nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2023‒02‒27
23 papers chosen by
Joseph Marchand
University of Alberta

  1. Employee-Owned Firms and the Careers of Young Workers By Burdin, Gabriel; Garcia-Louzao, Jose
  2. The impact of alternative childcare policies on mothers' employment in selected EU countries By Narazani, Edlira; Agúndez García, Ana; Christl, Michael; Figari, Francesco
  3. The employment activated by the National Recovery and Resilience Plan and its characteristics By Gaetano Basso; Luigi Guido; Matteo Paradisi; Andrea Petrella
  4. Globalization and Firm Performance By Catão, Luis A. V.; de Faria, Pedro; Martins, António; Portela, Miguel
  5. Monopsony Makes Firms not only Small but also Unproductive: Why East Germany has not Converged By Rüdiger Bachmann; Christian Bayer; Heiko Stüber; Felix Wellschmied
  6. The spillover effect of services offshoring on local labour markets By Magli, Martina
  7. Labor Demand on a Tight Leash By Bossler, Mario; Popp, Martin
  8. Train Drain? Access to Foreign Workers and Firms' Provision of Training By Oswald-Egg, Maria Esther; Siegenthaler, Michael
  9. Fiscal Stimulus and Skill Accumulation over the Life Cycle By Laure Simon
  10. The Effects of Schooling on Cognitive Skills: Evidence from Education Expansions By Cappellari, Lorenzo; Checchi, Daniele; Ovidi, Marco
  11. The long-run earnings effects of winning a mayoral election. By Marco Bertoni; Giorgio Brunello; Lorenzo Cappellari; Maria De Paola
  12. Exploiting Growth Opportunities:The Role of Internal Labor Markets By Giacinta Cestone; Chiara Fumagalli; Francis Kramarz; Giovanni Pica
  13. Collective bargaining and spillovers in local labor markets By Bassier, Ihsaan
  14. Structural Reforms and Income Distribution: New Evidence for OECD Countries By Rasmus Wiese; João Tovar Jalles; Jakob de Haan
  15. Causal Misperceptions of the Part-Time Pay Gap By Annekatrin Schrenker
  16. When are wages cut? The roles of incomplete contracts and employee involvement By Marco Fongoni; Daniel Schaefer; Carl Singleton
  17. Testing Marx By Charlotte Bartels; Felix Kersting
  18. Trade sanctions and informal employment By Ali Moghaddasi Kelishomi; Roberto Nisticò
  19. Fair Earnings Tax Reforms By Erwin Ooghe; Erik Schokkaert; Hannes Serruys
  20. Governing Sustainable School to Work Transitions: Lessons for the EU By Schmid, Günther; Bellmann, Lutz; Gazier, Bernard; Leschke, Janine
  21. Measuring peer effects in parental leaves: evidence from a reform. By Davide Dottori; Francesca Modena; Giulia Martina Tanzi
  22. Delegation and Recruitment in Organizations: The Slippery Slope to “Bad” Leadership By Selcen Çakır; Konstantinos Matakos; Janne Tukiainen
  23. Measuring the effects of bank remuneration rules: evidence from the UK By Sakalauskaite, Ieva; Harris, Qun

  1. By: Burdin, Gabriel (Leeds University Business School); Garcia-Louzao, Jose (Bank of Lithuania)
    Abstract: Using detailed administrative data from Spain, we investigate the impact of having an initial work experience in an employee-owned firm (EOF) versus a conventional business on subsequent earnings. We find that young workers' exposure to EOFs at the time of labour market entry reduces earnings by about 8% during the first 15 years in the labour market. The selection of individuals with low initial ability in EOFs does not appear to be a relevant channel. Our results seem to be rather related to differences in job mobility and wage returns to experience. On the one hand, we document lower wage returns to experience acquired in EOFs, although no differences in subsequent career progression in terms of promotions. On the other hand, we find that workers who had their first job in EOFs show a strong attachment to such a business model and are less likely to voluntarily leave their employers. Taken together, our findings suggest the existence of non-pecuniary job attributes offered by EOFs that might compensate for lower lifetime earnings.
