nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2021‒03‒08
27 papers chosen by
Joseph Marchand
University of Alberta

  1. Routine-biased technological change and wages by education level: Occupational downgrading and displacement effects By Elliot Moiteaux; Clément Bosquet; Paul Maarek
  2. Labor Market Effects of a Minimum Wage: Evidence from Ecuadorian Monthly Administrative Data By Jaerim Choi; Ivan Rivadeneyra; Kenia Ramirez
  3. Passthrough of Firm Performance to Income and Employment Stability By Maibom, Jonas; Vejlin, Rune Majlund
  4. Culture as a Hiring Criterion: Systemic Discrimination in a Procedurally Fair Hiring Process By Meurs, Dominique; Puhani, Patrick A.
  5. The Gender Pay Gap Revisited with Big Data: Do Methodological Choices Matter? By Strittmatter, Anthony; Wunsch, Conny
  6. Wages, Minimum Wages, and Price Pass-through: The Case of McDonald's Restaurants By Ashenfelter, Orley; Jurajda, Štepán
  7. Does exposure to more women in male-dominated fields render female students more career-oriented? By Bruna Borges; Fernanda Estevan
  8. Home Sweet Home: Working from home and employee performance during the COVID-19 pandemic in the UK By Deole, Sumit S.; Deter, Max; Huang, Yue
  9. The Child Penalty: Implications of Parenthood on Labour Market Outcomes for Men and Women in Germany By Charlotte H. Feldhoff
  10. Heterogeneous Policy Distortions and the Labor Share By Gabriel Smagghue
  11. Breaking Through the Digital Ceiling: ICT Skills and Labour Market Opportunities By David Pichler; Robert Stehrer
  12. Talent Poaching and Job Rotation By Diego Battiston; Miguel Espinosa; Shuo Liu
  13. Searching for Job Security and the Consequences of Job Loss By Gregor Jarosch
  14. Adverse Effects of Monitoring: Evidence from a Field Experiment By Holger Herz; Christian Zihlmann
  15. Language Training and Refugees' Integration By Nielsen Arendt, Jacob; Bolvig, Iben; Foged, Mette; Hasager, Linea; Peri, Giovanni
  16. Non-linear Incentives, Worker Productivity, and Firm Profits: Evidence from a Quasi-Experiment By Freeman, Richard B.; Huang, Wei; Li, Teng
  17. Routinization and Employment: Evidence for Latin America By Leonardo Gasparini; Irene Brambilla; Guillermo Falcone; Carlo Lombardo; Andrés César
  18. Kinks as Goals: Accelerating Commissions and the Performance of Sales Teams By Peter J. Kuhn; Lizi Yu
  19. International student exchange and academic performance By Czarnitzki, Dirk; Joosten, Wytse; Toivanen, Otto
  20. Employment Structures in China from 1990 to 2015: Demographic and Technological Change By Ge, Peng; Sun, Wenkai; Zhao, Zhong
  21. Trade in Information Technologies and Changes in the Demand for Occupations By Vahagn Jerbashian
  22. Wage Inequality and Labor Rights Violations By Ioana Marinescu; Yue Qiu; Aaron Sojourner
  23. Personality and Public Sector Employment By Maczulskij, Terhi; Viinikainen, Jutta
  24. Working horizon and labour supply: the effect of raising the full retirement age on middle-aged individuals By Francesca Carta; Marta De Philippis
  25. Institutions and the Productivity Challenge for European Regions By Andres Rodriguez-Pose; Roberto Ganau;
  26. Does It Matter Where You Invest? The Impact of FDI on Domestic Job Creation and Destruction By BiN Ni; Hayato Kato; Yang Liu
  27. Can Mentoring Alleviate Family Disadvantage in Adolescence? A Field Experiment to Improve Labor-Market Prospects By Resnjanskij, Sven; Ruhose, Jens; Wiederhold, Simon; Woessmann, Ludger

  1. By: Elliot Moiteaux; Clément Bosquet; Paul Maarek (Université de Cergy-Pontoise, THEMA)
    Abstract: Taking advantage of geographic (and time) variation in the proportion of routine occupations in the US, we study the impact of this variation on the wage rate of workers by educational group. Using individual data and a Bartik-type IV strategy, we show that not only non-college-educated workers but also, in the same proportion, workers with fewer than four years of college are negatively impacted by this routine- biased technological change. The latter skill group currently represents 30% of the US population. We show that only 10% to 20% of the impact on both educational groups is related to occupational and industrial downgrading (the composition eect) and that most of the wage impact occurs within industries and occupations, including manual service occupations. This is consistent with the displacement effect described in the theoretical literature on task-biased technological change and automation.
