nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2020‒03‒30
twenty-six papers chosen by
Joseph Marchand
University of Alberta

  1. Do Cash Windfalls Affect Wages? Evidence from R&D Grants to Small Firms By Sabrina T. Howell; J. David Brown
  2. Career Consequences of Firm Heterogeneity for Young Workers: First Job and Firm Size By Arellano-Bover, Jaime
  3. What Do Employers' Associations Do? By Martins, Pedro S.
  4. Employee Training and Firm Performance: Quasi-experimental evidence from the European Social Fund By Martins, Pedro S.
  5. Flexible Work Arrangements and Precautionary Behavior: Theory and Experimental Evidence By Orland, Andreas; Rostam-Afschar, Davud
  6. The Demand for Interns By Jaeger, David A.; Nunley, John M.; Seals, Jr., R. Alan; Wilbrandt, Eric J.
  7. Does vocational education pay off in China? Instrumental-variable quantile-regression evidence By Dai, Li; Martins, Pedro S.
  8. Trade Liberalization and Wage inequality: Evidence from Chile By Yoshimichi Murakami
  9. CEO Health and Corporate Governance By Keloharju, Matti; Knüpfer, Samuli; Tåg, Joacim
  10. Are Workers Rewarded for Inconsistent Performance? By Anil Özdemir; Helmut Dietl; Giambattista Rossi; Robert Simmons
  11. Who benefits from tax incentives? The heterogeneous wage incidence of a tax credit By Clément Carbonnier; Clément Malgouyres; Loriane Py; Camille Urvoy
  12. Downward Nominal Wage Rigidity in the United States during and after the Great Recession By Bruce C. Fallick; Daniel Villar Vallenas; William L. Wascher
  13. Labor Market Dynamics under Technology Shocks: The Role of Subsistence Consumption By Sangyup Choi; Myungkyu Shim
  14. Urbanization and its Discontents By Edward L. Glaeser
  15. Higher Education Expansion, the Hukou System, and Returns to Education in China By Huang, Bin; Zhu, Yu
  16. Unobserved Worker Quality and Inter-Industry Wage Differentials By Ge, Suqin; Macieira, João
  17. Extreme wages, performance and superstars in a market for footballers By Rachel Scarfe; Carl Singleton; Paul Telemo
  18. Output Costs of Education and Skill Mismatch By Garibaldi, Pietro; Gomes, Pedro Maia; Sopraseuth, Thepthida
  19. Optimal Taxation under Regional Inequality By Sebastian G. Kessing; Vilen Lipatov; J. Malte Zoubek
  20. Occupational entry regulations and their effects on productivity in services: Firm-level evidence By Giuseppe Nicoletti; Indre Bambalaite; Christina von Rueden
  21. Intergenerational Occupational Mobility in Latin American Economies: An Empirical Approach By Doruk, Ömer Tuğsal; Pastore, Francesco; Yavuz, Hasan Bilgehan
  22. Fueling the Engines of Liberation with Cleaner Cooking Fuel By Tushar Bharati; Yiwei Qian; Jeonghwan Yun
  23. “Disemployment” effects of the minimum wage in the Colombian manufacturing sector By Luis E. Arango; Sergio A. Rivera
  24. Employer Provided Training in Europe: Determinants and Obstacles By Brunello, Giorgio; Wruuck, Patricia
  25. Measuring occupational entry regulations: A new OECD approach By Christina von Rueden; Indre Bambalaite
  26. Do Short-Term Incentives A?ect Long-Term Productivity? By Heitor Almeida; Nuri Ersahin; Vyacheslav Fos; Rustom M. Irani; Mathias Kronlund

  1. By: Sabrina T. Howell; J. David Brown
    Abstract: This paper examines how employee earnings at small firms respond to a cash flow shock in the form of a government R&D grant. We use ranking data on applicant firms, which we link to IRS W2 earnings and other U.S. Census Bureau datasets. In a regression discontinuity design, we find that the grant increases average earnings with a rent-sharing elasticity of 0.07 (0.21) at the employee (firm) level. The beneficiaries are incumbent employees who were present at the firm before the award. Among incumbent employees, the effect increases with worker tenure. The grant also leads to higher employment and revenue, but productivity growth cannot fully explain the immediate effect on earnings. Instead, the data and a grantee survey are consistent with a backloaded wage contract channel, in which employees of financially constrained firms initially accept relatively low wages and are paid more when cash is available.