    Keywords: employee-owned firms, careers, wages, job mobility
    JEL: J31 J50 J62
    Date: 2023–01
  2. By: Narazani, Edlira; Agúndez García, Ana; Christl, Michael; Figari, Francesco
    Abstract: This paper contributes to the debate on the revision of the Barcelona targets on childcare, as promoted by the European Commission in 2022, that aims to provide childcare for children below the age of 3. Using EUROLAB, a structural model of labour supply that can also accounts for labour demand constraints, we estimate female labour market participation reactions to alternative scenarios of formal childcare policies in European countries with very low child care provision for children below 3. We quantify the potential increases in the labour supply of mothers (at the extensive and intensive margins) in the case of fulfilling potential new targets of childcare provision (40%, 50%, 60% and 65%). Achieving these targets would lead to significantly increased labour supply of mothers especially in countries like Hungary and Poland where the current share of formal childcare and/or female labour participation is low. In countries like Portugal, that are far beyond the existing childcare target, changes in labour supply incentives are instead expected to be moderate. We further show that when accounting for labour demand, the expected final employment effects will be less pronounced, but still positive.
    Keywords: Labour market equilibrium, labour supply, labour demand, structural models, discrete choice, childcare
    JEL: J20 J22 J23 J13
    Date: 2023
  3. By: Gaetano Basso (Bank of Italy); Luigi Guido (Einaudi Institute for Economics and Finance); Matteo Paradisi (Einaudi Institute for Economics and Finance); Andrea Petrella (Bank of Italy)
    Abstract: The National Recovery and Resilience Plan (NRRP) allocates substantial resources to be used by 2026 and could significantly boost demand in many sectors. This paper proposes a quantification of the employment generated in the various sectors, broken down by type of skills required. Within the context of an input-output model, we allocate the resources of the NRRP to the sectors whose production will most likely be activated. The estimates point to a 1.7 per cent increase in labour demand on 2019 payroll employment. The new jobs would be created mainly in the construction sector and, to a lesser extent, in smaller high-tech sectors. The increase in labour demand for qualified professionals with analytical skills seems to be substantial.
    Keywords: employment, National Recovery and Resilience Plan, skills.
    JEL: D57 J23 J24 H50
    Date: 2023–02
  4. By: Catão, Luis A. V. (Inter-American Development Bank); de Faria, Pedro (University of Groningen); Martins, António (ISEG); Portela, Miguel (University of Minho)
    Abstract: Using a new panel dataset of about 140 thousand Portuguese firms during 2006-2019, we measure the effects of globalization on firm-level performance along four dimensions: ownership of capital, employment of foreign-seasoned managers, and participation in export and import markets. Once at least one of these channels is active, firms are larger, less leveraged, employ better qualified workers, and pay higher hourly wages. We also uncover a pecking order of effects, with export-market participation having generally larger positive effects on productivity and negative effects on unit labor costs. All four channels interact, sometimes complementing, sometimes substituting one another. For instance, foreign ownership boosts exports at the extensive margin while being an importer and/or having a foreign-experienced manager help at the intensive margin; conversely, the marginal productivity gains of foreign-ownership are greatly reduced when the firm is already an exporter. Breaking down the effects of each channel by firm size, we show that smaller firms stand the most to gain from export market participation and foreign-ownership.
    Keywords: foreign direct investment, entrepreneurship, trade, productivity, wages, labor costs, leverage, firm size distribution
    JEL: D22 D24 F23 G34 J3 L20 M10
    Date: 2023–01
  5. By: Rüdiger Bachmann; Christian Bayer; Heiko Stüber; Felix Wellschmied
    Abstract: When employers face a trade-o between being large and paying low wages|and in this sense have monopsony power|some productive employers decide to acquire few customers, forgo sales, and remain small. These decisions have adverse consequences for aggregate labor productivity. Using high-quality administrative data from Germany, we document that East German plants (compared to West German ones) face steeper size-wage curves, invest less into marketing, remain smaller, and are less productive. A model with labor market monopsony, product market power, and customer acquisition matching these features of the data predicts ten percent lower aggregate labor productivity in East Germany.
    Keywords: aggregate productivity, plant heterogeneity, unions, monopsony power, size-wage curve, customer capital, size distortions
    JEL: E20 E23 E24 J20 J42 J50
    Date: 2023–02
  6. By: Magli, Martina
    Abstract: I provide new empirical evidence on the direct and indirect impact of services offshoring on local employment and wages, using a unique dataset on firms in the UK for the period 2000-2015. Exploiting variation in firms’ services offshoring across labour markets, I show positive aggregate local labour employment and wage elasticity to services offshoring. Spillovers from offshoring to non-offshoring firms explain the positive results, and services offshoring complementary to firms’ production has a larger effect than the offshoring competing with firms’ outputs. Finally, I show that services offshoring widens firms’ employment and wage dispersion within local labour markets.
