nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2022‒08‒15
27 papers chosen by
Joseph Marchand
University of Alberta

  1. Take-up and Labor Supply Responses to Disability Insurance Earnings Limits By Krekó, Judit; Prinz, Daniel; Weber, Andrea
  2. Job Satisfaction, Structure of Working Environment and Firm Size By Tansel, Aysit
  3. Training, Communications Patterns, and Spillovers Inside Organizations By Miguel Espinosa; Christopher T. Stanton
  4. Attrition from Administrative Data: Problems and Solutions with an Application to Postsecondary Education By Andrew Foote; Kevin M. Stange
  5. Job tenure and unskilled workers before the Industrial Revolution: St Paul’s Cathedral 1672-1748 By Paker, Meredith; Stephenson, Judy; Wallis, Patrick
  6. Mending the Gap: Apparel Export Prices and the Gender Wage Gap in Bangladesh By Robertson, Raymond; Kokas, Deeksha; Cardozo Medeiros, Diego; Lopez-Acevedo, Gladys
  7. Minimum Wages and Labor Markets in the Twin Cities By Loukas Karabarbounis; Jeremy Lise; Anusha Nath
  8. A Shot at Economic Prosperity: Long-Term Effects of India's Childhood Immunization Program on Earnings and Consumption Expenditure By Summan, Amit; Nandi, Arindam; Bloom, David E.
  9. How Representative Are Social Partners in Europe? The Role of Dissimilarity By Martínez Matute, Marta; Martins, Pedro S.
  10. The post-COVID-19 rise in labour shortages By Orsetta Causa; Michael Abendschein; Nhung Luu; Emilia Soldani; Chiara Soriolo
  11. Air Pollution and the Labor Market: Evidence from Wildfire Smoke By Borgschulte, Mark; Molitor, David; Zou, Eric Yongchen
  12. Labour Transitions that Lead to Platform Work: Towards Increased Formality? Evidence from Argentina By Sonia Filipetto; Ariela Micha; Francisca Pereyra; Cecilia Poggi; Martín Trombetta
  13. Real-Time Inequality By Thomas Blanchet; Emmanuel Saez; Gabriel Zucman
  14. Job Creation and Destruction in the Digital Age: What about Portugal? By Anabela M. Santos; Javier Barbero Jimenez; Andrea Conte
  15. It ain’t where you’re from it’s where you’re at: firm effects, state dependence, and the gender wage gap By Sabrina Di Addario; Patrick Kline; Raffaele Saggio; Mikkel Soelvsten
  16. Income Inequality in Canada By Sarah Burkinshaw; Yaz Terajima; Carolyn A. Wilkins
  17. When Is Discrimination Unfair? By Peter J. Kuhn; Trevor T. Osaki
  18. Optimal Income Taxation By Louis Kaplow
  19. The Great Migration and Educational Opportunity By Cavit Baran; Eric Chyn; Bryan A. Stuart
  20. How does intrahousehold bargaining power impact labor supply? European cross-country evidence (2004-2019) By Belloc, Ignacio; Molina, José Alberto; Velilla, Jorge
  21. Optimal policies in an aging society By Richard Jaimes; Ed Westerhout; Ed Westerhout
  22. Disruptive innovation and spatial inequality By Tom Kemeny; Sergio Petralia; Michael Storper
  23. Caring for Carers? The Effect of Public Subsidies on the Wellbeing of Unpaid Carers By Costa-Font, Joan; D’Amico, Francesco; Vilaplana-Prieto, Cristina
  24. Common Ownership in Labor Markets By Jose Azar; Yue Qiu; Aaron Sojourner
  25. How do firms respond to demand and supply shocks? By Michał Gradzewicz
  26. A new beginning: The effect of the free housing program on the quality of life of beneficiary households By Adriana Camacho-González; Jorge Enrique Caputo-Leyva; Fabio Sánchez-Torres
  27. Industrial sources and unevenness of regional employment resilience in Japan By Nishi, Hiroshi

  1. By: Krekó, Judit (Budapest Institute); Prinz, Daniel (Institute for Fiscal Studies, London); Weber, Andrea (Central European University)
    Abstract: In most disability insurance programs beneficiaries lose some or all of their benefits if they earn above an earnings threshold. While intended to screen out applicants with high remaining working capacity, earnings limits can also distort the labor supply of beneficiaries. We develop a simple framework to evaluate this trade-off. We use a reduction in the earnings limit in Hungary to examine screening and labor supply responses. We find that the policy changed selection into the program modestly but reduced labor supply significantly. Viewed through the lens of our model, these findings suggest that the earnings threshold should be higher.
