nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2024‒01‒01
23 papers chosen by
Joseph Marchand, University of Alberta

  1. Students' Coworker Networks and Labor Market Entry By Demir, Gökay; Sandner, Malte; Hertweck, Friederike; Yükselen, Ipek
  2. Gender Pay Gaps across STEM Fields of Study By Zając, Tomasz; Magda, Iga; Bożykowski, M.; Chłoń-Domińczak, Agnieszka; Jasiński, M.
  3. Minimum Wages and Changing Wage Inequality in India By Khurana, Saloni; Mahajan, Kanika; Sen, Kunal
  4. Automation and income inequality in Europe By Karina Doorley; Jan Gromadzki; Piotr Lewandowski; Dora Tuda; Philippe Van Kerm
  5. Labour market and education reforms are needed to create more and better jobs in Türkiye By Dennis Dlugosch
  6. The Efficacy of Tournaments for Non-Routine Team Tasks By Florian Englmaier; Stefan Grimm; Dominik Grothe; David Schindler; Simeon Schudy
  7. One Says Goodbye, Another Says Hello: Turnover and Compensation in the Early Care and Education Sector By Flavio Cunha; Marcos Lee
  8. Promotion Prospects and Within-level Wage Growth: A Decomposition of the Part-time Penalty for Women By Boryana Ilieva
  10. Unexpected Inheritances and Household Labor Supply: Does the Identity of the Recipient Matter? By Belloc, Ignacio; Molina, José Alberto; Velilla, Jorge
  11. The Outlook for Women's Employment and Labor Force Participation By Stefania Albanesi
  12. Bureaucratic Frictions and Innovation Procurement By Leonardo M. Giuffrida; Emilio Raiteri; Leonardo Maria Giuffrida
  13. “Navigating the Precarious Path: Understanding the Dualisation of the Italian Labour Market through the Lens of Involuntary Part-Time Employment” By Liliana Cuccu; Vicente Royuela; Sergio Scicchitano
  14. What Makes Hiring Difficult? Evidence from Linked Survey-Administrative Data By Bertheau, Antoine; Larsen, Birthe; Zhao, Zeyu
  15. Endogenous Working Hours, Overlapping Generations, and Balanced Neoclassical Growth By Irmen, Andreas
  16. Human Capital, Institutions, and Ambitious Entrepreneurship during Good Times and Two Crises By Mircea Epure; Victor Martin-Sanchez; Sebastian Aparicio; David Urbano
  17. Spillover Effects at School: How Black Teachers affect their White Peers’ Racial Competency By Seth Gershenson; Constance A. Lindsay; Nicholas W. Papageorge; Romaine A. Campbell; Jessica H. Rendon
  18. Not the Best Fillers in of Forms? The Danish and Norwegian Graduate Biographies and “Upper Tail Knowledge” By Nicholas Martin Ford; Kristin Ranestad; Paul Sharp
  19. The Beauty Premium of Politicians in Offce By Klaus Gründler; Niklas Potrafke; Timo Wochner
  20. Stigma and Take-up of Labor Market Assistance: Evidence from Two Field Experiments By Osman, Adam; Speer, Jamin D.
  21. Dishonesty and Public Employment By Guillermo Cruces; Martín A. Rossi; Ernesto Schargrodsky
  22. Hidden costs of ban the box laws: unraveling the effects on drug-related deaths By Cheipesh, Oleksandra
  23. Does innovation stimulate employment in Africa? New firm-level evidence from the Worldbank Enterprise Survey By Keraga, Mezid N.; Stephan, Andreas

  1. By: Demir, Gökay; Sandner, Malte; Hertweck, Friederike; Yükselen, Ipek
    JEL: I23 J24 J31
    Date: 2023
  2. By: Zając, Tomasz (University of Queensland); Magda, Iga (Warsaw School of Economics); Bożykowski, M. (University of Warsaw); Chłoń-Domińczak, Agnieszka (Warsaw School of Economics); Jasiński, M. (University of Warsaw)
    Abstract: Gender pay gaps in earnings are well-documented in the literature. However, new factors contributing to women's lower earnings have emerged and remain under-researched. Educational choices are among them. We use a rich administrative dataset from Poland, a Central Eastern European country with high tertiary education enrolment and high female employment rates among young women, to study gender pay gaps among tertiary education graduates with degrees in different fields of study while paying particular attention to STEM fields graduates (science, technology, engineering, and mathematics). We find that already in the first year after graduation, women earn over 20% less than men. This gap widens over time. We also find significant variation across different STEM fields both in the size of the gender pay gap and in how it changes over time. The gap is largest among mathematics graduates, at over 25%; while it does not exceed 3% among chemical and Earth sciences graduates. As these differences narrow only slightly within the first four years of graduates' working careers, policymakers' efforts to increase the number of women earning STEM degrees may not be enough to achieve gender pay equality.
