nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2024‒03‒25
sixteen papers chosen by
Joseph Marchand, University of Alberta

  1. Estimating the wage premia of refugee immigrants: Lessons from Sweden By Baum, Christopher F.; Lööf, Hans; Stephan, Andreas; Zimmermann, Klaus F.
  2. The Heterogeneous Productivity Effects of Generative AI By David H. Kreitmeir; Paul A. Raschky
  3. Strategic Behaviours in a Labour Market with Mobility-Restricting Contractual Provisions: Evidence from the National Hockey League By Fumarco, Luca; Longley, Neil; Palermo, Alberto; Rossi, Giambattista
  4. Family Restrictions at Work By Enriqueta Aragonès
  5. Can Voluntary Adult Education Reduce Unemployment? Causal Evidence from East Germany after Reunification By Rupieper, Li Kathrin Kaja; Thomsen, Stephan L.
  6. COVID 19 and Wage Polarization: A task based approach By Schettino, Francesco; Scicchitano, Sergio; Suppa, Domenico
  7. Breaking Barriers: The Impact of Employer Exposure to Immigrants By Lehrer, Steven; Lepage, Louis-Pierre; Sousa Pereira, Nuno
  8. Preference dynamics: A procedurally rational model of time and effort allocation By Krecik, Markus
  9. Do Medical Treatments Work for Work? Evidence from Breast Cancer Patients By N. Meltem Daysal; William N. Evans; Mikkel Hasse Pedersen; Mircea Trandafir
  10. Perceived Legitimacy and Motivation Effects of Authority By Holger Herz; Christian Zihlmann
  11. Appropriate Entrepreneurship? The Rise of China and the Developing World By Josh Lerner; Junxi Liu; Jacob Moscona; David Y. Yang
  12. The impact of the COVID-19 pandemic and policy support on productivity By Lalinsky, Tibor; Anyfantaki, Sofia; Benkovskis, Konstantins; Bergeaud, Antonin; Bun, Maurice; Bunel, Simon; Colciago, Andrea; De Mulder, Jan; Lopez, Beatriz Gonzalez; Jarvis, Valerie; Krasnopjorovs, Olegs; Lebastard, Laura; Lopez-Garcia, Paloma; Martins, Fernando; Meinen, Philipp; Meriküll, Jaanika; Parker, Miles; Serafini, Roberta; Szörfi, Béla; Vanhala, Juuso; Volk, Matjaz; Anastasatou, Marianthi; Fantino, Davide; Havel, Jiri; Khametshin, Dmitry; Kolaiti, Tetie; Raos, Josip; Šelebaj, Domagoj; Vaňko, Milan
  13. Work Activity Status of Male Youth in India: Role of Social Networks By Ronak Maheshwari; Brinda Viswanathan
  14. Healthcare Workforce Shortages and Job Autonomy: Nurse Practitioners and Entrepreneurship in the United States By Shishir Shakya; Joshua K. Bedi; Alicia Plemmons
  15. Does Removing Restrictions on Night Shifts for Women Workers Improve Their Labour Market Outcomes? Evidence from India By Kumar, Sai Shreyas Krishna
  16. Digitalisation and productivity By Bunel, Simon; Bijnens, Gert; Botelho, Vasco; Falck, Elisabeth; Labhard, Vincent; Lamo, Ana; Röhe, Oke; Schroth, Joachim; Sellner, Richard; Strobel, Johannes; Anghel, Brindusa

  1. By: Baum, Christopher F.; Lööf, Hans; Stephan, Andreas; Zimmermann, Klaus F.
    Abstract: This paper examines the wage earnings of fully-employed previous refugee immigrants in Sweden. Using administrative employer-employee data from 1990 onwards, about 100, 000 refugee immigrants who arrived between 1980 and 1996 and were granted asylum, are compared to a matched sample of native-born workers. Employing recentered influence function (RIF) quantile regressions to wage earnings for the period 2011-2015, the occupational-task-based Oaxaca-Blinder decomposition approach shows that refugees perform better than natives at the median wage, controlling for individual and firm characteristics. This overperformance is due to female refugee immigrants, who have-relative to their endowment-higher wages than comparable native-born female peers up to the 8th decile of the wage distribution. Given their endowments, refugee immigrant females perform better than native females across all occupational tasks studied, including non-routine cognitive tasks. A remarkable similarity exists in the relative wage distributions among various refugee groups, suggesting that cultural differences and the length of time spent in the host country do not significantly affect their labor market performance.
