|
on Labor Markets - Supply, Demand, and Wages |
| By: | Luca Fumarco; Alessandro Vandromme; Levi Halewyck; Eline Moens; Stijn Baert (-) |
| Abstract: | We are the first to estimate the impact of relative age (i.e., the difference in classmates’ ages) on both speed and quality of individuals’ transition from education to the labour market. Moreover, we are the first to explore whether and how this impact passes through characteristics of students’ educational career. We use rich data pertaining to schooling and to labour market outcomes one year after graduation to conduct instrumental variables analyses. We find that a one-year increase in relative age increases the likelihood of (i) being employed then by 3.5 percentage points, (ii) having a permanent contract by 5.1 percentage points, and (iii) having full-time employment by 6.5 percentage points. These relative age effects are partly mediated by intermediate outcomes such as having had a schooling delay at the age of sixteen or taking on student jobs. The final mediator is particularly notable as no earlier studies examined relative age effects on student employment. |
| Keywords: | relative age, school starting age, labour market transition |
| JEL: | I21 J23 J24 J6 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:22/1037&r= |
| By: | Maclean, Catherine; Pichler, Stefan; Ziebarth, Nicolas R. |
| Abstract: | This paper evaluates how sick pay mandates operate at the job level 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 18 percentage points from a baseline level of 66% in the first two years. Newly covered employees take two additional sick days per year. We find little evidence that mandating sick pay crowds-out non-mandated fringe benefits. Finally, we develop a model of optimal sick pay provision and illustrate the trade-offs when assessing welfare. |
| Keywords: | sick pay mandates,take-up,social insurance,fringe benefits,moral hazard,unintended consequences,medical leave,National Compensation Survey,optimal social insurance,Baily-Chetty,welfare |
| JEL: | I12 I18 J22 J28 J32 J38 J88 H75 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21083&r= |
| By: | Samuel Dodini; Kjell Salvanes; Alexander L.P. Willén; Kjell G. Salvanes |
| Abstract: | This paper brings together the modern literatures on monopsony power and labor unions by empirically examining the effects of unionization on the dynamics of worker earnings across differently concentrated markets. Exploiting tax reforms to union due deductions as exogenous shocks to unionization, we demonstrate that there is a steep unionization gradient over labor market concentration. We show that there is an equally steep gradient in the union wage premium over concentration and that the premium loads almost exclusively on highly concentrated markets. This result implies a potentially important role of unions as alleviating market failures induced by imperfect competition. To validate our findings and examine robustness to different types of shocks, we extend the analysis by exploiting the emergence of import competition from China as an exogenous shock to employer concentration. This analysis suggest that the negative earnings effect of labor market concentration is eliminated upon reaching a union density of approximately 63 percent at the firm. |
| Keywords: | monopsony, skills, unions, market power |
| JEL: | J23 J24 J42 J51 J52 J63 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9495&r= |
| By: | Geyer, Johannes; Lorenz, Svenja; Zwick, Thomas; Bruns, Mona |
| Abstract: | Early retirement options are usually targeted at employees at risk of not reaching their regular retirement age in employment. An important at-risk group comprises employees who have worked in demanding jobs for many years. This group may be particularly negatively affected by the abolition of early retirement options. To measure differences in labor market reactions of employees in low- and high-demand jobs, we exploit the quasi-natural experiment of a cohort-specific pension reform that increased the early retirement age for women from 60 to 63 years. Based on a large administrative dataset, we use a regression-discontinuity approach to estimate the labor market reactions. Surprisingly, we find the same relative employment increase of about 25% for treated women who were exposed to low and to high job demand. For older women in demanding jobs, we also do not find substitution effects into unemployment, partial retirement, disability pension, or inactivity. Eligibility for the pension for women required highlabor market attachment; thus, we argue that this eligibility rule induced a positive selection of healthy workers into early retirement. |
| Keywords: | pension reform,job demand,early retirement,quasi-experimental variation |
| JEL: | J14 J18 J22 J26 H31 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21082&r= |
| By: | Caliendo, Marco (University of Potsdam); Wittbrodt, Linda (University of Potsdam) |