    JEL: G32 G35 J31 J41
    Date: 2020–02
  2. By: Arellano-Bover, Jaime (Yale University)
    Abstract: I study the long-term effects of landing a first job at a large firm versus a small one using Spanish social security data. Size could be a relevant employer attribute for inexperienced workers since large firms are associated with greater training, higher wages, and enhanced productivity. The key empirical challenge is selection into first jobs – for instance, more able people may land jobs at large firms. I address this challenge developing an instrumental-variables approach that, while keeping business-cycle conditions fixed, leverages variation in the composition of labor demand that labor-market entrants face. I find that initially matching with a larger firm substantially improves long-term outcomes such as lifetime income, and that these benefits persist through subsequent jobs. Additional results point to mechanisms related to search frictions and better skill-development at large firms. Together, these findings shed light on how heterogeneous firms persistently impact young workers' trajectories.
    Keywords: first job, employer size, firm heterogeneity, young workers, lifetime income, on-the-job skills
    JEL: E24 J23 J24 J31 J62
    Date: 2020–02
  3. By: Martins, Pedro S.
    Abstract: While trade unions have been studied in detail, there is virtually no economics research on employer associations (EAs), trade unions' counterparts in many countries. However, besides conducting collective bargaining, EAs perform several other activities that can in uence economic outcomes, including training and coordination. This paper studies the contributions of EAs by comparing affiliated and non-affiliated firms in terms of sales, employment, productivity, and wages. Using matched employer-employee panel data for Portugal, we find that affiliated firms exhibit better outcomes along most of these dimensions, even when drawing on changes in affiliation status over time; and that this affiliation premium tends to increase with EA coverage (defined as the percentage of workers in the relevant industry/region domain that are employed by affiliated firms). Sectors as a whole also appear to benefit from EA coverage, even if non-affiliated firms do worse.
    Keywords: Employer Organisations,Productivity,Social Dialogue,Collective Bargaining
    JEL: J50 J23 L22
    Date: 2020
  4. By: Martins, Pedro S.
    Abstract: As work changes, firm-provided training may become more relevant for good economic and social outcomes. However, so far there is little or no causal evidence about the effects of training on firms. This paper studies a large training grants programme in Portugal, contrasting successful firms that received the grants and unsuccessful firms that did not. Combining several rich data sets, we compare a large number of potential outcomes of these firms, while following them over long periods of time before and after the grant decision. Our difference-in-differences models estimate significant positive effects on take up (training hours and expenditure), with limited deadweight; and that such additional training led to increased sales, value added, employment, productivity, and exports. These effects tend to be of at least 5% and, in some cases, 10% or more.
    Keywords: Training subsidies,Productivity,Counterfactual evaluation
    JEL: J24 H43 M53
    Date: 2020
  5. By: Orland, Andreas; Rostam-Afschar, Davud
    Abstract: In the past years, work time in many industries has become increasingly flexible opening up a new channel for intertemporal substitution. To study this, we set up a two-period model with wage uncertainty. This extends the standard savings model by allowing a worker to allocate a fixed time budget between two work-shifts or to save. To test the existence of these channels, we conduct laboratory consumption/saving experiments. A novel feature of our experiments is that we tie them to a real-effort style task. In four treatments, we turn on and off the two channels for consumption smoothing: saving and time allocation. Our four main findings are: (i) subjects exercise more effort under certainty than under risk; (ii) savings are strictly positive for at least 85 percent of subjects (iii) a majority of subjects uses time allocation to smooth consumption; (iv) saving and time shifting are substitutes, though not perfect substitutes.
    Keywords: precautionary saving,labor supply,intertemporal substitution,experiment
    JEL: D14 E21 J22 C91 D81
    Date: 2020
  6. By: Jaeger, David A. (University of St. Andrews); Nunley, John M. (University of Wisconsin, La Crosse); Seals, Jr., R. Alan (Auburn University); Wilbrandt, Eric J.
