nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2024‒04‒01
fifteen papers chosen by
Joseph Marchand, University of Alberta

  1. Global Labor Market Power By Amodio, Francesco; Brancati, Emanuele; Brummund, Peter; de Roux, Nicolás; Di Maio, Michele
  2. How well do online job postings match national sources in European countries?: Benchmarking Lightcast data against statistical and labour agency sources across regions, sectors and occupation By Wessel Vermeulen; Fernanda Gutierrez Amaros
  3. Is there a glass ceiling for ethnic minorities to enter leadership positions? Evidence from a large-scale field experiment with over 12, 000 job applications By Mladen Adamovic; Andreas Leibbrandt
  4. Multi-Rater Performance Evaluations and Incentives By Ockenfels, Axel; Sliwka, Dirk; Werner, Peter
  5. The Employment Impact of Emerging Digital Technologies By Ekaterina Prytkova; Fabien Petit; Deyu Li; Sugat Chaturvedi; Tommaso Ciarli
  6. Minimum wage and tax kink effects in the formal and informal sector in Zambia By Samuel Bryson; Evaristo Mwale; Kwabena Adu-Ababio
  7. Field of Study and Mental Health in Adulthood By Stenberg, Anders; Tudor, Simona
  8. Will Artificial Intelligence Get in the Way of Achieving Gender Equality? By Carvajal, Daniel; Franco, Catalina; Isaksson, Siri
  9. Do Medical Treatments Work for Work? Evidence from Breast Cancer Patients By Daysal, N. Meltem; Evans, William N.; Pedersen, Mikkel Hasse; Trandafir, Mircea
  10. The Impact of a Multifaceted Program on Fragile Individuals. Evidence from an RCT in Italy By Del Boca, Daniela; Pronzato, Chiara D.
  11. How well do online job postings match national sources in large English speaking countries?: Benchmarking Lightcast data against statistical sources across regions, sectors and occupations By Alexandra Tsvetkova; Elettra D'Amico; Alexander Lembcke; Polina Knutsson; Wessel Vermeulen
  12. The economic value of childhood socio-emotional skills By Del Bono, Emilia; Etheridge, Ben; Garcia, Paul
  13. The Heterogeneous Productivity Effects of Generative AI By David Kreitmeir; Paul A. Raschky
  14. Adverse Childhood Experiences and Long-term Economic Well-being: Understanding Mechanisms to Explain Group Differences in Net Worth By Scott D. Easton; Geoffrey T. Sanzenbacher
  15. Integrating the Social Reproduction of Labour into Macroeconomic Theory By Mark Setterfield

  1. By: Amodio, Francesco (McGill University); Brancati, Emanuele (Sapienza University of Rome); Brummund, Peter (University of Alabama); de Roux, Nicolás (Universidad de los Andes); Di Maio, Michele (Sapienza University of Rome)
    Abstract: We estimate the labor market power of over 13, 000 manufacturing establishments across 82 low and middle-income countries around the world. Within local labor markets, larger and more productive firms have higher wage markdowns and pay lower wages. Labor market power across countries exhibits a mild non-linear relationship with GDP per capita, entirely driven by a strong hump-shaped relationship with the share of self-employed workers. Labor market institutions fully account for the hump shape: in countries with unemployment protection, wage markdowns increase with the share of self-employment while the opposite is true in countries without it. We explain this finding through the lens of a simple oligopsonistic labor market model with frictions. Self-employment prevalence correlates with the elasticity of labor supply to the wage paid, and labor market institutions can change the sign of this relationship.
    Keywords: labor market power, self-employment, development, labor market institutions
    JEL: J20 J30 J42 L11
    Date: 2024–02
  2. By: Wessel Vermeulen; Fernanda Gutierrez Amaros
    Abstract: Data on online job postings represents an important source of information for local labour markets. Many countries lack statistics on labour demand that are sufficiently up-to-date and disaggregated across regions, sectors and occupations. Web-scraped data from online job postings can provide further insights on the trends in labour demand and the skills needed across regions, sectors and occupations. This paper assesses the comparability and validity between Lightcast and other data sources for Austria, Belgium, Bulgaria, Germany, Hungary, the Netherlands, Portugal, Romania, Spain and Sweden, for the years 2019 to 2022 across regions, sectors and occupations. It concludes with some recommendations for labour market analysts that want to use data on online job postings for assessing labour demand trends.
