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on Labor Markets - Supply, Demand, and Wages |
| By: | Brüll, Eduard (ZEW); Mäurer, Samuel (University of Mannheim); Rostam-Afschar, Davud (University of Mannheim) |
| 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: | belief updating, firm expectations, technology adoption, innovation, technological change, automation, artificial intelligence, expertise, labor demand, white collar jobs, training |
| JEL: | J23 J24 D22 D84 O33 C93 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18225 |
| By: | Lewandowski, Piotr (Institute for Structural Research (IBS)); Madoń, Karol (Institute for Structural Research (IBS)); Park, Albert (Hong Kong University of Science & Technology) |
| Abstract: | This paper develops a task-adjusted, country-specific measure of workers’ exposure to Artificial Intelligence (AI) across 108 countries. Building on Felten et al. (2021), we adapt the Artificial Intelligence Occupational Exposure (AIOE) index to worker-level PIAAC data and extend it globally using comparable surveys and regression-based predictions, covering about 89% of global employment. Accounting for country-specific task structures reveals substantial cross-country heterogeneity: workers in low-income countries exhibit AI exposure levels roughly 0.8 U.S. standard deviations below those in high-income countries, largely due to differences in within-occupation task content. Regression decompositions attribute most cross-country variation to ICT intensity and human capital. High-income countries employ the majority of workers in highly AI-exposed occupations, while low-income countries concentrate in less exposed ones. Using two PIAAC cycles, we document rising AI exposure in high-income countries, driven by shifts in within-occupation tasks rather than employment structure. |
| Keywords: | AI, occupations, job tasks, technology, skills |
| JEL: | J21 J23 J24 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18235 |
| By: | Maré, David C. (Motu Economic and Public Policy Research Trust); Fabling, Richard (Independent Researcher) |
| Abstract: | We estimate relative wage discrimination for ethnic and migrant groups in New Zealand, using linked employer-employee and firm-level productivity data, and comparing each group’s contribution to output with their share of their firm’s wage bill. We find that wage discrimination is relatively favourable for European migrants and Asian/MELAA employees, and relatively unfavourable for M?ori, Pacific, and NZ-born European employees, with variation across NZ-born, recent migrants, and longer-term migrants. We present pooled and firm-fixed effects estimates of discrimination, highlighting distinct within-firm and between-firm patterns. |
| Keywords: | ethnicity, productivity, earnings |
| JEL: | J15 J30 J42 J71 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18216 |
| By: | Maré, David C. (Motu Economic and Public Policy Research Trust); Fabling, Richard (Independent Researcher) |
| Abstract: | We examine the contribution to ethnic earnings gaps of differences in the firms where different ethnic groups work. We use linked employer-employee data to estimate worker and firm pay premiums (fixed effects), adapting existing methods to deal with multiple-response ethnicities and weighting. The sorting of workers across firms contributes 10-26 percent of within-ethnicity gender gaps but affects average earnings for men or women within ethnic groups by less than 1 percent, in the face of average ethnic earnings gaps of up to 14 percent. We conclude that within-firm earnings differences are the dominant source of ethnic earnings gaps. |
| Keywords: | two-way fixed effects, sorting, ethnicity, earnings, linked employer employee data |
| JEL: | J15 J30 J42 J71 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18206 |
| By: | Derenoncourt, Ellora (Princeton University); Gerard, Francois (Queen Mary, University of London); Lagos, Lorenzo (Brown University); Montialoux, Claire (UC Berkeley) |
| Abstract: | How do minimum wages affect informality? We study the near-doubling of the real minimum wage from 2000 to 2009 in Brazil, where 46% of the workforce is informal. Using labor force surveys covering the informal sector, we show the minimum wage exhibits near full passthrough to informal employees working in formal firms, about half of all informal employees. The formal-to-informal reallocation elasticity with respect to the formal wage is small: -0.28. Our findings illustrate how minimum wages can positively affect living standards for workers thought beyond the reach of labor law, a sizable share of the workforce in developing economies. |
| Keywords: | informality, minimum wages, inequality |
| JEL: | J23 J46 J88 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18234 |
| By: | Carmel Chiswick |
