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on Labor Markets - Supply, Demand, and Wages |
| By: | Frisvold, David E. (University of Iowa); Kim, Sun Hyung (Shanghai University) |
| Abstract: | Although recessions negatively affect labor market outcomes, we find that individuals with greater cognitive skills have been less affected by recessions since 2000 compared to those in the 1980s and 1990s. This result occurs despite a decrease in the returns to cognitive skills over the last few decades, on average. We argue that changes in the provision of employer-paid training can help explain the relative return to cognitive skills during recent recessions due to lower training costs and enhanced labor productivity. Consistent with this, we find that firms provide more training to workers with higher cognitive skills during post-2000 recessions. |
| Keywords: | cognitive skills, social skills, training, recessions |
| JEL: | J01 J23 J24 J31 J60 J64 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16746&r=lma |
| By: | Andrew S. Hanks; Shengjun Jiang; Xuechao Qian; Bo Wang; Bruce A. Weinberg |
| Abstract: | We study how human capital diversification, in the form of double majoring, affects the response of earnings to labor market shocks. Double majors experience substantial protection against earnings shocks, of 56%. This finding holds across different model specifications and data sets. Furthermore, the protection double majors experience is more pronounced when the two majors are more distantly related, highlighting the importance of diverse skill sets. Additional analyses demonstrate that double majors are more likely to work in jobs that require a diverse set of skills and knowledge and are less likely to work in occupations that are closely related to their majors. |
| JEL: | D81 I23 J24 J30 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32095&r=lma |
| By: | Arntz, Melanie (ZEW Mannheim); Genz, Sabrina (Utrecht University); Gregory, Terry (LISER); Lehmer, Florian (Institute for Employment Research (IAB), Nuremberg); Zierahn-Weilage, Ulrich (Utrecht University) |
| Abstract: | This paper examines the extent to which aggregate-level de-routinization can be attributed to firm-level technology adoption during the most recent technological expansion. We use administrative data and a novel firm survey to distinguish frontier technologies from older technologies. We find that adopters of frontier technologies contribute substantially to deroutinization. However, this is driven only by a subset of these firms: large adopters replace routine jobs and less routine-intensive adopters experience faster growth. These scale and composition effects reflect firms' readiness to adopt and implement frontier technologies. Our results suggest that an acceleration of technology adoption would be associated with faster de-routinization and an increase in between-firm heterogeneity. |
| Keywords: | technology, automation, tasks, capital-labor substitution, decomposition |
| JEL: | J21 J23 J24 O33 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16740&r=lma |
| By: | Philipp Lergetporer; Katharina Wedel; Katharina Werner |
| Abstract: | We study how beliefs about the automatability of workers’ occupation affect labor-market expectations and willingness to participate in further training. In our representative online survey, respondents on average underestimate the automation risk of their occupation, especially those in high-automatability occupations. Randomized information about their occupations’ automatability increases respondents’ concerns about their professional future, and expectations about future changes in their work environment. The information also increases willingness to participate in further training, especially among respondents in highly automatable occupation (+five percentage points). This uptick substantially narrows the gap in willingness to train between those in high- and low-automatability occupations. |
| Keywords: | automation, further training, labor-market expectations, survey experiment, information |
| JEL: | J24 O33 I29 D83 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10862&r=lma |
| By: | Müller, Gerrit (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "Drawing on newly available panel data, this paper presents an empirical analysis of the wage effects of changing job tasks, assessed for individuals at their workplace. I am therefore able to exploit within-occupation within-individual variation, over time, to study wage returns to cognitive, interpersonal, physical and routine task intensity. The findings of Autor and Handel’s (2013) pioneering work on the significance of such within-occupation (“intensive margin”) task variation are reassessed. Unobserved worker attributes and ongoing self-selection into occupations can be accounted for in a much more comprehensive way than possible with purely cross-sectional data, as in the original work." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | IAB-Open-Access-Publikation |
| JEL: | J24 J31 |
| Date: | 2024–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:202402&r=lma |
| By: | Messina, Julián (Universidad de Alicante); Sanz-de-Galdeano, Anna (Universidad de Alicante); Terskaya, Anastasia (University of Barcelona) |
