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on Labor Markets - Supply, Demand, and Wages |
| By: | Belloc, Ignacio (University of Zaragoza); Gimenez-Nadal, José Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza) |
| Abstract: | Understanding the determinants of worker effort is central, as even small changes in productivity can have significant implications for economic growth and labor market performance. This study examines the relationship between extreme temperatures and work effort—proxied by non-work time while at the workplace—using the ATUS 2003–2019. Results indicate that extremely hot days (? 100ºF) are related to increased time spent at work not working, particularly among women in non-supervised occupations. On these days, women in non-supervised occupations spend 6.79 more minutes at work not working compared to comfortable temperature days. Men, by contrast, do not exhibit significant changes in non-work time at work. Furthermore, the results align with increased worker bargaining power during economic expansions, which facilitates labor supply adjustments on extremely hot days, and with hypotheses regarding adaptation and acclimation to high temperatures in warmer counties. These findings underscore the relevance of temperature as a determinant of worker effort, reveal a previously overlooked margin of labor adjustment, and highlight the moderating role of occupational supervision in shaping behavioral responses to environmental stressors. |
| Keywords: | non-work time at work, temperature, climate change, supervision, ATUS |
| JEL: | J16 J22 J24 Q54 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18038 |
| By: | Fang, Tony (Memorial University of Newfoundland); Gunderson, Morley (University of Toronto); Hartley, John (Memorial University of Newfoundland); King, Graham (Memorial University of Newfoundland); Ming, Hui (Sichuan University) |
| Abstract: | Remote work arrangements are compelling examples of an organization’s ability to utilize digital technology. This study analyzes data from a representative survey of Atlantic Canadian employers to evaluate three phenomena: how remote work evolved during the recent COVID-19 pandemic; the factors influencing these changes; and the impact of these changes on business outcomes. Our findings suggest that urban firms, technologically advanced companies in certain highly skilled industries, and firms offering greater flexibility for remote work were most likely to enhance remote work practices during the pandemic. For the average firm, an increase in the share of remote work correlated with higher organizational productivity, improved employee performance, and greater new product/service innovation. The primary downside was heightened management complexity. Variations were observed along industry and provincial lines. |
| Keywords: | COVID-19, Atlantic provinces, Canada, remote work, digital technology usage, technology-organization-environment (TOE) framework |
| JEL: | J22 J24 J28 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18020 |
| By: | Anders Humlum; Pernille Plato |
| Abstract: | This paper shows that effective reskilling can have profound mental health benefits for workers and their partners. Using institutional variation in access to higher education after work accidents in Denmark, we find that reskilling prevents one case of depression for every three injured workers. Strikingly, the spillover effects on partners are just as large. These mental health gains are accompanied by higher partner employment and increased separation rates, suggesting that reskilling frees partners from costly relationship commitments. Together, the mental health and partner benefits add 83% to the direct labor earnings gains from reskilling. |
| JEL: | I18 I26 I31 J12 J24 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34095 |
| By: | Gagnon, Nickolas; Nosenzo, Daniele |
| Abstract: | We reconsider discrimination preferences through moral lenses and conduct experiments to systematically investigate these preferences using representative UK samples. Specifically, we evaluate the distribution of individual preferences for and against taste-and statistical-based discrimination across three domains—ethnicity, gender, and LGBTQ+ status. Using over 60, 000 anonymous decisions affecting how workers are paid from more than 3, 500 individuals, we document that most individuals prefer to engage in at least one type of discrimination, that there is substantial heterogeneity in preferences, and that the existence of multiple preferences changes our understanding of why individuals engage or not in discrimination. Among others, we examine how preferences relate across domains, map them onto socio-demographic characteristics, politics, support for policies, and gender wage gaps, and study underlying redistributive principles and effects of wage transparency. |
| Keywords: | Ethnicity, Gender, LGBTQ+, Moral principles, Experiment, Discrimination |
| JEL: | D63 D90 J23 J31 J71 J78 K31 M52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:323979 |
| By: | Pencavel, John H. (Stanford University) |
