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on Labor Markets - Supply, Demand, and Wages |
| By: | Somers, Melline (RS: GSBE other - not theme-related research, ROA / Health, skills and inequality); Stolp, Tom (RS: GSBE other - not theme-related research, ROA / Education and transition to work); Burato, Francesca; Groot, Wim (Maastricht Graduate School of Governance, RS: GSBE MGSoG, RS: CAPHRI - R2 - Creating Value-Based Health Care, Health Services Research); van Merode, Frits (Faculteit FHML Centraal, RS: CAPHRI - R2 - Creating Value-Based Health Care); Vooren, Melvin |
| Abstract: | The healthcare and education sectors suffer from shortages of nurses and teachers. Extending their working hours has often been proposed as a solution to this. In this study, we conduct a discrete choice experiment (DCE) in the Netherlands to elicit nurses’ and teachers’ preferences for different jobs and working conditions. We present both nurses and teachers with nine hypothetical choice sets, each consisting of two jobs that differ in seven observable job attributes. From the DCE, we infer workers’ willingness to pay for these different job characteristics. Moreover, we calculate how many additional hours workers would be willing to work if a specific workplace condition were met. We find that both nurses and teachers most negatively value high work pressure. Spending a lot of time on patient-related tasks is highly valued by nurses, followed by having more control over working hours. Next to work pressure, teachers place significant importance on receiving social support from both colleagues and managers. Nurses and teachers who work part-time require higher incentives to work additional hours compared to full-time workers. |
| JEL: | J45 J81 J20 J30 I10 I20 |
| Date: | 2024–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:unm:umagsb:2024014 |
| By: | Peter Toth (National Bank of Slovakia); Matej Vitalos (Supreme Audit Office of the Slovak Republic) |
| Abstract: | We study the returns to language skills of immigrants using the European Adult Education Survey (2016). We estimate a standard income equation augmented by self-reported proficiency levels in the host country's language and in English. Contrary to earlier literature, we find that the inclusion of English skills of immigrants increases the estimated returns to proficiency in the local language. Next, considering heterogeneous effects across occupations, we find significantly positive returns to language proficiency only for medium-skilled occupations. Among those, blue-collar jobs reward fluency in both the local language and English. Whereas in white-collar jobs, only the knowledge of English yields significantly higher income. These estimates are consistent with occupational sorting of immigrants and suggest that there are complementarities between proficiency in languages and job skills for some occupations. Following earlier literature, we also corrected the potential endogeneity bias in host-country language skills using instrumental variable methods. Our findings could be relevant for immigration policies in Europe. |
| JEL: | J15 J31 J61 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:svk:wpaper:1114 |
| By: | Ludger Woessmann |
| Abstract: | The multitude of tasks performed in the labor market requires skills in many dimensions. Traditionally, human capital has been proxied primarily by educational attainment. However, an expanding body of literature highlights the importance of various skill dimensions for success in the labor market. This paper examines the returns to cognitive, personality, and social skills as three important dimensions of basic skills. Recent advances in text analysis of online job postings and professional networking platforms offer novel methods for assessing a wider range of applied skill dimensions and their labor market relevance. A synthesis and integration of the evidence on the relationship between multidimensional skills and earnings, including the matching of skill supply and demand, will enhance our understanding of the role of human capital in the labor market. |
| Keywords: | skills, human capital, education, labor market, earnings, tasks, cognitive skills, personality, social skills, multidimensional skills |
| JEL: | J24 I26 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11428 |
| By: | Caliendo, Marco (University of Potsdam); Pestel, Nico (Maastricht University); Olthaus, Rebecca (DIW Berlin) |
| Abstract: | We investigate the long-term effects of the introduction of the German minimum wage in 2015 and its subsequent increases on regional employment. Using comprehensive survey data, we are able to measure the regional bite of the minimum wage in 2014, just before its introduction, as well as in 2018, before it was raised substantially in several steps. The introduction mainly affected the labour market in East Germany, while the minimum wage increases increasingly affected low-wage regions in West Germany, with about one third of regions changing their (binary) treatment status between 2014 and 2018. We use different specifications and extensions of the canonical difference-in-differences approach, as well as a set of new estimators that allow unbiased effect estimation with a staggered treatment adoption and heterogeneous treatment effects. Our results show a small negative effect on total dependent employment of 0.5%, driven by a significant reduction in marginal employment of 2.4%. The extended specifications suggest additional effects of the minimum wage increases, as well as stronger negative effects for those regions that were strongly affected by the minimum wage in both periods. |
