nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2022‒09‒05
24 papers chosen by
Joseph Marchand
University of Alberta

  1. Income Taxes, Gross Hourly Wages, and the Anatomy of Behavioral Responses: Evidence from a Danish Tax Reform By Kazuhiko Sumiya; Jesper Bagger
  2. The Impact of Absent Coworkers on Productivity in Teams By Hoey, Sam; Peeters, Thomas; van Ours, Jan C.
  3. A Note on Evaluating Formal Education for Adults By Stenberg, Anders
  4. Help Really Wanted? The Impact of Age Stereotypes in Job Ads on Applications from Older Workers By Ian Burn; Daniel Firoozi; Daniel Ladd; David Neumark
  5. Technological Progress, Occupational Structure and Gender Gaps in the German Labour Market By Bachmann, Ronald; Gonschor, Myrielle
  6. The Distributional Impact of the Minimum Wage in the Short and Long Run By Erik Hurst; Patrick J. Kehoe; Elena Pastorino; Thomas Winberry
  7. Minimum Wages and Labor Markets in the Twin Cities By Loukas Karabarbounis; Jeremy Lise; Anusha Nath
  8. First Foot Forward: A Two-Step Econometric Method for Parsing and Estimating the Impacts of Multiple Identities By Andrew S. Hanks; Kevin M. Kniffin; Xuechao Qian; Bo Wang; Bruce A. Weinberg
  9. Impact of the COVID-19 Crisis on India’s Rural Youth : Evidence from a Panel Survey and an Experiment By Chakravorty, Bhaskar; Bhatiya, Apurav Yash; Imbert, Clement; Lohnert, Maximilian; Panda, Poonam; Rathelot, Roland
  10. China's Skill-Biased Imports By Li, Hongbin; Li, Lei; Ma, Hong
  11. Wage inequality and induced innovation in a classical-Marxian growth model By Stamegna, Marco
  12. Adjustments of local labour markets to the COVID-19 crisis: The role of digitalisation and working-from-home By Ben Yahmed, Sarra; Berlingieri, Francesco; Brüll, Eduard
  13. Pro-Productivity institutions at work: Country practices and new insights on their set-up and functioning By OECD
  14. ZEW-EviSTA: A microsimulation model of the German tax and transfer system By Buhlmann, Florian; Hebsaker, Michael; Kreuz, Tobias; Schmidhäuser, Jakob; Siegloch, Sebastian; Stichnoth, Holger
  15. Monetary Policy Under Labor Market Power By Miss Anke Weber; Rui Mano; Mr. Yannick Timmer; Anastasia Burya
  16. Simple Tests for Selection: Learning More from Instrumental Variables By Dan A. Black; Joonhwi Joo; Robert LaLonde; Jeffrey A. Smith; Evan J. Taylor
  17. The double burden: The impact of school closures on labor force participation of mothers By Kozhaya, Mireille
  18. Screening with Multitasking By Michael Dinerstein; Isaac M. Opper
  19. Industry Choice and within Industry Earnings Effects By Eric Brunner; Shaun Dougherty; Stephen L. Ross
  20. Discrimination, Quotas, and Stereotypes By Lennart Struth; Max Thon
  21. Firms and Unemployment Insurance Take-up By Marta Lachowska; Isaac Sorkin; Stephen A. Woodbury
  22. Media coverage and pandemic behaviour: Evidence from Sweden By Garz, Marcel; Zhuang, Maiting
  23. Genetic Endowments, Educational Outcomes and the Mediating Influence of School Investments By Benjamin W. Arold; Paul Hufe; Marc Stoeckli
  24. The Zombification of the Economy? Assessing the Effectiveness of French Government Support during Covid-19 Lockdown By Mattia Guerini; Lionel Nesta; Xavier Ragot; Stefano Schiavo

  1. By: Kazuhiko Sumiya (Research Institute of Economy, Trade and Industry, RIETI); Jesper Bagger (Royal Holloway London)
    Abstract: This paper provides quasi-experimental evidence on the effects of income taxes on gross hourly wages by utilizing administrative data and a tax reform in Denmark. The reform introduced joint taxation to a middle tax bracket, bringing large changes to the tax system facing married couples. Using variation in spousal income for identification, we present non-parametric graphical evidence based on a difference-in-differences design among working married males. First, we find heterogeneous effects across income levels. For low-income workers, taxes have negative and dynamic effects on wages. Their elasticity of wages (with respect to net-of-marginal-tax rates) is close to one. For higher-income workers, the effects are small and static, with an elasticity of approximately 0.2. Second, wages respond to taxes through human capital accumulation and job changes. Finally, with smaller magnitudes than wages, daily hours worked also respond negatively to taxes, which contrasts with the prediction from a standard labor supply-and-demand model.
