nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2023‒08‒21
34 papers chosen by
Joseph Marchand
University of Alberta

  1. Who Values Human Capitalists' Human Capital? The Earnings and Labor Supply of U.S. Physicians By Joshua D. Gottlieb; Maria Polyakova; Kevin Rinz; Hugh Shiplett; Victoria Udalova
  2. Mismatch in preferences for working from home: Evidence from discrete choice experiments with workers and employers By Lewandowski, Piotr; Lipowska, Katarzyna; Smoter, Mateusz
  3. Accident-Induced Absence from Work and Wage Ladders By Biro, Aniko; Bisztray, Márta; da Fonseca, João G.; Molnár, Tímea Laura
  4. Uncovering the Roots of Obesity- Based Wage Discrimination: The Role of Job Characteristics By Juan Dolado; Luigi Minale; Airam Guerra
  5. Short-Term Labor Supply Response to the Timing of Transfer Payments: Evidence from the SNAP Program By Marks, Mindy; Prina, Silvia; Tahaj, Redina
  6. Firms with Benefits? Nonwage Compensation and Implications for Firms and Labor Markets By Paige Ouimet; Geoffrey Tate
  7. Biased Wage Expectations and Female Labor Supply By Maximilian Blesch; Philipp Eisenhauer; Peter Haan; Boryana Ilieva; Annekatrin Schrenker; Georg Weizsäcker
  8. External pay transparency and the gender wage gap By Frimmel, Wolfgang; Schmidpeter, Bernhard; Wiesinger, Rene; Winter-Ebmer, Rudolf
  9. Incentive Complexity, Bounded Rationality and Effort Provision By Johannes Abeler; David Huffman; Collin Raymond; David B. Huffman
  10. Air Pollution and Entrepreneurship By Guo, Liwen; Cheng, Zhiming; Tani, Massimiliano; Cook, Sarah; Zhao, Jiaqi; Chen, Xi
  11. Trade, Income and Heterogeneous Labor Supply By Nicolás Depetris-Chauvin; Agustin Velasquez
  12. Does Performance Pay Increase the Risk of Marital Instability? By Baktash, Mehrzad B.; Heywood, John S.; Jirjahn, Uwe
  13. Unionization, Employer Opposition, and Establishment Closure By Sean Wang; Samuel Young
  14. The Economic Effects of COVID-19 in Sweden: A Report on Income, Taxes, Distribution, and Government Support Policies By Angelov, Nikolay; Waldenström, Daniel
  15. Is there a trade-off between productivity and employment?: A cross-country micro-to-macro study By Sara Calligaris; Flavio Calvino; Rudy Verlhac; Martin Reinhard
  16. Access to Financing and Racial Pay Gap Inside Firms By Janet Gao; Wenting Ma; Qiping Xu
  17. Natural Resources, Demand for Skills, and Schooling Choices By Aline Bütikofer; Antonio Dalla-Zuanna; Kjell G. Salvanes
  18. Modern Manufacturing Capital, Labor Demand and Product Market Dynamics: Evidence from France By P. AGHION; C. ANTONIN; S. BUNEL; X. JARAVEL
  19. Are Managers More Machiavellian Than Other Employees? By Mehrzad B. Baktash; Uwe Jirjahn
  20. Risk and Heterogeneity in Benefits from Vocational versus General Secondary Education: Estimates for Early and Mature Career Stages in Portugal By Joop Hartog; Pedro Raposo; Hugo Reis
  21. Skill mismatch and learning-by-doing: Theory and evidence from time allocation on tasks By Storm, Eduard
  22. The making of ethnic segregation in the labor market -Evidence from a field experiment. By Bursell, Moa; Bygren, Magnus
  23. Unleashing strong, digital and green growth in Viet Nam By Patrick Lenain; Ben Westmore; Quoc Huy Vu; Minh Cuong Nguyen
  24. The effects of the EU Fit for 55 package on labour markets and the demand for skills By Francesca Borgonovi; Elisa Lanzi; Helke Seitz; Ruben Bibas; Jean Fouré; Hubert Plisiecki; Laura Atarody
  25. Purposes and Uses of Special and Incentive Pay for Military Personnel By Congressional Budget Office
  26. Remote Work and City Structure By Ferdinando Monte; Charly Porcher; Esteban Rossi-Hansberg
  27. Estimating Recruitment Elasticity in the Multi-stage and Bilateral Job Matching Process By KAMBAYASHI, Ryo; KAWAGUCHI, Kohei; OTANI, Suguru
  28. Relationship between Social Security Programs and Elderly Employment in Japan By Takashi Oshio; Satoshi Shimizutani; Akiko S. Oishi
  29. Does Incentive Pay Substitute for Monitoring? The Role of Managerial Skills and Span of Control By Filippo Belloc; Stefano Dughera; Fabio landini
  30. Taxation and labour supply decisions: an evaluation of the earned income tax credit in Italy By Luca Villamaina; Paolo Acciari
  31. Welfare reform: Employment, mental health and intrahousehold insurance By Mike Brewer; Thang Dang; Emma Tominey
  32. Commuting in dual-earner households: International Gender Differences with Time Use Surveys By Echeverría, Lucía; Gimenez-Nadal, J. Ignacio; Molina, José Alberto
  33. The Impact of the Transition and EU Membership on the Returns to Schooling in Europe By Patrinos, Harry Anthony; Rivera-Olvera, Angelica
  34. Teachers' desired mobility to disadvantaged schools: Do financial incentives matter? By J. SILHOL; L. WILNER

  1. By: Joshua D. Gottlieb; Maria Polyakova; Kevin Rinz; Hugh Shiplett; Victoria Udalova
    Abstract: Is government guiding the invisible hand at the top of the labor market? We use new administrative data to measure physicians' earnings and estimate the influence of healthcare policies on these earnings, physicians' labor supply, and allocation of talent. Combining the administrative registry of U.S.~physicians with tax data, Medicare billing records, and survey responses, we find that physicians' annual earnings average $350, 000 and comprise 8.6% of national healthcare spending. The age-earnings profile is steep; business income comprises one-quarter of earnings and is systematically underreported in survey data. There are major differences in earnings across specialties, regions, and firm sizes, with an unusual geographic pattern compared with other workers. We show that health policy has a major impact on the margin: 25% of physician fee revenue driven by Medicare reimbursements accrues to physicians personally. Physicians earn 6% of public money spent on insurance expansions. We find that these policies in turn affect the type and quantity of medical care physicians supply in the short run; retirement timing in the medium run; and earnings affect specialty choice in the long run.
