|
on Labor Markets - Supply, Demand, and Wages |
| By: | Timothy K. M. Beatty; Joakim A. Weill |
| Abstract: | We estimate the impact of anticipated transfers on labor supply using confidential driver-level data from Uber. Leveraging the staggered timing of Social Security retirement benefits within each month and a novel identification strategy, we find that the labor supply of older drivers declines by 2% on average in the week around benefit receipt—a precisely estimated but economically small effect. Individual-level analyses reveal that the average effect obscures heterogeneous micro-behavior: while the majority of drivers does not meaningfully adjust labor supply in response to social security benefits, a small group reduces labor supply by more than 40%. The results suggest that departures from standard models of labor supply are meaningful but only for a small number of individuals. |
| Keywords: | Labor supply; Retirement; Social security; Gig economy |
| JEL: | J14 J18 J22 C10 H55 J26 |
| Date: | 2024–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:2024-79 |
| By: | Marguerita Lane |
| Abstract: | This paper examines how different socio-demographic groups experience AI at work. As AI can automate non-routine, cognitive tasks, tertiary-educated workers in “white-collar” occupations will likely face disruption, even if empirical analysis does not suggest that overall employment levels have fallen due to AI, even in “white-collar” occupations. The main risk for those without tertiary education, female and older workers is that they lose out due to lower access to AI-related employment opportunities and to productivity-enhancing AI tools in the workplace. By identifying the main risks and opportunities associated with different socio-demographic groups, the ultimate aim is to allow policy makers to target supports and to capture the benefits of AI (increased productivity and economic growth) without increasing inequalities and societal resistance to technological progress. |
| Keywords: | Artificial Intelligence, Education, Employment, Gender, Inequality |
| JEL: | J16 J21 J23 J24 O33 |
| Date: | 2024–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:oec:comaaa:26-en |
| By: | Gagliardi Nicola (CEBRIG and DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles); Elena Grinza (Department of Economics, Social Studies, Applied Mathematics and Statistics, University of Turin, Torino, CEBRIG (Université Libre de Bruxelles), LABORatorio Riccardo Revelli); Rycx François (CEBRIG and DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles) |
| Abstract: | In this paper, 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, including temperature. We begin by estimating firms' total factor productivity (TFP) using control-function techniques. We then apply multiple-way fixed-effects regressions to assess how higher temperature anomalies affect firm productivity - measured via TFP, labor productivity, and capital productivity. Our findings reveal that global warming significantly and negatively impacts firms' TFP, with the most adverse effects occurring at higher anomaly levels. Labor productivity declines markedly as temperatures rise, while capital productivity remains unaffected - indicating that TFP is primarily affected through the labor input channel. Our moderating analyses show that firms involved in outdoor activities, such as agriculture and construction, are more adversely impacted by increased warming. Manufacturing, capital-intensive, and blue-collar-intensive firms, compatible with assembly-line production settings, also experience significant productivity declines. Geographically, the negative impact is most pronounced in temperate and mediterranean climate areas, calling for widespread adaptation solutions to climate change across Europe. |
| 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: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:tur:wpapnw:094 |
| By: | Kevin S. Milligan; Tammy Schirle |
| Abstract: | We evaluate the retirement incentives embedded in Canada’s retirement income system with attention to where individuals are located in the income distribution. We find that larger social security benefits are available to individuals with lower earnings in their work history because of the benefit income tests, but those from the top of the income distribution tend to enjoy longer lives over which they may receive benefits. Overall, we see greater Social Security Wealth among individuals from lower deciles. The implicit tax rates on continued work tend to be higher for workers from lower-earning deciles. Considering changes to actuarial adjustments associated with early pension take up, these implicit tax rates on work at older ages fell substantially after 2011. Our regression estimates confirm the importance of incentives on retirement behavior, with substantially larger effects for individuals in lower deciles. These effects are greater for women than men. In simulations, we show that changes to the actuarial adjustment had some impact on retirement rates by lowering the implicit tax on work. The overall redistributive effect of these induced retirement changes was fairly small, however, as the actuarial adjustments brought the system closer to actuarial fairness. |
| JEL: | H55 J14 J26 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33069 |
| By: | Hermes Morgavi |
| Abstract: | Pension reforms, particularly those changing the normal retirement ages, are both crucial and controversial in ageing developed countries. This paper investigates the effects of such reforms on the labour market, focusing on the older-age employment rate. While existing cross-country estimates agree on a positive and significant effect of raising normal retirement ages, the estimated labour market effects are modest and usually much smaller than those derived from country-specific studies using micro data. This study attempts to reconcile these differences by introducing greater heterogeneity into the cross-country approach to better capture country-specific demographics and pension system characteristics, so that estimated effects are closer to those from single-country studies. Starting from a standard cross-country panel error correction model, several empirical innovations are introduced to better capture the influence of the demographic composition of countries, the possibility to retire at earlier ages, and the importance of private pension funds and early exit pathways. These changes result in larger and more heterogeneous predicted effects of changes in the normal retirement ages on the older-age employment rate and average age of labour market exit across countries. This suggests a greater and varied impact of pension reforms on the labour market than previously estimated with pooled cross-country estimations, emphasising the importance of considering countries’ demographic compositions and pension systems specificities when predicting the effects of pension reforms. The proposed model, distinguishing between minimum and normal retirement ages, allows for simulations on the effects of increasing normal retirement ages and narrowing the gap between normal and minimum retirement ages. In countries with the lowest older age employment rates, bridging these gaps could result in substantial increases in their employment rates. |