| Abstract: | The goal of economic development is to raise standards of living in LDCs, to be achieved by accumulating both human and non-human capital so as to maximize production net of the cost of these investments. An LDC economy is modelled with two sectors, modern and traditional, each of which uses its own type of human and non-human capital in production. Sector-specific human capital is specified as an attribute embodied in its workers, who have agency to choose their sector of employment and level of education. Earnings of labor are the sum of two components: recovery of human capital investment costs (e.g., student loan repayments) and an economic rent (i.e., profit) available for current consumption. The consumption-maximizing resource allocation equalizes rates of return to investments in all types of capital and allocates workers between the two sectors so that labor rents (i.e. consumption levels) are the same in both. Policy implications emphasize removing economic, social and cultural barriers to economic mobility for all resources. |
| Keywords: | Economic development; growth; human capital; LDCs; labor rents. |
| JEL: | I25 I26 J21 J24 O00 O15 O41 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:gwc:wpaper:2025-011 |
| By: | Ferrando, Mery (Tilburg University); Katzkowicz, Noemi (Universidad de la Republica); Le Barbanchon, Thomas (Bocconi University); Ubfal, Diego (World Bank) |
| Abstract: | This paper provides the first experimental evidence on the long-term effects of work-study programs, leveraging a randomized lottery design from a national program in Uruguay. Participation leads to a persistent 11 percent increase in formal labor earnings seven years after the program, driven by a 4 percent increase in the monthly probability of being employed and a 6 percent increase in monthly wages. Effects are significantly larger for men, while remaining positive for women. The program is highly cost-effective, outperforming most job training programs and reaching levels comparable to early childhood investments. |
| Keywords: | school-to-work transition, youth employment, work-study program, long-term effects |
| JEL: | I21 I26 J13 J24 J31 O15 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18238 |
| By: | Bicakova, Alena (CERGE-EI); Cortes, Matias (York University, Canada); Foley, Kelly (University of Saskatchewan); Mazza, Jacopo (Utrecht University); McHenry, Peter (College of William and Mary) |
| Abstract: | Using data from the Current Population Survey’s Education Supplement for 1977-2023, we explore two important, yet understudied facets of the pattern of countercyclical post-secondary education (PSE) enrollment in the U.S. First, we show that economic downturns are associated with higher enrollment probabilities at both 2- and 4-year colleges among young men, but only at 2-year institutions among young women. Second, we show that the overall increase in enrollment propensities during downturns is primarily driven by persistence (i.e., changes in enrollment among individuals with prior PSE participation), rather than matriculation (i.e., new enrollments). However, higher unemployment rates increase matriculation probabilities at 2-year colleges among 18-year-old men and women, and at 4-year colleges among individuals in their early 20s. Our findings improve our understanding of the dimensions along which aggregate economic fluctuations induce changes in human capital acquisition. |
| Keywords: | 2- and 4-year institutions, business cycles, college enrollment, persistence |
| JEL: | I23 J24 E32 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18244 |
| By: | Elliott Ash; Soumitra Shukla; Jason Sockin |
| Abstract: | Interviews allow employers to learn about workers, but do they also enable workers to learn about firms? Studying 500, 000 interview reports from Glassdoor, we find candidates for high-paying jobs are more likely to reject a job offer if they believe the interview was easy. Easy interviews appear to convey poor ``fit'' as those who accept offers after easy interviews are two-fifths of a standard deviation less satisfied with their jobs and 10 percent less likely to remain with their employer for at least one year. Analysis of interview narratives using large language models reveals difficult interviews signal colleague ability whereas easy interviews convey a nonselective process. In a small-scale randomized field experiment, an exogenous increase in difficulty elevated perceived difficulty and boosted applicant engagement with the vacancy. Interviews offer workers a preview of match quality, highlighting a channel through which labor markets may become less efficient if firms automate hiring with AI. |
| Keywords: | interviews, peer effects, job satisfaction, large language models |
| JEL: | J24 M50 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12229 |
| By: | Goos, Maarten (Utrecht University); Salomons, Anna (Tilburg University); Scheer, Bas (CPB Netherlands Bureau for Economic Policy Analysis); Van den Berge, Wiljan (Utrecht School of Economics) |