| Abstract: | Using annual observations on U.S. non-farm workers from the late 1940s to 2019, descriptions of the movements of nominal wages, real consumption wages, and real product wages are reported. The prices faced by consumer workers and the prices faced by owner-managers move differently. Variables associated with movements in these wages are presented and the roles of these wages in accounting for changes in employment, hours of work, and in Labor’s share are noted. Changes in real product wages have had a larger (negative) impact on the use of labor than changes in real consumption wages. |
| Keywords: | nominal wages, real product wages, real consumption wages, labor productivity |
| JEL: | J31 N31 N32 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18033 |
| By: | Hossain, Md Mobarak (Northern Arizona University); Fossen, Frank M. (University of Nevada, Reno); Mukhopadhyay, Sankar (University of Nevada, Reno) |
| Abstract: | What motivates individuals to become entrepreneurs and create jobs? We develop and estimate a dynamic structural microeconometric model that accounts for both employer and non-employer entrepreneurs. Individuals in each period choose to work as an employee, as one of the two entrepreneur types, or remain non-employed. Different work experiences may affect earnings in the three sectors differently. The estimated model replicates key data patterns. The results suggest that experience in employment provides positive returns in entrepreneurship, but entrepreneurial experience does not have positive returns in employment. The model is used to simulate how policy scenarios would affect individuals' entrepreneurial choices. |
| Keywords: | dynamic structural model, employer, entrepreneurship, life cycle |
| JEL: | J22 J23 L26 C61 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18009 |
| By: | Doorley, Karina (Economic and Social Research Institute, Dublin); Simon, Agathe (ESRI, Dublin); Tuda, Dora (ESRI, Dublin) |
| Abstract: | This paper evaluates the redistributive and labour supply effects of transitioning from a joint to a fully individualised income tax system in Ireland. The current Irish tax system, which remains partially joint since the early 2000’s, provides a financial advantage to married couples by allowing them to to share tax bands and credits. However, it also creates a financial disincentive for secondary earners (who are typically women) to work. Using the microsimulation model, SWITCH, we estimate the distributional effect of moving to a fully individualised tax system in Ireland. We find that this would result in income losses, which increase with the level of income. Linking SWITCH to a discrete choice labour supply model, we then estimate the behavioural response of married couples to a fully individualised tax regime. We find that a shift to individualised taxation would result in increased labour supply of married women, and a reduction in the hours worked by married men due to intra-household labour substitution effects. We explore the implications of this for a range of outcomes linked to womens’ financial independence. |
| Keywords: | labour supply, taxation of couples, tax-benefit system |
| JEL: | E24 E32 J22 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18035 |
| By: | Barone, Guglielmo (University of Bologna); Loviglio, Annalisa (University of Bologna); Tommasi, Denni (University of Bologna) |
| Abstract: | Digital skills are increasingly essential for full participation in modern life. Yet many low-income families face a dual digital divide: limited access to technology and limited ability to use it effectively. These gaps can undermine adults' ability to support their children's education, restrict access to public services, and reduce their own employability. Despite growing policy attention, rigorous evidence on how to close these gaps—especially among disadvantaged adults in high-income countries—remains scarce. We evaluate the impact of a comprehensive digital inclusion program in Turin, Italy, targeting 859 low-income families with school-aged children. Participants were randomly assigned to a control group or one of two treatment arms, each combining a free tablet with internet access and digital literacy training of different durations. One year later, treated participants reported large improvements in daily technology use and digital skills, as measured by the "Digital Skills Indicator 2.0" (DSI) developed by Eurostat. Parents also became more confident in guiding their children's online activities, more engaged in digital parenting, and more likely to access public services digitally. We find no effects on employment or job search behavior, but treated participants expressed greater optimism about future training prospects. The effects are statistically similar across the two training intensities, suggesting that (i) once basic barriers are removed, digital engagement can become self-sustaining, and/or (ii) that the returns to digital training are strongly diminishing. Mediation analysis confirms that digital skills — not just access — are key drivers of broader behavioral and economic outcomes. Sequential effects are particularly strong in the domains of social inclusion and parenting. The findings underscore the importance of addressing both financial and learning constraints and suggest that bundled interventions can foster inclusive digital participation. |
