nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2023‒01‒16
twelve papers chosen by
Joseph Marchand
University of Alberta

  1. Technological and Organizational Change and the Careers of Workers By Battisti, Michele; Dustmann, Christian; Schönberg, Uta
  2. Approaches to Learn about Employer Learning By Ablay, Mahmut; Lange, Fabian
  3. Is Affirmative Action in Employment Still Effective in the 21st Century? By Noriko Amano-Patiño; Julian Aramburu; Zara Contractor
  4. Minimum Wage in Germany: Countering the Wage and Employment Gap between Migrants and Natives? By Ingwersen, Kai; Thomsen, Stephan L.
  5. Managers and the Management of Organizations By John Roberts; Kathryn L. Shaw
  6. Long-Run Effects of Technological Change: The Impact of Automation and Robots on Intergenerational Mobility By Heyman, Fredrik; Olsson, Martin
  7. The Employment Effects of Mobile Internet in Developing Countries By Gaurav Chiplunkar; Pinelopi Koujianou Goldberg
  8. Remote Work, Children’s Health and the Racial Gap in Female Wages By Amairisa Koukia; Robert M. Sauer
  9. Human Capital and Self-Employment in India: An Empirical Analysis for Different Cohorts By Dutta, Nabamita; Kar, Saibal; Ray, Shaswata
  10. Mind the gap: Effects of the national minimum wage on the gender wage gap in Germany By Schmid, Ramona
  11. Working and Saving Informally: The Link between Labor Market Informality and Financial Exclusion By Luca Flabbi; Mauricio Tejada
  12. Traumatic Experiences Adversely Affect Life Cycle Labor Market Outcomes of the Next Generation - Evidence from WWII Nazi Raids. By Vincenzo Atella; Edoardo Di Porto; Joanna Kopinska; Maarten Lindeboom

  1. By: Battisti, Michele (University of Glasgow); Dustmann, Christian (University College London); Schönberg, Uta (University College London)
    Abstract: This paper investigates the effects of technological and organizational change (T&O) on jobs and workers. We show that although T&O reduces firm demand for routine relative to abstract task-based jobs, affected workers do not face higher probability of non-employment or lower earnings growth than unaffected workers. Rather, firms that adopt T&O offer routine workers re-training opportunities to upgrade to more abstract jobs. Older workers form an important exception: T&O increases the risk that they permanently withdraw from the labor market and reduces their earnings, regardless of the tasks they performed in the firm prior to T&O.
    Keywords: careers of workers, technological change
    JEL: J23 J24 O33
    Date: 2022–11
  2. By: Ablay, Mahmut (McGill University); Lange, Fabian (McGill University)
    Abstract: The empirical literature on employer learning assumes that employers learn about unobserved ability differences across workers as they spend time in the labor market. This article describes testable implications that arise from this basic hypothesis and how they have been used to quantify the contribution of Job Market Signaling and human capital in measured returns to education. While the empirical basis is still thin, the results suggest that Signaling contributes at most about 25% to the observed returns to education.
    Keywords: Job Market Signaling, human capital, returns to education, employer learning
    JEL: E24 J31
    Date: 2022–12
  3. By: Noriko Amano-Patiño; Julian Aramburu; Zara Contractor
    Abstract: We study Executive Order 11246, an employment-based affirmative action policy tar geted at firms holding contracts with the federal government. We find this policy to be in effective in the 21st century, contrary to the positive effects found in the late 1900s (Miller, 2017). Our novel dataset combines data on federal contract acquisition and enforcement with US linked employer-employee Census data 2000–2014. We employ an event study around firms’ acquiring a contract, based on Miller (2017), and find the policy had no ef fect on employment shares or on hiring, for any minority group. Next, we isolate the impact of the affirmative action plan, which is EO 11246’s preeminent requirement that applies to firms with contracts over $50,000. Leveraging variation from this threshold in an event study and regression discontinuity design, we find similarly null effects. Last, we show that even randomized audits are not effective, suggesting weak enforcement. Our results highlight the importance of the recent budget increase for the enforcement agency, as well as recent policies enacted to improve compliance
    Keywords: Racial discrimination, affirmative action regulation, unemployment, earnings differentials.
