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on Labor Markets - Supply, Demand, and Wages |
| By: | Brüll, Eduard; Mäurer, Samuel; Rostam-Afschar, Davud |
| Abstract: | We provide experimental evidence on how employers adjust expectations to automation risk in high-skill, white-collar work. Using a randomized information intervention among tax advisors in Germany, we show that firms systematically underestimate automatability. Information provision raises risk perceptions, especially for routine-intensive roles. Yet, it leaves short-run hiring plans unchanged. Instead, updated beliefs increase productivity and financial expectations with minor wage adjustments, implying within-firm inequality like limited rent-sharing. Employers also anticipate new tasks in legal tech, compliance, and AI interaction, and report higher training and adoption intentions. |
| Keywords: | Artificial Intelligence, Automation, Technological Change, Innovation, Technology Adoption, Firm Expectations, Belief Updating, Expertise, Labor Demand, White Collar Jobs, Training |
| JEL: | J23 J24 D22 D84 O33 C93 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1683 |
| By: | Ina Ganguli; Raviv Murciano-Goroff |
| Abstract: | We study how exposure to scientific research in university laboratories influences students’ pursuit of careers in science. Using administrative data from thousands of research labs linked to student career outcomes and a difference-in-differences design, we show that state minimum wage increases reduce employment of undergraduate research assistants in labs by 7.4%. Undergraduates exposed to these minimum wage increases graduate with 18.1% fewer quarters of lab experience. Using minimum wage changes as an instrumental variable, we estimate that one fewer quarter working in a lab, particularly early in college, reduces the probability of working in the life sciences industry by 2 percentage points and of pursuing doctoral education by 7 percentage points. These effects are attenuated for students supported by the Federal Work-Study program. Our findings highlight how labor market policies can shape the career paths of future scientists and the importance of budget flexibility for principal investigators providing undergraduates with research experience. |
| JEL: | J24 J39 O30 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34244 |
| By: | Sari Pekkala Kerr; William R. Kerr; Louis J. Maiden |
| Abstract: | We characterize the careers of minimum wage workers by merging SIPP panels covering 1992-2016 into the LEHD. A long-run analysis shows strong earnings growth for these workers in subsequent decades, becoming indistinguishable from peers earning modestly more initially. Most of this growth is due to the steep earnings trajectories of young workers. Older workers earning minimum wages show a modest dip in earnings at that moment compared to earlier and later periods. Increases in state minimum wages do not significantly alter the future careers of workers who are on the minimum wage when the increases occur. |
| JEL: | D31 E24 J21 J31 J38 J42 J62 J78 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34405 |
| By: | Fouarge, Didier (ROA, Maastricht University); Fregin, Marie-Christine (Maastricht University); Janssen, Simon (Institute for Employment Research (IAB), Nuremberg); Levels, Mark (Maastricht University); Montizaan, Raymond (ROA, Maastricht University); Özgül, Pelin (Maastricht University); Rounding, Nicholas (Maastricht University); Stops, Michael (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | We analyze the impact of AI-augmented training on worker productivity in a financial services company. The company introduced an AI tool that provides performance feedback on call center agents to guide their training. To estimate causal effects, we exploit the staggered roll out of the AI-tool. The AI-augmented training reduces call handling time by 10 percent. We find larger effects for short-tenured workers because they spend less time putting clients on hold. But the AI-augmented training also improves communication style with relatively stronger effects for long-tenured agents, and we find slightly positive effects on customer satisfaction. |
| Keywords: | performance feedback, training, artificial intelligence, employee productivity |
| JEL: | J24 O31 O33 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18224 |
| By: | Cronin, Christopher J.; Harris, Matthew C.; Ziebarth, Nicolas R. |