    Keywords: disability insurance, policy reform, earnings limit, labor supply
    JEL: H53 H55 I38 J22
    Date: 2022–06
  2. By: Tansel, Aysit
    Abstract: Employees' wellbeing is important to the firms. Analysis of job satisfaction may give insight into various aspect of labor market behavior, such as worker productivity, absenteeism and job turn over. Little empirical work has been done on the relationship between structure of working environment and job satisfaction. This paper investigates the relationship between working environment, firm size and worker job satisfaction. We use a unique data of 28,240 British employees, Workplace Employee Relations Survey. In this data set the employee questionnaire is matched with the employer questionnaire. Four measures of job satisfaction considered are satisfaction with influence over job, satisfaction with amount of pay, satisfaction with sense of achievement and satisfaction with respect from supervisors. They are all negatively related to the firm size implying lower levels of job satisfaction in larger firms. The firm size in return is negatively related to the degree of flexibility in the working environment. The small firms have more flexible work environments. This is the first study that explore the effect of work amenities. We further find that, contrary to the previous results lower levels of job satisfaction in larger firms can not necessarily be attributed to the inflexibility in their structure of working environment.
    Keywords: Job Satisfactions,Firm Size,Working Environment,Linked Employer-Employee Data,Britain
    JEL: J21 J28 J29 J81
    Date: 2022
  3. By: Miguel Espinosa; Christopher T. Stanton
    Abstract: We study direct productivity changes and spillovers after a randomized training program for the frontline workers in a Colombian government agency. While trained workers improved their individual production, we also find substantial spillovers that affected managers' productivity. We use email data and a survey to explore the mechanisms behind these spillovers and find that managers' increased output arises from reductions in the need to help lower level employees. Accounting for spillovers to manager productivity changes the organization's implied return on investment from the training program, expanding the set of training investments that can be supported.
    JEL: J24 L2 M5 M53
    Date: 2022–07
  4. By: Andrew Foote; Kevin M. Stange
    Abstract: This paper examines the bias arising from individuals’ migration from administrative outcome data, with a focus on the labor market consequences of postsecondary education. We find that out-of-state migration is particularly problematic for high-earners, flagship graduates, and certain majors. Consequently, the effect of graduating from a flagship university is 10% higher than one would estimate using in-state earnings exclusively, though the extent of bias differs substantially across contexts. The impact of obtaining a 2-year CTE credential is also understated, as are earnings differences across majors. Approaches to testing for and bounding this bias are considered.
    JEL: I26 J31 J61
    Date: 2022–07
  5. By: Paker, Meredith; Stephenson, Judy; Wallis, Patrick
    Abstract: How were unskilled workers selected and hired in preindustrial labour markets? We exploit records from the rebuilding of St. Paul’s Cathedral, London (1672–1748) to analyze the hiring and employment history of over one thousand general building labourers, the benchmark category of ‘unskilled’ workers in long-run wage series. Despite volatile demand, St. Paul’s created a stable workforce by rewarding the tenure of longstanding workers. More senior workers received more days of work each month, preference when jobs were scarce, and the opportunity to earn additional income. We find the cathedral’s strategy consistent with reducing hiring frictions and turnover costs.