    Abstract: We describe the demand for interns in the U.S. using ads from an internship-specific website. We find that internships are more likely to be paid when more closely associated with a specific occupation, when the local labor market has lower unemployment, and when the local and federal minimum wage are the same. A résumé audit study with more than 11,500 applications reveals that employers are more likely to respond positively when internship applicants have previous internship experience. Employers are also less likely to respond to applicants with black-sounding names and when the applicant is more distant from the firm.
    Keywords: internships, training, audit study
    JEL: J23 I23
    Date: 2020–02
  7. By: Dai, Li; Martins, Pedro S.
    Abstract: As China's firms upgrade their position in the quality ladder, vocational education may become more important. In this paper, we study returns to secondary vocational education in China paying attention to individual heterogeneity. We use instrumental variables based on geographical and longitudinal changes in enrolment to address the selection between the two types of education. We find that vocational education provides a wage premium vis-à-vis academic education of over 30% but which applies only for individuals at the middle of the conditional wage distribution.
    Keywords: Human capital,vocational education,quantile treatment effects
    JEL: I26 I25 J24 J31 C36
    Date: 2020
  8. By: Yoshimichi Murakami (Research Institute for Economics and Business Administration, Kobe University, Japan)
    Abstract: This study analyzes the impacts of further tariff reductions resulting from the proliferation of regional trade agreements on wage inequality between skilled and unskilled workers in Chile in the 2000s. Thus, we use data on effective tariff rates instead of uniform most-favored-nation rates to measure trade liberalization. We match panel data on industry characteristics, including effective tariff rates, to pooled individual cross-section data from national household surveys at the industry level. We find that the reductions in effective tariffs on final goods increase industry wage premiums, thus suggesting that liberalization-induced productivity improvements lead to higher wages. However, considering the differential impacts on different skill groups, we find that the reductions significantly increase industry wage premiums only for skilled workers, thereby increasing wage inequality. Moreover, the impact is larger in skilled workers employed in large-sized firms. The results are robust to the inclusion of other industry characteristics, including input tariffs, the share of foreign-owned capital, and payments to foreign technology. The results are also robust to the inclusion of industry productivity, which is likely to affect the effective tariffs and industry wage premiums simultaneously, as well as control for the potential endogeneity of trade policy.
    Keywords: Regional trade agreements; Effective tariffs; Industry wage premiums; Industry skill premiums; Productivity
    JEL: F16 F61 J31 O15 O54
    Date: 2020–03
  9. By: Keloharju, Matti (Aalto University School of Business); Knüpfer, Samuli (BI Norwegian Business School); Tåg, Joacim (Research Institute of Industrial Economics (IFN))
    Abstract: Boards hire and fire CEOs based on imperfect information. Using comprehensive data on 28 cohorts in Sweden, we analyze the role of a potentially important unobserved attribute—CEO health—in corporate governance. We find CEOs are significantly healthier than the population and other highskill professionals, in particular in mental health. Health at appointment predicts turnover, suggesting boards respond to health problems and correct mismatches that occurred at the time of appointment. Health-related corporate governance appears to work imperfectly, however, as we find CEO health also associates with firm policies requiring an active CEO role.
    Keywords: CEOs; Corporate Governance; Executives; Mental Health; Physical Health
    JEL: G34 I12 J24 J31
    Date: 2020–03–25
  10. By: Anil Özdemir (Department of Business Administration, University of Zurich); Helmut Dietl (Department of Business Administration, University of Zurich); Giambattista Rossi (Department of Management Birkbeck, University of London); Robert Simmons (Lancaster University, Management School, Department of Economics)
    Abstract: This paper examines whether workers are rewarded for inconsistent performances by salary premia. Some earlier research suggests that performance inconsistency leads to salary premia while other research finds premia for consistent performances. Using detailed salary and performance data, we find that inconsistency is rewarded for some dimensions of performance, specifically those where creativity is important and outcomes have higher variance. We find salary penalties for inconsistent performances in those dimensions that are basic requirements of successful team production.