| Abstract: | The rising incidence of alternative work arrangements, such as outsourcing, raises important questions about worker outcomes in such non-standard labor contracts. We study this question in the Netherlands, a country with a rapid rise in flexible labor contracts, using administrative employer-employee data from 2006--2019. To identify the causal impact of outsourcing, we take advantage of a legal arrangement called "patrolling", where workers hired by one firm are placed on a staffing firm's payroll while maintaining their job duties at the original firm. We find that outsourced workers experience worse labor market outcomes compared to a matched control group. These include persistently lower employment probability, lower hourly wage growth, a lower incidence of permanent contracts, and strikingly reduced pension contributions. This suggests that outsourcing erodes employment protection and job quality and leads to long-term scarring of labor market outcomes. |
| Keywords: | staffing companies, outsourcing, non-standard work arrangements, labor contracts |
| JEL: | J31 J32 J41 J42 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18228 |
| By: | Francesco Agostinelli; Domenico Ferraro; Giuseppe Sorrenti; Leonard Treuren |
| Abstract: | We ask to what extent the quantification of labor market power depends on the modeling of the long-term worker-firm employment relationship. We develop an oligopsony model with dynamic wage contracts. Workers decide whether and where to work, choosing among firms providing different amenities and solving a dynamic discrete choice labor supply problem with firm-specific human capital. As a result, firms optimally choose wage-tenure contracts to attract and retain workers. We find that such contracts mitigate firms' incentives to impose large instantaneous wage markdowns—compared to standard static wage-setting models—thereby reducing the share of socially inefficient worker-firm separations. As a consequence, we show that the empirical approaches based on "sufficient statistics" tend to overestimate the extent of labor market power: low levels of firm-specific labor supply elasticities do not necessarily indicate rent extraction, but instead reflect firms’ ability to retain workers by offering long-term value through human capital accumulation. |
| JEL: | J0 J42 L10 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34439 |
| By: | Bruno Paolo Bosco (Department of Economics, Management and Statistics, University of Milano-Bicocca); Carlo Federico Bosco (Independent Researcher); Paolo Maranzano (Department of Economics, Management and Statistics, University of Milano-Bicocca and Fondazione Eni Enrico Mattei) |
| Abstract: | Ignoring the possible hierarchical clustering of the data that frequently characterises the structure of labour markets implies that studies of the effects of income tax changes on labour supply use less than necessary information on the variability of the labour response. Estimation efficiency is reduced and relevant relationships affecting the agents’ reaction to net wage changes remain undetected. Motivated by the desire to implement an estimation procedure that accommodates a nested hierarchical statistical structure of labour supply macro data into of a causal-effect framework, we propose a novel multilevel DiD model that can estimate labour responses to exogenous tax hikes taking the above hierarchical structure into consideration. Using Italy as a case study, we examine the labour response to exogenous income tax changes using a hierarchical DiD model modified to account for the existence of different sources of variation of the data (regional and provincial labour markets) as well as for various possible clustering of the data (territorial, age and gender). We compare results obtained from various nested and non-nested procedures and show that our multilevel variant of the DiD model generates gains in efficiency with respect to approaches that ignore the clustering nature of the labour data. The hierarchical multilevel DiD procedure permits to qualify labour response in terms of cluster membership and to shed light on aspects of the tax issues not highlighted by current literature. |
| Keywords: | Income Taxation and Labour Supply, Tax Treatment Effect, Hierarchical Multilevel Panel Data DiD model, Linear mixed models for policy evaluation |
| JEL: | C21 C32 H24 H31 J38 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2025.20 |
| By: | Mayer Gukovas, Renata |