| Abstract: | In many countries, women are over-represented among low-wage employees, which is why a wage floor could benefit them particularly. Following this notion, we analyse the impact of the German minimum wage introduction in 2015 on the gender wage gap. Germany poses an interesting case study in this context, since it has a rather high gender wage gap and set the minimum wage at a relatively high level, affecting more than four million employees. Based on individual data from the Structure of Earnings Survey, containing information for over one million employees working in 60,000 firms, we use a difference-in-difference framework that exploits regional differences in the bite of the minimum wage. We find a significant negative effect of the minimum wage on the regional gender wage gap. Between 2014 and 2018, the gap at the 10th percentile of the wage distribution was reduced by 4.6 percentage points (or 32%) in regions that were strongly affected by the minimum wage compared to less affected regions. For the gap at the 25th percentile, the effect still amounted to -18%, while for the mean it was smaller (-11%) and not particularly robust. We thus find that the minimum wage can indeed reduce gender wage disparities. While the effect is highest for the low-paid, it also reaches up into higher parts of the wage distribution. |
| Keywords: | minimum wage, gender wage gap, regional bite |
| JEL: | J16 J31 J38 J71 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14926&r= |
| By: | Suanna Oh |
| Abstract: | Does identity influence economic behavior in the labor market? I investigate this question in rural India, focusing on the effect of caste identity on job-specific labor supply. In a field experiment, laborers choose whether to take up various job offers, which differ in associations with specific castes. Workers are less willing to accept offers that are linked to castes other than their own, especially when those castes rank lower in the social hierarchy. Workers forego large payments to avoid job offers that conflict with their caste identity, regardless of whether these decisions are made in private. |
| Keywords: | identity, labor supply, caste, occupational choice |
| JEL: | D91 J24 O10 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9487&r= |
| By: | Dolado, Juan J. (Universidad Carlos III de Madrid); Guerra, Airam (Universidad Carlos III de Madrid) |
| Abstract: | This paper investigates the roots of labour market discrimination underlying the negative correlation between body fat percentage and wages. Using a large panel dataset of individuals drawn from the 1997 National Longitudinal Survey of Youth (NLSY97) for the US, we test whether residual wage gaps (once observed differences in productivity related to obesity are controlled for) are due to prejudice (taste-based discrimination) or statistical discrimination. Our main contribution is to examine how these two types of discrimination hinge on a wide range of obese individuals' specific job and occupational characteristics (drawn from the O * Net Online database). Our analysis sheds light on whether discrimination originates from the attitudes of clients, fellow-workers or employers. We find strong empirical evidence supporting taste-based discrimination against obese females, especially as they become older, in jobs requiring frequent communication with either clients or employers. The evidence on this issue for males is weaker. These differences may be explained both by an over-representation of males among employers and different image concerns against people of the same gender. |
| Keywords: | obesity, wages, job characteristics, NLSY97, O*Net Online |
| JEL: | J71 J15 J31 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14935&r= |
| By: | Cobb-Clark, Deborah A. (University of Sydney); Dahmann, Sarah C. (University of Melbourne); Kamhöfer, Daniel A. (Düsseldorf Institute for Competition Economics (DICE)); Schildberg-Hörisch, Hannah (Heinrich Heine University Düsseldorf) |
| Abstract: | This study investigates the predictive power of self-control for individuals and their children using population representative data. We use the well-established Brief Self-Control Scale to demonstrate that people's trait self-control is highly predictive of their life outcomes. Higher self-control is associated with better health, education, and employment outcomes as well as greater financial and overall well-being. Importantly, self-control often adds explanatory power beyond more frequently studied personality traits and economic preferences. The self-control of children is correlated with that of their parents, while higher parental self-control is also linked to fewer behavioral problems among children. Our results suggest that social interventions targeting self-control may be beneficial. |
| Keywords: | Brief Self-Control Scale, personality traits, intergenerational transmission |
| JEL: | D91 D01 J24 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14920&r= |
| By: | Dorn, David (University of Zurich); Levell, Peter (Institute for Fiscal Studies, London) |