| Keywords: | minimum wage, employment, regional bite |
| JEL: | J23 J31 J38 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17436 |
| By: | Somers, Melline (RS: GSBE other - not theme-related research, ROA / Health, skills and inequality); Fleck, Lara (ROA / Human capital in the region, RS: GSBE other - not theme-related research); Groot, Wim (Maastricht Graduate School of Governance, RS: GSBE MGSoG, RS: CAPHRI - R2 - Creating Value-Based Health Care, Health Services Research); van Merode, Frits (Faculteit FHML Centraal, RS: CAPHRI - R2 - Creating Value-Based Health Care) |
| Abstract: | Like in many other high-income countries, the Netherlands experiences significant staff shortages in both healthcare and education. The key shortage occupations in these sectors are nurses and teachers. Both occupations suffer from high retirements rates and encounter difficulties in attracting and retaining (early career) workers. Due to early attrition, both sectors accumulate considerable hidden reserves. In this study, we estimate the magnitude of these hidden reserves and explore directions for unlocking this untapped potential. We define the hidden reserve as individuals who obtained a nursing or teaching diploma, but are not employed in the healthcare or education sector. Our definition of the hidden reserve also encompasses the number of additional hours that part-time workers could supply to reach a full-time working week. Using registry data, we show that the hidden reserves among (former) nurses and teachers by far exceeds the current staff shortages. Our analysis of survey data reveals that inactive nurses and teachers perceive several working conditions more favorably than their active counterparts. Activating this hidden reserve could involve strategies such as reducing work pressure and providing greater control over working hours, salary, and autonomy. |
| JEL: | J45 J81 J20 J30 I10 I20 |
| Date: | 2024–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:unm:umagsb:2024013 |
| By: | Bryson, Alex (University College London); Dale-Olsen, Harald (Institute for Social Research, Oslo) |
| Abstract: | Norwegian workers' job mobility decisions are related to firms' wage policies, but also depend on the national tax schedule. By utilising Norwegian population-wide administrative linked employer-employee data on workers and firms between 2010-2019, we study how the job-to-job turnover of employees is affected by marginal taxes and firms' pay policies, enabling inferences to be made about on-the-job search. Paying higher wages is associated with a drop in job-to-job separation rates, but this negative relationship is weakened when income taxes increase. Higher taxes imply strictly reduced search activity, but less so for bonus job-workers than salaried workers. |
| Keywords: | job search, marginal taxes, monopsony, wages, effort |
| JEL: | H24 J42 J63 M12 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17385 |
| By: | Jason B. Cook; Chloe N. East |
| Abstract: | Supplemental Nutrition Assistance Program (SNAP) is the backbone of the U.S. safety net. We provide the most comprehensive and generalizable evaluation of the labor supply effects of access to modern SNAP to date. To do so we use new, rich administrative data and an examiner design based on conditional random assignment of SNAP applicants to caseworkers. We find no evidence of large or lasting negative effects of SNAP on labor supply. We also provide the first large, quantitative evaluation of the role of SNAP caseworkers in determining applicants’ outcomes. |
| Keywords: | SNAP, labor supply, caseworker |
| JEL: | H53 I38 J22 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11278 |
| By: | Mehrzad B. Baktash |
| Abstract: | Increased wages and productivity associated with performance pay can be beneficial to both employers and employees. However, performance pay can also entail unintended consequences for workers’ well-being. This study is the first to systematically examine the association between performance pay and loneliness, a significant social well-being concern. Using representative survey data from Germany, I find that performance pay is positively associated with incidence, dimensions, and intensity of loneliness. Correspondingly, performance pay is negatively associated with social life satisfaction of the workers. The findings also hold in sensible instrumental variable estimations addressing the potential endogeneity of performance pay and in various robustness checks. Investigating the potential role of moderating factors reveals that the association between performance pay and loneliness is particularly large for private sector employees. Finally, implications are discussed. |
| Keywords: | Performance Pay, Loneliness, Social Life, Well-Being, SOEP |
| JEL: | J33 I31 J32 I10 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:trr:wpaper:202412 |
| By: | Kniesner, Thomas J. (Claremont Graduate University); Sullivan, Ryan (Naval Postgraduate School); Viscusi, W. Kip (Vanderbilt University) |
