nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2022‒06‒13
29 papers chosen by
Joseph Marchand
University of Alberta

  1. Minimum Wages and the Rise in Solo Self-Employment By Ganserer, Angelika; Gregory, Terry; Zierahn, Ulrich
  2. The Impact of Robots on Labour Market Transitions in Europe By Bachmann, Ronald; Gonschor, Myrielle; Lewandowski, Piotr; Madoń, Karol
  3. Accounting for Firms in Ethnicity Wage Gaps throughout the Earnings Distribution By Phan, Van; Singleton, Carl; Bryson, Alex; Forth, John; Ritchie, Felix; Stokes, Lucy; Whittard, Damian
  4. Training, Productivity and Wages: Direct Evidence from a Temporary Help Agency By Dong, Xinwei; Hyslop, Dean; Kawaguchi, Daiji
  5. Effort at Work and Worker Well-Being in the US By Gimenez-Nadal, J. Ignacio; Molina, José Alberto; Sevilla, Almudena
  6. Minimum Wage Increases and Vacancies By Kudlyak, Marianna; Tasci, Murat; Tüzemen, Didem
  7. The declining fortunes of (most) American workers By Laura A. Harvey; James Rockey
  8. What's across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects By Jha, Priyaranjan; Neumark, David; Rodriguez-Lopez, Antonio
  9. The Value of Leisure Synchronization By Georges-Kot, Simon; Goux, Dominique; Maurin, Eric
  10. Gender Gaps in Early Wage Expectations By Leibing, Andreas; Peter, Frauke; Waights, Sevrin; Spieß, C. Katharina
  11. Physicians and the Production of Health: Returns to Health Care during the Mortality Transition By Liebert, Helge; Mäder, Beatrice
  12. Explicit and Implicit Belief-Based Gender Discrimination: A Hiring Experiment By Kai Barron; Ruth Ditlmann; Stefan Gehrig; Sebastian Schweighofer-Kodritsch
  13. The Full Returns to the Choice of Occupation and Education By Clark, Andrew E.; Cotofan, Maria; Layard, Richard
  14. Present Bias in the Labor Market – When it Pays to be Naive By Matthias Fahn; Regina Seibel
  15. Creating USAGE-OCC: a CGE model of the U.S. with a disaggregated occupational dimension By Peter B. Dixon; Maureen T. Rimmer
  16. Monopsony Makes Firms Not Only Small but Also Unproductive: Why East Germany Has Not Converged By Bachmann, Rüdiger; Bayer, Christian; Stüber, Heiko; Wellschmied, Felix
  17. Informal Incentives and Labor Markets By Matthias Fahn; Takeshi Murooka
  18. Go green or go home? Energy transition, directed technical change and wage inequalit By Maria Alejandra Torres León
  19. Trade Liberalization and Human Capital Accumulation: Evidence from Indian Census By Azam, Mehtabul
  20. The Design of Defined Contribution Plans By Vivek Bhattacharya; Gastón Illanes
  21. Does Money Change Who You Are? Quasi-Experimental Evidence on the Effects of Wage Increases on Personality By Ayaita, Adam
  22. Reward or Punishment? The Distribution of Life-Cycle Returns to Political Office By Dahlgaard, Jens Olav; Kristensen, Nicolai; Larsen, Frederik Kjøller
  23. Financial Literacy Amongst Young People: When Does the Gender Gap Begin? By Preston, Alison; Wright, Robert E.
  24. A Rising Tide? The Local Incidence of the Second Wave of Globalization By Rowena Gray; Greg C. Wright
  25. Precarious employment in Greece: economic crisis, labour market flexibilisation, and vulnerable workers By Livianos, Ilios; Tzika, Evi
  26. Profit Shifting, Employee Pay, and Inequalities: Evidence from US-Listed Companies By Baptiste Souillard
  27. Estimation of the Economic Opportunity Cost of Labor: An Operational guide for Ghana By Pejman Bahramian; Mikhail Miklyaev; Glenn P. Jenkins
  28. Measuring Knowledge By James J. Heckman; Jin Zhou
  29. Identification and Estimation of Categorical Random Coefficient Models By Zhan Gao; M. Hashem Pesaran

  1. By: Ganserer, Angelika (ZEW Mannheim); Gregory, Terry (REWE Group); Zierahn, Ulrich (ZEW Mannheim)
    Abstract: Solo self-employment is on the rise despite less favorable working conditions compared to traditional jobs. We show that the introduction of minimum wages in German industries led to an increase in the share of solo self-employment by up to 8.5 percentage points. We explain our findings within a substitution-scale model that predicts a decline in demand and earnings perspectives for high-skilled dependent workers, whenever the negative scale effect (overall decline in industry employment) dominates the positive substitution effect (shift towards high-skilled workers). Such situations can occur during an economic downturn in combination with a strong and rising minimum wage bite.