| Abstract: | The share of low-income countries in global exports nearly tripled between 1990 and 2015, driven largely by the rapid emergence of China as an exporting powerhouse. While research in economics had long acknowledged that trade with lower-income countries could raise income inequality in Europe and the US, empirical estimates indicated only a modest contribution of trade to growing national skill premia. However, if workers are not highly mobile across firms, industries and locations, then the unequal impacts of trade can manifest along different margins. Recent evidence from countries across Europe and the US shows that growing import competition from China differentially reduced earnings and employment rates for workers in more trade-exposed industries, and for the residents of more trade-exposed geographic regions. These adverse impacts were often largest for lower-skilled individuals. We show that domestic manufacturing employment declined much more in countries that saw a large growth of net imports from China (such as the UK and the US), than in countries that maintained relatively balanced trade with China (such as Germany and Switzerland). Drawing on a new analysis for the UK, we further show that trade with China contributed to job loss in manufacturing, but also to substantial declines in consumer prices. However, while the adverse labour market impacts were concentrated on specific groups of workers and regions, the consumer benefits from trade were widely dispersed in the population, and appear similarly large for high-income and low-income households. Globalisation has thus created pockets of losers, and recent evidence indicates that in addition to financial losses, residents of regions with greater exposure to import competition also suffer from higher crime rates, a deterioration of health outcomes, and a dissolution of traditional family structures. We argue that new import tariffs such as those imposed by the US in 2018 and 2019 are unlikely to help the losers from globalisation. Instead, displaced workers may be better supported by a combination of transfers to avert financial hardship, skills training that facilitate reintegration into the labour market, and place-based policies that stimulate job creation in depressed locations. |
| Keywords: | trade, globalisation, inequality, employment, wages, consumer prices, public policy |
| JEL: | E31 F13 F14 F16 F23 I14 I38 J21 J23 J31 J61 J62 R11 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14914&r= |
| By: | James C. Davis; Holden A. Diethorn; Gerald R. Marschke; Andrew J. Wang |
| Abstract: | Employment in STEM occupations suffered smaller peak-to-trough percentage declines than non-STEM occupations during the Great Recession and COVID-19 recession, suggesting a relative resiliency of STEM employment. We exploit the sudden peak-to-trough declines in STEM and non-STEM employment during the COVID-19 recession to measure STEM recession-resiliency, decomposing our difference-in-differences estimate into parts explained by various sources. We find that STEM knowledge importance on the job explains the greatest share of STEM employment resiliency, and that workers in non-STEM occupations who nonetheless use STEM knowledge experienced better employment outcomes. STEM employment resiliency may explain the mild effects of COVID-19 on innovative activity. |
| JEL: | I1 J21 O3 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29568&r= |
| By: | Merfeld, Joshua D. (KDI School of Public Policy and Management); Brummund, Peter (University of Alabama) |
| Abstract: | A consistent finding in the development literature is that average non-farm labor productivity is higher than average farm labor productivity. These differences in average productivity are sometimes used to promote policies which advance the non-farm sector. In this paper, we analyze the importance of two specification choices when comparing productivity gaps, using detailed household panel data from Malawi. Importantly, we are able to calculate both average revenue products (ARPLs) – similar to most of the sectoral productivity gap literature – as well as marginal revenue products (MRPLs). We show that the choice of productivity measure combined with the choice of production function specification can lead to different sectoral productivity rankings. MRPLs from translog production functions suggest the household farm sector is more productive than the household non-farm sector, while MRPLs from a Cobb-Douglas and ARPLs from both a translog and a Cobb-Douglas find the opposite ranking. |
| Keywords: | non-farm production, agriculture, labor productivity |
| JEL: | J24 J43 O13 Q12 R23 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14864&r= |
| By: | James J. Feigenbaum; Daniel P. Gross |
| Abstract: | AT&T was the largest U.S. firm for most of the 20th century. Telephone operators once comprised over 50% of its workforce, but in the late 1910s it initiated a decades-long process of automating telephone operation with mechanical call switching—a technology first invented in the 1880s. We study what drove AT&T to do so, and why it took one firm nearly a century to automate this one basic function. Interdependencies between operators and nearly every other part of the business were obstacles: the manual switchboard was the fulcrum of a complex system which had developed around it, and automation only began after the firm and automatic technology were adapted to work together. Even then, automatic switching was only profitable for AT&T in larger markets—hence diffusion expanded as costs declined and service areas grew. We show that automation supported AT&T's continued growth, generating a positive feedback loop between scale and automation that reinforced AT&T's high market share in local markets. |
| JEL: | J23 L11 L23 M11 M15 M54 N32 O33 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29580&r= |
| By: | Rebecca Schrader |
