nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2020‒04‒27
25 papers chosen by
Joseph Marchand
University of Alberta

  1. Comparative Advantage and Moonlighting By Stéphane AURAY; David L. FULLER; Guillaume VANDENBROUCKE
  2. Mandated Sick Pay: Coverage, Utilization, and Welfare Effects By Maclean, J. Catherine; Pichler, Stefan; Ziebarth, Nicolas R.
  3. Is Precarious Employment Bad for Worker Health? The Case of Zero Hours Contracts in the UK By Farina, Egidio; Green, Colin P.; McVicar, Duncan
  4. The Labor Market Returns to Advanced Degrees By Joseph G. Altonji; Ling Zhong
  5. Does retirement affect voluntary work provision? Evidence from England, Ireland and the U.S. By Peter Eibich; Angelo Lorenti; Irene Mosca
  6. The Effect of Labor Market Conditions at Entry on Workers' Long-Term Skills By Arellano-Bover, Jaime
  7. Adult skills and labor market conditions during teenage years: Cross-country evidence from ALL and PIAAC By Marianne Haraldsvik; Bjarne Strøm
  8. Moving from a Poor Economy to a Rich One: The Contradictory Roles of Technology and Job Tasks By Yashiv, Eran
  9. Entrepreneurship and the fight against poverty in US Cities By Lee, Neil; Rodríguez-Pose, Andrés
  10. Minimum Wages and Firm-Level Employment in a Developing Country By Sjöholm, Fredrik
  11. Spatial aggregation bias in wage curve and NAWRU estimation By Damiaan Persyn
  12. Unemployment-Insurance Taxes and Labor Demand: Quasi-Experimental Evidence from Administrative Data By Johnston, Andrew C.
  13. Cash Transfer Programs and Household Labor Supply By Del Boca, Daniela; Pronzato, Chiara D.; Sorrenti, Giuseppe
  14. What Makes Work Meaningful and Why Economists Should Care about It By Nikolova, Milena; Cnossen, Femke
  15. The Risk of Automation in Argentina By Leonardo Gasparini; Irene Brambilla; Andrés César; Guillermo Falcone; Carlo Lombardo
  16. Income Taxation and Dual Job Labour Supply By Choe, Chung; Oaxaca, Ronald L.; Renna, Francesco
  17. Connecting to Power: Political Connections, Innovation, and Firm Dynamics By Ufuk Akcigit; Salomé Baslandze; Francesca Lotti
  18. Human Capital as Engine of Growth the Role of Knowledge Transfers in Promoting Balanced Growth within and across Countries By Ehrlich, Isaac; Pei, Yun
  19. Understanding “Wage Theft”: Evasion and Avoidance Responses to Minimum Wage Increases By Jeffrey Clemens; Michael R. Strain
  20. What Happened to the US Economy During the 1918 Influenza Pandemic? A View Through High-Frequency Data By Francois R. Velde
  21. Losing control? Unions' Representativeness, "Pirate" Collective Agreements and Wages. By Claudio Lucifora; Daria Vigani
  22. Teacher Preferences, Working Conditions, and Compensation Structure By Johnston, Andrew C.
  23. Labor Market Polarization and the Great Divergence: Theory and Evidence By Donald R. Davis; Eric Mengus; Tomasz K. Michalski
  24. Understanding the Mechanisms Linking College Education with Longevity By Kai Hong; Peter Savelyev; Kegon Teng Kok Tan
  25. Rising Burdens of Proofs and The Grand Bargain of Workers’ Compensation Laws By Andy Yuan; Price V. Fishback

  1. By: Stéphane AURAY (CREST-ENSAI and ULCO); David L. FULLER (University of Wisconsin-Oshkosh); Guillaume VANDENBROUCKE (Research Division, Federal Reserve Bank of St. Louis, P.O. Box 442, St. Louis, MO 63166, USA)
    Abstract: The prevalence of multiple job holders in the U.S. data is trending down since the mid 1990s, and cross-sectional data reveal two seemingly contradictory patterns regarding multiple job holders: (i) conditional on education the most productive workers are the least likely to hold multiple jobs; (ii) the most educated workers are the most likely to hold multiple jobs, even though they are the most productive. We develop an equilibrium model of the labor market to understand these facts. A dominating income effect explains both the negative correlation with productivity and the downward trend overtime, while a higher part-to-fulltime pay differential for skilled workers (a comparative advantage) explains the positive correlation with education. We provide empirical evidence of the comparative advantage using CPS data. We calibrate the model to 1994 and assess its ability to reproduce the 2017 data. There are three exogenous driving forces: productivity, number of children and the proportion of skilled workers. The model accounts for 64.1% of the moonlighting trend for college-educated workers, and 96.7% for high school-educated workers.