    Keywords: services offshoring; local labour market; spillover effect; quantile analysis
    JEL: F10 F16 J20
    Date: 2022–12–09
  7. By: Bossler, Mario (Institute for Employment Research (IAB), Nuremberg, Germany ; LASER); Popp, Martin (Institute for Employment Research (IAB), Nuremberg, Germany)
    Abstract: "We develop a labor demand model that encompasses pre-match hiring cost arising from tight labor markets. Through the lens of the model, we study the effect of labor market tightness on firms’ labor demand by applying novel Bartik instruments to the universe of administrative employment data on Germany. In line with theory, the IV results suggest that a 10 percent increase in labor market tightness reduces firms’ employment by 0.5 percent. When accounting for search externalities, we find that the individual-firm wage elasticity of labor demand reduces from -0.7 to -0.5 at the aggregate level. For the 2015 minimum wage introduction, the elasticities imply only modest disemployment effects mirroring empirical ex-post evaluations. Moreover, the doubling of tightness between 2012 and 2019 led to a significant slowdown in employment growth by 1.1 million jobs." (Author's abstract, IAB-Doku) ((en))
    Keywords: IAB-Open-Access-Publikation
    JEL: J23 J31 J60 D22
    Date: 2023–02–08
  8. By: Oswald-Egg, Maria Esther (ETH Zurich); Siegenthaler, Michael (ETH Zurich)
    Abstract: Does better access to foreign workers reduce firms' willingness to provide general skills training to unskilled workers? We analyze how the opening of the Swiss labor market to workers from the European Union affected the number of apprenticeship positions that firms provide. We exploit that the availability of foreign workers increased more in firms close to the border because they gained unrestricted access to cross-border workers from Switzerland's neighboring countries. Our Difference-in-Differences estimates suggest that firm-provided training to unskilled workers and access to foreign workers are not necessarily substitutes: opening the borders did not have a statistically significant effect on apprenticeship provision. Using unique data on firms' costs and motives to train apprentices, we show that the greater availability of foreign workers reduced firms' incentive to train because hiring skilled workers externally became cheaper, among others because new hires became more productive from the start. Positive impacts on firm growth worked in the opposite direction.
    Keywords: apprenticeships, cross-border workers, firm-provided training, free movement of workers, hiring costs, immigration, immigration policy, labor mobility, vocational education and training
    JEL: J24 J63 M53
    Date: 2023–01
  9. By: Laure Simon
    Abstract: Using micro data from the U.S. Consumer Expenditure Survey and Current Population Survey, I document that government spending shocks affect individuals differently over the life cycle. Young households increase their consumption after an expansionary shock while prime-age households reduce it, regardless of their level of income or debt. Productivity and wages increase significantly for young workers. To rationalize these findings, I develop a parsimonious New Keynesian life-cycle model where young agents accumulate skills on the job through a learning-by-doing process. An increase in government spending raises hours worked, which enhances skill accumulation, particularly among young workers who face a steep learning curve. The ensuing increase in the relative labor demand for young workers boosts their wages, thus stimulating their consumption.
    Keywords: Business fluctuations and cycles; Fiscal policy; Productivity
    JEL: D12 D15 E21 E62 J11 J24
    Date: 2023–01
  10. By: Cappellari, Lorenzo (Università Cattolica del Sacro Cuore); Checchi, Daniele (University of Milan); Ovidi, Marco (Catholic University Milan)
    Abstract: We quantify the causal effect of schooling on cognitive skills across 21 countries and the full distribution of working-age individuals. We exploit exogenous variation in educational attainment induced by a broad set of institutional reforms affecting different cohorts of individuals in different countries. We find a positive effect of an additional year of schooling on internationally-comparable numeracy and literacy scores. We show that the effect is substantially homogeneous by gender and socio-economic background and that it is larger for individuals completing a formal qualification rather than dropping out. Results suggest that early and late school years are the most decisive for cognitive skill development. Exploiting unique survey data on the use of skills, we find suggestive evidence that our result is mediated by access to high-skill jobs.
