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on Labor Markets - Supply, Demand, and Wages |
| By: | Claudio Schilter |
| Abstract: | This field experiment investigates how stressing selectivity at career information events affects the diversity, size, and quality of the applicant pool. While the total number of applications remains unaffected by stressing selectivity, it reduces the share of female participants and children of migrants in the applicant pool. A key mechanism driving this effect is that treated participants perceive their (also treated) peers as more competitive during the event. Leveraging treatment timing, I find that exposure to such peer behavior significantly contributes to the gender-specific effect of stressing selectivity. Moreover, further analysis reveals that stressing selectivity deters high-quality female participants from applying and attracts low-quality male participants. The results point to de-emphasizing selectivity as a simple way of boosting diversity, particularly when potential applicants interact with one another. |
| Keywords: | Occupational Choice, Diversity, Gender, HR Policies |
| JEL: | C93 J21 J24 M14 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iso:educat:0236 |
| By: | Jośé Ignacio Giménez-Nadal (University of Zaragoza); José Alberto Molina (Departamento de Análisis Económico, Universidad de Zaragoza); Jorge Velilla (Departamento de Análisis Económico, Universidad de Zaragoza) |
| Abstract: | This paper develops a household-level model of commuting that allows to examine how commuting time, wages, labor supply, and consumption decisions interact within the household, and extends traditional urban and labor market models. The theoretical model integrates static and life-cycle perspectives and allows us to examine commut- ing patterns both across households and within households over time. We employ PSID data and address the potential endogeneity between commuting time and wages using GMM. Our findings indicate that, while cross-sectional analyses suggest a posi- tive correlation between wages and commuting, this relationship weakens significantly when adjusting for household heterogeneity and endogeneity. Additionally, we high- light a positive correlation between commuting time and consumption, and between the spouses’ commuting times. We further document how commuting patterns evolve over the life cycle, with household wealth reducing commuting durations while higher earnings increase them. Our results contribute to the literature on gender gaps, labor mobility, and urban economics by providing a household perspective on commuting and labor market outcomes. |
| Keywords: | Commuting; household behavior; wages; PSID. |
| JEL: | D12 D15 J22 J31 |
| Date: | 2025–03–05 |
| URL: | https://d.repec.org/n?u=RePEc:boc:bocoec:1087 |
| By: | Henrik Kleven (Princeton University); Claus Kreiner (Department of Economics, University of Copenhagen); Kristian Larsen (Department of Economics, University of Copenhagen); Jacob Soegaard (Department of Economics, University of Copenhagen) |
| Abstract: | We investigate long-run earnings responses to taxes in the presence of dynamic returns to effort. First, we develop a theoretical model of earnings determination with dynamic returns to effort. In this model, earnings responses are delayed and mediated by job switches. Second, using administrative data from Denmark, we verify our models predictions about earnings and hours-worked patterns over the lifecycle. Third, we provide a quasi-experimental analysis of long-run earnings elasticities. Informed by our model, the empirical strategy exploits variation among job switchers. We find that the long-run elasticity is around 0.5, considerably larger than the short-run elasticity of roughly 0.2. |
| Keywords: | Labor supply, tax distortions |
| JEL: | H21 J22 |
| Date: | 2025–03–17 |
| URL: | https://d.repec.org/n?u=RePEc:kud:kucebi:2503 |
| By: | VILLANI Davide (European Commission - JRC); GONZALEZ VAZQUEZ Ignacio (European Commission - JRC); FERNANDEZ MACIAS Enrique (European Commission - JRC) |
| Abstract: | The green transition is set to transform labour markets, yet its impact remains difficult to measure. This paper critically examines the occupational approach—based on task-based measures—which is the most widely used framework among researchers and institutions for estimating green employment. First, we identify theoretical shortcomings in this approach, emphasizing that its reliance on occupational titles leads to false positives by misclassifying non-green jobs as green, while also producing false negatives by excluding key contributors to the green transition. Second, we highlight methodological issues, such as inconsistent categorizations, arbitrary task definitions, outdated classifications, and the flawed assumption that occupational content remains stable across time and countries. Third, we apply the occupational approach using the O*NET framework to quantify green employment in 24 European countries from 2011 to 2022. Our analysis reveals that, according to this method, there has been virtually no net creation of green jobs in Europe. Moreover, we find no meaningful correlation between the presence of green jobs and various aggregate and sectoral environmental indicators. These findings underscore the fundamental limitations of the occupational approach, suggesting that it is an inadequate tool for assessing the labour market effects of the green transition. We discuss how this measure is suitable for policy benchmarking in the context of the European green transition. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:laedte:202502 |