    Keywords: Macroeconomics, labor supply, multiple job holders, productivity, full-time job, part-time job, comparative advantage, income effect.
    JEL: E1 J2 J22 J24 O4
    Date: 2020–03–01
  2. By: Maclean, J. Catherine (Temple University); Pichler, Stefan (ETH Zurich); Ziebarth, Nicolas R. (Cornell University)
    Abstract: This paper evaluates the labor market effects of sick pay mandates in the United States. Using the National Compensation Survey and difference-in-differences models, we estimate their impact on coverage rates, sick leave use, labor costs, and non-mandated fringe benefits. Sick pay mandates increase coverage significantly by 13 percentage points from a baseline level of 66%. Newly covered employees take two additional sick days per year. We find little evidence that mandating sick pay crowds-out other non-mandated fringe benefits. We then develop a model of optimal sick pay provision along with a welfare analysis. For a range of plausible parameter values, mandating sick pay increases welfare.
    Keywords: sick pay mandates, sick leave, medical leave, employer mandates, fringe benefits, moral hazard, unintended consequences, labor costs, National Compensation Survey (NCS), welfare effects, optimal social insurance, Baily-Chetty
    JEL: I12 I13 I18 J22 J28 J32
    Date: 2020–04
  3. By: Farina, Egidio (Queen's University Belfast); Green, Colin P. (Norwegian University of Science and Technology (NTNU)); McVicar, Duncan (Queen's University Belfast)
    Abstract: The increasing numbers of workers in employment with little to no job security, so-called precarious employment, has led to a range of concerns over worker outcomes. A particular focus is the effect of instability on health in general, and particularly, mental health. We provide new evidence on this, focusing on an extreme form of precarious employment that has grown rapidly in the UK, zero-hours contracts (ZHCs). We demonstrate that workers employed on ZHCs are more likely to report a long-lasting health problem than workers employed on other types of contract. In particular, reported levels of mental ill health are higher (almost double) among ZHC workers than for other workers. These associations remain, and a positive association between ZHC employment and physical ill health emerges, after controlling for a rich set of observable characteristics. Estimated associations vary little between different demographic groups, although they are concentrated in parts of the economy where underlying job instability is likely to be higher. Finally, we exploit sectoral variation in the historical prevalence of ZHC-like employment, in an instrumental variables framework, to demonstrate large and potentially causal effects of ZHC employment on reporting a long-lasting health problem and on mental ill health, but no effect on physical health. It is unlikely that these effects are currently factored into short-term employment conditions or that they attract compensating wage differentials.
    Keywords: zero hours contracts, atypical employment, precarious employment, casual employment, health, mental health, instrumental variables
    JEL: J21 J48 M55
    Date: 2020–04
  4. By: Joseph G. Altonji; Ling Zhong
    Abstract: We estimate the labor market return to an MBA, a JD, and master’s in engineering, nursing, education, psychology and social work, and thirteen other graduate degrees. To control for heterogeneity in preferences and ability, we use fixed effects for combinations of field-specific undergraduate and graduate degrees obtained by the last time we observe an individual. Basically, we compare earnings before the graduate degree to earnings after the degree. We find large differences across graduate fields in earnings effects, and more moderate differences in internal rates of return that account for program length and tuition. The returns often depend on the undergraduate major. The contribution of occupational upgrading to the earnings gain varies across degrees. Finally, simple regression-based estimates of returns to graduate fields are often highly misleading.