    Keywords: income taxation, administrative data, tax reforms, difference-in-differences, gross hourly wages, labor supply, human capital accumulation, job changes
    JEL: H22 H24 J22 J24 J30 J62
    Date: 2022–08–18
  2. By: Hoey, Sam (Erasmus University Rotterdam); Peeters, Thomas (Erasmus University Rotterdam); van Ours, Jan C. (Erasmus University Rotterdam)
    Abstract: We study how workers in production teams are affected by the temporary absence and replacement of a coworker. When a substitute coworker is absent, the remaining coworkers produce less output per working time. They compensate for this by increasing their working time at the expense of the (less able) replacement worker, such that the output loss per remaining worker is not significant. When a complementary coworker is absent, we see a similar loss in output per minute worked, but this directly leads to a loss of output produced, because remaining workers do not take over the absent worker’s tasks.
    Keywords: absenteeism, worker productivity, team production, ice hockey
    JEL: M50 M54 J24
    Date: 2022–07
  3. By: Stenberg, Anders (SOFI, Stockholm University)
    Abstract: Evaluations of adults in formal education (AE) are typically based on earnings measured 5-10 years after program enrollment. This paper estimates returns up to 24 years after enrollment, and explore results for 15 cohorts of first-time registered in AE in Sweden 1994-2008 with at least a 10-year follow-up period. The results indicate substantially higher payoffs in absolute terms after the maximum length of follow-up compared with after 10 years. There is also weak support that multiplier effects increase the percentage returns to AE over time, regardless of gender or whether the level of AE is college or high school.
    Keywords: adult education, self-selection, propensity score matching
    JEL: H30 H52 I20 J24 O30
    Date: 2022–06
  4. By: Ian Burn; Daniel Firoozi; Daniel Ladd; David Neumark
    Abstract: Correspondence studies have found evidence of age discrimination in callback rates for older workers, but less is known about whether job advertisements can themselves shape the age composition of the applicant pool. We construct job ads for administrative assistant, retail, and security guard jobs, using language from real job ads collected in a prior large-scale correspondence study (Neumark et al., 2019a). We modify the job-ad language to randomly vary whether or not the job ad includes ageist language regarding age-related stereotypes. Our main analysis relies on machine learning methods to design job ads based on the semantic similarity between phrases in job ads and age-related stereotypes. In contrast to a correspondence study in which job searchers are artificial and researchers study the responses of real employers, in our research the job ads are artificial and we study the responses of real job searchers. We find that job-ad language related to ageist stereotypes, even when the language is not blatantly or specifically age-related, deters older workers from applying for jobs. The change in the age distribution of applicants is large, with significant declines in the average and median age, the 75th percentile of the age distribution, and the share of applicants over 40. Based on these estimates and those from the correspondence study, and the fact that we use real-world ageist job-ad language, we conclude that job-ad language that deters older workers from applying for jobs can have roughly as large an impact on hiring of older workers as direct age discrimination in hiring.
    JEL: J14 J6 J7 J78
    Date: 2022–07
  5. By: Bachmann, Ronald (RWI); Gonschor, Myrielle (RWI)
    Abstract: We analyze if technological progress and the corresponding change in the occupational structure have improved the relative position of women in the labour market. We show that the share of women rises most strongly in non-routine cognitive and manual occupations, but declines in routine occupations. While the share of women also rises relatively strongly in high-paying occupations, womens' individual-level wages lag behind which implies within-occupation gender wage gaps. A decomposition exercise shows that composition effects with respect to both individual and job characteristics can explain the rise of female shares in the top tier of the labour market to an extent. However, the unexplained part of the decomposition is sizeable, indicating that developments such as technological progress are relevant.