    Keywords: synthetic control method, solo self-employment, minimum wages
    JEL: J21 J31 J38 J08
    Date: 2022–05
  2. By: Bachmann, Ronald (RWI); Gonschor, Myrielle (RWI); Lewandowski, Piotr (Institute for Structural Research (IBS)); Madoń, Karol (Institute for Structural Research (IBS))
    Abstract: We study the effects of robot exposure on worker flows in 16 European countries between 1998-2017. Overall, we find small negative effects on job separations and small positive effects on job findings. Labour costs are shown to be a major driver of cross-country differences: the effects of robot exposure are generally larger in absolute terms in countries with low or average levels of labour costs than in countries with high levels of labour costs. These effects are particularly pronounced for workers in occupations intensive in routine manual or routine cognitive tasks, but are insignificant in occupations intensive in non-routine cognitive tasks. For young and old workers in countries with low levels of labour costs, robot exposure had a beneficial effect on transitions. Our results imply that robot adoption increased employment and reduced unemployment most in the European countries with low or average levels of labour costs.
    Keywords: robots, technological change, tasks, labour market flows, Europe
    JEL: J24 O33 J23
    Date: 2022–05
  3. By: Phan, Van (University of the West of England, Bristol); Singleton, Carl (University of Reading); Bryson, Alex (University College London); Forth, John (Cass Business School); Ritchie, Felix (University of the West of England, Bristol); Stokes, Lucy (National Institute of Economic and Social Research (NIESR)); Whittard, Damian (University of the West of England, Bristol)
    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: decomposition methods, unconditional quantile regression, employer-employee data, UK labour market
    JEL: J31 J7 J71
    Date: 2022–05
  4. By: Dong, Xinwei (University of Tokyo); Hyslop, Dean (Motu Economic and Public Policy Research Trust); Kawaguchi, Daiji (University of Tokyo)
    Abstract: Firms frequently provide general skill training to workers at the firm's cost. Theories proposed that labor market frictions entails wage compression, larger productivity gain than wage growth to skill acquisition, and motivates a firm to offer opportunities for skill acquisition, but few studies directly test the hypothesis. We use unusually rich data from a temporary help service firm that records both workers' wages and their productivity as measured by the fees charged to client firms. We first document that the firm provides upfront training, and show that both workers' tenure and the initial fee charged to clients are positively related to the length of training, but the initial wage paid to workers is not. We then demonstrate that the fees charged to clients grow faster over workers' tenure than the wages paid to workers. Finally, we find that about one-quarter of the fee growth is associated with client quality upgrading, but that workers receive none of this growth. Each of these results are consistent with wage compression that skills acquired through training and learning-by-doing increases productivity more than wages.
    Keywords: training, general skill, temporary help service agency, productivity, wages
    JEL: J24 J42
    Date: 2022–05
  5. By: Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Sevilla, Almudena (University College London)
    Abstract: This paper analyses detailed 24-hour diary data from the United States to provide evidence on the relationship between workers' effort and well-being while at work. In doing so, we first measure workers' effort in terms of its timing, its nature, and its composition. Second, we link these three measures of worker effort with data on instantaneous well-being while at work. We find that the lower the number of on-the-job leisure episodes, and the more time workers spend working until on-the-job-leisure, the higher the levels of stress during their work tasks. A back-of-the-envelope calculation based on time use data over the last 4 decades indicates that an increase in the length of time uninterrupted by leisure, observed in the US, is related to increases in worker stress. In analyzing workers' effort and stress during market work activities we contribute to the underdeveloped literature on the determinants of worker happiness while at work, positing the structure of work as an affective factor.
