nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2020‒08‒10
twenty-six papers chosen by
Joseph Marchand
University of Alberta

  1. Impact of COVID-19 pandemic on labour supply and gross value added in India By Xavier Estupinan; Mohit Sharma; Sargam Gupta; Bharti Birla
  2. If sick-leave becomes more costly, will I go back to work? Could it be too soon? By Olivier Marie; Judit Vall Castello
  3. Routinization and Covid-19: a comparison between United States and Portugal By De Dominicis, Piero
  4. Nominal Wage Adjustments and the Composition of Pay: New Evidence from Payroll Data By Daniel Schäfer; Carl Singleton
  5. Dismissal Protection and Long-term Sickness Absence - First Evidence from Germany By Gürtzgen, Nicole; Hiesinger, Karolin
  6. Bayesian Inference for Distributional Changes: The Effect of Western TV on Wage Inequality and Female Participation in Former East Germany By Edwin Fourrier-Nicolai; Michel Lubrano
  7. The labor market and poverty impacts of COVID-19 in South Africa By Rocco Zizzamia; Ronak Jain; Joshua Budlender; Ihsaan Bassier
  8. Human Capitalists, Reallocation and the Global Division of Labor By Jan Schymik
  9. Unemployment benefit duration and startup success By Camarero Garcia, Sebastian; Murmann, Martin
  10. The Spatial Decay of Human Capital Externalities - A Functional Regression Approach with Precise Geo-Referenced Data By Eppelsheimer, Johann; Rust, Christoph
  11. Job Search and Hiring with Two-sided Limited Information about Workseekers’ Skills By Kate Orkin; Eliana Carranza; Robert Garlick; Neil Rankin
  12. Sectoral Digital Intensity and GDP Growth After a Large Employment Shock: A Simple Extrapolation Exercise By Giovanni Gallipoli; Christos Makridis
  13. The Productivity Puzzle in Network Industries: Evidence from the Energy Sector By Ajayi, V.; Dolphin, G.; Anaya, K.; Pollitt, M.
  14. Waiting for Recovery: The Canadian Labour Market in June 2020 By Stephen R.G. Jones; Fabian Lange; W. Craig Riddell; Casey Warman
  15. Nonlinear Occupations and Female Labor Supply Over Time By Youngsoo Jang; Minchul Yum
  16. Sherwin Rosen By Kenneth J. McLaughlin
  17. The Unintended Consequences of Employer Credit Check Bans for Labor Markets By Kristle Romero Cortes; Andrew Glover; Murat Tasci
  18. Decoupling of Labour Productivity Growth from Median Wage Growth in Central and Eastern Europe By Joris M. Schröder
  19. Understanding pay gaps By Amadxarif, Zahid; Angeli, Marilena; Haldane, Andrew G; Zemaityte, Gabija
  20. The effect of appraisal interviews and target agreements on employee effort - New evidence using representative data By Kampkötter, Patrick; Maier, Patrick
  21. The Labor Market Impacts of Employer Consolidation: Evidence from Germany By Kevin, Todd; Heining, Jörg
  22. The Rather Limited Role Of Mental Ill Health In Driving Work Beyond 50 By Vincent Vandenberghe
  23. Foreign Ownership, Exporting and Gender Wage Gaps: Evidence from Japanese Linked Employer-Employee Data By Greaney, Theresa; Tanaka, Ayumu
  24. Peasant Households and Pandemic Viral Diseases By Feuerbacher, Arndt; McDonald, Scott; Thierfelder, Karen
  25. Age Diversity and Aggregate Productivity By Balazs Zelity
  26. Real-time inequality and the welfare state in motion: Evidence from COVID-19 in Spain By Oriol Aspachs; Ruben Durante; Alberto Graziano; Josep Mestres; José Garcia Montalvo; Marta Reynal-Querol

  1. By: Xavier Estupinan (International Labour Organization, New Delhi); Mohit Sharma (Collaborative Research and Dissemination, Delhi); Sargam Gupta (Indira Gandhi Institute of Development Research); Bharti Birla (International Labour Organization, New Delhi)
