nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2022‒11‒14
twenty papers chosen by
Joseph Marchand
University of Alberta

  1. The Role of Within-Occupation Task Changes in Wage Development By Bachmann, Ronald; Demir, Gökay; Green, Colin P.; Uhlendorff, Arne
  2. What's My Employee Worth? The Effects of Salary Benchmarking By Zoe B. Cullen; Shengwu Li; Ricardo Perez-Truglia
  3. Informal Institution Meets Child Development: Clan Culture and Child Labor in China By Tang, Can; Zhao, Zhong
  4. Long Social Distancing By Jose Maria Barrero; Nicholas Bloom; Steven J. Davis
  5. The gender wage gap in Egypt: public versus private sector By Emanuela Ghignoni; Francesco Pastore
  6. Labor market spillovers of a large plan opening. Evidence from the oil industry By Matteo Alpino; Irene Di Marzio; Maurizio Lozzi; Vincenzo Mariani
  7. Employer Cooperation, Productivity, and Wages: New Evidence from Inter-Firm Formal Network Agreements By Devicienti, Francesco; Grinza, Elena; Manello, Alessandro; Vannoni, Davide
  8. Older Workers’ Employment and Social Security Spillovers through the Second Year of the COVID-19 Pandemic By Gopi Shah Goda; Emilie Jackson; Lauren Hersch Nicholas; Sarah Stith
  9. "The Double Dividend of Training" – Labor Market Effects of Work-Related Continuous Education in Switzerland By Denzler, Stefan; Ruhose, Jens; Wolter, Stefan C.
  10. The Labor-market Effects of Service Offshoring: A Synthetic Control Approach with High-dimensional Microdata By Kässi, Otto
  11. Filling the Gap: The Consequences of Collaborator Loss in Corporate R&D By Pöge, Felix; Gaessler, Fabian; Hoisl, Karin; Harhoff, Dietmar; Dorner, Matthias
  12. Labor Market Concentration and Competition Policy across the Atlantic By Araki, Satoshi; Bassanini, Andrea; Green, Andrew; Marcolin, Luca; Volpin, Cristina
  13. Gender gaps in time devoted to Commuting: Evidence from Peru, Ecuador, Chile, and Colombia By Campaña, Juan Carlos; Gimenez-Nadal, J. Ignacio
  14. Who Suffers the Most During the COVID-19 Pandemic? Evidence from Thailand By Sasiwimon Warunsiri Paweenawat; Lusi Liao
  15. Cousins from Overseas: The Labour Market Impact of a Major Forced Return Migration Shock By Bohnet, Lara; Peralta, Susana; Pereira dos Santos, João
  16. Nudging the Nudger: A Field Experiment on the Effect of Performance Feedback to Service Agents on Increasing Organ Donor Registrations By Julian House; Nicola Lacetera; Mario Macis; Nina Mazar
  17. The Financial literacy of micro-entrepreneurs: evidence from Italy By Paolo Finaldi Russo; Ludovica Galotto; Cristiana Rampazzi
  18. The health-Consumption Effects of Increasing Retirement Age Late in the Game By Eve Caroli; Catherine Pollak; Muriel Roger
  19. COVID-19 Pandemic and the Health and Well-being of Vulnerable People in Vietnam By Dang, Hai-Anh; Do, Minh N.N.
  20. How Good Am I? Effects and Mechanisms behind Salient Ranks By Megalokonomou, Rigissa; Zhang, Yi

  1. By: Bachmann, Ronald (RWI); Demir, Gökay (RWI); Green, Colin P. (Norwegian University of Science and Technology (NTNU)); Uhlendorff, Arne (CREST)
    Abstract: We examine how changes in task content over time condition occupational wage development. Using survey data from Germany, we document substantial heterogeneity in within-occupational changes in task content. Combining this evidence with administrative data on individual employment outcomes over a 25-year period, we find important heterogeneity in wage penalties amongst initially routine intensive jobs. While occupations that remain (relatively) routine intensive generate substantial wage penalties, occupations with a decreasing routine intensity experience stable or even increasing wages. These findings cannot be explained by composition or cohort effects.
