nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2022‒11‒07
25 papers chosen by
Joseph Marchand
University of Alberta

  1. The Dynamics of Power in Labor Markets: Monopolistic Unions versus Monopsonistic Employers By Dodini, Samuel; Salvanes, Kjell G.; Willén, Alexander
  2. Opening the Black Box: Task and Skill Mix and Productivity Dispersion By G. Jacob Blackwood; Cindy Cunningham; Matthew Dey; Lucia Foster; Cheryl Grim; John Haltiwanger; Rachel Nesbit; Sabrina Wulff Pabilonia; Jay Stewart; Cody Tuttle; Zoltan Wolf
  3. Identifying and Overcoming Gender Barriers in Tech: A Field Experiment on Inaccurate Statistical Discrimination By Jan Feld; Edwin Ip; Andreas Leibbrandt; Joseph Vecci
  4. Staff Engagement, Coworkers' Complementarity and Employee Retention: Evidence from English NHS Hospitals By Moscelli, Giuseppe; Sayli, Melisa; Mello, Marco
  5. The EITC and the Extensive Margin: A Reappraisal By Henrik Kleven
  6. The Employment Effects of Working Time Reductions: Sector-Level Evidence from European Reforms By Batut, Cyprien; Garnero, Andrea; Tondini, Alessandro
  7. Anticipated labour market discrimination and educational achievement By Andy Dickerson; Anita Ratcliffe; Bertha Rohenkohl; Nicolas Van de Sijpe
  8. The wage elasticity of recruitment By Boris Hirsch; Elke J. Jahn; Alan Manning; Michael Oberfichtner
  9. The Effects of Income on the Economic Wellbeing of Families with Low Incomes: Evidence from the 2021 Expanded Child Tax Credit By Natasha Pilkauskas; Katherine Michelmore; Nicole Kovski; H. Luke Shaefer
  10. Skill-bias and Wage Inequality in the EU New Member States: Empirical Investigation By Jan Pintera
  11. Relationship Stability: Evidence from Labor and Marriage Markets By Iris Kesternich; Bettina Siflinger; James P. Smith; Franziska Valder
  12. Is International Trade Always Beneficial to Labor Markets? A Case Study from Egypt By Robertson, Raymond; Vergara Bahena, Mexico Alberto; Lopez-Acevedo, Gladys
  13. The Effect of Removing Early Retirement on Mortality By Bellés Obrero, Cristina; Jimenez-Martin, Sergi; Ye, Han
  14. Career and Non-Career Jobs: Dangling the Carrot By Andri Chassamboulli; Demetris Koursaros
  15. The Heterogeneous Effect of Minimum Wage on Labor Market Flows in Colombia By Luz A. Flórez; Didier Hermida; Leonardo Fabio Morales
  16. The impact of public transportation and commuting on urban labour markets: evidence from the new survey of London life and labour, 1929-32 By Andrew Seltzer; Jonathan Wadsworth
  17. Active Commuting and the Health of Workers By Echeverría, Lucía; Gimenez-Nadal, J. Ignacio; Molina, José Alberto
  18. The Impacts of COVID-19 on Racial Inequality in Business Earnings By Robert W. Fairlie
  19. The demand for language skills in the European labour market: Evidence from online job ads By Gabriele Marconi; Loris Vergolini
  20. Firms and inequality when unemployment is high By Ihsaan Bassier
  21. Revisiting Real Wage Rigidity By Michael Ellington; Chris Martin; Bingsong Wang
  22. Backward-bending Labor Supply and Urban Location By Tabuchi, Takatoshi
  23. The Econometrics of Antidotal Variables By Das, Tirthatanmoy; Polachek, Solomon
  24. The Impact of the Age Distribution on Unemployment: Evidence from US States By Bruce Fallick; Christopher L. Foote
  25. The anatomy of consumption in a household foreign currency debt crisis By Gyöngyösi, Győző; Rariga, Judit; Verner, Emil

  1. By: Dodini, Samuel (Norwegian School of Economics); Salvanes, Kjell G. (Norwegian School of Economics); Willén, Alexander (Norwegian School of Economics)
    Abstract: This paper brings together the modern research on employer power and employee power by empirically examining the effects of unionization on worker earnings, employment, and inequality across differently concentrated markets. Exploiting national tax reforms to union membership dues as exogenous shocks to unionization, we show that high levels of unionization mitigate the negative wage and employment effects generated by imperfect competition. We also identify considerable effect heterogeneity with respect to worker types across differentially concentrated markets, and show that this has major implications for the role of unions in shaping labor market wage inequality.