    Keywords: physical salaries, performance, consistency
    JEL: J31 M52 Z20
    Date: 2020–03
  11. By: Clément Carbonnier (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques [Sciences Po] - Sciences Po - Sciences Po, Centre de recherche de la Banque de France - Banque de France); Clément Malgouyres (IPP - Institut des politiques publiques - PSE - Paris School of Economics, PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Loriane Py (Centre de recherche de la Banque de France - Banque de France, IPP - Institut des politiques publiques - PSE - Paris School of Economics); Camille Urvoy (LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques [Sciences Po] - Sciences Po - Sciences Po)
    Abstract: Do workers gain from lower business taxes, and why? We estimate how a large French corporate income tax credit is passed on to wages and explore the firm- and employee-level underlying mechanisms. The amount of tax credit firms get depends on their payroll share of workers paid less than a wage threshold. Exposure to the policy thus varies both across workers depending on their wage and across firms depending on their wage structure. Using exhaustive employer-employee data, we find that half of the surplus generated by the reform falls onto workers. Wage gains load on incumbents in high-skill occupations. The wage earnings of low-skill workers -- nearly all individually eligible -- do not change. This heterogeneous wage incidence is unlikely to be driven by scale effects or skill complementarities. We find that the groups of workers benefiting from wage gains are also more likely to continue working for the same firm. Further, we show that firms do not change their wage-setting behavior in response to the individual eligibility status of workers as there is no bunching in the distribution of entrants' wages. Overall, our results suggest that the wage incidence of firm taxation operates collectively through rent-sharing and benefits workers most costly to replace.
    Keywords: business taxation,tax incentives,wage incidence,rent sharing
    Date: 2020–03
  12. By: Bruce C. Fallick; Daniel Villar Vallenas; William L. Wascher (Bank für Internationalen Zahlungsausgleich; Board of Governors of the Federal Reserve System (U.S.); University of Pennsylvania)
    Abstract: Rigidity in wages has long been thought to impede the functioning of labor markets. In this paper, we investigate the extent of downward nominal wage rigidity in US labor markets using job-level data from a nationally representative establishment-based compensation survey collected by the Bureau of Labor Statistics. We use several distinct methods to test for downward nominal wage rigidity and to assess whether such rigidity is less or more severe in the presence of negative economic shocks than in more normal economic times. We find a significant amount of downward nominal wage rigidity in the United States and no evidence that the high degree of labor market distress during the Great Recession reduced downward nominal wage rigidity. We further find a lower degree of nominal rigidity at multi-year horizons.
    JEL: J3 E24
    Date: 2020–03–17
  13. By: Sangyup Choi (Yonsei University); Myungkyu Shim (Yonsei University)
    Abstract: This paper establishes new stylized facts about labor market dynamics in developing economies and proposes a simple theory to explain them. We first show that the response of hours worked and employment to a technology shock—identified by a structural VAR model with long-run restrictions—is smaller in developing economies than in advanced economies. We then present the evidence that the level of PPP-adjusted income per capita—a proxy for the importance of subsistence consumption—is strongly and robustly correlated with the relative variability of employment and consumption to output across countries, while other structural characteristics are not. We argue that an RBC model augmented with subsistence consumption can account for the several salient features of business cycle fluctuations in developing economies, including their distinct labor market dynamics under technology shocks.
    Keywords: Business cycles; Developing economies; Subsistence consumption; Labor market dynamics; In- come effect; Long-run restrictions
    JEL: E21 E32 F44 J20
    Date: 2020–03–12
  14. By: Edward L. Glaeser
    Abstract: American cities have experienced a remarkable renaissance over the past 40 years, but in recent years, cities have experienced considerable discontent. Anger about high housing prices and gentrification has led to protests. The urban wage premium appears to have disappeared for less skilled workers. The cities of the developing world are growing particularly rapidly, but in those places, the downsides of density are acute. In this essay, I review the causes of urban discontent and present a unified explanation for this unhappiness. Urban resurgence represents private sector success, and the public sector typically only catches up to urban change with a considerable lag. Moreover, as urban machines have been replaced by governments that are more accountable to empowered residents, urban governments do more to protect insiders and less to enable growth. The power of insiders can be seen in the regulatory limits on new construction and new businesses, the slow pace of school reform and the unwillingness to embrace congestion pricing.