    Keywords: cognitive skills, educational policies, returns to schooling
    JEL: H52 I21 I28
    Date: 2023–01
  11. By: Marco Bertoni; Giorgio Brunello; Lorenzo Cappellari (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Maria De Paola
    Abstract: We estimate the effect of winning a mayoral election on long-run licit earnings, which plays a key role in the selection of local political leaders. We use Italian administrative social security data from 1995 to 2017 and a sharp regression discontinuity design based on close elections. Over a 15-year horizon, the average present discounted value of winning an election is equal to 35, 000€, or 85 percent of the annual labor and social security earnings for the average candidate in our sample, a modest effect driven by the compensations for political service and concentrated during the first five years after the election. Net of compensations for service, this effect is negative during the first ten years after the election, and almost fades away afterwards. Differences in the political careers of winners and runners-up and a two-term limit rule on mayors’ office contribute to explain our results.
    Keywords: returns to office; political selection; revolving door; rent-seeking; close elections.
    JEL: D72 J44 J45
    Date: 2023–01
  12. By: Giacinta Cestone; Chiara Fumagalli; Francis Kramarz; Giovanni Pica
    Abstract: We explore how business groups use internal labor markets (ILMs) in response to changing economic conditions. We show that following the exit of a large industry competitor, groupaffiliated firms expand and gain market share by increasing their reliance on the ILM to ensure swift hiring, especially of technical managers and skilled blue collar workers. The ability to take advantage of this shock to growth opportunities is greater in firms with closer access to their ffiliates’ human capital, as geographical proximity facilitates employee relocations across units. Overall, our findings point to the ILM as a prominent mechanism making affiliation with a business group valuable at times of change. For the ILM to perform its role in the face of industry shocks, group sectoral diversification must be combined with geographical proximity between affiliates. Keywords: Business Groups, Human Capital, Labor Market Frictions, Internal Labor Markets JEL Classification: G30, L22, J20
    Date: 2023
  13. By: Bassier, Ihsaan
    Abstract: How does collective bargaining affect the broader wage structure? How are such spillovers transmitted? I present a model where firms with wage-setting power that are not covered by collective bargaining agreements, but are close to collective bargaining firms, are incentivized to increase their wages alongside these wage agreements. My model suggests an empirically rich measure of closely connected firms, the flow of workers between them. I test my hypotheses across a decade of wage agreements matched with worker-level data in South Africa. I show that bilateral worker flows reflect a wide range of firm characteristics, capturing firm links which are poorly predicted by industry and location. Observed wages in collective bargaining firms follow sharp increases in prescribed wages, and indeed firms more closely connected by worker flows to covered firms differentially increase wages more. My implied cross-wage elasticity is higher than comparable estimates in the literature because I am able to pin down the labor market segments empirically relevant to wage spillovers. A microdata simulation suggests that spillovers double the intensive and extensive margin effects of collective bargaining agreements on the full wage distribution.
    Keywords: collective bargaining; spillovers; worker flows; monopsony
    JEL: J31 J42 J51 L10
    Date: 2022–12–13
  14. By: Rasmus Wiese; João Tovar Jalles; Jakob de Haan
    Abstract: This paper examines the impact of labour market and product market reforms on income inequality for 25 OECD countries, using the local projections approach and updates of the reform indicators put together by Duval et al. (2018) until 2020. Our results suggest that both types of (endogenized) reforms cause more income inequality. Consistent with this finding is that counter-reforms lead to less income inequality. However, the inequality-raising effects of reforms occur especially in countries that have below median levels of social spending; in countries where social spending is above the sample median, the effect of reform is mostly statistically insignificant.
    Keywords: structural reforms, income distribution, local projections, nonlinearities
    JEL: D31 J21 H30 L43 L51
    Date: 2023
  15. By: Annekatrin Schrenker (DIW Berlin and FU Berlin)
    Abstract: This paper studies if workers infer from correlation about causal effects in the context of the part-time wage penalty. Differences in hourly pay between full-time and part-time workers are strongly driven by worker selection and systematic sorting. Ignoring these selection effects can lead to biased expectations about the consequences of working part-time on wages (`selection neglect bias'). Based on representative survey data from Germany, I document substantial misperceptions of the part-time wage gap. Workers strongly overestimate how much part-time workers in their occupation earn per hour, whereas they are approximately informed of mean full-time wage rates. Consistent with selection neglect, those who perceive large hourly pay differences between full-time and part-time workers also predict large changes in hourly wages when a given worker switches between full-time and part-time employment. Causal analyses using a survey experiment reveal that providing information about the raw part-time pay gap increases expectations about the full-time wage premium by factor 1.7, suggesting that individuals draw causal conclusions from observed correlations. De-biasing respondents by informing them about the influence of worker characteristics on observed pay gaps mitigates selection neglect. Subjective beliefs about the part-time/full-time wage gap are predictive of planned and actual transitions between full-time and part-time employment, necessitating the prevention of causal misperceptions.
