nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2022‒05‒16
twenty-six papers chosen by
Joseph Marchand
University of Alberta

  1. Increasing the Demand for Workers with a Criminal Record By Zoe B. Cullen; Will S. Dobbie; Mitchell Hoffman
  2. Taxing the Gender Gap: Labor Market Effects of a Payroll Tax Cut for Women in Italy By Enrico Rubolino
  3. Labour Market Concentration, Wages and Job Security in Europe By Bassanini, Andrea; Bovini, Giulia; Caroli, Eve; Ferrando, Jorge Casanova; Cingano, Federico; Falco, Paolo; Felgueroso, Florentino; Jansen, Marcel; Martins, Pedro S.; Melo, António; Oberfichtner, Michael; Popp, Martin
  4. Consumer Bankruptcy, Mortgage Default and Labor Supply By Wenli Li; Costas Meghir; Florian Oswald
  5. The Anatomy of U.S. Sick Leave Schemes: Evidence from Public School Teachers By Christopher J. Cronin; Matthew C. Harris; Nicolas R. Ziebarth
  6. Labor Substitutability among Schooling Groups By Mark Bils; Bariş Kaymak; Kai-Jie Wu
  7. Computerization of White Collar Jobs By Marcus Dillender; Eliza Forsythe
  8. Eclipse of Rent-Sharing: The Effects of Managers' Business Education on Wages and the Labor Share in the US and Denmark By Daron Acemoglu; Alex He; Daniel le Maire
  9. Male Wage Inequality and Characteristics of "Early Mover" Marriages By Hani Mansour; Terra McKinnish
  10. Economic Shocks and Skill Acquisition: Evidence from a National Online Learning Platform at the Onset of COVID-19 By Ina Ganguli; Jamal I. Haidar; Asim Ijaz Khwaja; Samuel W. Stemper; Basit Zafar
  11. Bundling Time and Goods: Implications for the Dispersion in Hours Worked By Lei Fang; Anne Hannusch; Pedro Silos
  12. Accounting for firms in ethnicity wage gaps throughout the earnings distribution By Van Phan; Carl Singleton; Alex Bryson; John Forth; Felix Ritchie; Lucy Stokes; Damian Whittard
  13. Are Manufacturing Jobs Still Good Jobs? An Exploration of the Manufacturing Wage Premium By Kimberly Bayard; Tomaz Cajner; Vivi Gregorich; Maria D. Tito
  14. The Long Run Impacts of Court-Ordered Desegregation By Garrett Anstreicher; Jason Fletcher; Owen Thompson
  15. Trends in Retirement and Retirement Income Choices by TIAA Participants: 2000–2018 By Jeffrey R. Brown; James M. Poterba; David P. Richardson
  16. The Education-Innovation Gap By Barbara Biasi; Song Ma
  17. Air Pollution and the Labor Market: Evidence from Wildfire Smoke By Mark Borgschulte; David Molitor; Eric Zou
  18. Universal, targeted or both: Effects of different child support policies on labour supply and poverty - A simulation study By Bruckmeier, Kerstin; d'Andria, Diego; Wiemers, Jürgen
  19. Clean Energy Access: Gender Disparity, Health, and Labour Supply By Anjali P. Verma; Imelda
  20. Are Managers Paid for Market Power? By Renjie Bao; Jan De Loecker; Jan Eeckhout
  21. Corporatism and Capital Accumulation: The Fate of the Social Corporatist Model By Jonathan Perraton
  22. Supporting informal carers of older people: Policies to leave no carer behind By Eileen Rocard; Ana Llena-Nozal
  23. Urbanization in Industrialized Countries: Appearances Are Deceptive By Ludwig von Auer; Mark Trede
  24. Characterizing the Schooling Cycle By Sadaba, Barbara; Vujic, Suncica; Maier, Sofia
  25. Abundance from Abroad: Migrant Income and Long-Run Economic Development By Gaurav Khanna; Emir Murathanoglu; Caroline B. Theoharides; Dean Yang
  26. Dynamic Heterogeneous Distribution Regression Panel Models, with an Application to Labor Income Processes By Fernández-Val, Iván; Gao, Wayne Yuan; Liao, Yuan; Vella, Francis

  1. By: Zoe B. Cullen; Will S. Dobbie; Mitchell Hoffman