    Keywords: refugees, wage earnings gap, occupational sorting, employer-employee data, correlated random effects model, Blinder-Oaxaca decomposition
    JEL: C23 F22 J24 J6 O15
    Date: 2024
  2. By: David H. Kreitmeir (Department of Economics and SoDa Labs, Monash University); Paul A. Raschky (Department of Economics and SoDa Labs, Monash University)
    Abstract: We analyse the individual productivity effects of Italy's ban on ChatGPT, a generative pretrained transformer chatbot. We compile data on the daily coding output quantity and quality of over 36, 000 GitHub users in Italy and other European countries and combine these data with the sudden announcement of the ban in a difference-in-differences framework. Among the affected users in Italy, we find a short-term increase in output quantity and quality for less experienced users and a decrease in productivity on more routine tasks for experienced users.
    Keywords: artificial intelligence, productivity
    JEL: D8 J24 O33
    Date: 2024–03
  3. By: Fumarco, Luca; Longley, Neil; Palermo, Alberto; Rossi, Giambattista
    Abstract: We follow workers' performance along an unbalanced panel dataset over multiple years and study how performance varies at the end of fixed-term contracts, in a labour market where some people face a mobility restricting clause (i.e., a noncompete clause). Focusing on the labour market of the National Hockey League, we analyse players' performance data and contracts with a fixed effect estimator to address empirical limitations in previous studies. We find that, on average, NHL players' performance does not vary. However, our estimations detect substantially heterogeneous behaviours, depending on tenure, perceived expected performance, and mobility. Only younger players (i.e., restricted free-agents) with high expected mobility but low expected performance tend to behave strategically and perform better. Differently, older players (i.e., unrestricted free-agents) with high expected mobility tend to underperform, as the option of moving back to European tournaments is more appealing.
    Keywords: strategic behaviour, mobility, noncompete clauses
    JEL: D82 J24 J33 M52 Z22
    Date: 2024
  4. By: Enriqueta Aragonès
    Abstract: This paper analizes the discrimination that individuals face at work due to their commitment to unpaid care work. The formal model presents a parametrization of the discrimination that affects the individual’s optimal labor market participation. The welfare of individuals with commitment to family duties is reduced for two different reasons: for not being able to participate as much in the labor market and thus receive a lower labor income, and for not being able to contribute as much to their family commitments. We compare the results for the female and male sections of the society and we illustrate the observed gender gaps in terms of labor market participation, income levels, and overall utility obtained. We find that even though the gender wage gap may be alleviated with reductions of the cost associated to unpaid care work, the gender utility gap will persist.
    Keywords: discrimination, labor market, unpaid care work
    JEL: J7 J31
    Date: 2024–02
  5. By: Rupieper, Li Kathrin Kaja (Leibniz University of Hannover); Thomsen, Stephan L. (Leibniz University of Hannover)
    Abstract: After the German Reunification in 1990, East Germany transitioned from a centrally planned economic system to a market economy. At the time, upskilling through adult education was deemed essential for the successful integration of the workforce into the labor market. Besides substantial mandatory training programs provided by active labor market policies, Volkshochschulen (VHS) were the most important providers of voluntary adult education. The economic effects of their courses have not been analyzed so far. Based on newly digitized data, we evaluate the effects of VHS courses on unemployment in a county-level analysis of East Germany between 1991 and 2002. Our identification strategy is based on a decentralized expansion of courses, which led to substantial and quasi-random variation in course numbers. We find no evidence that VHS courses harmed labor market integrations, in contrast to some active labor market policies. Courses did not affect subsequent unemployment on average. Yet, in counties neighboring West Germany, we find that courses reduced unemployment. Low labor demand may have restricted the realization of education effects. As both work-related and purely recreational courses reduced unemployment in counties bordering West Germany, our results also hint towards the relevance of social capital for successful labor market integrations.