    JEL: I13 I18 J24 J31
    Date: 2023–07
  2. By: Lewandowski, Piotr; Lipowska, Katarzyna; Smoter, Mateusz
    Abstract: We study preferences for remote work using a large-scale discrete choice study with 10, 000 workers and 1, 500 employers in Poland. Workers value remote work more than employers. On average, workers are willing to sacrifice 2.9% of earnings for remote work, with hybrid work from home (WFH) for 2-3 days (5.1%) preferred over 5 days (0.6%). Employers expect a 21.0% wage cut from remote workers. This 18 pp gap between employers' and workers' valuations reflects employers' concerns over productivity loss (14 pp) and effort to manage remote workers (4 pp). Only 25-36% of employers with positive perceptions of remote work productivity show valuations of remote work that align with workers' willingness to pay for it.
    Keywords: Working from home, remote work, discrete choice experiment, willingness to pay
    JEL: J21 J31 J81
    Date: 2023
  3. By: Biro, Aniko (Centre for Economic and Regional Studies); Bisztray, Márta (KRTK KTI; Centre for Economic and Regional Studies, Institute of Economics); da Fonseca, João G. (University of Montreal); Molnár, Tímea Laura (Central European University)
    Abstract: How do temporary spells of absence from work affect individuals' labor trajectory? To answer this question, we augment a 'wage ladder' model, in which individuals receive alternative take-it-or-leave-it wage offers from firms and potentially suffer accidents which may push them into temporary absence from work. In such an environment, during absence, individuals do not have the opportunity to receive alternative wage offers that they would have received had they remained present. To test our model's predictions and to quantify the importance of foregone opportunities to climb the wage ladder, we use linked employer-employee administrative data from Hungary, that is linked to rich individual-level administrative health records. We use unexpected and mild accidents with arguably no permanent labor productivity losses, as exogenous drivers of short periods of absence. Difference-in-Differences results show that, relative to counterfactual outcomes in the case no accidents, (i) even short (3-12-months long) periods of absence due to accidents decrease individuals' wages for up to two years, by around 2.5 percent; and that (ii) individuals reallocate to lower-paying employers. The share of wage loss due to missed opportunities to switch employers is between 7-20 percent over a two-year period after returning to work, whereas at most 2 percent is due to occupation switches. Our results are robust to (a) instrumenting absence with having suffered an accident, (b) exploiting the random nature of the time of the accident, and (c) within-firm matching of individuals with and without an accident and subsequent absence spell.
    Keywords: wage ladder, accidents, health shocks, temporary absence from work
    JEL: J22 J23 I10
    Date: 2023–07
  4. By: Juan Dolado (Dept. of Economics, UC3M); Luigi Minale (Dept. of Economics, UC3M); Airam Guerra (Dept. of Economics, UC3M)
    Abstract: This paper investigates the roots of potential labour-market discrimination underlying the negative correlation between obesity and hourly wages. Using a panel dataset of white individuals drawn from the U.S. 1997 National Longitudinal Survey of Youth (NLSY97), we test whether residual wage gaps could be attributed to prejudice (taste-based discrimination) and/or statistical discrimination. To this end, we examine how these two types of discrimination hinge on a wide range of obese individuals’ specific job and occupational characteristics (drawn from the O*Net Online database). In particular, our analysis sheds light on whether discrimination originates from clients’ attitudes, fellow workers or employers. Our findings are consistent with taste-based discrimination against obese females, especially as they become older, in jobs requiring frequent communication with either clients or employers. However, the evidence on this issue is weaker for males. We conjecture that these differences may originate from both an over-representation of males among employers and different image concerns against people of the same gender.