    Abstract: This paper estimates the first order supply shock through labour supply reduction associated with the containment measures taken by the Government of India to control COVID-19 spread. We make use of two metrics to estimate the labour supply shock. The first metric is based on whether a worker is employed in an essential or a non-essential industry and second measures the extent to which a worker can perform the work activities remotely. For the latter, we construct a Remote Labour Index (RLI) following Rio-Chanona et al. (2020). Using PLFS (2017-18) we find that 116.18 million (25 percent) and 78.93 million (17 percent) workers were affected in Lockdown 1.0 and Lockdown 2.0, respectively, and are at risk of job loss. To get an extensive impact of COVID-19 pandemic on the labour market in India we carry out an in-depth analysis of labour supply shocks by employment status, industry level, and occupation. The expected monthly wage loss of casual workers and regular and salaried employees is estimated to be Rs. 33.8 thousand crores (in 2017-18 prices). Further, the loss in Gross Value Added (GVA) (at 2011-12 prices) is predicted to be between 13 percent and 19 percent during the lockdown period from 25th March to 31st May 2020. The y-o-y quarterly growth rate forecast of GVA (at 2011-12 prices) for Q1:2020-21 is expected to be between -4.6 percent and -8.8 percent, using the baseline model.
    Keywords: COVID-19 Pandemic, Remote Labour Index, Labour Supply Shock, Gross Value Added, ARIMA Modelling
    JEL: C35 C53 E25 E01 J21 J22 J24 J33 J38
    Date: 2020–06
  2. By: Olivier Marie (Erasmus University Rotterdam, ROA, TI, IZA, CEPR, CEP, and CESIfo); Judit Vall Castello (Universitat de Barcelona, IEB and CRES-UPF)
    Abstract: We investigate the impact on work absence of a massive reduction in paid sick leave benefits. We exploit a policy change that only affected public sector workers in Spain and compare changes in the number and length of spells they take relative to unaffected private sector workers. Our results highlight a large drop in frequency mostly offset by increases in average duration. Overall, the policy did reduce number of days lost to sick leave. For some, return to work may have been premature as we document very large increases in both the proportion of relapses and the working accidents rate.
    Keywords: Sickness Insurance, Paid Sick Leave, Absenteeism, Presenteeism, Relapses Contagious Diseases, Benefit Displacement, Working Accidents, Negative Externalities, Spain
    JEL: I12 I13 I18 J22 J28 J32
    Date: 2020
  3. By: De Dominicis, Piero
    Abstract: The purpose of this paper is to identify what is the role of automatization in increasing wage inequality, making a comparison between the two countries. Using PSID and Quadros de Pessoal, we find that labor income dynamics are strongly determined by the variance of the individual fixed component. This effect is drastically reduced by adding information on workers' occupational tasks, confirming that decreasing price of capital and the consequent replacement of routine manual workers have deepened wage inequality. During the current crisis, we find that the ability to keep working is strongly related with the occupation type. As such, we simulate the impact of a permanent demand shock using an overlapping-generations model with incomplete markets and heterogeneous agents to quantitatively predict the impact of Covid-19 and lockdown measures on wage premium and earnings inequality. We find that wage premia and earnings dispersion increase, suggesting that earnings inequality will increase at the expenses of manual workers.
    Keywords: Routinization, Wage Inequality, Covid-19, Income processes, Teleworking
    JEL: E21 J23 J31
    Date: 2020–06
  4. By: Daniel Schäfer (Economics Department at Johannes Kepler University); Carl Singleton
    Abstract: TWe use representative payroll data from Great Britain to document novel facts about nominal wage adjustments, focusing on workers who stayed in the same firm and job from one year to the next. The richness of these data allows us to analyse basic pay and the other components of earnings, such as overtime and incentive pay, while accounting for hours worked. Weekly and hourly basic pay show signs of downward nominal rigidity, but non-basic pay components adjust more commonly. Unusually, these payroll-based data also report the wage rates of hourly-paid employees. A quarter of these workers typically see no change in their wage rates from one year to the next in the same job, and very few experience wage cuts. We exploit the employer-employee link in the data and find evidence of state-dependent pay setting, depending on the business cycle and whether firms are shrinking or expanding. Finally, we show that the basic and non-basic wages of new hires and existing employees are similarly flexible.