    Keywords: time-use, effort at work, stress
    JEL: D60 J22 J24
    Date: 2022–05
  6. By: Kudlyak, Marianna (Federal Reserve Bank of San Francisco); Tasci, Murat (Federal Reserve Bank of Cleveland); Tüzemen, Didem (Federal Reserve Bank of Kansas City)
    Abstract: Using a unique data set and a novel identification strategy, we estimate the effect of minimum wage increases on job vacancy postings. Utilizing occupation-specific county- level vacancy data from the Conference Board's Help Wanted Online for 2005-2018, we find that state-level minimum wage increases lead to substantial declines in existing and new vacancy postings in occupations with a larger share of workers who earn close to the prevailing minimum wage. We estimate that a 10 percent increase in the state-level effective minimum wage reduces vacancies by 2.4 percent in the same quarter, and the cumulative effect is as large as 4.5 percent a year later. The negative effect on vacancies is more pronounced for occupations where workers typically have lower educational attainment (high school or less) and in counties with higher poverty rates. We argue that our focus on vacancies versus on employment has a distinct advantage of highlighting a mechanism through which minimum wage hikes affect labor demand. Our finding of a negative effect on vacancies is not inconsistent with the wide range of findings in the literature about the effect of minimum wage changes on employment, which is driven by changes in both hiring and separation margins.
    Keywords: minimum wage, vacancies, hiring, search and matching
    JEL: E24 E32 J30 J41 J63 J64
    Date: 2022–04
  7. By: Laura A. Harvey (University of East Anglia); James Rockey (University of Birmingham)
    Abstract: While real US GDP per capita has increased around 80% since 1980, median incomes have remained roughly constant. This paper documents that: 1) This stagnation masks an important intergenerational decline — more recent generations have earned less than less recent ones. 2) This decline is largest amongst white males without college educations. But, we find evidence for similar declines amongst those with college educations. The decline is also sufficiently large to more than offset reductions in the racial and gender wage gaps. 3) Quantile regression estimates suggest that on average only women and non-Whites in the lowest quantiles have seen growth in real incomes, the majority have experienced real declines. 4) Exploiting state and industry variation in workforce composition we obtain race and gender-specific labor share estimates. These data suggest that intergenerational declines in the labor share can account for much of the decline in earnings. 5) We find some evidence that intergenerational reductions in the labor share are due to increased import competition, but no correlation with unionization.
    Keywords: Wages, Intergenerational Differences, Labor Share, Stagnation, Jobs
    JEL: E24 J24 J31 D33 D31
    Date: 2022–05
  8. By: Jha, Priyaranjan (CESifo); Neumark, David (University of California, Irvine); Rodriguez-Lopez, Antonio (CESifo)
    Abstract: Dube, Lester, and Reich (2010) argue that state-level minimum wage variation can be correlated with economic shocks, generating spurious evidence that higher minimum wages reduce employment. Using minimum wage variation within contiguous county pairs that share a state border, they find no relationship between minimum wages and employment in the U.S. restaurant industry. We show that this finding hinges critically on using cross-border counties to define local economic areas with which to control for economic shocks that are potentially correlated with minimum wage changes. We use, instead, multi-state commuting zones, which provide superior definitions of local economic areas. Using the same within-local area research design—but within cross-border commuting zones—we find a robust negative relationship between minimum wages and employment.
    Keywords: minimum wage, employment, commuting zones
    JEL: J23 J38
    Date: 2022–05
  9. By: Georges-Kot, Simon (INSEE); Goux, Dominique (CREST-INSEE); Maurin, Eric (Paris School of Economics)
    Abstract: This paper explores the extent to which workers are willing to trade hours worked for leisure time shared with their spouse. This parameter is essential to properly assess contemporary trends in the regulation of work and leisure time. We use the fact that the number and timing of paid vacation days to which French employees are entitled vary in a quasi-random way, from year to year, along with the dates of public holidays. Self-employed workers do not benefit from public holidays but we show that a large fraction of them substitute a day of unpaid leisure for a day of paid work whenever their spouse gets an extra day of paid leave.
    Keywords: leisure, synchronization, public holidays
    JEL: J22 D13
    Date: 2022–04
  10. By: Leibing, Andreas (DIW Berlin); Peter, Frauke (DZHW-German Centre for Research on Higher Education and Science Studies); Waights, Sevrin (DIW Berlin); Spieß, C. Katharina (Bundesinstitut für Bevölkerungsforschung (BiB))
    Abstract: Using detailed data from a unique survey of high school graduates in Germany, we document a gender gap in expected full-time earnings of more than 15%. We apply a regression-compatible Oaxaca-Blinder decomposition and find that especially differences in coefficients help explain the gap. In particular, the effects of having time for family as career motive and being first-generation college student are associated with large penalties in female wage expectations exclusively. This is especially true for higher expected career paths. Resulting expected returns to education are associated with college enrollment of women and could thus entrench subsequent gaps in realized earnings.
