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on Labor Markets - Supply, Demand, and Wages |
| By: | Michael Doersam; Henrika Langen |
| Abstract: | To enhance the attractiveness of vocational education and training and to secure an adequate supply of skilled labour, the German government introduced a statutory minimum apprenticeship wage. Since January 1, 2020, apprentices who start their training have been entitled to a minimum wage that increases annually. Using administrative register data on apprenticeship contracts, we estimate the causal effect of this legislation on apprentice employment. Exploiting regional and occupational variation in the share of apprenticeships paid at the minimum wage, we apply standard difference-in-differences, triple-difference, and synthetic difference-in-differences models. Our results indicate that the minimum apprenticeship wage increased the number of apprenticeship contracts while reducing the contract termination rate in low-wage occupations. We also find considerable heterogeneity across occupations, which may be best explained by differences in exposure to skilled labour shortages and changes in apprentices' educational attainment. |
| Keywords: | minimum wage, apprenticeship market, employment effects, difference-in-differences, triple difference, synthetic difference-in-differences |
| JEL: | J08 J24 J38 C23 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iso:educat:0250 |
| By: | McGuinness, Seamus (Economic and Social Research Institute, Dublin); Kelly, Lorcan (Economic and Social Research Institute, Dublin); Devlin, Anne (Economic and Social Research Institute, Dublin); Whelan, Adele (ESRI, Dublin) |
| Abstract: | This paper examines the earnings and job satisfaction of Vocational Education and Training (VET) graduates in the European Union (EU) using two definitions of vocational education: a self-reported definition and a more specific definition that incorporates work-based learning. The incidence of third-level VET falls from 74% to 29% under the stricter definition. Across the EU, the returns to vocational and academic qualifications are comparable for upper secondary, post-secondary and tertiary qualifications. Earnings premia vary between countries, with VET generating higher returns in just under one-third of all EU-28 members. Additionally, third level VET graduates enjoy higher levels of job satisfaction. |
| Keywords: | work-based learning, european countries, job satisfaction, earnings, vocational education, on-the-job training |
| JEL: | I21 I26 J24 J30 J31 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18134 |
| By: | Cowan, Benjamin (Washington State University); Jones, Todd R. (Mississippi State University) |
| Abstract: | This paper examines how people adjust their time use when experiencing more time alone, a growing share of adults’ lives. We exploit the dramatic rise in remote work following the onset of the pandemic, which sharply reduced time spent with non-household members during the workday, to study whether individuals substitute toward more in-person interactions outside of work. On days individuals work from home, they spend 3.5 more hours in activities spent entirely alone and over 5 fewer hours in activities that include any non-household members. Using a difference-in-differences strategy, we compare pre- and post-pandemic changes in time use for workers in teleworkable versus non-teleworkable occupations to ask what happens to time allocations when workers are induced toward remote work. Averaging over all days, teleworkable workers spend 32 more minutes in activities spent entirely alone and 38 fewer minutes in activities that include any non-household members. Normalizing by their 46-minute increase in remote work, these effects are of a similar magnitude to our descriptive estimates. We find almost no substitution toward spending more time with others outside the household to offset lost in-person interactions at work. |
| Keywords: | social isolation, work from home, time use |
| JEL: | J22 J24 I31 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18112 |
| By: | Esther Arenas-Arroyo (Department of Economics, Vienna University of Economics and Business); Jacob Fabian (Market Development, ISO New England); Friederike Mengel (Department of Economics, University of Essex and Erasmus University Rotterdam); Bernhard Schmidpeter (Department of Economics, Vienna University of Economics and Business); Michel Serafinelli (King's College London, ESCoE, RFBerlin, CESifo) |
| Abstract: | How does firms’ skill demand change as the business landscape evolves? We present evidence from the green transition by analyzing how hurricanes impact demand for green skills. These disasters signal the risks of not acting on environmental issues. Using data from U.S. online job postings (2010–2019) and hurricane paths, we create a new measure of green job postings. Firms in areas affected by hurricanes are 6.4% more likely to post jobs that require green skills after the event, particularly those serving local markets. |
| Keywords: | Green skills, Green transition, Online job postings, Hurricanes |
| JEL: | J23 Q54 L20 J24 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp385 |
| By: | Salla Kalin (Labour Institute for Economic Research Labore); Tomi Kyyrä (VATT Institute for Economic Research); Tuomas Matikka (VATT Institute for Economic Research) |