    Keywords: downward nominal wage rigidity, components of pay, hourly pay rates, hiring wages, allocative wages
    JEL: E24 E32 J31 J33
    Date: 2020–06
  5. By: Gürtzgen, Nicole (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Hiesinger, Karolin (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper analyses the causal effects of weaker dismissal protection on the incidence of long-term sickness (> six weeks). We exploit a German policy change, which shifted the threshold exempting small establishments from dismissal protection from five to ten workers. Using administrative data, we find a significantly negative reform effect on transitions into long-term sickness in the second year after a worker has entered an establishment. This response is due to a behavioural, rather than a compositional effect and is mainly driven by less skilled workers. Our results further indicate that the reform did not alter the probability of involuntary unemployment after sickness." (Author's abstract, IAB-Doku) ((en))
    JEL: D02 I12 J28 J38 J88 J63 K31
  6. By: Edwin Fourrier-Nicolai (Aix-Marseille Univ, CNRS, AMSE, Marseille, France.); Michel Lubrano (Aix-Marseille Univ, CNRS, AMSE, Marseille, France.)
    Abstract: This paper investigates the evolution of wage formation in a Mincer model with sample selection for which we develop Bayesian inference and growth incidence and poverty growth curves. We estimate the effect of an exogenous exposure to Western TV broadcasts on labour market participation and wage inequality in East Germany after the German reunification. Using the GSOEP, we find evidences that Western television had significantly increased wage inequality among males while it has significantly affected female labour participation and led the less productive females to drop out from the market, hiding thus a large increase in wage inequality among females.
    Keywords: Bayesian inference, labour market, distributional changes, sample selection, wage inequality
    JEL: C11 C24 D31 D91 J21
    Date: 2020–07
  7. By: Rocco Zizzamia; Ronak Jain; Joshua Budlender; Ihsaan Bassier
    Abstract: We use newly-released South African data to present the first estimates of COVID-19-related employment and poverty impacts in a developing country. We observe a 40% decline in active employment. Half of this comprises job terminations, suggesting persistent labor market effects. Initially vulnerable groups are disproportionately affected. Exploiting the dataset’s panel dimension and comparing lockdown incomes of job losers to re-weighted job retainers, we estimate that 20-33% of job losers fall into poverty. Only 20% of those temporarily not working received the intended relief, while a third of job losers had no access to any major form of social protection.
    Keywords: Labor markets; poverty; unemployment; COVID-19; social protection
    JEL: J21 J48 J63 J68 I32 I38 H84
    Date: 2020
  8. By: Jan Schymik
    Abstract: The rise of top inequality in the United States and many other countries in recent decades is well documented but its causes remain controversial. Using data on equity ownership and income streams of corporate top earners in the U.S. and the U.K., this paper assesses the role of reallocation towards \superstar rms" for top earners. If economic activity is reallocated toward the largest rms in the economy, this a ects equity prices, top earners' marginal product and their incentives. Exploiting the global rise of trade in intermediate inputs as a source for economic reallocation, I assess three predictions of this hypothesis: (i) equity prices increase more for superstar rms, (ii) the value of equity ownership and labor incomes of top earners in superstar rms increase, (iii) equity ownership responds more elastically than labor incomes which changes the compensation structure of top earners. The results suggest that focusing on the income skill premium fundamentally underestimates the returns to globalization for top earners. Furthermore, the reallocation-channel rationalizes the prevalence of capital incomes vis-a-vis labor incomes for top earners.