    JEL: H70 R10 R31
    Date: 2020–03
  15. By: Huang, Bin (Nanjing University of Finance and Economics); Zhu, Yu (University of Dundee)
    Abstract: China experienced a near 5-fold increase in annual Higher Education (HE) enrolment in the decade starting in 1999. Using the China Household Finance Survey, we show that the expansion has exacerbated the large pre-existing urban-rural gap in educational attainment underpinned by the hukou (household registration) system. We then instrument years of schooling using the interaction of childhood urban hukou status and the timing of the expansion, which is analogous to a Difference-in-Differences estimator which uses rural students to control for any common time trend. The 2SLS estimates of 17% and 12% for men and women respectively are substantially larger than their OLS counterparts of 5% and 6%, both allowing for county fixed-effects. Our 2SLS results can be interpreted as a Local Average Treatment Effect (LATE), i.e. the average treatment effect of HE attendance on earnings for urban students who enrolled in HE as a result of the higher education expansion.
    Keywords: returns to education, 2SLS, higher education expansion, China
    JEL: I26 I23
    Date: 2020–02
  16. By: Ge, Suqin; Macieira, João
    Abstract: This study quantitatively assesses two alternative explanations for inter-industry wage differentials: worker heterogeneity in the formof unobserved quality and firmheterogeneity in the form of a firm's willingness to pay (WTP) for workers' productive attributes. We develop an empirical hedonic model of labor demand and apply a two-stage nonparametric procedure to recover worker and firm heterogeneities. In the first stage we recover unmeasured worker quality by estimating market-specific hedonic wage functions nonparametrically. In the second stage we infer each firm's WTP parameters for worker attributes by using first-order conditions from the demand model. We apply our approach to quantify inter-industry wage differentials on the basis of individual data from the NLSY79 and find that worker quality accounts for approximately two thirds of the inter-industry wage differentials.
    Keywords: hedonic models, inter-industry wage di§erentials, labor quality, wage determination
    JEL: J31 J24 C51 M51
    Date: 2020
  17. By: Rachel Scarfe (School of Economics, University of Edinburgh); Carl Singleton (Department of Economics, University of Reading); Paul Telemo (School of Economics, University of Edinburgh)
    Abstract: Using longitudinal wage and performance data for workers (players) and firms (teams), we study the sources of superstar wage effects in a particular market for sports talent: Major League Soccer in the United States. The top earners, whose annual salaries are mostly not accounted for by their past MLS performances, when compared alongside other footballers, are paid more because they attract significantly higher stadium attendances. There is no evidence that high residual salary spending by teams affects their relative performance in football terms, or that the amount teams spend on actual talent affects attendances. Taken together, these results suggest that a popularity-based explanation of superstar wage effects is appropriate among the top earners in this labour market.
    Keywords: Superstar effects, Top incomes, Major League Soccer
    JEL: D31 J24 J31 L83 Z22
    Date: 2020–03–20
  18. By: Garibaldi, Pietro (University of Turin); Gomes, Pedro Maia (Birkbeck, University of London); Sopraseuth, Thepthida (University of Cergy-Pontoise)
    Abstract: We propose a simple theory of under- and over-employment. Individuals of high type can perform both skilled and unskilled jobs, but only a fraction of low-type workers can perform skilled jobs. People have different non-pecuniary values over these jobs, akin to a Roy model. We calibrate two versions of the model to match moments of 17 OECD economies, considering separately education and skills mismatch. The cost of mismatch is 3% of output on average but varies between -1% to 9% across countries. The key variable that explains the output cost of mismatch is not the percentage of mismatched workers but their wage relative to well-matched workers.
    Keywords: education mismatch, skill mismatch
    JEL: E24 J24
    Date: 2020–02
  19. By: Sebastian G. Kessing (University of Siegen); Vilen Lipatov (Justus Liebig University Giessen); J. Malte Zoubek (University of Siegen)
    Abstract: We study how regional productivity differences and labor mobility shape optimal Mirrleesian tax-transfer schemes. When tax schedules are not allowed to differ across regions, productivity-enhancing inter-regional migration exerts a downward pressure on optimal marginal tax rates. When regionally differentiated taxation is allowed, marginal tax rates in high-(low-)productivity regions should be corrected downwards (upwards) relative to the benchmark without migration. Simulations of the productivity differences between metropolitan and other areas of the US indicate that migration affects the optimal tax-transfer schedule more strongly in the regionally differentiated rather than in the undifferentiated case.