    JEL: I21 I26 J24 J31
    Date: 2020–04
  5. By: Peter Eibich (Max Planck Institute for Demographic Research, Rostock, Germany); Angelo Lorenti (Max Planck Institute for Demographic Research, Rostock, Germany); Irene Mosca (Department of Economics Finance and Accounting, National University of Ireland, Maynooth)
    Abstract: Voluntary work is an important contribution for many non-profit organizations, such as charities, political and religious organizations. Older individuals make up a sizable share of the volunteer workforce, and volunteering is often regarded as an example of “active ageing”. In this study, we examine whether retirement has a causal effect on the frequency of voluntary work provision in three English-speaking countries – England, Ireland and the U.S. We draw on data from the ELSA, TILDA and HRS studies and employ a harmonised approach in the empirical analysis. We use eligibility ages for old age pensions in an instrumental variable estimation to address potential confounding. We find that retirement increases the frequency of voluntary work provision in all three countries, especially among men. This suggests that labour market policies aimed at increasing labour force participation at older ages might have unintended consequences for the size of the volunteer workforce.
    Keywords: retirement, voluntary work, instrumental variables.
    JEL: J22 J26
    Date: 2020
  6. By: Arellano-Bover, Jaime (Yale University)
    Abstract: This paper studies the impact of labor market conditions during the education-to-work transition on workers' long-term skill development. Using representative survey data on measures of work-relevant cognitive skills for adults from 19 countries, I document four main findings: i) cohorts of workers who faced higher unemployment rates at ages 18–25 have lower skills at ages 36–59; ii) unemployment rates faced at later ages (26–35) do not have such an effect; iii) the former findings hold even though, on average, people get more formal education as a response to higher unemployment in their late teens and early twenties; iv) skill inequality is affected: workers whose parents were less educated bear most of the negative effects. These findings can be rationalized by on-the-job learning during the early twenties being an important factor of skill-development, and such learning being negatively impacted by bad macroeconomic conditions. Using German panel data on skills, I show that young workers at large firms experience higher skill growth than those at small firms. This finding suggests firm heterogeneity in human capital provision to young workers as a potential mechanism since, in bad economic times, young workers disproportionately match with small firms.
    Keywords: labor market entry, macroeconomic conditions, measures of skills, cognitive skills, on-the-job learning, firms
    JEL: J24 J23 E24
    Date: 2020–04
  7. By: Marianne Haraldsvik (Department of Economics, Norwegian University of Science and Technology; Center for Economic Research at NTNU); Bjarne Strøm (Department of Economics, Norwegian University of Science and Technology)
    Abstract: Do individuals finishing compulsory school in economic downturns end up with higher skills in adulthood than comparable individuals that finish compulsory school in economic upturns? This paper answers this question by exploring data on country unemployment rates combined with individual data on educational attainment and adult skills in numeracy and literacy from the Program for the International Assessment of Adult Competencies (PIAAC) and the Adult Literacy and Life Skills Survey (ALL). We find that completed education is countercyclical, and the same pattern is found for adult skills in numeracy and literacy. The results are fairly robust across different model specifications including fixed country and cohort effects and country specific cohort trends. The results indicates that the labor market conditions at the time when young people make crucial educational decisions have long lasting effect on skills and potential earnings in adulthood.
    Keywords: Human capital accumulation, business cycles, adult skills
    JEL: E24 I2 J2
    Date: 2020–04–08
  8. By: Yashiv, Eran (Tel Aviv University)
    Abstract: The phenomenon of workers moving from a poor to a rich economy is high on the political agenda. When a worker moves to a richer economy, what is gained by the move? The empirical challenge in giving an answer stems from the difficulty to disentangle income differences from many other determinants. Estimates are potentially biased due to substantial misspecification of the model, when omitting relevant determinants. The paper makes use of a unique data set on Palestinian workers, working locally and in Israel, that allows to isolate the pure effects of income differences with no other relevant factors. It explicitly addresses the question of what workers newly experience in the richer economy (higher productivity), what is taken from the poorer economy (human capital), and their choices in moving (self-selection). Importantly, it encompasses the constraints placed on workers in terms of the human capital skills demanded. The findings show that income differences affecting worker choice are made up of contradictory elements. Consistently with findings in the development accounting literature, productivity differences in favor of the richer economy, due to differences in TFP and in physical capital, are sizeable and operate to raise wages for movers. But lower job task values operate to lower wages for movers, who are offered manual tasks in the rich economy. The latter loss offsets the former gain. The paper emphasizes the idea that tasks are tied to locations. Workers choose a location-wage-task 'pack,' with movers getting low rewards to the skills bundled in their job tasks.