    Keywords: STEM, labor market, higher education, gender pay gap, field of study, Poland
    JEL: J16 J24 J3 J71
    Date: 2023–11
  3. By: Khurana, Saloni (Indian Institute of Foreign Trade (IIFT)); Mahajan, Kanika (Ashoka University); Sen, Kunal (University of Manchester)
    Abstract: Using nationally representative data on employment and earnings, this paper documents a fall in wage inequality in India over the last two decades. It then examines the role played by increasing minimum wages for the lowest skilled workers in India in contributing to the observed decline. Exploiting regional variation in changes in minimum wages over time in the country, we find that an increase in minimum wages by one percent led to an increase in wages for workers in the lowest quintile by 0.17%. This effect is smaller at upper wage quintiles and insignicant for the highest wage quintile. Counterfactual wage estimations show that the increase in minimum wages explains 26% of the decline in wage inequality in India during 1999-2018. These findings underscore the important role played by rising minimum wages in reducing wage disparities in India.
    Keywords: minimum wages, wage inequality, India
    JEL: J31 J38
    Date: 2023–11
  4. By: Karina Doorley; Jan Gromadzki; Piotr Lewandowski; Dora Tuda; Philippe Van Kerm
    Abstract: We study the effects of robot penetration on household income inequality in 14 European countries between 2006–2018, a period marked by the rapid adoption of industrial robots. We establish that, similarly to the United States, automation reduced relative hourly wages and employment of directly affected demographic groups in Europe. We then use the estimated wage and employment shocks as input to the EUROMOD microsimulation model to assess how robot-driven shocks affected household income inequality. Automation had very small effects on income inequality. Household risk-sharing and tax and welfare policies largely absorbed wage and employment shocks caused by automation.
    Keywords: robots, automation, tasks, income inequality, wage inequality, microsimulation
    JEL: J24 O33 J23
    Date: 2023–10
  5. By: Dennis Dlugosch
    Abstract: The Turkish economy grew strongly over the past two decades and created many jobs. However, given its young and growing workforce, Türkiye needs to ramp up efforts to achieve high-quality formal job creation. A sizeable share of the workforce, mostly female workers, does not actively participate in the labour market. While informality has decreased significantly, it is still widespread and entrenches productivity differences across firms. Rigid labour market rules, particularly the high severance pay but also minimum wages, impede formal job creation. More flexible labour markets should be part of a comprehensive reform programme that shifts job loss protection to a broader-based unemployment insurance scheme, supported by well-designed activation policies. While educational attainment has risen impressively, a growing number of vacancies, significant skill mismatches and a low level of adult skills highlight the need to address the quality of education and to improve on the matching of talent to jobs.
    Keywords: education, labour demand, labour market, labour regulations, labour supply, training, Türkiye
    JEL: I25 J08 J21 J23 J24 J65 I26
    Date: 2023–12–12
  6. By: Florian Englmaier (LMU Munich); Stefan Grimm (LMU Munich); Dominik Grothe (LMU Munich); David Schindler (Tilburg University); Simeon Schudy (LMU Munich)
    Abstract: Tournaments are often used to improve performance in innovation contexts. Tournaments provide monetary incentives but also render teams' identity and image concerns salient. We study the effects of tournaments on team performance in a non-routine task and identify the importance of these behavioral aspects. In a field experiment (n>1, 700 participants), we vary the salience of team identity, social image concerns, and whether teams face monetary incentives. Increased salience of team identity does not improve performance. Social image motivates the top performers. Additional monetary incentives improve all teams' outcomes without crowding out teams' willingness to explore or perform similar tasks again.
    Keywords: team work; tournaments; rankings; incentives; identity; image concerns; innovation; exploration; natural field experiment;
    JEL: C93 D90 J24 J33 M52
    Date: 2023–11–06
  7. By: Flavio Cunha; Marcos Lee
    Abstract: The quality of the early environment children experience influences their human capital development. We investigate retention and compensation in the Early Care and Education workforce by merging datasets from three different government agencies in Texas. We employ non-structural methods to compare turnover and pay in Early Care and Education with those in other sectors that employ similar workers. We estimate a dynamic discrete choice occupational model to quantify the labor supply and turnover elasticities in this industry. In addition, we simulate the impact of wage supplementation programs.