    Abstract: State and local policies increasingly restrict employers’ access to criminal records, but without addressing the underlying reasons that employers may conduct criminal background checks. Employers may thus still want to ask about a job applicant’s criminal record later in the hiring process or make inaccurate judgments based on an applicant’s demographic characteristics. In this paper, we use a field experiment conducted in partnership with a nationwide staffing platform to test policies that more directly address the reasons that employers may conduct criminal background checks. The experiment asked hiring managers at nearly a thousand U.S. businesses to make incentive-compatible decisions under different randomized conditions. We find that 39% of businesses in our sample are willing to work with individuals with a criminal record at baseline, which rises to over 50% when businesses are offered crime and safety insurance, a single performance review, or a limited background check covering just the past year. Wage subsidies can achieve similar increases but at substantially higher cost. Based on our findings, the staffing platform relaxed the criminal background check requirement and offered crime and safety insurance to interested businesses.
    JEL: C93 J23 J24 M51
    Date: 2022–04
  2. By: Enrico Rubolino
    Abstract: This paper studies the labor market effects of a large employer-borne payroll tax cut for unemployed women, introduced in Italy since 2013. I combine social security data with several empirical approaches, leveraging the time-limited application of the tax scheme and discontinuities in eligibility criteria across municipalities, cohorts, and occupations. I find that the payroll tax cut generates long-lasting growth in female employment, reduces the time spent on welfare, and spurs business growth, without crowding out male employment. By contrast, the tax cut does not raise net wages, suggesting that tax incidence is mostly on firms. A cost-benefit analysis implies that the net cost of the policy is nearly half of the budgetary cost. These findings suggest that employer-borne payroll tax cuts are an efficient strategy to raise demand for female labor and tackle the gender employment gap, but they are not sufficient for reducing the gender pay gap.
    Keywords: gender gap, female employment, payroll tax, tax incidence
    JEL: H22 J21 J31
    Date: 2022
  3. By: Bassanini, Andrea (OECD); Bovini, Giulia (Bank of Italy); Caroli, Eve (Université Paris-Dauphine); Ferrando, Jorge Casanova (Compass Lexecon); Cingano, Federico (Bank of Italy); Falco, Paolo (University of Copenhagen); Felgueroso, Florentino (FEDEA, Madrid); Jansen, Marcel (Universidad Autónoma de Madrid); Martins, Pedro S. (Nova School of Business and Economics); Melo, António (Université Paris-Dauphine); Oberfichtner, Michael (Institute for Employment Research (IAB), Nuremberg); Popp, Martin (Institute for Employment Research (IAB), Nuremberg)
    Abstract: We investigate the impact of labour market concentration on two dimensions of job quality, namely wages and job security. We leverage rich administrative linked employer-employee data from Denmark, France, Germany, Italy, Portugal and Spain in the 2010s to provide the first comparable cross-country evidence in the literature. Controlling for productivity and local product market concentration, we show that the elasticities of wages with respect to labour market concentration are strikingly similar across countries: increasing labour market concentration by 10% reduces wages by 0.19% in Germany, 0.22% in France, 0.25% in Portugal and 0.29% in Denmark. Regarding job security, we find that an increase in labour market concentration by 10% reduces the probability of being hired on a permanent contract by 0.46% in France, 0.51% in Germany and 2.34% in Portugal. While not affecting this probability in Italy and Spain, labour market concentration significantly reduces the probability of being converted to a permanent contract once hired on a temporary one. Our results suggest that considering only the effect of labour market concentration on wages underestimates its overall impact on job quality and hence the resulting welfare loss for workers.