    Keywords: Top Inequality, O shoring, Equity Ownership
    JEL: F14 F16 J33 L22
    Date: 2020–07
  9. By: Camarero Garcia, Sebastian; Murmann, Martin
    Abstract: Despite the importance of business creation for the economy and a relevant share of new firms being started out of unemployment, most research has focused on analyzing the effect of unemployment insurance (UI) policies on reemployment outcomes that ignore self-employment. In this paper, we assess how UI benefit duration affects the motivation for creating a startup while unemployed and the subsequent firms' success. To do so, we create a comprehensive dataset on founders in Germany that links administrative social insurance with survey data. Exploiting reform- and age-based exogenous variations in potential benefit duration (PBD) within the German UI system, we find that longer PBD leads to longer actual unemployment duration for those becoming self-employed. Furthermore, the UI duration elasticity for these individuals is higher than common estimates for those individuals becoming re-employed. With increasing unemployment benefit duration, the founders' outcomes in terms of self-assessed motivation, sales, and employment growth lessen. This overall causal effect of PBD can be rationalized with a mix of composition and individual-level duration effects. Therefore, our findings suggest that it is important to consider the fiscal externality of UI on startup success when it comes to the (optimal) design of UI systems.
    Keywords: entrepreneurship,unemployment insurance,fiscal externality
    JEL: D22 J21 J23 J44 J62 J64 J65 L11 L25 L26 M13
    Date: 2020
  10. By: Eppelsheimer, Johann (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Rust, Christoph
    Abstract: "This paper analyzes human capital externalities from high-skilled workers by applying functional regression to precise geocoded register data. Functional regression enables us to describe the concentration of high-skilledworkers aroundworkplaces as continuous curves and to eiciently estimate a spillover function that depends on distance. Furthermore, our rich panel data allow us to address the sorting of workers and to disentangle human capital externalities from supply eects by using an extensive set of time-varying fixed eects. Our estimates reveal that human capital externalities attenuate with distance and disappear after 15 kilometers. Externalities from the immediate neighborhood are twice as large as those from surroundings ten kilometers away." (Author's abstract, IAB-Doku) ((en))
    JEL: C13 D62 J24 J31 R10 R12
  11. By: Kate Orkin; Eliana Carranza; Robert Garlick; Neil Rankin
    Abstract: We present field experimental evidence that limited information about workseekers’ skills distorts both firm and workseeker behavior. Assessing workseekers’ skills, giving workseekers their assessment results, and helping them to credibly share the results with firms increases workseekers’ employment and earnings. It also aligns their beliefs and search strategies more closely with their skills. Giving assessment results only to workseekers has similar effects on beliefs and search, but smaller effects on employment and earnings. Giving assessment results only to firms increases callbacks. These patterns are consistent with two-sided information frictions, a new finding that can inform design of information-provision mechanisms.
    JEL: J23 J24 J31 J41 O15 O17
    Date: 2020
  12. By: Giovanni Gallipoli (Vancouver School of Economics, UBC); Christos Makridis (Arizona State University)
    Abstract: We examine the dynamics of GDP following an economy-wide pandemic shock that curtails physical mobility and the ability to perform certain tasks at work. We examine whether greater reliance on digital technologies has the potential to mediate employment and productivity losses. We employ industry-level indices of task-based digital intensity and ability to work from home (“home-shorability”), in conjunction with publicly available data on employment and GDP for Canada, and document that: (i) employment responses after the onset of the shock are milder in digitally-intensive sectors; (ii) conditional on the size of employment changes, GDP responses are less extreme in IT-intensive sectors. We suggest a simple state-dependent algorithm for predicting output dynamics as a function of employment across industries and locations with different digital intensity. In our baseline scenario, aggregate output returns to pre-crisis levels eight quarters after the initial shock onset, although we find significant heterogeneity in recovery patterns across sectors.
