nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2023‒11‒27
sixteen papers chosen by
Joseph Marchand, University of Alberta

  1. No Longer Qualified? Changes in the Supply and Demand for Skills within Occupations By Modestino, Alicia Sasser; Burke, Mary A.; Sadighi, Shahriar; Sederberg, Rachel; Stern, Tomere; Taska, Bledi
  2. Air Pollution and Time Use: Evidence from India By Jafarov, Jafar; Singh, Tejendra P.; Sahoo, Soham
  3. Job Training and Job Search Assistance Policies in Developing Countries By Carranza, Eliana; McKenzie, David
  4. Educate Some to Represent Many? Education and Female Political Representation in Europe By Bellani, Luna; Hidalgo-Hidalgo, Marisa
  5. Does Wage Theft Vary by Demographic Group? Evidence from Minimum Wage Increases By Clemens, Jeffrey; Strain, Michael R.
  6. Impacts of Home-Care Subsidies: Evidence from Quasi-Random Assignment By Ofek-Shanny, Yuval; Strulov-Shlain, Avner; Zeltzer, Dan
  7. Skills training programmes for unemployed workers in mature economies By Martina Bazzoli; Gianni De Fraja; Silvia De Poli; Enrico Rettore; Enrico Rettore
  8. Recruitment Competition and Labor Demand for High-Skilled Foreign Workers By Raux, Morgan
  9. Help wanted: the drivers and implications of labour shortages By Groiss, Martin; Sondermann, David
  10. Time allocation of daughters-in-law and mothers-in-law in India: The role of education as bargaining power By Bhattacharya, Leena
  11. How and Why the Gender Pension Gap in Urban China Decreased between 1988 and 2018 By Gustafsson, Björn Anders; Zhang, Peng; Jia, Hanrui
  12. Desperately Seeking a Japanese Yokozuna By Brunello, Giorgio; Yamamura, Eiji
  13. Spatial Analysis of Youth Unemployment in Indonesia: Minimum Wages and Industrial Mix By Mayrano Andrianus Sitinjak; Diny Ghuzini
  14. The role of shortlisting in shifting gender beliefs on performance: experimental evidence By Miguel A. Fonseca; Ashley McCrea
  15. Combining Part-time Work and Social Benefits: Empirical Evidence from Finland By Kalin, Salla; Kyyrä, Tomi; Matikka, Tuomas
  16. Extending social protection to informal economy workers: Lessons from the Key Indicators of Informality based on Individuals and their Household (KIIbIH) By Alexandre Kolev; Justina La; Thomas Manfredi

  1. By: Modestino, Alicia Sasser (Northeastern University); Burke, Mary A. (Federal Reserve Bank of Boston); Sadighi, Shahriar (Amazon); Sederberg, Rachel (Lightcast); Stern, Tomere (Northeastern University); Taska, Bledi (Lightcast)
    Abstract: Although labor market "mismatch" often refers to an imbalances in supply and demand across occupations, mismatch within occupations can arise if skill requirements are changing over time, potentially reducing aggregate matching efficiency within the labor market. To test this, we examine changes in employer education and skill requirements using a database of 200 million U.S. online job postings between 2007 and 2019. We find that the degree of persistence in educational upskilling lasted longer than was previously known and was not uniform but rather varied considerably across occupations and was often coupled with an increased demand for software skills. We also find evidence that upskilling contributed to reduced matching efficiency in certain segments of the US labor market as well as in the aggregate. In particular, matching efficiency was lower in higher-skilled occupations, potentially because they are becoming more specialized, and possibly explaining growing wage polarization and inequality.
    Keywords: labor demand, skills, vacancies, unemployment, firm behavior
    JEL: D22 E24 J23 J24 J63
    Date: 2023–10
  2. By: Jafarov, Jafar (Georgia State University); Singh, Tejendra P. (Georgia State University); Sahoo, Soham (Indian Institute of Management Bangalore)
    Abstract: We investigate how air pollution impacts outdoor activity avoidance, leveraging changes in local wind direction in an instrumental variable setup for causal identification. Our findings reveal a substantial reduction in time spent outdoors during polluted days, mainly driven by decreased engagement in employment-related activities. This effect varies significantly across age, education level, usual principal activity status, consumption expenditure, and residential location. Moreover, reduced outdoor time due to air pollution can potentially promote a more equitable allocation of unpaid caregiving responsibilities within households via increased male involvement. Our results rule out information provision as the primary mechanism and remain robust under various sensitivity tests.