    Keywords: part-time pay gap; wage expectations; selection neglect; causal misperceptions;
    JEL: J31 D83 D84
    Date: 2023–01–23
  16. By: Marco Fongoni (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Daniel Schaefer (JKU - Johannes Kepler University Linz [Linz]); Carl Singleton (UOR - University of Reading)
    Abstract: We develop a model of incomplete employment contracts such that employees have some discretion over effort, which depends on their work morale. Nominal wage cuts have a strong negative effect on morale, while employee involvement in workplace decision-making tends to increase morale. We derive predictions on how these two mechanisms affect the decisions of firms to cut nominal wages. Using matched employer-employee and manager survey data from Great Britain, we find support for our model: nominal wage cuts are only half as likely when managers think that employees have some discretion over how they perform their work, but this reduced likelihood recovers partially when employees are involved in the decision-making process at their workplace.
    Keywords: Employer-employee data, Wage rigidity, Reciprocity, Workplace relations
    Date: 2023–01–19
  17. By: Charlotte Bartels (DIW); Felix Kersting (Humboldt University Berlin)
    Abstract: We study the dynamics of capital accumulation, income inequality, capital concentration, and voting up to 1914. Based on new panel data for Prussian regions, we re-evaluate the famous Revisionism Debate between orthodox Marxists and their critics. We show that changes in capital accumulation led to a rise in the capital share and income inequality, as predicted by orthodox Marxists. But against their predictions, this did neither lead to further capital concentration nor to more votes for the socialists. Instead, trade unions and strike activity limited income inequality and fostered political support for socialism, as argued by the Revisionists.
    Keywords: Income Inequality, Concentration, Top Incomes, Capital Share, Capital Accumulation;
    JEL: D31 D63 J31 N30
    Date: 2023–01–24
  18. By: Ali Moghaddasi Kelishomi; Roberto Nisticò
    Abstract: This paper examines how trade sanctions affect the allocation of workers across formal and informal employment. We analyse the case of the unexpected and unprecedented trade sanctions imposed on Iran in 2012. We use a difference-in-differences approach and compare the probability of working in the informal sector before and after 2012 for individuals employed in industries with pre-existing different levels of exposure to international trade.
    Keywords: International trade, Informal work, Labour market, Economic sanctions, Trade
    Date: 2023
  19. By: Erwin Ooghe; Erik Schokkaert; Hannes Serruys
    Abstract: We characterize a measure of social welfare for linear production economies in which individuals differ in productive skills and preferences. The key feature of our measure is that it aggregates fairness gaps, defined as the difference between the money-metric utility that the individual currently obtains and the money-metric utility that the individual should obtain in a fair society. Social welfare depends on two normative parameters: society’s aversion to unfairness and the degree to which society wants to compensate individuals for productivity differences. The latter parameter makes it possible to accommodate a whole range of ethical perspectives, from libertarianism to resource-egalitarianism. As an illustration, we use our social welfare measure to evaluate four hypothetical earnings tax reforms for Belgian singles. The degree of compensation for productivity differences turns out to be the most important normative choice for the overall evaluation, while allowing for involuntary unemployment is the most important empirical choice.
    Keywords: fairness, money-metric utility, excess burden, unfair inequality, earnings tax reforms, involuntary unemployment
    JEL: D30 D60 D70 H20 I30 J20
    Date: 2023
  20. By: Schmid, Günther (WZB - Social Science Research Center Berlin); Bellmann, Lutz (Institute for Employment Research (IAB), Nuremberg); Gazier, Bernard (University of Paris 1 Panthéon-Sorbonne); Leschke, Janine (Copenhagen Business School)
    Abstract: The European Commission declared 2022 the "European Year of Youth." Apart from the obvious aim to enhance its visibility and political legitimacy, the Commission responded to the fact that COVID-19 badly affected especially young people, manifested in the rise of youth unemployment and of youth neither in employment nor in education or training (NEET). The future of young people at all levels of education – especially of the low- skilled and low-educated – is at stake. They must be prepared for the digital revolution accelerated both by the pandemic and the politically enforced transformation of the industrial economy to a sustainable economy that cares both for a healthy ecology as well as for a healthy society. Alongside its 2019-initiative of the "European Green Deal" the Commission established the "Just Transition Fund" aimed at caring for equitable and efficient transitions from fossil to renewable forms of energy, and alongside its 2020-initiative "Next Generation EU" the Commission aims at a "sustainable recovery" from the Corona pandemic to promote the green and digital transition under the condition of "social fairness". Moreover, in 2020, the Commission made the successful transition from school to work a key priority by reinforcing its Youth Guarantee from 2013. Whereas these initiatives are laudable, experiences so far reveal great deficits in implementation. The increasing complexity of how to navigate young people successfully from school to work is not well understood. The theory of Transitional Labour Markets (TLM), we claim, helps not only to get a structured view of this complexity but promises also plausible strategies for just transitions for youth into decent work.