    Keywords: unemployment, adult education, non-formal education, Volkshochschule, East Germany
    JEL: I21 J24 N34 P20 P36
    Date: 2024–01
  6. By: Schettino, Francesco; Scicchitano, Sergio; Suppa, Domenico
    Abstract: The aim of this paper is to estimate the effects of the COVID-19 pandemic on the wage polarization in Italy, combining individual characteristics with their task content in terms of physical proximity within the workplace. We use an innovative dataset which combines data from two sample surveys, the Italian Labor Force Survey and Italian Survey of Professions, which provides information on nature and content of the tasks. First, by employing a non-parametric method (the Relative Distribution) we detect a general increasing wage polarization in the sub-period 2020-2019, driven by lowest deciles, after a reduction in the previous one (2019-10). Different groups have been also isolated. Workers with low education, high proximity to customers job, such as the migrant, younger and female ones are the categories that more suffered the general downgrading of the Italian wages happened during the COVID-19 crisis.
    Keywords: Covid19, Income Polarization, Relative Distribution, Social Conflicts, Tasks
    JEL: J28 J81 H12 I18
    Date: 2024
  7. By: Lehrer, Steven (Queen's University); Lepage, Louis-Pierre (Swedish Institute for Social Research, Stockholm University); Sousa Pereira, Nuno (University of Porto)
    Abstract: We study how exposure of employers to immigrants, both at the market and at the individual firm level, mitigates immigrant-native disparities. We use administrative employee-employer matched data from Portugal, which provides a unique setting given that it experienced almost no immigration until the early 2000s followed by substantial immigration waves. Focusing on the evolution of market wages across successive immigration cohorts, we find that increased employer exposure to immigrant groups can account for up to 25% of the wage convergence between immigrants and natives over the last two decades. We also document that individual-level exposure of firms to immigrants plays an important role, influencing future hiring and remuneration of immigrants. Our results provide new insights into how barriers to hiring different worker groups shape economic inequality, with novel implications for immigration policies.
    Keywords: immigration; immigrant-native wage gaps
    JEL: J15 J31
    Date: 2024–03–01
  8. By: Krecik, Markus
    Abstract: Current time allocation and household production models face three major weaknesses: First, they only describe the average time allocation. Thus, information about the order of activities is lost. Therefore, it is impossible to describe the influence of activities on later ones. Such interactions are likely pervasive, and can significantly alter behavior. Second, they are unable to describe the effort allocation of individuals, although effort influences one's time allocation. Thereby, they are either unable or very limited in describing labor productivity or multitasking although individuals frequently multitask. Through the omission of interactions and effort allocation, current models yield biased descriptions of e.g. price and time elasticities. Third, they require strong assumptions, such as perfect foresight or periodic environments, and thus cannot describe behavior in unpredictable environments, like reactions to external shocks. In this paper, I provide a remedy for these shortcomings by developing a dynamical model of procedurally rational decision making. The basic idea of the model is a feedback loop between experienced utility, decision utility, and activities. In applications of the model, I show how introducing a work-leisure interaction and multitasking significantly changes elasticities and how nonmarginal external shocks cause short-term demand surges, none of which can be described by current time allocation models.
    Keywords: Preferences, Decision-Making, Behavioral Economics, Procedural Rationality, Household Economics
    JEL: C61 C63 D11 D90 J22
    Date: 2024
  9. By: N. Meltem Daysal; William N. Evans; Mikkel Hasse Pedersen; Mircea Trandafir
    Abstract: We investigate the effects of radiation therapy on the mortality and economic outcomes of breast cancer patients. We implement a 2SLS strategy within a difference-in-difference framework exploiting variation in treatment stemming from a medical guideline change in Denmark. Using administrative data, we reproduce results from an RCT showing the lifesaving benefits of radiotherapy. We then show therapy also has economic returns: ten years after diagnosis, treatment increases employment by 37% and earnings by 45%. Mortality and economic results are driven by results for more educated women, indicating that equalizing access to treatment may not be sufficient to reduce health inequalities.
    JEL: I10 I14 I18 J20
    Date: 2024–02
  10. By: Holger Herz; Christian Zihlmann
    Abstract: Organizational structures are an important determinant of individual incentives and thus individual motivation in organizations. We study whether their effects on individual motivation go beyond incentives and how they relate to the perceived legitimacy of organizational structure. To this end, we design a laboratory experiment in which we exogenously manipulate the organizational structure in a way that leaves the incentives of all individuals unaffected, but changes the perceived legitimacy of the organizational structure. Our data show that organizational structure indeed affects behavior beyond monetary incentive effects and that the observed changes are significantly associated with changes in perceived legitimacy.