    Keywords: big data, Lightcast (Burning Glass), online job postings, unconventional data sources, vacancy data
    JEL: C89 J23 J29 J63 O50 R12 Y1
    Date: 2024–03–11
  3. By: Mladen Adamovic (Department of Huan Resource Management & Employment Relations, King’s Business School, King’s College London, 30 Aldwych, London WC2B 4BG, UK.); Andreas Leibbrandt (Department of Economics, Monash University, Clayton, VIC 3800, Australia.)
    Abstract: Ethnic inequalities are pervasive in the higher echelons of organizations. We conducted a field experiment to analyze if there is a glass ceiling for ethnic minorities entering leadership positions. We submitted over 12, 000 job applications, to over 4, 000 job advertisements, to investigate hiring discrimination against six ethnic groups for leadership positions. Drawing on implicit leadership theory, we argue that ethnic discrimination is particularly pronounced in the recruitment of leadership positions. Our findings confirm this hypothesis. We find that discrimination increases for leadership positions. Resumes with non-English names receive 57.4% fewer positive responses for leadership positions than identical resumes with English names. For non-leadership positions, ethnic minorities receive 45.3 percent fewer positive responses. Ethnic discrimination for leadership positions is even more pronounced when the advertised job requires customer contact. In contrast, ethnic discrimination in leadership positions is not significantly influenced by whether the organization’s job advertisement emphasizes individualism or learning, creativity, and innovation. These findings provide novel evidence of a glass ceiling for ethnic minorities to enter leadership positions.
    Keywords: Ethnic discrimination, hiring discrimination, resume study, field experiment, audit study
    JEL: C93 J23 J71 J78
    Date: 2024–03
  4. By: Ockenfels, Axel (University of Cologne); Sliwka, Dirk (University of Cologne); Werner, Peter (Maastricht University)
    Abstract: We compare evaluations of employee performance by individuals and groups of supervisors, analyzing a formal model and running a laboratory experiment. The model predicts that multi-rater evaluations are more precise than single-rater evaluations if groups rationally aggregate their signals about employee performance. Our controlled laboratory experiment confirms this prediction and finds evidence that this can indeed be attributed to accurate information processing in the group. Moreover, when employee compensation depends on evaluations, multi-rater evaluations tend to be associated with higher performance.
    Keywords: performance appraisal, calibration panels, group decision-making, real effort, incentives
    JEL: J33 M52
    Date: 2024–02
  5. By: Ekaterina Prytkova; Fabien Petit; Deyu Li; Sugat Chaturvedi; Tommaso Ciarli
    Abstract: This paper measures the exposure of industries and occupations to 40 digital technologies that emerged over the past decade and estimates their impact on European employment. Using a novel approach that leverages sentence transformers, we calculate exposure scores based on the semantic similarity between patents and ISCO-08/NACE Rev.2 classifications to construct an open–access database, ‘TechXposure’. By combining our data with a shift–share approach, we instrument the regional exposure to emerging digital technologies to estimate their employment impact across European regions. We find an overall positive effect of emerging digital technologies on employment, with a one-standard-deviation increase in regional exposure leading to a 1.069 percentage point increase in the employment-to-population ratio. However, upon examining the individual effects of these technologies, we find that smart agriculture, the internet of things, industrial and mobile robots, digital advertising, mobile payment, electronic messaging, cloud storage, social network technologies, and machine learning negatively impact regional employment.
    Keywords: occupation exposure, industry exposure, text as data, natural language processing, sentence transformers, emerging digital technologies, automation, employment
    JEL: C81 O31 O33 O34 J24 O52 R23
    Date: 2024
  6. By: Samuel Bryson; Evaristo Mwale; Kwabena Adu-Ababio
    Abstract: This paper explores two policy interventions in Zambia, a minimum wage hike in 2018 and an upward revision in the first kink in the progressive income tax schedule in 2017, to examine and compare the impact of minimum wage and tax kink changes on wages and the earnings distribution in the formal and informal sectors. The analysis builds on two thus far separate strands of literature that investigate the effects of minimum wages and bunching around tax kinks in developing countries using Zambian personal income tax data and data from the ILO Labour Force Surveys over the period 2012-21.