| By: | Bertheau, Antoine (Dept. of Economics, Norwegian School of Economics and Business Administration); Hoeck, Christian Philip (Dept. of Economics, University of Copenhagen) |
| Abstract: | This paper yields new insights into why similar workers are paid differently by surveying a representative sample of Danish firms and linking responses to administrative data. We find that a substantial minority of firms, about 18 percent, have inaccurate beliefs about their position in the wage distribution. Inaccurate beliefs are more likely to occur in smaller firms. To study the implications of firms’ inaccurate beliefs, we build a simple model with monopsonistic firms. Using our survey, we elicit firms’ motives for setting high wages. The dominant motive aligns with wage-posting models, i.e., retaining and attracting new employees. The least common motive is compensating for negative job characteristics. |
| Keywords: | Wage dispersion; firm information frictions; biased beliefs |
| JEL: | D83 J01 J31 J42 M52 |
| Date: | 2025–03–06 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2025_005 |
| By: | Armangue-Jubert, Tristany (Universitat Autònoma de Barcelona and Barcelona School of Economics); Pietrobon, Davide (Department of Economics, Lund University); Ruggieri, Alessandro (CUNEF Universidad) |
| Abstract: | We argue that capital misallocation arises endogenously due to incomplete consumption insurance. We model risk-averse entrepreneurs with heterogeneous productivity who face idiosyncratic output shocks and choose how much capital to rent before uncertainty unfolds. We show that incomplete markets operate as correlated distortions, leading to a reallocation of capital from more to less productive firms relative to the complete markets benchmark. Using Portuguese administrative data, we document that capital misallocation is greater in locations and industries with higher output shock volatility, consistent with our framework. Leveraging the structure of the model, we show that completing insurance markets increases aggregate productivity and income by 64% and 97%, respectively. |
| Keywords: | Insurance; volatility; misallocation; distortions; efficiency. |
| JEL: | D61 E22 L23 L26 |
| Date: | 2025–02–26 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lunewp:2025_002 |
| By: | Alice Soldà (Emlyon business school, CNRS, Université Lumière Lyon 2, Université Jean-Monnet Saint-Etienne, GATE, 69007, Lyon, France); Marie Claire Villeval (CNRS, Université Lumière Lyon 2, Université Jean-Monnet Saint-Etienne, emlyon business school, GATE, 69007, Lyon, France; IZA, Bonn, Germany) |
| Abstract: | We investigated whether individuals use narratives about the role of luck to influence decision-makers’ interpretation of noisy performance signals in a tournament setting. In an experiment, pairs of workers were either rewarded for accurately estimating their relative performance (Control treatment), persuading a manager they outperformed their competitor (Strategic treatment), or both (Trade-Off treatment). Results show that workers were most likely to adopt self-serving narratives attributing signals of lower performance to bad luck in the Strategic treatment. This tendency was reduced in the Trade-Off treatment where accuracy incentives were introduced. While self-serving narratives influenced managers’ decisions regarding the allocation of the winner’s prize, they did not change workers’ beliefs, suggesting that the narratives did not deceive them. |
| Keywords: | Narratives, persuasion, beliefs, tournament, performance evaluation, online experiment |
| JEL: | C91 D83 J33 M52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:gat:wpaper:2505 |
| By: | Thea S. Zoellner |
| Abstract: | Although occupational choice research clearly shows the under-representation of women in mathematics- and science-related fields (STEM), the existing research mostly focuses on i) high-ability (university) students (rather than a wider spectrum of students) and ii) the choice between STEM or non-STEM fields (not specifically between mathematics and science). This study, in turn, investigates the gender gap in occupational choice by using data on the career choices of a wide spectrum of young Swiss students, who choose their work apprenticeships at age 15/16. Specifically, this study investigates whether students' gender is associated with differences in occupational requirements (mathematics, science, language) conditional on individual occupation preferences, skills, personality traits and socio-economic characteristics. The novel dataset links a representative student survey, administrative data on education trajectories and data on occupational skill requirements. While the results suggest only a very small gender gap in favour of men in occupations with higher science requirements (higher "science intensity"), the results suggest a statistically and economically significant gender gap in favour of men in occupations with higher mathematics requirements (higher "mathematics intensity") equivalent to a 12% wage reduction for women over the working life. The results suggest that the mathematics intensity of an occupation is associated with gender segregation both within STEM and non-STEM occupations. |