    Keywords: labour markets; construction; unskilled labour; churn; job creation; tenure; early modern; construction workers
    JEL: N33 N63 N83 J21 J22 J23
    Date: 2022–07
  6. By: Robertson, Raymond (Texas A&M University); Kokas, Deeksha (World Bank); Cardozo Medeiros, Diego (University of Chicago); Lopez-Acevedo, Gladys (World Bank)
    Abstract: Are the wage gains from exports specific to exporting industries, or do they dissipate throughout the economy? In the language of trade theory, are the benefits from exporting industry specific or factor specific? To analyze this question, we study the case of Bangladesh. Bangladesh was the 4th largest apparel supplier to the United States market in 2020. Recent studies show the positive impact of apparel exports on female labor force participation in the formal labor market and a range of household decisions. We extend this literature by estimating the relationship between apparel exports and the male-female wage gap surrounding an exogenous policy change in the European Union that corresponded to a discrete increase in apparel-export unit values. We find that the increase in prices is associated with increases in women's wages that go beyond the apparel sector. The economy-wide male-female wage gap for less-educated workers in Bangladesh dropped by more than half with the increase in apparel export prices, consistent with trade theory, and that the change estimated with a cross-section IV approach matches simulation results of a simple heterogenous firm comparative advantage (HFCA) model. Our findings are not driven by either changing minimum wage levels (that are not binding for apparel in Bangladesh) or other changes through time, and are robust to incorporating input-output table data to account for the contributions of non-traded industries to export markets.
    Keywords: Bangladesh, apparel, exports, male-female wage inequality, rules of origin
    JEL: F13 F14 F15 F16 J23 J31 O15 O19
    Date: 2022–07
  7. By: Loukas Karabarbounis; Jeremy Lise; Anusha Nath
    Abstract: Using merged administrative datasets from Minnesota, we bring new evidence on the labor market effects of large minimum wage increases by examining the policy changes implemented by Minneapolis and Saint Paul. We begin by using synthetic difference-in-differences methods to estimate counterfactual outcomes at the zip code level from Minnesota and at the city level from the rest of the country. The minimum wage did not affect employment in most industries but exerted a negative impact on restaurants' employment, with an elasticity of -0.8. Next, using variation in exposure to the minimum wage across establishments and workers within the Twin Cities, we find employment effects that are half as large as those from the time series. The cross-sectional estimates difference out employment effects from the pandemic or civil unrest that could confound the time series comparisons, but they do not include potential effects of the minimum wage operating through equilibrium adjustments such as entry. We quantify a model of establishment dynamics to reconcile the different estimates and argue that they plausibly reflect lower and upper bounds of employment losses. We use the model to show that our estimates are consistent with an establishment elasticity of labor demand of -1 and illustrate how they can inform deeper parameters characterizing product and labor market competition, factor substitution, and establishment dynamics.
    JEL: J08 J23 J38
    Date: 2022–07
  8. By: Summan, Amit (One Health Trust); Nandi, Arindam (The Population Council); Bloom, David E. (Harvard University)
    Abstract: Routine childhood vaccinations are among the most cost-effective interventions. In recent years, the broader benefits of vaccines, which include improved cognitive and schooling outcomes, have also been established. This paper evaluates the long-term economic benefits of India's national program of childhood vaccinations, known as the Universal Immunization Programme (UIP). We combine individual-level data from the 68th round of the National Sample Survey of India (2011–2012) with district-wise data on the rollout of UIP in 1985–1990. We employ age-district fixed effects regression models to compare the earnings and per capita household consumer spending of 21- to 26-year-old adults who were born in UIP-covered districts vis-à-vis non-UIP districts in 1985–1990. We find that exposure to UIP in infancy increases weekly wages by 13.8% (95% CI: 7.6% to 20.3%, p
    Keywords: India, child immunization, health, wages
    JEL: I15 I18 J31 J38
    Date: 2022–06
  9. By: Martínez Matute, Marta (Universidad Autónoma de Madrid); Martins, Pedro S. (Nova School of Business and Economics)
    Abstract: Social partners (trade unions and employers' associations) and their representativeness can shape labour institutions and economic and social outcomes in many countries. In this paper, we argue that, when examining social partners' representativeness, it is important to consider both affiliation rates and dissimilarity measures. The latter concerns the extent to which affiliated and non-affiliated firms or workers are distributed similarly across relevant dimensions, including firm size. In our analysis of the European Company Survey, we find that affiliation density and dissimilarity measures correlate positively across countries, particularly in the case of employers' associations in which we focus. This result also holds across employers' associations when we use more detailed, firm population data for Portugal. We conclude that higher affiliation densities do not necessarily correspond to more representative social partners as they can involve greater dissimilarity between affiliated and non-affiliated firms.