    Keywords: wage expectations, gender gap, college enrollment
    JEL: I26 J31 D84
    Date: 2022–05
  11. By: Liebert, Helge (University of Zurich); Mäder, Beatrice (University of St. Gallen)
    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: 2022–04
  12. By: Kai Barron; Ruth Ditlmann; Stefan Gehrig; Sebastian Schweighofer-Kodritsch
    Abstract: Understanding discrimination is key for designing policy interventions that promote equality in society. Economists have studied the topic intensively, typically taxonomizing discrimination as either taste-based or (accurate) statistical discrimination. To reveal the limitations of this taxonomy and enrich it psychologically, we design a hiring experiment that rules out both of these sources of discrimination with respect to gender. Yet, we still detect substantial discrimination against women. We provide evidence of two forms of discrimination, explicit and implicit belief-based discrimination. Both rely on statistically inaccurate beliefs but differ in how clearly they reveal that the choice was based on gender. Our analysis highlights the central role played by contextual features of the choice setting in determining whether and how discrimination will manifest. We conclude by discussing how policy makers may design effective regulation to address the specific forms of discrimination identified in our experiment.
    Keywords: discrimination, hiring decisions, gender, beliefs, experiment
    JEL: D90 J71 D83
    Date: 2022
  13. By: Clark, Andrew E. (Paris School of Economics); Cotofan, Maria (CEP, London School of Economics); Layard, Richard (London School of Economics)
    Abstract: Information on both earnings and non-pecuniary rewards is needed to understand the occupational dispersion of wellbeing. We analyse subjective wellbeing in a large UK sample to construct a measure of "full earnings", the sum of earnings and the value of non-pecuniary rewards, in 90 different occupations. Labour-market inequality is underestimated: the dispersion of full earnings is one-third larger than the dispersion of earnings. Equally, the gender and ethnic gaps in the labour market are larger than those in earnings alone, and the full returns to education on the labour market are underestimated. These results are similar in data on US workers. In neither cross-section nor panel data do we find evidence of compensating differentials.
    Keywords: occupation, wages, non-pecuniary benefits, inequality
    JEL: I31 J31
    Date: 2022–05
  14. By: Matthias Fahn; Regina Seibel (University of Zurich)
    Abstract: We study optimal employment contracts for present-biased employees if firms cannot commit to long-term contracts. Assuming that an employee’s effort increases his chances to obtain a future benefit, we show that individuals who are naive about their present bias will actually be better off than sophisticated or time-consistent individuals. Moreover, firms might benefit from being ignorant about the extent of an employee’s naivet´e. Our results also indicate that naive employees might be harmed by policies such as employment protection or a minimum wage, whereas sophisticated employees are better off.
    Keywords: Present bias, labor markets, on-the-job search, moral hazard
    JEL: D21 D90 J31 J32
    Date: 2022–04
  15. By: Peter B. Dixon; Maureen T. Rimmer
    Abstract: We created the USAGE-OCC model of the U.S. by adding to USAGE occupation-industry matrices for 2019 that identify numbers of people employed and wagebills in 233 occupations (aggregated from 789 6-digit BLS occupations) and 392 industries (BEA input-output). The aggregation from 789 to 233 occupations was performed in a way that minimized the loss of skill/experience/education detail. In specifying occupational mobility, we took account of: wage differences between occupations; physical requirements of occupations; and education/training/experience requirements. As well as providing detailed occupational projections, USAGE-OCC can generate results for employment by wage band, educational requirements and experience. In an illustrative application, we simulated the effects of a mandated 10 per cent increase in real wage rates in low-wage occupations. The results point to the idea that rectifying inequitable wage disparities without adverse employment effects requires policies such as negative tax rates that raise incomes for low-wage workers without increasing costs to employers.