    Keywords: technological progress, polarization, tasks, routine workers, training
    JEL: J31 J24 E24
    Date: 2022–10
  2. By: Zoe B. Cullen; Shengwu Li; Ricardo Perez-Truglia
    Abstract: While U.S. legislation prohibits employers from sharing information about their employees’ compensation with each other, companies are still allowed to acquire and use more aggregated data provided by third parties. Most medium and large firms report using this type of data to set salaries, a practice that is known as salary benchmarking. Despite their widespread use across occupations, there is no evidence on the effects of salary benchmarking. We provide a model that explains why firms are interested in salary benchmarking and makes predictions regarding the effects of the tool. Next, we measure the actual effects of these tools using administrative data from one of the leading providers of payroll services and salary benchmarks. The evidence suggests that salary benchmarking has a significant effect on pay setting and in a manner that is consistent with the predictions of the model. Our findings have implications for the study of labor markets and for ongoing policy debates.
    JEL: D83 J31 J38 M52
    Date: 2022–10
  3. By: Tang, Can (Renmin University of China); Zhao, Zhong (Renmin University of China)
    Abstract: Using a national representative sample, the China Family Panel Studies, this paper explores the influences of clan culture, a hallmark of Chinese cultural history, on the prevalence of child labor in China. We find that clan culture significantly reduces the incidence of child labor and working hours of child laborer. The results exhibit strong boy bias, and are driven by boys rather than girls, which reflects the patrilineal nature of Chinese clan culture. Moreover, the impact is greater on boys from households with lower socioeconomic status, and in rural areas. Clan culture acts as a supplement to formal institutions: reduces the incidence of child labor through risk sharing and easing credit constraints, and helps form social norms to promote human capital investment. We also employ an instrument variable approach and carry out a series of robustness checks to further confirm the findings.
    Keywords: informal institution, clan culture, child labor, China
    JEL: J22 J81 O15
    Date: 2022–10
  4. By: Jose Maria Barrero; Nicholas Bloom; Steven J. Davis
    Abstract: More than ten percent of Americans with recent work experience say they will continue social distancing after the COVID-19 pandemic ends, and another 45 percent will do so in limited ways. We uncover this Long Social Distancing phenomenon in our monthly Survey of Working Arrangements and Attitudes. It is more common among older persons, women, the less educated, those who earn less, and in occupations and industries that require many face-to-face encounters. People who intend to continue social distancing have lower labor force participation – unconditionally, and conditional on demographics and other controls. Regression models that relate outcomes to intentions imply that Long Social Distancing reduced participation by 2.5 percentage points in the first half of 2022. Separate self-assessed causal effects imply a reduction of 2.0 percentage points. The impact on the earnings-weighted participation rate is smaller at about 1.4 percentage points. This drag on participation reduces potential output by nearly one percent and shrinks the college wage premium. Economic reasoning and evidence suggest that Long Social Distancing and its effects will persist for many months or years.
    JEL: D12 E24 J14 J21 J22
    Date: 2022–10
  5. By: Emanuela Ghignoni; Francesco Pastore
    Abstract: The Egyptian Government has taken important steps toward the achievement of "equal pay for work of equal value" between men and women, by recently extending the gender equality legislation from the public sector to the private one. In this paper, we measure the actual degree of gender wage equality in the public and private sectors of the Egyptian labour market, as well as its evolution over the last 20 years and its determinants. To this aim, we first apply the Oaxaca-Blinder decomposition (with sample selection correction) to assess the role of characteristics and coefficients at the mean of the wage distribution in the two sectors. After that, we implement the Machado-Mata decomposition to assess the extent of the "discrimination" effect along the wage distribution in both sectors. To further the analysis, an innovative Inverse-Probability-Weighted Regression Adjustment (IPWRA) procedure is used to assess the joint impact on wages of being a woman and working in the private sector. Lastly, we analyze the cultural determinants of Egypt's low female participation. We find that discrimination plays an important role in the composition of the gap, albeit to a lesser extent in the public sector. We also find evidence of a sticky floor in the private sector and a glass ceiling in the public one. Overall, our results suggest that much remains to be done to reduce gender inequality by implementing more consistently the gender equality legislation in the private sector and seeking to break down cultural barriers to women's work.