    Keywords: employers' associations, social dialogue, collective bargaining
    JEL: J50 J23 L22
    Date: 2022–06
  10. By: Orsetta Causa; Michael Abendschein; Nhung Luu; Emilia Soldani; Chiara Soriolo
    Abstract: The labour market recovery from the COVID-19 pandemic has been strong among advanced countries, partly reflecting massive and unprecedented policy support to workers and firms. This paper provides evidence and stylised facts about labour market tightening and labour shortages since the onset of the pandemic. Labour shortages have been widespread across countries, yet particularly in Australia, Canada and the United States; and across industries, yet particularly in contact-intensive ones like accommodation and food, but also manufacturing. This picture is to a good extent driven by cyclical factors: in tight labour markets, workers are more likely to switch for better job opportunities. But this paper argues, based on illustrative evidence, that other factors beyond the economic cycle may also play a role: the post-COVID-19 increase in labour shortages may partly reflect structural changes, in particular changes in preferences, as some workers may no longer accept low-pay and poor or strenuous working conditions.
    Keywords: great resignation, labour market recovery, labour shortages, policy analysis
    JEL: E24 E32 J11 J22 J23 J31 J63
    Date: 2022–07–15
  11. By: Borgschulte, Mark (University of Illinois at Urbana-Champaign); Molitor, David (University of Illinois at Urbana-Champaign); Zou, Eric Yongchen (University of Oregon)
    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 plume 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.
    Keywords: air pollution, labor market, wildfires
    JEL: J21 Q51 Q52 Q53 Q54
    Date: 2022–06
  12. By: Sonia Filipetto (Universidad Nacional General Sarmiento); Ariela Micha (Universidad Nacional General Sarmiento/CONICET); Francisca Pereyra (Universidad Nacional General Sarmiento); Cecilia Poggi (AFD); Martín Trombetta (Universidad Nacional General Sarmiento/CONICET)
    Abstract: The recent growth of the platform economy as a tool for labour exchanges has brought about concerns on the overall quality of jobs created. As labour platforms leave a digital trace, this paper assesses whether platforms can help to increase registered labour in contexts of extended informality as the one for Argentina, asking what does formalization via registration - if any - actually imply for workers and how do they perceive it. The article inspects three on-demand occupations in the Buenos Aires Metropolitan Area: private passengers’ transportation (Uber), domestic work (Zolvers) and home repair services (Home Solution). The main results show that platforms “formalization effect” is dependent on several factors: a platform’s business model, or the company’s interest and need to promote or encourage such process; the pre-existing occupational dynamics in terms of formalization; and general labour market conditions. In the context of an Argentine labour market harmed by a prolongued recession, most transitions to formality via the platform occur to previously unemployed workers who join them.
    Keywords: Digital platforms; Informality; Registration; Labour transitions; Decent work.
    JEL: O17 J46 J60
    Date: 2022–06
  13. By: Thomas Blanchet; Emmanuel Saez; Gabriel Zucman
    Abstract: This paper constructs high-frequency and timely income distributions for the United States. We develop a methodology to combine the information contained in high-frequency public data sources—including monthly household and employment surveys, quarterly censuses of employment and wages, and monthly and quarterly national accounts statistics—in a unified framework. This allows us to estimate economic growth by income groups, race, and gender consistent with quarterly releases of macroeconomic growth, and to track the distributional impacts of government policies during and in the aftermath of recessions in real time. We test and successfully validate our methodology by implementing it retrospectively back to 1976. Analyzing the Covid-19 pandemic, we find that all income groups recovered their pre-crisis pretax income level within 20 months of the beginning of the recession. Although the recovery was primarily driven by jobs rather than wage growth, wages experienced significant gains at the bottom of the distribution, highlighting the equalizing effects of tight labor markets. After accounting for taxes and cash transfers, real disposable income for the bottom 50% was 20% higher in 2021 than in 2019, but fell in the first half of 2022 as the expansion of the welfare state during the pandemic was rolled back. All estimates are available at and are updated with each quarterly release of the national accounts, within a few hours.