| Keywords: | digital divide, digital literacy, low-income families, labor market outcomes, digital parenting |
| JEL: | I24 J24 O33 C93 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18032 |
| By: | Cooper, Dylan A. (California State University, Channel Islands); Fang, Tony (Memorial University of Newfoundland); Wan, Vincent (Shandong University) |
| Abstract: | Using a National Bureau of Economic Research dataset of employees of 14 United States companies with shared capitalism practices, we compare two prominent explanations of employee ownership’s influence on pro-organizational behaviors—psychological ownership and alignment of financial interests—by testing the effects of Employee Stock Ownership Plans (ESOPs) and current profit sharing on promotive voice. We conducted a path-analysis of a moderated multiple-mediation regression model using the PROCESS macro. Our sample included 16, 557 participants. We find that psychological ownership partially transmits the effects of ESOP participation and current profit sharing on promotive voice. Employee decision influence strengthens the relationship between ESOP participation and psychological ownership. Perceived alignment of interests does not mediate the relationships between employee ownership and promotive voice. |
| Keywords: | Employee Stock Ownership Plan, psychological ownership, promotive voice, employee ownership, profit sharing, decision influence |
| JEL: | J33 J54 J24 J26 J28 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18023 |
| By: | Ardito, Chiara (University of Turin); Berton, Fabio (European Commission Joint Research Centre (JRC)); Pacelli, Lia (University of Turin); Zanatta, Marina (University of Torino) |
| Abstract: | We analyse the long-term impact of hiring subsidies on both job and employment security. The subsidy that we examine was introduced in Italy through the 2015 Budget Law, with the goal of promoting open-ended contracts. We employ a non-linear difference-in-differences (NL-DiD) approach within a duration framework, using high-frequency, population-wide linked employer-employee administrative data from a large Italian region. Causal results on job security indicate that the subsidy’s protective effect is short-lived. Excess separations from subsidised jobs peak in the exact same month in which the monetary incentive expires. No long-term protective effect of the subsidy is observed regarding employment security. These results hold across a wide range of worker and firm characteristics, showing surprisingly little heterogeneity. One notable exception concerns firm size. Furthermore, the expiration of subsidies disproportionately affects workers with low human capital. Our findings suggest that hiring subsidies are not effective in promoting either job or employment security for beneficiaries and that this raises questions about the efficacy of this common and costly policy, particularly when offered unconditionally. |
| Keywords: | Italy, job and employment security, hiring subsidies, non-linear DiD, duration model |
| JEL: | H2 J2 J3 J6 L2 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18024 |
| By: | Fritz, Sarah (Halle Institute for Economic Research); van der List, Catherine (University of Essex) |
| Abstract: | We study the effects of place-based policies on aggregate productivity using administrative data on projects co-financed by the EU in Italy linked to balance sheet data. We exploit quasi-experimental variation in funding for a large place-based policy stemming from measurement error in regional GDP estimates. Results show that the policy likely decreases productivity. Decompositions reveal that aggregate declines are driven by reallocation of labor to low-productivity firms. Mechanism analysis using firm-level event studies reveals that negative reallocation effects are caused by high-productivity firms taking up the funds and subsequently becoming more liquidity constrained, leading to slowdowns in employment growth. |
| Keywords: | EU cohesion policy, productivity, place-based policy |
| JEL: | R11 R58 J23 Z18 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18036 |
| By: | Igor Asanov (University of Kassel, Germany); Maria Mavlikeeva (University of Kassel, INCHER, Germany) |
| Abstract: | We conduct a large-scale experiment in the labor market using more than 8, 000 fictitious resumes to uncover the demand-side mechanisms behind the wage penalty for the self-employed. We find that self-employed individuals, compared to wage earners, are subject to adverse treatment across different occupations. This adverse treatment is concentrated in the lower-skilled, non-managerial market. This differential treatment, conditional on managerial skills, also holds for different occupational levels and increases with the length of self-employment experience. The results suggest that self-employment leads to the development of generalist skills (useful for managerial roles) at the cost of specialist skills. |
