nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2023‒04‒10
thirteen papers chosen by
Joseph Marchand
University of Alberta

  1. The Great Migration and Educational Opportunity By Cavit Baran; Eric Chyn; Bryan A. Stuart
  2. Robots and Workers: Evidence from the Netherlands By Acemoglu, Daron; Koster, Hans R.A.; Ozgen, Ceren
  3. Changing Tracks: Human Capital Investment after Loss of Ability By Humlum, Anders; Munch, Jakob R.; Plato, Pernille
  4. The Race Between Education, Technology, and the Minimum Wage By Jonathan Vogel
  5. The Health-Consumption Effects of Increasing Retirement Age Late in the Game By Caroli, Eve; Pollak, Catherine; Roger, Muriel
  6. Labour market tightness and matching efficiency in different labour market segments – do differences in education and occupation matter? By Alka Obadić; Mislav Viktor Viljevac
  7. Public-Sector Employment, Wages and Education Decisions By Chassamboulli, Andri; Gomes, Pedro Maia
  8. Globalization, Productivity Growth, and Labor Compensation By Dreger, Christian; Fourné, Marius; Holtemöller, Oliver
  9. Not lost in translation: The implications of machine translation technologies for language professionals and for broader society By Francesca Borgonovi; Justine Hervé; Helke Seitz
  10. Climate change and labour-saving technologies: the twin transition via patent texts By Tommaso Rughi; Jacopo Staccioli; Maria Enrica Virgillito
  11. Monitoring Harassment in Organizations By Laura E. Boudreau; Sylvain Chassang; Ada Gonzalez-Torres; Rachel M. Heath
  12. The Impact of Minimum Wages on Income Inequality in the EU By Stefano Filauro; Klaus Grünberger; Edlira Narazani
  13. Subjective Earnings Risk By Andrew Caplin; Victoria Gregory; Eungik Lee; Søren Leth-Petersen; Johan Sæverud

  1. By: Cavit Baran; Eric Chyn; Bryan A. Stuart
    Abstract: This paper studies the impact of the First Great Migration on children. We use the complete count 1940 Census to estimate selection-corrected place effects on education for children of Black migrants. On average, Black children gained 0.8 years of schooling (12 percent) by moving from the South to North. Many counties that had the strongest positive impacts on children during the 1940s offer relatively poor opportunities for Black youth today. Opportunities for Black children were greater in places with more schooling investment, stronger labor market opportunities for Black adults, more social capital, and less crime.
    JEL: H75 J15 J24 N32
    Date: 2023–03
  2. By: Acemoglu, Daron (MIT); Koster, Hans R.A. (Vrije Universiteit Amsterdam); Ozgen, Ceren (University of Birmingham)
    Abstract: We estimate the effects of robot adoption on firm-level and worker-level outcomes in the Netherlands using a large employer-employee panel dataset spanning 2009-2020. Our firm-level results confirm previous findings, with positive effects on value added and hours worked for robot-adopting firms and negative outcomes on competitors in the same industry. Our worker-level results show that directly-affected workers (e.g., bluecollar workers performing routine or replaceable tasks) face lower earnings and employment rates, while other workers indirectly gain from robot adoption. We also find that the negative effects from competitors' robot adoption load on directly-affected workers, while other workers benefit from this industry-level robot adoption. Overall, our results highlight the uneven effects of automation on the workforce.
    Keywords: robots, workers, technology, productivity, the Netherlands
    JEL: D63 E22 E23 E24 J24 O33
    Date: 2023–03
  3. By: Humlum, Anders (University of Chicago Booth School of Business); Munch, Jakob R. (University of Copenhagen); Plato, Pernille (University of Copenhagen)
    Abstract: We provide the first evidence on how workers invest in human capital after losing ability. Using quasi-random work accidents in Danish administrative data, we find that workers enroll in bachelor's programs after physical injuries, pursuing degrees that build on their work experiences and provide pathways to cognitive occupations. Exploiting differences in eligibility driven by prior vocational training, we find that higher education moves injured workers from disability benefits to full-time employment. Reskilled workers earn 25% more than before their injuries and do not end up on antidepressants. Without higher education, by contrast, these workers end up entirely on disability benefits and often resort to taking antidepressants. Reskilling subsidies for injured workers pay for themselves four times over, and current rates of reskilling are substantially below the social optimum, especially for middle-aged workers.