| Abstract: | Utilizing comprehensive administrative data from Brazil, we investigate the impact of peer effects on wages, considering both within-gender and cross-gender dynamics. Since the average productivity of both individuals and their peers is unobservable, we estimate these values using worker fixed effects while accounting for occupational and firm sorting. Our findings reveal that within-gender peer effects have approximately twice the influence of cross-gender peer effects on wages for both males and females. Furthermore, we observe a reduction in the disparity between these two types of peer effects in settings characterized by greater gender equality. |
| Keywords: | peer effects, gender, matched employer-employee data, identity, wage determination |
| JEL: | J16 J24 J31 M12 M54 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16721&r=lma |
| By: | Healy, Olivia (Elon University); Heissel, Jennifer A. (Naval Postgraduate School) |
| Abstract: | This paper explores whether and why a maternal "child penalty" to earnings would emerge even without changes in employment and hours worked. Using a matched event study design, we trace monthly changes in determinants of wages (job performance, human capital accumulation, and promotions). Data come from a usefully unusual setting with required multiyear employment and detailed personnel data: the United States Marine Corps. Mothers' job performance initially declines, and gaps in promotion grow through 24 months postbirth. Fathers' physical fitness performance drops somewhat but recovers. These patterns lead mothers to earn relatively lower wages, even absent changes in employment postbirth. |
| Keywords: | parenthood, child penalty, gender wage gap, promotion |
| JEL: | J24 J16 J18 J45 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16743&r=lma |
| By: | Katarina Gomoryova (Charles University, Prague, Czech Republic) |
| Abstract: | Is female leadership the secret ingredient to financial prosperity? This question has been the subject of extensive research, yet the findings remain inconclusive. We aim to provide a comprehensive understanding of this relationship employing contemporary techniques on the up-to-date dataset comprising 1, 131 estimates gathered from 96 distinct studies. We address the pervasive issue of publication bias resulting in the mild preference for positive outcomes. After filtering out this bias, the study finds a negligible mean effect estimate, suggesting that the impact of women in leadership on financial performance is minimal. We further explore the potential factors that could account for variations in the estimated effects across different studies. Utilising Bayesian Model Averaging, weighted by the inverse number of estimates, we identify thirteen significant moderators that influence the relationship under study. Among these, the proportion of female authors, the impact factor of the journal, the duality of the CEO role, and the tenure of leaders are found to exert the most positive influence on the effect. Conversely, the age of leaders pushes effect the most in the opposite direction. Other influential factors include the publication status of the article, the number of variables used in the study, publication bias, the use of random estimation and matching approaches, the use of accounting-based financial measures, focus on the emerging market, and the representation of the leadership variable as a proportion. |
| Keywords: | meta-analysis, publication bias, Bayesian Model Averaging, female leadership, gender diversity, financial performance |
| JEL: | J23 J24 J31 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2024_06&r=lma |
| By: | Rich Ryan |
| Abstract: | When a firm hires a worker, adding the new hire to payroll is costly. These costs reduce the amount of resources that can go to recruiting workers and amplify how unemployment responds to changes in productivity. Workers also incur up-front costs upon accepting jobs. Examples include moving expenses and regulatory fees. I establish that workers' costs lessen the response of unemployment to productivity changes and do not subtract from resources available for recruitment. The influence of workers' costs is bounded by properties of a matching function, which describes how job openings and unemployment produce hires. Using data on job finding that are adjusted for workers' transitions between employment and unemployment and for how the Job Openings and Labor Turnover Survey records hires, I estimate a bound that ascribes limited influence to workers' costs. The results demonstrate that costs paid by workers upon accepting jobs affect outcomes in the labor market (firms threaten workers with paying the up-front costs again if wage negotiations fail), but their influence on volatility is less important than firms' costs. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.07423&r=lma |
| By: | Anomita Ghosh (National Council of Applied Economic Research) |