| Abstract: | In this study, I investigate the effect of partial retirement at the firm level on older workers’ labor participation. Thereby, I contribute to the controversial debate about the effects of partial retirement. Using detailed administrative employer-employee data from Germany, I exploit the introduction of partial retirement options in Germany related to the law on PR of 1996 within a difference-in-differences framework. My results show that older workers’ labor participation responds to the introduction of partial retirement and reveals substantial effect heterogeneities with regard to the specific partial retirement arrangement. Overall, I find evidence that partial retirement has the potential to extend older workers’ labor participation and thereby to serve as an instrument to lower the financial burden of governments struggling with the economic costs of demographic aging. |
| Keywords: | older workers, partial retirement, retirement decision, difference-in-differences |
| JEL: | J14 J22 J26 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:bav:wpaper:215_schrader&r= |
| By: | Barigozzi, Francesca (University of Bologna); Cremer, Helmuth (Toulouse School of Economics) |
| Abstract: | We study how workers' concern for coworkers' ability (CfCA) affects competition in the labor market. We consider two firms offering nonlinear contracts to a unit mass of prospective workers. Firms may differ in their marginal productivity, while workers are heterogeneous in their ability (high or low), and in their taste for being employed by any of the two firms. Workers receive a utility premium when employed by the firm hiring the workforce with larger average ability and they suffer a utility loss in the opposite case. These premiums/losses are endogenously determined. When workers' ability is observable and the difference in firms' marginal productivities is strictly positive, we show that CfCA increases surplus but it also increases firms' competition for high-ability workers. As a result, CfCA benefits high-ability workers but is detrimental to firms. In addition, CfCA exacerbates the existing distortion in sorting of high-ability workers to firms: too many workers are hired by the least efficient firm. When ability is not observable, the additional surplus appropriated by high-ability workers is eroded by overincentivization (countervailing incentives) and the more so when CfCA is high. Conversely, high-types' sorting improves when CfCA is low and remains the same when it is high. |
| Keywords: | screening, competition, concern for coworkers’ quality, sorting |
| JEL: | D82 L13 M54 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14855&r= |
| By: | Misty Heggeness; Palak Suri |
| Abstract: | We study the impact of increased pandemic-related childcare responsibilities on custodial mothers by telework compatibility of their job. We estimate changes in employment outcomes of these mothers in a difference-in-difference framework relative to prime-age women without children and a triple-difference framework relative to prime-age custodial fathers. Mothers' labor force participation decreased between 0.1 to 1.5 percentage points (ppts) relative to women without dependent children and 0.3 to 2.0 ppts compared to custodial fathers. Conditional on being in the labor force, the probability of being unemployed fell by 0.7 ppts relative to childless women. Conditional on being employed, leave take-up increased by 0.7 ppts. These patterns were especially prominent among custodial mothers with a college degree or higher in telework-compatible jobs. Compared to women without children, mothers working as teachers and white-collar workers disproportionately left the labor market at the end of the 2020-2021 virtual school year. These mothers likely struggled balancing remote work while simultaneously supporting their children's virtual schooling needs. The disparity between mothers and fathers widened over time, indicating the prevalence of inequality in sharing household duties even today. By the start of the 2021-2022 school year, eighteen months after the pandemic began, mothers' employment was still adversely impacted by childcare disruptions. Our findings emphasize that while flexible work has been shown to increase women's labor supply, it is not sufficient to ensure continued and increasing levels of women's labor force participation if accessible and affordable childcare is unavailable while they work for pay. |
| Keywords: | Labor supply; Gender telework; Difference-in-difference |
| JEL: | D10 J16 J22 |
| Date: | 2021–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmoi:93472&r= |
| By: | Sara B. Heller; Judd B. Kessler |
| Abstract: | Youth employment has been near historic lows in recent years, and racial gaps persist. This paper tests whether information frictions limit young people's labor market success with a field experiment involving over 43,000 youth in New York City. We build software that allows employers to quickly and easily produce letters of recommendation for randomly selected youth who worked under their supervision during a summer youth employment program. We then send these letters to nearly 9,000 youth over two years. Being sent a letter generates a 3 percentage point (4.5 percent) increase in employment the following year, with both employment and earnings increases persisting over the two-year follow-up period. By posting our own job advertisement, we document that while treatment youth do use the letters in applications, there is no evidence of other supply-side responses (i.e., no increased job search, motivation, or confidence); effects appear to be driven by the demand side. Labor market benefits accrue primarily to racial and ethnic minorities, suggesting frictions may contribute to racial employment gaps. But improved employment may also hamper on-time high school graduation. Additional evidence indicates that letters help improve job match quality. Results suggest that expanding the availability of credible signals about young workers—particularly for those not on the margin of graduating high school—could improve the efficiency of the youth labor market. |
