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on Labor Markets - Supply, Demand, and Wages |
| By: | Alexander Bick; Adam Blandin; Richard Rogerson |
| Abstract: | We document large differences in lifetime hours of work using data from the NLSY79 and argue that these differences are an important source of inequality in lifetime earnings. To establish this we develop and calibrate a rich heterogeneous agent model of labor supply and human capital accumulation that allows for heterogeneity in preferences for work, initial human capital and learning ability, as well as idiosyncratic shocks to human capital throughout the life-cycle. Our calibrated model implies that almost 20 percent of the variance in lifetime earnings is accounted for by differences in lifetime hours of work, with 90 percent of this effect due to heterogeneity in preferences. Higher lifetime hours contribute to lifetime earnings via two channels: a direct channel (more hours spent in production at given productivity) and a human capital channel (more hours spent investing in human capital, which increases future productivity). Between a third and a half of the effect of lifetime hours on lifetime earnings is due to the human capital channel. Our model implies that policies that limit long hours have important effects on both the mean and variance of lifetime earnings. |
| Keywords: | lifetime earnings; hours worked; human capital; inequality |
| JEL: | D15 E21 E24 J22 J31 J24 |
| Date: | 2024–09–16 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlwp:98792 |
| By: | Braunschweig, Luisa (Institute for Employment Research (IAB), Nuremberg, Germany ; Univ. Bamberg); Dauth, Wolfgang (Institute for Employment Research (IAB), Nuremberg, Germany ; Univ. Bamberg); Roth, Duncan (Institute for Employment Research (IAB), Nuremberg, Germany ; Institute of Labor Economics) |
| 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 a wage decomposition in the style of Abowd/Kramarz/Margolis (1999). 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 percent of the increase in wage inequality over the life cycle." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | IAB-Open-Access-Publikation ; Integrierte Erwerbsbiografien |
| JEL: | J23 J24 J31 J62 |
| Date: | 2024–09–02 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabdpa:202411 |
| By: | Matteo Picchio (Marche Polytechnic University); Jan C. van Ours (Erasmus University Rotterdam) |
| 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: | 2024–09–13 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240057 |
| By: | Gagliardi, Nicola (Free University of Brussels); Grinza, Elena (University of Turin); Rycx, François (Free University of Brussels) |
| Abstract: | We investigate the impact of rising temperatures on firm productivity using longitudinal firm-level balance-sheet data from private sector firms in 14 European countries, combined with detailed weather data. Our findings, based on control-function techniques and fixed-effects regressions, reveal that global warming significantly and negatively impacts firms' TFP. Labor productivity declines markedly as temperatures rise, while capital productivity remains unaffected – indicating that TFP is primarily affected through the labor input channel. Sensitivity tests show that firms involved in outdoor activities, such as agriculture and construction, are more adversely impacted. Manufacturing, capital-intensive, and blue-collar-intensive firms also experience significant productivity declines. Geographically, the negative impact is most pronounced in temperate and mediterranean climate areas. |
| Keywords: | climate change, global warming, firm productivity, Total Factor Productivity (TFP), semiparametric methods to estimate production functions, longitudinal firm-level data |
| JEL: | D24 J24 Q54 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17241 |
| By: | Alexander Bick; Adam Blandin; Aidan Caplan; Tristan Caplan |
| Abstract: | This paper documents the prevalence of work from home (WFH) in six U.S. data sets. These surveys measure WFH using different questions, reference periods, samples, and survey collection methods. Once we construct samples and WFH measures that are comparable across surveys, all surveys broadly agree about the trajectory of aggregate WFH since the Covid-19 outbreak. The surveys agree that pre-pandemic differences in WFH rates by sex, education, and state of residence expanded following the Covid-19 outbreak. The surveys also show similar post-pandemic trends in WFH by firm size and industry. Finally, we highlight that an important source of quantitative differences in WFH across surveys is WFH by self-employed workers; by contrast, surveys closely agree on rates of WFH among employees. |
| Keywords: | work from home; remote work; telecommuting; commuting; data set comparisons |
| JEL: | I18 J21 J22 J24 L23 |
| Date: | 2024–09–11 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlwp:98776 |
| 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: | I23 J16 J71 M51 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17240 |
| By: | Kory Kroft; Ismael Mourifié; Atom Vayalinkal |