    Keywords: labour market concentration, monopsony, wages, job security
    JEL: J31 J42 L41
    Date: 2022–04
  4. By: Wenli Li; Costas Meghir; Florian Oswald
    Abstract: We specify and estimate a lifecycle model of consumption, housing demand and labor supply in an environment where individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks, {education specific} productivity shocks, and catastrophic consumption events, while bankruptcy is governed by the basic institutional framework in the US as implied by Chapter 7 and Chapter 13. The model is estimated using micro data on credit reports and mortgages combined with data from the American Community Survey. We use the model to understand the relative importance of the two chapters (7 and 13) for each of our two education groups that differ in both preferences and wage profiles. We also provide an evaluation of the BACPCA reform. Our paper demonstrates importance of distributional effects of Bankruptcy policy.
    JEL: D14 D18 D52 D53 E21 G33 J22 J31 K35
    Date: 2022–03
  5. By: Christopher J. Cronin; Matthew C. Harris; Nicolas R. Ziebarth
    Abstract: This paper studies how U.S. employees use paid sick leave. The most common U.S. sick-leave schemes operate as individualized credit accounts---paid leave is earned over time and unused leave accumulates, producing an employee-specific "leave balance." We construct a unique administrative dataset containing the daily balance information and leave behavior of 982 public school teachers from 2010 to 2018. We have three main findings: First, we provide evidence of judicious sick-leave use---namely, teachers use more sick leave during higher flu activity---but no evidence of inappropriate use for the purposes of leisure. Second, we find that leave use is increasing in the leave balance with an average balance-use elasticity of 0.45. This relationship is strongest at the very bottom of the balance distribution. Third, we find that a higher leave balance reduces the likelihood that a teacher works sick ("presenteeism"), especially during flu season. Taken together, these results suggest that a simple alteration to the current sick-leave scheme could reduce the likelihood of presenteeism, thereby lowering infection risk in schools, with few adverse consequences.
    JEL: I12 I13 I18 J22 J28 J32 J38
    Date: 2022–04
  6. By: Mark Bils; Bariş Kaymak; Kai-Jie Wu
    Abstract: Knowing the degree of substitutability between schooling groups is essential to understanding the role of human capital in income differences and to assessing the economic impact of such policies as schooling subsidies, immigration systems, or redistributive taxes. We derive a lower bound for the substitutability required for worldwide growth in real GDP from 1960 to 2010 to be consistent with a stable wage premium for schooling despite the rapid growth in schooling, assuming no exogenous worldwide regress in the technology frontier for workers with only primary schooling. That lower bound for the long-run elasticity of substitution is about 4, which is far higher than values commonly used in the literature. Given our bound, we reexamine the importance of human capital in cross-country income differences and the roles of school quality versus the skill bias of technology in greater efficiency gains from schooling in richer countries.
    JEL: E24 J24 O15 O47
    Date: 2022–03
  7. By: Marcus Dillender; Eliza Forsythe
    Abstract: We investigate the impact of computerization of white-collar jobs on wages and employment. Using online job postings from 2007 and 2010--2016 for office and administrative support (OAS) jobs, we show that when firms adopt new software at the job-title level they increase the skills required of job applicants. Furthermore, firms change the task content of such jobs, broadening them to include tasks associated with higher-skill office functions. We aggregate these patterns to the local labor-market level, instrumenting for local technology adoption with national measures. We find that a 1 standard deviation increase in OAS technology usage reduces employment in OAS occupations by about 1 percentage point and increases wages for college graduates in OAS jobs by over 3 percent. We find negative wage spillovers, with wages falling for both workers with and without a college degree. These results are consistent with technological adoption inducing a realignment in task assignment across occupations, leading office support occupations to become higher skill. We argue relative wage gains for OAS workers indicates that factor-augmenting features of OAS technological change dominate task-substituting features. In addition, while we find that total employment increases, these gains primarily accrue to college-educated women.