    Keywords: air pollution, time-use, labor supply, intrahousehold bargaining, avoidance behavior, India
    JEL: D13 J22 O13 Q53 Q56
    Date: 2023–10
  3. By: Carranza, Eliana (World Bank); McKenzie, David (World Bank)
    Abstract: Governments around the developing world face pressure to intervene actively to help jobseekers find employment. Two of the most common policies used are job training, based on the idea that many of those seeking jobs lack the skills employers want, and job search assistance, based on the possibility that even if workers have the skills demanded, search and matching frictions make it difficult for workers to be hired in the jobs that need these skills. However, reviews of the first generation of evaluations of these programs found typical impacts to be small, casting doubt on the usefulness and cost-effectiveness of these programs. This paper reexamines the arguments for whether, when, and how developing country governments should undertake job training and job search assistance policies. The authors use their experience with policy implementation, and evidence from recent impact evaluations, to argue that there is still a role for governments in using these programs. However, success depends critically on program design and delivery elements that can be difficult to scale effectively, and in many cases the binding constraint may be a lack of firms with job openings, rather than a lack of workers with the skills to fill these openings.
    Keywords: active labor market policies, job search assistance, job training
    JEL: J22 J23 J24 J64 M53 O12 O15
    Date: 2023–10
  4. By: Bellani, Luna (Ulm University); Hidalgo-Hidalgo, Marisa (Universidad Pablo de Olavide)
    Abstract: Gender disparity is present in many aspects of life, especially in politics. This paper provides new evidence on the impact of women's education on political representation focusing on several European countries. We combine multi-country data from the Gender Statistics Database of the European Institute for Gender Equality (EIGE) and from the European Social Survey (ESS). We find increased female education significantly raises the percentage of women being elected to regional parliaments. We then explore possible channels at the individual level and find education increases women's interest in politics and induces more egalitarian views about gender roles in society among women, although it fails to do so among men.
    Keywords: education, female political participation, compulsory schooling reforms, ESS
    JEL: H52 I21 I23 J24 J31
    Date: 2023–10
  5. By: Clemens, Jeffrey (University of California, San Diego); Strain, Michael R. (American Enterprise Institute for Public Policy Research)
    Abstract: Using Current Population Survey data, we assess whether and to what extent the burden of "wage theft" - wage payments below the statutory minimum wage - falls disproportionately on various demographic groups following minimum wage increases. For most racial and ethnic groups at most ages we find that underpayment rises similarly as a fraction of realized wage gains in the wake of minimum wage increases. We also present evidence that the burden of underpayment falls disproportionately on relatively young African American workers and that underpayment increases more for Hispanic workers among the full working-age population.
    Keywords: minimum wage, subminimum wage, compliance, noncompliance, enforcement, underpayment
    JEL: J08 J38 K42
    Date: 2023–10
  6. By: Ofek-Shanny, Yuval (FAU, Erlangen Nuremberg); Strulov-Shlain, Avner (University of Chicago Booth School of Business); Zeltzer, Dan (Tel Aviv University)
    Abstract: We study the impact of subsidizing home-based long-term care on recipients' health and the labor supply of their working-age children. We use administrative data from Israel on the universe of welfare benefit applications linked with tax records of applicants and their adult children. To address the endogeneity of benefit recipients' health status, we instrument for benefit receipt using the leniency of randomly assigned evaluators who assess the applicant's functional status and determine benefit eligibility. We find that for compliers - applicants who receive subsidies only from more lenient evaluators - subsidizing home-based care has large adverse effects on recipient health but no detectable effects on the labor market outcomes of their children. The results are consistent with the crowd-out of self-care for the marginal recipient, highlighting the need to assess the heterogeneous eects of home-care subsidies.
    Keywords: home-based long-term care, labor supply
    JEL: I13 I18 J22 H53
    Date: 2023–10
  7. By: Martina Bazzoli; Gianni De Fraja; Silvia De Poli; Enrico Rettore; Enrico Rettore
    Abstract: This paper studies the effects on long term labour market success of the provision of intensive skills training courses offered in 2013-14 to adult unemployed workers in the north-east of Italy. We find a substantial effect, which persists well into the fourth year after the beginning of the course. From a methodological viewpoint, we argue, as proposed by Angrist and Rokkanen (2015) that the set-up is equivalent to a randomised controlled trial, in view of the fact that the criterion which determines admission to the course is unrelated to the outcomes of interest.