    Keywords: Personal income tax, Minimum wage, Informality, Zambia
    Date: 2024
  7. By: Stenberg, Anders (Swedish Institute for Social Research, Stockholm University); Tudor, Simona (Arbetsförmedlingen)
    Abstract: We analyze whether field of study assigned at age 16 impacts mental health in adulthood. Using a regression discontinuity design that exploits GPA cut-offs, we find that admission to the preferred study field improves mental health, lowering both the incidence of antidepressant prescriptions and of mental health-related hospitalizations. Engineering contributes strongly but not uniquely to the positive results. As for mechanisms, earnings explain 40% of the estimates, but earlier proposed hypotheses based on school-age peer characteristics have little explanatory power. Our findings imply that restrictions on individuals’ choices, to improve human capital allocations, entail costs that may have been underestimated.
    Keywords: field of study; health; secondary education
    JEL: I10 I21 I24 J24 J28 J32
    Date: 2024–02–21
  8. By: Carvajal, Daniel (Dept. of Economics, Norwegian School of Economics and Business Administration); Franco, Catalina (Center for Applied Research (SNF)); Isaksson, Siri (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: The promise of generative AI to increase human productivity relies on developing skills to become proficient at it. There is reason to suspect that women and men use AI tools differently, which could result in productivity and payoff gaps in a labor market increasingly demanding knowledge in AI. Thus, it is important to understand if there are gender differences in AI-usage among current students. We conduct a survey at the Norwegian School of Economics collecting use and attitudes towards ChatGPT, a measure of AI proficiency, and responses to policies allowing or forbidding ChatGPT use. Three key findings emerge: first, female students report a significantly lower use of ChatGPT compared to their male counterparts. Second, male students are more skilled at writing successful prompts, even after accounting for higher ChatGPT usage. Third, imposing university bans on ChatGPT use widens the gender gap in intended use substantially. We provide insights into potential factors influencing the AI adoption gender gap and highlight the role of appropriate encouragement and policies in allowing female students to benefit from AI usage, thereby mitigating potential impacts on later labor market outcomes.
    Keywords: Artificial intelligence; ChatGTP; gender; education; technology adoption
    JEL: I24 J16 J24 O33
    Date: 2024–03–14
  9. By: Daysal, N. Meltem (University of Copenhagen); Evans, William N. (University of Notre Dame); Pedersen, Mikkel Hasse (EY Denmark); Trandafir, Mircea (Rockwool Foundation Research Unit)
    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.
    Keywords: breast cancer, medical treatments, employment, mortality
    JEL: I10 I14 I18 J20
    Date: 2024–02
  10. By: Del Boca, Daniela (University of Turin); Pronzato, Chiara D. (University of Turin)
    Abstract: The increase in poverty rates among families and individuals in Italy over the past two decades can be attributed largely to repeated periods of economic crisis. Mounting concern over the problem has driven interest in the role of policy in supporting household welfare. Responding to the currently limited access to (or provision of) public aid and assistance, private institutions and philanthropic foundations have stepped up their efforts to create new initiatives for alleviating poverty. In this paper, we use a randomized control trial (RCT) to evaluate the impact of an Italian program aimed at supporting vulnerable individuals in four separate but related areas of household welfare: employment, financial circumstances, family responsibilities, and housing conditions. The program, known as Integro, was introduced in 2018 by the Compagnia di San Paolo, one of Italy's largest philanthropic institutions. Our findings indicate a positive and statistically significant impact of Integro on three of the four target outcomes considered, with only the fourth (housing conditions) not being affected. We also sought to identify any initial conditions potentially influencing the extent to which participants benefit from the program. Is Integro equally effective for everyone? According to our data, the program provides the best outcomes for males reporting lower human capital and greater socio-emotional stability.