    Keywords: Gender Wage Gap; Sample Selection Bias; IPWRA; Public versus private sector; Egypt
    JEL: C31 J16 J24 J31 K31
    Date: 2022–10
  6. By: Matteo Alpino (Bank of Italy); Irene Di Marzio (Bank of Italy); Maurizio Lozzi (Bank of Italy); Vincenzo Mariani (Bank of Italy)
    Abstract: We study the labor market spillovers of the opening of a large oil extracting facility in a peripheral area of the South of Italy, focusing on the time when the physical investment was made, before production took off and royalties started flowing in. Using firm-level administrative data covering the universe of non-farm businesses in a difference-in-differences design, we find large positive effects on firm-level employment and positive, albeit smaller, effects on wages per employee. Within-firm employment gains are geographically localized and are concentrated in the upstream sector (not only in manufacturing) and among the largest firms; however the number of firms declines. Aggregate results obtained using census data show that the overall employment effect in the area is slightly positive.
    Keywords: oil, local labor markets, plant opening, natural resource
    JEL: J21 L71 O13 R11
    Date: 2022–10
  7. By: Devicienti, Francesco (University of Turin); Grinza, Elena (University of Milan); Manello, Alessandro (University of Turin); Vannoni, Davide (University of Turin)
    Abstract: Using uniquely rich administrative matched employer-employee data, we investigate the impact of formal network agreements (FNAs) among firms under two perspectives. First, we assess the impact of joining a FNA on several indicators of firm performance, and total factor productivity. Second, we investigate whether and how such effects are transmitted to the workers, in terms of wage changes. On the firm-level side, we find an overall significant and economically relevant positive effect of FNAs on firm performance, which resists a large set of robustness tests. However, such a positive effect on firms does not translate into tangible benefits for the workers, on average. After estimating an array of multiple-way fixed effects wage regressions, we find a negative, though small, wage effect. Moreover, we detect a rather marked heterogeneity in the impacts on both firms and workers. The estimation of rent-sharing equations, as well as other tests that exploit unionization data, suggest that the negative effects on wages might be explained by a decrease in workers' bargaining power following the introduction of FNAs.
    Keywords: Inter-firm cooperation, formal network agreements, firm performance, total factor productivity (TFP), wages, matched employer-employee data
    JEL: L14 D24 J31
    Date: 2022–10
  8. By: Gopi Shah Goda; Emilie Jackson; Lauren Hersch Nicholas; Sarah Stith
    Abstract: The COVID-19 pandemic triggered a large and immediate drop in employment among US workers, along with major expansions of unemployment insurance and work from home. We use Current Population Survey and Social Security application data to study employment among older adults and their participation in disability and retirement insurance programs through the second year of the pandemic. We find ongoing improvements in employment outcomes among older workers in the labor force, along with sustained higher levels in the share no longer in the labor force during this period. Applications for Social Security disability benefits remain depressed, particularly for Supplemental Security Income. In models accounting for the expiration of expanded unemployment insurance, we find that the loss of these additional financial supports is associated with a drop in older adult unemployment rates and an increase in Social Security Disability Insurance claiming. Social Security retirement benefit claiming has rebounded to pre-pandemic levels, but has shifted from offline to online applications.