    JEL: J15 J23 J31 J71 J78 K31
    Date: 2022–11
  4. By: Ingwersen, Kai (Leibniz University of Hannover); Thomsen, Stephan L. (Leibniz University of Hannover)
    Abstract: This paper investigates the effects of the introduction of a statutory minimum wage in Germany on the wages and employment of migrants. Migrants are an overrepresented group in the low-wage sector and can be expected to particularly benefit from a minimum wage. We combine a "differential trend adjusted difference-in-differences estimator" (DTADD) and descriptive evidence to evaluate the impact of the minimum wage introduction in 2015 on hourly wages, monthly salaries, working hours and changes in employment and wage distribution. Contrary to expectations, our results show that the introduction of the minimum wage has weakened the position of migrants in the low-wage sector compared to their native counterparts. We observe an increase in part-time employment, a less pronounced decline in unemployment and a greater reduction in weekly working hours among migrants. The introduction of the minimum wage caused a temporary convergence in hourly wages between migrants and natives, which subsequently turned into a wage divergence. Migrant men in the low-wage sector have been particularly negatively affected by the introduction of the minimum wage. Moreover, increasing hourly wages have not translated into higher monthly salaries, thus widening wage inequality between migrants and natives.
    Keywords: minimum wage, migrants, differential trend adjusted difference-in-differences, SOEP
    JEL: J31 J63 J38 J21
    Date: 2022–12
  5. By: John Roberts; Kathryn L. Shaw
    Abstract: We critically review the emerging literature in Organizational and Personnel Economics concerning the role of managers and management practices. Our focus is on the middle managers who populate the hierarchies between top executives and front-line employees. We are especially concerned with research that brings together theoretical modeling and empirical investigation.
    JEL: J3 L2 M5 M50
    Date: 2022–12
  6. By: Heyman, Fredrik (Research Institute of Industrial Economics (IFN)); Olsson, Martin (Research Institute of Industrial Economics (IFN))
    Abstract: This paper examines whether recent advancements in automation and robotics have affected intergenerational income mobility. Using detailed data on all individuals and firms registered in Sweden, we study whether parental exposure to robots at the occupational level and heterogeneous adoption of robots across industries and regions influence children’s outcomes in adulthood. We find that occupational exposure to robots is associated with lower income mobility for children. Based on a shift-share IV approach, we show that the lower intergenerational income mobility originates from industry-regions with a relatively large increase in robot adoption. In addition, we show that these children are worse off in a number of labor market and family-related outcomes. Our results indicate a new channel through which technological changes affect intergenerational mobility and that automation and exposure to new technologies can have long-lasting effects.
    Keywords: Intergenerational Mobility; Automation; Robots; Matched Employer-Employee Data
    JEL: J24 J31 J62 O33
    Date: 2022–12–19
  7. By: Gaurav Chiplunkar; Pinelopi Koujianou Goldberg
    Abstract: We examine the employment effects of 3G mobile internet expansion in developing countries. We find that 3G significantly increases the labor force participation rate of women and the employment rates of both men and women. Our results suggest that 3G affects the type of jobs and there is a distinct gender dimension to these effects. Men transition away from unpaid agricultural work into operating small agricultural enterprises, while women take more unpaid jobs, especially in agriculture, and operate more small businesses in all sectors. Both men and women are more likely to work in wage jobs in the service sector.
    JEL: J21 J62 O30 O50
    Date: 2022–12
  8. By: Amairisa Koukia; Robert M. Sauer
    Abstract: This paper studies the racial gap in the female wage penalty to remote work. Using a temporary child health problem as a source of exogenous variation in the propensity to work from home, wage penalties reach 86 percent for black women and 77 percent for white women. Promotion bias, task re-assignment and lack of productive social interaction are the most likely mechanisms for the wage losses. The estimates provide rare evidence on the differential costs of social distancing by race and may be especially applicable when children are temporarily quarantined due to illness.