    Keywords: transitional labour markets, labour market policy, youth guarantee, apprenticeships, vocational education and training, just transitions, governing social risks, Europe
    JEL: J21 J38 J4 J48 J68 R28
    Date: 2023–01
  21. By: Davide Dottori (Bank of Italy); Francesca Modena (Bank of Italy); Giulia Martina Tanzi (Bank of Italy)
    Abstract: In this paper we estimate peer effects in parental leaves (PLs), analyzing whether mothers' choices may be influenced by prior decisions made by their female colleagues. We identify peer effects through an exogenous variation in the probability that peers take a PL driven by a reform implemented in Italy in 2015 which extended the time period over which parents can receive a paid PL, providing greater flexibility in its use. We focus on post-reform mothers and exploit the heterogeneity in the share of their peers who, due to their children's age, have been affected by the reform. Our findings show the existence of important peer effects: a 10 percentage point increase in the share of peers that took a PL in response to the reform results in mothers being 2.4 percentage points more likely to take a PL. We also find a positive effect on the amount of PLs taken and a negative effect on the probability of working part-time. As suggested by the heterogeneity analysis, signalling about employers' reaction to the use of PLs might be an important channel through which peer effects unfold.
    Keywords: Peer effects, parental leave, Italy
    JEL: C31 J13 J22 D04 K31
    Date: 2023–02
  22. By: Selcen Çakır (Department of Economics, Boğaziçi University); Konstantinos Matakos (Department of Political Economy, King's College London.); Janne Tukiainen (Department of Economics, University of Turku.)
    Abstract: We construct a dynamic model of two-sided sorting in labor markets with multi-dimensional agent and firm heterogeneity. We apply it to study optimal party structure and the decision of how (de)centralized candidate recruitment should be. Parties are non-unitary actors and compete at the local markets over recruitment of competent candidates and local organizers possess an informational advantage over the distribution of politicians' skill, which is positively related to electoral rent generation. Party leadership has a dual objective: they want simultaneously to maximize a) the organization's rents and b) their retention probability. Thus, when deciding how centralized recruiting should be, leaders face a trade-off: while delegating candidate selection to local party organizations might increase the party's electoral returns, it also limits a leader's ability to stack the organization with loyalists who are more likely to retain her when she faces a (stochastic) leadership challenge. We characterize an equilibrium delegation rule with two key properties: a) some high-skilled politicians may select into lower performing parties due to ideological alignment, and b) more extreme and incompetent leaders delegate less and as a result, survive longer at the helm of a shrinking party. Thus, our findings highlight the slippery slope to authoritarian and persistently "bad" leadership. Our model can be applied to other labor recruitment settings.
    Keywords: delegation, intraparty organization, recruitment, information, elections, heterogeneity, rent-seeking, two-sided matching
    JEL: C73 D72 D73 D83 J40 M51
    Date: 2022–12
  23. By: Sakalauskaite, Ieva (Bank of England); Harris, Qun (Bank of England)
    Abstract: In this paper, we study whether and how some of the remuneration rules introduced after the Global Financial Crisis affected bankers’ compensation using a unique regulatory dataset on remuneration in six major UK banks during 2014–19. We find that for bankers most affected by limits on their bonus to fixed pay ratios (the bonus cap), total pay growth did not decrease, but compensation shifted from bonuses to fixed remuneration. We also find some evidence which could indicate that requiring bankers’ bonuses to be deferred for longer periods was correlated with increases in total compensation and a lower proportion of bonuses being deferred.
    Keywords: Remuneration regulation; bonus cap; deferral; bank regulation
    JEL: G21 G28 G38 J33 L51
    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.