    JEL: J23 J24 O33
    Date: 2022–03
  8. By: Daron Acemoglu; Alex He; Daniel le Maire
    Abstract: This paper provides evidence from the US and Denmark that managers with a business degree (“business managers”) reduce their employees' wages. Within five years of the appointment of a business manager, wages decline by 6% and the labor share by 5 percentage points in the US, and by 3% and 3 percentage points in Denmark. Firms appointing business managers are not on differential trends and do not enjoy higher output, investment, or employment growth thereafter. Using manager retirements and deaths and an IV strategy based on the diffusion of the practice of appointing business managers within industry, region and size quartile cells, we provide additional evidence that these are causal effects. We establish that the proximate cause of these (relative) wage effects are changes in rent-sharing practices following the appointment of business managers. Exploiting exogenous export demand shocks, we show that non-business managers share profits with their workers, whereas business managers do not. But consistent with our first set of results, these business managers show no greater ability to increase sales or profits in response to exporting opportunities. Finally, we use the influence of role models on college major choice to instrument for the decision to enroll in a business degree in Denmark and show that our estimates correspond to causal effects of practices and values acquired in business education - rather than the differential selection into business education of individuals unlikely to share rents with workers.
    JEL: G30 J30 J31 J53 M52
    Date: 2022–03
  9. By: Hani Mansour; Terra McKinnish
    Abstract: Previous work shows that higher male wage inequality decreases the share of ever married women in their 20s, consistent with the theoretical prediction that greater male wage dispersion increases the return to marital search. Consequently, male wage inequality should be associated with higher husband quality among those “early-mover” women who choose to forgo these higher returns to search. We confirm using U.S. decennial Census and American Community Survey (ACS) data from 1980-2018 that married women ages 22-30 in marriage markets with greater male wage inequality are more likely to marry up in education and in husband’s occupation. We additionally consider whether male wage inequality increases wage uncertainty, leading women to prefer older husbands who can send stronger signals of lifetime earnings. We confirm that higher male wage inequality is also associated with a larger marital age gap.
    Keywords: marriage, marital search, marital sorting, inequality, male wages
    JEL: J12 J24
    Date: 2022
  10. By: Ina Ganguli; Jamal I. Haidar; Asim Ijaz Khwaja; Samuel W. Stemper; Basit Zafar
    Abstract: We study how large shocks impact individuals’ skilling decisions using data from the largest online learning platform in Saudi Arabia. The onset of the COVID-19 pandemic brought about a massive increase in online skilling, and demand shifted towards courses that offered skills, such as telework, likely to be immediately valuable during the pandemic. Consistent with a model where individuals trade off reskilling costs with their expectations of future labor market conditions and their duration of work, we find that shifts into telework courses were largest for older workers. In contrast, younger workers increased enrollments in courses related to new skills, such as general, occupation-specific, and computer-related skills. Using national administrative employment data, we provide suggestive evidence that these investments in skills in early 2020 helped users maintain employment over the course of the pandemic.
    JEL: I21 J24
    Date: 2022–04
  11. By: Lei Fang; Anne Hannusch; Pedro Silos
    Abstract: We document that the dispersion in hours worked is large in the cross-section. We study the quantitative effect of wage dispersion on hours dispersion using a model in which households combine their time and market goods to produce consumption activities. We estimate several models with different numbers of activities on the paired expenditures and time use data by consumption activity. The estimated model can account for 25%-87% of the dispersion in hours worked over 2003-2018 with the model incorporating more activities generating more dispersion. The substitutability between goods and time within an activity and across activities is key to the result.
