding rate but we find mixed effects in terms of post-unemployment wages.
    Keywords: labor market polarization,technological change,offshoring,active labor market programs,unemployment
    JEL: J64 J68 J31 J24
    Date: 2019
  3. By: German Cubas; Chinhui Juhn; Pedro Silos
    Abstract: Using U.S. time diary data we construct occupation-level measures of coordinated work schedules based on the concentration of hours worked during peak hours of the day. A higher degree of coordination is associated with higher wages but also a larger gender wage gap. In the data women with children allocate more time to household care and are penalized by missing work during peak hours. An equilibrium model with these key elements generates a gender wage gap of 6.6 percent or approximately 30 percent of the wage gap observed among married men and women with children. If the need for coordination is equalized across occupations and set to a relatively low value (i.e. Health care support), the gender gap would fall by more than half to 2.7 percent.
    JEL: E24 J2 J3
    Date: 2019–12
  4. By: Olena Kostyshyna; Etienne Lalé
    Abstract: The number of workers who hold more than one job (a.k.a. multiple jobholders) has increased recently in Canada. While this seems to echo the view that non-standard work arrangements are becoming pervasive, the increase has in fact been trivial compared with the long-run rise of multiple jobholding that has occurred since the mid-1970s. In this paper, we document this historical evolution and provide a comprehensive account of its underlying dynamics. To this end, we use restricted-access panel micro-data from the Canadian Labour Force Survey to construct transition probabilities into and out of multiple jobholding. We analyze these data through the lens of a trend decomposition that separates out the role of labor market inflows and outflows. The picture that emerges from our analysis is one of continued increases in the propensity of workers to take on second jobs. We argue that changes in technology and in preferences could both be responsible for this evolution.
    Keywords: Econometric and statistical methods; Labour markets
    JEL: E24 J21 J22 J60
    Date: 2019–12
  5. By: Athanasios Geromichalos; Ioannis Kospentaris (Department of Economics, University of California Davis)
    Abstract: In an attempt to mitigate the negative effects of clientelism, many governments around the world have adopted meritocratic hiring of public employees. This paper challenges the effectiveness of this common practice by showing that meritocratic government hiring can have unintended negative consequences on macroeconomic aggregates. In many countries, public employees enjoy considerable job security and generous compensation schemes; as a result, many talented workers choose to work for the public sector, which deprives the private sector of productive potential employees. This, in turn, reduces firms' incentives to create jobs, increases unemployment, and lowers GDP. To quantify the effects of this novel channel, we extend the standard Diamond-Mortensen-Pissarides model to incorporate workers of heterogeneous productivity and a government that fills public sector jobs based on merit. We calibrate the model to aggregate data from Greece and perform a series of counterfactual exercises. We find that the adverse effects of our mechanism on the economy's TFP, GDP, and unemployment are sizable.
    Keywords: search and matching models, public sector, meritocracy, unemployment
    JEL: E24 J30 J45 J64
    Date: 2020–01–02
  6. By: Bastian Kordyaka; Mario Lackner; Hendrik Sonnabend
    Abstract: Workplace flexibility offers a wide range of opportunities but also carries risks within the context of collaborative tasks. While increasing the number of collaborators can reduce fatigue and therefore enhance performance, it also increases coordination costs. Our study investigates this trade-off in a complex team task with high effort costs in a natural setting. We use the instrumental variables method combined with an extensive sensitivity analysis to identify the causal effect of in-game substitutions on performance in professional basketball. Our findings suggest that increasing the number of collaborators, on balance negatively affects team performance. However, we also provide evidence that the most successful teams are able to optimally trade off both effects.
    Keywords: coordination costs, fatigue, productivity, team performance, substitutions
    JEL: D22 J4 J22 Z20
    Date: 2019–11
  7. By: Seven, Unal; Tumen, Semih
    Abstract: We present cross-country evidence suggesting that agricultural credits have a positive impact on agricultural productivity. In particular, we find that doubling agricultural credits generates around 4-5 percent increase in agricultural productivity. We use two different agricultural production measures: (i) the agricultural component of GDP and (ii) agricultural labor productivity. Employing a combination of panel-data and instrumental- variable methods, we show that agricultural credits operate mostly on the agricultural component of GDP in developing countries and agricultural labor productivity in developed countries. This suggests that the nature of the relationship between agricultural finance and agricultural output changes along the development path. We conjecture that development of the agricultural finance system generates entry into the agricultural labor market, which pushes up the agricultural component of GDP and keeps down agricultural labor productivity in developing countries; while, in developed countries, it leads to labor-augmenting increase in agricultural production. We argue that replacement of the informal credit channel with formal and advanced agricultural credit markets along the development path is the main force driving the labor market response.
    Keywords: Agricultural credits,productivity,labor markets,financial development
    JEL: J43 Q14 Q18 O47
    Date: 2020
  8. By: Andrés Rodríguez-Pose; Roberto Ganau
    Abstract: Europe has witnessed a considerable labour productivity slowdown in recent decades. Many potential explanations have been put forward to try to address this so-called productivity ‘puzzle’. However, how the quality of local institutions influences labour productivity in different parts of Europe has been, so far, overlooked by the literature. This paper addresses this gap in our knowledge by evaluating how the quality of local institutions affects changes in labour productivity at a regional level, across 248 European regions during the period between 2003 and 2015. The results indicate that institutional quality plays a crucial role in determining different regional labour productivity trajectories. This role is both direct – as improvements in institutional quality have a substantial impact on productivity growth – as well as indirect – as the returns of investments in human capital and local innovative capacity rise significantly as the quality of government increases.
    JEL: E24 J24 O47 R11
    Date: 2019–10
  9. By: Bastani, Spencer; Giebe, Thomas; Gürtler, Oliver
    Abstract: We develop a general framework to study contests, containing the well-known models of Tullock (1980) and Lazear and Rosen (1981) as special cases. The contest outcome depends on players' effort and skill, the latter being subject to symmetric uncertainty. The model is tractable, because a symmetric equilibrium exists under general assumptions regarding production technologies and skill distributions. We construct a link between our contest model and expected utility theory and exploit this link to revisit important comparative statics results of contest theory and show how these can be overturned. Finally, we apply our results to study optimal workforce composition.
    Keywords: contest theory, symmetric equilibrium, heterogeneity, risk, decision theory
    JEL: C72 D74 D81 J23 M51
    Date: 2019–12–03
  10. By: Georg Graetz
    Abstract: Since the beginning of the Industrial Revolution, technological change has led to the automation of existing tasks and the creation of new ones, as well as the reallocation of labour across occupations and industries. These processes have been costly to individual workers, but labour demand has remained strong, and real wages have steadily increased in line with productivity growth. I provide evidence suggesting, however, that in recent decades automation has outpaced the creation of new tasks and thus the demand for labour has declined. There is strong disagreement about the future of labour demand, and predictions about technological breakthroughs have a poor track record. Given the importance of overall labour demand for workers’ standard of living as well as their ability to adjust to a changing labour market, obtaining accurate forecasts should be a priority for policy makers.
    JEL: J23 O30 O40
    Date: 2019–10

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