    Keywords: female labour market participation, occupations, tasks, technological progress
    JEL: J21 J31 O33
    Date: 2022–07
  6. By: Erik Hurst; Patrick J. Kehoe; Elena Pastorino; Thomas Winberry
    Abstract: We develop a framework with rich worker heterogeneity, firm monopsony power, and putty-clay technology to study the distributional impact of the minimum wage in the short and long run. Our production technology is disciplined to be consistent with the small estimated employment effects of the minimum wage in the short run and the large estimated elasticities of substitution across inputs in the long run. We find that in the short run, a large increase in the minimum wage has a small effect on employment and therefore increases the labor income of the workers who were earning less than the new minimum wage. In the long run, however, the minimum wage has perverse distributional implications in that it reduces the employment, income, and welfare of precisely the low-income workers it is meant to help. Nonetheless, these long-run effects take time to fully materialize because firms slowly adjust their mix of inputs. Existing transfer programs, such as the earned income tax credit (EITC), are more effective at improving long-run outcomes for workers at the low end of the wage distribution. But combining existing programs with a modest increase in the minimum wage generates even larger welfare gains for low-earning workers.
    Keywords: Employment; Earned income tax credit; Progressive tax and transfer system; Monopsony; Putty-clay capital; Inequality; Unemployment; Labor market participation; Labor income; Redistribution; Monopsonistic competition; Wages; Search frictions
    JEL: E24 J64 E62 J22 J23 J31 D33 J69
    Date: 2022–07–14
  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.
    Keywords: Wages; Hours; Jobs; Minimum wage
    JEL: J23 J08 J38
    Date: 2022–07–07
  8. By: Andrew S. Hanks; Kevin M. Kniffin; Xuechao Qian; Bo Wang; Bruce A. Weinberg
    Abstract: Marketing and strategy researchers have often studied how organizations navigate multiple identities in relation to category spanning but extant literature pays less attention to understanding how individuals do so. Moreover, current econometric approaches only scratch the surface with respect to addressing the impact of multiple identities in professional settings. As a model domain to study labor market returns when individuals have more than one identity, we focus on interdisciplinary dissertators in the United States since evidence shows clear uptrends in dissertators engaging multiple professional identities and unclear trends in their outcomes. Our novel estimation method leverages a two-step process to characterize salaries of interdisciplinary dissertators as functions of the identities (academic fields) they acquire as graduate students. We estimate a first-stage regression of log earnings for monodisciplinarians on field dummies and respondent characteristics. After capturing the estimated field coefficients, we then regress log earnings for interdisciplinarians on linear and non-linear functions of these coefficients. Our estimates robustly reject the hypothesis that interdisciplinarians receive a salary premium. We also find evidence that the academic market, but not other employment sectors, particularly compensates researchers based on their primary discipline, an outcome that challenges emphases on interdisciplinarity. While our findings for interdisciplinarians point to the primary identity holding predominant importance for doctoral graduates in the United States, our two-step method provides a framework for parsing and estimating the varied impacts of multiple identities across a wide range of contexts.