    Keywords: female labor supply, female earnings, race, remote work, telecommuting, flexible working arrangements, fertility, health
    Date: 2022
  9. By: Dutta, Nabamita (University of Wisconsin, La Crosse); Kar, Saibal (Centre for Studies in Social Sciences, Calcutta); Ray, Shaswata (Centre for Studies in Social Sciences)
    Abstract: The ambiguity in the relationship between self-employment and educational attainment is well documented in the literature. Using an extensive individual level dataset from Periodic Labor Force Survey, we estimate the probability of being self-employed in India based on educational attainments. Our results suggest that the probability of being self-employed rises for an individual with education but not monotonically so. Indeed, the impact of education on likelihood of self-employment does not convey much information without considering how the effect varies across gender, caste, age, household size, religion, and industry as various cohorts chosen for this study using 418, 297 observations. The probability to be self-employed varies considerably based on gender, caste and age when the level of education rises. A cohort based analysis for determination of self-employment is novel for India along with the findings where college educated women show higher probability of self-employment than men, for example. The importance of considering the non-linearity in the relationship between self-employment and education, usually part of analytical frameworks but inadequately addressed empirically, should be useful for better policies on the interaction between human capital and occupational choice. Robustness analysis considering further cohort effects in terms of household size and religion, buttresses our benchmark results.
    Keywords: Labor Force Survey, education, occupation, self-employment, gender, India
    JEL: J24 N3 N35
    Date: 2022–12
  10. By: Schmid, Ramona
    Abstract: With its introduction in 2015, the statutory minimum wage in Germany intends to benefit primarily low-wage workers. Thus, this paper aims at estimating the effectiveness of the im- plemented wage floor on gender wage gaps in the lower half of the wage distribution. Using administrative data, distinct regional differences regarding magnitudes of wage differentials and responses to the minimum wage are identified. Overall, wage gaps between men and women at the 10th percentile decrease by 2.46 and 6.34 percentage points respectively in the West and East of Germany after 2015. Applying counterfactual wage distributions, the study provides new evidence that around 60% and even 95% of the decline result from the introduction of the minimum wage in each region. Further, group-specific analyses identify concrete responses on the basis of age, educational level and occupational activity. Having yearly data, the study ad- ditionally reveals new results on the impact of the successive minimum wage raises in 2017 and 2019. Counterfactual aggregate decompositions of gender wage gaps finally indicate a decrease in discriminatory remuneration structures in the West of Germany due to the introduced wage floor.
    Keywords: Gender Wage Gap, Minimum Wage, Germany
    JEL: J16 J31 J38 J71 J78
    Date: 2022
  11. By: Luca Flabbi; Mauricio Tejada
    Abstract: The high level of informality and the low level of savings observed in developing countries are fundamentally linked because informal workers have limited access to formal financial institutions. We study this link by developing and estimating a labor market model where workers can be employed both formally and informally and agents can save through both formal and informal financial institutions. We estimate the model on nationally representative data for Colombia and use the estimated model to simulate counterfactual experiments. Results show that reaching full financial inclusion of informal workers would increase savings by 3% a month and formal assets by 21%. The same policy would strongly decrease inequality in assets and mildly decrease inequality in consumption.
    Keywords: Informality, financial inclusion, savings, labor market search, structural estimation
    Date: 2022
  12. By: Vincenzo Atella (CEIS & DEF, University of Rome "Tor Vergata"); Edoardo Di Porto (Federico II University of Napoli); Joanna Kopinska (Sapienza University of Rome); Maarten Lindeboom (Vrije Universiteit Amsterdam)
    Abstract: This paper examines the causal effect of a traumatic event experienced by pregnant women on the life-long labor market outcomes of their offspring. We exploit a unique natural experiment that involved randomly placed Nazi raids in municipalities in Italy during WWII. We link administrative data on male private sector workers to information about Nazi raids and war casualties. Our results suggest that prenatal exposure to traumatic events affect offspring earnings throughout the working career and in retirement. The lower earnings are due to lower educational attainment, the type of jobs held and interruptions in working careers due to unemployment. We further find that prenatal exposure exacerbates the adverse effects of later life job loss on earnings. We use a medical database on health expenditures to interpret the effect estimates. The prenatally exposed have higher medical expenditures on diseases of the nervous system and mental disorders, indicating that stress is likely to be an important factor driving our findings.
    Keywords: WWII; Violent raids; Prenatal exposure; Offspring; Life-cycle earnings; Mass layoff
    JEL: J24 I15
    Date: 2022–12–19

This nep-lma issue is ©2023 by Joseph Marchand. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.