| JEL: | C93 I21 J2 J48 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29579&r= |
| By: | Javier Alejo; Leonardo Gasparini; Gabriel Montes-Rojas; Walter Sosa-Escudero |
| Abstract: | The `paradox of progress' is an empirical regularity that associates more education with larger income inequality. Two driving and competing factors behind this phenomenon are the convexity of the `Mincer equation' (that links wages and education) and the heterogeneity in its returns, as captured by quantile regressions. We propose a joint least-squares and quantile regression statistical framework to derive a decomposition in order to evaluate the relative contribution of each explanation. The estimators are based on the `functional derivative' approach. We apply the proposed decomposition strategy to the case of Argentina 1992 to 2015. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.03836&r= |
| By: | Faran, Mahvish (University of Sheffield); Taylor, Karl (University of Sheffield) |
| Abstract: | This paper uses a novel firm level data set to investigate the impact of a unique quality management practice on the production and productivity of a large-scale garments manufacturer in Pakistan. The analysis provides evidence that production complexity is an important element in determining the impact of management practices, as there are sizeable differences in the effects between complex and basic lines of assembly. Most specifications show that the implementation of the new quality management practice has a negative impact on lines at the extreme ends of the complexity spectrum, while conversely it has a positive impact on those basic lines which exhibit the highest levels of complexity. We find evidence consistent with a quantity-quality trade off, in that whilst the implementation of the new management practice generally adversely impacted upon productivity it had the desired effect of reducing the number of daily quality defects observed after the intervention. |
| Keywords: | quality management practice, productivity, production complexity |
| JEL: | L2 M2 O14 O32 O33 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14875&r= |
| By: | Mariagrazia Squicciarini; Jacopo Staccioli |
| Abstract: | This paper exploits natural language processing techniques to detect explicit labour-saving goals in inventive efforts in robotics and assess their relevance for different occupational profiles and the impact on employment levels. The analysis relies on patents published by the European Patent Office between 1978 and 2019 and firm-level data from ORBIS® IP. It investigates innovative actors engaged in labour-saving technologies and their economic environment (identity, location, industry), and identifies technological fields and associated occupations which are particularly exposed to them. Labour-saving patents are concentrated in Japan, the United States, and Italy, and seem to affect low-skilled and blue-collar jobs, along with highly cognitive and specialised professions. A preliminary analysis does not find an appreciable negative effect on employment shares in OECD countries over the past decade, but further research to econometrically investigate the relationship between labour-saving technological developments and employment would be helpful. |
| Date: | 2022–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:124-en&r= |
| By: | Taryn Dinkelman; L. Rachel Ngai |
| Abstract: | Many African countries are still in the early stages of structural transformation. Typically, as economies move through the structural transformation, activities once conducted within the household are outsourced to the market. This has particular implications for women’s time use. In this paper, we document that current patterns of female time use in home production in several African countries closely resemble historical time use patterns in the US. We highlight two stylized facts about women’s time use in Africa. First, in North Africa, women spend very few hours in market work and female labor force participation overall is extremely low. Second, although extensive margin participation of women is high in sub-Saharan Africa, women tend to work in the market for only a few hours each week, with the rest of their work hours spent in home production. These two facts suggest two types of constraints that could slow down the reallocation of female time from home to market as economies grow: Social norms related to women’s market work, and a lack of infrastructure (e.g. household infrastructure and childcare facilities) to facilitate marketizing home production. We discuss recent empirical evidence related to each set of constraints and highlight new avenues for research. |
| JEL: | D13 J22 O11 O12 O55 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29571&r= |