| Abstract: | This paper investigates the causal effect of job training on wage rates in the presence of firm heterogeneity. When training affects worker sorting to firms, sample selection is no longer binary but is “multilayered”. This paper extends the canonical Heckman (1979) sample selection model - which assumes selection is binary - to a setting where it is multilayered, and shows that in this setting Lee bounds set identifies a total effect that combines a weighted-average of the causal effect of job training on wage rates across firms with a weighted-average of the contrast in wages between different firms for a fixed level of training. Thus, Lee bounds set identifies a policy-relevant estimand only when firms pay homogeneous wages and/or when job training does not affect worker sorting across firms. We derive sharp bounds for the causal effect of job training on wage rates at each firm which leverage information on firm-specific wages. We illustrate our partial identification approach with an empirical application to the Job Corps Study. Results show that while conventional Lee bounds are strictly positive, our within-firm bounds include 0 showing that canonical Lee bounds may be capturing a pure sorting effect of job training. |
| JEL: | C01 C21 C26 H0 H50 J0 J24 J32 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32952 |
| By: | Batistich, Mary Kate (University of Notre Dame); Bond, Timothy N. (Purdue University); Linde, Sebastian (Texas A&M University); Mumford, Kevin J. (Purdue University) |
| Abstract: | We develop a model of college major selection in an environment where firms and students have incomplete information about the student's aptitude. Students must choose from a continuum of majors which differ in their human capital production function and can act as a signal to the market. Whether black students choose more or less difficult majors than similar white students, and whether they receive a higher or lower return to major difficulty, depends on the extent to which employers statistically discriminate. We find strong evidence that statistical discrimination influences major choice using administrative data from several large universities and two nationally representative surveys. |
| Keywords: | mismatch, affirmative action, statistical discrimination |
| JEL: | J71 J15 I26 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17237 |
| By: | Sebastian Becker; Annica Gehlen; Johannes Geyer; Peter Haan |
| Abstract: | We provide novel evidence about the incentive and welfare effects of an increase in the generosity of disability benefits. Importantly, a unique policy variation in Germany allows us to isolate the income effect of a change in benefit generosity. We leverage this quasi-experimental policy variation using an RD design to estimate the effect of increasing disability benefits on employment, earnings, labor market transitions, and mortality outcomes using administrative data on the universe of new disability benefit recipients. Contrary to previous literature, our analysis reveals no significant impact on the employment and earnings of DI recipients due to the increased benefits. However, we find a sizable effect of the probability of returning to the labor market. We find no effects on recipient mortality six years after benefit award, but estimates imply a notable reduction in poverty risk, highlighting meaningful welfare implications of increased generosity. |
| Keywords: | disability insurance, pension reform, wealth effect, labor supply, mortality, RDD |
| JEL: | H55 I12 J22 J26 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2098 |
| By: | Antonio Cutanda (Universidad de Valencia, Valencia, Spain); Juan A. Sanchis (Universidad de Valencia and ERICES, Valencia, Spain) |
| Abstract: | In this paper, we estimate the intertemporal substitution for consumption and leisure in Spain. We use the standard intertemporal optimisation consumption model with an intratemporally separable utility function, using different population groups: employees, self-employed, unemployed or retired people. Further, we analyse if the elasticity of intratemporal substitution for leisure is affected by the individual labour status (temporary workers vs fixed-term contract workers). For this purpose, we use the panel of the Spanish Survey on Household Finances (Encuesta Financiera de las Familias, SHF), covering the period 2002- 2017. The results we obtain confirm that both intertemporal substitution elasticities for consumption and leisure are different depending on individuals’ labour status and the labour contract’s characteristics, such as the duration of the contract (temporary versus fixed-term) or the degree of uncertainty about the future. |
| Keywords: | Euler Equation, Instrumental variables, Intertemporal Substitution for consumption and leisure, Panel data |
| JEL: | C23 C26 D12 D15 J22 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:eec:wpaper:2408 |
| By: | Eric Bartelsman (Vrije Universiteit Amsterdam); Sabien Dobbelaere (Vrije Universiteit Amsterdam); Alessandro Zona Mattioli (Vrije Universiteit Amsterdam) |
| Abstract: | This paper provides evidence from a natural experiment on the importance of tacit knowledge that workers have about firms’ intangible assets for competition in product and labor markets. First, evidence is presented on product and labor market imperfections across firms in manufacturing and services industries in the Netherlands. Price-cost markups and wage markups are both shown to be positively related to intangible intensity at the firm level. A model is developed of the processes of intangible investment and wage bargaining of heterogeneous firms, providing a mechanism that relates workers’ tacit knowledge to product and labor market imperfections at the firm level. The model also incorporates a role for non-compete agreements (NCAs) limiting worker mobility. Our main empirical contribution comes from using linked employer-employee panel data with information on NCAs and changes in enforceability of these agreements. Using an event-study framework, we demonstrate that the removal of NCAs leads to higher wages and worker mobility and that the effect is stronger for workers employed in intangible-intensive firms. We find that NCAs affect workers across the skill distribution and across industries. The causal findings from changes in the legality of NCAs correspond with the mechanism described in the model. |
