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on Labor Markets - Supply, Demand, and Wages |
| By: | Gregory-Smith, Ian (University of Sheffield); Bryson, Alex (University College London); Gomez, Rafael (University of Toronto) |
| Abstract: | We examine the role that racial discrimination plays in the decision to retain or release an employee. Our empirical setting allows us to separate the retention decision from the wage decision. For the first four years of a player’s career, wages are mechanically determined and players are under a restricted ‘rookie’ contract, during which they can be released without cost. Players who survive in the league beyond four years receive a large uptick in their remuneration upon signing their first ‘free-agency’ contract. Consequently, marginal decisions over employment retention during the rookie contract have substantial implications for earnings realised over a player’s career. We find subtle but significant differences in retention rates between Black and White players (approximately 3 percentage points) that can’t be explained by a comprehensive set of individual characteristics including their productivity. We also show that traditional wage gap estimates, which appear to show equal earnings between Black and White players conditional upon playing position and productivity, mask underlying disparities in career earnings that become apparent when adjusting for these unequal retention rates. |
| Keywords: | retention, wages, discrimination |
| JEL: | J71 J31 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18079 |
| By: | Nikolova, Milena (University of Groningen) |
| Abstract: | A growing body of research in economics shows that workers care about more than just pay, often seeking social status, career mobility, or meaningful work. This chapter introduces the work orientations framework—a concept from psychology—as a unifying lens for understanding these motivations. Work orientations capture individuals’ core beliefs about the role of work: earning a living (“paycheck”), achieving recognition and advancement (“career”), or finding fulfillment (“calling”). These orientations are not mutually exclusive, and many people hold a mix that shapes their workplace behavior. Economists have long examined financial incentives, alignment with an organization’s mission, and career ambitions, but these strands remain fragmented. Integrating them within the work orientations framework broadens standard economic models, offers a richer view of labor supply and effort, and suggests new priorities for data collection, measurement, and theory development. The chapter reviews current evidence and outlines avenues for future empirical and conceptual research. |
| Keywords: | calling orientation, career orientation, job orientation, work orientations, labor economics |
| JEL: | J22 J24 J28 I31 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18056 |
| By: | Argan, Damiano (LUISS Guido Carli University); Gary-Bobo, Robert J. (University of Paris 1 Panthéon-Sorbonne); Goussé, Marion (CREST) |
| Abstract: | We study how the returns to higher education evolved in France during a period of educational expansion. We study possible changes in the mix of unobservable characteristics of the graduate population. Using a finite mixture model with latent types, we estimate type-specific log-wage, experience accumulation, and education-choice equations. We find that expected real wages declined for higher-education degrees, and that this result is not driven by adverse selection. Returns to education and experience decreased for certain unobserved types but increased for others. The composition of types among Master’s graduates suggests improved student selection over time, despite rising graduate numbers. |
| Keywords: | unobserved heterogeneity, selection, human capital, returns to experience, returns to education, wages, finite-mixture models, latent types |
| JEL: | C33 I21 I24 I26 J22 J24 J31 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18053 |
| By: | Fanfani, Bernardo (University of Turin) |
| Abstract: | This study documents the evolution of minimum wages bargained in Italian private sector collective contracts over a forty-year period (1983-2023). Minimum wages have grown in real levels over the last three decades, particularly among high-skilled occupations, but this growth has been partially eroded by the 2022-2023 inflation crisis. Nominal minimum wage growth is strongly correlated with past inflation and very weakly correlated with sectoral productivity growth and unemployment dynamics, which is consistent with strong coordination across industries and real wage rigidity. Increasing differences between high- and low-skilled occupation minimum wages can explain around one-third of the overall growth in the inequality of full-time equivalent daily wages that has occurred in Italy during the 1990s. |
| Keywords: | industrial relations, wage rigidity, wage inequality, minimum wage, collective bargaining |
| JEL: | J31 J38 J52 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18051 |
| By: | Askitas, Nikos (IZA) |
| Abstract: | Generative AI (GenAI) and Large Language Models (LLMs) are moving into domains once seen as uniquely human: reasoning, synthesis, abstraction, and rhetoric. Addressed to labor economists and informed readers, this paper clarifies what is truly new about LLMs, what is not, and why it matters. Using an analogy to auto-regressive models from economics, we explain their stochastic nature, whose fluency is often mistaken for agency. We place LLMs in the longer history of human–machine outsourcing, from digestion to cognition, and examine disruptive effects on white-collar labor, institutions, and epistemic norms. Risks emerge when synthetic content becomes both product and input, creating feedback loops that erode originality and reliability. Grounding the discussion in conceptual clarity over hype, we argue that while GenAI may substitute for some labor, statistical limits will, probably but not without major disruption, preserve a key role for human judgment. The question is not only how these tools are used, but which tasks we relinquish and how we reallocate expertise in a new division of cognitive labor. |