    Keywords: Obesity; Wages; Discrimination; Job Characteristics; NLSY97; O*Net Online
    JEL: J71 J15 J31 J24 I10
    Date: 2023–07–25
  5. By: Marks, Mindy (Northeastern University); Prina, Silvia (Northeastern University); Tahaj, Redina (Northeastern University)
    Abstract: We study the effect of the timing of SNAP payments on weekly labor supply using data from the CPS. We rely on exogenous variation in the fielding of CPS interviews relative to benefit receipt to estimate labor supply of SNAP eligible individuals at the end of their SNAP benefit cycle (i.e. about to receive benefits) compared to individuals at the start of their cycle (i.e. just received benefits). We find that the timing of SNAP benefits impacts labor supply at the intensive margin, while the extensive margin is unaffected. Conditional on being employed, eligible individuals at the end of their SNAP cycle are more likely to be absent from work compared to individuals at the start of their SNAP cycle. They are also less likely to temporarily shift to full time work. Results are more pronounced for individuals with higher predicted benefit amounts. Our findings suggest that a worsening of individuals' status (e.g. health problems, child care issues) at the end of their SNAP cycle adversely impacts short-term work presence.
    Keywords: consumption cycles, SNAP benefits, labor supply
    JEL: J22 I38
    Date: 2023–07
  6. By: Paige Ouimet; Geoffrey Tate
    Abstract: Using administrative data on health insurance, retirement, and leave benefits, we find within-firm variation accounts for a dramatically lower percentage of total variation in benefits than in wages. We also document sharply higher between-firm variation in nonwage benefits than in wages. We argue that this pattern can be a consequence of nondiscrimination regulations, fairness concerns, and the high administrative burden of managing too many or complex plans. Consistent with this mechanism, we show that the presence of high-wage workers in unrelated divisions of a firm as well as workers hired in high-benefit local labor markets positively predicts their colleagues’ benefits, controlling for occupation, wages, state, and industry. We find that the resulting high benefits reduce turnover, particularly among low-wage workers, for whom the benefits comprise a larger percentage of total compensation. Moreover, firms with more generous benefits attract and retain more high-wage workers, but also reduce their reliance on low-wage workers more than low-benefit peers. Our results suggest that benefits disproportionately matter for worker-firm matching and, hence, compensation inequality.
    JEL: G32 J01 J23 J32 J63
    Date: 2023–07
  7. By: Maximilian Blesch (HU Berlin and DIW Berlin); Philipp Eisenhauer (Amazon); Peter Haan (FU Berlin and DIW Berlin); Boryana Ilieva (HU Berlin and DIW Berlin); Annekatrin Schrenker (FU Berlin and DIW Berlin); Georg Weizsäcker (HU Berlin)
    Abstract: Wage growth occurs almost exclusively in full-time work, whereas it is close to zero in part-time work. German women, when asked to predict their own potential wage outcomes, show severely biased expectations with strong over-optimism about the returns to part-time experience. We estimate a structural life-cycle model to quantify how beliefs influence labor supply, earnings and welfare over the life cycle. The bias increases part-time employment strongly, induces flatter long-run wage profiles, and substantially influences the employment effects of a widely discussed policy reform, the introduction of joint taxation. The most significant impact of the bias appears for college-educated women.
    Keywords: returns to experience; biased beliefs; part-time work; dynamic life-cycle models; ;
    JEL: D63 H23 I24 I38 J22 J31
    Date: 2023–07–27
  8. By: Frimmel, Wolfgang; Schmidpeter, Bernhard; Wiesinger, Rene; Winter-Ebmer, Rudolf
    Abstract: We show that providing publicly available wage information in vacancies, so-called external pay transparency, can reduce the gender wage gap. There is an increasing interest in pay transparency policies as a tool to combat unequal pay. We exploit a reform of Austria's Equal Treatment Law to evaluate how providing wage information in vacancies affects the gender wage gap. To take into account that the value of providing such external pay information is likely to be heterogeneous along the wage distribution, we implement a Quantile Difference-in-Difference model. The reform led to a small overall reduction of the gender wage gap. Our main results highlight that reductions in the wage gap are larger in circumstances where women are likely to hold misspecied beliefs about their labor market options and when needing to make job acceptance decisions under pressure. The reduction in the gender wage gap was caused by an increase in women's earnings, particularly at the lower part of the distribution. Earnings of men, on the other side, remained largely constant. Our results lend support to policy proposals aimed at increasing external pay transparency.
    Keywords: Mandatory wage posting, pay transparency law, gender wage gap, job postings, quantile DiD
    JEL: J31 J23 J63
    Date: 2023
  9. By: Johannes Abeler; David Huffman; Collin Raymond; David B. Huffman
    Abstract: Using field and laboratory experiments, we demonstrate that the complexity of incentive schemes and worker bounded rationality can affect effort provision, by shrouding attributes of the incentives. In our setting, complexity leads workers to over-provide effort relative to a fully rational benchmark, and improves efficiency. We identify contract features, and facets of worker cognitive ability, that matter for shrouding. We find that even relatively small degrees of shrouding can cause large shifts in behavior. Our results illustrate important implications of complexity for designing and regulating workplace incentive contracts.