| By: | Bighelli, Tommaso; Lalinsky, Tibor; Vanhala, Juuso |
| Abstract: | We study the consequences of the COVID-19 pandemic on productivity by matching firm performance outcomes with corresponding firm-level information on government support. Our cross-country evidence for five EU countries shows that the pandemic led to a significant short-term decline in productivity predominantly driven by the within-firm growth component. A thorough comparative analysis of the distribution of employment and overall direct subsidies, considering separately also relative firm-level support and the probability of being supported, reveals several common characteristics. In general, the pandemic support was distributed rather efficiently, i.e. towards “deserving” firms and only marginally towards “zombie” and non-viable firms. However, government subsidies appear to have had a limited effect on aggregate productivity developments. |
| JEL: | D22 H25 J38 L29 |
| Date: | 2022–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2022_001&r= |
| By: | O'Higgins, Niall (ILO International Labour Organization); Caro, Luis Pinedo (ILO International Labour Organization) |
| Abstract: | In recent years, crowdworking has emerged as a small but rapidly growing source of employment and income principally for young(er) people. Here, we build on previous work in identifying the determinants of crowdworkers' earnings. We focus on the reasons why young crowdworkers earn significantly higher hourly wages than their older counterparts. We show that this is due to the higher returns to experience accruing to younger crowd-workers. Educational attainment does not explain this age-based differential, as education is a negligible factor in determining crowdworkers' earnings. We also analyse why young women earn around 20% less than their male counterparts despite blind hiring. We confirm that this is partly explained by constraints on working time faced by women with children. The analysis also shows that 'freely chosen' crowdwork - as opposed to, young people crowd-working because of a lack of alternative employment opportunities - is conducive to higher levels of job satisfaction. Moreover, young crowdworkers in middle income countries earn less than their counterparts in high income countries but report higher levels of job satisfaction. This is entirely attributable to the lower quality of their options outside of crowdwork. |
| Keywords: | crowdsourcing platforms, global labour markets, job satisfaction, youth employment |
| JEL: | J20 J41 F41 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14933&r= |
| By: | Ellul, Andrew; Pagano, Marco; Scognamiglio, Annalisa |
| Abstract: | The finance wage premium since the 1990s has arguably lured talent away from other industries. However, the allocation of talent is likely to respond to differences in career paths, not in wages at a given date. We use resume data to reconstruct the careers of 11,255 professionals in finance, high-tech and services from 1980 to 2017, and find that careers mostly develop within sectors. Careers in asset management feature higher and steeper pay profiles than those of employees in banking, insurance and non-finance, yet this career premium cannot be explained by higher risk. Labor market entry responds positively to career premia in asset management and high-tech, and these sectors are regarded as substitutes by potential entrants, consistently with high-tech competing with asset management in attracting talent. |
| Keywords: | careers,finance premium,asset management,labor market entry,high-tech |
| JEL: | G20 G23 J24 J62 J63 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:674&r= |
| By: | Karen Arulsamy (Geary Institute for Public Policy, University College Dublin) |
| Abstract: | A large body of evidence shows that poor mental health early in life reduces income over the lifespan, but a dearth of evidence exists on how early psychological distress affects long-term savings behaviour. By employing a nationally representative cohort panel (NLSY1997) and linear probability models, this paper provides novel evidence that poor mental health early in life can have persistent effects on lifelong financial security via lower retirement savings. Adolescents (16 to 20 years old) with poor mental health are 4.7 percentage points less likely to have access to and 8.9 percentage points less likely to participate in employer sponsored pension plans at age 30-35. There is no significant difference in pension participation rates when individuals with poor mental health have access to plans. The negative association between adolescent mental health and pension participation is mediated by access to a plan, education, income and employment status. These findings suggest that selection into less favourable employment conditions perpetuated by early mental health problems lowers access to and participation in employer sponsored pension plans. |
| Keywords: | Mental health; psychological distress; pensions; retirement savings; financial security; longitudinal studies; cohort studies |
| JEL: | J32 D91 G41 |
| Date: | 2022–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:202201&r= |
| By: | Inés Berniell (CEDLAS/UNLP); Lucila Berniell (CAF); Dolores de la Mata (CAF); María Edo (Universidad de San Andrés); Mariana Marchionni (CEDLAS/CONICET) |