    Keywords: workplace injury, human capital investment, employment, disability insurance
    JEL: I26 J24 J62
    Date: 2023–03
  4. By: Jonathan Vogel
    Abstract: What is the impact of the minimum wage on the college wage premium? I show that job-ladder models imply that the effect should be small on impact---raising only the wages of workers bound by the minimum wage---and grow over time as workers slowly move up the job ladder. Guided by my theory, I present evidence that these dynamic effects are present and powerful. Estimated at the national level, I show that minimum wages---together with supply and demand---play a central role in shaping the evolution of the U.S. college premium. Estimated at the state level, I show that the elasticity of the college premium to the minimum wage is small on impact and grows dramatically over time. To verify my theory's mechanisms, I additionally document the dynamic impact of the minimum wage over the full wage distribution: on impact, wages rise only for the lowest percentiles (consistent with the literature) but over time this effect spills over up the wage distribution (consistent with my theory and my empirical results on the skill premium). On the basis of these theoretical and empirical results, I conclude that the minimum wage plays a central role in shaping the U.S. college premium and its variation across states.
    JEL: E24 J0 J2 J3 J42
    Date: 2023–03
  5. By: Caroli, Eve (Université Paris-Dauphine); Pollak, Catherine (New York University); Roger, Muriel (INRA-CORELA)
    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 overall number of sick days remains unchanged, conditional on having a sick leave. 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: 2023–03
  6. By: Alka Obadić (Faculty of Economics and Business, University of Zagreb); Mislav Viktor Viljevac (Faculty of Economics and Business, University of Zagreb)
    Abstract: This paper analyses the existing educational and occupational structures of several EU member countries and their alignment with the needs of the labour market. Such a situation may indicate a structural mismatch in labour market in which the mismatch between the skills taught in schools and universities and the skills needed in the workplace appears. To evaluate this mismatch, the paper investigates the matching needs of employers and unemployed job seekers by disaggregating the registered employment office data by education and occupation groups in selected EU countries separately. More educated workers, as well as workers in more complex and better-paid occupations, might fare better when it comes to the aggregate labour market trends. For example, economic downturns and increases in unemployment might be felt more heavily by workers with lower education and those who work in professions requiring fewer skills. In this paper, we analyse the data for a selected group of countries (Austria, Croatia, Estonia, Slovenia, and Spain) from 2010 till 2022, using the Beveridge curves and estimate the labour market tightness and matching efficiency for different education and occupation groups. Our results show that differences in education levels and occupation result in relatively small deviations from aggregate trends in the labour market. Aggregate labour market trends therefore strongly impact all groups in the labour market, whether the market is segmented by education levels or by occupation. In other words, both the improvements in the labour market conditions and the worsening of labour market conditions have similar effects across different labour market segments.
    Keywords: educational structure, structural unemployment, Beveridge curve, matching efficiency, labour market tightness, EU
    JEL: J21 J22 J23 J63
    Date: 2023–03–27
  7. By: Chassamboulli, Andri (University of Cyprus); Gomes, Pedro Maia (Birkbeck, University of London)
    Abstract: We set up a search and matching model with a private and a public sector to understand the effects of employment and wage policies in the public sector on unemployment and education decisions. The effects on the educational composition of the labor force depend crucially on the structure of the labor market. An increase of skilled public-sector wages has a small positive impact on educational composition and larger negative impact on the private employment of skilled workers, if the two sectors are segmented. If there are movements across the two sectors, it has large positive impacts on education and on skilled private employment. We highlight the usefulness of the model for policymakers by calculating the value of public-sector job security for skilled and unskilled workers.
    Keywords: public-sector employment, public-sector wages, unemployment, skilled workers, education decision, public-sector job security premium
    JEL: E24 J31 J45 J64
    Date: 2023–03
  8. By: Dreger, Christian (DIW Berlin); Fourné, Marius (IWH Halle); Holtemöller, Oliver (IWH Halle)
    Abstract: We analyse how changes in international trade integration affect productivity and the functional income distribution. To account for endogeneity, we construct a leave-out measure for international trade integration for country-industry pairs using international input-output tables. First, we corroborate on the country-industry level that international trade integration increases productivity. Second, we show that international trade integration is associated with higher labour shares in advanced countries but with lower labour shares in manufacturing industries in emerging markets. Finally, we briefly discuss the implications of our results for a possible throwback in international trade integration due to experiences from recent crises.
    Keywords: global value chains, income distribution, globalization, labor share, productivity
    JEL: F4 F6 J3
    Date: 2023–03
  9. By: Francesca Borgonovi; Justine Hervé; Helke Seitz
    Abstract: The paper discusses the implications of recent advances in artificial intelligence for knowledge workers, focusing on possible complementarities and substitution between machine translation tools and language professionals. The emergence of machine translation tools could enhance social welfare through enhanced opportunities for inter-language communication but also create new threats because of persisting low levels of accuracy and quality in the translation output. The paper uses data on online job vacancies to map the evolution of the demand for language professionals between 2015 and 2019 in 10 countries and illustrates the set of skills that are considered important by employers seeking to hire language professionals through job vacancies posted on line.