    Keywords: Time Allocation, Consumption Expenditures,Hours Dispersion, Elasticity of Substitution
    JEL: J22 E21 D11
    Date: 2022–04
  12. By: Van Phan (Bristol Business School, University of West of England); Carl Singleton (Department of Economics, University of Reading); Alex Bryson (Social Research Institute, University College London); John Forth (Bayes Business School, City, University of London); Felix Ritchie (Bristol Business School, University of West of England); Lucy Stokes (National Institute of Economic and Social Research (NIESR)); Damian Whittard (Bristol Business School, University of West of England)
    Abstract: Ethnicity wage gaps in Great Britain are large and have persisted over time. Previous studies of these gaps have been almost exclusively confined to analyses of household data, so they could not account for the role played by individual employers, despite growing evidence of their wagesetting power. We study ethnicity wage gaps using high quality employer-employee payroll data on jobs, hours, and earnings, linked with the personal and family characteristics of workers from the national census for England and Wales. We show that firm-specific wage effects account for sizeable parts of the estimated differences between the wages of white and ethnic minorityworkers at the mean and other points in the wage distribution, which would otherwise mostly have been attributed to differences in individual worker attributes, such as education levels, occupations, and locations. Nevertheless, there are substantial gaps between the wages of white and ethnic minority employees which cannot be accounted for by who people work for or other attributes, especially among higher earners.
    Keywords: Employer-Employee Data, Unconditional Quantile Regression, Decomposition Methods, UK Labour Market
    JEL: J31 J7 J71
    Date: 2022–05–07
  13. By: Kimberly Bayard; Tomaz Cajner; Vivi Gregorich; Maria D. Tito
    Abstract: This paper explores the factors behind differences in wages between manufacturing and other sectors. Using data from the Current Population Survey, we find that the manufacturing wage premium--the additional pay a manufacturing worker earns relative to a comparable nonmanufacturing worker--disappeared in recent years and that the erosion of the premium has primarily affected workers employed in production occupations, who experienced a wage decline of 2.5 percentage points since the 1990s relative to other workers in production occupations. While the demographic composition and other worker observables introduce level differences in manufacturing premia, our analysis suggests that they are not responsible for the declining trends. A decomposition of the premium by union membership status reveals that declines have been substantially larger across union members. To quantify the role of unionization membership on wage premia, we exploit the heterogeneity in membership status across industries within manufacturing. We find that the decline in union membership explains more than 70 percent of the decline in premia since the 1990s for union members, but the declines in unionization rates have not significantly affected non-union premia, which have instead responded to other factors, such as capital intensity. Our findings suggest that the erosion of "good" manufacturing jobs has contributed to the increase in overall wage inequality and could accelerate the decline of the manufacturing sector.
    Keywords: Wage inequality; Manufacturing; Union membership
    JEL: E24 J31 J51
    Date: 2022–03–18
  14. By: Garrett Anstreicher; Jason Fletcher; Owen Thompson
    Abstract: Court ordered desegregation plans were implemented in hundreds of US school districts nationwide from the 1960s through the 1980s, and were arguably the most substantive national attempt to improve educational access for African American children in modern American history. Using large Census samples that are linked to Social Security records containing county of birth, we implement event studies that estimate the long run effects of exposure to desegregation orders on human capital and labor market outcomes. We find that African Americans who were relatively young when a desegregation order was implemented in their county of birth, and therefore had more exposure to integrated schools, experienced large improvements in adult human capital and labor market outcomes relative to Blacks who were older when a court order was locally implemented. There are no comparable changes in outcomes among whites in counties undergoing an order, or among Blacks who were beyond school ages when a local order was implemented. These effects are strongly concentrated in the South, with largely null findings in other regions. Our data and methodology provide the most comprehensive national assessment to date on the impacts of court ordered desegregation, and strongly indicate that these policies were in fact highly effective at improving the long run socioeconomic outcomes of many Black students.