    Keywords: legitimacy, organization, motivation
    JEL: D01 D23 D91 M50
    Date: 2024
  11. By: Josh Lerner; Junxi Liu; Jacob Moscona; David Y. Yang
    Abstract: Global innovation and entrepreneurship has traditionally been dominated by a handful of high-income countries, especially the US. This paper investigates the international consequences of the rise of a new hub for innovation, focusing on the dramatic growth of high-potential entrepreneurship and venture capital in China. First, using comprehensive data on global venture activities, we show that as the Chinese venture industry rose in importance, entrepreneurship increased substantially in other emerging markets, particularly in sectors dominated by Chinese companies. Using a broad set of country-level economic indicators, we find that this effect was driven by country-sector pairs most similar to their counterparts in China. Second, turning to mechanisms, we show that the baseline findings are driven by local investors and by new firms that more closely resemble existing Chinese companies. Third, we find that this growth in emerging-market investment had wide-ranging positive consequences, including a rise in serial entrepreneurship, cross-sector spillovers, innovation, and broader measures of socioeconomic well-being. Together, our findings suggest that developing countries benefited from more “appropriate” businesses and technology pioneered by China, and that a system where only rich countries lead in innovation could limit entrepreneurial activity in large parts of the world.
    JEL: O11 O33
    Date: 2024–03
  12. By: Lalinsky, Tibor; Anyfantaki, Sofia; Benkovskis, Konstantins; Bergeaud, Antonin; Bun, Maurice; Bunel, Simon; Colciago, Andrea; De Mulder, Jan; Lopez, Beatriz Gonzalez; Jarvis, Valerie; Krasnopjorovs, Olegs; Lebastard, Laura; Lopez-Garcia, Paloma; Martins, Fernando; Meinen, Philipp; Meriküll, Jaanika; Parker, Miles; Serafini, Roberta; Szörfi, Béla; Vanhala, Juuso; Volk, Matjaz; Anastasatou, Marianthi; Fantino, Davide; Havel, Jiri; Khametshin, Dmitry; Kolaiti, Tetie; Raos, Josip; Šelebaj, Domagoj; Vaňko, Milan
    Abstract: This paper studies the short-term and long-term consequences of the COVID-19 pandemic for productivity in Europe. Aggregate and sectoral evidence is complemented by firm-level data-based findings obtained from a large micro-distributed exercise. Productivity trends during the COVID-19 pandemic differed from past trends. Labour productivity per hour worked temporarily increased, while productivity per employee declined across sectors given the widespread use of job retention schemes. The extensive margin of productivity growth was muted to some degree by the policy support granted to firms. Firm entries declined while firm exits increased much less than during previous crises. The pandemic had a significant impact on the intensive margin of productivity growth and led to a temporary drop in within-firm productivity per employee and increased reallocation. Job reallocation was productivity-enhancing but subdued compared to the Great Recession. As confirmed by a granular data analysis of the distribution of employment subsidies and loan guarantees and moratoria, job reallocation and also debt distribution and“zombie firm” prevalence were not significantly affected by the COVID-19 policy support. The pandemic and related lockdowns accelerated changes in consumer preferences and working habits with potential long-term effects. Generous government support muted the surge in unemployment and reduced permanent scarring effects. JEL Classification: D22, H25, J38, O47
    Keywords: adjustment of firms, COVID-19, cross-country analysis, Europe, government support, labour productivity, micro-distributed exercise, productivity-enhancing reallocation
    Date: 2024–02
  13. By: Ronak Maheshwari (Research Scholar (Corresponding Author), Madras School of Economics, Gandhi Mandapam Road, Chennai-600 025 (India)); Brinda Viswanathan (Professor, Madras School of Economics, Gandhi Mandapam Road, Chennai)
    Abstract: The Right to Education Act of 2010 makes education a fundamental right for children aged six to fourteen years. Between 18 and 21 years, the activities of young adults diverge into pursuing further education or entering the labor force, or Not in Educational Employment and Training (NEET). Very few studies analyze the factors involved in these three choices and in particular, how the role of family and non-family networks varies across these activity statuses of youth in India after controlling for other covariates. This study attempts to fill this gap based on an empirical analysis of boys aged 18-21 years from the IHDS data for 2005-06 and 2011-12. The results from the discrete choice multinomial logit model show that, after controlling for socio-economic status, the primary source of household income, and parents’ education, both family and non-family networks increase the odds of enrolling in higher education or training compared to NEET while non-family networks favor workforce participation compared to NEET. The results further highlight that in addition to the number of ties the types of ties have a greater influence on the work-activity-related decisions of the youth.