    Keywords: Optimal taxation, place-based redistribution, regional inequality, migration, multidimensional screening, delayed optimal control
    JEL: H11 J45 R12
    Date: 2020
  20. By: Giuseppe Nicoletti; Indre Bambalaite; Christina von Rueden
    Abstract: This paper assesses the possible dynamic effects of occupational entry regulations (OER) on productivity. It combines firm-level productivity data with a new cross-country policy indicator measuring the stringency of OER by the presence of administrative burdens, qualifications requirements, and mobility restrictions, for five professional and ten personal services. The evidence suggests that bold reforms easing OER, especially those concerning qualification requirements, could help increase the contribution of personal and professional services to aggregate productivity growth via two channels: the acceleration of their catch up to best global practices (within-firm channel), where firms in regulated sectors could gain up to 2.5 percentage points of productivity on average; and a higher contribution of labour reallocation to firms’ employment growth (between-firm channel), which could increase by up to 10 percent for the most productive firms.
    Keywords: catch-up, occupational licensing, productivity, reallocation, regulations
    JEL: J44 O43 L5 O57 L16 C21
    Date: 2020–03–31
  21. By: Doruk, Ömer Tuğsal; Pastore, Francesco; Yavuz, Hasan Bilgehan
    Abstract: Identifying the determinants of intergenerational mobility is an important aim in the development literature. In this article, intergenerational transmission is examined for 6 neglected Latin American Economies (Brazil, Costa Rica, Ecuador, Mexico, Panama and Puerto Rico). We use a multinomial logit model of the determinants of choosing a white-collar job for a child of a father working in farming as compared to a child whose father had a blue- or a white-collar job. Our findings show that, in the studied countries, intergenerational occupation transmission is mainly linked to low skilled jobs. Our analysis confirms the low degree of social mobility typical of Latin America, contributing, in turn, to explain their low growth rate. Our findings help identifying specific target groups - talented young women coming from the agricultural sector - to develop in them soft skills while at primary or low secondary school and work-related skills while at the high secondary school or at the university.
    Keywords: Intergenerational occupational mobility,Intergenerational mobility,Latin American countries
    JEL: D60 I30 J24 J6 J62
    Date: 2020
  22. By: Tushar Bharati (Economics Discipline, Business School, University of Western Australia); Yiwei Qian (Department of Economics, University of Southern California); Jeonghwan Yun (Department of Economics, University of Southern California)
    Abstract: Using the staggered rollout of the Indonesian “Conversion to Liquefied Petroleum Gas (LPG) Program”, we show that a subsidy on the labor- and time-saving cook technology increased the female labor force participation. The program also increased household consumption expenditure and the decision-making power of women in the household, especially in financial matters. A back-of-the-envelope calculation suggests that the benefits of switching to LPG far outweighed the costs to the households. Based on previous research, we conjecture that intra-household externalities and gender differences in preferences drive low rates of adoption of the cost effective technology. The program’s impact on the financial decision-making power of women suggests that subsidies that empower women, even if temporary, can encourage the adoption and sustained use of beneficial technology.