    JEL: H31 H5 J14 J26
    Date: 2022–10
  9. By: Denzler, Stefan (Swiss Co-ordination Center for Research in Education); Ruhose, Jens (University of Kiel); Wolter, Stefan C. (University of Bern)
    Abstract: This paper presents the first longitudinal estimates of the effect of work-related training on labor market outcomes in Switzerland. Using a novel dataset that links official census data on adult education to longitudinal register data on labor market outcomes, we apply a regression-adjusted matched difference-in-differences approach with entropy balancing to account for selection bias and sorting on gains. We find that training participation increases yearly earnings and reduces the risk of unemployment two years after the treatment. However, the effects are heterogeneous as to gender, age, education, and regional labor market context. The gains are highest for middle-aged men with formal vocational education working in either depressed or booming labor markets.
    Keywords: continuous education, wages, unemployment, entropy balancing, Switzerland
    JEL: I21 I26 J24 M53
    Date: 2022–10
  10. By: Kässi, Otto
    Abstract: Abstract I use novel high-quality survey data on firms’ international sourcing activities combined with firm-level financial and linked employer–employee data to study the effect of services offshoring on wages and employment. To overcome the endogeneity related to reverse causality and omitted variables, I use microsynth, a variation of the synthetic control method specially developed for high-dimensional microdata. I find that offshoring firms pay higher wages for both high-skilled and low-skilled workers, and employ fewer FTE workers compared with a synthetic control, but these effects take several years to appear.
    Keywords: Service offshoring, Offshoring
    JEL: F14 C33 J31
    Date: 2022–10–28
  11. By: Pöge, Felix (Boston University); Gaessler, Fabian (Max Planck Institute for Innovation and Competition); Hoisl, Karin (Max Planck Institute for Innovation and Competition); Harhoff, Dietmar (University of Munich); Dorner, Matthias (Institute for Employment Research (IAB), Nuremberg)
    Abstract: We examine how collaborator loss affects knowledge workers in corporate R&D. We argue that such a loss affects the remaining collaborators not only by reducing their team-specific capital (as argued in the prior literature) but also by increasing their bargaining power over the employer, who is in need of filling the gap left by the lost collaborator to ensure the continuation of R&D projects. This shift in bargaining power may, in turn, lead to benefits, such as additional resources or more attractive working conditions. These benefits can partially compensate for the negative effect of reduced team-specific capital on productivity and influence the career trajectories of the remaining collaborators. We empirically investigate the consequences of collaborator loss by exploiting 845 unexpected deaths of active inventors. We find that inventor death has a moderate negative effect on the productivity of the remaining collaborators. This negative effect disappears when we focus on the remaining collaborators who work for the same employer as the deceased inventor. Moreover, this group is more likely to be promoted and less likely to leave their current employer.
    Keywords: collaboration, mobility, innovation, inventors, patents, teams
    JEL: J62 O32 J24
    Date: 2022–10
  12. By: Araki, Satoshi (OECD); Bassanini, Andrea (OECD); Green, Andrew (OECD); Marcolin, Luca (OECD); Volpin, Cristina (OECD)
    Abstract: Drawing upon data from the largest cross-country study of labor market concentration to date, this paper analyzes the level of concentration of labor input markets in Europe and North America and provides a comparative perspective on employers' monopsony power. It explores the characteristics of monopsony in labor markets and documents its impact by looking at the magnitude of employer concentration in selected jurisdictions. Using a harmonized dataset of online vacancies, this paper shows that European labor markets are no more competitive than North American ones. It also supports the view that the effects of concentration on labor markets are broadly similar in both Europe and North America, despite the much stronger labor market institutions in Europe. The article shows that there is no apparent economic or legal justification for a lack of enforcement activity by European competition authorities in labor markets relative to the US. While enforcement action has picked up in the last two years in Europe, there is likely still scope for a significant increase in the role of competition enforcement in labor markets. The article identifies sectors and practices that may be scrutinized with priority by European competition authorities and proposes a mix of enforcement, merger control and well-targeted policy and regulatory solutions to address employers' monopsony power.