    Keywords: output, digital intensity, employment, Canada, coronavirus, Structural change
    JEL: E32 E66 J21 J23
    Date: 2020–07
  13. By: Ajayi, V.; Dolphin, G.; Anaya, K.; Pollitt, M.
    Abstract: What accounts for the recent widespread slowdown in the productivity in advanced economies has remained a puzzle. One plausible explanation has been attributable to regulation, particularly anti-competitive regulations and environmental regulations. This paper focuses on the regulated energy network sectors by undertaking three sets of analysis in examining TFP in a sample of OECD countries over the period 1995-2016. First, using the growth accounting method, we find that there is a substantial productivity puzzle for the electricity and gas sectors, which exhibits a lower TFP growth than the whole economy over the period, and falls postfinancial crisis. Second, we identify the impact of regulation on productivity using a panel regression analysis. Our findings indicate that TFP levels seem weakly explained by changes to the competitive environment of the energy sector. Third, we show that energy and climate policy has negatively and significantly reduced energy sector productivity, at the same time as increasing capital input to the sector. We also find that the strength of energy and climate policy is positively correlated with lower aggregate TFP growth.
    Keywords: Total factor productivity, growth accounting, regulation, energy networks, climate policy
    JEL: D24 O47 H23
    Date: 2020–07–23
  14. By: Stephen R.G. Jones; Fabian Lange; W. Craig Riddell; Casey Warman
    Abstract: The Canadian labour market is currently emerging from a holding pattern with unusually high numbers in temporary (or “recall”) unemployment, those “employed but absent from work” for unspecified reasons, or not in the labour force while waiting to be recalled. Two encouraging signs are evident. New postings of vacancies have recovered from 50 percent to about 80 percent of their pre-crisis level. Also, data suggest that the increase in employment in May 2020 is due to some of those waiting to be recalled re-entering employment. These patterns suggest that the labour market might rebound quickly. Warning signs are that the shares of the unemployed without job attachment as well as those on recall engaged in job search are beginning to increase.
    Keywords: COVID-19; Vacancies; Unemployment; Employment
    JEL: J21 J22 J23 J63
    Date: 2020–06
  15. By: Youngsoo Jang; Minchul Yum
    Abstract: High hours worked and higher returns to longer hours worked are common in many occupations, namely nonlinear occupations (Goldin 2014). Over the last four decades, both the share and relative wage premium of nonlinear occupations have been rising. Females have been facing rising experience premiums especially in nonlinear occupations. To quantitatively explore how these changes affected female labor supply over time, we build a quantitative, dynamic general equilibrium model of occupational choice and labor supply at both extensive and intensive margins. A decomposition analysis finds that the rising returns to experience, especially in nonlinear occupations, and technical change biased towards nonlinear occupations are important to explain the intensive margin of female labor supply that keeps rising even in the recent period during which female employment stagnates. Finally, a counterfactual experiment suggests that if the nonlinearities were to be gradually vanishing, female employment could have been higher at the expense of significantly lower intensive margin labor supply.
    Keywords: Female labor supply, occupational choice, Roy model, experience premium
    JEL: E2 J2 J1
    Date: 2020–07
  16. By: Kenneth J. McLaughlin (Hunter College and the Graduate Center, CUNY)
    Abstract: This paper provides a critical survey of Sherwin Rosen’s contributions to economics. I identify the ideas that influenced him and the themes—diversity and inequality—that connect his papers. The model of compensating price differentials (Rosen 1974) is his greatest hit. The more general “equalizing differences” approach was a signature feature of his research in labor economics and other fields. I also evaluate the merits of Rosen (1979), through which he receives credit for the influential Roback-Rosen model in urban economics. And several of his most influential papers substantiate my claim that Rosen was an inequality economist.