| Abstract: | We study how public school teachers use paid sick leave. Most US sick leave schemes operate as individualized credit accounts: Paid leave is earned, and unused leave accumulates. We construct a unique dataset of daily leave balances and behavior among 982 teachers for 2010-2018. Sick leave use increases during flu season, and evidence indicates that the average teacher does not use sick leave for leisure though some subsets of teachers (e.g., the young and inexperienced) do. Usage increases with leave balance; the elasticity is around 0.4. Further, teachers with higher balances are less likely to work sick, particularly during flu season. |
| Keywords: | sick leave, teacher, presenteeism, moral hazard, labor supply |
| JEL: | I12 I13 I18 I28 J22 J28 J32 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:330324 |
| By: | Choi, Eleanor J. (Hanyang University); Jeong, Daeyoung (Yonsei University); Lee, Chae (Hanyang University); Yu, Kyuseob (University of Illinois at Urbana-Champaign) |
| Abstract: | This study examines the impact of economic conditions at college entry on post-graduation labor market outcomes, focusing on behavioral responses related to job market preparation and career advancement. Exploiting variation in regional unemployment rates within college entry cohorts, we utilize the large and unexpected recession triggered by the Asian Financial Crisis in South Korea as a natural experiment. Using data from the Korean Labor and Income Panel Study, we find that individuals who begin their undergraduate studies under more adverse economic conditions exhibit higher employment probabilities and earnings during the first decade after graduation. Further analysis of activities during college and early career stages indicates that the improved labor market outcomes are driven by greater effort devoted to education, training, and job search aimed at enhancing employment prospects. To explain these behavioral responses, we develop a theoretical framework based on the concept of ambiguity aversion. |
| Keywords: | economic crisis, college entrants, labor market outcomes, ambiguity aversion |
| JEL: | E32 J24 I23 D81 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18219 |
| By: | Block, Jörn (University of Trier); Gnad, Miriam (University of Trier); Kritikos, Alexander S. (DIW Berlin); Stiel, Caroline (DIW Berlin) |
| Abstract: | Despite substantial research on job satisfaction in self-employment, we know little about the consequences for the venture when job satisfaction declines after an external shock. Taking the pandemic as an example of an external shock and drawing on 7, 000 self-employed in Germany, we investigate how declines in job satisfaction are related to their investment decisions. Having separated job satisfaction into its financial and non-financial aspects, we build in our analysis on two perspectives to predict how reductions in financial and non-financial job satisfaction relate to investments in venture development. Our results show that decreasing financial job satisfaction is positively related to time investments, providing support for the performance feedback perspective. Negative performance, in terms of reduced financial job satisfaction, induces higher search efforts to improve the business situation. Moreover, we observe that reductions in non-financial job satisfaction are negatively associated with both time and monetary investments. This supports the broadening-and-build perspective in that negative experiences narrow the thought-action repertoire, thus hindering resource deployment. |
| Keywords: | broadening-and-build perspective, performance feedback perspective, self-employment and entrepreneurship, investment decisions, job satisfaction, behavioral economics, economic psychology, Germany |
| JEL: | L26 J28 G11 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18204 |
| By: | Philippe d’Astous; Vyacheslav Mikhed; Sahil Raina; Barry Scholnick |
| Abstract: | Using wealth windfalls from lottery winnings and matched employer-employee tax files, we compare the effect of additional wealth on the entrepreneurial activity of older and younger individuals. We find that additional wealth leads older winners (aged 55 to 64) to reduce business ownership and growth (as measured by sales, revenue, and employees). In contrast, extra wealth increases younger winners’ (aged 21 to 54) business ownership, but it has no effect on their business growth. The increase in business activity of a young winner does not offset the negative growth for an older winner, which may hurt economic growth. |
| Keywords: | Wealth; Age; Entrepreneurship; Retirement |
| JEL: | G5 G51 J22 L26 |
| Date: | 2025–10–21 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpwp:101992 |