    Keywords: job polarization, routine occupations, wages, education
    JEL: I24 J23 J24 J31 O33
    Date: 2021
  2. By: Jaerim Choi; Ivan Rivadeneyra; Kenia Ramirez
    Abstract: When Ecuador raised its monthly Unified Minimum Wage from $170 to $200 in 2008, it affected 35 percent of all private sector workers. We use this unexpected minimum wage hike under former president Rafael Correa to assess the labor market impacts of the minimum wage. We use an administrative dataset that covers all formal sector workers by month. Adopting a differences-indifferences approach at the firm level, we find that the minimum wage hike led to a decrease in labor demand in affected firms by 0.5 percent after one month and by 2.5 percent after four months. The decrease in labor demand resulted from both an increase in job separations and a slowdown in hiring. At the worker level, we find that the minimum wage hike led to a 2.2 percentage point decline in the probability of remaining employed after one month, and the treatment effect rose to 3.9 percentage points after four months. Last, we estimate the effects of the minimum wage hike on wage changes by wage bin throughout the monthly wage distribution. We find that, after one month, wages increased by 17 to 37 percent for workers who were being paid less than $200 and also uncover wage spillover effects up to the 77th percentile of the wage distribution.
    Keywords: Minimum Wage, Job Separations, New Hires, Worker Flows, Wage Distribution, WageSpillover Effects, Differences-in-Differences, Employment, Ecuador
    JEL: J23 J38 J88
    Date: 2021–03–04
  3. By: Maibom, Jonas (Aarhus University); Vejlin, Rune Majlund (Aarhus University)
    Abstract: To what extent do firms pass through idiosyncratic shocks to their workers? In this paper, we investigate this question focusing on passthrough to income for workers that stay in the firm and passthrough to employment stability. We take an empirical approach and use matched employer-employee data from Denmark, three different measures of firm performance (sales, value added, and value added per worker), and two measures of income (earnings and hourly wages). We distinguish between unemployment and job-to-job transitions. We find that passthrough to income is much higher for permanent (5-9 percent) than transitory (1 percent) shocks. Income passthrough is higher for blue collar workers and workers in small firms. On the employment margin, we find that worse firm performance increases both unemployment and job-to-job transitions. The unemployment risk is especially pronounced for blue collar, low-educated, low tenure workers, while the effect on job-to-job transitions is larger for managers and high-educated workers. We also find clear evidence of non-linearities with negative shocks driving both unemployment and job-to-job transitions.
    Keywords: firm shocks, passthrough, income, employment stability
    JEL: C33 D22 J31 J33
    Date: 2021–02
  4. By: Meurs, Dominique; Puhani, Patrick A.
    Abstract: Criteria used in hiring workers often do not reflect the skills required on the job. By comparing trainee performance for newly hired workers conditional on competitive civil service examination scores for hiring French public sector workers, we test whether women and men with the same civil service examination score exhibit similar performance in a job-related trainee programme. Both the civil service examination and trainee scores contain anonymous and non-anonymous components that we observe separately. We find that by the end of the trainee programme (first year of employment), women are outperforming men on both anonymous written and non-anonymous oral evaluations, a finding that holds both conditionally and unconditionally for the civil service examination results. According to further analysis, however, it is the anonymously graded "essay on common culture" civil service examination that, unlike the other CSE components, disadvantages women in this particular context.