| Abstract: | Our research reviews theory and empirical evidence in the economics literature and provides a standard value of a statistical life (VSL) applicable to the Department of Defense (DOD). We follow Viscusi (2018a) by conducting a meta-analysis consisting of 1, 025 VSL estimates from 68 different labor market studies and find a best-set average VSL estimate of $11.8 million (US$2021) across all studies. For DOD analysts and practitioners, we advocate using our best-set VSL estimate for the vast majority of benefit-cost analyses (BCAs) within the DOD. In addition to providing a VSL benchmark to use in DOD BCAs, we also breakdown casualty types and provide a range of VSL estimates to use in sensitivity analyses. Employing restricted data from the DOD on over 6, 700 U.S. military fatalities in Afghanistan and Iraq from 2001 to 2021 we show that (1) fatalities are highly concentrated among young, white, and enlisted males, and that (2) fatality rates in the Army and Marines are in contrast to the low number of fatalities (less than 5%) in the Air Force and Navy. Applying standard VSL pay grade and income adjustments to U.S. military fatalities in Afghanistan and Iraq, we find adjusted VSL estimates ranging in value from $3.2 million to $27.6 million per statistical life (US$2021). |
| Keywords: | military, DOD, VSL |
| JEL: | H56 I18 J17 J28 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17441 |
| By: | Pedro Bento; Lin Shao; Faisal Sohail |
| Abstract: | The prevalence of entrepreneurs, particularly low-productivity non-employers, declines as economies develop. This decline is more pronounced for women. Relative to men, women are more likely to be entrepreneurs in poor economies but less likely in rich economies. We investigate whether gender gaps in time dedicated to non-market activities, which narrow with development, can account for this pattern. We develop a quantitative framework in which selection into occupations depends on one’s ability and time and features gender-specific distortions and social norms around market work. When we calibrate the model to match cross-country data, we find that differences in social norms are almost entirely responsible for the patterns of gender gaps in both time use and entrepreneurship. Through affecting time use and entrepreneurship, social norms account for a substantial part of cross-country differences in output per worker and firm size and have significant welfare implications for women. |
| Keywords: | Firm Dynamics; Productivity |
| JEL: | J2 L2 O1 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:24-43 |
| By: | Haddad, Joanne; Kattan, Lamis |
| Abstract: | By the end of the nineteenth century, labor legislation for women had become a prominent issue in the United States, with most states enacting at least one female-specific work regulation. We examine the impact of three previously unexplored legislation: seating, health and safety, and night-work regulations. Given that not all states adopted these laws, and the staggered nature of adoption, we rely on a difference-in-differences strategy design to estimate the effects on female gainful employment. Our findings indicate that laws regulating health and safety conditions and restricting women's night work increased the likelihood of female employment by about 4% to 8%, accounting for about 10% to 20% from the total increase during our period of analysis. Examining heterogeneous effects reveals that younger and married women without children witnessed the largest increase in the likelihood of employment. We also document that native, higher-class and literate women were also incentivized to join the workforce. Women's labor supply in the decades under consideration has been estimated to be quite inelastic with respect to own wage. Nevertheless, we find sizable labor force participation responses to the female-specific labor regulation we study. This indicates that the legislation must have shifted women's labor supply curves, either because it made jobs more pleasant, or because it improved perceptions about how respectable it is for a woman to work in the labor market. Both channels would reduce disutility from work, and increase labor supply at any given wage level. Our findings hold important implications for policymakers and advocates seeking to promote gender equality in the labor market. |
| Keywords: | Labor Supply, Labor Law, Gender Law, Gender Norms |
| JEL: | J08 J16 J21 J24 J78 K31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1518 |
| By: | Crick Lund; Kate Orkin; Marc Witte; John Walker; Thandi Davies; Johannes Haushofer; Sarah Murray; Judy Bass; Laura Murray; Wietse Tol; Vikra, Patel |
| Abstract: | Mental health conditions are prevalent but rarely treated in low- and middle-income countries (LMICs). Little is known about how these conditions affect economic participation. This paper shows that treating mental health conditions substantially improves recipients’ capacity to work in these contexts. First, we perform a systematic review and meta-analysis of all randomized controlled trials (RCTs) ever conducted that evaluate treatments for mental ill-health and measure economic outcomes in LMICs. On average, treating common mental disorders like depression with psychotherapy improves an aggregate of labor market outcomes made up of employment, time spent working, capacity to work and job search by 0.16 standard deviations. Treating severe mental disorders, like schizophrenia, improves the aggregate by 0.30 standard deviations, but effects are noisily estimated. Second, we build a new dataset, pooling all available microdata from RCTs using the most common trial design: studies of psychotherapy in LMICs that treated depression and measured days participants were unable to work in the past month. We observe comparable treatment effects on mental health and work outcomes in this sub-sample of highly similar studies. We also show evidence consistent with mental health being the mechanism through which psychotherapy improves work outcomes. |