    Keywords: Employment by occupation and industry, Occupational mobility, Labor-market modeling, Wage increases in low-wage occupations
    JEL: J62 J24 J31 C68
    Date: 2022–05
  16. By: Bachmann, Rüdiger (University of Notre Dame); Bayer, Christian (University of Bonn); Stüber, Heiko (University of Erlangen-Nuremberg); Wellschmied, Felix (Universidad Carlos III de Madrid)
    Abstract: When employers face a trade-off between growing large and paying low wages—that is, when they have monopsony power—some productive employers will decide to acquire fewer customers, forgo sales, and remain small. These decisions have adverse consequences for aggregate labor productivity. Using high-quality administrative data from Germany, we document that East German plants (compared to West German ones) face a steeper size-wage curve, invest less into marketing, and remain smaller. A model with labor market monopsony, product market power, and customer acquisition matching these features of the data predicts 10 percent lower aggregate labor productivity in East Germany.
    Keywords: aggregate productivity, plant heterogeneity, unions, monopsony power, size-wage curve, monopolistic competition, customer capital, size distortions
    JEL: E20 E23 E24 J20 J42 J50
    Date: 2022–05
  17. By: Matthias Fahn; Takeshi Murooka
    Abstract: This paper theoretically investigates how labor-market tightness affects market outcomes if firms use informal and self-enforcing agreements to motivate workers. We characterize profit-maximizing equilibria and derive the following results. First, an increase in the supply of homogenous workers can increase wages. Second, even though all workers are identical in terms of skills or productivity, a discrimination equilibrium exists in which a group of majority workers are paid higher wages than a group of minority workers. Third, minimum wages can reduce such discrimination and increase employment. We discuss how these results are consistent with empirical evidence on immigration and a gender pay gap, and provide new testable implications.
    Keywords: Informal Incentives, Labor Supply, Immigration, Wage Discrimination, Minimum Wage.
    JEL: D21 D86 J21 J38 J61 J71
    Date: 2022–04
  18. By: Maria Alejandra Torres León
    Abstract: What happens to workers of the fossil fuels industry if an energy transition takes place? Even though an energy transition is one of the main objectives in the flght against climate change, it carries several economic and social costs, especially as it has heterogeneous effects on different groups of individuals. This paper introduces a directed technical change model where innovation is focused on the energy sector that demands both skilled and low-skilled labor. In this context, I show how an environmental catastrophe is inevitable if there is not a policy to carry out an energy transition. Once this policy is implemented, there is directed technical change toward the clean sector and workers in the dirty sector bear an extra cost to adapt their abilities to the skills' demand in the new sector. Consequently, the existing income gap is amplified following i) changes in relative labor supply favoring workers in the clean sector and ii) a reduction in disposable income for human capital investment. Government intervention is needed to compensate households and guarantee that economic and environmental gains from the energy transition outweigh its welfare losses.
    Keywords: Energy transitionDirected technical changeGrowthIncome distributionLabor market
    JEL: J24 O33 O44 Q43
    Date: 2022–05–11
  19. By: Azam, Mehtabul (Oklahoma State University)
    Abstract: We exploit the pre-reform employment composition of Indian districts and differential tariff cuts across industries introduced by the 1991 trade liberalization to examine the impact of liberalization on human capital accumulation measured by completion of different stages of schooling and aggregate schooling. Using Census 2011 data, we divide age cohorts that attended school before and after liberalization to implement cohort wise difference-in-difference strategy. We also construct a district-level panel using four decennial censuses that covers 1981-2011 and get an alternative difference-in-difference estimate by looking at the pre and post liberalization outcomes. We find that once we allow for the differential state policies, there is no evidence that the Indian trade liberalization has any impact on either aggregate schooling or on the attainment at different stages of schooling. We find suggestive evidence that positive effect of the increased returns to education was mitigated by the increased opportunity cost of schooling.
    Keywords: liberalization, human capital accumulation, difference-in-difference
    JEL: O15 J24 F16 F63
    Date: 2022–05
  20. By: Vivek Bhattacharya; Gastón Illanes
    Abstract: Defined contribution (DC) plans are a major vehicle for retirement savings in the US, holding almost $10 trillion in assets under management. In recent years, the quality and availability of these plans has been the subject of active policy attention and of several major lawsuits. This paper studies how employers and plan providers (recordkeepers) design these plans. We argue that low plan quality and limited provision can come from two sources. First, employer willingness to pay may be misaligned with that of workers or of regulators. Second, the market for recordkeeping may be imperfectly competitive. We propose a model of plan design and estimate that while both frictions are at play, significant changes to plan quality require modifying employer preferences. Accordingly, we evaluate proposed policies and conclude that only direct quality regulation can lead to significant quality improvements. Recent proposals can increase plan provision but have negligible quality effects.