    JEL: E01 H2 H5 J3
    Date: 2022–07
  14. By: Anabela M. Santos (Comissão Europeia); Javier Barbero Jimenez (Comissão Europeia Author-3-Name: Simone Salotti; Comissão Europeia); Andrea Conte (Comissão Europeia)
    Abstract: We assess the effect of digitalisation on employment for the European Union countries, and Portugal in particular, using data for the 1995-2019 period. We estimate an augmented labour demand function derived from a Constant Elasticity of Substitution (CES) cost function to test for a capital-labour substitution effect, distinguishing between digital and traditional capital. The results point towards a positive impact of digital investments on total employment, but the effects are heterogeneous depending on the different employment categories. In particular, high-skilled jobs benefit from digitalisation at the expense of medium- and low-skilled ones. Results for Portugal also show evidence of an overall positive effect of digital investments on employment, showing that an increase of €100.000 in the stock of digital technologies is associated with an increase of 4.6 jobs.
    Keywords: Digitalisation; Employment; Skills; Europe; Portugal
    JEL: O33 J24 O52
    Date: 2022–06
  15. By: Sabrina Di Addario (Bank of Italy); Patrick Kline (University of California, Berkeley); Raffaele Saggio (University of British Columbia, Canada); Mikkel Soelvsten (University of Wisconsin, Madison)
    Abstract: Sequential auction models of labour market competition predict that the wages required to successfully poach a worker from a rival employer will depend on the productivities of both the poached and the poaching firms. We develop a theoretically grounded extension of the two-way fixed effects model of Abowd et al. (1999) in which log hiring wages include a worker fixed effect, a fixed effect for the ‘destination’ firm hiring the worker, and a fixed effect for the ‘origin’ firm, or labour market state, from which the worker was hired. Fitting the model to Italian social security records, origin effects only explain 0.7 per cent of the variance of hiring wages, while destination effects explain about 23 per cent of the variance. Studying a cohort of workers entering the Italian labour market in 2005, we find that differences in origin effects yield essentially no contribution to the evolution of the gender gap in hiring wages, while differences in destination effects explain the majority of the gap at the time of labour market entry. These results suggest that where a worker is hired from tends to be relatively inconsequential for their wages in comparison to where they are currently employed.
    Keywords: hiring wages, sequential auctions, firm effects, bargaining, gender wage gap
    JEL: J31 D22
    Date: 2022–06
  16. By: Sarah Burkinshaw; Yaz Terajima; Carolyn A. Wilkins
    Abstract: Concerns over rising inequality have heightened in the years following the 2007–09 global financial crisis and, more recently, with the COVID-19 pandemic. This staff discussion paper reviews the historical facts regarding income inequality in Canada, comparing Canada with the United States and reviewing briefly what the literature says about the most likely drivers of the rise in inequality. Data show that income inequality in Canada increased substantially during the 1980s and first half of the 1990s but has been relatively stable over the past 25 years. This increase was felt mainly by low-income earners and younger people, while older people benefited from higher retirement income. Income inequality in the United States has been higher than in Canada for the last four decades, with the main differences observed at the high end of the income distribution. These facts give rise to a number of important questions for future research, including the role (if any) of monetary policy in driving changes in income inequality and that of the monetary policy framework and decisions in reflecting the observed inequality.