    Keywords: complexity, bounded rationality, shrouded attribute, Ratchet effect, dynamic incentives, field experiments
    JEL: D80 D90 J20 J30
    Date: 2023
  10. By: Guo, Liwen (University of New South Wales); Cheng, Zhiming (University of New South Wales); Tani, Massimiliano (University of New South Wales); Cook, Sarah (University of Nottingham); Zhao, Jiaqi (Peking University); Chen, Xi (Yale University)
    Abstract: We investigate the effect of exposure to air pollution on an individual's likelihood towards entrepreneurship using panel data in China. To address omitted variable bias and endogeneity arising from self-selection into entrepreneurship and location choice, we employ an individual fixed effects model with an instrumental variable approach. Our findings show that individuals exposed to higher levels of air pollution are less likely to become entrepreneurs or diversify their entrepreneurial activities. Specifically, a one standard deviation increase in air pollution leads to a 21 percentage points decrease in the propensity for entrepreneurship and a 34 percentage points decrease in the likelihood of entrepreneurial diversification. Our study identifies potential channels through which air pollution impacts entrepreneurship. In addition, our findings reveal that air pollution has a more significant negative impact for older individuals, people residing in less populated areas, and those with lower education levels compared to their counterparts.
    Keywords: air pollution, entrepreneurship, China
    JEL: J24 L26 Q53
    Date: 2023–07
  11. By: Nicolás Depetris-Chauvin (HES-SO); Agustin Velasquez (IMF)
    Abstract: Workers in developing countries tend to spend more time at work than those in developed countries. This can be explained by preferences with prevalent income effects: as income rises, workers reduce their supply of labor hours to consume more leisure. However, not all workers benefit alike. In this study, we estimate the heterogeneous effects of trade, as a shifter of aggregate income, on workers’ labor supply by age, education, and gender. We find that all workers benefit from more leisure caused by the income boost triggered by trade. However, young and elder workers benefit significantly more than prime-age workers. In addition, following increased trade openness women and less educated workers tend to reduce their labor supply relatively more
    Keywords: Hours worked, leisure, labor supply, international trade
    JEL: F16 J22
    Date: 2023–08
  12. By: Baktash, Mehrzad B.; Heywood, John S.; Jirjahn, Uwe
    Abstract: This paper uses German survey data on married couples to examine the association of performance pay at work and subsequent separation or divorce. Despite extensive controls, performance pay remains associated with an increased probability of separation or divorce. Yet, the results are entirely gender specific. When husbands earn performance pay, no association with marital instability is found. When wives earn performance pay, the association is large and robust. This pattern persists across a variety of modeling choices and attempts to account for endogeneity. We argue that the pattern fits theoretical expectations and discuss the implications.
    Keywords: Performance Pay, Separation, Divorce, Gender
    JEL: J33 I31 J32
    Date: 2023
  13. By: Sean Wang; Samuel Young
    Abstract: We study the effect of private-sector unionization on establishment employment and survival. Specifically, we analyze National Labor Relations Board union elections from 1981–2005 using administrative Census data. Our empirical strategy extends standard difference-in-differences techniques with regression discontinuity extrapolation methods. This allows us to avoid biases from only comparing close elections and to estimate treatment effects that include larger marginof- victory elections. Using this strategy, we show that unionization decreases an establishment’s employment and likelihood of survival, particularly in manufacturing and other blue-collar and industrial sectors. We hypothesize that two reasons for these effects are firms’ ability to avoid working with new unions and employers’ opposition to unions. We find that the negative effects are significantly larger for elections at multi-establishment firms. Additionally, after a successful union election at one establishment, employment increases at the firms’ other establishments. Both pieces of evidence are consistent with firms avoiding new unions by shifting production from unionized establishments to other establishments. Finally, we find larger declines in employment and survival following elections where managers or owners were likely more opposed to the union. This evidence supports new reasons for the negative effects of unionization we document.
    JEL: J23 J31 J38 J50 J53 J58 J83
    Date: 2023–07
  14. By: Angelov, Nikolay (Uppsala Center for Fiscal Studies); Waldenström, Daniel (Research Institute of Industrial Economics, Stockholm)
    Abstract: This report analyses the economic consequences of the coronavirus pandemic and support policies using underutilized data sources from the Swedish Tax Agency's tax register, which provides real-time information on firm sales and employees' wage income. Firms' sales, particularly in areas heavily impacted by COVID-19, declined by 6.1% on average, inducing a drastic economic recession. Excise tax revenue analysis reveals a decline in industrial electricity and air travel tax revenues, but a rise in alcohol tax revenue. The hospitality industry experienced significant negative effects, with drops in sales, employment, and wage income. Payroll tax revenues decreased due to government intervention, whereas sick pay drastically increased. Average pre-tax labor income decreased by 5%, largely due to increased unemployment among part-time workers, escalating income inequality. Policy simulations indicate government support measures mitigated wage income reduction and unemployment rise, yet they contributed to income inequality under certain conditions. These results provide insight into the diverse, yet significant, economic impacts of the pandemic. A number of policy recommendations are presented based on the empirical findings.