| Keywords: | employment rate, labour market policy, , normal retirement ages, older workers |
| JEL: | J26 J21 |
| Date: | 2024–10–18 |
| URL: | https://d.repec.org/n?u=RePEc:oec:ecoaaa:1823-en |
| By: | Ahammer, Alexander (University of Linz); Pruckner, Gerald J. (University of Linz); Stiftinger, Flora (Johannes Kepler University Linz) |
| Abstract: | We estimate the long-run labor market and health effects of breast cancer among Austrian women. Compared to a random sample of same-aged non-affected women, those diagnosed with breast cancer face a 22.8 percent increase in health expenses, 6.2 percent lower employment, and a wage penalty of 15 percent five years after diagnosis. Although affected women sort into higher quality jobs post-diagnosis, this is offset by a reduction in working hours. We argue that the hours reduction is more likely driven by an increase in the time preference rate, meaning that patients increasingly value the present over the future, rather than by an incapacitation effect or employer discrimination. |
| Keywords: | breast cancer, labor supply, health shocks, time discounting |
| JEL: | I10 J22 I12 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17316 |
| By: | Marina Di Giacomo; Massimiliano Piacenza; Luca Salmasi (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Gilberto Turati (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore) |
| Abstract: | This paper provides a causal estimate of labor productivity in maternity units. We consider an Italian law that defines the staffing requirements of maternity wards according to the annual number of births. We exploit these discontinuities in the availability of medical staff induced by the law to define both instrumental variables and an RDD framework that allows us to estimate the causal effect of different teams of professionals during delivery on the health status of newborns and mothers. The analysis is based on detailed patient-level data on deliveries in an Italian region. We find that maternity units with annual births above the thresholds are more likely to have a “full team” of professionals during delivery. In turn, the presence of a full team significantly affects outcomes. We find an improvement in both neonatal and maternal outcomes, coupled with more intense use of medical procedures, suggesting that larger hospitals are better able to manage deliveries with appropriate treatments to avoid complications than smaller units. In addition, we do not find substantial heterogeneous effects across days of the week, time of day, and nationality of mothers. |
| Keywords: | medical staff; maternity wards; productivity; instrumental variables. |
| JEL: | D24 H75 I10 I12 I18 J24 J45 J82 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ctc:serie1:def134 |
| By: | Lorenzo Incoronato (CSEF–University of Naples Federico II); Salvatore Lattanzio (Bank of Italy) |
| Abstract: | This paper studies a place-based industrial policy (PBIP) aiming to establish industrial clusters in Italy in the 1960s-70s. Combining historical archives spanning one century with administrative data and leveraging exogenous variation in government intervention, we investigate both the immediate effects of PBIP and its long-term implications for local development. We document agglomeration of workers and firms in the targeted areas persisting well after the end of the policy. By promoting high-technology manufacturing, PBIP favored demand for business services and the emergence of a skilled local workforce. Over time, this produced a spillover from manufacturing – the only sector targeted by the program – to services, especially in knowledge-intensive jobs. Accordingly, we estimate higher local wages, human capital, and house prices in the long run. We provide suggestive evidence that these persistent effects may depend on the initial conditions of targeted locations. |
| Keywords: | place-based industrial policy, employment, wages, agglomeration |
| JEL: | J24 N94 O14 O25 R58 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2419 |
| By: | Nurfatima Jandarova (Tampere University, Finnish Centre of Excellence in Tax Systems Research (FIT)); Aldo Rustichini (University of Minnesota) |
| Abstract: | We analyze the evolution of the distribution of genotypes in European populations over the past 14, 000 years. In our model, evolution is driven by selection operating after a shift in the productivity of agriculture, induced by the post-Younger Dryas climate change, in a Roy model where individuals self-select into one of two sectors, foraging and farming. The model extends a standard Wright-Fisher model to include two technologies and sexual reproduction. We test the model in two data sets, ancient and modern DNA, matching the observed distributions of genetic variables (allele frequencies and lineages). We show that a shift in the distribution of allele frequencies in a direction favoring higher cognitive ability, occurred when climate warming changed the relative productivity of agriculture and foraging. The general implication we draw is that historical transformations (e.g., climate change and technological change) may affect the distribution of genotype and thus economic equilibria and institutions. |
| Keywords: | technological change, occupational choice, individual characteristics, genetic transmission, population genetics |
| JEL: | E71 J24 O33 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:fit:wpaper:27 |
| By: | Nurfatima Jandarova (Tampere University, Finnish Centre of Excellence in Tax Systems Research (FIT)); Aldo Rustichini (University of Minnesota) |