| Keywords: | Price-cost markups, rent sharing, technology, tacit knowledge, non-compete agreements |
| JEL: | J41 L10 M52 |
| Date: | 2024–09–13 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240055 |
| By: | Valeria Cirillo; Andrea Mina; Andrea Ricci |
| Abstract: | New technologies can shape the production process by affecting the way in which inputs are embedded in the organization, their quality, and their use. Using an original employer-employee dataset that merges firm-level data on digital technology adoption and other characteristics of production with employee-level data on worker entry and exit rates from the administrative archive of the Italian Ministry of Labor, this paper explores the effects of new digital technologies on labor flows in the Italian economy. Using a Difference-in-Difference approach, we show that digital technologies lead to an increase in the firm-level hiring rate – particularly for young workers - and reduce the firm-level separation rate. We also find that digital technologies are positively associated with workplace training, proxied by the share of trained employees and the amount of training costs per employee. Furthermore, we explore the heterogeneity of effects related to different technologies (robots, cybersecurity and IoT). Our results are confirmed through several robustness checks. |
| Keywords: | Industry 4.0; Digital technologies; Hiring rate; Separation rate; Skills; Training; Employer-Employee data |
| Date: | 2024–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2024/22 |
| By: | Hoyos, Mateo (Center for Research and Teaching in Economics) |
| Abstract: | This paper documents that the relationship between tariffs and growth varies significantly with economic structure. Using a panel of 161 countries from 1960 to 2019 and employing a local projections difference-in-differences strategy, I show that tariff reductions are associated with higher GDP per capita in manufacturer countries but lower GDP per capita in nonmanufacturer ones. I then reveal that these results are consistent with, and possibly explained by, heterogeneous changes in productivity, capital accumulation, and the manufacturing share of GDP. The heterogeneity is further confirmed by a comprehensive set of robustness checks. The findings suggest that the recent rise in protectionism in manufacturer countries might end up being harmful, and that existing calls for further liberalization in nonmanufacturers could have unintended consequences. |
| Date: | 2024–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:v75aw |
| By: | Najam, Rafiuddin; Patrinos, Harry Anthony; Kattan, Raja Bentaouet |
| Abstract: | This paper uses microdata from the Labor Force and Household Surveys conducted in Afghanistan to show the wage premium differences for education between men and women, documenting a significantly larger premium for women. This sharp distinction is causal as demonstrated by analysis of the compulsory schooling law. Recent bans on women's education and employment are projected to have significant negative impacts on women's future schooling, wage growth, and national income growth. |
| Keywords: | Returns to schooling, Returns to experience, Investments in education, Afghanistan |
| JEL: | C13 J31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1490 |
| By: | Patricia Peñalosa; Lukas Kleine-Rueschkamp |
| Abstract: | This paper explores the geography of “green innovation hubs” and the relationship between green patents and local labour markets. The analysis considers the spatial distribution and evolution of patenting activity for green inventions and identifies green innovation hubs, i.e., regions demonstrating notable strength in green patenting. It also explores the relationship between the regional level of green patenting, economic activity, education, and local labour dynamics across OECD regions. Greater Copenhagen (a cross-border area including parts of Denmark and Southern Sweden) is used as an example to illustrate one region's green innovation ecosystem, assessing its progress, unique opportunities, and challenges. |
| Date: | 2024–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:oec:cfeaaa:2024/09-en |
| By: | Sasaki, Hiroaki; Sonoda, Ryunosuke |
| Abstract: | This study investigates how the income redistribution policy affects economic growth, employment, income distribution, income inequality, and asset inequality. The income redistribution policy is defined as one that imposes capital taxation on capitalists and redistributes it to workers. Therefore, we constructed a Kaleckian model in which, in addition to capitalists, workers own capital stock through savings. Depending on the relative size of workers' and capitalists' saving rates, we obtained the Pasinetti equilibrium, in which both classes coexist, and the dual equilibrium, in which only workers own capital stock, whereas capitalists do not. In the Pasinetti equilibrium, raising the tax rate for capitalists drives an increase in workers' assets and income shares. Simultaneously, economic growth and employment rates increase when the short-run equilibrium is wage-led growth whereas they decrease when the short-run equilibrium is profit-led growth. Hence, the income redistribution policy is effective in reducing inequality and promoting economic growth and employment when the short-run equilibrium is wage-led. |
| Keywords: | workers' saving; income equality; income redistribution policy; growth; employment |
| JEL: | E11 E12 E64 J31 J53 |
| Date: | 2024–09–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121968 |