nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2021‒12‒06
fifteen papers chosen by
Joseph Marchand
University of Alberta

  1. Telework and Time Use By Pabilonia, Sabrina Wulff; Vernon, Victoria
  2. Do Workers Share in Firm Success? Pass-through Estimates for New Zealand By Allan, Corey; Maré, David C.
  3. Labour-saving automation and occupational exposure: a text-similarity measure By Montobbio, Fabio; Staccioli, Jacopo; Virgillito, Maria Enrica; Vivarelli, Marco
  4. The human side of productivity: Uncovering the role of skills and diversity for firm productivity By Chiara Criscuolo; Peter Gal; Timo Leidecker; Giuseppe Nicoletti
  5. The Legacy of COVID-19 in Education By Werner, Katharina; Woessmann, Ludger
  6. Fertility, Family Policy, and Labor Supply: Quasi-Experimental Evidence from France By Elmallakh, Nelly
  7. The Gender Pay Gap in University Student Employment By Paul David Boll; Lukas Mergele; Larissa Zierow
  8. Income inequality and redistribution in Lithuania: The role of policy, labor market, income, and demographics By Nerijus Cerniauskas; Denisa Sologon; Cathal O'Donoghue; Linas Tarasonis
  9. Higher Education Expansion and Supply of Teachers in China By Dai, Fengyan; Xu, Lei; Zhu, Yu
  10. Learning-by-Doing and Productivity Growth among High-Skilled Workers: Evidence from the Treatment of Heart Attacks By Lundborg, Petter; James, Stefan; Lagerqvist, Bo; Vikström, Johan
  11. One Country, Two Systems: Evidence on Retirement Patterns in China By Giles, John T.; Lei, Xiaoyan; Wang, Gewei; Wang, Yafeng; Zhao, Yaohui
  12. A Pacific Skills Visa: Improving Opportunities for Skilled Migration throughout the Pacific Region By Chand, Satish; Clemens, Michael A.; Dempster, Helen
  13. The Right Person for the Right Job: Workers' Prosociality as a Screening Device By Bigoni, Maria; Ploner, Matteo; Vu, Thi-Thanh-Tam
  14. Vicious Circle or New Paradigm? Exploring the Impact of Shadow Economy on Labour Market in Latin America and Eurozone By Khorana, Sangeeta; Caram, Santiago; Biagetti, Marco
  15. Improving Worker Productivity Through Tailored Performance Feedback: Field Experimental Evidence from Bus Drivers By Romensen, Gert-Jan; Soetevent, Adriaan R.

  1. By: Pabilonia, Sabrina Wulff (U.S. Bureau of Labor Statistics); Vernon, Victoria (Empire State College)
    Abstract: This chapter reviews the evidence on the relationship between telework and households' time allocation, drawing heavily on the empirical evidence from time diary data, and discusses the implications of telework for workers' productivity, wages, labor force participation, and well-being. Telework results in significant time savings for workers, as they reduce time on commuting and grooming activities by over one hour on telework days. This time is reallocated to household and leisure activities, but differentially for men and women. Men spend most of their time windfall on leisure activities; however, fathers also increase time on primary child care. Women, on the other hand, increase their household production. Children and parents benefit because they spend more time together; however, average full-time workers spend more time alone when they telework.
    Keywords: working from home, telework, telecommuting, commuting, home-based work, alternative work arrangements, work-life balance, time use, productivity, well-being, wages
    JEL: J22 J31 D13
    Date: 2021–11
  2. By: Allan, Corey; Maré, David C. (Motu Economic and Public Policy Research Trust)
    Abstract: We study the extent to which firm financial performance is passed on to workers in the form of higher wages and how this has changed over 2002-2018. We measure financial performance as value added per worker and as quasi-rents. Quasi-rents better approximate the resources available to be shared between workers and firms as the measure takes into account the rental cost of capital as well as the reservation wages. We estimate the reservation wage bill for each firm using estimates from a two-way fixed-effect model and further decompose the pass-through into contributions from worker sorting and rent-sharing. Our IV estimates of pass-through are in the range of 0.12 and 0.19 for value added and 0.11 and 0.07 for quasi-rents. Worker sorting explains between 35% and 50% of pass-through. While the extent of overall pass-through is relatively stable over time, the contribution of worker sorting declines dramatically to explain almost none of the estimated pass-through.