    Keywords: Compensating Differentials, Labor Economics, Equalizing differences, inequality
    JEL: B2 J3
    Date: 2020
  17. By: Kristle Romero Cortes; Andrew Glover; Murat Tasci
    Abstract: Over the last 15 years, 11 states have restricted employers’ access to the credit reports of job applicants. We estimate that county-level job vacancies have fallen by 5.5 percent in occupations affected by these laws relative to exempt occupations in the same counties and national-level vacancies for the same occupations. Cross-sectional heterogeneity suggests that employers use credit reports as signals of a worker’s ability to perform the job: vacancies fall more in counties with a large share of subprime residents, while they fall less for occupations with other commonly available signals. Vacancies fall most for occupations involving routine tasks, suggesting that credit reports contain information relevant for these types of jobs.
    Keywords: Vacancies; Credit score; Credit check
    JEL: E24 E65 J23 J63
    Date: 2020–07–15
  18. By: Joris M. Schröder
    Abstract: The US-centred debate on the decoupling of productivity from workers’ compensation has given rise to the question whether this decoupling has also taken place in other countries, and if so, to what degree. However, in-depth analyses of the extent and the underlying causes of wage-productivity decoupling within Europe are still sparse. This is particularly the case for the Central and East European members of the EU (EU-CEE11), where trickle down of increased labour productivity to local workers in the form of compensation and wage growth has been questioned. Existing analyses provide little explanation as to why the gains in productivity are (not) fully passed on in the form of higher compensation, and why this is more pronounced in some countries than in others. This study thus provides an overview of the extent and underlying factors of wage-productivity decoupling with a focus on the EU-CEE11 countries. In general, the results reveal strong cross-country variation in the amount and underlying reasons for decoupling. Further, we find that the extent of decoupling within the EU-CEE11 is strongly related to the industry structures of these countries, as it is mostly a phenomenon which occurs in countries that have followed an export- and manufacturing-focused development path, while other countries have experienced “reverse decoupling”. We provide further insights into this finding by contrasting productivity and compensation developments in industry and construction with those in the service sector and by looking at each EU-CEE11 country individually.
    Keywords: Labour productivity, compensation, wages, economic growth, wage inequality, labour share
    JEL: E24 J3 D3 J24
    Date: 2020–07
  19. By: Amadxarif, Zahid (Bank of England); Angeli, Marilena (Bank of England); Haldane, Andrew G (Bank of England); Zemaityte, Gabija (Bank of England)
    Abstract: In this paper, we use micro-data from the UK Labour Force Survey to estimate unconditional and conditional pay gaps for gender and ethnicity groups since the mid-90s. Both types of gender pay gap have decreased over the sample, but remain in double digits. For ethnicity, the unconditional pay gap has been materially lower, compared to the gender pay gap, while the conditional pay gap is of similar magnitude to the gender one. These trends are apparent not only at the mean but also at the lower and upper ends of the distributions. Interaction effects between gender and ethnicity reveal that female ethnic minority workers experience a larger pay gap than both ethnic minority male, and white female workers. Half of the gender pay gap can be accounted for by compositional effects, such as the individual’s age, education, and the nature of their job, such as occupation and sector, while half remains unaccounted for. We find that the minimum wage leads to a decrease in the gender pay gap. Compositional effects for ethnicity suggest that ethnic minorities should be earning more than their white counterparts, with the unaccounted for factors driving the positive ethnicity pay gap. We find that compositional effects are heterogeneous across gender and ethnic minority groups. We assert that there is a strong case to extend compulsory pay gap reporting to ethnicity. There is also a case to extend compulsory reporting from firms with more than 250 employees to those with around 30 or more, to increase the coverage of the UK employed population.