| Abstract: | We use detailed, population-wide data from Finland to provide evidence of the impact of earnings disregard policies on part-time work during unemployment spells.The share of part-time workers among benefit recipients increased sharply from 10% to 18% over a few years after the implementation of earnings disregards in unemployment beneifts and housing allowances, which allowed individuals to earn up to 300 euros per month without reductions in their benefits. Using variation in the impact of the reforms on incentives between individuals eligible for different types of benefits, we estimate a 21–30% increase in participation in part-time work due to the implementation of earnings disregards. On average, we find no economically sizable effects of the earnings disregards on future full-time employment or the likelihood of leaving unemployment benefits, but find moderate positive employment effects among those unemployed individuals who are more attached to the labor market. |
| Keywords: | labor supply; social benefits; part-time work; earnings disregards |
| JEL: | H24 J21 J22 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:fit:wpaper:36 |
| By: | Minni, Virginia (University of Chicago Booth School of Business) |
| Abstract: | Why do managers matter for firm performance? This paper provides evidence of the critical role of managers in matching workers to jobs within the firm using the universe of personnel records from a large multinational firm. The data covers 200, 000 white-collar workers and 30, 000 managers over 10 years in 100 countries. I identify good managers by their speed of promotion and leverage exogenous variation induced by the rotation of managers across teams. I find that good managers cause workers to reallocate within the firm through lateral and vertical transfers. This leads to large and persistent gains in workers’ career progression and productivity. My results imply that the visible hands of managers match workers’ specific skills to specialized jobs, leading to an improvement in the productivity of existing workers that outlasts the managers’ time at the firm. |
| Keywords: | worker productivity, career trajectories, internal labor markets, managers |
| JEL: | J24 M5 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18137 |
| By: | Lehner, Lukas (University of Oxford); Massenbauer, Hannah (University of Zurich); Parolin, Zachary (University of Oxford); Pintro Schmitt, Rafael (University of California at Berkeley) |
| Abstract: | We study how minimum wage (MW) increases affect poverty and food hardship in the United States from 1981 to 2019. Applying stacked difference-in-difference models and the Supplemental Poverty Measure (SPM), we find that a $1 MW increase reduces poverty by 0.3 to 0.7 percentage points among all working-age adults, and by 1.2 to 1.7 percentage points among individuals most likely to work in MW jobs. We also find that a $1 MW increase reduces food insufficiency by 1.5 percentage points among likely-MW workers. Effects on poverty are partially offset by higher living costs in MW-increasing states. Our findings are robust across methodological choices that have divided the recent literature. Overall, MW increases meaningfully reduce poverty and food hardship for the workers most directly affected and deliver modest improvements for the broader working-age population. |
| Keywords: | labor markets, minimum wage, poverty |
| JEL: | I32 I38 J23 J38 J88 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18142 |
| By: | Francesca Barigozzi; Natalia Montinari; Giovanni Righetto; Alessandro Tampieri |
| Abstract: | In most countries, women systematically outperform men in academic achievement across fields of study. Yet within a year of graduation, they earn less, face lower employment rates, and are more likely to work part-time. If human capital were the sole determinant of pay, this pattern would be difficult to reconcile. We address this puzzle by extending the statistical discrimination framework ‘a la Phelps (1972) to include not only human capital but also additional components of productivity, such as IT skills and mobility intentions -the willingness to travel or relocate for work -which might capture candidates’ technological proficiency and adaptability. Using rich microdata from the AlmaLaurea survey of master’s graduates from the University of Bologna (2015–2022), we show that while human capital alone predicts no gender wage gap in favor of men, combining it with mobility intentions reproduces the early wage disadvantage observed for women in Economics and Engineering. We further show that IT skills -an observable CV trait constructed from multiple IT-skill items- reduce the residual gender wage gap, especially in Engineering. Our findings highlight the importance of complementing human capital with field-specific preference and skill traits to explain-and potentially address-early gender wage gaps. |
| JEL: | J16 J31 J71 J24 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:bol:bodewp:wp1212 |
| By: | McGuinness, Seamus (Economic and Social Research Institute, Dublin); Staffa, Elisa (Economic and Social Research Institute, Dublin); Lee, Sangwoo (University of Warwick); Kelly, Lorcan (Economic and Social Research Institute, Dublin); Redmond, Paul (ESRI, Dublin) |
| Abstract: | Skill shortages are a type of skill mismatch whereby employers are unable to fill existing vacancies due to a lack of suitably qualified and/or skilled candidates. Despite representing a significant concern for policy makers, both at national and EU level, the literature on skill shortages is hugely underdeveloped. There is a lack of clarity and consistency on how skill shortages are defined and measured. In this study, using data from the 2021 European Skills and Jobs Survey combined with Lightcast job vacancy data, we attempt to bridge the methodological gap by developing a measure of potential skill shortages that can be readily replicated across countries over time. We estimate that approximately 2% of job vacancies in the European Union are likely to experience skill shortages. However, there is substantial variation across occupations, ranging from 5.1% for ICT professionals to approximately zero in more elementary occupations. There is also substantial variation in the estimated incidences of potential skill shortages at member state level. Our analysis also shows that occupations that are most likely to experience skill shortages also tend to experience relatively high rates of changes in skill requirements over time. |
