nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2022‒05‒30
thirteen papers chosen by
Joseph Marchand
University of Alberta

  1. What COVID-19 May Leave Behind: Technology-Related Job Postings in Canada By Bellatin, Alejandra; Galassi, Gabriela
  2. 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
  3. Making Integration Work? Facilitating Access to Occupational Recognition and Immigrants’ Labor Market Performance By Anger, Silke; Bassetto, Jacopo; Sandner, Malte
  4. Physicians and the Production of Health: Returns to Health Care During the Mortality Transition By Helge Liebert; Beatrice Mäder
  5. How is the Minimum Wage Shaping the Wage Disitribution: Bite, Spillovers, and Wage Inequality By Carlos Oliveira
  6. Job Satisfaction and Training Investments By Cosima Obst
  7. Does financial aid for top international graduate programs boost education and earnings? Evidence from Colombia By Adriana Camacho; Catherine Rodríguez; Fabio Sanchez
  8. Bunching and Taxing Multidimensional Skills By Job Boerma; Aleh Tsyvinski; Alexander P. Zimin
  9. A New Macroeconomic Measure of Human Capital Exploiting PISA and PIAAC: Linking Education Policies to Productivity By Balazs Egert; Christine de la Maisonneuve; David Turner
  10. Political economy of labor market policies for current labor market transformations in Europe By Favero, Fausto
  11. A Parsimonious Model of Idiosyncratic Income By Edmund S. Crawley; Martin Holm; Hakon Tretvoll
  12. Supporting policies addressing the digital skills gap – Identifying priority groups in the context of employment By Clara Centeno; Zbigniew Karpinski; Cesira Urzi Brancati
  13. Resilience in the Time of Covid-19: Lessons Learned from MENA SMEs By Zouheir EL-SAHLI; Mouyad ALSAMARA

  1. By: Bellatin, Alejandra (University of Toronto); Galassi, Gabriela (Bank of Canada)
    Abstract: We use data from online job postings listed on a job board to study how the demand for jobs linked to new technologies during the COVID-19 crisis responded to pandemic mitigation policies. We classify job postings into a standard occupation classification, using text analytics, and we group occupations according to their involvement in the production and use of digital technologies. We leverage the variation in the stringency of containment policies over time and across provinces. We find that when policies become more stringent, job postings in occupations that are related to digital infrastructure or that allow for remote work fare relatively better than postings in more traditional occupations. Job postings for positions in occupations with low risk of automation recover faster during reopenings than postings for more traditional occupations. Occupations typically populated by disadvantaged groups (e.g., women and low-wage workers) gather relatively few job postings if they are not linked to new technologies. We also find that cities with scarce pre-pandemic job postings related to digital technologies post fewer job ads overall when policies become more stringent.
    Keywords: COVID-19, job vacancies, technology adoption
    JEL: J23 J24 O14
    Date: 2022–04
  2. By: Van Phan; Carl Singleton; Alex Bryson; John Forth; Felix Ritchie; Lucy Stokes; Damian Whittard
    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 wage-setting 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 minority workers 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 wage structures 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: 2022–05–01
  3. By: Anger, Silke (Institute for Employment Research (IAB), Nuremberg, Germany ; Univ. Bamberg ; IZA); Bassetto, Jacopo (Institute for Employment Research (IAB), Nuremberg, Germany ; University of Trento); Sandner, Malte (Institute for Employment Research (IAB), Nuremberg, Germany)
    Abstract: "This paper exploits a reform that facilitated the recognition of foreign occupational qualifications for non-EU immigrants in Germany. Using detailed administrative social security and survey data in a dfference-in-differences design, we find that the reform increased the share of non-EU immigrants with occupational recognition by 5 percentage points, raising their employment in regulated occupations (e.g., nurses) by 18.6 percent after the reform. Moreover, despite the large inflow of non-EU immigrants in regulated occupations, we find no evidence that these immigrants had lower skills or that they received lower wages." (Author's abstract, IAB-Doku) ((en))
    Keywords: IAB-Open-Access-Publikation
    JEL: F22 J24 J31 J62
    Date: 2022–05–23
  4. By: Helge Liebert; Beatrice Mäder
    Abstract: This paper investigates the returns to health care provision during the mortality transition. We construct a new panel data set covering German municipalities from 1928 to 1936. The endogeneity of health care supply is addressed by using the expulsion of Jewish physicians from statutory health insurance as exogenous variation in regional physician supply. Increases in the supply of physicians reduce infant mortality and mortality from common childhood diseases. Using a semiparametric control function approach, we find diminishing marginal returns to health care provision. The results are consistent with historical trends in infant mortality over the 20th century.