    Keywords: Gender; ethnicity; pay gap; inequality; minimum wage
    JEL: J15 J16 J31 J38
    Date: 2020–07–03
  20. By: Kampkötter, Patrick; Maier, Patrick
    Abstract: Performance measurement and evaluation systems are among the most common management instruments. An integral element of this process is the use of targets, typically set in appraisal interviews and formalized via written target agreements. In this paper, we investigate the relationship between performance management and evaluation systems and individual effort, proxied by the commonly used concept of work engagement. Using four waves of a new representative, linked employer-employee data set, the Linked Personnel Panel (LPP), we apply fixed effects estimations to account for unobserved heterogeneity. Our results show positive and statistically significant relationships between the presence of a performance management and evaluation process and employee engagement on the individual level. We are further able to differentiate between appraisal interviews and written target agreements which allows us to show a positive effect of appraisal interviews and an additional positive effect of target agreements. In addition, we find first evidence that these direct relationships are partially mediated by goal clarity and procedural fairness.
    Keywords: Target Agreements,Performance Appraisals,Work Engagement,Goal Clarity,Procedural Fairness
    JEL: D23 J01 J33 M41 M52
    Date: 2020
  21. By: Kevin, Todd; Heining, Jörg (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Wir verwenden detaillierte administrative Daten die Auswirkungen von Akquisitionen - hierunter sind Akquisitionen von Betrieben durch ähnliche Betriebe im gleichen lokalen Arbeitsmarkt zu verstehen - auf Arbeitnehmer zu untersuchen. Im Rahmen einer Event Study mit einer Kontrollgruppe von Arbeitnehmern aus Betrieben, die nicht durch eine Akquisition gekennzeichnet waren, zeigt sich, dass Akquisitionen hauptsächlich zu Beschäftigungsverlusten auf Seiten der Arbeitnehmer im akquirierten Betrieb ('Target') führen. Diese Beschäftigungsverluste sind dabei mit dem Rückzug von älteren Arbeitnehmerinnen vom Arbeitsmarkt assoziert. Gleichzeitig finden wir, sowohl für Arbeitnehmer aus dem akquirierten als auch dem akquirierenden Betrieb ('Buyer'), Evidenz für einen Anstieg der Löhne, sofern diese Arbeitnehmer in der konsolidierten Einheitweiter beschäftigt sind. Diese Anstiege konzentrieren sich dabei vor allem auf Arbeitnehmern mit niedrigen Löhnen. Wir interpretieren diese Ergebnisse derart, dass diese Art von Konsolidierung einerseits zwar zu einer Reduzierung der Gesamtbeschäftigung, aber auch andererseits zu steigenden Monopolrenten pro Arbeitnehmer führen. Insofern ergibt sich ein klares Muster an Gewinnern und Verlieren von Akquisitionen." (Autorenreferat, IAB-Doku)
    JEL: J3 J23 J63
  22. By: Vincent Vandenberghe (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: This paper's aim is to contribute to the literature on elderly employment barriers by exploring the role of mental health relative to that of physical health, and the complementarity between the two. The paper uses European SHARE data. It considers the distinction between the extensive and the intensive margin of work (employment rate and hours) as well as wages/productivity. Results point at the limited role of mental health in determining employment (extensive margin) and hours (the extensive margin) in comparison to physical health. Also, men's employment or hours respond more to health problems, singularly mental ones. Another result is that ill health (be it physical or mental) has no impact on wages. Finally, results suggest moderate complementarity between mental health and physical ill health in degrading people's capacity to stay in paid employment.
    Keywords: Ageing, Mental Health, Physical Health, Work, Work Capacity
    JEL: J22 I10 J26
    Date: 2020–06–24
  23. By: Greaney, Theresa; Tanaka, Ayumu
    Abstract: We explore potential relationships between international economic activities and gender wage gaps (GWGs) using linked employer-employee data for Japan. We find evidence that exporting and multinational activities are associated with reduced GWGs. Domestic-owned firms that neither export nor invest abroad (i.e., domestic-only firms) report the largest GWG, followed by Japanese-owned multinational enterprises (JMNE), then by locally-owned exporters that do not invest abroad and finally by foreign-owned multinational enterprises (FMNE). We separate FMNE by mode of entry and confirm that FMNE established by greenfield investment deviate more than FMNE established by merger and acquisition from domestic-only firms in terms of wages. Greenfield-born FMNE are associated with the smallest GWG and largest gender-neutral wage premium among the firm types. The estimated GWG among Greenfield-born FMNE is almost 12 percentage-points lower than the 26.8 percent prevailing at domestic-only firms.