| Keywords: | Labour; Development; Human capital; mental health; psychotherapy |
| JEL: | D90 I14 O10 J24 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:csa:wpaper:2024-03 |
| By: | Hugo Sant'Anna |
| Abstract: | In this paper, I introduce a novel decomposition method based on Gaussian mixtures and k-Means clustering, applied to a large Brazilian administrative dataset, to analyze the gender wage gap through the lens of worker-firm interactions shaped by comparative advantage. These interactions generate wage levels in logs that exceed the simple sum of worker and firm components, making them challenging for traditional linear models to capture effectively. I find that these ``complementarity effects'' account for approximately 17% of the gender wage gap. Larger firms, high human capital, STEM degrees, and managerial roles are closely related to it. For instance, among managerial occupations, the match effect goes as high as one-third of the total gap. I also find women are less likely to be employed by firms offering higher returns to both human capital and firm-specific premiums, resulting in a significantly larger firm contribution to the gender wage gap than previously estimated. Combined, these factors explain nearly half of the overall gender wage gap, suggesting the importance of understanding firm-worker matches in addressing gender-based pay disparities. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.03209 |
| By: | Wilson, Anna; Bajka, Scherwin M. (University of St.Gallen, Switzerland) |
| Abstract: | The rise of the knowledge economy has created new and higher skill demands on the labour market, posing challenges collective skill formation systems, traditionally catering to manual, mid-level skills. We examine how firms involved in apprentice training experience skill provision challenges in the knowledge economy, engaging with the political economy literature and with scholarship on ‘skill gaps’ and ‘skill shortages’. We explore factors predicting firms’ skill provision concerns, using novel survey data with over 1’650 participating Swiss training firms. Our findings lend support for scholarship emphasizing the primacy of digitalization and upskilling for a good adaptation to the knowledge economy, also in the context of dual vocational education and training systems. However, we identify issues of ‘skill gaps’ for firms in high-digitalized occupational fields, where the increasing attractiveness of general education at the expense of vocational education and training, and a lacking quality of applicants are prevalent. For firms in lower digitalized occupational fields, on the other hand, ‘skill shortage’ problems such as a loss of occupational popularity dominate. |
| Date: | 2024–10–29 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:qjpz5 |
| By: | Rosa Abraham; Nishat Anjum; Rahul Lahoti; Hema Swaminathan |
| Abstract: | Drawing from two labour market experiments in rural India, we offer insights on the influence of survey design on the measurement of employment. The first experiment contrasts self-reported estimates of employment with proxy-reported estimates from spouses. We find that employment estimates based on reports by men underestimate women's employment by six percentage points compared to estimates from women themselves. There are significant differences in the types of employment activities reported by self and proxy. |
| Keywords: | Survey, Gender, Labour force participation, India, Household survey, Survey data |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2024-64 |
| By: | Cristhian D. Prieto; Ilan Noy |
| Abstract: | Floods are among the most frequent and destructive natural hazards worldwide, yet their economic impacts remain poorly understood. This paper examines the effects of two cyclone-induced floods on firms’ economic performance in New Zealand. To identify flood damage, we propose a novel method using high-resolution satellite imagery to track changes in ground vegetation before and after the cyclones. By integrating this information with detailed business administrative records and enterprise survey data, we construct a unique plant-level dataset to estimate the flooding causal effects. Using a Difference-in-Differences (DID) approach, we find that firm premises located in flood-affected areas experienced significant declines in gross output and sales, alongside increased losses in profit and value-added. Contrary to common belief, our analysis reveals that capital damage and labour displacement, rather than productivity losses, are the primary channels through which flooding affects firms. Plants responded to these events by liquidating inventories and cashable assets, though no evidence of relocation is found. Our results are robust to various econometric specifications and alternative estimation methods, including the Synthetic Difference-in-Differences (SDID) estimator. |
