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on Labor Markets - Supply, Demand, and Wages |
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Issue of 2024‒05‒20
sixteen papers chosen by |
| By: | Carolin Linckh; Samuel Muehlemann; Harald Pfeifer |
| Abstract: | This paper analyzes the relationship between labor market tightness and firms' hiring behavior. We use unique linked employer-employee data to show that firms lower their hiring standards in tight labor markets, but we find no evidence that firms increase the starting wages of new hires. Exploiting detailed data on pre- and post-match hiring costs, we find that both cost components increase with the degree of tightness in the labor market. However, as pre-match search costs make up only a small share of the total hiring costs, our results highlight the importance of the post-match hiring costs for firms' adjustment to tightness. |
| Keywords: | Recruiting, Labor market tightness, Wages, Hiring standard, Hiring cost, On the Job Training |
| JEL: | J23 J24 J31 J63 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0217&r=lma |
| By: | Mauro Caselli; Edwin Fourrier-Nicolai; Andrea Fracasso; Sergio Scicchitano |
| Abstract: | This study examines the causal influence of digital technologies, specifically operational (ODT) and information digital technologies (IDT), on firms’ employment structure using Italian firm-level data. It employs a unique empirical approach, constructing instrumental variables based on predetermined employment composition and global technological progress, proxied by patents. Findings indicate that IDT investment positively affects employment, favoring a skilled, IT-competent workforce, as supported by firms’ training and recruitment plans. Conversely, ODT investment does not significantly alter total employment but skews the workforce towards temporary contracts. The study contributes methodologically by distinguishing between ODT and IDT and highlighting nuanced employment dynamics within firms. |
| Keywords: | digital technologies, labour demand, training, firms |
| JEL: | D22 J23 J24 M51 M53 O33 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11056&r=lma |
| By: | Daniil Kashkarov; Valentin Artemev |
| Abstract: | Which career paths lead workers towards high-skilled non-routine cognitive occupations? Using PSID data, we show that, for a significant share of workers, a career path towards non-routine cognitive occupations goes through middle-skilled routine occupations, with the majority going through a subset of routine cognitive occupations. We then argue that the decline in employment in routine cognitive occupations due to routine-biased technological change can negatively affect the chances of younger cohorts joining high-skilled occupations. To test this hypothesis, we develop a structural occupational choice model that endogenously generates realistic career paths and estimate it using PSID data and job ad data from three major US outlets covering the period from 1940 to 2000. Our estimations suggest that, on average, 6% of workers ending up in non-routine cognitive occupations use routine cognitive occupations as stepping stones that allow them to maintain and accumulate human capital and experience relevant for later employment in high-skilled occupations. A fall in employment opportunities in routine cognitive occupations over the period of the most intensive routine-biased technological change led to at least 1.37 million lost high-skilled workers who got stuck in less skilled occupations. |
| Keywords: | routine-biased tech. change, occupational choice, human capital, career paths |
| JEL: | J24 O33 E24 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp776&r=lma |
| By: | Andelic, Nicole (University of Aberdeen); Allan, Julia (University of Stirling); Bender, Keith A. (University of Aberdeen); Powell, Daniel (University of Aberdeen); Theodossiou, Ioannis (University of Aberdeen) |
| Abstract: | Recent research highlights the association of performance-related pay (PRP) and poor health. An uninvestigated potential mechanism is a lower frequency of leisure activities, since PRP incentives longer work hours. This study investigates PRP's effect on a variety of leisure pursuits. After correcting for self-selection, UK data show that PRP workers are less likely to engage in some forms of exercise and spend less time sleeping compared to non PRP workers. In addition, they are more likely to eat out and consume alcohol. Such leisure differences between PRP and salaried workers may negatively affect the health and wellbeing of PRP workers. |
| Keywords: | performance-related pay, leisure, sleep, health |
| JEL: | J33 J22 I0 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16886&r=lma |
| By: | Adamopoulou, Effrosyni; Manaresi, Francesco; Rachedi, Omar; Yurdagul, Emircan |