| Keywords: | automation and outsourcing, technological change, labor economics, autoregressive models, Large Language Models, Generative Artificial Intelligence, human-machine collaboration knowledge work, epistemic norms, digital transformation |
| JEL: | J24 O33 O31 J22 D83 L86 J44 O38 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18070 |
| By: | Contractor, Zara (Middlebury College); Reyes, Germán (Middlebury College) |
| Abstract: | Generative AI is transforming higher education, yet systematic evidence on student adoption remains limited. Using novel survey data from a selective U.S. college, we document over 80 percent of students using AI academically within two years of ChatGPT's release. Adoption varies across disciplines, demographics, and achievement levels, highlighting AI's potential to reshape educational inequalities. Students predominantly use AI for augmenting learning (e.g., explanations, feedback), but also to automate tasks (e.g., essay generation). Positive perceptions of AI's educational benefits strongly predict adoption. Institutional policies can influence usage patterns but risk creating unintended disparate impacts across student groups due to uneven compliance. |
| Keywords: | technology adoption, higher education, Generative AI, ChatGPT, student learning |
| JEL: | I23 O33 I21 J24 D83 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18055 |
| By: | Dworsky, Leonie; Pipke, David; Tschank, Juliet |
| Abstract: | We evaluate Raise-Up, a pilot in two Turin-area vocational schools that integrated project-based learning on digitization and the green transition into the regular curriculum. Using a difference-indifferences design on three survey waves, we find no positive effects on any pre-registered outcomes, including aspirations, motivation, competencies, preferences, and socio-emotional engagement. The only significant effect is negative: treated students report lower school enjoyment (-0.39σ), plausibly from higher workload. Impacts are more adverse for females, reducing self-confidence and perceived job knowledge, with no socio-economic differences. Post-program feedback aligns with these results, suggesting limited benefits and potential unintended costs. |
| Keywords: | vocational education and training, digital skills, green skills, projectbased learning, dropout prevention, gender differences, field experiment |
| JEL: | I21 J24 Q59 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:324657 |
| By: | Asakawa, Shinsuke (Osaka University); Shimono, Akinori; Takahashi, Mikiko; Yamane, Shoko (The University of Osaka); Sasaki, Masaru (The University of Osaka) |
| Abstract: | This study investigates whether a meeting environment’s visual openness influences team productivity and communication quality. We conducted a randomized controlled trial with participants assigned to discussions held in a transparent glass meeting room (treatment) or a fully curtained room (control). Team productivity was evaluated based on the quality of participants’ policy proposals. Communication quality was assessed using transcript-based indicators such as laugh frequency and topic diversity. We found that groups in visually open meeting rooms received significantly higher proposal ratings and exhibited greater emotional positivity and topic diversity, highlighting that within-session dynamics expose how environmental design affects group interaction. |
| Keywords: | randomized controlled trial, visual openness, communication quality, team productivity, workplace design, natural language processing |
| JEL: | C93 J24 M54 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18058 |
| By: | Seah, Kelvin (National University of Singapore); Pan, Jessica (National University of Singapore); Tan, Poh Lin (National University of Singapore) |
| Abstract: | Existing research suggests that broad versus specialized university curricula does not significantly lead to differences in earnings and unemployment outcomes shortly after graduation. This paper builds on previous work by examining the impact of curriculum breadth on medium-term labor market outcomes, up to six years after students have graduated. Exploiting a unique episode in the history of the National University of Singapore, in which a university-wide revision in graduation requirements in 2007 prompted students in a large faculty to unexpectedly read a more specialized curriculum, we find, using a difference-in-differences approach, that while taking a more specialized curriculum does not initially affect labor earnings shortly after graduation, its effect becomes negative and increases with work experience. We find no evidence that lower earnings are due to a lower propensity to switch jobs, suggesting weaker within-firm earnings trajectories among more specialized graduates. |
| Keywords: | difference-in-differences, curriculum breadth, university curriculum, earnings, employment |
| JEL: | I21 J31 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18067 |
| By: | Jirjahn, Uwe (University of Trier); Mohrenweiser, Jens (Bournemouth University) |