    JEL: J24 J3 O3
    Date: 2022–07
  9. By: Chakravorty, Bhaskar (University of Warwick and GLO); Bhatiya, Apurav Yash (University of Birmingham and CAGE); Imbert, Clement (BREAD, CEPR, EUDN, JPAL and University of Warwick); Lohnert, Maximilian (JPAL SA); Panda, Poonam; Rathelot, Roland (CEPR and Institut Polytechnique de Paris)
    Abstract: This paper presents evidence on the short and long-term impact of the COVID-19 crisis on India’s rural youth. We interviewed about 2,000 vocational trainees from Bihar and Jharkhand three times after the first national lockdown in 2020, between June 2020 and December 2021. We find that a third of respondents who were in salaried jobs pre-lockdown lost their jobs, and half of those who worked out of state returned home shortly after the lockdown. We report a stark difference between men and women: while many male workers took up informal employment, most female workers dropped out of the labor force. In the second part of the paper, we use a randomised experiment to document the effects of a government-supported digital platform designed to provide jobs to low-skilled workers. The platform turned out to be difficult to use and publicised only a few job ads. We find no effect on job search intensity or employment. Our findings suggest that bridging the gap between rural young workers and urban formal labor markets requires more active and targeted policy interventions, especially for female workers Key words: Youth unemployment ; gender ; vocational training ; public policy JEL Codes: J2 ; J3 ; J6 ; J7 ; M5
    Date: 2022
  10. By: Li, Hongbin (Stanford University); Li, Lei (University of Mannheim); Ma, Hong (Tsinghua University)
    Abstract: China has witnessed rapid increases in the skill premium over the last few decades. In this paper, we study the short-run effect of capital goods imports on skill premium in China. The surge in capital goods imports, which embody advanced technology, can explain the rising demand for skills in China. We exploit regional variations in capital goods import exposure stemming from initial differences in import structure and instrument for the capital goods import growth using exchange rate movements. A city at the 75th percentile of the distribution of capital goods imports growth has a higher skill premium by 5 percentage points (0.38 standard deviation) over the one at the 25th percentile. To explore the underlying mechanism, we provide firm-level evidence and show that imported capital goods are skill-complementary.
    Keywords: imported capital goods, skill-biased technological change, skill premium
    JEL: F16 J20 J31 O33
    Date: 2022–07
  11. By: Stamegna, Marco
    Abstract: The present paper works out a classical-Marxian growth model with an endogenous direction of technical change and a heterogeneous labour force, made up of high-skilled and low-skilled workers. It draws on the Kaleckian mark-up pricing to link wage inequality to the relative unit labour cost at a firm level; on growth cycle models à la Goodwin to formalize the dynamic interaction between labour market and distributive shares of income; on the induced innovation literature to link the bias of technical change to the firm’s choice of the optimal combination of factor-augmenting technologies. We assume that economic growth is constrained by the growth rate of the high-skilled effective labour supply, whereas the low-skilled labour supply is perfectly elastic. Thus, we develop a three-dimensional system of differential equations for the output-capital ratio, the relative unit labour cost and the employment rate of the high-skilled workers, and investigate the stability and the main properties of the steady-state equilibrium. We find that, in contrast to the neoclassical literature on skill-biased technical change, the institutional framework governing the conflict over income distribution is the ultimate determinant of both wage inequality and the direction of technical change. A decline in low-skilled workers’ bargaining strength or a rise in product market concentration lead to both an increase in wage inequality and a bias of technical change favouring high-skilled over low-skilled labour productivity growth. As opposed to the Goodwin model with induced technical change and homogeneous labour force, labour market institutions thus affect steady-state income distribution, capital accumulation and labour productivity growth, and no necessary trade-off arises between labour market regulation and employment. Finally, if the steady-state value of wage inequality exceeds a critical value, an exogenous increase in the mark-up or in the high-skilled workers’ bargaining power allow both capitalists and high-skilled workers to increase their income shares at the expense of the low-skilled workers.
    Keywords: Wage inequality; growth; distribution; endogenous technical change
    JEL: D33 E11 E24 O33
    Date: 2022–07–16
  12. By: Ben Yahmed, Sarra; Berlingieri, Francesco; Brüll, Eduard
    Abstract: Employment responses to the COVID-19 crisis differed widely across German local labour markets at the beginning of the pandemic, with differences in short-time work rates of up to 20 percentage points. We show that digital capital, and to a lesser extent working-from-home, were essential for the resilience of local labour markets. Using an empirical strategy that combines a difference-in-differences approach with propensity score weighting, we find that local exposure to digital capital reduced short-time work usage by up to 4 percentage points and the effect lasted for about 8 months. Working-from-home potential lowered short-time work rates, but only in local labour markets exposed to digital capital, and in the first four months of the pandemic when a strict lockdown was in place. Differences in unemployment rates across local labour markets were at most 2 percentage points and did not depend on digital capital or working-from-home potential.