    Keywords: recruitment,disparate impact,systemic discrimination,audit
    JEL: H83 J45 J71 M51
    Date: 2021
  5. By: Strittmatter, Anthony (University of St. Gallen); Wunsch, Conny (University of Basel)
    Abstract: The vast majority of existing studies that estimate the average unexplained gender pay gap use unnecessarily restrictive linear versions of the Blinder-Oaxaca decomposition. Using a notably rich and large data set of 1.7 million employees in Switzerland, we investigate how the methodological improvements made possible by such big data affect estimates of the unexplained gender pay gap. We study the sensitivity of the estimates with regard to i) the availability of observationally comparable men and women, ii) model flexibility when controlling for wage determinants, and iii) the choice of different parametric and semi- parametric estimators, including variants that make use of machine learning methods. We find that these three factors matter greatly. Blinder-Oaxaca estimates of the unexplained gender pay gap decline by up to 39% when we enforce comparability between men and women and use a more flexible specification of the wage equation. Semi-parametric matching yields estimates that when compared with the Blinder-Oaxaca estimates, are up to 50% smaller and also less sensitive to the way wage determinants are included.
    Keywords: gender inequality, gender pay gap, common support, model specification, matching estimator, machine learning
    JEL: J31 C21
    Date: 2021–02
  6. By: Ashenfelter, Orley (Princeton University); Jurajda, Štepán (CERGE-EI)
    Abstract: We use price and wage data from McDonald's restaurants to provide evidence on wage increases, labor-saving technology introduction, and price pass-through by a large low-wage employer facing a flurry of minimum wage hikes from 2016-2020. We estimate an elasticity of hourly wage rates with respect to minimum wages of 0.7. In 40% of instances where minimum wages increase, McDonald's restaurants' wages are near the effective minimum wage level both before and after its increase; however, we also uncover a tendency among a large subset of restaurants to preserve their pay 'premium' above the minimum wage level. We find no association between the adoption of labor-saving touch screen ordering technology and minimum wage hikes. Our data imply that McDonald's restaurants pass through the higher costs of minimum wage increases in the form of higher prices of the Big Mac sandwich. We find a 0.2 price elasticity with respect to wage increases, which implies an elasticity of prices with respect to minimum wages of about 0.14. Based on a listing of all US McDonald's restaurants from 2010 to 2020, we also find no effects of minimum wages on McDonald's restaurant entry and exit.
    Keywords: minimum wages, fast food, price pass-through
    JEL: J30 J23
    Date: 2021–02
  7. By: Bruna Borges; Fernanda Estevan
    Abstract: The underrepresentation of women in male-dominated fields of study can generate a lack of role models for female students, which may influence their career choices. This paper sheds light on this question, investigating the existence of impacts of the gender composition of instructors and peers in the Department of Economics from a selective Brazilian university. Specifically, we analyze whether having higher shares of female professors and classmates throughout undergraduate studies in Economics affects female students’ labor market outcomes. We use comprehensive administrative data from the University of Sao Paulo, containing information on students’ academic results and students’, instructors’, and course sections’ characteristics. We merge these data with Brazilian labor market and firm ownership data to obtain a broad range of career outcomes, including labor force participation, occupational choices, career progression, and wages. To overcome endogeneity issues arising from students’ self-selection into professors and peers, we exploit the random assignment of students in the first-semester classes and focus on mandatory courses. A higher representation of women in a male-dominated field, such as Economics, increases female students’ labor force participation. Moreover, larger female faculty shares increase the probability that a female student becomes a top manager. These results suggest ways to counteract the highly discussed glass ceiling in high-earning occupations. We show that students’ academic performance and elective coursechoice are not driving the effects. Instead, we find suggestive evidence that higher shares of female classmates may increase the likelihood of working during undergraduate studies, leading to stronger labor market attachment.
    Keywords: gender; economics; higher education; glass ceiling; labor market
    JEL: J16 J24 I23
    Date: 2021–02–22
  8. By: Deole, Sumit S.; Deter, Max; Huang, Yue
    Abstract: In 2020, the COVID-19 pandemic forced governments in many countries to ask employees to work from home (WFH) where possible. Using representative data from the UK, we show that increases in WFH frequency are associated with a higher self-perceived productivity per hour and an increase in weekly working hours among the employed. The WFH-productivity relationship is stronger for employees residing in regions worse affected by the pandemic and those who previously commuted longer distances, while it is weaker for mothers with childcare responsibilities. Also, we find that employees with higher autonomy over job tasks and work hours and those with childcare responsibilities worked longer hours when working from home. With prospects that WFH possibility may remain permanently open for some employees, we discuss our results' labor market policy implications.