    Keywords: Active labour market policies, Trento, Unemployment training, Randomised control trial, Regression discontinuity design
    JEL: J24 J68 M53 C21
    Date: 2023–11
  8. By: Raux, Morgan (University of Luxembourg)
    Abstract: This paper estimates the causal effect of recruitment competition on the labor demand for high-skilled foreign workers. I assemble a new data set, combining a firm-level panel of all Labor Condition Applications (LCAs) submitted as a first step to obtaining H-1B visas between 2010 and 2019 with online job vacancies and data on venture capital (VC) investments. I use plausibly quasi-exogeneous variation in VC investments in start-ups to instrument yearly changes in recruitment competition at the local labor market level. I find that a one standard deviation increase in the number of job postings advertised by start-ups yields an 8 percent increase in the number of LCAs submitted by employers in the market and a 3 percent increase in the wages advertised in these LCAs. Estimates are only significant for computer occupations. These results support the role of labor market tightness in explaining the absence of the crowding-out effect from H-1B workers against close native substitutes.
    Keywords: labor market tightness, skilled workers, H-1B
    JEL: F22 J23 J61
    Date: 2023–10
  9. By: Groiss, Martin; Sondermann, David
    Abstract: Labour shortages have become prevalent across advanced economies. Yet, little is known about which firms are more likely to face them and the impact they have on the labour market. We create a firm-level data set spanning 28 EU countries, 283 regions and 18 sectors, contributing to close this gap. We find that structural factors play the dominant role. Firms in regions with limited labour supply as well as innovative and fast-growing firms are particularly prone to face labour shortages. Moreover, shortages tend to aggravate at business cycle peaks. In a second stage, we empirically determine the impact of labour shortages on wages and hiring. Firms with higher shortages pay a wage growth premium to keep and attract workers, increasingly so if they face excess demand. At the same time, those are the firms that hire less than the average. JEL Classification: C36, E24, J20, J23, J30
    Keywords: labour shortages, matching, shift-share instrument, tightness
    Date: 2023–11
  10. By: Bhattacharya, Leena
    Abstract: The paper addresses the less-researched topic of intrahousehold dynamics of female in-laws in developing countries by focusing on the bargaining between mother-in-law and daughter-inlaw and its influence on the latter's time allocation. Using the first nationally representative Time Use Survey of India, 2019, the paper answers two questions. First, how does the presence of the parents-in-law, particularly the mother-in-law, shape the daughter-in-law's distribution of time between paid and unpaid activities? Second, how does the relative bargaining power among the female in-laws affect the daughter-in-law's time allocation across different activities, where their education levels are used as indicators of bargaining power? The findings show that the daughter-in-law's participation in paid work increases in the presence of her mother-in-law and she allocates more time to paid work and less time to household production. The effect is evident for the daughters-in-law who co-reside with mothers-in-law who have completed at least secondary education. The mother-in-law's time allocated to household production and childcare increases when she co-resides with a daughter-in-law who has completed tertiary education. The father-in-law's presence consistently diminishes the daughter-in-law's engagement in paid work and increases both women's time spent on household production. Heterogeneity in results is observed by socio-religious groups and by the extent of patriarchy in the state of residence. Overall, the results suggest that policies that aim to increase women's education and promote gender-equal attitudes among men can enhance the daughter-in-law's bargaining power and time allocation.
    Keywords: Intrahousehold bargaining, time allocation, education, gender, work, household production
    JEL: J22 J16 D13
    Date: 2023
  11. By: Gustafsson, Björn Anders (Göteborg University); Zhang, Peng (Zhejiang University); Jia, Hanrui (Shanghai Administration Institute)
    Abstract: In urban China, gender gaps in employment and earnings have steadily increased since the 1990s. Such gender gaps are important because pension rights and amounts are based on labor force participation and wages. However, as this study demonstrates, despite the rise in gender differences in the urban labor market, the average gender pension gap decreased between 1988 and 2018. In the paper, we describe the evolution of the fragmented pension system in urban China using a quantitative approach that distinguishes between pension coverage rates and average benefit amounts. Additionally, we conducted a birth cohort analysis to gain further insights into the reasons for changes in the gender pension gap. We utilized data from the China Household Income Project, focusing on individuals aged 60 years and older. Therefore, this study demonstrates how changes in China's pension system have benefited women more than men during the aforementioned period.
    Keywords: gender pension gap, pension reforms, time effect, cohort effect, urban, China
    JEL: H55 J14 J26 P36
    Date: 2023–10
  12. By: Brunello, Giorgio (University of Padova); Yamamura, Eiji (Seinan Gakuin University)
    Abstract: Using data on wrestlers and tournaments since the early 1970s, we study promotion practices in Sumo, a Japanese traditional sport. We show that, especially since 2010, foreign-born wrestlers trying to attain the second highest rank in Sumo were treated less favorably than Japanese born wrestlers. Similar practices, however, do not apply to foreign-born wrestlers competing for the top rank, probably because of the much higher public scrutiny attracted by promotions to this rank. Together with the 2010 Reform that effectively restricted access to foreign-born wrestlers, existing promotion practices may favor the return of Japanese born players to the top rank of the game.