    Keywords: housing, employment, randomized controlled trial
    JEL: J68 J24 I31 C93
    Date: 2024–02
  11. By: Alexandra Tsvetkova; Elettra D'Amico; Alexander Lembcke; Polina Knutsson; Wessel Vermeulen
    Abstract: This paper presents the first international assessment of the Lightcast vacancy data representativeness based on benchmarking against officially reported vacancy data in Australia, Canada, the United Kingdom and the United States. The analysis compares distributions in the Lightcast data versus official data across large (TL2) regions, industrial sectors and occupational categories. The analysis shows differences in representativeness across countries and on the three dimensions considered. In general, regional representativeness is considerably better than both occupational and sectoral representativeness.
    Keywords: big data, Lightcast (Burning Glass), online job postings, unconventional data sources, vacancy data
    JEL: C89 J23 J29 J63 O50 R12 Y1
    Date: 2024–03–11
  12. By: Del Bono, Emilia; Etheridge, Ben; Garcia, Paul
    Abstract: We investigate the relationship between child socio-emotional skills and labour market outcomes using longitudinal data from the 1970 British Cohort Study. We perform a novel factor analysis of child skills and capture four latent dimensions, representing ‘attention’, ‘conduct’, ‘emotional’, and ‘peers’ problems. Conditional on a range of confounding variables, we ï¬ nd that conduct problems, driven by aggression and impulsivity, are associated with positive outcomes in the labour market: higher wages, higher labour supply, sorting into ‘good’ jobs and higher productivity conditional on job tasks. Attention problems are instead negatively associated with labour market outcomes and this relationship is partially accounted for by schooling. We explore different mediating pathways, including through career interests, socialization and mental health - all measured in the adolescent period - but none of these is able to fully explain the association between child skills and later economic outcomes.
    Date: 2024–03–11
  13. By: David Kreitmeir; Paul A. Raschky
    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.
    Date: 2024–03
  14. By: Scott D. Easton (Boston College); Geoffrey T. Sanzenbacher (Boston College)
    Abstract: Past research has documented that Adverse Childhood Experiences (ACEs) impact cognition, education, relationship stability, employment, and earnings. Less research has focused on how these impacts affect measures of long-term economic well-being that capture cumulative disadvantage. This study therefore uses the National Longitudinal Study of Youth 1979 Cohort to investigate the net worth of individuals near the end of their careers, comparing those with and without ACEs. The study uses a Blinder-Oaxaca Decomposition to investigate the underlying mechanisms for any group differences. The findings suggest that observed differences in education, marital instability, and lifetime earnings explain significant portions of the net worth disparities between those with and without ACEs. The fact that those experiencing ACEs also get less out of normally beneficial aspects of their families – such as higher income – also plays a significant role. The results suggest that no “silver bullet” exists to reduce the impact of ACEs on long-term economic well-being. Interventions that simultaneously prevent child maltreatment and increase social and emotional development – like high-quality preschool – are more likely to be effective than those targeting any single aspect of individuals’ lives.
    Keywords: Adverse Childhood Experiences, Wealth Inequality, Cumulative Disadvantage
    JEL: J12 J24 D3
    Date: 2024–03–03
  15. By: Mark Setterfield (Department of Economics, New School For Social Research, USA)
    Abstract: The purpose of this paper is to contribute to the integration of unpaid care-giving in the household into short- and long-term macroeconomic theory and, in particular, the theoretical structure of production on the supply-side of the economy. The ambition of the project is to furnish a general theoretical representation of how unpaid care giving and its (gendered) social structure contributes to the technical conditions of production in the sphere of marketed output. In so doing, it aims to provide macro theorists with an apparatus that allows consistent description of both short-term (levels of activity) and long-term (rates of growth) macro outcomes in a manner that routinely integrates feminist insights regarding the gendered structure of the social reproduction of labour into macroeconomic analysis.
    Keywords: Social reproduction of labour, unpaid care-giving, macroeconomic theory, potential output, natural rate of growth, technical change
    JEL: E11 E12 B54 E23 J13 J16 J24 O33
    Date: 2024–03

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