    Keywords: monopsony, skills, unions, market concentration
    JEL: J23 J24 J42 J51 J52 J63
    Date: 2022–10
  2. By: G. Jacob Blackwood; Cindy Cunningham; Matthew Dey; Lucia Foster; Cheryl Grim; John Haltiwanger; Rachel Nesbit; Sabrina Wulff Pabilonia; Jay Stewart; Cody Tuttle; Zoltan Wolf
    Abstract: An important gap in most empirical studies of establishment-level productivity is the limited information about workers’ characteristics and their tasks. Skill-adjusted labor input measures have been shown to be important for aggregate productivity measurement. Moreover, the theoretical literature on differences in production technologies across businesses increasingly emphasizes the task content of production. Our ultimate objective is to open this black box of tasks and skills at the establishment-level by combining establishment-level data on occupations from the Bureau of Labor Statistics (BLS) with a restricted-access establishment-level productivity dataset created by the BLS-Census Bureau Collaborative Micro-productivity Project. We take a first step toward this objective by exploring the conceptual, specification, and measurement issues to be confronted. We provide suggestive empirical analysis of the relationship between within-industry dispersion in productivity and tasks and skills. We find that within-industry productivity dispersion is strongly positively related to within-industry task/skill dispersion.
    Keywords: productivity, skills, tasks, manufacturing
    JEL: D24 J24 J31 L60
    Date: 2022–09
  3. By: Jan Feld; Edwin Ip; Andreas Leibbrandt; Joseph Vecci
    Abstract: Women are significantly underrepresented in the technology sector. We design a field experiment to identify statistical discrimination in job applicant assessments and test treatments to help improve hiring of the best applicants. In our experiment, we measure the programming skills of job applicants for a programming job. Then, we recruit a sample of employers consisting of human resource and tech professionals and incentivize them to assess the performance of these applicants based on their resumes. We find evidence consistent with inaccurate statistical discrimination: while there are no significant gender differences in performance, employers believe that female programmers perform worse than male programmers. This belief is strongest among female employers, who are more prone to selection neglect than male employers. We also find experimental evidence that statistical discrimination can be mitigated. In two treatments, in which we provide assessors with additional information on the applicants’ aptitude or personality, we find no gender differences in the perceived applicant performance. Together, these findings show the malleability of statistical discrimination and provide levers to improve hiring and reduce gender imbalance.
    Keywords: field experiment, discrimination, beliefs, gender
    JEL: C93 J23 J71 J78
    Date: 2022
  4. By: Moscelli, Giuseppe (University of Surrey); Sayli, Melisa (University of Surrey); Mello, Marco (University of Surrey)
    Abstract: Retention of skilled workers is essential for labour-intensive organisations like hospitals, where an excessive turnover of doctors and nurses can reduce the quality and quantity of services to patients. In the public sector, where salaries are often not negotiable at individual level, workers increasingly care about the non-pecuniary aspects of their jobs. We empirically investigate the role played by two such aspects, staff engagement and the retention of complementary coworkers, in affecting employee retention within the public hospital sector. We exploit a unique and rich panel dataset based on employee-level payroll and staff survey records from the universe of English NHS hospitals, and estimate dynamic panel data models to deal with the bias due to reverse causality. We find that nurses' retention is positively associated with their engagement, whereas doctors' retention is positively associated with nurses' retention. This heterogeneous response of employee retention can be explained by the hierarchy of workers' professional roles within the organisation.