    Keywords: Higher Education; Labor Force Participation; NEET; Social Networks; Youth Labor
    JEL: I23 J24 J64 N30 P36
    Date: 2024–01
  14. By: Shishir Shakya; Joshua K. Bedi; Alicia Plemmons
    Abstract: The laws governing nurse practitioners’ scope of practice significantly impact the degree of autonomy and independence they have in their professional roles. Lowautonomy environments resulting from restrictions on nurse practitioners’ scope of practice can have long-term adverse effects on their recruitment, training, and retention. These laws directly affect the range of services they can offer, their decision-making authority, and their ability to establish and manage their practices. By lowering both monetary and non-monetary benefits of practice ownership, restrictions on independent practice make it more difficult for nurse practitioners to start a practice. Thus, these regulations potentially exacerbate the shortage crisis in primary care, especially within communities already struggling with access to healthcare. We track sole proprietor nurse practitioners in each US state from 2016- 2023 to analyze how the scope of practice laws influence sole proprietorship among nurse practitioners. Our results help lay the groundwork for future evidence-based policy surrounding nurse practitioner scope of practice. Key Words: Scope of Practice, Entrepreneurship, Nurse Practitioner, Primary Care, Healthcare Workforce
    JEL: D73 K42 O17 P16 J44
    Date: 2024
  15. By: Kumar, Sai Shreyas Krishna (Warwick University)
    Abstract: I study the effect of lifting restrictions on night – shift work for women on their labour market outcomes. Using the staggered repeal of night – shift restrictions for women under the Factories Act, 1948 in the Indian states of Punjab, Gujarat, Maharashtra, and Assam, I employ a Triple Difference model to estimate its effect on the share of women workers and daily wages for women in manufacturing. My results suggest no significant impact as the estimated effects are close to 0 and statistically insignificant. I am also able to rule out effects larger than 0.95 p.p and 2.8% on the share of women workers and daily wages respectively, and these estimates are robust to the use of the Stacked Triple Difference regression. I also provide several possible explanations for my results using case studies.
    Keywords: Night Shifts ; Female Labour Force Participation ; Wages ; Manufacturing ; India JEL classifications: J08 ; J16 ; J21 ; J31 ; J38 ; K31 ; O14 ; O25
    Date: 2024
  16. By: Bunel, Simon; Bijnens, Gert; Botelho, Vasco; Falck, Elisabeth; Labhard, Vincent; Lamo, Ana; Röhe, Oke; Schroth, Joachim; Sellner, Richard; Strobel, Johannes; Anghel, Brindusa
    Abstract: The productivity-enhancing effects of digitalisation have generated increased interest in the promotion of digital technologies. This report provides different estimations for euro area countries of the impact of digital uptake on productivity at firm level, showing that the adoption of digital technologies could lead to an increase in firms’ productivity in the medium term. However, not all firms and sectors experience significant productivity gains from digital adoption, and not all digital technologies deliver significant productivity gains. The report highlights possible factors behind the low productivity benefits of digitalisation in euro area countries. For example, a lack of strong institutions and governance structures may help to explain why digital diffusion is slower than expected, why it is slower in some countries than others and why the expected productivity benefits from digitalisation have not been fully achieved by now. Furthermore, the report suggests that the full benefits of the digital revolution will be reaped by properly supplying skills to firms and also by investing in computerised information in low-productivity firms. JEL Classification: D24, E24, E22, J24, O33, O38, C67
    Keywords: complementary investments, digitalisation, human capital, institutions, productivity
    Date: 2024–02

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