    JEL: C78 J32 L51
    Date: 2022–04
  21. By: Ayaita, Adam
    Abstract: Using the 2015 introduction of a statutory minimum wage in Germany as a quasi-experiment, I investigate the effects of wage increases on personality. The degree to which each worker’s wage is affected by the reform is used as an instrument for the increase in hourly wage in a two-stage least squares estimation based on nationally representative panel data. The results show that wage increases have a positive effect on the trait of openness. An analysis of potential mechanisms indicates that the result is likely to be driven by an increase in monthly earnings rather than a change in working hours.
    Keywords: income,minimum wage,money,personality,quasi-experiment,wage
    JEL: A12 D31 D63 J31 J38
    Date: 2022
  22. By: Dahlgaard, Jens Olav (Copenhagen Business School); Kristensen, Nicolai (VIVE - The Danish Centre for Applied Social Science); Larsen, Frederik Kjøller (University of Copenhagen)
    Abstract: How political office is remunerated will affect who decides to engage in politics. Even if average returns to office are positive, as unilaterally found in the literature, some office holders' returns are likely zero or negative. The timing of returns to office are crucial too, as politicians often have lucrative pensions and other types of delayed compensation. Utilizing data for all parliament candidates in Denmark from 1994 to 2015 linked to administrative data, we causally estimate the returns to office for first-time runners to parliament. We find large short-term average returns to office, corresponding to a 112% income increase. Quantile Difference-in-Difference estimates reveal considerable heterogeneity, but, strikingly, all MPs experience an economic gain during their first term. The distribution of life-cycle returns, computed as the net present value, reveals that candidates from the top quarter of the pre-office income distribution have no long-term economic gain from winning.
    Keywords: returns to office, political careers, proportional representation
    JEL: J33 J4
    Date: 2022–05
  23. By: Preston, Alison (University of Western Australia); Wright, Robert E. (University of Glasgow)
    Abstract: Using micro-data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, and the Oaxaca-Blinder decomposition technique, this paper contributes to knowledge on gender-gaps in financial literacy (FL) via a study of teenagers, emerging adults and young adults. The analysis suggests that important predictors of FL include schooling, high school-type, labour market activity and parental employment. There are large unexplained gaps, equal to 31.6%, 19.3% and 11.9% amongst those aged 15-19, 20-24 and 25-29, respectively. Very little of the gap may be explained by gender differences in human capital variables and other characteristics, including mathematics ability, cognitive ability and personality. The main conclusion is that the gap starts young and likely derives from gender stereotype beliefs.
    Keywords: financial literacy, gender gap in financial literacy, gender stereotypes, adolescence, Oaxaca-Blinder decomposition
    JEL: B54 D14 D31 G18 I30 J26
    Date: 2022–05
  24. By: Rowena Gray; Greg C. Wright
    Abstract: We estimate the short- and long-run local labor market impacts of the large increase in U.S. imports and exports that occurred over the 1970s. We exploit the sequential opening of overseas shipping container ports over the period, which generated discontinuous changes in U.S. trade ows. We find that the impacts of the export shock on employment, income, and home and rental prices were large, but short-lived, suggesting that U.S. local labor markets equilibrated quickly. The import effects were also large and mostly short-lived, but we find strong persistence in the impact on home and rental prices. We exploit differences in housing supply elasticities across markets to show that this is due to the fact that the housing stock is durable and so does not easily contract, a result with important welfare implications. Overall, we estimate that the net impact of the shock was to raise manufacturing sector employment by 250,000 workers over the decade of the 1970s.
    Keywords: containerization, international trade, globalization, housing durability
    JEL: F14 F16 F66 J21 R31
    Date: 2022
  25. By: Livianos, Ilios; Tzika, Evi
    Abstract: The discourse on precarious employment has been growing over the last few years, particularly due to the recent financial crisis. Flexible forms of work, such as part-time or temporary, traditionally seen as a way for boosting employment, have now given way to a new form of work, the so-called precarious employment. Greece has been the European country mostly hit by the economic crisis and the levels of unemployment during the past decade have reached unprecedented levels. Nevertheless, the official levels of unemployment only tell a part of the story. Thousands of workers have been “forced” to accept jobs in positions that would not be their first choice, thus masking the real extent of the problem. This paper utilises data from the Labour Force Survey from both before and during the economic crisis in order to investigate different aspects of precarious employment and how these have been intensified. Ten measures of precarious employment are constructed covering six areas including a) contractual precariousness, b) unsociable hours precariousness c) institutional context precariousness d) income precariousness, e) insecurity precariousness and f) working conditions precariousness. The evolution and intensification of aspects of precarious employment is investigated at a country as well as regional level and across various groups of workers. The findings of the study point towards a continuous deterioration of the employment relationship with impacts on both the structures of the economy and targeted towards specific groups of workers.