    Keywords: COVID-19 crisis,Digitalisation,Employment,Information and communication technologies,Local labour markets,Short-time work,Working-from-home
    JEL: J21 O3 R12 R23
    Date: 2022
  13. By: OECD
    Abstract: In the face of slowing productivity growth, a number of OECD countries have set up pro-productivity institutions to produce objective evidence and data on productivity trends and growth drivers and help inform pro-productivity policies and interventions. The paper presents a new analytical framework to analyse the key characteristics of these pro-productivity institutions. The framework draws on a comprehensive stocktaking of pro-productivity institutions and applied policy advice work aimed at supporting capabilities and mutual learning across these institutions. The paper finds that pro-productivity institutions rely on a variety of set-ups and approaches to contribute to pro-productivity policies. Despite this variety, the paper does point to some lessons that can help pro-productivity institutions to continuously strengthen their capabilities. In particular, the paper highlights the importance of guaranteeing the analytical independence of pro-productivity institutions and access to micro-level data on firms and workers to inform policies and interventions with objective data and evidence. The paper opens a new line of research on the political economy of productivity policies that can support countries ensure the effective implementation of policies aimed at enhancing incomes and living standards.
    JEL: D02 D04 D24 E24 J24 O47
    Date: 2022–08–16
  14. By: Buhlmann, Florian; Hebsaker, Michael; Kreuz, Tobias; Schmidhäuser, Jakob; Siegloch, Sebastian; Stichnoth, Holger
    Abstract: This article describes ZEW-EviSTA®, the microsimulation model developed and used at ZEW - Centre for European Economic Research in Mannheim. The model simulates the German tax and transfer system using household micro level data. By estimating fiscal effects, labor market outcomes as well as distributional impacts the model allows for a comprehensive ex ante analysis of reform proposals. Heterogeneity analyses targeting specific subgroups of the population are feasible, too. The present article describes which data sources are used for the simulation, how key features of the German tax and transfer system are implemented, which simulation methods are employed to analyze policy changes and how the model is validated against official statistics. Moreover, by providing examples of the outputs which ZEW-EviSTA generates the paper gives an idea of the questions that can be answered using the model.
    Keywords: microsimulation,tax system,tax policy,labour market,labour supply,labourdemand,Germany,policy analysis
    JEL: D58 H20 J22 J23
    Date: 2022
  15. By: Miss Anke Weber; Rui Mano; Mr. Yannick Timmer; Anastasia Burya
    Abstract: Using the near universe of online vacancy postings in the U.S., we study the interaction between labor market power and monetary policy. We show empirically that labor market power amplifies the labor demand effects of monetary policy, while not disproportionately affecting wage growth. A search and matching model in which firms can attract workers by either offering higher wages or posting more vacancies can rationalize these findings. We also find that vacancy postings that do not require a college degree or technology skills are more responsive to monetary policy, especially when firms have labor market power. Our results help explain the “wageless” recovery after the 2008 financial crisis and the flattening of the wage Phillips curve, especially for the low-skilled, who saw stagnant wages but a robust decline in unemployment.
    Keywords: Labor market power; Monetary Policy; Vacancies; Wages; vacancy posting; wage Phillips curve; technology skill; monetary policy shock; Labor markets; Labor demand; Labor share; Unemployment rate; Global
    Date: 2022–07–01
  16. By: Dan A. Black; Joonhwi Joo; Robert LaLonde; Jeffrey A. Smith; Evan J. Taylor
    Abstract: We provide simple tests for selection on unobserved variables in the Vytlacil-Imbens-Angrist framework for Local Average Treatment Effects (LATEs). Our setup allows researchers not only to test for selection on either or both of the treated and untreated outcomes, but also to assess the magnitude of the selection effect. We show that it applies to the standard binary instrument case, as well as to experiments with imperfect compliance and fuzzy regression discontinuity designs, and we link it to broader discussions regarding instrumental variables. We illustrate the substantive value added by our framework with three empirical applications drawn from the literature.