    JEL: I24 J71 J78
    Date: 2022–04
  15. By: Jeffrey R. Brown; James M. Poterba; David P. Richardson
    Abstract: This paper documents trends over the last two decades in retirement behavior and retirement income choices by participants in TIAA, a large and mature defined contribution plan with a wide range of withdrawal options. Between 2000 and 2018, the average retirement age rose by approximately 1.3 years for female and 2 years for male participants. There is considerable variation in the elapsed time between the last contribution to and the first income draw from participants’ plan accounts; only 40% take an initial income payment within 48 months of their last contribution, which is likely to coincide with retirement. Later retirement and lags between retirement and the first retirement income payout led to a growing fraction of participants reaching the Required Minimum Distribution (RMD) age before starting income draws. The fraction of first-time income recipients who took no income until their RMD rose from 10% (2000) to 52% (2018), while the fraction of these recipients who selected a life-contingent annuitized payout stream declined from 61 to 18%. Among those who began receiving income before age 70, annuitization rates were significantly higher than among those who did so at older ages. Aggregating across all income recipients at a point in time, not just the new recipients, the proportion who had a life annuity as part of their payout strategy fell from 52% in 2008 to 31% in 2018. At the same time, the proportion of all income recipients taking an RMD payment rose from 16 to 29%. About one-fifth of retirees received more than one type of income; the most common pairing was an RMD and a life annuity. The data suggest that the RMD is becoming the de facto default distribution option for newly-retired TIAA participants.
    JEL: H24 H55 J14 J32
    Date: 2022–04
  16. By: Barbara Biasi; Song Ma
    Abstract: This paper documents differences across higher-education courses in the coverage of frontier knowledge. Comparing the text of 1.7M syllabi and 20M academic articles, we construct the “education-innovation gap,” a syllabus’s relative proximity to old and new knowledge. We show that courses differ greatly in the extent to which they cover frontier knowledge. More selective and better funded schools, and those enrolling socio-economically advantaged students, teach more frontier knowledge. Instructors play a big role in shaping course content; research-active instructors teach more frontier knowledge. Students from schools teaching more frontier knowledge are more likely to complete a PhD, produce more patents, and earn more after graduation.
    Keywords: education, innovation, syllabi, instructors, text analysis, inequality
    JEL: I23 I24 I26 J24 O33
    Date: 2022
  17. By: Mark Borgschulte; David Molitor; Eric Zou
    Abstract: We study how air pollution impacts the U.S. labor market by analyzing effects of drifting wildfire smoke that can affect populations far from the fires themselves. We link satellite smoke plumes with labor market outcomes to estimate that an additional day of smoke exposure reduces quarterly earnings by about 0.1 percent. Extensive margin responses, including employment reductions and labor force exits, can explain 13 percent of the overall earnings losses. The implied welfare cost of lost earnings due to air pollution exposure is on par with standard valuations of the mortality burden. The findings suggest that labor market channels warrant greater consideration in policy responses to air pollution.
    JEL: J21 Q51 Q52 Q53 Q54
    Date: 2022–04
  18. By: Bruckmeier, Kerstin (Institute for Employment Research (IAB), Nuremberg, Germany); d'Andria, Diego (Institute for Employment Research (IAB), Nuremberg, Germany); Wiemers, Jürgen (Institute for Employment Research (IAB), Nuremberg, Germany)
    Abstract: "We study a set of hypothetical reforms of child benefits in Germany, using a static tax-benefit microsimulation model augmented with endogenous labour supply and take-up choices (IAB-MSM). We distinguish between a reform of the universal non-means-tested child benefit, a reform of the mean-tested child benefit under the minimum income scheme, and a combination of both. Since the reforms are associated with different fiscal costs, we consider two different budget closures: an increase in the income tax or a consumption tax. The model simulates the impacts of the reforms on household income, poverty and labour supply. We find that improvements in the means-tested child benefit are well-targeted: They provide a high level of poverty reduction with a low fiscal impact at the cost of reduced labour supply incentives for low-income families. When unconditional benefits are increased, the effect on overall income inequality is more pronounced at the cost of reduced labour supply incentives for middle- and high-income families. Finally, when combined, the two approaches show synergies, particularly in the form of improved poverty reduction." (Author's abstract, IAB-Doku) ((en))
    Keywords: IAB-Open-Access-Publikation
    JEL: C15 D31 H53 I38
    Date: 2022–04–25
  19. By: Anjali P. Verma (The University of Texas at Austin); Imelda (IHEID, Graduate Institute of International and Development Studies, Geneva)
    Abstract: Women bear a disproportionate share of the health and time burden associated with lack of access to modern energy. We study the impact of clean energy access on adult health and labour supply outcomes by exploiting a nationwide rollout of a clean cooking fuel program in Indonesia. We find that access to clean cooking fuel led to an improvement in women's health and an increase in their work hours. We also find an increase in men's work hours and in their propensity to have an additional job, primarily in those households where women accrued the largest program benefits.