| Keywords: | measurement, skill shortages, policy |
| JEL: | J6 J20 J22 J23 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18133 |
| By: | Zhu, Chen (China Agricultural University); Böckerman, Petri (University of Jyväskylä) |
| Abstract: | In genetics, heterosis describes how crossbreeding produces offspring with greater fitness than their parents. We propose a socioeconomic heterosis hypothesis: does genetic diversity at the individual level benefit economic success? Using UK Biobank data (N=488, 152), we find that people with higher genome-wide heterozygosity perform better in modern societies. Greater heterozygosity is positively linked to education, income, leadership, height, and ownership of a home and car. A one standard deviation increase corresponds to about 0.75% higher income and modest gains in schooling and assets. Results are robust to additional controls and corrections for multiple testing, with no effects on migration, diabetes, or neuroticism. Effects rise steadily across the observed range and are stronger for men, suggesting sexual selection. Because heterozygosity is fixed at conception, our findings reveal an underappreciated endowment shaping human capital, wealth accumulation, and inequality. |
| Keywords: | socioeconomic achievement, education, income, genetic heterozygosity, heterosis, sexual selection |
| JEL: | J10 J24 D31 I14 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18113 |
| By: | Oliver Cassagneau-Francis (UCL Centre for Education Policy and Equalising Opportunities) |
| Abstract: | Recent work has highlighted the significant variation in returns to higher education across individuals. I develop a novel methodology --- exploiting recent advances in the identification of mixture models --- which groups individuals according to their prior ability and estimates the wage returns to a university degree by group, and show that the model is non-parametrically identified. Applying the method to data from a UK cohort study, the findings reflect recent evidence that skills and ability are multidimensional. The flexible model allows the returns to university to vary across the (multi-dimensional) ability distribution, a flexibility missing from commonly used additive models, but which I show is empirically important. Returns are generally increasing in ability for both men and women, but vary non-monotonically across the ability distribution. |
| Keywords: | Mixture models; Distributions; Treatment effects; Higher education; Wages; Human capital; Cognitive and non-cognitive abilities. |
| JEL: | E24 I23 I26 J24 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:ucl:cepeow:25-10 |
| By: | Subhasish Dugar (Department of Economics, University of Utah); Kenju Kamei (Faculty of Economics, Keio University) |
| Abstract: | Performance pay raises productivity but can also trigger costly peer dynamics, which can influence workers’ preferences over pay schemes. We test whether sabotage risk drives compensation choices using a field experiment with Indian vegetable packers. Workers first perform under exogenously assigned tournaments that differ only in pay inequality but are equivalent in total payout, then choose between them, enabling endogenous sorting. Under impartial expert evaluation, workers select steeper tournaments, indicating no aversion to inequality or competition. Under peer evaluation, sabotage escalates sharply with pay dispersion, prompting workers to preemptively prefer more equitable schemes. Our study expands the literature on labor market sorting by identifying sabotage risk as a fundamental driver of sorting and shows how destructive peer dynamics can rationalize compressed wage structures in practice. |
| Keywords: | Field experiment, Pay equity, Tournament, Sabotage, Sorting. |
| JEL: | C93 J31 M52 D81 |
| Date: | 2025–09–18 |
| URL: | https://d.repec.org/n?u=RePEc:keo:dpaper:dp2025-020 |
| By: | Christopher Cotton; Brent R. Hickman; John A. List; Joseph Price; Sutanuka Roy |
| Abstract: | Using field-experimental data (study-time tracking and randomized incentives), we identify a structural model of learning. Student effort is influenced by external costs/benefits and unobserved heterogeneity: motivation (willingness to study) and productivity (conversion rate of time into skill). We estimate academic labor-supply elasticities and skill technology. Productivity and motivation are uncorrelated. Low productivity, not low motivation, is the stronger predictor of academic struggles. School quality augments productivity and accelerates skill production. We find that dynamic skill complementarities arise mainly from children’s aging and from a feedback loop between investment activity and productivity, rather than from carrying forward past skill stocks. |
| JEL: | C90 C92 C93 I21 I22 I24 J24 O15 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34274 |
| By: | Catalina Amuedo-Dorantes (Department of Economics, University of California, Merced); Esther Arenas-Arroyo (Department of Economics, Vienna University of Economics and Business); Parag Mahajan (Department of Economics, University of Delaware); Bernhard Schmidpeter (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | How do migrant workers impact firm performance? We exploit an unexpected Change in firms’ likelihood of securing low-wage workers through the U.S. H-2B visa program to address this question. Using comprehensive administrative data, we find that access to H-2B workers raises firms’ annual revenues and survival likelihood. We do not find evidence of crowding out of non-H-2B workers or negative spillover effects on competitor firms. Our results support the notion that formal guest worker programs can mitigate labor shortages while limiting harm to incumbent workers. |
