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on Labor Markets - Supply, Demand, and Wages |
| By: | Braunschweig, Luisa (Institute for Employment Research (IAB), Nuremberg); Dauth, Wolfgang (Institut für Arbeitsmarkt- und Berufsforschung); Roth, Duncan H.W. (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | We examine the development of worker-firm matching over the career due to job mobility. Using administrative employer-employee data covering the universe of German employees, we measure the degree of assortative matching as the correlation of worker and firm quality measures obtained from an AKM wage decomposition. We also introduce a novel measure based on the distance between the estimates of worker and firm quality. Both measures indicate that the degree of assortative matching, on average, increases with each job move. For high-quality workers, this can be explained by job ladder models as these workers move to higher-quality firms. Low-quality workers are matched less assortatively at the beginning of their careers, but also manage to climb the job ladder at first. For this group, the increase in assortative matching increases after the third job, when they fall down the job ladder. Changes in worker-firm matching are also relevant for the extent of life cycle inequality. We estimate that the increase in assortative matching accounts for around 25% of the increase in wage inequality over the life cycle. |
| Keywords: | assortative matching, wage decomposition, job mobility, life cycle, wage inequality, firms |
| JEL: | J23 J24 J31 J62 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17207 |
| By: | Cnossen, Femke (University of Groningen); Nikolova, Milena (University of Groningen) |
| Abstract: | Self-determination theory posits that individuals are motivated at work when their inherent psychological needs for competence, autonomy, and relatedness are satisfied. Drawing on this theory, this paper presents a new conceptual model explaining how work meaningfulness influences effort at work. In our model, motivation decreases the disutility of exerting effort and paves the way for experiencing meaningful work, which, in turn, boosts effort. We find empirical support for our model's propositions using new data from the Dutch LISS panel. Specifically, work meaningfulness is positively associated with effort. We also show that self-determination enhances work meaningfulness, especially for individuals experiencing high levels of competence, autonomy, and relatedness. Overall, our findings suggest that satisfying workers' psychological needs from working enhances work meaningfulness, motivation, and effort, providing valuable insights for economic models of effort and productivity. |
| Keywords: | meaningful work, motivation, non-monetary benefits of work, labor market outcomes, self-determination theory |
| JEL: | J01 J30 J32 J81 I30 I31 M50 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17182 |
| By: | Daron Acemoglu; Fredric Kong; Pascual Restrepo |
| Abstract: | This chapter reviews recent advances in the task model and shows how this framework can be put to work to understand the major labor market trends of the last several decades. Production in each industry necessitates the completion of a range of tasks, which can be allocated to workers of different skill types or to capital. Factors of production have well-defined comparative advantage across tasks, which governs the pattern of substitution between skill groups. Technological change can: (1) augment a specific labor type—e.g., increase the productivity of labor in tasks it is already performing; (2) augment capital; (3) automate work by enabling capital to perform tasks previously allocated to labor; (4) create new tasks. The task model clarifies that these different types of technological changes have distinct effects on labor demand, factor shares and productivity, and their full impact depends on the pattern of substitution between different factors which arises endogenously in the task framework. We explore the implications of the task framework using reduced-form evidence, which highlights the central role of automation and new tasks in recent labor market trends. We also explain how general equilibrium effects ignored in these reduced-form approaches can be estimated structurally. |
| JEL: | J23 J31 O33 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32872 |
| By: | Matteo Picchio (Department of Economics and Social Sciences, Universita' Politecnica delle Marche); Jan C. Van Ours (Erasmus School of Economics and Tinbergen Institute, The Netherlands) |
| Abstract: | High temperatures can have a negative effect on workplace safety for a variety of reasons. Discomfort and reduced concentration caused by heat can lead to workers making mistakes and injuring themselves. Discomfort can also be an incentive for workers to report an injury that they would not have reported in the absence of heat. We investigate how temperature affects injuries of professional tennis players in outdoor singles matches. We find that for men injury rates increase with ambient temperatures. For women, there is no effect of high temperatures on injuries. Among male tennis players, there is some heterogeneity in the temperature effects, which seem to be influenced by incentives. Specifically, when a male player is losing at the beginning of a crucial (second) fourth set in (best-of-three) best-of-five matches, the temperature effect is much larger than when he is winning. In best-of-five matches, which are more exhausting, this effect is age-dependent and stronger for older players. |