| Abstract: | Skill transferability is essential for occupational mobility and adapting to external shocks, yet detailed data on workers’ skills is often scarce and costly to collect, specially in developing countries. This paper explores whether the American O*NET database, one of the most popular databases used in studies on occupational skills, can provide relevant insights in the Brazilian context. By complementing it with unique longitudinal administrative Brazilian employer-employee data, this paper validates the application of skill similarity measures in a country lacking data on workers’ skills. Applying the same methodology produces results in Brazil comparable to those in the American literature, and further refining the similarity measure increases its power to explain occupational mobility in the country. Then, this paper uses the validated measure to analyze the role of skill transferability in explaining Brazilian mobility patterns, exploring heterogeneity across different genders, age groups, and education levels. |
| JEL: | J24 J31 J62 O15 O54 |
| Date: | 2025–10–27 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2025024 |
| By: | Adamopoulou, Effrosyni (ZEW); Hannusch, Anne (University of Bonn); Kopecky, Karen A. (Federal Reserve Bank of Atlanta); Obermeier, Tim (University of Leicester) |
| Abstract: | US college-educated couples with children marry at higher rates than those without a college degree. We argue that marriage, which entails lower separation risk and more equitable asset division if separation occurs, provides insurance to the lower-earning spouse, facilitating child investment. Investing in children is more valuable for college-educated couples, who are more likely to send their children to college. Using an OLG model of marriage, cohabitation, wealth accumulation, and educational investments where college is costly and completion is risky, we find that high college costs reduce incentives to marry among couples without a college degree. These differences in union choice by education heighten differences in children’s educational attainment and reduce intergenerational mobility. |
| Keywords: | college costs, human capital accumulation, child development, marriage, cohabitation, intergenerational mobility |
| JEL: | D15 E24 J12 J22 J24 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18237 |
| By: | Ashmita Gupta (Asian Development Research Institute, India); Neha Hui (Department of Economics, University of Reading) |
| Abstract: | This paper investigates how trade liberalization reshaped caste-based occupational mobility in rural India. Using district-level exposure to the 1991 tariff reforms and nationally representative survey data, we provide the first causal evidence on how market integration affected labor market outcomes for Dalits (historically marginalized groups). We classify occupations by wages, skill intensity, task content, and international prestige scales to capture job quality. Our results show that while overall employment increased, Dalits in more liberalized districts were disproportionately excluded from high prestige occupations and shifted into low-wage, insecure work. Education emerges as a key mechanism: tariff exposure improved Dalit literacy but reduced higher-education attainment, limiting access to skilled jobs. These effects were most pronounced in states with flexible labor laws, where discriminatory hiring and firing practices could more easily operate. The findings demonstrate that structural reforms can reinforce existing social hierarchies, highlighting the importance of considering inequality transmission and barriers to mobility in assessing the population-wide effects of globalization. |
| Keywords: | trade liberalisation, caste, discrimination, occupational prestige, India |
| JEL: | J71 O24 J15 |
| Date: | 2025–11–03 |
| URL: | https://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2025-05 |
| By: | Balgova, Maria (Bank of England); Tekleselassie, Tsegay (affiliation not available); Hensel, Lukas (Peking University); Witte, Marc J. (Vrije Universiteit Amsterdam) |
| Abstract: | Wage information is rare in job adverts, yet crucial for search. To study this information friction, we run a field experiment with real vacancies, randomly adding or withholding wage information. Disclosing wages does not change average application volumes. Instead, it amplifies the wage elasticity of applications: higher-wage vacancies receive more applicants, while lower-wage vacancies receive fewer. Average applicant quality remains unchanged, challenging standard directed search models. We rationalize the lack of skill-based sorting with two-sided limited information about applicants’ skills. We further show that firms’ decision not to post wages can act as insurance against unproductive matches. |
| Keywords: | vacancy posting, wage posting, information, field experiment, job search |
| JEL: | J31 J62 J63 C93 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18220 |
| By: | Taveras, Elisa (The University of Texas Rio Grande Valley); Tonguc, Ozlem (State University of New York); Zhu, Maria (Syracuse University); Miller, Nicola (Binghamton University, New York) |