    Keywords: Working from home,productivity,working hours,COVID-19 pandemic
    JEL: J22 J24
    Date: 2021
  9. By: Charlotte H. Feldhoff
    Abstract: Whilst gender inequality has been falling in the developed world, child-related gender inequality in pay has stayed constant. In this paper I use German panel data spanning across 33 years from 1984 until 2017 including over 50,000 individuals. The main contribution of this paper is the analysis of the effect of parenthood on women’s and men’s earnings using propensity score matching. I estimate the annual average treatment effect of parenthood over the 20 years following the birth of the first child to be -10500€ for women and +6800€ for men. When comparing the percentage loss of potential earnings, I find that women suffer a long-run child penalty of 63% compared to men. I then examine the relationship between the treatment effect and gender norms, willingness to take on risk for your career and priorities regarding job characteristics. There exists evidence which suggests that all of these factors are associated with changes in the individual treatment effects.
    Keywords: Gender Economics, Child Penalty, Propensity Score Matching
    JEL: J13 J16 J21 J31 C12 C13
    Date: 2021
  10. By: Gabriel Smagghue
    Abstract: I develop an extension of the neoclassical growth model in which firms are heterogeneous both in terms of labor share and productivity. In this model, distortions in the allocation of resources across firms can impact the labor share of national income. Using administrative firm-level data to calibrate the model, I show in particular that a removal of policies reducing the output price of more productive firms can generate a sizable decrease in the aggregate labor share (between 1 and 4 percentage points). My results suggest that the recent decline in the global labor share of income is both qualitatively and quantitatively consistent with an improvement in resource allocation across firms.
    Keywords: Labor Share; Size-based Policy; Productivity-based Policy; Resource Misallocation; Heterogeneous Labor Intensity.
    JEL: E23 E25 H23 J23
    Date: 2021
  11. By: David Pichler; Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper analyses the impact of ICT-skills on individuals’ labour market mobility patterns, in particular job-to-job, employment- to-unemployment and unemployment-to-employment transitions. Based on the OECD’s Programme for the International Assessment of Adult Competencies (PIAAC) and longitudinal EU-SILC data, individuals’ labour market outcomes are examined over the period 2011-2017 in nine EU countries and the UK. Our results indicate that individuals with strong ICT skills have better opportunities and are therefore not only more likely to change jobs more frequently but are also less likely to face unemployment. Furthermore, ICT skills support unemployment exit towards medium and high digital occupations. A certain minimum level of ICT skills also supports unemployment exit towards low digital occupations but seems to make employment in such occupations less likely once this threshold is crossed. Overall, ICT skills have less predictive power for transition towards medium digital occupations. Thus, while ICT skills appear to improve labour market opportunities significantly, it seems that there are still jobs that require relatively few ICT skills.
    Keywords: digital skills, labour market transitions
    JEL: C25 J23
    Date: 2021–02
  12. By: Diego Battiston; Miguel Espinosa; Shuo Liu
    Abstract: Firms allocate workers to clients to provide services. On the job, workers acquire skills that increase their client-specific productivity and therefore raise the probability that clients poach them. In this paper, we advance the understanding of this important, yet understudied feature of service industries. We show, both theoretically and empirically, that in order to mitigate poaching risk firms may forgo potential productivity gains by moving workers from one client to the other. Focusing on a security service-industry firm in Colombia, we find that an increase in client-specific experience increases both workers’ productivity and probability that the workers are poached. After a policy change that forbids talent poaching, the firm sharply decreased the frequency of rotation, especially for workers who were more likely to be poached before the policy change. The theoretical model we propose is consistent with these empirical patterns and substantiates the broad applicability of the studied mechanism.