    Keywords: labour market concentration, monopsony, cross-country comparison, competition enforcement
    JEL: J31 J41 J42 L40
    Date: 2022–10
  13. By: Campaña, Juan Carlos; Gimenez-Nadal, J. Ignacio
    Abstract: We analyze the relationship between gender and the time devoted to commuting by men and women in Latin American Countries. Using data from time surveys from Peru (2010), Ecuador (2012), Chile (2015) and Colombia (2012 and 2017), we observe in the four countries, that women devoted less time to this activity compared to men. We find that among the possible justifications for these gender gaps, it is important to consider the presence of children in the household, the hours of work and the type of employment of individuals. These results illustrate the importance of studying this topic in countries where the evidence is scarce mainly due to limitations in comparing the data between countries.
    Keywords: Time Use,Commuting,Gender Gaps,Latin America countries
    JEL: D10 J22
    Date: 2022
  14. By: Sasiwimon Warunsiri Paweenawat; Lusi Liao
    Abstract: This study investigates Thailand’s recent labor market disruption induced by the COVID-19 pandemic. We found that the impact varied across demographic groups. Workers that are the most adversely affected by the COVID-19 pandemic are (1) in high-risk sectors, (2) less-educated, (3) youth worker, and (4) parents. Our empirical results show that the unemployment rate is positively related to sectorial risk levels and marital status: married and public sector employees are less likely to be unemployed. Further, less occupational flexibility decreases wages, and this effect is stronger for women. Parenthood negatively affects wages, and its effect is larger for women.
    Keywords: COVID-19; Labor market; Demographics; Thailand
    JEL: J21 J24 J16 J12
    Date: 2022–10
  15. By: Bohnet, Lara (New York University); Peralta, Susana (Universidade Nova de Lisboa); Pereira dos Santos, João (RWI)
    Abstract: We study the labour market impact of the return of half a million Portuguese due to onset of the colonial war in 1974. Both the size and similarity with the native population (almost 80% were Portuguese-born) make this a unique shock. We use census data from 1960 and 1981 to document a decrease in dependent employment of 15% for native males and 62% for females. The bulk of the effects is driven by Portuguese-born repatriates. We use shit-share IVs based on the repatriates' municipality of birth, and the municipal hotel capacity, exploiting a large-scale resettlement program.
    Keywords: return migration, labour market, labour supply, entrepreneur- ship, instrumental variable
    JEL: F22 J20 R23
    Date: 2022–09
  16. By: Julian House; Nicola Lacetera; Mario Macis; Nina Mazar
    Abstract: We conducted a randomized controlled trial involving nearly 700 customer-service representatives (CSRs) in a Canadian government service agency to study whether providing CSRs with performance feedback with or without peer comparison affected their subsequent organ donor registration rates. Despite having no tie to remuneration or promotion, the provision of individual performance feedback three times over one year resulted in a 25% increase in daily signups, compared to otherwise similar encouragement and reminders. Adding benchmark information that compared CSRs performance to average and top peer performance did not further enhance this effect. Registrations increased more among CSRs whose performance was already above average, and there was no negative effect on lower-performing CSRs. A post-intervention survey showed that CSRs found the information included in the treatments helpful and encouraging. However, performance feedback without benchmark information increased perceived pressure to perform.
    JEL: C93 D90 H41 I10 J45 M50
    Date: 2022–10
  17. By: Paolo Finaldi Russo (Banca d'Italia); Ludovica Galotto (Banca d'Italia); Cristiana Rampazzi (Banca d'Italia)
    Abstract: Entrepreneurs, including those who run very small businesses or sole proprietorships, are often assumed to have sound financial skills as they make frequent financial decisions. This paper explores the issue by analysing the level of financial literacy (FL) of Italian micro-entrepreneurs in comparison with other countries and other Italian adults. The results, based on the 2020 Survey on the Financial Literacy of Italian Adults conducted by the Bank of Italy according to the OECD/INFE methodology, are threefold. First, Italian micro-entrepreneurs have quite low levels of FL by international standards. Second, compared with other Italians, business owners have only a slightly higher level of FL; this is mainly attributable to their higher income and more frequent use of financial services. Third, thanks to their slightly more advanced financial skills, micro-entrepreneurs are more likely to make better financial decisions than other adults. These findings suggest that strengthening the financial literacy of micro-entrepreneurs can have a positive impact on their ability to make better financial decisions and ultimately on the resilience and growth of their businesses.