| Keywords: | guest workers, migrants, employment, firm dynamics, H-2B visa |
| JEL: | J23 F22 J61 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp384 |
| By: | Jens Friedmann; Britta Glennon; Exequiel Hernandez |
| Abstract: | We examine how firms respond to talent scarcity caused by restrictive immigration policies. We argue that when firms cannot build capabilities internally through hiring, they alter their boundaries by engaging in corporate acquisitions to make up for the foregone talent and capabilities. Using data on 3, 861 U.S. firms and their use of the H-1B visa program (2001-2020), we leverage two exogenous shocks—the 2004 H-1B cap reduction and the 2007-2008 visa lottery—and find causal evidence that firms make more acquisitions as their exposure to immigration restrictions rises. This effect is stronger for deals with purposes related to the skills of the foregone talent, for small acquisitions, for domestic targets, and for targets in places with higher concentrations of skilled workers. |
| JEL: | F22 G34 J24 J61 L2 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34248 |
| By: | Raquel Fonseca; Étienne Lalé; François Langot; Thepthida Sopraseuth |
| Abstract: | In this paper, the authors develop a general equilibrium overlapping generations model with human capital to analyze the evolution of the wage premium associated with university education and lifetime earnings profiles in the United States between 1940 and 2020. The model incorporates choices related to schooling and on-the-job training, along with aggregate economic shocks and cohort-specific trends in initial skill endowments and learning abilities. The estimated model replicates the W-shaped pattern of the college wage premium as well as the flattening and subsequent steepening of earnings over the life cycle. The results show that variations in labor efficiency—rather than shifts in relative skill prices—are the primary drivers of these dynamics. The authors also highlight the significant role of declining initial skills and learning capacities among more recent cohorts. However, adjustments in educational attainment and relative wages help offset these disadvantages. Without such market mechanisms, the lifetime earnings gap between individuals with and without university degrees would widen substantially, and the college premium would double. Dans ce document, les auteur‧e‧s développent un modèle d’équilibre général à générations imbriquées avec capital humain pour analyser l’évolution de la prime salariale liée aux études universitaires et des profils de revenus sur l’ensemble de la vie active aux États-Unis entre 1940 et 2020. Le modèle prend en compte les choix de scolarisation et de formation en emploi, ainsi que des chocs économiques d’ampleur variable et des tendances propres aux différentes générations quant à leurs compétences initiales et leurs capacités d’apprentissage. Le modèle estimé reproduit la trajectoire en « W » de la prime universitaire ainsi que la tendance des revenus à s’aplatir, puis à s’accentuer à nouveau au cours de la vie professionnelle. Les résultats montrent que ce sont les variations dans l’efficacité du travail — plutôt que dans les écarts de rémunération selon le niveau de compétence — qui expliquent principalement ces changements. Les auteur‧e‧s soulignent également le rôle déterminant de la baisse des compétences initiales et des capacités d’apprentissage chez les générations récentes. Toutefois, les ajustements dans les niveaux de scolarité atteints et dans les salaires relatifs permettent de compenser en partie ces désavantages. En l’absence de ces mécanismes, les écarts de revenus sur l’ensemble de la vie entre travailleur‧euse‧s diplômé‧e‧s et non diplômé‧e‧s se creuseraient davantage, et la prime universitaire doublerait. |
| Keywords: | College premium, Life-cycle wage profile, On-the-job training, Human capital, Technological progress, Prime d'études, Profil salarial tout au long du cycle de vie, Formation en cours d'emploi, Capital humain, Progrès technologique |
| JEL: | E24 E25 J24 J31 |
| Date: | 2025–09–22 |
| URL: | https://d.repec.org/n?u=RePEc:cir:cirwor:2025s-28 |
| By: | Bensnes, Simon (Statistics Norway); Hernaes, Øystein (Ragnar Frisch Centre for Economic Research); King, Max-Emil M. (Ragnar Frisch Centre for Economic Research) |
| Abstract: | This study examines the impact of receiving one additional week of paid vacation on labor market attachment among Norwegian workers aged 60+. Employing a triple-differences estimation strategy, we exploit age-based eligibility thresholds before and after a 2009 reform to identify causal effects. Our findings indicate that the extra leave has negligible effects on both employment, sickness absence and disability benefit receipt in the year workers first receive it. If anything, some workers use the additional vacation time to increase earnings from secondary employers. The results imply that policymakers should consider alternative measures to mandated leave to support an aging workforce. |
| Keywords: | triple-differences, labor supply, older workers, paid vacation, public policy |
| JEL: | H8 I12 J22 J26 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18121 |
| By: | Wizan, Maisarah (University of Antwerp); Sologon, Denisa M. (LISER); Marchal, Sarah (University of Antwerp) |