| Abstract: | Do temporary labor supply programs cause physicians to move to and stay in undesirable areas? To what extent do these programs improve the health of the elderly and nonelderly population in those areas? I investigate these questions by studying state and local loan repayment programs for new eligible physicians which were rolled out over the last four decades in hundreds of counties across US states. Leveraging a new longitudinal dataset that tracks all physicians from medical school to mid-career, and exploiting both space and time variation, I find that these policies increase the number of physicians by 5% in treated counties relative to untreated counties in the state. The inflows of physicians are driven by higher paying eligible specialities. The programs continue to influence physicians’ location decisions even after they end effects persist for at least ten years after the minimum obligation period. Furthermore, the programs modestly spur trainees to enter eligible specialities in treated states by substituting away from ineligible specialities. Treated counties also see the elderly increase their visits to physicians while reducing those to the emergency rooms. Using patient level data from California, I demonstrate these results are not driven by selective admission of patients to treated hospitals. Overall, my findings emphasize the importance of policies that reduce financial frictions for highly skilled professionals –- in shaping not only their migration and labor market trajectories, but also the health outcomes of people in their communities. |
| Keywords: | labor supply, state and local government, migration flows, occupational choice, adverse health events, health expenditures |
| JEL: | H75 J24 J32 J61 I18 |
| Date: | 2024–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:nca:ncaerw:154&r=lma |
| By: | Lukas Kiessling; Pia Pinger; Philipp Seegers; Jan Bergerhoff |
| Abstract: | This paper presents evidence from a large-scale study on gender differences in expected wages before labor market entry. Based on data for over 15, 000 students, we document a significant and large gender gap in wage expectations that resembles actual wage differences, prevails across subgroups, and along the entire distribution. Over the life-cycle this gap amounts to roughly half a million Euros. Our findings further suggest that expected wages relate to expected asking and reservation wages and that a difference in plans about “boldness” during prospective wage negotiations pertains to gender difference in expected and actual wages. Given the importance of wage expectations for labor market decisions, household bargaining, and wage setting, our results provide an explanation for persistent gender inequalities. |
| Keywords: | Wage expectations, gender gap, negotiations |
| JEL: | D81 D84 I21 I23 J13 J30 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_496&r=lma |
| By: | Cosmas Benard Meka'a; Astride Claudel Njiepue Nouffeussie; Romus Noufelie; Gaëlle Tatiana Timba |
| Abstract: | The objective of this article is to evaluate the effects of Information and Communication Technologies (ICTs) on the quality of youth employment in Cameroon. The study uses data from the Cameroonian Household Survey (CHS 4) carried out by the National Institute of Statistics of Cameroon (NIS) in 2014. The quality of employment is apprehended here by five of its dimensions: income by sector of activity, the nature of the contract, regularity of employment, job satisfaction and length of employment. Our results suggest that young active workers in the formal sector and the informal agricultural sector, demonstrating ICTs skills. |
| Keywords: | ICTs, youth, job quality, heckman model, Cameroon |
| JEL: | J13 J24 J64 J18 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10867&r=lma |
| By: | Heski Bar-Isaac; Justin P. Johnson; Volker Nocke |
| Abstract: | It is often argued that startups are acquired for the sole purpose of hiring specialized talent. We show that the goal of such acquihires might be to shut down the most relevant labor market competitor. This grants the acquirer monopsony power over specialized talent. As a consequence, acquihiring may harm employees and be socially inefficient. We explore the robustness of these effects, allowing for private benefits associated with working at a startup, varying bargaining protocols, multiple employees with and without complementarities, and private information. |
| Keywords: | Acquihiring, acquisitions, monopsony power, specialized labor markets, competition policy |
| JEL: | J42 L13 M12 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_500&r=lma |
| By: | Pallavi Choudhuri (National Council of Applied Economic Research); Santanu Pramanik (Krea University); Sonalde Desai (National Council of Applied Economic Research) |
| Abstract: | The COVID-19 pandemic, and the consequent nationwide lockdown in India that began on March 25, 2020, caused a major disruption in the labour market, leading to the widespread loss of livelihoods and food insecurity. The findings from a telephonic survey of a representative sample of more than 3, 000 households in the National Capital Region (NCR) also reveal a dramatic loss in earning capacity. The place of residence and occupation mediated the impact of the lockdown, with greater vulnerabilities witnessed amongst those engaged in informal employment, especially in urban areas. The Government rolled out a series of welfare measures in response to the widespread economic distress, with the provision of free foodgrains and cash transfers aimed at rehabilitating those who were the most affected. While the use of prior social registries enabled quick disbursement, our analysis shows that few households received both foodgrains and cash transfers, particularly in urban areas. Urban residents were also eight percentage points less likely to receive cash transfers as compared to their rural counterparts. |
| Keywords: | Informal Employment, Income, Social Protection, Cash Transfer, COVID-19, India |
| JEL: | I38 J21 O17 |
| Date: | 2024–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:nca:ncaerw:156&r=lma |