    Keywords: employee retention, staff engagement, job complementarities, coworkers, hospitals, endogeneity
    JEL: C33 C36 I11 J22 J28 J63
    Date: 2022–10
  5. By: Henrik Kleven (Princeton University)
    Abstract: This paper reappraises the impact of the Earned Income Tax Credit (EITC) on labor supply at the extensive margin for single mothers. I investigate every EITC reform at the state and federal level since the inception of the policy. Apart from the federal 1993 reform, EITC expansions have not had any clear and significant effects on employment. The 1993 reform is associated with large employment effects, but these effects align more closely with confounding changes from welfare reform and the macroeconomy than with the EITC. I conduct a comprehensive analysis of the robustness of the EITC null result to model uncertainty.
    Keywords: labor supply, taxation, fiscal policy
    JEL: H20 H24 H31 J20 J21 J22
    Date: 2022–09
  6. By: Batut, Cyprien (Paris School of Economics); Garnero, Andrea (OECD); Tondini, Alessandro (Paris School of Economics)
    Abstract: In this paper, we exploit a panel of industry-level data in European countries to study the economic impact of national reductions in usual weekly working hours between 1995 and 2007. Our identification strategy relies on the five national reforms that took place over this period and on initial differences across sectors in the share of workers exposed to the reforms. On average, the number of hours worked in more affected sectors fell, hourly wages rose, while employment did not increase. The effect on value-added per hour worked appears to be positive but non-significant.
    Keywords: working time, work sharing, employment, wages, value-added
    JEL: J20 J30 J80
    Date: 2022–09
  7. By: Andy Dickerson (Department of Economics and Sheffield Methods Institute, University of Sheffield, 9 Mappin Str, Sheffield S1 4DT, UK); Anita Ratcliffe (Department of Economics, University of Sheffield, 9 Mappin Str, Sheffield S1 4DT, UK); Bertha Rohenkohl (Institute for the Future of Work and Sheffield Methods Institute, University of Sheffield); Nicolas Van de Sijpe (Department of Economics, University of Sheffield, 9 Mappin Str, Sheffield S1 4DT, UK)
    Abstract: Some theories suggest that students who anticipate discrimination in the labour market may invest more in easily observable human capital like education, to signal their productivity to employers and reduce the scope for statistical discrimination. Empirical research on this issue has been hampered, however, by a lack of direct information on anticipated labour market treatment. We use data from a unique longitudinal survey of young people in England to link student expectations of facing discrimination in the labour market to subsequent performance in high-stakes exams. Our findings suggest that the anticipation of labour market discrimination is associated with better exam performance, consistent with the view that students are seeking to counteract potential future penalties.
    Keywords: Anticipated discrimination; human capital investment; ethnic minorities; high-stakes exams
    JEL: I24 I26 J24 J71
    Date: 2022–10
  8. By: Boris Hirsch (Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre); Elke J. Jahn (Institute for Employment Research, University of Bayreuth, and IZA); Alan Manning (London School of Economics and Centre for Economic Performance); Michael Oberfichtner (Institute for Employment Research and IZA)
    Abstract: One of the factors likely to affect the market power of employers is the sensitivity of the flow of recruits to the offered wage, but there is very little research on this. This paper presents a methodology for estimating the wage elasticity of recruitment and applies it to German data. Our estimates of the wage elasticity of recruitment are about 1.4. We also report evidence that high-wage employers are more selective in hiring, in which case the relevant recruitment elasticity should be higher, about 2.2. Together with prior estimates of the quit elasticity these results imply that wages are 72–77% of the marginal product of labour. Further, we find lower elasticities for recruits hired from non-employment as well as for women, non- German nationals, non-prime-age workers, less skilled workers, and workers with less complex jobs.
    Keywords: Monopsony, imperfect labour markets, wage elasticity of recruitment
    JEL: J42 J31
    Date: 2022–10
  9. By: Natasha Pilkauskas; Katherine Michelmore; Nicole Kovski; H. Luke Shaefer
    Abstract: We examine the effects of an unconditional cash transfer on the economic wellbeing (material hardship, ability to meet needs, money on hand, use of friends and family for assistance, and employment) of families and children with very low incomes. We use a parameterized difference-in-differences approach to study the impact of the 2021 temporary expansion of the Child Tax Credit (CTC), which provided monthly, unconditional cash payments to families with children from July to December 2021. The 2021 monthly CTC reduced the number of hardships families experienced, and in particular their food insecurity. We find some evidence that the credit reduced medical hardships, reduced reliance on friends and family for food, and improved respondents’ ability to pay utility bills. We also find no effects on any labor supply measures. Analyses that examine differences by racial/ethnic groups show that the effects are somewhat stronger for Black families than for Hispanic and White families, but the differences are not large.