    Keywords: wage determination, rent sharing, worker sorting
    JEL: J31 J71 E25 D22
    Date: 2021–10
  3. By: Montobbio, Fabio; Staccioli, Jacopo; Virgillito, Maria Enrica; Vivarelli, Marco
    Abstract: This paper represents one of the first attempts at building a direct measure of occupational exposure to robotic labour-saving technologies. After identifying robotic and LS robotic patents retrieved by Montobbio et al. (2022), the underlying 4-digit CPC definitions are employed in order to detect functions and operations performed by technological artefacts which are more directed to substitute the labour input. This measure allows to obtain fine-grained information on tasks and occupations according to their similarity ranking. Occupational exposure by wage and employment dynamics in the United States is then studied, complemented by investigating industry and geographical penetration rates.
    Keywords: Labour-Saving Technology,Natural Language Processes,Labour Markets,Technological Unemployment
    JEL: O33 J24
    Date: 2021
  4. By: Chiara Criscuolo; Peter Gal; Timo Leidecker; Giuseppe Nicoletti
    Abstract: Relying on linked employer-employee datasets from 10 countries, this paper documents that the skills and the diversity of the workforce and of managers – the human side of businesses – account on average for about one third of the labour productivity gap between firms at the productivity “frontier” (the top 10% within each detailed industry) and medium performers at the 40-60 percentile of the productivity distribution. The composition of skills, especially the share of high skills, varies the most along the productivity distribution, but low and medium skilled employees make up a substantial share of the workforce even at the frontier.High skills show positive but decreasing productivity returns. Moreover, the skill mix of top firms varies markedly across countries, pointing to the role of different strategies pursued by firms in different policy environments. We also find that managerial skills play a particularly important role, also through complementarities with worker skills. Gender and cultural diversity among managers – and to a lesser extent, among workers – is positively related to firm productivity as well. We discuss public policies that can facilitate the catch-up of firms below the frontier through skills and diversity. These cover a wide range of areas, exerting their influence through three main channels: the supply, upgrading and the matching across firms (the SUM) of skills and other human factors.
    Keywords: diversity, linked employer-employee data, managers, productivity, skills
    JEL: D24 J24 M14
    Date: 2021–12–06
  5. By: Werner, Katharina (Ifo Institute for Economic Research); Woessmann, Ludger (University of Munich)
    Abstract: If school closures and social-distancing experiences during the Covid-19 pandemic impeded children's skill development, they may leave a lasting legacy in human capital. To understand the pandemic's effects on school children, this paper combines a review of the emerging international literature with new evidence from German longitudinal time-use surveys. Based on the conceptual framework of an education production function, we cover evidence on child, parent, and school inputs and students' cognitive and socio-emotional development. The German panel evidence shows that children's learning time decreased severely during the first school closures, particularly for low-achieving students, and increased only slightly one year later. In a value-added model, learning time increases with daily online class instruction, but not with other school activities. The review shows substantial losses in cognitive skills on achievement tests, particularly for students from disadvantaged backgrounds. Socio-emotional wellbeing also declined in the short run. Structural models and reduced-form projections suggest that unless remediated, the school closures will persistently reduce skill development, lifetime income, and economic growth and increase inequality.
    Keywords: COVID-19, school closures, education, schools, students, educational inequality
    JEL: I20 H52 J24
    Date: 2021–10
  6. By: Elmallakh, Nelly
    Abstract: This paper examines fertility and labor supply responses to a French policy reform that consisted in conditioning the amount of child allowances on household income. Relying on Regression Discontinuity Design and administrative income data, the paper finds that restricting family allowance eligibility criteria decreases fertility. The results also highlight that receiving half the amount of the allowances or not receiving any leads to an increase in both male and female labor supply. Auxiliary regressions show that at least part of the decline in fertility is due to timing effects, as the fertility impact declines as women's age increases.
    Keywords: family policy,child allowances,fertility,labor supply,France
    JEL: H53 J21 J22
    Date: 2021
  7. By: Paul David Boll; Lukas Mergele; Larissa Zierow
    Abstract: Gender pay gaps are commonly studied in populations with already completed educational careers. We focus on an earlier stage by investigating the gender pay gap among university students working alongside their studies. With data from five cohorts of a large-scale student survey from Germany, we use regression and wage decomposition techniques to describe gender pay gaps and potential explanations. We find that female students earn about 6% less on average than male students, which reduces to 4.1% when accounting for a rich set of explanatory variables. The largest explanatory factor is the type of jobs male and female students pursue.