| By: | Daniel S. Hamermesh; Anwen Zhang |
| Abstract: | Since the mapping of the human genome in 2004, biologists have demonstrated genetic links to the expression of several income-enhancing physical traits. To illustrate how heredity produces intergenerational economic effects, this study uses one trait, beauty, to infer the extent to which parents’ physical characteristics transmit inequality across generations. Analyses of a large-scale longitudinal dataset in the U.S., and a much smaller dataset of Chinese parents and children, show that a one standard-deviation increase in parents’ looks is associated with a 0.4 standard-deviation increase in their child’s looks. A large data set of U.S. siblings shows a correlation of their beauty consistent with the same expression of their genetic similarity, as does a small sample of billionaire siblings. Coupling these estimates with parameter estimates from the literatures describing the impact of beauty on earnings and the intergenerational elasticity of income suggests that one standard-deviation difference in parents’ looks generates a 0.06 standard-deviation difference in their adult child’s earnings, which amounts to additional annual earnings in the U.S. of about $2300. |
| JEL: | D31 D64 J71 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32086&r=lma |
| By: | David Autor; Anne Beck; David Dorn; Gordon H. Hanson |
| Abstract: | We study the economic and political consequences of the 2018-2019 trade war between the United States, China and other US trade partners at the detailed geographic level, exploiting measures of local exposure to US import tariffs, foreign retaliatory tariffs, and US compensation programs. The trade-war has not to date provided economic help to the US heartland: import tariffs on foreign goods neither raised nor lowered US employment in newly-protected sectors; retaliatory tariffs had clear negative employment impacts, primarily in agriculture; and these harms were only partly mitigated by compensatory US agricultural subsidies. Consistent with expressive views of politics, the tariff war appears nevertheless to have been a political success for the governing Republican party. Residents of regions more exposed to import tariffs became less likely to identify as Democrats, more likely to vote to reelect Donald Trump in 2020, and more likely to elect Republicans to Congress. Foreign retaliatory tariffs only modestly weakened that support. |
| JEL: | D72 F14 F16 J23 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32082&r=lma |
| By: | Pushkar Maitra (Department of Economics, Monash University, Clayton Campus, VIC 3800 Australia); Ananta Neelim (Tasmanian School of Business and Economics, University of Tasmania, Hobart, Tasmania 7001, Australia) |
| Abstract: | In this chapter, we provide an account of the discrimination literature in economics and discuss two widely pursued policies to tackle discrimination in developing countries. We present a discussion of the main classical theories of discrimination: taste-based discrimination and statistical discrimination and extend our discussion to the new and developing literature on norm-based discrimination We briefly discuss the measurement approaches to discrimination and alternative policies to reduce it. We focus on two main policy prescriptions: increasing contact between adversarial groups (the contact hypothesis); and legislating diversity (through affirmative action policies including quotas). |
| Keywords: | Discrimination, Inter-group Contact, Gender, Minority-Majority, Experiments |
| JEL: | C9 D9 J1 J7 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2024-03&r=lma |
| By: | Lorena Skufi (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic & Bank of Albania, Tirana, Albania); Meri Papavangjeli (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic & Bank of Albania, Tirana, Albania); Adam Gersl (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | Motivated by migration phenomena and wage-inflation spillovers, we investigate the relationship between the two and the inflationary remittances built-in pressures. We establish a feedback loop between migration and inflation, and specify a simple dynamic model to identify the pass-through. Our empirical approach focuses on the wage Phillips Curve, price setting under monopolistic competition, and state space model for the natural unemployment rate. Our estimates suggest that overshooting inflation and tight labor market conditions increase wage-inflation sensitivity. A continuous decline of population by 1% leads to 98 basis points (BP) of inflation pressures in the short-run and 23 BP in the long-run. Remittances induce excessive pressures by 18 BP on inflation. Supportive schemes such as an older retirement age and higher labor force participation rate can partially mitigate inflationary. |
| Keywords: | labor market, demographics, inflation, wage, remittances, feedback-loop |
| JEL: | J11 J21 J31 E24 E31 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2024_05&r=lma |
| By: | Hwanoong Lee; Changsu Ko; Wookun Kim |