    Keywords: infant mortality, physicians, health care supply, mortality transition, semiparametric IV
    JEL: I10 I18 N34
    Date: 2022
  5. By: Carlos Oliveira (Nova School of Business and Economics)
    Abstract: Over the last three decades, wage inequality and the importance of the minimum wage presented an interesting negative correlation in Portugal. Using a semiparametric approach, counterfactual decomposition methods, and an extremely rich matched employer-employee dataset of all employees in the country, this paper presents significant visual and quantitative evidence of how the minimum wage structurally reshaped the wage distribution. The remarkable rise in the real minimum wage of 2006-2019 fully explained the sharp decline in wage inequality, and 40% of average wage growth - for women, who benefited the most, that was 60%. Spillover effects reached up to 40% above the minimum, being at times more important than the bite itself. The minimum wage reduced within and between wage in- equality in several fronts, cutting the gender wage gap by a quarter, potentially decreasing the returns to education, and raising wages of workers at less productive firms. While the minimum wage bite was felt in workers’ base wages, spillovers predominantly manifested in total wages.
    Keywords: minimum wage, spillover effects, wage inequality, counterfactual decomposition
    JEL: C14 D31 J31 J38
    Date: 2022–04
  6. By: Cosima Obst (University of Potsdam)
    Abstract: Job satisfaction has been found to impact behavioral choices at the workplace. Since levels of satisfaction are not guaranteed to remain high, understanding the consequences of job dissatisfaction is essential. Hence, I analyze the relationship between a worker’s job satisfaction and her training investments. Based on my theoretical model, I expect a U-shaped relationship if dissatisfied workers attempt to improve the situation or plan to quit. In contrast, there is an overall positive relationship if dissatisfied workers neglect their duties. Using logit regressions with the Household, Income and Labour Dynamics in Australia (HILDA) survey I find tentative evidence that there is on average an overall positive relationship with a 1 standard deviation increase in job satisfaction being associated with a 1.5% increased likelihood of participating in training. A closer inspection of the reasons for training as well as quit intentions reveals some hints of a U-shaped relationship. My results highlight the importance of considering the source of dissatisfaction as there are heterogeneous effects along different job satisfaction facets.
    Keywords: Human Capital Investment, Work-related Training, Job Satisfaction
    JEL: J24 J28 C23
    Date: 2022–05
  7. By: Adriana Camacho; Catherine Rodríguez; Fabio Sanchez
    Abstract: This paper estimates the impact of a postgraduate merit-based financial aid program in Colombia. Exploiting a regression discontinuity design using rich survey and administrative data, we find three main results by. First, credit constraints are binding and important even for talented individuals with higher education degrees. Our results indicate that financial aid beneficiaries increase their probability of attaining any graduate education by 33% and a graduate education at a top university abroad by 50%. Second, the labor market highly rewards this education. Beneficiary individuals earn an average a monthly labor income 45% higher than non-beneficiaries. Mediation analyses suggest that at least 50% of the impact is due to the signaling effect of being a financial aid scholar. Importantly, effects are driven by male candidates and in a higher proportion by those who attended private higher education institutions in their undergraduate studies. Third, back-of-the-envelope cost-benefit analyses suggest that this credit scholarship has a private and social IIR of 22% and 29%, respectively.
    Keywords: Merit-based financial aidGraduate educationReturns to educationColombiaInternational StudiesRegression discontinuity
    JEL: I22 I23 I26
    Date: 2022–05–16
  8. By: Job Boerma; Aleh Tsyvinski; Alexander P. Zimin
    Abstract: We characterize optimal policies in a multidimensional nonlinear taxation model with bunching. We develop an empirically relevant model with cognitive and manual skills, firm heterogeneity, and labor market sorting. The analysis of optimal policy is based on two main results. We first derive an optimality condition - a general ABC formula - that states that the entire schedule of benefits of taxes second order stochastically dominates the entire schedule of tax distortions. Second, we use Legendre transforms to represent our problem as a linear program. This linearization allows us to solve the model quantitatively and to precisely characterize the regions and patterns of bunching. At an optimum, 9.8 percent of workers is bunched both locally and nonlocally. We introduce two notions of bunching - blunt bunching and targeted bunching. Blunt bunching constitutes 30 percent of all bunching, occurs at the lowest regions of cognitive and manual skills, and lumps the allocations of these workers resulting in a significant distortion. Targeted bunching constitutes 70 percent of all bunching and recognizes the workers' comparative advantage. The planner separates workers on their dominant skill and bunches them on their weaker skill, thus mitigating distortions along the dominant skill dimension. Tax wedges are particularly high for low skilled workers who are bluntly bunched and are also high along the dimension of comparative disadvantage for somewhat more skilled workers who are targetedly bunched.
    Date: 2022–04
  9. By: Balazs Egert; Christine de la Maisonneuve; David Turner
    Abstract: This paper provides a new measure of human capital using PISA and PIAAC surveys, and mean years of schooling. The new measure is a cohort-weighted average of past PISA scores (representing the quality of education) of the working age population and the corresponding mean years of schooling (representing the quantity of education). In contrast to the existing literature, the relative weights of each component are not imposed or calibrated but directly estimated. The paper finds that the elasticity of the stock of human capital with respect to the quality of education is three to four times larger than for the quantity of education. The new measure has a strong link to productivity with the potential for productivity gains being much greater from improvements in the quality than quantity component of human capital. The magnitude of these potential gains in MFP is considerable but the effects materialise with long lags. The paper simulates the impact of a particular reform to education policy (pre-primary education) on human capital and productivity to demonstrate the usefulness of the new measure for policy analysis.