    Keywords: Gender pay gap, university student employment, job types
    JEL: I22 I23 J16 J31
    Date: 2021
  8. By: Nerijus Cerniauskas (Vilniaus Universitetas); Denisa Sologon (Luxembourg Institute of Socio-Economic Research (LISER, CEPS/INSTEAD)); Cathal O'Donoghue (National University of Ireland); Linas Tarasonis (Vilniaus Universitetas; Lietuvos Bankas)
    Abstract: We model the household disposable income distribution in Lithuania and explore the drivers of the increase in income inequality between 2007 and 2015. We quantify the contributions of four factors to changes in the disposable income distribution: (i) demographics; (ii) labor market structure; (iii) returns and prices; and (iv) tax–benefit system. Results show that the effects of the factors were substantial and reflected heterogeneous developments over two subperiods: changes in the tax and benefit system cushioned a rapid rise in market income inequality because of the global financial crisis during 2007–2011, but failed to do so during the subsequent years of economic expansion, when rising returns in the labor and capital markets significantly increased disposable income inequality. We also find that declining marriage rates contributed to the increase in income inequality in Lithuania.
    Keywords: income inequality, redistribution, decompositions, microsimulation, tax-benefit policies.
    JEL: D31 H23 J21
    Date: 2021
  9. By: Dai, Fengyan (Nanjing University of Finance and Economics); Xu, Lei (National Institute of Economic and Social Research (NIESR)); Zhu, Yu (University of Dundee)
    Abstract: We examine the teacher labour market in China using the 2005 mini-Census, in the context of the transformation of the world's largest education system. We first document a significant increase not only in quantity, but also in quality of teachers during 1990-2005. Instrumental Variables results based on the natural experiment of a substantial expansion of higher education in 1992/93 indicate a large positive causal effect of the expansion on supply of teachers. Consistent with differential opportunity costs across graduate occupations, the supply effect is more pronounced for women and those living in less developed regions. Further analyses of differential college premiums in earnings and non-pecuniary benefits between teaching and non-teaching occupations suggest that teacher recruitment has become more market-oriented and flexible, in attracting low to lower-middle ability college graduates into teaching in an increasingly decentralized and competitive graduate labour market.
    Keywords: higher education expansion, supply of teachers, China, instrumental variables, college premium, non-pecuniary benefits
    JEL: I23 I26 J45
    Date: 2021–11
  10. By: Lundborg, Petter (Lund University); James, Stefan (Uppsala University); Lagerqvist, Bo (Uppsala University); Vikström, Johan (IFAU)
    Abstract: Learning-by-doing is a fundamental concept in economics but a challenging one to document in high-skilled settings due to non-random assignment of workers to tasks and lacking performance measures. Our paper overcomes these challenges in the context of heart attack treatments in Sweden, where we exploit quasirandom assignment of physicians to patients. We document long learning curves, where physicians keep learning over the first 1000 treatments performed, affecting both proficiency and decision-making skills. These learning effects translate into effects on patient health, but only over the first 150 treatments performed, corresponding to one year of experience. Learning rates are higher for physicians who have worked with more experienced colleagues and who have gained more experience in treating complicated cases. Experienced physicians are more responsive to patient characteristics when deciding on treatments and experience from more recent heart attack treatments is more valuable than experience from more distant ones, suggesting that human capital depreciates. We also show that productivity growth keeps pace with wage growth over the first four years of the career but flattens out thereafter. Our results provide rare evidence on the existence of prolonged learning curves in high-skilled tasks and support the notion that learning-by-doing can be a powerful mechanism for productivity growth.
    Keywords: operation volume, learning-by-doing, survival, causal effect
    JEL: I11 I12 I18 L11
    Date: 2021–09
  11. By: Giles, John T. (World Bank); Lei, Xiaoyan (Peking University); Wang, Gewei (Peking University); Wang, Yafeng (Peking University); Zhao, Yaohui (Peking University)
    Abstract: This paper documents the patterns and correlates of retirement in China using a nationally representative survey, the China Health and Retirement Longitudinal Study (CHARLS). After documenting stark differences in retirement ages between urban and rural residents, the paper shows that China's urban residents retire earlier than workers in many OECD countries and that rural residents continue to work until advanced ages. Differences in access to generous pensions and economic resources explain much of the urban-rural difference in retirement rates. The paper suggests that reducing disincentives created by China's Urban Employee Pension system, improving health status, providing childcare and elder care support may all facilitate longer working lives. Given spouse preferences for joint retirement, creating incentives for women to retire later may facilitate longer working lives for both men and women.