    JEL: C26 C52 C93
    Date: 2022–07
  17. By: Kozhaya, Mireille
    Abstract: This paper investigates the effect of school closure on the labor force participation, hours worked, extensive, and the intensive margin of women in Mexico for the years 2017 to 2021. Using a difference-in-differences approach, I analyze how school closure, due to the COVID-19 pandemic, affects the labor supply of women with school-aged children, 6 to 14 years old, versus women with nursery-aged children, 0 to 5 years old. This approach allows me to isolate the impact of school closure from the economic impact of the COVID-19 pandemic. The findings show that on average mothers with children younger than 14 decrease their labor force participation by about 2.6 percentage points. Mothers with school-aged children, however, decrease their labor force participation by an additional 1.7 percentage points and increase their domestic work. While the increase in domestic work occurs immediately after the school closure, the impact on the labor force is only observed several months later. The decrease is observed for all women with low or middle education level, formal and informal employment, and income quantiles. However, I find no decrease for single-mothers and mothers with access to informal child care.
    Keywords: Child care,COVID-19,women's labor supply,school closure
    JEL: J1 J16 J2 J23
    Date: 2022
  18. By: Michael Dinerstein; Isaac M. Opper
    Abstract: What happens when employers would like to screen their employees but only observe a subset of output? We specify a model in which heterogeneous employees respond by producing more of the observed output at the expense of the unobserved output. Though this substitution distorts output in the short-term, we derive three sufficient conditions under which the heterogenous response improves screening efficiency: 1) all employees place similar value on staying in their current role; 2) the employees' utility functions satisfy a variation of the traditional single-crossing condition; 3) employer and worker preferences over output are similar. We then assess these predictions empirically by studying a change to teacher tenure policy in New York City, which increased the role that a single measure -- test score value-added -- played in tenure decisions. We show that in response to the policy teachers increased test score value-added and decreased output that did not enter the tenure decision. The increase in test score value-added was largest for the teachers with more ability to improve students' untargeted outcomes, increasing their likelihood of getting tenure. We find that the endogenous response to the policy announcement reduced the screening efficiency gap -- defined as the reduction of screening efficiency stemming from the partial observability of output -- by 28%, effectively shifting some of the cost of partial observability from the post-tenure period to the pre-tenure period.
    JEL: D23 I21 J08 J24 J41
    Date: 2022–07
  19. By: Eric Brunner (University of Connecticut); Shaun Dougherty (Boston College); Stephen L. Ross (University of Connecticut)
    Abstract: We examine the effect of attending stand-alone technical high schools on the industry of employment choices and within industry earnings premiums of young adults using a regression discontinuity design. Our analysis is based on the universe of students that applied to the Connecticut Technical Education and Career System (CTECS) between 2006 and 2011. Admission to a CTECS school shifts male applicants towards working in higher paying industries that align with CTECS course work and programs of study. Admission to a CTECS school has a much more modest impact on the industry of employment for female applicants. Further, key industry effects observed for females shift these applicants towards lower paying industries. Surprisingly, both the overall industry earnings premiums and the treatment effects of CTECS on earnings premiums are similar and sometimes larger for female applicants in traditionally male dominated industries like manufacturing and construction. However, the number of females in these industries is too small to contribute substantially to female earnings in aggregate. Our mechanism analysis suggests that treatment effects on industry specific earnings premium vary across industries. In particular, for male applicants, treatment effects in the manufacturing and construction industry depend in part on work experience while in high school and as a young adult. Finally, we find that in the professional and office support industries CTECS treatment effects on earnings arise due to the selection into these industries of students with high 8th grade tests scores because these industries offer a higher direct return to cognitive skills for young adults.