    Keywords: gender inequality; energy access; health; labour supply; Indonesia
    JEL: H51 I15 I18 J22 O13 Q48 Q53
    Date: 2022–05–06
  20. By: Renjie Bao; Jan De Loecker; Jan Eeckhout
    Abstract: To answer the question whether managers are paid for market power, we propose a theory of executive compensation in an economy where firms have market power, and the market for man- agers is competitive. We identify two distinct channels that contribute to manager pay in the model: market power and firm size. Both increase the profitability of the firm, which makes managers more valuable as it increases their marginal product. Using data on executive compensation from Com- pustat, we quantitatively analyze how market power affects Manager Pay and how it changes over time. We attribute on average 45.8% of Manager Pay to market power, from 38.0% in 1994 to 48.8% in 2019. Over this period, market power accounts for 57.8% of growth. We also find there is a lot of heterogeneity within the distribution of managers. For the top managers, 80.3% of their pay in 2019 is due to market power. Top managers are hired disproportionately by firms with market power, and they get rewarded for it, increasingly so.
    JEL: E2 J2 L1
    Date: 2022–04
  21. By: Jonathan Perraton (Department of Economics, University of Sheffield, UK)
    Abstract: An extensive literature has examined whether corporatist national wage bargaining systems can deliver superior economic performance, but this has mostly focused on short run indicators. Such systems of industrial relations could provide incentives for investment if organized labour can credibly pre-commit to wage moderation. This paper examines this, building on monopoly union models that indicate the response of corporatist wage bargaining arrangements to investment. The paper estimates the response of wage bargaining to capital investment, conditional on outside options, in six key economies widely characterized as having sustained corporatist bargaining arrangements over 1970-2017. The econometric approach allows changes in regimes to be determined endogenously; these shifts appear consistent with wider evidence on changes in bargaining arrangements and financial integration of these economies.
    Keywords: Social corporatism; Capital accumulation; Wage bargaining; Eichengreen hypothesis; Structural breaks
    JEL: E22 J31 J51
    Date: 2022–03
  22. By: Eileen Rocard (OECD); Ana Llena-Nozal (OECD)
    Abstract: Informal carers – family and friends who perform care - are the first line of support for older people. About 60% of older people who receive care at home report receiving only informal care across OECD countries.While informal carers help to contain public costs, those costs are borne elsewhere. Women perform the majority of informal care, posing a barrier to their labour market participation. It is generally impacted when caring over 20 hours per week. The COVID-19 pandemic has increased pressures on carers.Making informal care a choice without constrains requires a comprehensive set of policies. Countries have taken steps, though more could be done. While access to information has improved, counselling and training depends heavily on the voluntary sector and respite typically remains insufficient. About two-thirds of OECD countries provide direct or indirect cash benefits to informal carers. Nearly two-thirds also mandate paid or unpaid care leave entitlements.