    Keywords: human capital, PISA, PIAAC, mean years of schooling, education policies, productivity, OECD countries
    JEL: E24 I20 I25 I26 I28
    Date: 2022
  10. By: Favero, Fausto
    Abstract: Within the past decades, employment precariousness has emerged as an alarming phenomenon afflicting labor markets across Europe. While the spread of job insecurity can be traced to specific mechanisms and processes triggered by recent macroeconomic developments, evidence shows how mainstream practices in labor market policy hold some clear responsibilities. Policy prescriptions forwarded by the economic analysis of dominant politicaleconomic paradigms have been consistently prioritizing objectives of flexibility and competitiveness as a way to secure growth and employment, yet this strategy proved to be the source of lower quality and more uncertain jobs for wider shares of the workforce, with a higher incidence among the lower skilled. After having documented and further contextualized these labor market issues, the present research will investigate whether the unprecedented social challenges brought by the Covid-19 pandemic were met by the European Commission with an innovative approach to active labor market management. Our findings suggest that the proposal by the Commission of a policy strategy centered on upskilling and reskilling through training schemes might not break with past trends of precariousness. Specifically, as in the case of flexicurity, the attempt to achieve win-win solutions in different, and possibly contrasting, policy agendas - in this case the upskilling of highly qualified technicians and the reskilling and relocation of displaced workers - configures as an effective focus for political agreement, while numerous unaddressed barriers prevent the achievement of real change.
    Keywords: Labor Market Policy,Europe,Policy Paradigm,Welfare-state,Precariousness,Neoliberalism,Flexicurity,Recovery
    JEL: J08 J24 J58
    Date: 2022
  11. By: Edmund S. Crawley; Martin Holm; Hakon Tretvoll
    Abstract: The standard model of permanent and transitory income is known to be misspecified. Estimates of income volatility in the model differ depending on the type of data moments used—levels or differences—and how these moments are weighted in the estimation. We propose two changes to the standard model. First, we account for the time-aggregated nature of observed income data. Second, we allow transitory shocks to persist for varying lengths of time. With only one additional parameter, our proposed model consistently recover the parameters of the income process irrespective of the estimation method. To the extent that researchers employ the standard model, we advise special caution with the use of first-difference moments.
    Keywords: Income uncertainty; Inequality; Household finance
    JEL: E21 E24 J30
    Date: 2022–05–12
  12. By: Clara Centeno (European Commission - JRC); Zbigniew Karpinski (European Commission - JRC); Cesira Urzi Brancati (European Commission - JRC)
    Abstract: In a context of deficiency of digital skills in Europe to respond to the needs of the labour market, this report analyses the most recent data from Eurostat, OECD and CEDEFOP that refer to the digital skills gap in contexts of employment. In doing so it makes an attempt to clarify the differences between the existing data sets (relative to different methodological approaches) and concludes upon which would be the highest priority groups to take into account in those policies that seek to increase digital skills, providing a set of policy design recommendations. With this research we aim to bring some light to the two questions – 1. which type of gaps exist and 2. which would be the priority target groups for policy action – and through these, support several of the latest Digital Decade targets on digital skills also mentioned in the European Social Pillar Action Plan; the European Skills Agenda actions, including Action 2: Strengthening skills intelligence; Action 3: EU support for strategic national upskilling action; and Action 6: The Commission support to digital skills for all; and the Digital Education Action Plan, Priority 2, Enhancing digital skills and competences for the digital transformation.
    Keywords: digital skills gap, skilling policies, digital divide
    Date: 2022–04
  13. By: Zouheir EL-SAHLI; Mouyad ALSAMARA
    Abstract: We investigate the effects of the Covid-19 pandemic on small and medium-sized enterprises (SMEs) in four non-oil-exporting MENA countries (Jordan, Morocco, Tunisia, and Egypt). Using data from a recent enterprise survey, we highlight several new findings. MENA SMEs resorted to wage and work hours reductions more readily than layoffs in the wake of the pandemic. Within SMEs, larger firms are more resilient, recover faster, and adapt more often. On the sector level, the accommodation and food services sector is the worst affected in most outcomes. There is, however, clear recovery in Q2 (versus Q1) 2021 across sectors and countries. Furthermore, SMEs that switch to remote work are less likely to face closures, recover faster, and adapt more frequently, signaling higher resilience and adaptability. On the other hand, participation in government assistance programs does not improve firm outcomes, whereas firms that participate in international trade are more resilient and adaptable in the face of the shock. The results of the study carry very important policy implications to support SMEs in developing countries in time of extreme exogenous shocks.
    Keywords: Afrique
    JEL: Q
    Date: 2022–04–28

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