| Keywords: | Climate change, temperatures, tennis, injuries, health. |
| JEL: | J24 J81 Q51 Q54 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:anc:wpaper:489 |
| By: | Chung, Andy (University of Reading); Hamermesh, Daniel S. (University of Texas at Austin); Singleton, Carl (University of Stirling); Wang, Zhengxin (Zhejiang University of Finance and Economics); Zhang, Junsen (Zhejiang University) |
| Abstract: | We investigate the relationship between physical attractiveness and the time people devote to video/computer gaming. Average American teenagers spend 2.6% of their waking hours gaming, while for adults this figure is 2.7%. Using the American Add Health Study, we show that adults who are better-looking have more close friends. Arguably, gaming is costlier for them, and they thus engage in less of it. Physically attractive teens are less likely to engage in gaming at all, whereas unattractive teens who do game spend more time each week on it than other gamers. Attractive adults are also less likely than others to spend any time gaming; and if they do, they spend less time on it than less attractive adults. Using the longitudinal nature of the Add Health Study, we find supportive evidence that these relationships are causal for adults: good looks decrease gaming time, not vice-versa. |
| Keywords: | physical attractiveness, beauty, time allocation, social activity, teenage behavior |
| JEL: | J22 L82 L86 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17191 |
| By: | Claudio Schilter; Samuel Luethi; Stefan C. Wolter |
| Abstract: | We merge experimental data on competitiveness of a large sample of students with their complete educational history for up to ten years after the initial assessment. Exploiting quasi-random class assignments, we find that having competitive peers as classmates makes students choose and secure positions in higher-paying occupations. These occupations are also more challenging and more popular. On the cost side, competitive peers do not lead to a lower probability of graduating from the subsequent job-specific education, but they significantly increase the probability of requiring extra time to do so. |
| Keywords: | Peer effects, competitiveness, occupational choice |
| JEL: | C93 D91 J24 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iso:educat:0228 |
| By: | Daniel M. Hungerman; David C. Phillips; Kevin Rinz; James X. Sullivan |
| Abstract: | We examine the labor supply effects of short-term income transfers for families experiencing a housing crisis. We link callers of an emergency assistance homelessness prevention hotline to their federal tax records and measure their employment & earnings in years surrounding their calls. Our methodology exploits quasi-random variation in the availability of assistance to compare similar families receiving and not receiving funds. Looking up to four years post-assistance, we find evidence, especially for the lowest earners, of earnings and employment gains, and overall we find no evidence that assistance lowers earnings or employment. Our results indicate that any income effect of temporary transfers for those in crisis is minimal and that these transfers may convey labor market benefits for the poorest of the poor. |
| JEL: | I38 I39 R20 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32856 |
| By: | Tomas Key (Bank of England); Jamie Lenney (Bank of England) |
| Abstract: | In this paper, we examine the response of earnings and employment to fluctuations in aggregate economic activity (GDP) across the income distribution. Using data from the UK’s Labour Force Survey, we present evidence that aggregate fluctuations have economically significant but heterogeneous impacts across the income distribution. Sensitivity is greatest at the very bottom (first decile) of the income distribution and smallest in the upper middle (seventh and eight deciles) of the distribution. The transmission of GDP fluctuations also differs across the income distribution. Changes to hours worked and employment explain the majority of the labour earnings response in the bottom half of the distribution, whereas changes to the hourly wage are more important in the top half. In a further decomposition, we show that the changes to employment are largely due to fluctuations in the employment to unemployment transition rate. We also find that GDP fluctuations are positively correlated with job switching in the bottom half of the distribution. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cfm:wpaper:2430 |
| By: | Luis Bauluz; Pawel Bukowski; Mark Fransham; Annie Lee; Margarita Lopez-Forero; Filip Novokmet; Sebastien Breau; Neil Lee; Clément Malgouyres; Moritz Schularick; Gregory Verdugo |