    Keywords: Central bank research; Labour markets; Monetary and financial indicators
    JEL: D31 D63 J31 J32 I24 I32 N32
    Date: 2022–07
  17. By: Peter J. Kuhn; Trevor T. Osaki
    Abstract: Using a vignette-based survey experiment on Amazon’s Mechanical Turk, we measure how people’s assessments of the fairness of race-based hiring decisions vary with the motivation and circumstances surrounding the discriminatory act and the races of the parties involved. Regardless of their political leaning, our subjects do not distinguish between taste-based and statistical discrimination, but they react in very similar ways to other aspects of the act, such as the quality of information on which statistical discrimination is based. Compared to conservatives, moderates and liberals are much less accepting of discriminatory actions, and consider the discriminatee’s race when making their fairness assessments. We describe four simple models of fairness –utilitarianism, race-blind rules (RBRs), racial in-group bias, and belief-based utilitarianism (BBU)-- and show that the latter two are inconsistent with major patterns in our data. Instead, we argue that a two-group model in which conservatives care only about race-blind rules (RBRs), while moderates and liberals care about both RBRs and utilitarian ethics can account for the main patterns we see.
    JEL: J71
    Date: 2022–07
  18. By: Louis Kaplow
    Abstract: This article explores subjects in optimal income taxation characterized by recent research interest, practical importance in light of concerns about inequality, potential for misunderstanding, and prospects for advancement. Throughout, the analysis highlights paths for further investigation. Areas of focus include multidimensional abilities and endogenous wages; asymmetric information and the income of founders; production and consumption externalities from labor effort; market power and rents; behavioral phenomena relating to perceptions of the income tax schedule, myopic labor supply, and the interactions of savings, savings policies, and labor supply; optimal income transfers; the relationship between optimal income taxation and the use of other instruments; and issues relating to the social welfare function and utility functions, including nonwelfarist objectives, welfare weights, heterogeneous preferences, and taxation of the family.
    JEL: A13 D61 D62 D63 D82 D83 H20 H21 H23 H24 H41 H43 H53 H55 J22 L40
    Date: 2022–07
  19. By: Cavit Baran (Northwestern University); Eric Chyn (NBER and Dartmouth College); Bryan A. Stuart (Federal Reserve Bank of Philadelphia)
    Abstract: This paper studies the impact of the First Great Migration on children. We use the complete-count 1940 Census to estimate selection-corrected place effects on education for children of Black migrants. On average, Black children gained 0.8 years of schooling (12 percent) by moving from the South to the North. Many counties that had the strongest positive impacts on children during the 1940s offer relatively poor opportunities for Black youth today. Opportunities for Black children were greater in places with more schooling investment, stronger labor market opportunities for Black adults, more social capital, and less crime.
    Keywords: Great Migration, human capital, education, place effect
    JEL: N32 J15 J24 H75
    Date: 2022–06
  20. By: Belloc, Ignacio; Molina, José Alberto; Velilla, Jorge
    Abstract: This paper analyzes how intrahousehold bargaining power impacts labor supply, for seventeen European countries. To that end, we estimate a collective model using the European Union Statistics on Income and Living Conditions for the period 2004-2019, and we study the validity of several potential distribution factors; that is to say, variables that impact labor supply only through intrahousehold bargaining power. Results show some degree of heterogeneity in the responses of labor supply to intrahousehold bargaining power. Spouses' education and the age gap operate as distribution factors in central European countries, such as Austria, Belgium, France, Luxembourg, and Switzerland. On the other hand, in the Mediterranean South countries, the share of unearned income of the wife operates as a distribution factor in Italy, Portugal, and Spain, and in countries of Eastern Europe (Czech Republic, Hungary, Latvia, and Lithuania), the sex ratio, wives' non-labor income share, spouses' age and education gap, and the fertility rate all operate as distribution factors. In northern economies, such as Denmark and Estonia, we find evidence for share of unearned income, age gap, and fertility rate, while in islands, such as Ireland and the United Kingdom, the sex ratio, the share of unearned income, the age and education gap, and the fertility rate are suitable bargaining power variables. The results are consistent with theoretical sharing rules, and distribution factors that empower a given spouse are mainly positively correlated with increases in the share of income they attract from intrahousehold bargaining.