    Keywords: movers and stayers, rich and poor economies, pure income effects, job tasks, TFP differentials, human capital differences, self-selection, skill bundle, development accounting
    JEL: E24 J24 J31 O15
    Date: 2020–04
  9. By: Lee, Neil; Rodríguez-Pose, Andrés
    Abstract: Entrepreneurship is sometimes portrayed as a cure-all solution for poverty reduction. Proponents argue it leads to job creation, higher incomes, and lower poverty rates in the cities in which it occurs. Others, by contrast, posit that many entrepreneurs are actually creating low-productivity firms serving local markets. Yet, despite this debate, little research has considered the impact of entrepreneurship on poverty in cities. This paper addresses this gap using a panel of US cities for the period between 2005 and 2015. We hypothesise that the impact of entrepreneurship depends on whether it occurs in tradeable sectors – and, therefore, is more likely to have positive local multiplier effects – or non-tradable sectors, which may saturate local markets. We find that entrepreneurship in tradeables reduces poverty and increases incomes for non-entrepreneurs. The result is confirmed using an instrumental variable approach, employing the inheritance of entrepreneurial traits as an instrument. In contrast, while there are some economic benefits from non-tradeable entrepreneurship, we find these are not large enough to reduce poverty.
    Keywords: entrepreneurship; Poverty; Cities; Economic development; USA
    JEL: M13 J31 J21 O18 R11
    Date: 2020–04–09
  10. By: Sjöholm, Fredrik (Department of Economics, Lund University, and)
    Abstract: The effect of minimum wages on employment is a matter of debate, and the existing empirical literature contains mixed results. One reason for this is the methodological difficulties involved where changes in minimum wages are endogenous to other important economic changes. To overcome this problem, we examine exogenous changes to local minimum wages in Indonesia between 1989 and 1994. Our natural experiment results from a national policy change: from minimum wages being determined by local guidelines and criteria to minimum wages being harmonized and set according to nationwide criteria. We examine how these changes in minimum wages affect employment, considering the effect both on employment within plants and on exit of plants. Our results show no evidence of an effect of minimum wages on employment in Indonesian plants. One explanation found in the data is that higher minimum wages force plants to increase productivity, which in turn enables them to retain their labor force, despite higher wage costs.
    Keywords: Minimum wages; Employment; Plants; Indonesia
    JEL: J21 J23 J38
    Date: 2020–04–08
  11. By: Damiaan Persyn (European Commission - JRC)
    Abstract: I argue in this paper that the estimation of wage curves and NAWRUs at the country level suffers from spatial aggregation bias. Using European data for the years 2000-2017, I find steeper country level wage curves and higher NAWRUs, compared to estimating at the underlying regional level. The distribution of regional unemployment rates within countries over time is not mean-scaled. Regions with low unemployment rates are the main drivers of changes in aggregate unemployment. The steepness of a log-linear wage curve in regions with low unemployment dominates at the aggregate (country) level, overestimating wage pressure. Lagged wages are important in explaining wage growth, together with unemployment. This suggests that a wage curve fits the data better than the assumption of a NAWRU or long run natural rate of unemployment. With regional wage curves, spatial aggregation bias can produce aggregate data that resembles such a natural rate of unemployment, however.
    Keywords: Region, Growth, Unemployment, NAWRU, NAIRU, Wage Curve, Labor markets.
    JEL: J30 J41 R23
    Date: 2020–04
  12. By: Johnston, Andrew C. (University of California, Merced)
    Abstract: To finance unemployment insurance, states raise payroll tax rates on employers who engage in layoffs. Tax rates are, therefore, highest for firms after downturns, potentially hampering labor-market recovery. Using full-population, administrative records from Florida, I estimate the effect of these tax increases on firm behavior leveraging a regression kink design in the tax schedule. Tax hikes reduce hiring and employment substantially, with no effect on layoffs or wages. The results imply unanticipated costs of the financing regime which reduce the optimal benefit by a quarter and account for twelve percent of the unemployment in the wake of the Great Recession.