| Abstract: | Working Paper Series no. 957. The rise of economic inequalities in advanced economies has been often linked with the growth of spatial inequalities within countries, yet there is limited comparative research that studies the relationship between national and subnational economic inequality. This paper presents the first systematic attempt to create internationally comparable evidence showing how different countries perform in terms of geographic wage inequalities. We create cross-country comparable measures of spatial wage disparities between and within similarly-defined local labour market areas (LLMAs) for Canada, France, (West) Germany, the UK and the US from the 1970s to 2010s, and assess their contribution to national inequality. By the end of the 2010s, spatial inequalities in LLMA average primary wages are similar in Canada, France, Germany and the UK; the US exhibits the highest degree of spatial inequality. Over the study period, spatial inequalities have nearly doubled in all countries, except for France where spatial inequalities have fallen back to 1970s levels, after an increase in the 1990s. Due to a concomitant increase in within-place inequality, the contribution of places in explaining national wage inequality has remained fairly constant over the 40-year study period, except in the UK where we document a significant increase. Whilst common global social, economic and technological shocks are important drivers of spatial inequality, this variation in levels and trends of spatial inequality opens the way to comparative research exploring the role of national institutions in mediating how global shocks translate into economic disparities between places. |
| Keywords: | Regional Inequality, Wage Inequality, Local Labour Markets |
| JEL: | J3 R1 R23 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:957 |
| By: | Meango, Romuald (University of Oxford); Girsberger, Esther Mirjam (University of Technology, Sydney) |
| Abstract: | Ex ante returns, the net value that agents perceive before they take an investment decision, are understood as the main drivers of individual decisions. Hence, their distribution in a population is an important tool for counterfactual analysis and policy evaluation. This paper studies the identification of the population distribution of ex ante returns using stated choice experiments, in the context of binary investment decisions. The environment is characterised by uncertainty about future outcomes, with some uncertainty being resolved over time. In this context, each individual holds a probability distribution over different levels of returns. The paper provides novel, nonparametric identification results for the population distribution of returns, accounting for uncertainty. It complements these with a nonparametric/semiparametric estimation methodology, which is new to the stated-preference literature. Finally, it uses these results to study the preference of high ability students in Côte d'Ivoire for public-sector jobs and how the competition for talent affects the expansion of the private sector. |
| Keywords: | subjective expectations, ex ante returns, nonseparable panel, distribution regression, job search, public sector |
| JEL: | C21 C23 D84 J21 J24 J30 J45 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17174 |
| By: | Hollandt, Nils Torben; Müller, Steffen |
| Abstract: | Wage mobility reduces the persistence of wage inequality. We develop a framework to quantify the contribution of employer-to-employer movers to aggregate wage mobility. Using three decades of German social security data, we find that inequality increased while aggregate wage mobility decreased. Employer-to-employer movers exhibit higher wage mobility, mainly due to changes in employer wage premia at job change. The massive structural changes following German unification temporarily led to a high number of movers, which in turn boosted aggregate wage mobility. Wage mobility is much lower at the bottom of the wage distribution, and the decline in aggregate wage mobility since the 1980s is concentrated there. The overall decline can be mostly attributed to a reduction in wage mobility per mover, which is due to a compositional shift toward lower-wage movers. |
| Keywords: | business dynamism, employer changes, German linked-employer-employee data, inequality persistence, wage inequality, wage mobility, wage premiums |
| JEL: | D63 J30 J31 J62 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwhdps:302192 |
| By: | Mary Ann Bronson; Daniel Haanwinckel; Maurizio Mazzocco |
| Abstract: | How do different income taxation systems affect household decisions and welfare? We answer this question by first documenting the strong labor supply disincentives for secondary earners of the U.S. tax system and by using variations from the Bush Tax Cuts to assess their effects on intra-household specialization. We then develop a lifecycle model incorporating labor supply, marriage and divorce decisions with limited commitment, household production, human capital accumulation, and assortative mating. After estimating and validating the model with various datasets, we evaluate four tax systems: a U.S.-like income-splitting system, an individual taxation system, a flexible general joint system, and an income-splitting system with secondary-earner deductions. We find that the individual taxation system provides higher welfare than income splitting but increases inequality. The general joint system offers the highest welfare but is complex to implement. The income-splitting system with a secondary-earner deduction improves welfare and reduces inequality while maintaining simplicity. |
| JEL: | H2 H3 J1 J2 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32861 |
| By: | Dahlstrand, Amanda (University of Zurich); Le Nestour, Nestor (Stockholm University); Michaels, Guy (London School of Economics) |