    JEL: H20 I3 I30 I31 I38 J20
    Date: 2022–10
  10. By: Jan Pintera (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: We use the individual-level data on income and education level from the EU-SILC database to investigate the trends in income distribution and wage polarization in the EU New Member States. We do not confirm the existence of job polarization in wages and employment that has been observed in the United States or other developed countries. Rather, we document decreasing inequality, particularly in Czechia, Poland, Hungary and Slovakia. Also, our estimates of the elasticity of substitution between low and high skill labour are higher than often found in other countries. These results imply a different impact of globalization on the labour markets in the EU New Member States than in other countries. However, it remains unclear whether these differences are temporary or will prevail in the future.
    Keywords: Labor Markets, Technological Change, Polarization, Skills
    JEL: J30 J31 O14 O31 O33
    Date: 2022–10
  11. By: Iris Kesternich (KU Leuven and University of Hamburg); Bettina Siflinger (Tilburg University); James P. Smith (Rose Li and Associates); Franziska Valder (University of Copenhagen, Center of Economic Behavior and Inequality)
    Abstract: Behavior in labor and marriage markets follows similar structures when it comes to commitment to long-term relationships. We argue that there is a joint social skill driving stability in both markets. Applying a grouped fixed-effect estimator on data from the Survey of Health, Ageing and Retirement in Europe, we identify types of individuals at risk of instability in both domains. We provide evidence on how economic preferences and personality are related to instability in both markets. We also show negative consequences of instability in terms of reduced life satisfaction and wealth late in life.
    Keywords: Relationship Stability, Marriage dissolution, Job turnover, Social Skills, Non-Cognitive Skills, Grouped Fixed-E ect Estimator, Survey of Health, Ageing and Retirement in Europe
    JEL: J12 J24 J63 I31 C33
    Date: 2022–10–03
  12. By: Robertson, Raymond (Texas A&M University); Vergara Bahena, Mexico Alberto (World Bank); Lopez-Acevedo, Gladys (World Bank)
    Abstract: Egypt's industries heavily rely on imported goods for production. Thus, an increase in imports could have a potentially positive effect on the labor market as it means more inputs for the production of exporting goods. Alternatively, minimal backward linkages in global value chains (GVCs) could also mean that increasing imports substitute for domestic production and thus, lost employment opportunities. This paper evaluates the relationship between regional trade agreements using a gravity model and import flows to test whether rising imports impacted wages, informality, and female labor force participation using the Bartik (1991) approach. Our results suggest that imports are not to blame for disappointing labor market outcomes in Egypt.
    Keywords: imports, trade, labor market, informality, econometrics, bartik, Egypt
    JEL: F1 C1
    Date: 2022–10
  13. By: Bellés Obrero, Cristina (University of Mannheim); Jimenez-Martin, Sergi (Universitat Pompeu Fabra); Ye, Han (University of Mannheim)
    Abstract: This paper sheds new light on the mortality effect of delaying retirement by investigating the impacts of the 1967 Spanish pension reform. This reform exogenously changed the early retirement age, depending on the date individuals started contributing to the Social Security system. Those contributing before 1 January 1967 maintained the right to voluntarily retire early (at age 60), while individuals who started contributing after that date could not voluntarily claim a pension until the age of 65. Using the Spanish administrative Social Security data, we find that the reform delayed the individuals' labour market exit by around half a year and increased the probability that individuals take up disability pensions, partial pensions, and no pensions. We show evidence that delaying exiting employment increases the hazard of dying between the ages of 60 and 69, for almost all individuals. Heterogeneous analysis indicates that the increase in mortality is stronger for those employed in low-skilled, physically and psychosocially demanding jobs. Moreover, we show that allowing for flexible retirement schemes, such as partial retirement, mitigates the detrimental effect of delaying retirement on mortality.