| By: | Dalaman, Burak (University of London); Kalay, Ali Furkan (Macquarie University, Sydney); Kettlewell, Nathan (University of Technology, Sydney) |
| Abstract: | Large language models (LLMs) have altered the nature of academic writing. While the influence of LLMs on academic writing is not uncontroversial, one promise for this technology is to bridge language barriers faced by nonnative English-speaking researchers. This study empirically demonstrates that LLMs have led to convergence in the lexical diversity of native and nonnative speakers, potentially helping to level the playing field. There has also been an increase in language complexity for nonnatives. We classify over one million authors as native or nonnative English speakers based on the etymological origins of their names and analyze over one million abstracts from arXiv.org, evaluating changes in lexical diversity and readability before and after ChatGPT’s release in November 2022. The results demonstrate a sharp increase in writing sophistication among all researchers, with nonnative English speakers showing the greatest gains across all writing metrics. Our findings provide empirical evidence on the impact of LLMs in academic writing, supporting recent speculations about their potential to bridge language barriers. |
| Keywords: | technology adoption, large language models, academic equity, generative AI, language barrier, bayesian structural time series |
| JEL: | J24 I23 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18215 |
| By: | Enghin Atalay; Ryan Kobler; Ryan Michaels |
| Abstract: | This paper re-examines the response of parental labor supply to the pandemic-era suspension of in-person instruction. The effect of school closures is undetectable after controlling comprehensively for unobserved heterogeneity. Even excluding such controls, a shift from fully virtual to in-person implies an increase in weekly hours worked of just 2 to 2.5. These estimates are used to inform a simple model of the household in which access to telework and nonparental care mitigate the labor supply impact of school closures. Time use data suggest telework and nonparental care indeed helped some parents balance work and childcare during the pandemic. |
| Keywords: | Market work; family economics; childcare; pandemic; in-person learning |
| JEL: | J21 J22 J48 |
| Date: | 2025–10–28 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpwp:101998 |
| By: | Inés P. Murillo Huertas; Josep-Lluís Raymond-Bara |
| Abstract: | This article estimates a human capital production function (HCPF) using both ordinary least squares (OLS) and instrumental variables (IV), finding that the returns to schooling in terms of competencies are higher when using the IV approach. To interpret this counterintuitive result, a proxy for individual ability is constructed using data from the Programme for the International Assessment of Adult Competencies (PIAAC). The higher IV-based returns align with OLS estimates when the sample is restricted to high-ability individuals. Moreover, when the ability proxy is included as a control in the HCPF, the OLS and IV estimates converge, suggesting that the discrepancy between the two methods can be explained by omitted variable bias related to ability. This extended HCPF is then used to compare the effectiveness of competency generation across a selection of OECD countries. The results indicate that countries with lower competency outcomes are primarily characterized by poorer effectiveness in transforming attained schooling into competencies. |
| Keywords: | HCPF, IV, OLS, omitted variables bias |
| JEL: | C18 I26 J24 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1526 |
| By: | Kuhlemann, Jana (Mannheim Centre for European Social Research (MZES), University of Mannheim); Kosyakova, Yuliya (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "This study investigates the role of engaging in physical leisure activities in facilitating refugees’ structural integration through enhancing their social capital, destination-language proficiency, and health. The physical fitness gained from such activities can also be crucial for securing physically demanding jobs. As employment significantly influences refugees’ social integration, this research specifically examines the impact of the intensity and regularity of sports engagement on employment outcomes among refugees from the 2015/16 influx in Germany. Utilizing longitudinal data from the IAB-BAMF-SOEP Survey of Refugees, findings reveal that regular and more intensive engagement in physical leisure activities increases refugees’ chances of securing gainful employment and obtaining physically demanding jobs in the subsequent year. However, sports involvement does not correlate with higher occupational prestige, potentially locking them into lower-status jobs. Additionally, time spent in other types of leisure activities shows a slightly negative association with labor market outcomes, underscoring the unique benefits of sports. This points to the dual-edged nature of sports as an integration tool – beneficial in fostering initial labor market entry but possibly limiting in terms of career advancement." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | IAB-Open-Access-Publikation |