| Abstract: | Using rich administrative data from 2005 to 2021 for Belgium, this paper analyses how earnings dynamics differ across socio-demographic groups, focusing on gender and education. We find that while permanent earnings inequality remains the dominant source of overall earnings inequality in Belgium, it has declined modestly in recent years. We further decompose the sources of permanent inequality and find that this decline is mainly driven by reductions in between-group inequality, especially between men and women, and falling permanent earnings inequality among women. These factors combined, outweigh the disequalising effects from compositional shifts in the educational structure of the population. On the other hand, earnings instability has risen, particularly for the low- and medium-educated and more generally for men. These groups additionally exhibit higher persistence in transitory shocks. Our findings show that stability in overall inequality trends can mask structural changes in the nature of inequality, and highlights the importance of exploring the heterogeneity in earnings dynamics across skill groups. |
| Keywords: | Biewen decomposition, education, earnings dynamics |
| JEL: | I24 J21 J31 J62 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18132 |
| By: | Bollinger, Christopher R. (University of Kentucky); Jenkins, Stephen P. (London School of Economics); Rios-Avila, Fernando (Levy Economics Institute); Tasseva, Iva V. (LSE) |
| Abstract: | We contribute new cross-national evidence about the nature of measurement errors in employment earnings, fitting the same error components model to harmonised earnings data for Austria and the UK. The model allows for measurement error in the administrative data and linkage error as well as survey measurement error. We find several cross-national similarities in error structure but also intriguing differences in error component probabilities, means, and dispersions. |
| Keywords: | administrative data, linked survey data, earnings, linkage error, measurement error, finite mixture models |
| JEL: | C81 C83 D31 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18129 |
| By: | Hoehn-Velasco, Lauren (Georgia State University); Huang, Yu-Ting (Georgia State University); Yusuff, Olanrewaju (Georgia State University) |
| Abstract: | Public insurance reimbursement policies shape the structure and reach of healthcare markets. In this study, we examine the 1980 federal Medicaid mandate requiring states to reimburse Certified Nurse-Midwives, one of the first reforms targeting non-physician providers. We find the mandate increased midwife-attended deliveries by 1.1 percentage points, an 80% rise, adding about 1, 100 midwife births annually per state by 1985. We also document a geographic expansion of midwife services into unserved areas and increased hospital employment, consistent with supply-side labor market responses. Our findings demonstrate that reimbursement mandates directly alter healthcare delivery by expanding provider use and reshaping the workforce. |
| Keywords: | non-physician provider, public insurance, certified nurse-midwife, maternal health, Medicaid reimbursements, health insurance. |
| JEL: | H51 H75 I18 I11 I13 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18149 |
| By: | Christa Deneault; Evan Riehl |
| Abstract: | We provide a comprehensive analysis of a Texas policy that relaxed teacher licensing requirements and created a large for-profit training industry. Using detailed administrative data, we show that for-profit-trained teachers have higher turnover and lower value-added than standard-trained teachers. But the policy significantly increased the supply of certified teachers, reducing schools' reliance on uncertified teachers with even worse outcomes. Exploiting variation in policy exposure across schools, we find a zero net impact on student achievement due to these offsetting forces. Thus lower licensing requirements improved access to teaching and reduced training costs without harming students. |
| JEL: | I28 J44 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34232 |
| By: | Drydakis, Nick (Anglia Ruskin University) |
| Abstract: | The study evaluates the effectiveness of a 12-week AI module delivered to non-STEM university students in England, aimed at building students’ AI Capital. An integral part of the process involved the development and validation of the AI Capital of Students scale, used to measure AI Capital before and after the educational intervention. The module was delivered on four occasions to final-year students between 2023 and 2024, with follow-up data collected on students’ employment status. Moreover, AI Capital is positively associated with academic performance in AI-related coursework. However, disparities persist.students, White students, and those with stronger backgrounds in mathematics and empirical methods achieved higher levels of AI Capital and academic success. Furthermore, enhanced AI Capital is associated with higher employment rates six months after graduation. To provide a theoretical foundation for this pedagogical intervention, the study introduces and validates the AI Learning–Capital–Employment Transition model, which conceptualises the pathway from structured AI education to the development of AI Capital and, in turn, to improved employment outcomes. |
| Keywords: | university students, AI Capital, AI literacy, Artificial Intelligence, grades, academic performance, employment rates |
| JEL: | I23 I21 J24 J21 O33 O15 I24 J15 J16 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18138 |
| By: | Fernández Guerrico, Sofía (University of Konstanz); Tojerow, Ilan (Université Libre de Bruxelles) |
| Abstract: | We examine the causal impact of high-speed internet on adult mental health using administrative data from Belgium. We exploit predetermined telecommunications infrastructure and broadband technology's distance-sensitive nature for identification. Our difference-in-differences estimates show internet increased mental health-related disability insurance claims by 0.054 percentage points—a 31% increase relative to the control group. These findings are supported by increased antidepressant use at the municipality level. Results point to a work-related mechanism: effects are concentrated among knowledge workers and those in high work-from-home potential jobs. Time-use data show a substitution from leisure to work and less social interaction on weekends. |