    Keywords: delaying retirement, mortality, heterogeneity, flexible retirement
    JEL: I10 I12 J14 J26
    Date: 2022–09
  14. By: Andri Chassamboulli; Demetris Koursaros
    Abstract: We develop a model of the labor market with career and non-career jobs. Workers in career jobs start at the low rank and can be promoted to a higher rank. Non-career jobs have the typical single-rank structure. We show that it is optimal for career firms to incentivize their employees through the option value of a promotion. By increasing the wage spread between low and top positions they can elicit more effort from the mass of the workers in low ranks, while rewarding handsomely only the very few that get promoted. We explore the macroeconomic implications of this hierarchical payment structure. We show how our model can provide interesting insights into various puzzles such as the wage gap between men and women, the cyclicality of the labor wedge and the low volatility of the real wage relative to hours and output along the business cycle, without imposing ad-hoc nominal wage rigidities.
    Keywords: career-jobs; promotions; job hierarchy; labor wedge; gender wage gap
    JEL: J31 J33 J64 E24
    Date: 2022–10–07
  15. By: Luz A. Flórez; Didier Hermida; Leonardo Fabio Morales
    Abstract: We provide evidence of the negative effect of the minimum wage on labor market flows, such as job creation, job destruction, hiring, and separations in Colombia. Depicting firms' minimum wage (MW) compliance cost, we find evidence of an adverse effect of increases on MW compliance cost on employment. This negative effect is explained mainly by a reduction in job creation and hiring rate and the rise in job destruction and separations. In contrast to the evidence for developed economies, our results are in line with the predictions of the standard search model. We also explore this differential effect by firm size and age. We found that an increase in the MW compliance cost has relatively critical negative impacts on small and medium-sized firms (with less than 250 employees); and new and young firms (lower than six years old). **** RESUMEN: Este paper presenta evidencia del efecto del salario mínimo sobre flujos del mercado laboral colombiano: la tasa de creación, de destrucción, las contrataciones, separaciones y el nivel de empleo. Usando una medida del costo de cumplimiento (CC) del salario mínimo a nivel de firma, encontramos que incrementos en el costo de cumplimiento tienen efectos negativos en el nivel de empleo. Este efecto es explicado por una reducción en la tasa de creación y contratación, además, de un aumento en la tasa de destrucción y separación de las firmas. En contraste con la evidencia encontrada en los países desarrollados, nuestros resultados van en línea con la predicción de los modelos de desempleo de equilibrio (o modelos de búsqueda). Adicionalmente, se exploran los efectos diferenciales del CC por tamaño y edad de la firma. Los resultados indican que un incremento en el CC tiene un efecto negativo importante en las empresas de tamaño pequeño y mediano (con menos de 250 empleados), y en las empresas nuevas y jóvenes (menores de 6 años).
    Keywords: minimum wage compliance cost, job destruction, job creation, worker and job reallocation, churning, firms's size, firm's age, and young workers, Costo de cumplimiento del salario mínimo, tasa de destrucción, tasa de creación, reasignación de trabajadores y trabajos, edad y tamaño de la firma
    JEL: J08 J21 J23 J30 J63 E24 L25
    Date: 2022–10
  16. By: Andrew Seltzer; Jonathan Wadsworth
    Abstract: This paper examines the consequences of the commuter transport revolution on working-class labour markets in London, circa 1930. Using GIS-based data constructed from the New Survey of London Life and Labour, we examine the extent of commuting and estimate the earnings returns to commuting. We show that commuting was an important feature for most working-class Londoners in the early-twentieth century. Using a variety of identifying procedures to address the endogeneity of distance commuted, we estimate a likely causal return of between 1.5 to 3.5 percent of earnings for each additional kilometre travelled. We also show that commuting was an important contributor to improvements in quality of life in the early-twentieth century.