| JEL: | I12 J15 J24 J61 Z13 Z20 |
| Date: | 2025–10–23 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabdpa:202515 |
| By: | Bergantino, Angela Stefania (University of Bari); Clemente, Antonello (University of Bari); Iandolo, Stefano (University of Salerno); Turati, Riccardo (Universitat Autònoma de Barcelona) |
| Abstract: | This paper examines the evolution and determinants of skill-specific internal mobility among Italian citizens by urban–rural origin. Using administrative data from the Registry of Transfer of Residence (ADELE), which records the universe of skill-specific bilateral moves across more than 700 millions potential municipality pairs between 2012 and 2022, we document distinct trends in residential mobility for college-educated and non-college-educated citizens. We then assess the role of economic and non-economic factors in shaping these flows, employing a Poisson Pseudo-Maximum Likelihood (PPML) estimator with an extensive set of destination and origin-by-nest fixed effects. Our findings show that low-skilled movers respond more strongly to economic factors, while high-skilled movers are respond more to non-economic ones, with the urban–rural divide at origin amplifying these differences. Moreover, we find that after the COVID-19 pandemic, economic drivers became less relevant, whereas non-economic factors gained importance. Overall, this study highlights that, similar to international migration, the drivers of internal mobility are inherently skill-specific. |
| Keywords: | Italy, urban-rural, human capital, migration, COVID-19 |
| JEL: | J24 J61 R23 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18203 |
| By: | Beber, Bernd; Frohnweiler, Sarah; Lakemann, Tabea; Anti Partey, Peter; Schnars, Regina; Lay, Jann |
| Abstract: | Despite substantial investment in skills training worldwide, evidence for the effectiveness of such interventions in sub-Saharan Africa is still relatively sparse. We contribute to this literature by implementing a multisite randomized controlled trial (RCT) of the Professionalization of Artisans (ProfArts) program in Ghana, a state-of-the art training program designed to improve employment quality through skilled trades training. The research design enables the assessment of impacts on labor market outcomes across multiple sites (four different urban labor markets, six providers). We find limited overall impacts, with variation across cities, including notable employment and income effects in Tamale in the less developed north and some benefits in job quality in the more developed central city of Kumasi. We present evidence that these differences are not well explained by variation in program implementation, hinting at the importance of local labor market conditions. We also document how Bayesian implementers could learn from this evaluation and how real-world stakeholders actually learn. We collect data on implementers' expectations regarding the program's effectiveness, both before and after the presentation of RCT results. Stakeholders' beliefs about the program's impact adjust in response to empirical findings, but more optimistically than Bayesian learning would suggest. |
| Abstract: | Trotz erheblicher Investitionen in Qualifizierungsmaßnahmen ist die Evidenz zur Wirksamkeit solcher Interventionen in Subsahara-Afrika nach wie vor vergleichsweise spärlich. Wir tragen zu dieser Literatur bei, indem wir ein randomisiert kontrolliertes Experiment (RCT) an mehreren Standorten zum Programm "Professionalization of Artisans" (ProfArts) in Ghana durchführen - einem State-of-the-Art-Qualifizierungsprogramm, das durch Ausbildung in qualifizierten Handwerksberufen die Qualität der Beschäftigung verbessern soll. Das Forschungsdesign ermöglicht die Bewertung der Effekte auf Arbeitsmarktergebnisse über mehrere Standorte hinweg (vier verschiedene städtische Arbeitsmärkte, sechs Träger). Insgesamt finden wir begrenzte Wirkungen, die