    Keywords: talent poaching, job rotation, outsourcing
    JEL: D22 J24 L84 M21 M51 M54
    Date: 2021–02
  13. By: Gregor Jarosch
    Abstract: Job loss comes with large present value earnings losses which elude workhorse models of unemployment and labor market policy. I propose a parsimonious model of a frictional labor market in which jobs differ in terms of unemployment risk and workers search off- and on-the-job. This gives rise to a job ladder with slippery bottom rungs where unemployment spells beget unemployment spells. I allow for human capital to respond to time spent out of work and estimate the framework on German Social Security data. The model captures the joint response of wages, employment, and unemployment risk to job loss which I measure empirically. The key driver of the “unemployment scar” is the loss in job security and its interaction with the evolution of human capital.
    JEL: E24 J3
    Date: 2021–02
  14. By: Holger Herz; Christian Zihlmann
    Abstract: We conduct a field experiment with remote workers to assess potential adverse effects of monitoring. We find that monitoring reduces the average performance of workers, in particular among the intrinsically motivated workforce. Moreover, monitoring cultivates the average worker: There are fewer high performers and the variance in performance is significantly reduced. Importantly, we show that performance reductions primarily occur among challenging tasks. These performance reductions significantly increase unit costs in our setting. This effect is particularly severe when challenging tasks have high marginal value, as in high-performance work systems or when tasks are complementary inputs into the production function.
    Keywords: monitoring, hidden costs of control, remote work, field experiment
    JEL: C93 D21 J24 M50
    Date: 2021
  15. By: Nielsen Arendt, Jacob (Rockwool Foundation Research Unit); Bolvig, Iben (VIVE - The Danish Centre for Applied Social Science); Foged, Mette (University of Copenhagen); Hasager, Linea (University of Copenhagen); Peri, Giovanni (University of California, Davis)
    Abstract: We evaluate a Danish reform focused on improving Danish language training for those granted refugee status on or after January 1, 1999. Using a Regression Discontinuity Design we find a significant, permanent, positive effect on earnings. This effect emerged after completion of language classes and was accompanied by additional schooling and higher probability of working in communication-intensive jobs, suggesting that language training, rather than other minor aspects of the reform, produced it. We also find evidence of higher completion rates of lower secondary school and lower probability of crime for male children with both parents exposed to the reform.
    Keywords: refugee integration, language skills, regression discontinuity, second generation
    JEL: J60 J24 E64 I30
    Date: 2021–02
  16. By: Freeman, Richard B. (Harvard University); Huang, Wei (National University of Singapore); Li, Teng (National University of Singapore)
    Abstract: Using administrative data from a major Chinese insurance firm that raised its sales targets and rewards for insurance agents in a highly non-linear incentive system, we find that the improvement in productivity far outweighed the costs associated with bunching distortions and other gaming behaviors. Labor turnover decreased, which suggests that the extra pay for workers exceeded the non-pecuniary cost of extra effort by workers, and thus improved their well-being. The firm gained about two-thirds of the higher net output, making the reform profitable. Analysis of non-linear incentive systems should accordingly focus more on the productivity-enhancing than on the distortionary effects.
    Keywords: non-linear incentives, insurance commission, strategic gaming behavior, productivity, turnover rates
    JEL: J33 M52
    Date: 2021–02
  17. By: Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP & CONICET); Irene Brambilla (CEDLAS-IIE-FCE-UNLP & CONICET); Guillermo Falcone (CEDLAS-IIE-FCE-UNLP & CONICET); Carlo Lombardo (CEDLAS-IIE-FCE-UNLP & CONICET); Andrés César (CEDLAS-IIE-FCE-UNLP)
    Abstract: We study changes in employment by occupations characterized by different degree of exposure to routinization in the six largest Latin American economies over the last two decades. We combine our own indicators of routine task content based on information from the Programme for the International Assessment of Adult Competencies (PIACC) with labor market microdata from harmonized national household surveys. We find that the increase in jobs was decreasing in the automatability of the tasks typically performed in each occupation, and increasing in the initial wage, a pattern more consistent with the traditional skill-biased technological change than with the polarization hypothesis.