    JEL: H51 H53 H75 I31 I38 J48
    Date: 2022–05–04
  23. By: Ludwig von Auer; Mark Trede
    Abstract: This study introduces the urbanicity index of employment. This density-based measure is derived from spatial point pattern analysis and, therefore, makes use of the complete spatial information contained in geo-coded sectoral employment data. The index accounts for both the scale and the concentration aspect of urbanization. Changes in concentration can be decomposed into intersectoral mobility of employment and spatial mobility of sectors and further into the contributions of each sector of the economy. The index is applied to a large industrialized country and reveals that strong urbanization trends have occurred that simpler measures would overlook.
    Keywords: agglomeration, concentration, index, measurement, migration
    JEL: R12 J21 C43
    Date: 2022–04
  24. By: Sadaba, Barbara (Bank of Canada); Vujic, Suncica (University of Antwerp); Maier, Sofia (European Commission Joint Research Centre (JRC))
    Abstract: This paper develops a novel and tractable empirical approach to estimate the cycle in schooling participation decisions, which we denominate the schooling cycle. The estimation procedure is based on unobserved components time series models that decompose higher education enrollment rates into a slow-moving stochastic trend and a stationary cyclical factor. By doing so, we obtain a full characterization of the cyclical dynamics of schooling participation and analyze its relationship with the business cycle in a time-varying fashion. Using data for 16–24-year-olds attending full-time post-secondary education in the United Kingdom from 1995Q1 to 2019Q4, we find evidence of a very persistent schooling cycle largely, but not exclusively, explained by the business cycle. Additionally, we find that the direction of the response of schooling participation to the business cycle, say, pro-, counter- or a-cyclical, is largely time-dependent, as is the degree of synchrony between both cycles. We note, however, that results are heterogeneous across gender.
    Keywords: human capital, business cycle, state space, kalman smoother
    JEL: E3 I2 J2 C32
    Date: 2022–04
  25. By: Gaurav Khanna; Emir Murathanoglu; Caroline B. Theoharides; Dean Yang
    Abstract: How does income from international migrant labor affect the long-run development of migrant-origin areas? We leverage the 1997 Asian Financial Crisis to identify exogenous changes in international migrant income across regions of the Philippines, derived from spatial variation in exposure to exchange rate shocks. The initial shock to migrant income is magnified in the long run, leading to substantial increases in income in the domestic economy in migrant-origin areas; increases in population education; better-educated migrants; and increased migration in high-skilled jobs. Four-fifths of long-run income gains are actually from domestic (rather than international migrant) income. A simple structural model yields insights on mechanisms and magnitudes, in particular that one-fifth of long-run income gains are due to increased educational investments in origin areas. Increased income from international labor migration not only benefits migrants themselves, but also fosters long-run economic development in migrant-origin areas.
    JEL: F22 J24 O15 O16
    Date: 2022–03
  26. By: Fernández-Val, Iván (Boston University); Gao, Wayne Yuan (University of Pennsylvania); Liao, Yuan (Rutgers University); Vella, Francis (Georgetown University)
    Abstract: We consider estimation of a dynamic distribution regression panel data model with heterogeneous coefficients across units. The objects of interest are functionals of these coefficients including linear projections on unit level covariates. We also consider predicted actual and stationary distributions of the outcome variable. We investigate how changes in initial conditions or covariate values affect these objects. Coefficients and their functionals are estimated via fixed effect methods, which are debiased to deal with the incidental parameter problem. We propose a cross-sectional bootstrap method for uniformly valid inference on function-valued objects. This avoids coefficient re-estimation and is shown to be consistent for a large class of data generating processes. We employ PSID annual labor income data to illustrate various important empirical issues we can address. We first predict the impact of a reduction in income on future income via hypothetical tax policies. Second, we examine the impact on the distribution of labor income from increasing the education level of a chosen group of workers. Finally, we demonstrate the existence of heterogeneity in income mobility, which leads to substantial variation in individuals' incidences to be trapped in poverty. We also provide simulation evidence confirming that our procedures work well..
    Keywords: distribution regression, individual heterogeneity, panel data, uniform inference, labor income dynamics, incidental parameter problem, poverty traps
    JEL: C10 J30
    Date: 2022–04

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