jedoch zwischen den Städten variieren, darunter Beschäftigungs- und Einkommenseffekte in Tamale im weniger entwickelten Norden sowie einige Verbesserungen der Arbeitsqualität in der stärker entwickelten zentralen Stadt Kumasi. Wir zeigen, dass sich diese Unterschiede nicht gut durch Variationen in der Programmdurchführung erklären lassen, was auf die Bedeutung lokaler Arbeitsmarktbedingungen hindeutet. Zudem dokumentieren wir, wie bayesianisch lernende Durchführende aus dieser Evaluation lernen könnten und wie reale Akteure tatsächlich lernen. Wir erheben Daten zu den Erwartungen der Durchführenden hinsichtlich der Programmwirksamkeit, sowohl vor als auch nach der Präsentation der RCT-Ergebnisse. Die Erwartungen der Akteure über die Wirkungen des Programms passen sich zwar an die empirischen Befunde an, bleiben jedoch optimistischer, als es bayesianisches Lernen nahelegen würde. |
| Keywords: | Skills trainings, labor market interventions, randomized controlled trials |
| JEL: | J24 O12 D84 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:330179 |
| By: | Jeff Borland (Department of Economics) |
| Abstract: | This paper presents a five-year review of Australia’s labour market spanning what I term the ‘COVID-19 era’, from early 2020 through to the end of 2024. A first objective is to provide a history of the main developments in the labour market during this tumultuous period. The evolution of employment outcomes across different phases is charted, together with analysis of how adjustment happened, and which jobs and workers were most affected. In addition, topics relating to wage growth, labour supply and labour productivity, and the role of government policy, are covered in detail. A second objective is to demonstrate that understanding the COVID-19 era enables important lessons to be drawn about the operation of Australia’s labour market and about policy – relevant both for today and for similar future episodes. |
| Keywords: | labour market; Australia; COVID-19; Policy; employment; wages; productivity |
| JEL: | J01 J08 J40 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iae:iaewps:wp2025n15 |
| By: | Riddhi Kalsi |
| Abstract: | This paper resolves the empirical puzzle in the public-private wage literature: why studies using similar data reach contradictory conclusions about wage premiums and penalties. Utilizing rich French administrative panel data (2012-2019), this study has two main contributions: first, it presents a set of new, intuitive yet previously undocumented stylized facts about wage dynamics, sectoral mobility, and gender differences across sectors. The results reveal that the modest hourly wage gaps conceal substantial disparities in lifetime earnings and employment stability. Women, in particular, gain a significant lifetime earnings advantage in the public sector, driven by higher retention, better-compensated part-time work, and more equitable annual hours compared to the private sector, where gender gaps remain larger, especially for those with higher education. In contrast, highly educated men experience a lifetime penalty in public employment due to rigid wage structures. By flexibly modeling sectoral transitions, transitions into and out of employment, and earnings heterogeneity using an Expectation-Maximization algorithm, this study shows that both premiums and penalties depend systematically on gender, education, and labor market experience. The analysis reveals that significant unobserved heterogeneity remains in wage dynamics. These findings unify prevailing narratives by providing a comprehensive, descriptive account of sectoral differences in transitions, part-time work and wages by gender. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.16626 |
| By: | Åstebro, Thomas (HEC Paris); Hällerfors, Henrik (Department of Economics, Uppsala University); Bergh, Andreas (Department of Economics, Lund University, and); Tåg, Joacim (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Many countries have established new local colleges to increase access to education for disadvantaged populations. However, many of these expansions have not reduced educational inequality. Drawing on evidence from a large-scale college expansion initiative, we find that increased college availability did not lead to a differential increase in attendance among students from parents with less education. Rather, the expanded access primarily benefited students with marginal academic ability. These results suggest that higher education enrollment is largely determined by inherent scholastic ability and that the expansion of higher education tends to attract students at the upper margin of this ability distribution. |