    Keywords: technical high school, earnings premiums, young adults, regression discontinuity design
    JEL: I25 I26 I24 J30
  20. By: Lennart Struth (University of Cologne); Max Thon (University of Cologne)
    Abstract: We analyze the effect of employment-quota policies on the development of uncertainty and stereotypes in a model of inaccurate statistical discrimination with ambiguity about worker abilities. We show that, even if group characteristics are identical, higher uncertainty about one group can result in discriminatory employment decisions. The success of a quota in correcting the beliefs then depends crucially on the firm’s learning process. In particular, we find that the more confident the firm is in its initial priors, the longer a quota needs to be implemented until beliefs are sufficiently corrected such that discriminatory behavior vanishes.
    Keywords: Statistical discrimination, stereotypes, quotas, ambiguity
    JEL: J71 K31 M51 D81
    Date: 2022–08
  21. By: Marta Lachowska; Isaac Sorkin; Stephen A. Woodbury
    Abstract: We use administrative data to quantify the firm role in unemployment insurance (UI) take-up. First, there are firm effects in both claiming and appeals, and, consistent with deterrence effects, these are negatively correlated. Second, low-wage workers are less likely to claim and more likely to have their claims appealed than median-wage workers, and firm effects explain a large share of these income gradients. Third, high-claiming and low-appealing firms are desirable firms: they are higher-paying and have lower separation rates. Finally, the dominant source of targeting error in the UI system is that eligible workers do not apply. Our findings emphasize a novel dimension of the role of firms in the labor market, and have implications for the financing of UI.
    JEL: H32 J30
    Date: 2022–07
  22. By: Garz, Marcel (Jönköping University); Zhuang, Maiting (Mistra Center for Sustainable Markets (Misum))
    Abstract: We study the effect of media coverage on individual behaviour during a public health crisis. For this purpose, we collect a unique dataset of 200,000 newspaper articles about the Covid-19 pandemic from Sweden – one of the few countries that did not impose mandatory lockdowns or curfews. We show that mentions of Covid-19 significantly lowered the number of visits to workplaces and retail and recreation areas, while increasing the duration of stays in residential locations. Using two different identification strategies, we show that these effects are causal. The impacts are largest when Covid-19 news stories are more locally relevant, more visible and more factual. We find larger behavioural effects for articles that reference crisis managers (as opposed to medical experts) and contain explicit public health advice. These results have wider implications for the design of public communications and the value of the local media.
    Keywords: Covid-19; Mobility; Newspapers; Persuasion; Public health
    JEL: D83 H12 I12 I18 J22 L82
    Date: 2022–08–02
  23. By: Benjamin W. Arold; Paul Hufe; Marc Stoeckli
    Abstract: Genetic endowments are fixed at conception and matter for the educational attainment of individuals. Do investments in schooling environments mitigate or magnify the outcomes of this genetic lottery? Using data from a representative sample of US adolescents, we analyse the interdependent associations of genetic endowments, teacher quality and teacher quantity with educational attainment. Our results suggest that higher-quality teachers act as substitutes for genetic endowments: a 1 SD increase in teacher quality reduces the positive association between educational attainment and a 1 SD increase in the relevant polygenic score from 0.37 to 0.30 years—a decrease of 20%. In particular, high-quality teachers increase the probability that genetically disadvantaged students complete college. This increase is underpinned by gains in health, language ability, patience, and risk aversion.
    Keywords: polygenic scores, school resources, skill formation
    JEL: I29 I21 J24
    Date: 2022
  24. By: Mattia Guerini; Lionel Nesta; Xavier Ragot; Stefano Schiavo
    Abstract: This paper evaluates the risk of zombification of the French economy during the sanitary crisis, as a result of the unconditional financial support provided to firms by public authorities. We develop a simple theoretical framework based on a partial-equilibrium model to simulate the liquidity and solvency stress faced by a large panel of French firms and assess the impact of government support measures. Simulation results suggest that those policies helped healthy but illiquid firms to withstand the shock caused by the pandemic. Moreover, the analysis finds no evidence of a “zombification effect”, as government support has not disproportionately benefited less productive companies.
    Keywords: Covid-19, zombie firms, job-retention, schemes, microsimulation, policy evaluation
    JEL: H12 H32 J38 G33 L20
    Date: 2022

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