| Keywords: | occupational choice, gender gap, STEM, skill requirements |
| JEL: | J24 J16 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iso:educat:0237 |
| By: | German Pulido (UCL Social Research Institute) |
| Abstract: | This paper examines the impact of a debt forgiveness program implemented in 2011 on education and labour market outcomes for student loan holders who pursued university education in Colombia. The policy generated a sharp discontinuity in the eligibility criteria, which I exploit to identify the causal effect of debt forgiveness. Regression discontinuity estimates indicate an increase of 10 percentage points, equivalent to 19.5 percent, in the graduation rate of marginally eligible students. Additionally, the probability of graduating on time (within five years of enrolment) increased by 7.2 percentage points (25.4 percent). There is evidence that the policy had an effect on labour market outcomes. Eight years post-enrolment, eligible students are 19.5 percent more likely to be employed in the formal sector and have higher earnings. |
| Keywords: | student loans, higher education, debt relief, financial aid, graduation, employment |
| JEL: | I22 I23 I28 J21 J31 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:ucl:cepeow:25-02 |
| By: | Catarina Midões (Ca’ Foscari University of Venice; Universitat Autònoma de Barcelona); Enrica De Cian (Ca’ Foscari University of Venice; Centro Euro-Mediterraneo sui Cambiamenti Climatici; RFF-CMCC European Institute on Economics and the Environment) |
| Abstract: | Climate change is bringing abnormally high temperatures to Europe and thus a substantial physical and mental health burden, especially for older populations. We expand the individual longitudinal Survey on Health, Aging and Retirement (SHARE) on the 50+ population in Europe, with heat exposure from gridded datasets and derived household location. We estimate that ten extra days in a year at 31º, an increase predicted for many European regions, without air-conditioning (AC), increases by 3 - 7 p.p. the probability of reporting fatigue, by 2 - 4 p.p. of reporting reduced appetite and by 4 p.p. of reporting difficulties sleeping. It also increases the probability of being irritable by 4 p.p., but the effect is short lived. Ultimately, heat increases the probability of hospitalization by 2 - 4 p.p.. Addressing potential biases in estimating AC's effect, we find that it protects meaningfully against hospitalization risk and especially against fatigue, but not against irritability nor difficulties sleeping. These states are mechanisms behind socio-economic outcomes connected with rising temperatures - cognitive performance, labour productivity, and aggressive behaviours. We find that the effects of heat and AC's protection accrue over time. The evidence of significant residual impacts calls for research on alternative adaptation measures. |
| Keywords: | Climate Adaptation, Air-conditioning, Heat, Well-being, Climate Change |
| JEL: | D12 O13 Q41 Q5 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2025:03 |
| By: | Catherine Guirkinger (Development Finance and Public Policies, University of Namur); Quentin Stoeffler (Bordeaux School of Economics, University of Bordeaux) |
| Abstract: | We investigate how artisanal gold mining affect household investment in primary education in Burkina Faso. Using a variety of estimation methods with primary data and secondary data, we find a significant, robust and strong negative effect of artisanal mining on primary school enrolment for boys but not for girls. We explore potential channels and find that direct involvement in mining work does not explain the results. However, children appear to substitute for their parents working in mines (or other activities that developed after the mining boom). In addition, elicited perceived returns to primary education are negatively affected by the presence of mines. Both mechanisms suggest an indirect increase in the opportunity cost of education. We find no evidence of a negative income effect or of a change in school supply which could affect the direct cost of education. Our findings suggest that artisanal mining causes negative externalities on human capital accumulation that need to be addressed if mining is to contribute to poor household livelihoods. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nam:defipp:2503 |
| By: | ALOISI Antonio |