| Abstract: | Online delivery of one-to-one services offers potential cost savings and increased convenience, yet relatively little is known about its impacts on providers and consumers. This paper studies the online delivery of healthcare, focusing on primary care doctor consultations. We use novel data from Sweden and an effectively random assignment of patients to nurses, who differ in their propensity to direct patients to online versus inperson consultations. Our findings reveal that online consultations are delivered sooner, are shorter, and yield similar in-consultation outcomes, including rates of diagnosis, prescriptions, and specialist referrals, as well as patient satisfaction. However, in the short term, online consultations lead to more emergency department (ED) visits and additional in-person primary care visits, though no significant medium-term health effects are observed. We discuss the extent to which follow-ups reduce online's cost savings, as well as online's advantages for different patients and how to improve hybrid organizations' cost effectiveness. |
| Keywords: | telehealth, remote work, online services |
| JEL: | J44 I11 O33 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17177 |
| By: | Julia Schmidt; Graham Pilgrim; Annabelle Mourougane |
| Abstract: | This paper estimates the artificial intelligence-hiring intensity of occupations/industries (i.e. the share of job postings related to AI skills) in the United Kingdom during 2012-22. The analysis deploys a natural language processing algorithm (NLP) on online job postings, collected by Lightcast, which provides timely and detailed insights into labour demand for different professions. The key contribution of the study lies in the design of the classification rule identifying jobs as AI-related which, contrary to the existing literature, goes beyond the simple use of keywords. Moreover, the methodology allows for comparisons between data-hiring intensive jobs, defined as the share of jobs related to data production tasks, and AI-hiring intensive jobs. Estimates point to a rise in the economy-wide AI-hiring intensity in the United Kingdom over the past decade but to fairly small levels (reaching 0.6% on average over the 2017-22 period). Over time, the demand for AI-related jobs has spread outside the traditional Information, Communication and Telecommunications industries, with the Finance and Insurance industry increasingly demanding AI skills. At a regional level, the higher demand for AI-related jobs is found in London and research hubs. At the occupation level, marked changes in the demand for AI skills are also visible. Professions such as data scientist, computer scientist, hardware engineer and robotics engineer are estimated to be the most AI-hiring intense occupations in the United Kingdom. The data and methodology used allow for the exploration of cross-country estimates in the future. |
| Keywords: | AI-hiring intensity, artificial intelligence, job advertisements, natural language processing, united kingdom |
| JEL: | C80 C88 E01 J21 |
| Date: | 2024–09–05 |
| URL: | https://d.repec.org/n?u=RePEc:oec:comaaa:25-en |
| By: | Karger, Ezra (Federal Reserve Bank of Chicago); Wray, Anthony (University of Southern Denmark) |
| Abstract: | The average white male born in 1900 earned 2.6 times more labor income over their lifetime than the average Black male. This gap is nearly twice as large as the more commonly studied cross-sectional Black-white earnings gap because 48% of Black males born in 1900 died before the age of 30 as compared to just 26% of white males. We calibrate a model of optimal consumption in a world with mortality risk to data describing the life-cycle earnings and survival probabilities of Black and white males born between 1900 and 1970. We find that convergence in Black and white mortality rates led to a 50% reduction in Black-white welfare gaps between the 1900 and 1920 birth cohorts, even as cross-sectional Black-white income gaps for those cohorts remained relatively constant. However, the Black-white welfare gap stagnated for the 1920 to 1970 birth cohorts as gaps in Black-white life expectancy and income remained stable and large. |
| Keywords: | life-cycle earnings, life expectancy, Black-white welfare gap |
| JEL: | J11 J31 N32 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17221 |
| By: | Bietenbeck, Jan (Department of Economics, Lund University); Irmert, Natalie (Department of Economics, Lund University); Nilsson, Therese (Department of Economics, Lund University, and) |
| Abstract: | This paper investigates the role of individualism in explaining cross-country differences in working from home (WFH). Using data from the Current Population Survey (CPS) of the United States and the European Social Survey (ESS), we isolate the influence of individualism by comparing immigrants from different cultural backgrounds residing in the same location. We find that a 10-point increase in country-of-origin individualism, measured on a 0-100 scale, is associated with a 3.9 percentage point (pp) higher likelihood of WFH and 1.12 more weekly WFH hours in the CPS, and a 2 pp higher likelihood of frequent WFH in the ESS. Our analysis of potential mechanisms suggests that individualism influences WFH through higher educational attainment and occupational selection. |
| Keywords: | Working from home; Individualism; Culture; Epidemiological approach |
| JEL: | D22 E24 J20 L23 |
| Date: | 2024–08–27 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1498 |
| By: | Abraham, Katharine G. (University of Maryland); Haltiwanger, John C. (University of Maryland); Hou, Claire (Congressional Budget Office); Sandusky, L. Kristin (U.S. Census Bureau); Spletzer, James R. (Independent Researcher) |