| Keywords: | Self-employment, Field experiment, Skills mismatch, Wage penalty, Managerial skills, Specialist skills |
| Date: | 2025–04–16 |
| URL: | https://d.repec.org/n?u=RePEc:mar:magkse:202513 |
| By: | Satadru Das; Chetan Ghate; Subhadeep Halder; Debojyoti Mazumder; Sreerupa Sengupta; Satyarth Singh |
| Abstract: | A predominant share of employment in EMDEs is in the informal sector. In 2019-2020, approximately 72% of total employment was in the informal sector in India, with casual employment comprising 22% and self-employment comprising 50%. How does informality in labor markets affect inflation stabilization and monetary policy setting? To address this, we build a medium-scale NK-DSGE model with segmented labor markets and search and matching frictions. We calibrate the model to India. As in the data, we divide informal employment into self-employment and casual employment. We show that more formality improves the transmission of monetary policy. We show that a contractionary monetary policy shock leads to a decline in both formal and informal employment (self and casual), suggesting that monetary policy's impact on output and inflation works through informal labor markets as well. Our paper highlights the mechanism behind the transmission of monetary policy in the presence of heterogeneous labor markets. |
| Keywords: | business cycles, informal labor markets, monetary policy, inflation targeting, NK-DSGE models |
| JEL: | E52 E24 E26 E32 E63 E61 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-47 |
| By: | Kiran Tomlinson; Sonia Jaffe; Will Wang; Scott Counts; Siddharth Suri |
| Abstract: | Given the rapid adoption of generative AI and its potential to impact a wide range of tasks, understanding the effects of AI on the economy is one of society's most important questions. In this work, we take a step toward that goal by analyzing the work activities people do with AI, how successfully and broadly those activities are done, and combine that with data on what occupations do those activities. We analyze a dataset of 200k anonymized and privacy-scrubbed conversations between users and Microsoft Bing Copilot, a publicly available generative AI system. We find the most common work activities people seek AI assistance for involve gathering information and writing, while the most common activities that AI itself is performing are providing information and assistance, writing, teaching, and advising. Combining these activity classifications with measurements of task success and scope of impact, we compute an AI applicability score for each occupation. We find the highest AI applicability scores for knowledge work occupation groups such as computer and mathematical, and office and administrative support, as well as occupations such as sales whose work activities involve providing and communicating information. Additionally, we characterize the types of work activities performed most successfully, how wage and education correlate with AI applicability, and how real-world usage compares to predictions of occupational AI impact. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.07935 |
| By: | Deniz Dutz (University of Chicago); Ingrid Huitfeldt (BI Norwegian Business School, and Statistics Norway); Santiago Lacouture (University of Chicago); Magne Mogstad (University of Chicago, Statistics Norway, and NBER); Alexander Torgovitsky (University of Chicago); Winnie van Dijk (Yale University) |
| Abstract: | We show how to use randomized participation incentives to test and account for nonresponse bias in surveys. We first use data from a survey about labor market conditions, linked to full-population administrative data, to provide evidence of large differences in labor market outcomes between survey participants and nonparticipants, differences which would not be observable to an analyst who only has access to the survey data. These differences persist even after correcting for observable characteristics. We then use the randomized incentives in our survey to directly test for nonresponse bias, and find evidence of substantial bias. Next, we apply a range of existing methods that account for nonresponse bias and find they produce bounds (or point estimates) that are either wide or far from the ground truth. We investigate the failure of these methods by taking a closer look at the determinants of participation, finding that the composition of participants changes in opposite directions in response to incentives and reminder emails. We develop a model of participation that allows for two dimensions of unobserved heterogeneity in the participation decision. Applying the model to our data produces bounds (or point estimates) that are narrower and closer to the ground truth than the other methods. Our results highlight the benefits of including randomized participation incentives in surveys. Both the testing procedure and the methods for bias adjustment may be attractive tools for researchers who are able to embed randomized incentives into their survey. |
| Date: | 2025–07–14 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2451 |