| Abstract: | Minimum wages generate an asymmetric pass-through of rm shocks across workers. We establish this result leveraging employer-employee data on Italian metalmanufacturing rms, which face dierent wage oors that vary within occupations. In response to negative rm productivity shocks, workers close to the wage oors experience higher job separations but no wage loss. However, the wage of high-paid workers decreases, and more so in rms with higher incidence of minimum wages. A neoclassical model with complementarities across workers with dierent skills rationalizes these ndings. Our results uncover a novel channel that tilts the welfare gains of minimum wages toward low-paid workers. |
| Keywords: | Firm productivity shocks, pass-through, employer-employee data, skill complementarities, incomplete-market model |
| JEL: | E24 E25 E64 J31 J38 J52 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:290403&r=lma |
| By: | Congressional Budget Office |
| Abstract: | The difference between the compensation of federal civilian employees and that of similar private-sector employees varied widely in 2022 depending on employees’ educational attainment. For federal workers whose highest level of education was a master’s degree or more, the cost of total compensation was less, on average, than the cost for their counterparts in the private sector. |
| JEL: | J30 J31 J32 J33 J45 |
| Date: | 2024–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:59970&r=lma |
| By: | Congressional Budget Office |
| Abstract: | CBO compared economic outcomes from 2017 to 2019 of veterans who are Black, male, and working age (ages 22 to 54) with outcomes of two groups of working-age men: Black nonveterans and White veterans. The agency found that, on average, Black veterans had more earnings, higher rates of marriage and homeownership, and greater educational attainment than Black nonveterans did. But the average earnings of Black veterans and Black nonveterans did not differ among men with similar demographic characteristics (age, marital status, level of education, and region of residence). |
| JEL: | D31 H31 H51 H55 H56 I18 I24 J15 J26 J32 J33 J38 J45 M52 N32 N42 |
| Date: | 2024–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:60043&r=lma |
| By: | Arni, Patrick (University of Bristol); Egger, Peter (ETH Zurich); Erhardt, Katharina (Heinrich Heine University Düsseldorf); Gubler, Matthias (Swiss National Bank); Sauré, Philip (CEPR) |
| Abstract: | This paper identifies the causal effects of trade shocks on worker outcomes. We exploit a unique setting based on three pillars: (i) a large, unanticipated appreciation of the Swiss franc in 2015, (ii) detailed data with firm-level exposure to trade via output markets (both domestic and foreign) and imported inputs (distinguished by their foreign labor content), which we match to (iii) worker-level panel data with rich information on labor-market outcomes. We find that increased competition in output markets induces negative effects on earnings for workers of affected firms. Conversely, a price drop of foreign inputs generates positive effects for workers of importing firms, but less so the higher the labor content of these imported inputs. All these patterns are consistent with a parsimonious model of task-based production. Moreover, positive and negative earnings effects are especially strong for workers in the lower tail of the within-firm wage distribution and, in particular, for workers who change their employer, pointing at involuntary (voluntary) job separations from firms that are negatively (positively) affected by the exchange rate appreciation. |
| Keywords: | trade and labor, exchange rate shock, matched employer-employee data |
| JEL: | F14 F16 J46 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16895&r=lma |
| By: | Richard Blundell; Christopher R. Bollinger; Charles Hokayem; James P. Ziliak |
| Abstract: | We present new estimates of earnings volatility over time and the lifecycle for men and women by race and human capital. Using a long panel of restricted-access administrative Social Security earnings linked to the Current Population Survey, we estimate volatility with both transparent summary measures, as well as decompositions into permanent and transitory components. From the late 1970s to the mid 1990s there is a strong negative trend in earnings volatility for both men and women. We show this is driven by a reduction in transitory variance. Starting in the mid 1990s there is relative stability in trends of male earnings volatility because of an increase in the variance of permanent shocks, especially among workers without a college education, and a more attenuated trend decline among women. Cohort analyses indicate a strong U-shape pattern of volatility over the working life, which comes from large permanent shocks early and later in the lifecycle. However, this U-shape shifted downward and leftward in more recent cohorts, the latter from the fanning out of lifecycle transitory volatility in younger cohorts. These patterns are more pronounced among White men and women compared to Black workers. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:24-21&r=lma |