    Keywords: financial literacy, financial behaviour, micro-entrepreneurs, SMEs
    JEL: G53 L26 J24
    Date: 2022–10
  18. By: Eve Caroli (LEDa - Université Paris Dauphine - PSL and IZA); Catherine Pollak (DRESS and LEDa - Université Paris Dauphine - PSL); Muriel Roger (Centre d'Economie de la Sorbonne - Université Paris 1 Panthéon-Sorbonne and LIEPP)
    Abstract: Using the differentiated increase in retirement age across cohorts introduced by the 2010 French pension reform, we estimate the health-consumption effects of a 4-month increase in retirement age. We focus on individuals who were close to retirement age but not retired yet by the time the reform was passed. Using administrative data on individual sick-leave claims and non-hospital health-care expenses, we show that the probability of having at least one sickness absence increases for all treated groups, while the duration of sick leaves remains unchanged. Delaying retirement does not increase the probability of seeing a GP, except for men in the younger cohorts. In contrast, it raises the probability of having a visit with a specialist physician for all individuals, except men in the older cohorts. Delaying retirement also increases the probability of seeing a physiotherapist among women from the older cohorts. Overall, it increases health expense claims, in particular in the lower part of the expenditure distribution
    Keywords: pension reform; retirement age; health; health-care consumption
    JEL: I10 J14 J18 J26
    Date: 2022–10
  19. By: Dang, Hai-Anh (World Bank); Do, Minh N.N. (National Economics University Vietnam)
    Abstract: Despite a sizable population and modest status as a low middle-income country, Vietnam has recorded a low COVID-19 fatality rate that rivals those of richer countries with far larger spending on health. We offer an early review of the emerging literatures in public health and economics on the pandemic effects in Vietnam, with a specific focus on vulnerable population groups. Our review suggests that vulnerable workers were at more health risks than the general population. The pandemic reduced household income, increased the poverty rate, and worsened wage equality. It increased the proportion of below-minimum wage workers by 2.5 percentage points (i.e., 32 percent increase). While government policy responses were generally regarded as effective, the public support for these responses was essential for this success, particularly where there were stronger public participation in the political process. Our review also indicates the need for a social protection database to identify the poor and the informal workers to further enhance targeting efforts. Finally, we suggest future directions for research in the Vietnamese context.
    Keywords: COVID-19, health, vulnerable households, poverty, inequality, Vietnam
    JEL: E24 I1 I30 J21 O12
    Date: 2022–10
  20. By: Megalokonomou, Rigissa (University of Queensland); Zhang, Yi (University of Queensland)
    Abstract: How can individuals respond to their ordinal ranking when they are not aware of it? We present evidence on the effects and mechanisms of achievement rank effects in middle schools when ranks are salient to students and their parents. For identification, we rely on the random assignment of students (and teachers) to classrooms in China. That is, students with the same baseline test scores end up having different achievement ranks in their assigned classroom. We find positive and large effects of being assigned a higher rank on subsequent performance, especially for males and overconfident students. We show that students with higher ranks spend more hours on autonomic studying. What drives these effects is still an open question, especially when ranks are salient to both students and their parents. Using rich survey data, we show that these academic gains are not only mediated through (1) students' higher self-perception and higher subject learning confidence, but also through (2) better parental understanding of their child's ranks, stricter parental requirements for their child's study, and higher parental expectations regarding their child's educational attainment and career prospects. We show that these two channels make similar contributions to explaining salient rank effects, and when combined they explain 46.80% of the increase in test scores. We find no impact on teachers' investment or attention to students as a result of rank effects.
    Keywords: achievement rank, saliance, quasi-random classroom assignment, mechanisms, survey data, middle schools, mediation analysis
    JEL: I21 J24
    Date: 2022–09

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