    Keywords: unemployment insurance, payroll taxes, recession
    JEL: D22 H22 H25 H71 J23 J32 J38 J65
    Date: 2020–04
  13. By: Del Boca, Daniela (University of Turin); Pronzato, Chiara D. (University of Turin); Sorrenti, Giuseppe (University of Amsterdam)
    Abstract: Employment helps reduce the risk of poverty. Through a randomized controlled trial, we evaluate the impact of a conditional cash transfer (CCT) program to low-income families with dependent children on household members' labor supply. Recipients are required to attend labor-market-oriented mentoring courses as a condition of the transfer. One year after admission to the program, fathers assigned to the CCT program are more likely to work (+14 percent) than fathers assigned to an unconditional cash transfer program or to a pure control group. No effect arises for mothers. Results seem to be explained by improved family networks and increased parental investments in activities that enhance labor market opportunities.
    Keywords: conditional cash transfers, poverty, household labor supply, mentoring courses
    JEL: I10 I20 J24 I31
    Date: 2020–03
  14. By: Nikolova, Milena (University of Groningen); Cnossen, Femke (University of Groningen)
    Abstract: We demonstrate why meaningful work, i.e. job-related activities that individuals view as purposeful and worthwhile, matters to labour economists. Building on self-determination theory, which specifies the roles of autonomy, competence, and relatedness as preconditions for motivation, we are the first to explore the determinants of work meaningfulness. Specifically, using three waves of the European Working Conditions Survey, we show that autonomy, competence, and relatedness explain about 60 percent of the variation in work meaningfulness perceptions. Meanwhile, extrinsic factors, such as income, benefits, and performance pay, are relatively unimportant. Meaningful work also predicts absenteeism, skills training, and retirement intentions, which highlights the concept's economic significance. We provide new insights that could help organise the future of work in a meaningful and dignifying way and propose concrete avenues for future research on meaningful work in economics.
    Keywords: meaningful work, motivation, non-monetary benefits of work, labour economics, labour market outcomes, self-determination theory
    JEL: J01 J30 J32 J81 I30 I31 M50
    Date: 2020–04
  15. By: Leonardo Gasparini (Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS), IIE-FCE - Universidad Nacional de La Plata, CONICET); Irene Brambilla (Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS), IIE-FCE - Universidad Nacional de La Plata, CONICET); Andrés César (Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS), IIE-FCE - Universidad Nacional de La Plata); Guillermo Falcone (Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS), IIE-FCE - Universidad Nacional de La Plata, CONICET); Carlo Lombardo (Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS), IIE-FCE - Universidad Nacional de La Plata, CONICET)
    Abstract: In this paper we characterize workers’ vulnerability to automation in the near future in Argentina as a function of the exposure to routinization of the tasks that they perform and the potential automation of their occupation. In order to do that we combine (i) indicators of potential automatability by occupation and (ii) worker’s information on occupation and other labor variables. We find that the ongoing process of automation is likely to significantly affect the structure of employment. In particular, unskilled and semi-skilled workers are likely to bear a disproportionate share of the adjustment costs. Automation will probably be a more dangerous threat for equality than for overall employment.
    JEL: J21 J23 J24 O33
    Date: 2020–04
  16. By: Choe, Chung (Hanyang University); Oaxaca, Ronald L. (University of Arizona); Renna, Francesco (University of Akron)
    Abstract: This paper examines the effects of increasing marginal tax rates on labour supply in a setting in which workers may hold two jobs and may be constrained in their weekly hours on their main jobs. A panel data, multi-equation labour supply model is estimated with correction for tax system endogeneity and multi-sample selection in a correlated random effects framework. Data come from the British Household Panel Survey. The effects of counterfactual increases in marginal tax rates are obtained from Gauss-Seidel simulations of labour supply embedded in a tax system with allowances, tax credits, and child benefits. Labour supply to the main job is reduced by increased marginal tax rates while labour supply to the second job is increased. On net total labour supply is reduced. These effects diminish with increased marginal tax rates. In addition there are labour force withdrawal effects as well as transitions from dual job holding to unitary job holding in response to increased marginal tax rates.