| Abstract: | We study how observed individual characteristics affect earnings of individuals. The characteristics we study are individual personality traits (including cognitive ability) and family background. We make use of data providing information on the individual characteristics rather than estimating them as latent variables. Their contribution may be indirect (facilitating the acquisition of education) or direct (perhaps affecting productivity). We estimate the fraction of these two contributions through regression analysis and structural model, and find that the contribution of both pathways is significant. These characteristics may be in part determined endogenously. To estimate the proportion due to original individual characteristics we use measures provided by Polygenic Scores for education years and fluid intelligence. The marginal effects of these scores is significant and high. The indirect contribution (operating though acquisition of college) is around one third of the total effect. |
| Keywords: | education, cognitive skills, noncognitive skills, family background, polygenic score |
| JEL: | J24 I21 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:fit:wpaper:26 |
| By: | Nikhil Datta |
| Abstract: | This paper studies flexible work arrangements, with a focus on zero-hours contracts (ZHCs). Leveraging a unique dataset from a large UK firm in the low-pay sector, it provides novel descriptives on ZHC workers, as well as evidence on demand and supply side mechanisms for the use of ZHCs. The results show that ZHC workers experience significantly higher turnover rates and lower wages than permanent employees, and large heterogeneity in hours and earnings volatility. Causal evidence on the firm demand-side demonstrates that ZHCs help firms manage production and demand shocks. On the supply-side, ZHC roles attract 25% more applicants than comparable permanent jobs. ZHC roles are concentrated among specific demographics, and vacancy applicant and firm offer data demonstrates this is supply driven. Few ZHC workers apply for permanent positions and their decision to apply for a permanent position is wage insensitive. In contrast, permanent workers exhibit ZHC-wage elasticities that are an order of magnitude larger than those of their ZHC counterparts. |
| Keywords: | Technological change, Employment, zero-hours contracts, gig economy, jobs |
| Date: | 2024–10–09 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2039 |
| By: | Felipe Alves; Giovanni L. Violante |
| Abstract: | We develop a Heterogeneous Agent New Keynesian model with a three-state frictional labour market that is consistent with the empirical evidence that (i) low-skilled workers are more exposed to the business cycle, (ii) displacement leads to long-lasting earnings losses, and (iii) unemployment is a stepping stone toward exit from the labor force. In this environment, a transient contractionary monetary policy shock induces a very persistent reduction in labour force participation and labour productivity, especially among workers at the bottom of the skill distribution. Despite the negative hysteresis on output, the model does not give rise to protracted deflation. |
| Keywords: | Monetary Policy Transmission; Labour Markets |
| JEL: | E21 E24 E31 E32 E52 J24 J64 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:24-39 |
| By: | Wolfgang Frimmel; Rene Wiesinger |
| Abstract: | We analyze how a worker’s severe health shock affects the employment and health behavior of their older coworkers. We link comprehensive administrative data on labor market histories and health records from Austria to identify coworker networks and severe health shocks in small firms, which cause substantial increases in healthcare expenditures, absenteeism, and mortality, as well as persistent reductions in the labor supply of affected workers. Combining a matching approach with a difference-in-difference framework, we find a significant impact of a health shock on the labor market outcomes and health behavior of older coworkers. Affected coworkers are about 2.3 percentage points more likely to be employed in the shock firm and tend to delay retirement. Although there is no change in daily earnings and earnings growth, coworkers are more likely to receive special bonus payments after leaving the firm. The employment effects are larger when the health shock affects a high-skilled worker and when the shocked worker leaves the firm after the health shock. Finally, we find that female coworkers in the treatment group are more likely to have a mammography, especially in response to health shocks due to cancer. We find no statistically significant effects on participation in general health check-ups and PSA tests, or on coworker absenteeism. |
| Keywords: | coworker health shock · employment · retirement · health behavior · difference-in-difference |
| JEL: | I10 I12 J20 J21 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:jku:econwp:2024-12 |
| By: | Laetitia Lepetit (Laboratoire d'Analyse et de Prospective Économique (LAPE), Faculté de Droit et des Sciences Économiques, Université de Limoges); Frank Strobel (Department of Economics, University of Birmingham); Laurent Weill (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | This study investigates the relationship between bank risk and employee wage compensation using a comprehensive dataset of U.S. commercial banks spanning 1990 to 2022. Our key finding is that higher bank risk is associated with increased wage compensation. We interpret this pattern such that higher risk necessitates higher compensation to mitigate bankruptcy risk for employees. We additionally find that this positive relationship between bank risk and wage compensation is only observed for small banks, in favorable economic conditions and when bank concentration is low. These findings suggest that greater bargaining power of employees relative to banks increases the possibility for employees to demand higher wages in the presence of high bank risk. We also find that the positive relationship between bank risk and wage compensation only occurs when banks operate in states with higher past bank default risk, in line with the view that experience affects economic beliefs and behavior. |
| Keywords: | bank, risk, wage determination. |
| JEL: | G21 J31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:lar:wpaper:2024-09 |