| Abstract: | Using rich administrative tax data, we explore the effects of the introduction of online ridesharing platforms on entry, employment and earnings in the Taxi and Limousine Services industry. Ridesharing dramatically increased the pace of entry of workers into the industry. New entrants were more likely to be young, female, White and U.S. born, and to combine earnings from ridesharing with wage and salary earnings. Displaced workers have found ridesharing to be a substantially more attractive fallback option than driving a taxi. Ridesharing also affected the incumbent taxi driver workforce. The exit rates of low-earning taxi drivers increased following the introduction of ridesharing in their city; exit rates of high-earning taxi drivers were little affected. In cities without regulations limiting the size of the taxi fleet, both groups of drivers experienced earnings losses following the introduction of ridesharing. These losses were ameliorated or absent in more heavily regulated markets. |
| Keywords: | Gig Economy |
| JEL: | J20 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17179 |
| By: | Wouter Simons; Alessandro Turrini; Lara Vivian |
| Abstract: | This discussion paper presents the key features of Artificial Intelligence (AI), highlighting the main differences with respect to previous IT and digital technologies. It presents the most relevant facts about AI diffusion across EU countries, and discusses the main economic implications, focusing especially on its impact on productivity and labour markets. While AI presents a formidable opportunity, it also entails major challenges, with implications for policy. This paper focuses on policies to remove bottlenecks to AI development and adoption, regulatory policies, competition policy, policies to deal with labour market and distributive implications. |
| JEL: | O30 J20 J30 O40 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:210 |
| By: | Tibor Lalinsky (National Bank of Slovakia); Jaanika Merikull (Bank of Estonia); Paloma Lopez-Garcia (European Central Bank) |
| Abstract: | This paper studies how the Covid-19 pandemic and the extensive job retention support that accompanied it affected productivity in Europe. The focus is on the reallocation channel and productivity-enhancing reallocation of jobs, following Foster et al., 2016. An extensive micro-distributed analysis of firm-level data for 11 euro area countries is used. The unique firm-level datasets are constructed by merging balance-sheet and income-statement data with policy support data. The paper exploits variation in employment responsiveness to productivity over time, particularly examining the relationship between changes in employment responsiveness and the job retention support in 2020 and studying how well the support was targeted by firm productivity. Acknowledging limitations of a small set of countries covered and occasionally large confidence bounds around estimates, the findings suggest that (1) productivity-enhancing reallocation was weaker in the pandemic than in the Great Recession; (2) The countries that were more generous with job retention support and countries where more support was allocated to lowproductivity firms showed weaker productivity-enhancing reallocation in 2020. |
| JEL: | D22 H25 J38 L29 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:svk:wpaper:1105 |
| By: | Casamonti, Matilde (PwC Middle East); Zinovyeva, Natalia (University of Warwick) |
| Abstract: | We analyze the impact of evaluator and candidate gender on the language used in academic evaluations using data on 295, 000 evaluation reports for applicants seeking professorial promotion across all academic fields in Italy. In this context, candidates are assessed by a national-level committee composed of five randomly selected evaluators from the corresponding field. We observe that the language used in evaluation reports varies significantly with applicants’ productivity and professional ties to evaluators, but we find no indication that the language of the assessments depends on the gender of either the candidates or the evaluators. |
| Keywords: | Academic Evaluations ; Women in Academia ; Gendered Language JEL Codes: I23 ; J16 ; J71 ; M51 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1513 |
| By: | Sebastian Benz; Alexander Jaax; Elisabeth van Lieshout |
| Abstract: | The contribution of services in the United Kingdom (UK) to exports, value added, and employment is one of the highest amongst OECD countries. UK employment also depends strongly on exports of digital services: in 2019 the jobs of around 3.2 million domestic workers in digital services sectors were embodied in UK exports. Median wages in these services are considerable higher than wages in other sectors of the UK economy. Econometric analysis shows that strong growth of employment in digital services generates multiplier effects benefitting local economies in the United Kingdom, with each additional digital services job creating around 0.3 jobs in the local non-tradable sector. Continued support for plurilateral and multilateral initiatives to dismantle barriers to services trade, including via the WTO Joint Initiative on Services Domestic Regulation, can help to enable more UK firms to take advantage of the potential for further growth in digital services trade. Improving the availability of training programmes and aligning curricula with the rapidly evolving needs of exporters of digital services is crucial to enable for workers to shift into sectors with growing labour demand. |
| Keywords: | E-commerce, Multipliers, Services Trade, Wages |
| JEL: | E4 F13 F15 F16 J21 L86 R11 |
| Date: | 2024–09–05 |
| URL: | https://d.repec.org/n?u=RePEc:oec:traaab:284-en |