    Keywords: dual job, labour supply, taxation, simulation
    JEL: J01 J22 H24
    Date: 2020–03
  17. By: Ufuk Akcigit; Salomé Baslandze; Francesca Lotti
    Abstract: How do political connections affect firm dynamics, innovation, and creative destruction? To answer this question, we build a firm dynamics model, where we allow firms to invest in innovation and/or political connection to advance their productivity and to overcome certain market frictions. Our model generates a number of theoretical testable predictions and highlights a new interaction between static gains and dynamic losses from rent-seeking in aggregate productivity. We test the predictions of our model using a brand-new dataset on Italian firms and their workers. Our dataset spans the period from 1993 to 2014, where we merge: (i) firm-level balance sheet data, (ii) social security data on the universe of workers, (iii) patent data from the European Patent Office, (iv) the national registry of local politicians, and (v) detailed data on local elections in Italy. We find that firm-level political connections are widespread, especially among large firms, and that industries with a larger share of politically connected firms feature worse firm dynamics. We identify a leadership paradox: when compared to their competitors, market leaders are much more likely to be politically connected but much less likely to innovate. In addition, political connections relate to a higher rate of survival, as well as growth in employment and revenue, but not in productivity—a result that we also confirm using a regression discontinuity design.
    Keywords: political connections; productivity; innovation; firm dynamics; creative destruction
    JEL: O30 O43
    Date: 2020–04–17
  18. By: Ehrlich, Isaac (University at Buffalo, SUNY); Pei, Yun (University at Buffalo, SUNY)
    Abstract: Unlike physical capital, human capital has both embodied and disembodied dimensions. It can be perceived of as skill and acquired knowledge, but also as knowledge spillover effects between overlapping generations and across different skill groups within and across countries. We illustrate the roles these characteristics play in the process of economic development; the relation between income growth and income and fertility distributions; and the relevance of human capital in determining the skill distribution of immigrants in a balanced-growth global equilibrium setting. In all three illustrations, knowledge spillover effects play a key role. The analysis offers new insights for understanding the decline in fertility below population replacement rate in many developed countries; the evolution of income and fertility distributions across developing and developed countries; and the often asymmetric effects that endogenous immigration flows and their skill composition exert on the long-term net benefits from immigration to natives in source and destination countries.
    Keywords: human capital, economic growth, demographic change, endogenous immigration, income distribution
    JEL: F22 F43 J11 J24 O15
    Date: 2020–04
  19. By: Jeffrey Clemens; Michael R. Strain
    Abstract: A holistic assessment of the labor market effects of minimum wage regulation requires understanding employer compliance. We investigate how minimum wage increases and the strength of enforcement regimes affect the prevalence of subminimum wage payment. Using the Current Population Survey (CPS), we find strong evidence that higher minimum wages lead to a greater prevalence of subminimum wage payment. We estimate that increases in measured underpayment following minimum wage increases average between 14 and 22 percent of realized wage gains. Furthermore, we provide evidence that these estimates are unlikely to be driven by measurement error in the CPS’s wage data, which are self-reported. Taken together, we interpret these findings as evidence that minimum wage noncompliance is an important reality in the low-wage labor market. We find some evidence that enforcement regimes mediate both baseline rates of subminimum wage payment and the response of subminimum wage payment to increases in minimum wages.
    JEL: J08 J38 K42
    Date: 2020–04
  20. By: Francois R. Velde
    Abstract: Burns and Mitchell (1946, 109) found a recession of “exceptional brevity and moderate amplitude.” I confirm their judgment by examining a variety of high-frequency data. Industrial output fell sharply but rebounded within months. Retail seemed little affected and there is no evidence of increased business failures or stressed financial system. Cross-sectional data from the coal industry documents the short-lived impact of the epidemic on labor supply. The Armistice possibly prolonged the 1918 recession, short as it was, by injecting momentary uncertainty. Interventions to hinder the contagion were brief (typically a month) and there is some evidence that interventions made a difference for economic outcomes.