| Abstract: | We exploit a series of public-sector entity relocations in South Korea as an exogenous source of variation in public sector employment to estimate the local employment multiplier. We find that the introduction of one public sector employment position increases private sector employment by one unit, primarily driven by the service sector. Consistent with existing literature, we document that the effect of public employment on private employment is highly localized. In addition to changes in private employment, we also discover that the relocations led to a positive net influx of residents into the treated neighborhoods; this effect is also localized. Lastly, by estimating the local employment multiplier for each relocation site, we document the heterogeneity of the local employment multiplier and provide suggestive evidence that this het-erogeneity is shaped by the local economic environment's capacity to accommodate additional general equilibrium responses. |
| Keywords: | employment multiplier, public employment, spatial spillover, migration, heterogeneity |
| JEL: | H31 J45 J61 R11 R23 R58 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10870&r=lma |
| By: | Josten, Cecily (London School of Economics); Lordan, Grace (London School of Economics) |
| Abstract: | This study develops and validates the 'Individual Inclusiveness Inventory'. Collaboration and inclusion are key contributors to successful work outcomes in an increasingly diverse workforce. We capture what makes an individual inclusive of others at work. We define an inclusive individual as someone who actively includes individuals in a group and encourages diversity of thought and background but still encourages the group in a way as to maximise performance and productivity. To develop the 'Individual Inclusiveness Inventory' we combine a deductive and inductive approach: we generate scale items based on the existing literature on inclusion and interviews with 14 experts in diversity and inclusion. The items are then reduced using exploratory factor analysis and confirmed using confirmatory factor analysis in two samples of working professionals in the UK. This results in a two-factor solution where factor 1 'Belonging and Uniqueness' captures the importance of fostering belonging and uniqueness at work and factor 2 'Challenge and Openness' captures being open to challenge and being challenged. We test the predictive validity of the two-factor solution with respect to work outcomes. We find that 'Challenge and Openness' is positively related to all work outcomes studied including income. This link to productivity is intuitive for individuals who are open to challenge are also likely competitive and innovative. 'Belonging and Uniqueness' is positively related to the number of people managed and perceived comparative seniority and happiness. This factor is less predictive of productivity as fostering belonging and uniqueness is likely more about group outcomes or happiness. |
| Keywords: | inclusion, collaboration, measurement, belonging, challenge, openness |
| JEL: | J4 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16753&r=lma |
| By: | Axelle Arquié; Thomas Grjebine |
| Abstract: | Relying on rich administrative data, this paper examines the adaptive capabilities of the French labor market in the aftermath of large-scale layoffs in the manufacturing sector. We assess both individual and aggregate effects of these shocks, using a unique quantitative definition of mass layoffs. We first show that displaced workers suffer a long-lasting increase in the probability of being unemployed and, for those who find a job, a decrease in their salary. While mass layoffs entail costs for displaced workers, there is a possible social benefit if they result in productive reallocation of workers to the most innovative companies and in the creation of new firms. Remarkably, our findings indicate that firms that hire displaced workers exhibit lower investment rates, decreased value added, and a reduced workforce, with a higher proportion of employees on fixed-term contracts. Additionally, mass layoffs do not contribute to the enhancement of allocative efficiency, as the most skilled workers are less likely to be matched with the most successful establishments. Furthermore, we assess the extent to which local economies adapt to these shocks, revealing that, six years after the mass layoff event, the local unemployment rate is 12% higher in comparison to unaffected regions. Lastly, the affected areas experience a diminished share of new establishment creation. |
| Keywords: | Mass layoffs;Sorting |
| JEL: | J31 J42 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2024-03&r=lma |
| By: | Joop Adema; Cevat Giray Aksoy; Yvonne Giesing; Panu Poutvaara |
| Abstract: | During 2022, about eight million Ukrainians were displaced from Ukraine due to the Russian invasion. Whether these individuals will return holds great significance for Ukraine’s reconstruction and is pivotal in shaping integration strategies in host countries. We used Facebook ads to recruit a panel of Ukrainian refugees in Europe, starting in June 2022. Six waves carried out in 2022 and 2023 allow us to examine the causal impact of local conflict intensity on refugees’ return intentions and integration. We find that less than 10% of Ukrainian refugees express a desire to permanently settle abroad. While the duration of time spent abroad leads to a higher proportion of refugees being employed, it does not diminish their intentions to return. Conflict intensity in one’s home municipality decreases current return intentions, but it has only a small impact on plans to return once safety is restored. |
| Keywords: | conflict, Ukraine, migration, refugees, return migration |
| JEL: | D74 F22 J24 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10877&r=lma |