| Abstract: | Since the emergence of personnel economics, economists have been increasingly aware that the management practices used by firms are an important determinant of productivity. However, it is an open question of whether the impact of management practices on the productivity of firms depends on workplace health promotion activities (alternatively called workplace wellness programs). Using a widely recognized management index developed by Bloom and Van Reenen (2007), this study provides evidence that workplace health promotion moderates the link between management practices and productivity. Our panel data estimates show that the positive impact of management practices on productivity is stronger if a firm engages in workplace health promotion. This finding fits the notion that workplace health promotion mitigates adverse side effects of management practices on employees’ health. However, our estimates also provide evidence of a negative direct influence of workplace promotion on productivity. The positive moderating influence of workplace health promotion only dominates the negative direct influence if a firm uses Bloom and Van Reenen’s management practices (targets, monitoring and incentives) at a high intensity. |
| Keywords: | workplace wellness programs, employee health, incentives, monitoring, targets, firm performance |
| JEL: | I10 J24 J28 J81 M50 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18059 |
| By: | Francesco Amodio (McGill University); Emanuele Brancati (Sapienza University of Rome); Nicolás de Roux (Universidad de los Andes); Michele Di Maio (Sapienza University of Rome) |
| Abstract: | We measure firms’ wage-setting power in 16 Latin American and Caribbean countries. Exploiting variation in firms’ exposure to trade and exchange rates, we generate shocks to labor demand to trace out firm-level labor supply curves and quantify labor market power. We estimate an inverse labor supply elasticity of 0.82, implying that workers receive 55 cents per additional dollar produced. Wage-setting power is significantly higher among firms in countries with lower union density, limited collective bargaining, and no unemployment protection. This underscores the role of labor market institutions in shaping firms’ wagesetting power and the distribution of the gains from trade. |
| Keywords: | firms, labor market power, labor institutions |
| JEL: | J31 J50 O54 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:col:000089:021499 |
| By: | Katharine C. Sadowski |
| Abstract: | Childcare is essential for working families, yet it remains increasingly unaffordable and inaccessible for parents and offers poverty-level wages to many employees. While research suggests minimum wage policies may improve the welfare of low-wage workers, there is also evidence they may increase firm exits, especially among smaller, low-profit firms, which could reduce access and harm consumer well-being. This study is the first to examine these trade-offs in the childcare industry, a labor-intensive, highly regulated sector where capital-labor substitution is limited, and to provide evidence on how minimum wage policies affect a dual-sector labor market in the U.S., where self-employed and waged providers serve overlapping markets. Using variation from state-level minimum wage increases between 1995 and 2019 and unique microdata, I implement a cross-state county border discontinuity design to estimate impacts on the stocks, flows, and composition of childcare establishments. I find that while county-level aggregate establishment stocks and employment remained stable, establishment-level turnover increased, and employment decreased. I reconcile these findings by showing that minimum wage increases prompted reallocation, with larger establishments in the waged-sector more likely to enter and less likely to exit, making this one of the first studies to link null aggregate effects to shifts in establishment composition. Finally, I show that minimum wage increases may negatively affect the self-employed sector, resulting in fewer owners with advanced degrees and more with only high school education. These findings suggest that minimum wage policies reshape who provides care in ways that could affect both quality and access. |
| Keywords: | Child Care, Early Childhood Education, Minimum Wage |
| JEL: | H32 H44 H75 I21 I28 J13 J38 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-53 |
| By: | Stefan Buechele (University of Kassel, INCHER and Institute of Economics); Guido Buenstorf (University of Kassel, INCHER and Institute of Economics); Matthias Huegel (University of Kassel, INCHER and Institute of Economics); Johannes Koenig (University of Kassel, INCHER and Institute of Economics; IAB Institute for Employment Research, Saarbruecken); Maria Theissen (University of Kassel, INCHER and Institute of Economics) |
| Abstract: | Previous research has shown that a large fraction of tenured university faculty in the U.S. and other countries were trained at a small number of highly prestigious universities. The question remains whether this concentration is due to competitive advantages held by candidates from these universities, or whether it merely reflects the larger output of early-career researchers aspiring to faculty positions by these universities. To address this question, we analyze data covering the full population of doctoral graduates in Germany since the 1960s. Similar to studies of the U.S. system of higher education, we observe a strong concentration of professors trained at only a small number of universities. However, we find no evidence indicating that the prestige of the doctoral degree-granting university systematically affects individuals’ odds of being appointed to professorships. Despite increasing stratification tendencies, our results do not indicate that the importance of the degree-granting university for academic careers has increased. While doctoral graduates from top-tier universities are more likely to secure faculty positions at similar institutions, this is mostly due to returns to their own alma mater after initial appointments elsewhere. |