    Keywords: COVID-19, taxes, inequality, policy effects
    JEL: D31 H12 H24 J22 J24
    Date: 2023–07
  15. By: Sara Calligaris; Flavio Calvino; Rudy Verlhac; Martin Reinhard
    Abstract: The impact of productivity on employment remains uncertain, particularly in light of growing concerns regarding potential negative effects of technological progress on labour demand. This report uses harmonised and comparable data from 13 countries spanning the last two decades to comprehensively analyse how productivity growth affects employment dynamics at various levels of aggregation. The study's findings highlight a positive correlation between productivity growth and employment as well as wage growth, both at the firm level and on a broader scale. This outcome arises from counteracting mechanisms and heterogeneous dynamics across different groups of firms. The findings have relevant policy implications: productivity is not just an isolated key economic objective, but well-designed and complementary policies can also help convert technological and organisational change into higher employment and wage growth.
    JEL: J23 O30 O33
    Date: 2023–08–09
  16. By: Janet Gao; Wenting Ma; Qiping Xu
    Abstract: How does access to financing influence racial pay inequality inside firms? We answer this question using the employer-employee matched data administered by the U.S. Census Bureau and detailed resume data recording workers’ career trajectories. Exploiting exogenous shocks to firms’ debt capacity, we find that better access to debt financing significantly narrows the earnings gap between minority and white workers. Minority workers experience a persistent increase in earnings and also a rise in the pay rank relative to white workers in the same firm. The effect is more pronounced among mid- and high-skill minority workers, in areas where white workers are in shorter supply, and for firms with ex-ante less diverse boards and greater pre-existing racial inequality. With better access to financing, minority workers are also more likely to be promoted or be reassigned to technology-oriented occupations compared to white workers. Our evidence is consistent with access to financing making firms better utilize minority workers’ human capital.
    Keywords: Racial Inequality, Diversity, Financing Friction, Access to Debt.
    JEL: J31 J71 G3
    Date: 2023–07
  17. By: Aline Bütikofer; Antonio Dalla-Zuanna; Kjell G. Salvanes
    Abstract: This paper studies the consequences of the buildup of a new economic sector—the Norwegian petroleum industry—on investment in human capital. We assess both short-term and long-term effects for a broad set of educational margins, by comparing individuals in regions exposed to the new sector with individuals in unexposed regions. Importantly, we analyze how the effects and the mechanisms change as the sector develops. Our results indicate that an initial increase in the high school dropout rate is short-lived both because dropouts get their degrees later as adults, and because later-born cohorts adapt to the new needs of the industry by enrolling more in vocational secondary education. We also observe a decrease in academic high school and college enrollment except for engineering degrees. Financial incentives to both completing high school and field of study, are the most likely channels driving these effects.
    Keywords: school choice, demand for skills, natural resource sector
    JEL: J24 J23 I26 I23
    Date: 2023
  18. By: P. AGHION (Insead, Collège de France et London School of Economics); C. ANTONIN (OFCE - Sciences Po); S. BUNEL (Banque de France et Paris School of Economics); X. JARAVEL (London School of Economics)
    Abstract: We use comprehensive micro data in the French manufacturing sector between 1995 and 2017 to document the effects of a fall in the cost of investments in modern manufacturing capital, including modern automation technologies, on employment, wages, sales, prices, and business stealing. Causal effects are estimated with event studies and a shift-share IV design leveraging pre-determined supply linkages and productivity shocks across foreign suppliers of manufacturing capital. At all levels of analysis — plant, firm, and industry — the estimated impact of capital investments on employment is positive, even for unskilled industrial workers. Furthermore, we find that capital investments lead to higher sales and exports, higher profits, and lower consumer prices, while wages and wage inequality remain unchanged. We estimate a positive industry-level employment response to manufacturing capital investments only in industries that are exposed to import competition, due to business-stealing across countries. Thus, typical investments in modern manufacturing capital lead to an increase in domestic labor demand and promote competitiveness in international markets.
    Keywords: Production, Automation, Machines, Labor
    JEL: D24 J23 J24 O32
    Date: 2023
  19. By: Mehrzad B. Baktash; Uwe Jirjahn
    Abstract: Concerns about corporate scandals and abusive leadership suggest that individuals with an opportunistic and manipulative personality take advantage of incomplete incentive and control systems to get their way into managerial positions. Against this background, we examine whether there is an association between Machiavellianism and occupying a managerial position. We suggest how to incorporate the psychological concept of Machiavellianism into agency theory and hypothesize that individuals scoring high on Machiavellianism are more likely to attain and keep a managerial position. Using a large and representative panel dataset from Germany, our empirical analysis confirms a strong and positive relationship between Machiavellianism and occupying a managerial position. This result holds in various robustness checks and in instrumental variable estimations accounting for possible endogeneity. Furthermore, our analysis provides evidence that the relationship is monotone; i.e., those with the highest scores of Machiavellianism are most likely to be managers. It also suggests that the direction of influence runs from Machiavellianism to occupational status and not vice versa.