    JEL: J21 J23 J24 O33
    Date: 2021–03
  18. By: Peter J. Kuhn; Lizi Yu
    Abstract: We study the performance of small retail sales teams facing an incentive scheme that includes both a lump sum bonus and multiple accelerators (kinks where the piece rate jumps upward). Consistent with standard labor supply models, we find that the presence of an attainable bonus or kink on a work-day raises mean sales, and that sales are highly bunched at the bonus; inconsistent with those models we find that teams bunch at the kinks instead of avoiding them. Teams’ responses to the kinks are consistent with models in which the kinks are perceived as symbolic rewards, and inconsistent with reference point models where kinks induce loss aversion.
    JEL: J33 M52
    Date: 2021–02
  19. By: Czarnitzki, Dirk; Joosten, Wytse; Toivanen, Otto
    Abstract: International student exchange has become an important part of university-level studies and the EU plans to increase it significantly. We analyze how international student exchange affects students' academic human capital. Using detailed student-level data from four faculties (Economics and Business, Law, Engineering and Science) of a large Belgian public university we find that, on average, exchange students lose 7% in terms of grades relative to their non-mobile peers, but less so in Erasmus-facilitated exchange. Since students' academic performance is an important factor in companies' hiring decisions, participation in international exchange seems to have a non-negligible impact on labor market outcomes.
    Keywords: Exchange programs,student mobility,academic performance
    JEL: I23 I26 J24
    Date: 2021
  20. By: Ge, Peng (Renmin University of China); Sun, Wenkai (Renmin University of China); Zhao, Zhong (Renmin University of China)
    Abstract: Using national representative samples from population census and mini-census of China, this paper documents important employment dynamics in China from 1990 to 2015. The share of routine manual jobs decreased significant from 57% to 32%; both the share of routine cognitive jobs and the share of not-working increased significantly, from 8% to 19%, and from 16% to 31%, respectively; however, the share of non-routine jobs had no significant change. Our decomposition exercises suggest that the composition effect resulting from change in the composition of population demographics, the propensity effect from change in the probability for people with given demographic characteristics into different employment categories and the interaction effect contribute to 68%, 66% and -34% to the fall in routine manual jobs, respectively. Meanwhile, these effects for the rise in routine cognitive jobs and for the increase in not-working are 16%, 74%, 11%, and 7%, 93%, 0.3%, respectively.
    Keywords: employment dynamics, routine job, non-routine job, China
    JEL: J21
    Date: 2021–02
  21. By: Vahagn Jerbashian
    Abstract: I use data from the World Input-Output Database and show that trade in information technologies (IT) has a significant contribution to the growth in foreign intermediate goods in the 2001-2014 period. China has strongly contributed to the rise in trade in IT and has become one of the major foreign suppliers of IT. I merge these data with the EU KLEMS database and EU Labour Force Survey and obtain a dataset of 12 European countries and 2001-2007 period. I show that IT imports from China are associated with lower IT prices in European countries. The fall in IT prices has increased the demand for high wage occupations and reduced the demand for medium wage occupations. Nearly 25 percent of the variation in the demand for occupations can be attributed to the trade with China.
    Keywords: trade, information technologies, China, demand for occupations
    JEL: F16 J23 J24 O33 L63
    Date: 2021
  22. By: Ioana Marinescu; Yue Qiu; Aaron Sojourner
    Abstract: Wage inequality does not fully capture differences in job quality. Jobs also differ along other key dimensions, including the prevalence of labor rights violations. We construct novel measures of labor violation rates using data from federal agencies. Within local industries over time, a 10% increase in the average wage is associated with a 0.15% decrease in the number of violations per employee and a 4% decrease in fines per dollar of pay. Reduced labor market concentration and increased union coverage rate are also associated with reductions in labor violations. Overall, labor violations are regressive: they increase inequality in job quality.