    Keywords: promotion, Sumo, sports, Japan
    JEL: J40 J71
    Date: 2023–10
  13. By: Mayrano Andrianus Sitinjak (Badan Pusat Statistik Kabupaten Empat Lawang); Diny Ghuzini (Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada)
    Abstract: This study examines the spatial distribution of youth unemployment rates (15–24 years old) and the impact of wages and industrial composition on these rates in Indonesian provinces. The persistently high youth unemployment rate and uneven distribution of youth labor across provinces have motivated this research. Data from 2010 to 2018, sourced from Sakernas and other BPS publications, were analyzed for 33 Indonesian provinces. This study employed Moran's index and spatial panel data regression methods. The findings reveal a clustered spatial pattern of youth unemployment rates among provinces. The best-fitting model, identified as the Spatial Durbin Model (SDM) with random effects, indicates that increasing the minimum wage ratio significantly contributes to higher youth unemployment rates. Conversely, higher real wages lead to a slight decrease, whereas greater industrial sector absorption reduces youth unemployment. However, increased absorption in the service sector amplifies youth unemployment.
    Keywords: Youth Unemployment, Minimum Wages, Industrial Mix, Spatial Panel
    JEL: C23 J30 J46
    Date: 2023–08
  14. By: Miguel A. Fonseca (Department of Economics, University of Exeter); Ashley McCrea (Department of Economics, University of Exeter)
    Abstract: In labour markets, women are often underrepresented relative to men. This underrepresentation may be due to inaccurate beliefs about ability across genders. Inaccurate beliefs might cause a sampling problem: to have accurate beliefs about a group, one must first collect information about that group. However, inaccurate beliefs may persist due to biased belief updating. We run a stylized hiring experiment to disentangle these two effects. We ask participants to create shortlists from a male and a female pool of workers and give them feedback on the skill of those they shortlist. Based on that information, participants hire workers, and provide us with their beliefs about the distribution of skills in the male and female pots. We study how recruiters update their beliefs as a function of their past shortlisting behaviour, and how they shortlist given their beliefs. As expected, participants were more likely to sample from the pool with the highest subjective mean quality (on average men) and lowest subject variance. Participants were not Bayesian updaters but there were no gender-specific biases in updating. Sampling more from a pool and, somewhat surprisingly, greater time spent engaging in sampling behaviour yield more accurate beliefs.
    Keywords: inaccurate statistical discrimination, belief updating, gender, shortlisting, chess
    JEL: C91 D83 J71 J78 M51
    Date: 2023–11–07
  15. By: Kalin, Salla; Kyyrä, Tomi; Matikka, Tuomas
    Abstract: We use detailed, population-wide data from Finland to provide evidence of the impact of earnings disregard policies on part-time work during unemployment spells, and describe the longer-run trends in combining part-time work and social benefits. We find that part-time or temporary work while receiving unemployment benefits is strongly concentrated at service and social and health care sectors, and women participate in part-time work much more commonly than men (25% vs. 12% of benefit recipients). The share of part-time workers among unemployment benefit recipients increased sharply from 10% to 18% over a few years after the implementation of earnings disregards in unemployment benefits and housing allowances. The earnings disregards allowed individuals to earn up to 300 euros per month without reductions in their benefits. Using variation in the impact of the reforms on incentives between individuals eligible to different types of benefits, we estimate a 17–28% increase in participation in part-time work rate due to the implementation of earnings disregards. However, we find no evidence of economically significant positive or negative effects of increased participation in part-time work on transitions to full-time employment.
    Keywords: labor supply, social benefits, part-time work, earnings disregards, Labour markets and education, Social security, taxation and inequality, H24, J21, J22, fi=Sosiaaliturva|sv=Social trygghet|en=Social security|, fi=Työmarkkinat|sv=Arbetsmarknad|en=Labour markets|, fi=Verotus|sv=Beskattning|en=Taxation|,
    Date: 2023
  16. By: Alexandre Kolev; Justina La; Thomas Manfredi
    Abstract: This paper exploits the information available in the OECD Key Indicators of Informality based on Individuals and their Household (KIIBIH) to shed light on several elements that could help inform national strategies for the extension of social protection to workers in the informal economy. It provides an assessment of current social protection coverage of informal workers throughout a large sample of developing and emerging economies and proposes a statistical framework to examine country-specific data, upon which a strategy for extending social protection to informal workers could be articulated. While the paper does not intend to provide detailed country-level recommendations, it highlights a number of important findings and policy directions as regards the way to extend non-contributory and contributory schemes to informal workers.
    JEL: I31 I38 J46
    Date: 2023–11–09

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