    Keywords: Machiavellianism, Dark Triad, Managers, Agency Theory, Occupational Sorting
    JEL: D23 D90 J24 M12 M51
    Date: 2023
  20. By: Joop Hartog; Pedro Raposo; Hugo Reis
    Abstract: We estimate a dynamic model of individual labour market careers (turnover and search, wage development) on Portuguese panel data of graduates from vocational and general secondary education. We find that vocational graduates benefit more from the internal labour market than from the external market. This holds even more for mature than for young individuals. This hurts as among the mature, vocational has higher lay-off probability. To the common result that vocational education trades early employment advantage for later disadvantage we add a decomposition of employment status in its dynamic components. To the literature on wage effects we add a breakdown of variances in heterogeneity and risk.
    Keywords: risk, vocational education, search models
    JEL: J30 J64 D80 I26
    Date: 2023
  21. By: Storm, Eduard
    Abstract: This paper studies wage effects and job mobility as a result of skill mismatch in worker- occupation pairs. I develop a Roy model in which learning on the job induces workers to shift more time towards job-specific activities. Using a short task panel containing data on worker's time allocation of job tasks, I test the model's implications and present three main findings. First, workers who are overqualified in their initial occupation in regards to abstract tasks are more likely to switch to another job by up to 19 pp. Second, task-based learning only pays off with respect to acquisition of abstract skills and is associated with a return of up to 2-3% with each year of experience. Third, gains from task-based learning are heterogenous and benefit primarily workers in abstract-intensive occupations. My findings highlight the effects of investments in job-specific skills on wage growth and job mobility.
    Keywords: Learning-by-Doing, occupational mobility, skill mismatch, task panel, task tenure, wage determination
    JEL: J24 J31 J62
    Date: 2023
  22. By: Bursell, Moa (Institute for Futures Studies, Iffs); Bygren, Magnus (Institute for Futures Studies and Department of Sociology, Stockholm University)
    Abstract: Western labor markets are typically segregated by country of birth, with immigrants often working in immigrant-typed jobs, e.g., cleaners, taxi drivers, fast-food chefs, and similar. The aim of this paper is to investigate whether employer variation in discriminatory hiring choices contributes to the maintenance of such immigrant niches by channeling immigrants and their descendants into these types of jobs. We use correspondence audit data derived from 7, 051 job applications sent to job openings in 15 different occupations in the Swedish labor market between 2013 and 2019, in which names signaling the ‘foreignness’ of job applicants were randomly assigned to job applications with otherwise identical qualifications. Our results suggest that employers do contribute to this type of segregation. While ethnic discrimination is pervasive in the ‘native’ occupations in our data, it declines as the share of foreign-born individuals working in a given occupation increases, and is low or even absent in the most immigrant-dense niches. However, the pattern is gendered: it is only ‘foreign’-named men who are disproportionately channeled into such niches. We conclude that variation in discriminatory employer hiring choices appears to be partly responsible for reproducing (male-dominated) immigrant niches in the labor market.
    Keywords: discrimination; ethnicity; segregation; correspondence audit; field experiments; labor market; hiring
    JEL: J71
    Date: 2023–05–17
  23. By: Patrick Lenain; Ben Westmore; Quoc Huy Vu; Minh Cuong Nguyen
    Abstract: Viet Nam has been quick to recover from the downturns caused by the COVID-19 pandemic, but it faces long-term economic challenges. Boosting labour productivity will be crucial to sustained high economic growth. Attracting further foreign investment and reaping the benefit of advanced technologies will require additional improvements to the business environment through simplifying administrative procedures. Levelling the playing field of competition between state-owned enterprises and private enterprises will also help to maintain Viet Nam’s attraction for international investors. The country is already among the leaders of digitalisation in Southeast Asia, with strong adoption of e-commerce, telemedicine and telework. Further investment in digital skills will be key to maintain this momentum. The authorities have committed to net zero carbon emissions by 2050 and are expanding renewable energy generation capacity. A comprehensive decarbonisation plan would facilitate the transition to greener growth.
    Keywords: business climate, carbon pricing, climate policy, digital skills, digitalisation, energy transition, foreign investment, net zero, productivity
    JEL: H23 J24 K23 O14 Q43 Q52 Q54
    Date: 2023–08–07
  24. By: Francesca Borgonovi; Elisa Lanzi; Helke Seitz; Ruben Bibas; Jean Fouré; Hubert Plisiecki; Laura Atarody
    Abstract: This paper quantifies changes in employment and the demand for skills in the European Union following the implementation of Fit for 55 policies. Between 2019 and 2030, the economy is projected to grow by 1.3% in the Fit for 55 scenario (3% in a Baseline scenario without the Fit for 55 policies). Employment growth is projected to be lower in the Fit for 55 than the Baseline scenario. Employment in the Fit for 55 scenario is projected to decrease by 3% for blue collar and farm workers (2% in the Baseline) and increase by 4 5% for other occupations (5-6% in the Baseline). The most demanded skills following the implementation of Fit for 55 will be those related to inter personal communication and the use of digital technologies, whereas the demand for skills related to the use of traditional tools and technologies is projected to decline. Anticipating changes in employment and the demand for skills as well as the socio-demographic profile of those most affected can facilitate the design of upskilling and reskilling efforts and promote the reallocation of workers across sectors and occupations.