| By: | Duygu Buyukyazici; Francesco Quatraro; ; |
| Abstract: | In response to global challenges related to resource scarcity and environmental concerns, the circular economy (CE) has emerged as a transformative model focused on resource e |
| Keywords: | circular economy, skills, competencies, relatedness, complexity |
| JEL: | O33 E24 Q01 Q50 J24 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2411&r=lma |
| By: | Stefan C. Wolter; Thea Zoellner |
| Abstract: | Despite numerous measures intended to enhance gender equality, gender-specific study and career choices remain a persistent concern for policymakers and academics globally. We contribute to the literature on gendered career choices by focusing on explicitly stated parental preferences for their children's occupations, using a large-scale randomized survey experiment with adults (N=5940) in Switzerland. The focus on parents (and hypothetical parents) is motivated by the observation that adolescents consistently mention their parents as the single most important factor influencing their career choices. The surveyed adults are presented with a realistic choice situation, in which their hypothetical daughter or son has been proposed two different training occupations. The pair of occupations presented to the adults is drawn from a random sample of 105 pairs of occupations, and the respondents are not informed about the gender distribution of the two occupations. Results show that adults are gender-neutral when advising a daughter but have a pronounced preference for male- dominated occupations when advising sons. Preferences are almost identical for parents and non-parents and across age cohorts of adults. |
| Keywords: | Gender, Occupational choice, Career advice, Vocational Education |
| JEL: | J24 J16 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0216&r=lma |
| By: | Congregado, Emilio (University of Huelva); Fossen, Frank M. (University of Nevada, Reno); Rubino, Nicola (University of Rome Tor Vergata); Troncoso, David (University of Seville) |
| Abstract: | The dynamics of startup activity are crucial for job creation, innovation, and a competitive economy. Does regional firm formation exhibit hysteresis, such that shocks, including those induced by temporary policy interventions, have permanent effects? Due to the pronounced heterogeneity among new entrepreneurs, it is important to distinguish between those pulled by opportunity and those pushed by necessity. This distinction allows evaluating the long-term effects of policies aimed at stimulating opportunity entrepreneurship versus active labor-market policies supporting self-employment as a way out of unemployment. Based on 84 waves of quarterly microdata from the Spanish Labor Force Survey, we create time series of new opportunity and new necessity entrepreneurship for the 17 Spanish regions. To test whether exogenous shocks have long-run effects on firm formation, we apply a battery of panel data and time series unit root tests accounting for deterministic breaks. We also present results for the different Spanish regions and industrial sectors. We find that hysteresis is more widespread in new opportunity than in new necessity entrepreneurship, implying that shocks and temporary policies are more likely to shift opportunity than necessity entrepreneurship in the long run. Moreover, we document that the global Financial Crisis of 2008 changed the technology of firm formation out of opportunity, but not out of necessity. Our analysis opens the door to further research on the long-term effectiveness of a regional and sectoral policy mix of entrepreneurship promotion and active labor market policies. |
| Keywords: | self-employment, opportunity entrepreneurship, necessity entrepreneurship, firm formation, hysteresis, stationarity, regions |
| JEL: | C32 E23 J24 L26 M13 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16930&r=lma |
| By: | Hideo Akabayashi (Faculty of Economics, Keio University); Shimpei Taguchi (Graduate School of Economics, Keio University (Graduate student)); Mirka Zvedelikova (Institute of Social and Economic Research, Osaka University) |
| Abstract: | During the COVID-19 pandemic, schools switched to online education. Using Japan' s nationwide administrative data, we examine the impact of schools' ICT equipment and teachers' IT skills on the provision of online classes, communication with students' families, and teachers' working hours in early 2020. To isolate supply-side effects, we exploit differences in ICT resources between public elementary and junior high schools at a municipality level, the level at which ICT resources are decided. We find that basic ICT equipment was critical to implementing online classes, but IT skills were not. However, IT skills were associated with teachers f working hours. |
| Keywords: | COVID-19, remote education, teachers' skills, school resources |
| JEL: | I20 J22 H75 |