    JEL: I2 J24 J39 J49
    Date: 2023–11
  8. By: Boryana Ilieva (DIW Berlin, HU Berlin)
    Abstract: I study the life-cycle pattern of part-time employment and its impact on wage growth in female careers. I show that the part-time wage penalty consists of two essential components: i) a penalty for promotions and ii) a within-career-level wage penalty. Using dynamic structural modeling, I quantify the relative importance of the channels. The penalty for working half a day for two consecutive years in one's early thirties is one Euro per hour. 70% of it is due to slowdowns in experience accumulation within career levels. A part-time spell of four years marks the point at which forgone chances of promotion and within-level wage losses contribute to the wage penalty to an equal degree. Counterfactual simulations demonstrate that financial incentives to increase the time spent working can be well complemented by policies which ensure that experienced young women are promoted early in their careers.
    Keywords: wage growth; female labor supply; part-time employment; promotions;
    JEL: J21 J21 J24 J31
    Date: 2023–11–19
  9. By: Matteo Picchio (Department of Economics and Social Sciences, Universita' Politecnica delle Marche); Jan C. Van Ours (Erasmus School of Economics and Tinbergen Institute, The Netherlands)
    Abstract: High temperatures can have a negative effect on work-related activities because workers may experience difficulties concentrating or have to reduce effort in order to cope with heat. We investigate how temperature affects performance of professional tennis players in outdoor singles matches in big tournaments. We find that performance significantly decreases with ambient temperature. This result is robust to including wind speed and air pollution in the analysis. There are no differences between men and women. However, there is some heterogeneity in the magnitude of the temperature effect in other dimensions. In particular, we find that the temperature effect is smaller when there is more at stake. Our findings also suggest that the negative temperature effect is smaller if the heat lasts, i.e. there is some adaptation to high temperatures.
    Keywords: Climate change, temperatures, tennis, performance, productivity.
    JEL: J24 J81 Q51 Q54
    Date: 2023–12
  10. By: Belloc, Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Velilla, Jorge (University of Zaragoza)
    Abstract: Traditionally, the data of inheritances in surveys are analysed assuming that they are equally shared within households. However, inheritances are individual assets, regardless of the marital property regime adopted at the time of marriage. In this paper, we examine the impact of individual unexpected inheritances on the household labor supply. To do so, we use data from the SHARE for the years 2006-2015 from 13 European countries and adopt a collective perspective to analyze whether inheritances are equally distributed within the household or, on the contrary, the identity of the recipient matters. We reject the inheritance pooling hypothesis, in favour of the intrahousehold approach. Our results suggest that females decrease their labor force participation by 5.3 percentage points if they have received an unexpected inheritance since the prior interview. We find no impact of inheritances on the labor supply of males. These results suggest that estimates based on the inheritance pooling hypothesis, a pure unitary perspective, may be biased downwards.
    Keywords: inheritances, intrahousehold allocation, inheritance pooling hypothesis, SHARE
    JEL: D13 D31 G51 J14 J22
    Date: 2023–11
  11. By: Stefania Albanesi
    Abstract: Employment and participation rates for US prime age women rose steadily during the second half of the 20th century. In the last 30 years, however, those rates stagnated, even as employment and participation rates for women in other industrialized countries continued to rise. I discuss the role of changes in the earnings structure and persistent institutional barriers, such as limited investment in family policies, that may be holding back employment among American women today. The COVID-19 pandemic reduced employment more for women than for men and raised the barriers to female participation due to the increase in childcare responsibilities during this period. Yet, the diffusion of remote and hybrid work arrangements in its aftermath may be beneficial for women's participation in the long run, even if both men's and women's post-pandemic employment growth so far are strongly associated with access to remote work options.
    JEL: E20 E6 H2 H31 H4 H52 J16 J21 J22 J30 J31 J33
    Date: 2023–11
  12. By: Leonardo M. Giuffrida; Emilio Raiteri; Leonardo Maria Giuffrida
    Abstract: Is work overload a friction to public agencies? Using data on R&D procurements, patents, and contracting units from a US federal agency, we investigate how officer workload impacts innovation procurement outcomes. Unanticipated retirement shifts provide an exogenous source of variation that we exploit as an instrument for workload. When workload declines, we find a significant increase in patent rates. One additional officer leads to a 28 percent increase in the probability that a contract will generate a patent. Our findings suggest that officers burdened with excessive workloads may not provide adequate guidance to R&D suppliers when it is most needed.