    Keywords: gender wage gap, wage premium, exporters, multinational enterprises
    JEL: F14 F16 J31
    Date: 2020–06–19
  24. By: Feuerbacher, Arndt; McDonald, Scott; Thierfelder, Karen
    Abstract: Outbreaks of infectious diseases are particularly devastating for developing countries and the poor: they deplete, through premature death and morbidity the primary asset of the poor – their labour – in economies with the least developed health care systems. This study examines how peasant households, who are simultaneously producers and consumers, might adapt to the impact of a pandemic. The analyses indicate that the dual role of peasant households allows them to mitigate some of the adverse impacts of a coronavirus pandemic, and thereby offset some of the economic effects. Critical to this is the ability of peasant households to transfer labour between agricultural activities and social reproduction; and this happens whenever in the year a pandemic occurs. But it is noteworthy that the changes in consumption and production patterns differ according to the timing of the pandemic.
    Keywords: Peasant households; Seasonal labour; Labour-Leisure trade-off; Pandemics; Economy-wide modelling.
    JEL: I10 I15 I32 J22 O10 O11 O13 Q13
    Date: 2020–06–24
  25. By: Balazs Zelity (Department of Economics, Wesleyan University)
    Abstract: This research explores theoretically, empirically and quantitatively the role of age diversity in determining aggregate productivity and output. Age diversity has two conflicting effects on output. On the one hand, due to skill complementarity across different cohorts, age diversity may be beneficial. On the other hand, rapid skill-biased technological change makes age diversity costly as up-to-date education tends to be concentrated among younger cohorts. To study this trade-off, I first build an overlapping-generations (OLG) model which, in view of these two opposing forces, predicts a hump-shaped relationship between age diversity and GDP per capita. This prediction is established analytically, and also quantitatively using real-world population data in an extended computational version of the model. The prediction is then tested using country-level panel data with a novel instrument, and regional data from Europe. Moving one standard deviation closer to the optimal level of age diversity is associated with a 1.5% increase in GDP per capita. In addition, consistent with the predictions of the model, the optimal level of age diversity is lower in economies where skill-biased technological change is more prevalent.
    Keywords: age diversity, education, experience, human capital, demographics, skill-biased
    JEL: E24 O40 J24 O15
    Date: 2020–07
  26. By: Oriol Aspachs; Ruben Durante; Alberto Graziano; Josep Mestres; José Garcia Montalvo; Marta Reynal-Querol
    Abstract: Most official economic statistics have a relatively low frequency. The measures of inequality, in particular, are not only produced with low frequency but also with significant lags. This poses an important challenge for policymakers in their objective to mitigate the effects of a rapidly moving epidemic as the COVID-19. We propose a methodology for tracking the evolution of income inequality in the aftermath of the COVID-19 pandemic using high-frequency, high-quality microdata from bank-records. Using this approach we study the evolution of inequality since the beginning of the COVID-19 pandemic, and its effect on different groups of the population. First, we show that the payroll data managed by banks are an extremely useful source of information to detect, timely and accurately, changes in the distribution of wages. Our data replicate very closely the distribution of wages from the official wage surveys. Second, we show that, in absence of public benefits schemes, inequality would have increased dramatically. The impact of the crisis on inequality is explained mostly by its effect on low-wage workers. Pre-benefits wage inequality has increased significantly among foreign-born individuals, and regions that have a heavy economic dependence on touristic activities. Finally, we show that the public benefits activated soon after the beginning of the pandemic have substantially mitigated the impact of the COVID-19 crisis on inequality.
    Keywords: Inequality, COVID-19, administrative data, high frequency
    JEL: C81 D63 E24 J31
    Date: 2020–07

This nep-lma issue is ©2020 by Joseph Marchand. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.