| By: | Henrika Langen; Michael Doersam |
| Abstract: | This paper examines how improved public transportation affordability, resulting from the introduction of the so-called Deutschlandticket, affected the commuting choices of newly commencing apprentices in Germany. Introduced in May 2023, the Deutschlandticket offers nationwide access to local and regional public transport at a flat monthly rate, replacing a previously fragmented fare system and substantially reducing commuting costs, particularly for commutes across transport association boundaries. Using administrative register data on apprenticeship contracts and detailed pre-Deutschlandticket fare information, we assess changes in commuting patterns among new apprentices between 2022 and 2023. Our difference-in-differences analyses show that the Deutschlandticket led to a significant increase of around 21% in commutes on inter-transport-association routes, especially among older apprentices, those with lower school-leaving certificates, and those in certain training occupations. In contrast, we find no significant effect of region-specific Deutschlandticket-related cost savings on commuting distances within single transport associations. Our findings suggest that by reducing financial and informational barriers, the Deutschlandticket expanded access to apprenticeship opportunities and may have helped alleviate regional mismatches, without increasing commuting distances or requiring relocation. |
| Keywords: | commuting behavior, vocational education and training (VET), D-Ticket, public transportation, Difference-in-Differences |
| JEL: | I21 J61 J24 R23 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iso:educat:0246 |
| By: | Vojtech Bartos |
| Abstract: | Discrimination remains a persistent challenge with significant moral and economic consequences. While extensive economics research has documented its existence, identifying effective strategies for reducing discrimination remains an evolving field. This chapter synthesizes theoretical perspectives from economics and psychology, integrating them with recent empirical findings on discrimination reduction. It reviews interventions that mitigate bias by manipulating the cost of discrimination, shaping information processing, leveraging intergroup contact, changing attitudes, and manipulating identity perceptions. The discussion covers taste-based and statistical discrimination models, implicit bias frameworks, and psychological theories of discrimination. A particular emphasis is placed on well-identified and sufficiently powered studies, including field experiments with incentivized measures. By bridging insights across disciplines, this chapter provides a comprehensive understanding of effective discrimination reduction strategies, highlights remaining gaps, and outlines directions for future research to develop scalable solutions. |
| Keywords: | discrimination reduction, bias mitigation, statistical and taste-based discrimination, implicit bias, intergroup contact |
| JEL: | D6 D9 J1 J7 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12045 |
| By: | Mark Hoekstra; Suhyeon Oh; Meradee Tangvatcharapong |
| Abstract: | We implement five different tests of whether grand juries, which are drawn from a representative cross-section of the public, discriminate against Black defendants when deciding to prosecute felony cases. Three tests exploit that while jurors do not directly observe defendant race, jurors do observe the “Blackness” of defendants’ names. All three tests—an audit-study-style test, a traditional outcome-based test, and a test that estimates racial bias using blinded/unblinded comparisons after purging omitted variable bias—indicate juries do not discriminate based on race. Two additional tests indicate racial bias explains at most 0.3 percent of the Black-White felony conviction gap. |
| JEL: | J15 J71 K42 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34106 |
| By: | Hiziroglu Aygun, Aysun |
| Abstract: | We examine the short-term effects of Türkiye’s Family Support Program (FSP), a large-scale unconditional cash transfer (UCT) introduced in 2022 amid 85.5% annual inflation. The program complements food and shelter support and offers approximately one-third of the monthly minimum wage to low-income families. Using a regression discontinuity design based on the program's per capita income eligibility threshold, we analyze the program's short-term effects on child labor, time use, health, and emotional well-being within six months of implementation. We find significant reductions in children's participation in family businesses and agricultural work. Investigating the heterogeneous effects, we find that the program reduces non-market outside work for boys and time spent on domestic work for girls. Emotional well-being improved, especially among boys. These findings suggest that UCTs can improve child welfare during macroeconomic crises when combined with in-kind transfers. |
| Keywords: | cash transfers, in-kind support, child labor, regression discontinuity design, program evaluation, Türkiye |
| JEL: | I21 I28 I38 J21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:324156 |