    JEL: J21 J23 J28 Z13
    Date: 2023–03–30
  10. By: Tommaso Rughi; Jacopo Staccioli; Maria Enrica Virgillito
    Abstract: This paper provides a direct understanding of the twin transition from the innovative activity domain. It starts with a technological mapping of the technological innovations characterised by both climate change mitigation/adaptation (green) and labour-saving attributes. To accomplish the task, we draw on the universe of patent grants in the USPTO since 1976 to 2021 reporting the Y02-Y04S tagging scheme and we identify those patents embedding an explicit labour-saving heuristic via a dependency parsing algorithm. We characterise their technological, sectoral and time evolution. Finally, after constructing an index of sectoral penetration of LS and non-LS green patents, we explore its impact on employment share growth at state level in the US. Our evidence shows that employment shares in sectors characterised by a higher exposure to LS (non-LS) technologies present an overall negative (positive) growth dynamics.
    Keywords: Climate change mitigation technologies; Labour-saving technologies; Search heuristics; Natural Language Processing; Labour markets.
    Date: 2023–03–15
  11. By: Laura E. Boudreau; Sylvain Chassang; Ada Gonzalez-Torres; Rachel M. Heath
    Abstract: We evaluate secure survey methods designed for the ongoing monitoring of harassment in organizations. We use the resulting data to answer policy relevant questions about the nature of harassment: How prevalent is it? What share of managers is responsible for the misbehavior? How isolated are its victims? To do so, we partner with a large Bangladeshi garment manufacturer to experiment with different designs of phone-based worker surveys. Garbling responses to sensitive questions by automatically recording a random subset as complaints increases reporting of physical harassment by 288%, sexual harassment by 269%, and threatening behavior by 46%. A rapport-building treatment has an insignificant aggregate effect, but may affect men and women differently. Removing team identifiers from survey responses does not significantly increase reporting and prevents the computation of policy-relevant team-level statistics. The resulting data shows that harassment is widespread, that the problem is not restricted to a minority of managers, and that victims are often isolated in teams.
    JEL: C42 D82 J70 J71 J81 J83 M54
    Date: 2023–03
  12. By: Stefano Filauro (European Commission – DG ECFIN); Klaus Grünberger (European Commission - JRC); Edlira Narazani (European Commission - JRC)
    Abstract: A number of studies documents that minimum wage policies have the potential to reduce income inequality. The recently adopted EU Commission’s proposal for a Directive on adequate minimum wages was supported by a detailed analysis of the social impacts of hypothetical minimum wage levels in countries with a statutory minimum wage. This paper extends these country-level analyses by exploring the impact of minimum wage policies on EU-level income inequality. To our knowledge, this is the first study that uses a microsimulation model such as EUROMOD to assess the impact of EU-promoted policies on the distribution of income in the EU, beyond their national effects. Assuming no employment effects, static simulation results show that a hypothetical minimum wage corresponding to 60% of the national median wage would bring about a small but significant reduction in EU-level disposable income inequality (by 0.75% in 2019 as measured through the Gini index). This result stems primarily from a reduction in the within-country component of income inequality as the effect on inequality between countries is rather muted. The reduction in EU-level income inequality is the highest in disposable incomes, but some reduction is detectable also in market incomes. In turn, the withdrawal of social benefits because of higher minimum wages seems to neutralise part of this inequality reduction.
    Keywords: Minimum wage, Microsimulation, European Union, Income inequality, EUROMOD
    JEL: H31 I32 J31
    Date: 2023–02
  13. By: Andrew Caplin; Victoria Gregory; Eungik Lee; Søren Leth-Petersen; Johan Sæverud
    Abstract: Earnings risk is central to economic analysis. While this risk is essentially subjective, it is typically inferred from administrative data. Following the lead of Dominitz and Manski, 1997, we introduce a survey instrument to measure subjective earnings risk. We pay particular attention to the expected impact of job transitions on earnings. A link with administrative data provides multiple credibility checks. It also shows subjective earnings risk to be far lower than its administratively-estimated counterpart. This divergence arises because expected earnings growth is heterogeneous, even within narrow demographic and earnings cells. We calibrate a life-cycle model of search and matching to administrative data and compare the model-implied expectations with our survey instrument. This calibration produces far higher estimates of individual earnings risk than do our subjective expectations, regardless of age, earnings, and whether or not workers switch jobs. This divergence highlights the need for survey-based measures of subjective earnings risk.
    JEL: J30
    Date: 2023–03

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