    Keywords: commuting, public transport, earnings, London
    Date: 2022–09–05
  17. By: Echeverría, Lucía (University of Zaragoza); Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza)
    Abstract: Research has shown that commuting is related to the health of workers, and that mode choice may have differential effects on this relationship. We analyze the relationship between commuting by different modes of transport and the health status reported by US workers, using the 2014-2016 Eating and Health (EH) Module of the American Time Use Survey (ATUS). We estimate Ordinary Least Squares models on a measure of subjective health, that is the self-reported assessment of individual general health status, and on the body mass index. We find that longer commutes by bicycle are significantly related to higher levels of subjective health and to lower body mass index, while commuting by walking is weakly related to both health measures. We test the robustness of our results to possible measurement errors in commuting times, to the exclusion of compensating factors, and to the estimation method. We additionally instrument individual use of bicycles with an indicator of individual green attitudes, based on the General Social Survey (GSS), and the results consistently show that individuals who commute longer by bicycle report better subjective health and lower body mass index. Our results may help policy makers in evaluating the importance of having infrastructures that facilitate the use of bicycles as a means of transport, boosting investment in these infrastructures, especially in large cities.
    Keywords: commuting, health, walking, cycling, American Time Use Survey
    JEL: R40 I10 J22
    Date: 2022–09
  18. By: Robert W. Fairlie
    Abstract: Many small businesses have closed, lost revenues, or downsized as a response to health and economic disruptions caused by COVID-19. But, were economic losses in the pandemic disproportionately felt by businesses owned by people of color? This paper provides the first study of the impacts of COVID-19 on racial inequality in business earnings. Pandemic-induced losses to business earnings in 2020 were 16-19 percent for all business owners. Racial inequality increased in the pandemic: Black business owners experienced larger negative impacts on business earnings of 12-14 percent relative to white business owners. Regression estimates for Latinx and Asian business owners reveal negative point estimates but the estimates are not statistically significant. Using Blinder-Oaxaca decompositions and a new pandemic-focused decomposition technique, I find that the industry concentrations of Black, Latinx, and Asian business owners placed each of these groups at a higher risk of experiencing disproportionate business earnings losses in the pandemic. Higher education levels among Asian business owners helped insulate them from larger losses from COVID-19. Finally, differential exposure to COVID case rates, business closure policies, and mask mandates did not contribute to racial inequality in business earnings losses.
    JEL: J15 J3 L26
    Date: 2022–10
  19. By: Gabriele Marconi; Loris Vergolini
    Abstract: We investigate foreign language skill demand and its determinants with a novel dataset, the Web Intelligence Hub's Online Job Advertisement (OJA) database, with information on about 53 million ads posted in 2021 for jobs in Europe. This unique dataset has been built crawling hundreds of job search engines and websites of public employment services, allowing us to identify foreign language requirements in OJAs at the NUTS-3 regional level. Moreover, we analyse how the demand for foreign languages varies at occupational level in the European countries as well as the possible macro factors (GDP, population density; participation rate in education and training; percentage of people employed in the high-tech sector and in the touristic sector) that could influence the request for foreign languages.
    Keywords: Language skills, Labour market, Occupational groups, NUTS, Online job ads, Eurostat, English, German, Chinese, French, Spanish, big data, web scraping
    JEL: J20 J24 R10
    Date: 2022–10
  20. By: Ihsaan Bassier
    Abstract: How important are firms for wage inequality in developing countries where structural unemployment is high? Research focused on contexts close to full employment has suggested a substantial role of firms in labor market inequality. Using matched employer-employee data from South Africa, I find that firms explain a larger share of wage variation than in richer countries. I consider drivers of this, documenting first a higher productivity dispersion as found for other developing countries. Secondly, I estimate the separations elasticity by instrumenting wages of matched workers with firm wages, and I find a low separations elasticity. This generates a high degree of monopsony, and the correspondingly high estimated rent-sharing elasticity helps explain the important role of firm wage policies in inequality. Monopsony may be driven by higher unemployment, and regional heterogeneity provides suggestive evidence for this. Such firm-level competitive dynamics may exacerbate inequality in developing countries more generally.