| Abstract: | The green and digital transitions are increasingly described as the ‘twin transition’ in EU policy documents, social partners’ strategic plans and academic debates. However, the exact meaning of this term remains ambiguous, and the interconnections between these transitions are largely unexplored. This paper aims to clarify the motivations and pitfalls behind their ‘twinning’ and assess where and how their convergence might be successful. It considers the socioeconomic risks, policy trade-offs and implications for the future of work. The analysis covers major EU employment and social policy developments concerning workers’ environmental and digital rights, as enshrined in legislation that presents a ‘mix’ between two distinct legal areas. A key finding is that the transitions are often treated as separate rather than integrated phenomena, with limited direct spillovers. However, despite shifts in institutional agendas and inconsistencies in understanding, the underlying priorities remain deeply entrenched. This paper identifies regulatory gaps and rigidities that maintain outdated, inflexible and hierarchical organisational paradigms, which are ill-suited to the demands of the twin transitions. It also calls for regenerating labour regulation to foster positive interactions and modernisation of work practices. The proposed normative changes should promote worker-oriented flexibility, universal labour protection and worker participation in technological and green initiatives, paving the way for more sustainable working arrangements. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:laedte:202501 |
| By: | Behringer, Jan; van Treeck, Till; Victor, Vincent |
| Abstract: | This paper investigates the role of family firms in the fall of the labor share and rise in corporate saving in Germany from 1993 to 2019. Combining a new Family Ownership and Governance (FOG) database with financial data, we analyze 929 publicly listed firms. Our findings show that firm-level labor share declines are widespread in Germany, contrasting with findings from the U.S. that link this trend to a few fast-growing superstar firms. Family firms, particularly in manufacturing, experienced sharper decreases in the labor share and stronger increases in corporate saving compared to non-family firms. The level of family involvement in Germany's two-tier board system (management and supervisory board) further affects these outcomes. Despite paying lower wages, we find no evidence that family firms provide greater employment stability. Our results challenge global generalizations about the drivers of the labor share and corporate saving, while emphasizing the macroeconomic relevance of family firms, especially in Germany's corporate sector. |
| Keywords: | Labor share, corporate saving, family firms |
| JEL: | D22 D33 G32 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifsowp:313637 |
| By: | Jesus Fernandez-Villaverde (University of Pennsylvania); Yang Yu (Shanghai Jiao Tong University); Francesco Zanetti (University of Oxford) |
| Abstract: | Defensive hiring of researchers by incumbent firms with monopsony power reduces creative destruction. This mechanism helps explain the simultaneous rise in R&D spending and decline in TFP growth in the US economy over recent decades. We develop a simple model highlighting the critical role of the inelastic supply of research labor in enabling this effect. Empirical evidence confirms that the research labor supply in the US is indeed inelastic and supports other model predictions: incumbent R&D spending is negatively correlated with creative destruction and sectoral TFP growth while extending incumbents’ lifespan. All these effects are amplified when ideas are harder to find. An extended version of the model quantifies these mechanisms’ implications for productivity, innovation, and policy. |
| Keywords: | Productivity growth, innovation, R&D, patents, creative destruction |
| JEL: | E22 L11 O31 O33 |
| Date: | 2025–03–11 |
| URL: | https://d.repec.org/n?u=RePEc:pen:papers:25-007 |
| By: | Flavio de Carolis; Vinzenz Peters |
| Abstract: | We investigate how leverage and the debt maturity structure of SMEs influences their resilience to floods. Using a dataset of six million geo-coded firm-year observations across nine European countries and granular flood maps, we employ dynamic difference- in-differences estimators to assess the economic impacts of floods and the mediating effects of leverage and debt maturity. Our findings highlight a non-linear relationship between leverage and resilience. SMEs with high levels of short-term debt and low levels of long-term debt show more severe reductions in their post-flood employment growth. |
| Keywords: | Economic Resilience; Climate Change; Floods; Leverage; Small- and Medium-Sized Enterprises |
| JEL: | G32 J21 Q54 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:dnb:dnbwpp:832 |
| By: | Darwin Cortés; Andrés Gallegos-Vargas; Jorge Pérez Pérez |
| Abstract: | We analyze the effect of adverse health shocks on households' expenditure shares in different good categories using a fixed-effects approach and a structural approach based on microeconomic theory. We find that, on average, households substitute health and food expenditure in response to adverse health shocks. Our estimates unveil substantial heterogeneity in this trade-off mediated by access to social protection, job contract type, and urban or rural location. Households from rural areas --where household heads are more likely to hold informal jobs and lack access to safety nets-- engage in more substitution of food expenditure for health expenditure than others. Our findings suggest that access to formal employment and a higher quality of local institutions can help mitigate the negative consequences of health shocks for households. |
| Keywords: | Health shocks;household expenditure;informal labor;urban-rural |
| JEL: | D12 I15 J46 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:bdm:wpaper:2025-03 |