| Abstract: | We study the causal effect of motherhood on labour market outcomes in Latin America. We adopt an event study approach around the birth of the first child based on panel data from national household surveys for Chile, Mexico, Peru, and Uruguay. Our main contributions are: (i)providing new and comparable evidence on the effects of motherhood on labour outcomes in developing countries; (ii) exploring the possible mechanisms driving these outcomes; (iii) discussing the potential links between these outcomes and the prevailing gender norms and family policies in the region. We find that motherhood reduces women’s labour supply in the extensive and intensive margins and influences female occupational structure towards flexible occupations— part-time work, self-employment, and informal jobs—needed for family–work balance. Furthermore, countries with more conservative gender norms and less generous family policies are associated with larger differences between mothers’ and non-mothers’ labour market outcomes. |
| Keywords: | child penalty, event study, female labour supply, self-employment, labour informality, developing countries, Latin America |
| JEL: | J13 J16 J22 J46 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:aoz:wpaper:93&r= |
| By: | Sebastian Gechert (Department of Economics, Chemnitz University of Technology) |
| Abstract: | This paper investigates recent developments in meta-analysis, the tool to quantitatively synthesize research in a certain body of literature. After providing a brief overview on how to do a meta-analysis and discussing recent methodological advancements in the field, I review applied contributions to the field of macroeconomics. It turns out that meta-analyses have often questioned the conventional wisdom and established new consensuses in fiscal, monetary and labor market policies by uncovering substantial publication bias and unexpected determining factors in many bodies of literature – in particular those dominated by policy conclusions in the neoclassical tradition like minimum wages, financial regulation and the relative effects of tax and spending policies. |
| Keywords: | Meta-analysis, macroeconomics, monetary policy, fiscal policy, labor market |
| JEL: | E50 E60 J30 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:tch:wpaper:cep053&r= |
| By: | Mark L. Egan; Alexander MacKay; Hanbin Yang |
| Abstract: | We study empirical patterns in investment behavior using a comprehensive data set of defined contribution plans. Using plan-level portfolio allocation data for the near universe of 401(k) plans over the period 2009-2019, we document substantial differences in investment behavior across plans. Plans with wealthier and more educated participants tend to have higher equity exposure while plans with more retirees and minorities tend to have lower equity exposure. These patterns cannot be explained by differences in 401(k) menus or participation costs. To help interpret these facts, we use a revealed preference approach to estimate investors' expectations of stock market returns and risk aversion, where we allow investors to have heterogeneous risk aversion and subjective and potentially biased beliefs. We find that there is substantial variation in both beliefs and risk aversion across investors and over time, and that both sources of variation help explain investors' portfolio decisions. We also provide new evidence to understand how investors form beliefs. We find that investors extrapolate beliefs from past fund returns even when they initially allocate portfolios in new plans. We also find that investors extrapolate beliefs about the market from the past performance of their employer, which suggests that investor experience helps shape beliefs. |
| JEL: | G0 G11 G12 G40 G5 G51 J32 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29604&r= |
| By: | Morsy, Hanan (African Development Bank); Shimeles, Abebe (African Development Bank); Nabassaga, Tiguene (HEC Montreal) |
| Abstract: | This paper examines how inequality could be tackled through structural transformation using unit record data from the Demographic and Health Surveys (DHS) for Africa. Results suggest inequality between countries tends to be higher when the share of labor employed or value-added in the agriculture sector is higher, while no effect is seen for industry and services sectors' contributions to employment or value-added of the gross domestic product (GDP). On the other hand, within-country inequality tends to be strongly affected by structural change. A one standard deviation growth in the movement of labor from low- to high-productivity sectors could decrease overall inequality by 0.5 percent and inequality of opportunity by 1.1 percent. Results from other data sources strongly support these findings suggesting that rapid structural transformation could lead to sustained reduction in inequality in Africa. Other factors correlated strongly with inequality reduction include human capital which tend to have large and significant income or asset equalizing effect in Africa, particularly at higher level of education. Growth in urbanization and high initial per capita GDP tend to worsen inequality, while initial inequality tended to stem the rise in inequality. |
| Keywords: | structural transformation, inequality, labor productivity growth |
| JEL: | D30 D31 J2 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14878&r= |