| Keywords: | disability insurance, internet, mental health, employment |
| JEL: | H55 I1 J2 L86 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18130 |
| By: | Kuosmanen, Natalia; Kuosmanen, Timo; Pajarinen, Mika |
| Abstract: | Abstract Microeconomic theory posits that in competitive markets, wages are determined by the marginal revenue product of labor. This study empirically tests this theoretical prediction using comprehensive firm-level register data from Finland’s manufacturing and service industries in years 2000–2022. We estimate the marginal products of labor based on production functions estimated using both parametric and nonparametric methods, including convex expectile regression and its control function extension. We then compare the estimated marginal products with estimated marginal costs of labor. The estimated marginal products systematically exceed the marginal costs in all industries, which suggests that most Finnish firms are understaffed, employing less than profit-maximization in a competitive market would require. We find that marginal products are most closely aligned with marginal costs in traditional service sectors. In contrast, the marginal products exceed the marginal costs most notably in capital and knowledge-intensive manufacturing industries, such as pharmaceuticals, metal industries, and information services. Our findings reveal persistent and heterogeneous wage-productivity gaps in Finland despite the fact that Finland has strong unions and labor market institutions. |
| Keywords: | Convex expectile regression, Labor compensation, Wage-productivity gap, Marginal product of labor, Manufacturing, Service industries, Finland |
| JEL: | D24 J31 L60 L80 |
| Date: | 2025–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:133 |
| By: | Christopher Goetz; Henry Hyatt; Zachary Kroff; Kristin Sandusky; Martha Stinson |
| Abstract: | Entrepreneurs are known to be key drivers of economic growth, and the rise of online platforms and the broader “gig economy” has led self-employment to surge in recent decades. Yet the young and small businesses associated with this activity are often absent from economic data. In this paper, we explore a novel longitudinal dataset that covers the owners of tens of millions of the smallest businesses: those without employees. We produce three new sets of statistics on the rapidly growing set of nonemployer businesses. First, we measure transitions between self-employment and wage and salary jobs. Second, we describe nonemployer business entry and exit, as well as transitions between legal form (e.g., sole proprietorship to S corporation). Finally, we link owners to their nonemployer businesses and examine the dynamics of business ownership. |
| Keywords: | entrepreneurship, nonemployer business, dynamics, reallocation, business income |
| JEL: | L26 J63 J21 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-60 |
| By: | Menta, Giorgia (LISER); Biroli, Pietro (University of Bologna); Mehta, Divya (Queensland University of Technology); D'Ambrosio, Conchita (University of Luxembourg); Cobb-Clark, Deborah A. (University of Sydney) |
| Abstract: | Epigenetics is the study of how people’s behavior and environments influence the way their genes are expressed, even though their DNA sequence is itself unchanged. By aggregating age-related epigenetic markers, epigenetic ‘clocks’ have become the leading tool for studying biological aging. We make an important contribution by developing a novel, integrated measure of epigenetic aging – the Multi EpiGenetic Age (MEGA) clock – which combines several existing epigenetic clocks to reduce measurement error and improve estimation efficiency. We use the MEGA clock in three empirical contexts to show that: i) accelerated epigenetic aging in adolescence is associated with worse educational, mental-health, and labor market outcomes in early adulthood; ii) exposure to child maltreatment before adolescence is associated with half a year higher epigenetic aging; and iii) that entering school one year later accelerates epigenetic aging by age seven, particularly among disadvantaged children. The MEGA clock is robust to alternative methods for constructing it, providing a flexible and interpretable approach for incorporating epigenetic data into a wide variety of settings. |
| Keywords: | child abuse, DNA methylation, epigenetic clocks, human capital, ALSPAC data |
| JEL: | I12 I14 J24 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18114 |
| By: | Meekes, Jordy (Leiden University); van Lent, Max (Leiden University) |
| Abstract: | Child penalties in paid working hours are persistent and widen the gender earnings gap. This paper studies an important mechanism through which working hours are affected: peer effects. Using three unique layers of peer networks: neighbours, colleagues, and family, we analyse peer effects on individuals’ paid working hours. We analyse peer effects up to six years after childbirth on individuals who become first-time parents in the period 2014-2018, using Dutch full-population administrative monthly microdata up to September 2024. The identification strategy exploits exogenous variation in peers’ working hours through peers-of-peers. Our research is the first to establish long-term statistically significant peer effects on fathers’ working hours. The results indicate positive peer effects on fathers and mothers, where colleague peers are more important than neighbour peers and family peers. |