    Keywords: household labor supply,collective model,distribution factors,EU-SILC
    JEL: D13 J22
    Date: 2022
  21. By: Richard Jaimes; Ed Westerhout; Ed Westerhout
    Abstract: We analyze optimal social security in a two-period overlapping generations model with endogenous retirement and demographic change. In this model, households choose to spend the second period of their lives in full retirement if the tax rate on labor income exceeds a certain threshold. We find that this threshold is increasing in life expectancy and decreasing in the fertility rate, which implies that both types of demographic change increase the relevance of the partial retirement case in which households participate on the labor market. Related, both an increase in life expectancy and a drop in fertility imply that retirement is delayed in the partial retirement case. We also show that when the government decides about the retirement age, the command optimum can be replicated through social security policies as long as the laissez-faire equilibrium features an overaccumulation of capital. When households decide about their retirement age themselves, however, replication of the command optimum is not possible, even if overaccumulation of capital applies. In both cases, it is optimal to expand social security when longevity increases and to reduce it when fertility drops.
    Keywords: Aging, Retirement, Optimal taxation.
    JEL: J11 J26 H21
    Date: 2022–06–14
  22. By: Tom Kemeny; Sergio Petralia; Michael Storper
    Abstract: Although technological change is widely credited as driving the last two hundred years of economic growth, its role in shaping patterns of inequality remains under-explored. Drawing parallels across two industrial revolutions in the United States, this paper provides new evidence of a relationship between highly disruptive forms of innovation and spatial inequality. Using the universe of patents granted between 1920 and 2010 by the U.S. Patent and Trademark Office, we identify disruptive innovations through their rapid growth, complementarity with other innovations, and widespread use. We then assign more- and less-disruptive innovations to subnational regions in the geography of the U.S. We document three findings that are new to the literature. First, disruptive innovations exhibit distinctive spatial clustering in phases understood to be those in which industrial revolutions reshape the economy; they are increasingly dispersed in other periods. Second, we discover that the ranks of locations that capture the most disruptive innovation are relatively unstable across industrial revolutions. Third, regression estimates suggest a role for disruptive innovation in regulating overall patterns of spatial output and income inequality
    Keywords: technological change; regional development; industrial revolutions; innovation; inequality
    JEL: O30 O33 O51 J31
    Date: 2022–07
  23. By: Costa-Font, Joan (London School of Economics); D’Amico, Francesco (CEP, London School of Economics); Vilaplana-Prieto, Cristina (Universidad de Murcia)
    Abstract: We study the effect of long-term care (LTC) subsidies and supports on the wellbeing of unpaid caregivers. We draw on evidence from a policy intervention, that universalized previously means-tested caregiving supports in Scotland, known as free personal care (FPC). We document causal evidence of an increase in the well-being (happiness) of unpaid carers after the introduction of FPC. Our estimates suggest economically relevant improvements in the happiness (12pp increase in subjective wellbeing) among caregivers exposed to FPC and that provide at least 35 hours of care per week. Consistently, these results are larger among women and non-actively employed caregivers (17pp increase in happiness). Estimates are not driven by selection into caregiving (we find similar wellbeing effects among caregivers at baseline and caregivers throughout the sample), and are driven by income effects of FPC among caregivers.
    Keywords: caregiver's wellbeing, subjective wellbeing, long-term care subsidies, caregiving, Scotland
    JEL: J22
    Date: 2022–06
  24. By: Jose Azar (University of Navarra, IESE & CEPR); Yue Qiu (Temple University); Aaron Sojourner (W.E. Upjohn Institute for Employment Research)
    Abstract: In this paper, we study the effects of common ownership, the extent to which firms are linked via common owners, on employee earnings in U.S. local labor markets. Between 1999 and 2017, common ownership in local labor markets has more than doubled. Panel regressions show that employee earnings in a local labor market are negatively associated with common ownership. To identify causal effects, we use a firm’s addition to the S&P 500 index as a shock to common ownership of its competitors in a local labor market. Using a matched difference-in-differences analysis, we find that, after a firm enters the S&P 500 index, the average annual earnings per employee of its local competitors decreases relative to the counterfactual. The effect of index inclusion shocks on employee earnings is stronger in local labor markets where the shares of S&P 500 incumbents are higher before a shock.