    Keywords: precarious employment; involuntary employment; regional inequalities; gender equality; economic crisis; Hellenic Observatory
    JEL: J21 R12 R23
    Date: 2022–05
  26. By: Baptiste Souillard
    Abstract: Corporate tax avoidance has regularly been accused of aggravating income inequalities. Yet, systematic evidence on this matter is still lacking. To fill this gap, the present paper explores the effect of profit shifting on employee pay among S&P 1500 companies. The study shows that its effect indeed varies across occupations. Chief executive officers and chief financial officers receive higher compensations when their firm starts operating in tax havens. Non-executive employees, if anything, see their wages fall in the meantime. Furthermore, the inequality-deepening impact of firm entry into tax havens is driven by companies that reward executives on an after-tax basis and more pronounced in intangible-intensive companies. These new findings enrich our understanding of the distributional consequences of profit shifting. They also cast light on the evolution of income inequalities, public opinion about globalization, and ongoing debates on international tax reforms.
    Keywords: employee pay, multinational enterprises, profit shifting, tax havens, income inequalities
    JEL: F16 H26 J30 M12
    Date: 2022
  27. By: Pejman Bahramian (Department of Economics, Queen’s University, Kingston, Canada); Mikhail Miklyaev (Department of Economics, Queens University, Kingston, Ontario, Canada, K7L3N6 and Cambridge Resources International Inc.); Glenn P. Jenkins (Department of Economics, Queens University, Kingston, Ontario, Canada, K7L3N6 and Cambridge Resources International Inc.)
    Abstract: This report employs the supply price approach to the estimation of the economic opportunity cost of labor (EOCL) for a number of labor market situations in Ghana. This is applied as an instrument for the economic evaluation of public projects to be implemented. The relevant literature refers to the significant heterogeneity of labor, which leads to a consideration of different types of labor. Accordingly, the EOCL will vary by skill, location, and labor market conditions, and these factors need to be incorporated in its estimation. In this analysis, the estimation has been carried out to quantify the EOCL and the conversion factor corresponding to the two types of labor: skilled and unskilled. Furthermore, these estimates refer to groups of labor according to areas of residence (urban/rural).
    Keywords: Economic Cost, Labor, Supply Price, Protected Wage, Investment Appraisal
    JEL: J43 H43
    Date: 2022–04–18
  28. By: James J. Heckman; Jin Zhou
    Abstract: Empirical studies in the economics of education, the measurement of skill gaps across demographic groups, and the impacts of interventions on skill formation rely on psychometrically validated test scores that record the proportion of items correctly answered. Test scores are sometimes taken as measures of an invariant scale of human capital that can be compared over time and people. We show that for a prototypical test, invariance is violated. We use an unusually rich data set from an early childhood intervention program that measures knowledge of narrowly defined skills on essentially equivalent subsets of tasks. We examine if conventional, broadly-defined measures of skill are the same across people who are comparable on detailed knowledge measures. We reject the hypothesis of aggregate scale invariance and call into question the uncritical use of test scores in research on education and on skill formation. We compare different measures of skill and ability and reject the hypothesis of valid aggregate measures of skill.
    JEL: C81 I21 J71
    Date: 2022–04
  29. By: Zhan Gao; M. Hashem Pesaran
    Abstract: This paper proposes a linear categorical random coefficient model, in which the random coefficients follow parametric categorical distributions. The distributional parameters are identified based on a linear recurrence structure of moments of the random coefficients. A Generalized Method of Moments estimator is proposed, and its finite sample properties are examined using Monte Carlo simulations. The utility of the proposed method is illustrated by estimating the distribution of returns to education in the U.S. by gender and educational levels. We find that rising heterogeneity between educational groups is mainly due to the increasing returns to education for those with postsecondary education, whereas within group heterogeneity has been rising mostly in the case of individuals with high school or less education.
    Keywords: random coefficient models, categorical distribution, return to education
    JEL: C01 C21 C13 C46 J30
    Date: 2022

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