    Keywords: climate mitigation, computable general equilibrium models, employment, skills
    JEL: C68 J21 J24 J44 Q43 Q54
    Date: 2023–08–02
  25. By: Congressional Budget Office
    Abstract: Special and incentive (S&I) pay is a particular category of compensation paid to eligible active-duty service members in the Army, Navy, Air Force, and Marine Corps. The Department of Defense uses that pay to attract or retain personnel in certain occupations or to compensate personnel for the unusual conditions of some assignments or for serving in designated locations. Those types of pay are provided in addition to other elements of military cash compensation.
    JEL: H51 H56 J26 J31 J32 J33 J38 J45
    Date: 2023–07–27
  26. By: Ferdinando Monte; Charly Porcher; Esteban Rossi-Hansberg
    Abstract: We study the adoption of remote work within cities and its effect on city structure and welfare. We develop a dynamic model of a city in which workers can decide to work in the central business district (CBD) or partly at home. Working in the CBD allows them to interact with other commuters, which enhances their productivity through a standard production externality, but entails commuting costs. Switching between modes of labor delivery is costly, and workers face idiosyncratic preference shocks for remote work. We characterize the parameter set in which the city exhibits multiple stationary equilibria. Within this set, a coordination mechanism can lead to stationary equilibria in which most workers commute or most of them work partially from home. In these cases, large shocks in the number of commuters, like the recent lockdowns and self-isolation generated by the COVID-19 pandemic, can result in dynamic paths that make cities converge to a stationary equilibrium with large fractions of remote workers. Using cell-phone-based mobility data for the U.S., we document that although most cities experienced similar reductions in CBD trips during the pandemic, trips in the largest cities have stabilized at levels that are only about 60% of pre-pandemic levels. In contrast, smaller cities have, on average, returned to pre-pandemic levels. House price panel data by city show consistent changes in house price CBD-distance gradients. We estimate the model for 274 U.S. cities and show that cities that have stabilized at a large fraction of remote work are much more likely to have parameters that result in multiple stationary equilibria. Our results imply welfare losses in these cities that average 2.7%.
    JEL: D24 J22 J23 J61 O33 R32
    Date: 2023–07
  27. By: KAMBAYASHI, Ryo; KAWAGUCHI, Kohei; OTANI, Suguru
    Abstract: Estimating recruitment elasticity is complex due to the multi-stage, bilateral decisionmaking process involving workers and employers in job matching. To measure it, this study uses novel data from a major job-matching intermediary in Japan and investigates the selectivity of vacancies and worker wage elasticities at each stage of the job-matching process from applications to offer acceptances. Our findings reveal that vacancies exhibit greater selectivity for job offers compared to interview invitations. Worker application elasticities range between 0.05 and 0.21, contingent upon previous wage and employment status. However, interview attendance elasticities are statistically insignificant and offer acceptance elasticities of approximately 0.05. These results suggest that workers exhibit reduced sensitivity to wages during interview attendance decisions, anticipating competition from fellow applicants. The elasticities are higher for above-median wage workers compared to their below-median counterparts, supporting this interpretation. Implied recruitment elasticities do not exceed 1, even for the estimated upper bound, reflecting the strong market power of employers.
    Keywords: Market power of employers, Monopsony, Job matching intermediary, Recruitment elasticity, Application, Interview, Offer, Control function approach
    JEL: J20 J30 J42 J64 L13 L40
    Date: 2023–07
  28. By: Takashi Oshio; Satoshi Shimizutani; Akiko S. Oishi
    Abstract: This study examines how elderly employment is associated with social security programs and how it responds to recent reforms in Japan. To this end, we employed a rich and longitudinal dataset of middle-aged and older individuals collected between 2005 and 2018. By incorporating various factors related to social security incentives into a single index of implicit tax (ITAX), we confirmed that the index successfully captured the incentives and their changes incorporated in recent social security reforms. We further estimated the association of ITAX with an individual’s decisions concerning retirement and pension benefit claims. Lastly, we conducted counterfactual simulations to assess the effect of recent social security forms on retirement based on the estimated regression parameters. The results showed that a higher ITAX drove individuals, especially men, to retire and claim benefits earlier.