    Keywords: Monopsony, oligopsony, labor markets, competition policy, common ownership
    JEL: J42 J31 L40 D40 G34
    Date: 2022–07
  25. By: Michał Gradzewicz
    Abstract: The study aims to identify the granular demand and productivity shocks, their properties, and the responses of the important firm-level variables to these shocks. We use comprehensive data from the Polish enterprise sector that cover the 2002-2019 period. As the data do not include prices, the identification of the demand shocks relies on the information on inventory changes. We utilize the control function approach to estimate the parameters of the production function and to identify productivity shocks. We use projection methods with granular data to identify the dynamic impulse-response function. We show that the distributions of the two shocks differ: i.e., supply (productivity) shocks are symmetrically distributed, and the distribution of demand shocks is negatively skewed. Moreover, both distributions have fat tails. Productivity shocks have much more persistent effect on firms' outcomes than demand shocks. Following demand shocks, there are short-lived increases in output, market share, productivity, real wages and markups; whereas investment and employment demand remain elevated for a longer period. We also find a very limited transmission of productivity into wages and we showed that proxies for prices increase after demand shocks, and they decrease after the supply shock, in a theory-consistent way.
    Keywords: demand shocks, supply shocks, granular impulse response function, granular local projections
    JEL: D22 D24 D4 J42 L11
    Date: 2022–04
  26. By: Adriana Camacho-González; Jorge Enrique Caputo-Leyva; Fabio Sánchez-Torres
    Abstract: This paper analyzes the effect of the Free Housing Program (PVG) on the well-being of beneficiary households. This program is an initiative of the Colombian Government to provide free houses to the most vulnerable households in the country. To estimate causal impacts of the program, we exploit that 38% of the beneficiaries were selected through housing lotteries. We show that most of recipients still reside in the houses provided in the program (5-6 years after the housing lotteries), which have adequate conditions of structure, space, and access to public services. Also, we show that program improves the labor conditions of beneficiary households, either through greater labor participation (in women), or by changing the type of work or economic sector (in men) and even earning more income (both). As a result of the previous impacts, the beneficiary households were able to restructure their expenses, acquire more durable goods, save more money, and escape extreme poverty. The main mechanism that explains these results is that the beneficiaries were relocated to places with a greater provision of public goods, closer proximity to complementary services and more economic activity.
    Keywords: free public housing, poverty, employment, income
    JEL: I38 J22 O18 R28 R31
    Date: 2022–07–19
  27. By: Nishi, Hiroshi
    Abstract: Given the increase in the importance of measuring the degree and source of resilience after great shocks, resilience has garnered researchers’ attention. However, there is no generally agreed-upon measurement for resilience; the existing approach holds few industrial assessments for resilience. This study provides a structural sensitivity index to measure the industrial sources of regional employment resilience and applies it to the Japanese economy between 1980 and 2012. It presents a novel formula that quantifies the sources of regional resilience by within-sector and structural change effects and extracts how unevenly different local industries con-tribute to regional resilience. Exploring the industrial and quantitative aspects of employment resilience chronally and geographically reveals that Japanese prefectures gradually became resilient after the 1990s, increasing the regional heterogeneity. Moreover, the structural change effect has constantly hurt the regional resilience, offsetting some favourable within-sector effects. Finally, the increasing regional heterogeneity behind improvements in resilience accompanies industrial unevenness from different time horizons, but the overall relationship between industrial unevenness and resilience is not unique from a different spatial perspective.
    Keywords: Resilience, sensitivity index, employment, industrial structural change, Japan
    JEL: B52 E24 J21 R11 R12
    Date: 2022–06–23

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