| Keywords: | floods, firms, production, cyclones, coping strategies, labour, capital, productivity, DID, SDID |
| JEL: | D24 J20 L11 O13 O14 Q54 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11430 |
| By: | Brueckner , Markus (Australian National University); Ciminelli, Gabriele (Asian Development Bank); Loayza, Norman (World Bank) |
| Abstract: | We examine the relationship between oil price windfalls and labor market regulation empirically through panel regressions in a sample of 83 countries spanning 1970–2014. We find that oil price windfall gains lead to a deregulation of the labor market in autocracies but have no effects in democracies. Windfall losses instead cause a sizeable deregulation in democracies but have limited effects in autocracies. We then consider possible transmission channels. Democracies appear to redistribute the rents stemming from a positive windfall by increasing government expenditure. Rent extraction and economic efficiency considerations are instead both plausible deregulation drivers following windfall gains in autocracies, as expenditures are not raised, while gross domestic product and employment gradually increase after positive windfalls. Finally, the deregulation following windfall losses in democracies is consistent with the crisis-inducedreform hypothesis, as windfall losses deteriorate the current account and budget balances and increase the probability of a systemic banking crisis. |
| Keywords: | oil price; windfalls; labor market; deregulation; political institutions |
| JEL: | F16 J41 O13 P11 P16 Q02 |
| Date: | 2024–11–13 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0752 |
| By: | Mandal, Biswajit; Das, Maitrayee |
| Abstract: | Trade Variations Due to Distance and Delaying Costs across Time Zones Abstract This paper constructs a competitive trade model involving two nations, with distinct time zone locations. Our results suggest that geographical distance could positively impact service trade, in contrast to its harmful nature for goods trade. These results partly disagree with the gravity arguments of international trade. Our model also reveals an intriguing relationship: an increase in distance between trading nations results in higher skilled labour wages and diminished capital rent for service products, while goods trade experienced the opposite effect. We then connect distance with delaying cost and find that an escalation in delaying cost led to a decline in skilled labour wages and an increase in rent. We further extend our basic model to introduce two additional sectors—informal and Government manufacturing—along with unorganized labour and land as extra production factors. Despite these additions, the consistency in the effects on factor prices and output persists. JEL Classification: D24, E26, F1, J3, J31, O14 Key words: Trade; Time Zone; Factor prices; Output Changes; Informality: Manufacturing Sector |
| Keywords: | Key words: Trade; Time Zone; Factor prices; Output Changes; Informality: Manufacturing Sector |
| JEL: | F1 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122608 |
| By: | Asbjoern Juul Petersen (Department of Economics, University of Copenhagen) |
| Abstract: | investigate what affects foreign students’ decision to stay and work in the host country after completion of higher education. Specifically I ask whether the network of native peers at university affect the probability that foreign students in Denmark stay in the country and find employment after ended studies. To identify the causal effects, I exploit idiosyncratic variation in the share of Danish students who are admitted into each study program over adjacent cohorts. I find that an increase in the share of native peers of one standard deviation increases the probability that foreign students are employed in Denmark two years after ended studies by 4 pct. points. The effects are significant at least four years after ended studies. Improved professional network and knowledge of the Danish labor market seem to be an important mechanism. |
| Keywords: | Foreign students, labor supply, peer effects, higher education |
| JEL: | J22 I21 F66 |
| Date: | 2024–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:kud:kucebi:2417 |
| By: | Busso, Matías; Alfonso, Mariana; Ñopo, Hugo R.; Rivera Bianchi, Antonella Maria; Yentzen, Triana |
| Abstract: | Education systems seeking to improve outcomes must attract, develop, and retain highly effective teachers. A critical challenge is making the teaching profession appealing to talented youth. This paper presents evidence from an experiment in Peru, where we provided high school seniors with information about recent reforms to the teaching career. Wefi nd positive effects on both the extensive and intensive margins: treated students were more likely to enroll in higher education and to choose an education major. These results suggest that career incentives and information can shape not only the current teaching workforce but also future cohorts. |
| Keywords: | Civil Service Reform;Education policy;Teachers;Information Treatment;Randomized Control Trial |
| JEL: | I28 I23 J40 O10 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13821 |