| Keywords: | Faculty appointment, university prestige, stratification, academic labor market, professorship, Germany, Habilitation |
| JEL: | I24 J24 J40 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:mar:magkse:202516 |
| By: | Marcos J Ribeiro (Department of Economics, University of Sao Paulo); Klaus Prettner (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | How do new technologies affect economic growth and the skill premium? To answer this question, we analyze the impact of industrial robots and artificial intelligence (AI) on the wage differential between low-skill and high-skill workers across 52 countries using counterfactual simulations. In so doing, we extend the nested CES production function framework of Bloom et al. (2025) to account for cross-country income heterogeneity. Confirming prior findings, we Show that the use of industrial robots tends to increase wage inequality, while the use of AI tends to reduce it. Our contribution lies in documenting substantial heterogeneity across income groups: the inequality-increasing effect of robots and the inequality-reducing effects of AI are particularly strong in high-income countries, while they are less pronounced among middle- and lower-middle income countries. In addition, we show that both technologies boost economic growth. In terms of policy recommendations, our findings suggest that investments in education and skill-upgrading can simultaneously raise average incomes and mitigate the negative effects of automation on wage inequality. |
| Keywords: | Skill Premium, Automation, Industrial Robots, Artificial Intelligence |
| JEL: | J31 O14 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp381 |
| By: | Holzer, Harry J. (Georgetown University) |
| Abstract: | In this paper, I examine what we know and don’t know about both private and public workforce development in the US. I highlight three of the most important categories of programs and policy: a) Workforce development in accredited higher education institutions, particularly community colleges; b) Other publicly-funded or private training and services, including “sectoral training” that targets specific high-demand sectors of the economy; and c) On-the-job or work-based learning, including apprenticeships. I summarize the theoretical literature on workforce development and a broad landscape of the three key categories. I synthesize the empirical literature on workforce development, beginning with comparisons of different data sources, outcome measures and empirical methods used before reviewing the literature on estimated impacts in each of the three categories. I then consider the international evidence on workforce development, and how public efforts differ between the US and other industrial countries, before concluding. |
| Keywords: | WIOA, sectoral, community college, training, workforce, apprenticeship work-based learning |
| JEL: | J24 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18061 |
| By: | Beckmann, Michael (University of Basel); Grunau, Philipp (Institut für Arbeitsmarkt- und Berufsforschung); Kretschmer, Tobias (LMU Munich); Shvartsman, Elena (WHU – Otto Beisheim School of Management) |
| Abstract: | An employee’s affective commitment to the firm is a key driver of individual and, ultimately, firm performance. We study the role of high involvement management (HIM) practices in promoting affective commitment and ask if different components of HIM, specifically power, information, rewards, and knowledge, form a coherent management system and/or are complementary across components. Coherence implies that the components are not in conflict with or substitute for each other, i.e., adding them individually generates additional positive returns, while complementarity implies that the returns from adding one component increase with the number of other components already in place. We use detailed and unique data from a large sample of German firms and their employees and find that while HIM is a coherent management system, there are no strong complementarities across practices. |
| Keywords: | high involvement management, affective commitment, coherent management system, complementarity |
| JEL: | D2 M1 M5 L2 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18047 |
| By: | Tobler, Lina; Fervers, Lukas; Reiff, Annika |
| Abstract: | In response to increasing difficulties faced by firms in filling training positions, Germany intro-duced a minimum apprenticeship wage (MAW) of 515€ in 2020. Theoretically, the MAW’s effect is ambiguous: higher costs may reduce firms’ incentives to offer training positions, while increased wages could make apprenticeships more attractive, potentially increasing applicant numbers. It remains unclear which effect predominates in terms of actual take-ups. This paper provides first empirical analyses of the MAW’s impact on offered apprenticeship positions and actual take-ups. Using a difference-in-differences design with firm-level panel data, we find negative effects on both offered and filled trainings. This finding is robust to sensitivity analyses, including placebo tests for diverging trends before treatment, effects on other employee groups, inclusion of controls covering COVID-19 affectedness, post-treatment selection and attrition. The results suggest that the negative impact on offers dominated possible gains and did not lead to more entrants into the training system. |
| Date: | 2025–08–13 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:hjb74_v1 |