    Keywords: workload, procurement, bureaucrats, R&D, patents, instrumental variable
    JEL: D23 D73 H57 J24 O31
    Date: 2023
  13. By: Liliana Cuccu (AQR-IREA, University of Barcelona); Vicente Royuela (AQR-IREA, University of Barcelona); Sergio Scicchitano (John Cabot University)
    Abstract: This paper investigates the surge in Involuntary Part-Time (IPT) employment in Italy from 2004 to 2019, exploring its impact on various socio-economic groups and adopting a spatial perspective. Our study tests the hypothesis that technological shifts, specifically routine biased technological change (RBTC), and the expansion of household substitution services contribute to IPT growth. We uncover a widening negative gap in IPT prevalence among marginalized groups- women, young, and less skilled workers. After controlling for sector and occupation, the higher IPT propensity diminishes but remains significant, hinting at persistent discrimination. Additionally, segregation into more exposed occupations and sectors intensifies over time. Leveraging province-level indicators, and using a Partial Adjustment model, we find support for RBTC’s correlation with IPT, especially among women. The impact of household substitution services is notably pronounced for women, highlighting sector segregation and gender norms’ influence
    Keywords: Involuntary part-time, Precarisation of labour, Automation JEL classification: J21, J24, O33.
    Date: 2023–10
  14. By: Bertheau, Antoine (Dept. of Economics, Norwegian School of Economics and Business Administration); Larsen, Birthe (Copenhagen Business School); Zhao, Zeyu (University of Copenhagen)
    Abstract: We designed an innovative survey of firms and linked it to Danish administrative data to yield new insights about the factors that can influence firms’ hiring decisions. Several important findings stand out: (1) search and training frictions and economic uncertainty are as important as labor costs in hiring decisions ; (2) search and training frictions are more likely to affect younger and smaller firms; (3) uncertainty is more likely to affect hiring decisions in low-productivity firms; (4) thirty percent of firms prefer to hire already employed persons over the unemployed, because they believe that unemployed workers have lower abilities due to negative selection or skill depreciation during unemployment; and (5) these firms are more likely to report that labor market frictions and labor costs considerations discourage them from hiring.
    Keywords: Hiring
    JEL: J20 J21
    Date: 2023–12–05
  15. By: Irmen, Andreas
    JEL: D91 J22 O33 O41
    Date: 2023
  16. By: Mircea Epure; Victor Martin-Sanchez; Sebastian Aparicio; David Urbano
    Abstract: We argue that the positive relationship between pro-market institutions and entrepreneurial growth aspirations is dampened for individuals with general human capital (higher education), but augmented for those with specific human capital (experience in the marketplace). However, during a crisis, the differential effect of pro-market institutions on growth aspirations manifests only for entrepreneurs with specific human capital, with stronger effects than in good economic times. We run our empirical analysis on a dataset of individual- and country-level characteristics during 2005– 2020, thus exploiting variation from the Global Financial Crisis and the Covid-19 pandemic. We confirm our predictions and show stronger results for early stage (compared to nascent) entrepreneurs, and potential complementarities between human capital types. Altogether, our work paves the way to institutional adaptive policymaking.
    Keywords: pro-market institutions, human capital, growth aspirations, entrepreneurship, crisis
    JEL: L26 M13 I25 J24 K2
    Date: 2023–11
  17. By: Seth Gershenson; Constance A. Lindsay; Nicholas W. Papageorge; Romaine A. Campbell; Jessica H. Rendon
    Abstract: Do white teachers learn racial competency from their Black peers? We answer this question using a mixed-methods approach. Longitudinal administrative data from North Carolina show that having a Black same-grade peer significantly improves the achievement and reduces the suspension rates of white teachers’ Black students. Open-ended interviews of North Carolina public school teachers reaffirm these findings. Broadly, our findings suggest that the positive impact of Black teachers’ ability to successfully teach Black students is not limited to their direct interaction with Black students but is augmented by spillover effects on early-career white teachers, likely through peer learning.
    JEL: I20 J24
    Date: 2023–11
  18. By: Nicholas Martin Ford (Lund University); Kristin Ranestad (University of Oslo); Paul Sharp (University of Southern Denmark, CAGE, CEPR)
    Abstract: “Upper tail knowledge”, embodied by knowledge elites, has been suggested to be a driving force of industrialization and development, yet measuring it remains problematic. Despite some recent innovations, much empirical work continues to rely on measures of “average” or “non-upper tail” human capital such as literacy and years of schooling. We thus turn to per- haps unique sources from Denmark and Norway. From the early nineteenth century until after the Second World War, these countries had the tradition of publishing biographies of all high school graduates, usually 25 and 50 years after graduation. These were effectively mini-CVs covering entire careers, including work positions, travel, achievements, and more. We discuss these sources and their potential for furthering our understanding of the role of upper tail knowledge and human capital for development. Source criticism reveals strengths and weak- nesses, but importantly confirms promising perspectives for improving the measurement of upper tail knowledge.