| Keywords: | peers-of-peers, paid working hours, colleague peers, neighbour peers, family peers |
| JEL: | J22 D85 C26 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18148 |
| By: | Christopher L. Foote; Shigeru Fujita; Amanda M. Michaud; Joshua Montes |
| Abstract: | We suggest a core set of indicators for evaluating the position of the labor market relative to maximum employment. The unemployment rate remains the key indicator of the cyclical position of the labor market, as it is time-tested, is highly correlated with other indicators, and has practical measurement advantages. But other indicators can provide complementary evidence to get a fuller picture of the labor market. A joint analysis of job vacancies and unemployment in a Beveridge curve diagram is helpful when structural shocks affect the labor market and when the labor market is very tight, while the employment-to-population ratio is useful late in expansions, when increases in employment tend to arise from higher labor force participation. Additional indicators—including wage growth and worker flows—can complement the core indicators we discuss. We draw on lessons from the Global Financial Crisis and the COVID-19 pandemic to evaluate the effectiveness of various indicators. |
| Keywords: | Maximum employment; Unemployment; Job vacancies; Labor force participation; Wages; Business cycle |
| JEL: | E24 E32 J23 |
| Date: | 2025–08–22 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:2025-67 |
| By: | Albanese, Andrea (Luxembourg Institute of Socio-Economic Research (LISER)); Deschenes, Olivier (Department of Economics, University of California, Santa Barbara); Gathmann, Christina (Luxembourg Institute of Socio-Economic Research (LISER)); Nieto, Adrian (Department of Economics, Lund University) |
| Abstract: | This paper provides novel evidence of the impact of temperature fluctuations on retirement behavior and underlying mechanisms, combining 30 years of rich longitudinal survey data with granular daily weather information. Exposure to cold and hot temperatures accelerates transitions into retirement, particularly among individuals unaccustomed to such conditions, and the effects are strongest among vulnerable populations facing greater health challenges and limited access to healthcare. Extreme temperatures deteriorate health through a higher incidence of cardiovascular diseases and strokes, reducing individuals' ability to work, while better access to healthcare mitigates the adverse effects of extreme temperatures on retirement behavior. |
| Keywords: | Temperature; Health; Retirement; Healthcare; |
| JEL: | I14 I18 J26 Q54 |
| Date: | 2025–09–25 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lunewp:2025_008 |
| By: | Gazze, Ludovica (University of Warwick and CAGE); Gupta, Tanu (University of Southampton Delhi); Huang, Allen (Weiyi) (St Hilda's College, University of Oxford); Londoño, Valentina (Universidad del Rosario); Saavedra, Santiago (Universidad del Rosario); Toma, Mattie (University of Warwick) |
| Abstract: | There is limited evidence on the non-health impacts of air pollution, including productivity in the workplace and behavior. We examine the effect of air pollution on participation, collaboration, and feedback provision in a workplace setting. Our experiment randomly assigns air purifiers to rooms at three large academic conferences to investigate the causal impact of air pollution on participants’ engagement behavior. We construct a participant engagement index based on 12 presentation-level behavioral outcomes directly measured by conference observers through an online form and weigh each behavioral outcome using weights elicited from an expert survey. Conference rooms treated with air purifiers exhibit 48% less PM2.5 concentration compared to control rooms. However, we do not find a statistically significant change in engagement. Communication in the workplace might not be a large driver of the empirical relationship between air quality and productivity, albeit more research is needed across workplaces and measures of communication. |
| Keywords: | Indoor air quality; Engagement; Workplace; Field Experiment JEL Classification: Q53, J24 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:773 |
| By: | Lorenzo Aldeco Leo; Horacio Reyes Rocha |
| Abstract: | We estimate the slope of the Phillips curve in Mexico between 2005 and 2020 using city level data. We overcome the endogeneity of unemployment and core inflation through a panel instrumental variable strategy. Time-period fixed effects account for aggregate supply, demand, and expectation variables, while possible endogeneity between unemployment and core inflation at the city-quarter level is addressed with local labor demand shock instruments. We find a statistically significant Phillips curve linking local unemployment to local core inflation in Mexico, but this relationship is relatively weak: an increase of 1 percentage point in city-level unemployment lowers year-on-year core inflation by approximately 0.18 percentage points. We analyze city-level characteristics that relate to steeper Phillips curves, and find that informality rates, cash transfers, and some demographic characteristics in cities strengthen the relationship between unemployment and inflation. |
| Keywords: | Phillips Curve;Core Inflation;Unemployment;Instrumental Variables;Panel Data;Labor Market |
| JEL: | J23 C23 C26 E31 O54 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:bdm:wpaper:2025-14 |
| By: | Schmitt, Maximilian L. (RS: GSBE other - not theme-related research, Microeconomics & Public Economics); Cao, Gewei (RS: GSBE other - not theme-related research, Microeconomics & Public Economics); Meissner, Thomas (RS: GSBE UM-BIC, Microeconomics & Public Economics); Rusch, Hannes (RS: GSBE UM-BIC, Microeconomics & Public Economics, RS: GSBE other - not theme-related research) |