    Keywords: inequality, firm wage premia, unemployment, monopsony
    Date: 2022–10–07
  21. By: Michael Ellington (Management School, University of Liverpool, Liverpool L69 7ZH UK); Chris Martin (Department of Economics, University of Bath, Bath BA2 7AY UK); Bingsong Wang (Department of Economics, University of Sheffield, 9 Mappin Str, Sheffield S1 4DT, UK)
    Abstract: In this paper, we provide empirical evidence that real wage rigidity is not a major cause of unemployment volatility. We argue that there is a disconnect between the theoretical and empirical literatures on this topic. While theoretical studies define real wage rigidity as the response of wages to changes in unemployment following productivity shocks, the empirical literature measures real wage rigidity as the estimated semi-elasticity of wages with respect to unemployment, averaged over all shocks. We show that averaging over shocks gives a biased measure of real wage rigidity, as the impact of other shocks confounds the response to productivity shocks. Our results indicate that the estimated semi-elasticity with respect to productivity shocks is twice as large as the estimated semi-elasticity averaged over all shocks. This implies that one cannot attribute unemployment volatility to real wage rigidity.
    Keywords: real wage rigidity, time-varying parameter model, real wages, search frictions,
    JEL: E23 E32 J23 J30 J64
    Date: 2022–09
  22. By: Tabuchi, Takatoshi
    Abstract: This paper is an attempt to combine a labor supply model with a housing location model. We focus on the trade-off between the hours of work, commute times and leisure time as well as the trade-off between the consumption of a good, housing space, and leisure time. We show that both labor supply and urban location choice are inverted U-shaped in relation to the wage rate. These results are empirically shown by using Japanese data on the hours of work and commute times by household income class and on the number of households by income class.
    Keywords: labor supply; leisure time; residential location; U-shaped relationship
    JEL: J22 R21 R31
    Date: 2022–09–29
  23. By: Das, Tirthatanmoy (Indian Institute of Management Bangalore); Polachek, Solomon (Binghamton University, New York)
    Abstract: Some interventions or population attributes negate the effects of a treatment. This paper shows that incorporating these, what we call antidotal variables (AV), into a causal treatment effects analysis can with one cross-sectional regression identify the true causal effect, in addition to possible biases from selectivity and SUTVA violations. Whereas we apply the AV technique to analyze the California Paid Family Leave program, it has applications beyond this example.
    Keywords: antidotal variables, causality, CPFL
    JEL: C18 C36 I38 J18 J38
    Date: 2022–09
  24. By: Bruce Fallick; Christopher L. Foote
    Abstract: Economists have studied the potential effects of shifts in the age distribution on the unemployment rate for more than 50 years. Most of this analysis uses a "shift-share" method, which assumes that the demographic structure has no indirect effects on age-specific unemployment rates. This paper uses state-level data to revisit the influence of the age distribution on unemployment in the United States. We examine demographic effects across the entire age distribution rather than just the youth share of the population — the focus of most previous work — and extend the date range of analysis beyond that which was available for previous research. We find that shifts in the age distribution move the unemployment rate in the direction that a mechanical shift-share model would predict. But these effects are larger than the mechanical model would generate, indicating the presence of amplifying indirect effects of the age distribution on unemployment.
    Keywords: age distribution; unemployment; demographics; shift-share
    JEL: E24 J21
    Date: 2022–10–18
  25. By: Gyöngyösi, Győző; Rariga, Judit; Verner, Emil
    Abstract: How do households adjust to a large debt shock? This paper studies household responses to a revaluation of foreign currency household debt during a large depreciation in Hungary. Relative to similar local currency debtors, foreign currency debtors reduce consumption expenditures approximately one-for-one with increased debt service, suggesting binding liquidity constraints. Foreign currency debtors reduce both the quantity and quality of expenditures, consistent with nonhomothetic preferences and a “flight from quality.” Debt revaluation has no effect on labor market status, hours, or earnings, but there is a small adjustment toward foreign income streams and a substantial increase in home production. JEL Classification: E21, G51, J20
    Keywords: flight from quality, home production, marginal propensity to consume
    Date: 2022–09

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