    JEL: H55 J14 J26
    Date: 2023–07
  29. By: Filippo Belloc; Stefano Dughera; Fabio landini
    Abstract: We model the conditions under which firm agency issues are tackled through incentive pay as opposed to monitoring. The model shows that a larger span of control makes labor surveillance less effective as an effort extraction mechanism, whereas managerial skills increase the opportunity cost of monitoring. As a result, the use of pay-for-performance schemes is more likely in firms with a lower staff-to-managers ratio and more skilled managers. An empirical analysis on firm-level Italian data produces results coherent with our theoretical predictions. Taken together, our results help to explain the highly heterogeneous use of incentive contracts among firms
    Keywords: Incentive pay, Managerial ability, Span of control
    JEL: L23 M52 C72 J33 J41
    Date: 2023–06
  30. By: Luca Villamaina (Ministry of Economy and Finance); Paolo Acciari (Ministry of Economy and Finance)
    Abstract: The earned income tax credit - so-called ’monthly e80 bonus’ - introduced in Italy in 2014, has been characterized by a rapid phase-out area for budget-constraints reasons, leading to very high effective marginal tax rates. The aim of our analysis is to empirically investigate whether this policy design has effectively determined a reduction of the intensive margin of the labour supply of employees. The empirical analysis is based on the longitudinal electronic database of Personal Income Tax returns from 2011 to 2017 assembled by the Department of Finance of the Italian Ministry of Economy and Finance. The timing and the structure of the reform allow us to exploit the difference-in-discontinuities design using the before/after with the discontinuous policy change. Despite a close to 100% effective average tax rate for a substantial income range, a unique feature among EU and OECD countries, we found that the tax credit design had no negative effect on changes of the labour effort in Italy, challenging the economic theory but confirming previous empirical evidence.
    Keywords: EITC, Public Economics, Labor Market, Labor supply, Personal Income Tax
    JEL: H21 H24 H30 J22 J38
    Date: 2023–08
  31. By: Mike Brewer (Resolution Foundation); Thang Dang (Centre for Fertility and Health, Norwegian Insititute of Public Health); Emma Tominey (Department of Economics, University of York; HCEO; IZA)
    Abstract: The UK Universal Credit (UC) welfare reform simplified the benefits system, combining six benefit applications into one, whilst creating strict incentives for full-time employment. Exploiting a staggered roll-out, we analyse the impact of entering unemployment under UC compared to the former system on mental health, future employment transitions and intrahousehold labour supply reactions. Groups with fewer intrahousehold insurance possibilities - single adults and lone parents - experience a mental health deterioration of 8.4-13.9% sd. Whilst these groups experience an increase in employment transition, it is to part-time work. For couples UC creates an intrahousehold reaction, increasing partners' labour participation and UC partially or fully mitigates the mental health consequences of unemployment.
    Keywords: Welfare reform; Mental health; Employment transitions; Universal Credit; Intrahousehold insurance
    JEL: D13 D61 H53 I10 I14 I38 J2
    Date: 2023–07
  32. By: Echeverría, Lucía; Gimenez-Nadal, J. Ignacio; Molina, José Alberto
    Abstract: Prior literature analyzing gender differences in commuting has reported that men commute longer distance/time than do women, and one explanation for this gender gap is based on household responsibilities falling on women. But most of the literature examining gender differences in commuting has not considered the interdependence that exists between the members of couples. We analyze gender differences in commuting time for a sample of dual-earner couples living in Spain, Italy, South Korea, and the United Kingdom, taking into account the inter-relatedness of decisions within couples. We estimate Ordinary Least Squares equations for men and women on commuting time and mode of transport (private, public, and active transport) including own characteristics as well as spouse attributes and commuting choices. Results indicate that the number of children is significantly related to shorter commuting times for female workers in all countries, with no associations found for their male counterparts. In addition, having children is associated with changes in the commuting mode choice of women in Italy, Korea and the UK, but no associations are found for men. Our evidence indicates that, while the presence of children is related to commuting behavior of women, it is not the case for men. Furthermore, we find that couples' decisions on commuting are complementary, which may shed light on their relationship that should be addressed by theoretical models.
    Keywords: commuting, gender differences, dual-earner couples, intra-spousal effects, household responsibilities, Multinational Time Use Study
    JEL: R40 J22 O57 D19
    Date: 2023
  33. By: Patrinos, Harry Anthony; Rivera-Olvera, Angelica
    Abstract: Countries across Eastern Europe and Central Asia are in their third decade of independence. What impact does this have on the skills premium and does accession to the European Union have an impact on the returns to education? The returns to education in 28 transition and 20 non-transition countries in Europe and Central Asia are analyzed using panel data analysis and difference-in-difference methods to estimate the impact of transition and EU accession. It is found that the transition from a centrally planned economy to a market economy increases the returns to schooling in post-socialist countries positively and significantly, especially through the EU accession channel.
    Keywords: returns to education, transition, technological change
    JEL: I26 J31
    Date: 2023
  34. By: J. SILHOL (Insee, AMSE); L. WILNER (Insee, Crest, Ined)
    Abstract: This paper exploits a 2018 reform of teachers' financial incentives to work in some French disadvantaged schools, and determines the role of incentives in teachers' stated preferences to move towards such schools based on this quasi-natural experiment. Using data from the internal human resource management of an educational authority, we find that most responsive teachers are less qualified, have less experience and are already working in such areas. Counterfactual simulations suggest that the policy has not hurt other disadvantaged schools, but rather induced some teachers not to remain in their current school or to opt less for regular schools.
    Keywords: Teacher mobility; Financial incentives; Stated preferences; Rank-ordered choices; Disadvantaged schools
    JEL: I21 I22 J45
    Date: 2023

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