    JEL: J28 J31 J32 J33 J83 K31 K42
    Date: 2021–02
  23. By: Maczulskij, Terhi; Viinikainen, Jutta
    Abstract: Abstract Using a representative survey combined with register data on long-term labour market outcomes, this paper examines how personality traits predict sorting into public and private sector employment among prime working-age individuals. To gain deeper insights into the dynamic dimensions of the sorting process, we also study the role of personality traits in the decisions to enter or exit public sector work. Our robust results show that public sector workers are more social, while private sector workers exhibit more orderly behaviour. The link between orderliness and sectoral sorting is partly explained by the reduced entry of individuals with high levels of orderliness into public sector employment. High sociability is also financially better rewarded in the public sector, which may implicitly indicate a good fit between this trait and job performance in that sector.
    Keywords: Personality, Public sector, Private sector, Occupational choice
    JEL: J23 J45
    Date: 2021–02–22
  24. By: Francesca Carta (Bank of Italy); Marta De Philippis (Bank of Italy)
    Abstract: This paper analyses the effects of raising the statutory full retirement age on the labour force participation of middle-aged individuals and their partners. Identification relies on a difference-in-differences setting that exploits the large heterogeneous increase in the age eligibility for retirement caused by an unexpected Italian pension reform. We detect a sizeable increase in the participation rate of middle-aged women that spills over into their husbands' labour supply, who choose to postpone their retirement decision.
    Keywords: family economics, labour supply, retirement
    JEL: J16 J22 J26
    Date: 2021–02
  25. By: Andres Rodriguez-Pose; Roberto Ganau;
    Abstract: Europe has witnessed a considerable labour productivity slowdown in recent decades. Many potential explanations have been proposed to address this productivity ‘puzzle’. However, how the quality of local institutions influences labour productivity has been overlooked by the literature. This paper addresses this gap by evaluating how institutional quality affects labour productivity growth and, particularly, its determinants at the regional level during the period 2003-2015. The results indicate that institutional quality influences regions’ labour productivity growth both directly —as improvements in institutional quality drive productivity growth— and indirectly —as the short- and long-run returns of human capital and innovation on labour productivity growth are affected by regional variations in institutional quality.
    Keywords: Labour productivity; institutional quality; physical capital; human capital; innovation; regions; Europe
    JEL: E24 J24 O47 R11
    Date: 2021–02
  26. By: BiN Ni (Faculty of Economics, Hosei University, Machida, Tokyo, Japan.); Hayato Kato (Graduate School of Economics, Osaka University); Yang Liu (Research Institute of Economy, Trade and Industry (RIETI))
    Abstract: This study uses unique division-level data of Japanese firms to examine how foreign direct investment (FDI) affects domestic employment. Contrary to most previous studies focusing on the effect on net employment growth, we decompose it into gross job creation and gross job destruction. We find that FDI destination plays an important role: FDI to Asia increases job creation, while FDI to Europe or North America decreases it. A frictional search-and-matching model with heterogeneous jobs can explain the differential effects. The model provides additional predictions on job creation and destruction by job type, which are also empirically confirmed.
    Keywords: Outward FDI, firm-establishment-division-level data, multinational enterprises(MNEs), large-firm search model, high/low-skilled jobs
    JEL: F23 J21 J23
    Date: 2021–01
  27. By: Resnjanskij, Sven (ifo Institute); Ruhose, Jens (Kiel University); Wiederhold, Simon (Catholic University Eichstaett-Ingolstadt); Woessmann, Ludger (ifo Institute and LMU Munich)
    Abstract: We study a mentoring program that aims to improve the labor-market prospects of school-attending adolescents from disadvantaged families by offering them a university-student mentor. Our RCT investigates program effectiveness on three outcome dimensions that are highly predictive of adolescents later labor-market success: math grades, patience-social skills, and labor-market orientation. For low-SES adolescents, the one-to-one mentoring increases a combined index of the outcomes by half a standard deviation after one year, with significant increases in each dimension. Part of the treatment effect is mediated by establishing mentors as attachment figures who provide guidance for the future. The mentoring is not effective for higher-SES adolescents. The results show that substituting lacking family support by other adults can help disadvantaged children at adolescent age.
    Keywords: mentoring; disadvantaged youths; adolescence; school performance; patience; social skills; labor-market orientation; field experiment;
    JEL: I24 J24 H52
    Date: 2021–02–26

This nep-lma issue is ©2021 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.