    Keywords: household technology; time saving; female labor; decision making
    JEL: D13 J22 O14 Q4
    Date: 2020
  23. By: Luis E. Arango (Banco de la República de Colombia); Sergio A. Rivera (Banco de la República de Colombia)
    Abstract: In a labour demand approach, we present evidence of the effect that variations of the real minimum wage has on the formal employment of the industrial sector. The sample includes all industrial establishments of the Annual Manufacturing Survey between 2000 and 2015 that were always active during the whole period. We differentiate the workforce between skilled and unskilled by types of contracts (permanent and temporary). The real wage paid to workers by plants is divided into two components: one linked to the minimum wage and other that mirrors the plants’ own-policy remuneration. The labour demand functions, conditional and unconditional, that we estimate are consistent with the theory and the previous literature. The evidence suggests that increases of the real minimum wage destroy employment fundamentally of unskilled labour, both permanent and temporary mainly in plants with less than 100 workers dedicated to production. The long-term elasticities of labour demand to the real minimum wage that we estimate in multiple specifications are between -0.615 and -0.715. Thus, an increase of 1 percent of the minimum wage reduces, ceteris paribus, labour demand about 0.7 percent within a period between one and two years. The real wage elasticity is between -0.358 and -0.718 while the sizeable output elasticity, about 1.6, suggests a high cyclicality of labour demand. **** RESUMEN: En un enfoque de demanda laboral, presentamos evidencia del efecto que tienen las variaciones del salario mínimo real en el empleo formal del sector industrial. La muestra incluye los establecimientos industriales de la Encuesta Anual de Manufactura entre 2000 y 2015 que estuvieron activos durante todo el período. Diferenciamos los trabajadores entre calificados y no calificados con contratos permanentes y temporales. El salario real que pagan las plantas a sus trabajadores se divide en dos componentes: uno vinculado al salario mínimo y otro que refleja la política de remuneración propia de la firma. Las funciones de demanda laboral estimadas, condicional e incondicional, son consistentes con la teoría y la literatura previa. La evidencia sugiere que los aumentos en el salario mínimo real destruyen el empleo fundamentalmente de mano de obra no calificada, tanto permanente como temporal, principalmente en planteas con menos de 100 trabajadores dedicados a la producción. Las elasticidades a largo plazo de la demanda laboral al salario mínimo real estimadas en múltiples especificaciones están entre -0,615 y -0,715. Esto es, con todo lo demás constante, un aumento del SM real de 1% produce una pérdida de puestos de trabajo de 0,7% en un horizonte de uno a dos años. La elasticidad al salario real está entre -0,358 y -0,718 mientras que la elasticidad al producto se sitúa alrededor de 1,6, lo cual sugiere una alta dependencia de la demanda laboral al ciclo económico.
    Keywords: minimum wage, employment, permanent workers, temporary workers, skilled and unskilled workers, salario mínimo, empleo, empleados permanentes, empleados temporales, trabajadores calificados y no calificados.
    JEL: J23
    Date: 2020–03
  24. By: Brunello, Giorgio (University of Padova); Wruuck, Patricia (European Investment Bank)
    Abstract: This report looks at employer–provided training in Europe. We start with a brief outline of the economic theory of training. We then look at the recent facts, by combining data from two employer surveys, the European Investment Bank's Investment Survey (EIBIS) and Eurostat's Continuous Vocational Training Survey (CVTS). We review the recent empirical literature on the relationship between economic institutions and training and between training and productivity and consider whether financing constraints hamper the training provision by firms. The paper concludes by discussing policy implications.
    Keywords: employer provided training, Europe
    JEL: J24
    Date: 2020–02
  25. By: Christina von Rueden; Indre Bambalaite
    Abstract: This paper explores cross-country differences in the design and stringency of occupational entry regulations (OER) in five professional services, nine personal services and nurses, based on a new composite indicator. The indicator – which is available for a total of 18 OECD countries, India and South Africa, with Canada and the United States being covered at the province-level or state-level – provides a comparative source of information on the various approaches used across countries to regulate entry into services. It notably distinguishes between different areas of regulation (administrative, qualification and mobility requirements) and different types of regulation (licensing, a situation in which only supervisors require a license, and certification). According to these metrics, the stringency of OER varies significantly across occupations, with stark differences emerging between personal and professional services, which are typically subject to far stricter entry requirements.
    Keywords: occupational licensing, regulations
    JEL: J44 O57 L5
    Date: 2020–03–31
  26. By: Heitor Almeida; Nuri Ersahin; Vyacheslav Fos; Rustom M. Irani; Mathias Kronlund
    Abstract: Previous research shows that stock repurchases that are caused by earnings management lead to reductions in ?rm-level investment and employment. It is natural to expect ?rms to cut less productive investment and employment ?rst, which could lead to a positive e?ect on ?rm-level productivity. However, using Census data, we ?nd that ?rms make cuts across the board irrespective of plant productivity. This pattern seems to be associated with frictions in the labor market. Speci?cally, we ?nd evidence that unionization of the labor force may prevent ?rms from doing e?cient downsizing, forcing them to engage in easy or expedient downsizing instead. As a result of this ine?cient downsizing, EPS-driven repurchases lead to a reduction in long-term productivity.
    Keywords: roductivity, Employment, Labor unions, Investment, Short-termism, Share repurchases
    JEL: G32 G35 J23
    Date: 2020–03

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