    Keywords: Biographies, Denmark, Norway, human capital, source criticism, upper tail knowledge
    JEL: E24 I20 J24 N33 N34
    Date: 2023–11
  19. By: Klaus Gründler; Niklas Potrafke; Timo Wochner
    Abstract: The beauty premium in politics shows that attractive politicians are more likely to get elected to ofce than less attractive politicians, but little is known about whether beauty also shapes the behavior of members of parliament (MPs) once in ofce. We use newly collected data on the attractiveness and parliamen tary activity of 866 MPs in the German Bundestag over the period 2009-2017 to examine the link between beauty and parliamentary work. Our results show that attractive MPs are more likely to be absent from parliament and less active in labor-intensive background work than others. Consistent with our hypothesis of higher outside earnings and appear more often on television talk shows. Our results suggest that attractive MPs re-allocate their time from parliamentary work to other activity that increases their income and popularity.
    Keywords: attractiveness of politicians, parliamentary activity, members of parliament, political economy,
    JEL: D72 H11 J45 J70 K40
    Date: 2023
  20. By: Osman, Adam (University of Illinois at Urbana-Champaign); Speer, Jamin D. (University of Memphis)
    Abstract: Aversion to "stigma" - disutility associated with a program or activity due to beliefs about how it is perceived - may affect labor market choices and utilization of social programs, but empirical evidence of its importance is scarce. Using two randomized field experiments, we show that stigma can affect consequential labor market decisions. Treatments designed to alleviate stigma concerns about taking entry-level jobs - such as how those jobs are perceived by society - had small average effects on take-up of job assistance programs. However, using compositional analysis and machine learning methods, we document large heterogeneity in the responses to our treatments. Stigma significantly affects the composition of who takes up a program: the treatments were successful in overcoming stigma for older, wealthier, and working respondents. For other people, we show that our treatments merely increased the salience of the stigma without dispelling it. We conclude that social image concerns affect labor market decisions and that messaging surrounding programs can have important effects on program take-up and composition.
    Keywords: stigma, experiment, machine learning
    JEL: J22 C93 I38 Z13
    Date: 2023–11
  21. By: Guillermo Cruces (University of Nottingham, CEDLAS-FCE-UNLP, and CONICET); Martín A. Rossi (Universidad de San Andrés); Ernesto Schargrodsky (Universidad Torcuato Di Tella, CAF, and CONICET)
    Abstract: We exploit a natural experiment to study the causal link between dishonest behavior and public employment. When military conscription was mandatory in Argentina, eligibility was determined by both a lottery and a medical examination. To avoid conscription, individuals at risk of being drafted had strong incentives to cheat in their medical examination. These incentives varied with the lottery number. Exploiting this exogenous variation, we first present evidence of cheating in medical examinations. We then show that individuals with a higher probability of having cheated in health checks exhibit a higher propensity to occupy non-meritocratic public sector jobs later in life.
    Keywords: Conscription; public employment; state capacities; dishonesty; impressionable years
    JEL: D91 J45 K42 O15
    Date: 2023–11
  22. By: Cheipesh, Oleksandra
    Abstract: Drawing on data from the National Vital Statistics System (NVSS), thisstudy investigates the impact of Ban the Box (BTB) laws on drug-related mortality. Two years after adoption, BTB laws are associated with more than a 35 percent increase in drug-related mortality among Black and Hispanic men. The main mechanism driving this increase appears to be diminished labor opportunities. Consistent with the results of previous studies, I find evidence that BTB adoption reduces wages, the probability of employment, and the probability of full-time employment among Black and Hispanic men. This is the first study to provide evidence that BTB laws have negative spillover effects on drug-related fatalities.
    Keywords: Ban The Box Laws; Drug-Related Mortality; Employment; Labor Market Outcomes
    JEL: I12 J78 K31
    Date: 2023–12–12
  23. By: Keraga, Mezid N. (Addis Ababa University); Stephan, Andreas (Linnaeus University)
    Abstract: This paper provides novel evidence on the question of whether innovation expands or reduces employment using firm-level data from the World Bank Enterprise Survey (ES) for six African economies. The results of the difference-in-differences estimations combined with propensity score matching confirm that both product and process innovations significantly expand job opportunities in Africa. In addition, the findings show significant intra-industry innovation spillover effects on employment. In sum, this study supports the view that innovation enhances employment in the analyzed African economies.
    Keywords: Innovation; Employment; Sub-Saharan; Spillover effects; DID; Matching approach
    JEL: J20 O30
    Date: 2023–11–30

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