    Keywords: retirement, aging, pensions, urban-rural gap, China, CHARLS
    JEL: J26 O15 O17 O53
    Date: 2021–09
  12. By: Chand, Satish (University of New South Wales); Clemens, Michael A. (Center for Global Development); Dempster, Helen (Center for Global Development)
    Abstract: The demand for skills exceeds supply, both within the Pacific Islands and the high-income countries of the Pacific Rim. Enhancing skilled migration therefore has the potential to generate large economic gains. The Global Skill Partnership is a migration model that can support such mutually beneficial mobility by moving training into the country of origin. In this paper, we outline its regional application to the Pacific. To assess the potential economic gains from such a Pacific Skills Partnership, we present new data on earnings and the cost of training in the Pacific Islands for three qualifications— accountants, computer science graduates, and chefs—and explore how such training could be financed through loan schemes. Graduates could be provided with internationally accredited qualifications and a new Pacific Skills Visa, facilitating their access to work opportunities abroad, particularly in the regions' high-income countries. This Pacific Skills Partnership could bring large economic benefits to countries of origin, destination, and the migrants themselves.
    Keywords: immigration, labor, low-skill, visa, mobility, Pacific Islands, Papua New Guinea, seasonal, temporary
    JEL: F22 J11 J24
    Date: 2021–11
  13. By: Bigoni, Maria (University of Bologna); Ploner, Matteo (University of Trento); Vu, Thi-Thanh-Tam (University of Trento)
    Abstract: The impact of workers' non-pecuniary motivation on their productivity is a fundamental issue in labor economics. Previous studies indicate that prosocially motivated workers may perform better when assigned to jobs having socially desirable implications – even if effort is non contractible and they are offered a low-powered fixed-compensation scheme – as compared to a standard job with an effort-contingent payment. This suggests that profit maximizing employers should assign workers to different jobs, based on workers' prosociality. We run an experiment to explore the link between workers' prosociality and their level of effort under a prosocial and a standard job, and show that employers actually exploit the information on workers' prosociality to assign them the type of job that would be most profitable from the firm's perspective.
    Keywords: dictator game, incentives, laboratory experiment, principal-agent game, real-effort task
    JEL: C91 D63 D64
    Date: 2021–10
  14. By: Khorana, Sangeeta; Caram, Santiago; Biagetti, Marco
    Abstract: The relationship between shadow economy (or informal economy) and development has been extensively researched. But there is a lack of consensus on how institutional quality affects the size of informal economy in any country. Using the Kuznets Curve hypothesis we assess the relationship between institutional quality and the size of SE for a group of Latin American and Eurozone countries for 1991-2015. We examine the rationale of the 'exclusion' and 'escape' theories in short and long-run with the multiple indicators multiple causes (MIMIC) model. We use two techniques, namely an instrumental variable (IV) and Fully Modified OLS (FMOLS) approach. The results show positive and a significant relationship between labour productivity and the size of the shadow economy. We also find that the size of the informal sector is related to the institutional framework, and while the size of the informal sector varies across countries, both formal and informal sectors can co-exist in the long run. High corruption together with an excessive tax burden and adverse socio-economic conditions impact the size of the informal sector in an economy.
    Keywords: Shadow Economy,informal sector,development,cointegration,causality
    JEL: O17 O40 O43 C23 C26
    Date: 2021
  15. By: Romensen, Gert-Jan; Soetevent, Adriaan R.
    Abstract: Can the design and intensity of performance feedback be used to improve worker productivity? We analyze two forms of feedback in a sample of 409 drivers at a large Dutch bus company: written peer-comparison reports and in-person coaching by high-achieving peers. We experimentally vary the nature and number of peer-comparison messages that drivers receive in their written feedback report. We exploit the quasi-experimental variation in the in-person coaching program implemented in parallel to the written feedback to analyze its effects. We find no effect of the announcement and introduction of the company's written feedback program on fuel efficiency. Including peer-comparison messages into these reports is generally ineffective in improving either fuel economy or outcomes pertaining to passenger comfort. In-person coaching however generates significant improvements on all dimensions for drivers in the bottom half of the performance distribution for about eight weeks. In-person coaching weakens the impact of written peer-comparison feedback but not vice versa.
    Keywords: labor productivity,feedback,peer comparisons,field experiment
    JEL: D23 J24 M53 Q55
    Date: 2021

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