| Abstract: | Exploitative labor conditions are a massive global challenge, generating substantial illicit gains for delinquent employers. However, their strategic logic remains poorly understood. Here, we study the three practically most relevant forms of exploitative employer behavior in a principal-agent setting: deception, threat, and coercion. We analyze principals’ incentives for using these means, their welfare consequences, and the effects of introducing licensing to mitigate prevalent deception. We find that exploiters’ use of deception harms not only agents but also legitimate employers who are forced to compensate agents for the risk of exploitation. Moreover, we observe that increasing the costs of exploitation does not necessarily improve social welfare, as it can incentivize more employers to use milder forms of exploitation. Overall, we improve the economic understanding of exploitative labor relations by separating threat and coercion, integrating deception, providing insights into resulting market distortions, and identifying crucial pitfalls for seemingly first-best policy interventions. |
| JEL: | D01 D80 J47 |
| Date: | 2025–09–18 |
| URL: | https://d.repec.org/n?u=RePEc:unm:umagsb:2025007 |
| By: | Zohal Hessami; Sebastian Schirner; Clara Wobbe |
| Abstract: | How do asylum seekers affect host-country economies from a supply and demand perspective? What share of such immigration shocks is absorbed by existing vs. new businesses? To study these questions, we combine exclusive business registration and asylum seeker data for the universe of German districts over 2007-2021. We address endogeneity in asylum seeker allocation by exploiting rule-based allocation quotas as an instrument. A one SD treatment (10 asylum seekers/1, 000 inhabitants) leads to 0.7 new businesses (7.9% increase) including 2.7 full-time jobs per 1, 000 inhabitants. A sector-level analysis suggests that the founding of new businesses is both supply- (additional workforce) and demand-driven (need for basic goods/services), while the demand effect kicks in first. District-level employment data shows that total job creation is about four times larger, suggesting that 75% of the immigration shock is absorbed by existing businesses. |
| Keywords: | asylum seekers, business registrations, host-country economy |
| JEL: | F22 J20 L26 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12151 |
| By: | Robalino, David A. (World Bank); Bourkane, Loubna (African Development Bank); Ben Ghod Bene, Amir |
| Abstract: | The paper discusses the limits of credit and capital subsidies to finance MSMEs in the presence of jobs-related externalities. Using a stylized model of the decision to lend to enterprises with different levels of risk, we show that instruments like credit guarantees are likely to exclude enterprises that have a higher social rate of return and a higher social value than some of those that get access to credit. We also show that pigouvian wage subsidies equal to the value of the jobs externality are unlikely to be an efficient policy instrument; they would need to be firm specific and do not change the distribution of financial risks. We argue that impact investment funds focused on jobs (IIFJ) can be a market mechanism to channel part of existing government subsidies and deal with market failures resulting from both asymmetric information and jobs externalities. Using an extended version of the model that is calibrated to a representative country we show that -- if well designed -- IIFJ can generate significant welfare gains relative to traditional investment funds because of their impact on jobs. |
| Keywords: | impact investment funds, jobs externalities, credit guarantees, pigouvian wage subsidies |
| JEL: | G2 J3 O1 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18119 |
| By: | Pablo Astorga (Institut Barcelona d’Estudis Internacionals (IBEI)) |
| Abstract: | From a long-term perspective little is known about income inequality in Venezuela. This is regrettable as the country offers a unique opportunity to study distributional dynamics in an economy dominated by oil richness since the 1920s amid an accelerated process of structural change amid demographic and institutional transformations. The main reason for this lacuna is scarcity of data. Consistently-defined household surveys are available from 1974 and cover only labour income. The paper benefits from a new set of Ginis based on dynamic social tables with four occupational groups defined by their skill level, and National Accounts data. This evidence sheds light on inequality in two contrasting periods shaped by the interplay of external forces linked to international oil markets and endogenous transformations: one from 1920 to the 1970s of a rapidly growing economy driven by the consolidation of the oil industry, the rise of the middle class, increasing real wages, and industrialisation; the other, ending in 2013 characterised by economic stagnation, a collapse in real wages, the hollowing out of the middle class, declining oil production, volatile oil rents, and de-industrialisation. Altogether, income inequality has been primarily oil driven, first, by a steady rise in oil production and fiscal revenues influencing the pace and nature of endogenous transformations; and, since 1973, by the timing of oil-price shocks. Overall inequality widened during the 1970s and 2000s booms, but also during the slump of the 1980s and 1990s. Prosperity favoured most those in the top group; adversity impacted worst those in the bottom group. |
| Keywords: | Economic Development, Income Inequality, Wage Structure, Non-renewable Resources, Oil Prices |
| JEL: | O10 O15 J3 Q32 Q43 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0283 |