| Date: | 2024–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2024-010&r=lma |
| By: | OECD; Orsetta Causa; Maxime Nguyen; Emilia Soldani |
| Abstract: | This paper develops a novel classification of high-polluting occupations for a large sample of European countries. Unlike previous efforts in the literature, the classification exploits country-level data on air polluting emission intensity by industry. The country-level data allows to capture important cross-country differences, due to differences in technology and in production focus. Applying the new classification to European Labour Force Survey data shows that, on average across the countries covered, about 4% of workers are employed in high-polluting jobs, ranging from 9% in Czechia and the Slovak Republic to around 2% in Austria. These shares do not exhibit any clear decreasing trend over the past decade. High-polluting jobs are unequally distributed, being over-represented among men, workers with lower and medium educational attainment and those living in rural areas. |
| Keywords: | air polluting emissions, classification, climate change, green transition, high-polluting jobs, labour markets |
| JEL: | J21 Q51 Q53 Q56 |
| Date: | 2024–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1795-en&r=lma |
| By: | Das, Gouranga G.; Bhattacharya, Ranajoy |
| Abstract: | Empirical literature on the effect of Contract Farming (CF) on economic development of a Less Developed Economy (LDC) is divided on the basic issue of concern for the policy makers in LDCs: should CF be encouraged, and if so, under what circumstances? Broadly, there are both intermediate (yield, price etc.) and ultimate (mainly household income and food security) benefits. However, the implication of the outcomes on welfare are not unidirectional. For instance, in most cases yield per hectare and household income of farmers increased along with rise in prices of crops. Das, Bhattacharya and Marjit (JRFM, 2023) builds a model to explore such adverse welfare impacts due to CF. This paper's focus is totally different. Also, there is no homogeneity in the sample of crops or the country of occurrence. Since most of these contracts are private in nature with a clear objective of profit maximization, the estimates could have self-section biases, which is rarely controlled for. Additionally, these are mostly in the nature of treatment/control group studies (though not RCTs). A fundamental issue is that spillover effects bias outcomes in these methods and it should be controlled for. This implies that there is virtually no empirical literature on spillover effects. Looking at it differently, these studies conclude that in the absence of spillover effects CF appears to be conditionally beneficial to LDCs. Given this background, this paper investigates: what are the nature of these conditions? To what extent do spillover effects relax them? Constructing a three-sector-four-factors general equilibrium model: agricultural with contract farming, traditional agriculture, and manufacturing, we derive the conditions under which it is conducive for low-income farmers. The objective is to prescribe a clear set of recommendations to the governments of the LDCs that are experimenting with CF on the nature of priors that they need to ensure for significantly increasing the probability of net benefit from CF. |
| Keywords: | Land deal, Contract Farming, Vertical Coordination, Wage gap, Self-selection Bias, Spillover, Governance |
| JEL: | F22 J31 Q15 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1428&r=lma |
| By: | Blazar, David (University of Maryland); Anthenelli, Max (University of Maryland at College Park); Gao, Wenjing (University of Maryland at College Park); Goings, Ramon (University of Maryland, Baltimore County); Gershenson, Seth (American University) |
| Abstract: | Mounting evidence supporting the advantages of a diverse teacher workforce prompts policymakers to scrutinize existing recruitment pathways. Following four cohorts of Maryland public high-school students over 12 years reveals several insights. Early barriers require timely interventions, aiding students of color in achieving educational milestones that are prerequisites for teacher candidacy (high school graduation, college enrollment). While alternative pathways that bypass traditional undergraduate teacher preparation may help, current approaches still show persistent racial disparities. Data simulations underscore the need for race-conscious policies specifically targeting or differentially benefiting students of color, as race-neutral strategies have minimal impact. Ultimately, multiple race-conscious policy solutions addressing various educational milestones must demonstrate significant effects—approximately 30% increases—to reshape the teacher workforce to align with student body demographics. |
| Keywords: | teacher diversity, teacher labor markets |
| JEL: | I2 J2 J4 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16928&r=lma |