| Keywords: | Intergenerational correlations; University expansion; Access to education; Higher education |
| JEL: | I23 I24 I28 J24 J62 |
| Date: | 2025–10–22 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1538 |
| By: | Cristina Bellés-Obrero; Sergi Jiménez-Martín; Han Ye |
| Abstract: | This paper studies the mortality effects of delaying retirement by leveraging the 1967 Spanish pension reform, which exogenously increased the earliest voluntary claiming age from 60 to 65 based on individuals’ date of first contribution. Using Spanish administrative data, we find that removing access to early retirement delays age at last employment by 4 months and increases the probability of death between ages 60 and 69 by 11 percent. The mortality effects are concentrated among workers in physically demanding, high-psychosocial-burden, and low- skilled occupations, while men and women are affected similarly. Access to flexible retirement mitigates the adverse effects of delaying retirement. |
| Keywords: | heterogeneity , mortality , early retirement , delaying retirement , work conditions |
| JEL: | I10 I12 J14 J26 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:upf:upfgen:1924 |
| By: | Rieder, André; Schnabel, Claus |
| Abstract: | Representative establishment data reveal that over 60% of German plants covered by collective agreements pay wages above the level stipulated in the agree- ments, creating a wage cushion between actual and contractual wages. While collective bargaining coverage has fallen over time, the prevalence of wage cushions has increased, particularly in eastern Germany. Cross-sectional and fixed-effects analyses for 2008-2023 indicate that in western Germany the presence of a wage cushion is mainly related to plant profitability, unemployment, vacancies, and the business cycle. Plants which apply collective agreements at the firm rather than the sectoral level are less likely to have wage cushions since firm-level agreements make it easier to explicitly take firm-specific conditions into account. In eastern Germany, however, the explanatory power of these variables is much lower. Against the backdrop of falling bargaining coverage, the increasing prevalence of wage cushions suggests that the traditionally rigid German system of wage determination has become more flexible and differentiated. |
| Abstract: | Repräsentative Betriebsdaten zeigen, dass über 60% der tarif- gebundenen Betriebe in Deutschland Löhne zahlen, die über dem in Tarifverträgen fest- gelegten Niveau liegen, wodurch ein Lohnpuffer zwischen den tatsächlichen und den vertraglich vereinbarten Löhnen entsteht. Während die Tarifbindung im Laufe der Zeit zurückgegangen ist, hat die Verbreitung der übertariflichen Entlohnung zugenommen, besonders in Ostdeutschland. Querschnitts- und Fixed-Effects-Analysen für 2008-2023 zeigen, dass in Westdeutschland das Vorhandensein eines Lohnpuffers hauptsächlich mit der Rentabilität des Betriebs, der Arbeitslosigkeit, offenen Stellen und dem Konjunk- turzyklus zusammenhängt. Betriebe, die Tarifverträge auf Betriebs- statt Branchen- ebene anwenden, zahlen seltener über Tarif, da es bei Firmentarifverträgen einfacher ist, betriebsspezifische Bedingungen ausdrücklich zu berücksichtigen. In Ostdeutsch- land ist der Erklärungswert dieser Variablen jedoch erheblich geringer. Vor dem Hinter- grund der sinkenden Tarifbindung deutet die zunehmende Verbreitung von Lohnpuffern darauf hin, dass das traditionell starre deutsche System der Lohnfindung flexibler und differenzierter geworden ist. |
| Keywords: | wage determination, collective bargaining, wage cushion, Germany |
| JEL: | J30 J31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:faulre:330331 |
| By: | David Bruns-Smith; Emi Nakamura; Jón Steinsson |
| Abstract: | A canonical finding from earlier research is that the cross-sectional variance of income increases sharply with age Deaton and Paxson (1994). However, the trend in this age profile is not separately identified from time and cohort trends. Conventional methods solve this identification problem by ruling out "time effects." This strong assumption is rejected by the data. We propose a new proxy variable machine learning approach to disentangle age, time and cohort effects. Using this method, we estimate a significantly smaller slope of the age profile of income variance for the US than conventional methods, as well as less erratic slopes for 11 other countries. |
| JEL: | E20 J20 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34380 |