    Keywords: 1918 Flu Pandemic; Covid-19; Labor Supply
    JEL: E32 I10 I18 H1 J22
    Date: 2020–04–10
  21. By: Claudio Lucifora (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Daria Vigani
    Abstract: This paper documents the evolution of sector-level collective agreements in Italy and estimates the wage effects of the diffusion of non-representative agreements, often signed by unknown organisations - i.e. "pirate" agreements. Using employer-employee data from Social Security Archives, we nd evidence of a signicant dumping effect on wages associated with different types of non-representative agreements (-15% with respect to regular collective agreements). We show that half of the wage differential associated with "pirate" agreements is due to selection effects. Also, heterogeneous effects are found across rm size and industry aliation. Finally, we show that rms with non-representative agreements are also less likely to comply with negotiate.
    Keywords: collective bargaining, collective agreements, representativeness, wage dierentials.
    JEL: J52 J31 J41
    Date: 2020–03
  22. By: Johnston, Andrew C. (University of California, Merced)
    Abstract: Improving schools depends on attracting high-caliber teachers and increasing retention, both made possible by appealing to teacher preferences. I deploy a discrete-choice experiment in a setting where teachers have reason to reveal their preferences. There are three main findings: (1) I calculate willingness-to-pay for a series of workplace attributes including salary structure, retirement benefits, performance pay, class size, and time-to-tenure. (2) Highly rated teachers have stronger preferences for schools offering performance pay, which may be used to differentially attract and retain them. (3) Under various criteria, schools seem to underpay in salary and performance pay while overpaying in retirement benefits.
    Keywords: teachers, labor market, achievement, retention, selection
    JEL: I20 J32 J45 M50
    Date: 2020–04
  23. By: Donald R. Davis; Eric Mengus; Tomasz K. Michalski
    Abstract: In recent decades, middle-paid jobs have declined, replaced by a mix of high and low-paid jobs. This is labor market polarization. At the same time, initially skilled and typically larger cities have become even more skilled relative to initially less skilled and typically smaller cities. This is the great divergence. We develop a theory that links these two phenomena. We draw on existing models of polarization and heterogeneous labor in spatial equilibrium, adding to these a sharper interaction of individual- and city-level comparative advantage. We then confront the predictions of the theory with detailed data on occupational growth for a sample of 117 French cities. We find, consistent with our theory, that middle-paid jobs decline most sharply in larger cities; that these lost jobs are replaced two-to-one by high-paid jobs in the largest cities and two-to-one by low-paid jobs in the smallest cities; and that the lost middle-paid jobs are concentrated in an upper tier in the large cities and a lower tier in the smaller cities.
    JEL: J21 R12 R13
    Date: 2020–04
  24. By: Kai Hong (New York University); Peter Savelyev (The College of William & Mary); Kegon Teng Kok Tan (University of Rochester)
    Abstract: We go beyond estimating the effect of college attainment on longevity by uncovering the mechanisms behind this effect while controlling for latent skills and unobserved heterogeneity. We decompose the effect with respect to a large set of potential mechanisms, including health behaviors, lifestyles, earnings, work conditions, and health at the start of the risk period (1993–2017). Our estimates are based on the Wisconsin Longitudinal Study and show that the effect of education on longevity is well explained by observed mechanisms. Furthermore, we find that for women, the positive effect of education on longevity has been historically masked by the negative effect of education on marriage. An adjustment for the relationship between education and marriage based on data for more recent cohorts increases the explained effect of education on longevity for women. We discuss the implications for policies aimed at improving health and longevity and reducing health inequality.
    Keywords: college education, longevity, mechanisms, health behaviors, lifestyle
    JEL: C41 I12 J24
    Date: 2020–04
  25. By: Andy Yuan; Price V. Fishback
    Abstract: Nearly every state has amended workers’ compensation laws in the last two decades and the national averages of cash and medical benefits paid per covered worker have declined. As a result, writers have suggested that the states might be cutting back on workers’ compensation benefits. We show that measures of the statutory benefits have been rising over time, a trend that work against the declining trend in average payouts per covered worker. A decline in accident rates at the national level has contributed to the decline in payouts. We then investigate the impact of specific state laws related to burdens of proof and limits on medical coverage after developing an annual panel data set for all states between 1997 and 2016. The results show that state laws that ban liberal construction of the rules and apportion benefits based on pre-existing conditions contribute to sharp declines in the states where they are enacted.
    JEL: J32 J38 K31 K4
    Date: 2020–04

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