| Abstract: | This study investigates whether employers in an online hiring experiment exhibit discrimination based on workers’ accents that indicate English is not their primary language. To assess accent bias, we implement a randomized treatment design in which participants acting as employers are assigned to one of two conditions: a treatment where the worker’s accent is revealed (“Accent Revealed”) or a control where it is not (“Accent Blind”). Using incentive-compatible methods, we elicit employers’ beliefs about the productivity of randomly assigned workers, providing brief demographic information and audio clips that either reveal or mask accent characteristics. We evaluate worker productivity in two skills: Mathematics and Verbal reasoning. We find that employers rate accented workers as less capable than their non-accented counterparts in both skills, and this gap persists after providing employers with a signal of a worker’s test score. Employers also display lower willingness to pay, particularly in Verbal skills tasks, even when provided with performance signals. |
| Keywords: | laboratory experiments, labor market discrimination, foreign accent |
| JEL: | C91 D90 J01 J71 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18239 |
| By: | Yoshimichi Murakami (Research Institute for Economics and Business Administration, Kobe University, JAPAN); Nur Nahar Yasmin (Faculty of Business Studies, University of Dhaka, BANGLADESH) |
| Abstract: | This paper empirically examines the determinants of the gender wage gap across the wage distribution in rural Bangladesh, applying the Oaxaca–Blinder decomposition to the unconditional quantile regression approach. Using panel data from three rounds (2011–12, 2015, and 2019) of the Bangladesh Integrated Household Survey, this study controls for both household-level unobserved heterogeneity and selection bias in rural wage employment. Results reveal that the gender wage gap is most pronounced at the lower end of the distribution, providing strong evidence of the sticky floor phenomenon. We find that larger return to education and coefficient of full-time employment for females significantly contributed to a reduced wage gap at the upper end of the distribution, while larger return to education and coefficient of non-agricultural employment for females contributed to narrowing the wage gap at the lower end. Notably, as education is associated with a higher probability of wage employment for females, the contribution of education becomes stronger after controlling for selectivity bias. The findings suggest that promoting female education and expanding access to non-agricultural employment are key to reducing the gender wage gap in rural Bangladesh, although unobservable factors continue to perpetuate the sticky floor phenomenon. |
| Keywords: | Education; Decomposition; Household fixed effects; Gender wage gap; Rural Bangladesh; Unconditional quantile regression |
| JEL: | I24 I26 J31 J71 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:kob:dpaper:dp2025-26 |
| By: | Aronsson, Thomas (Department of Economics, Umeå School of Business, Economics and Statistics, Umeå University, Department of Economics, University of Graz); Bastani, Spencer (Department of Economics, Uppsala University; Research Institute for Industrial Economics (IFN) Uppsala Center for Fiscal Studies (UCFS), Uppsala Center for Labor Studies (UCLS)); Tayibov, Khayyam (Department of Economics and Statistics, School of Business and Economics, Linnaeus University) |
| Abstract: | his paper incorporates labor market inactivity and long-term unemployment into the framework of optimal redistributive taxation. We examine how a combination of education policy, public employment programs, unemployment benefits, and optimal income taxation can effectively address both redistributive goals and the persistent challenges of long-term unemployment. Our analysis shows that the second-best optimal policy typically implies overprovision of education compared to a policy rule that reflects only direct marginal benefits and costs. At the same time, public employment programs and unemployment benefits tend to be underprovided. Through numerical simulations, we illustrate how this policy mix adapts to varying preferences for redistribution, productivity disparities, and the proportion of individuals at risk of long-term unemployment. |
| Keywords: | long-term unemployment; education; optimal income taxation; pub lic sector employment |
| JEL: | H21 I21 J24 J45 |
| Date: | 2025–10–15 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ifauwp:2025_019 |
| By: | Ignacio Belloc (University of Zaragoza); Pierre-André Chiappori (Columbia University); José Alberto Molina (IEDIS, Universidad de Zaragoza); Jorge Velilla (IEDIS, University of Zaragoza) |
| Abstract: | The ability of spouses to commit to future behaviors has important implications for the design of policy interventions targeting specific household members. Using longitudinal data from the Japanese Panel Survey of Consumers (1993-2019), we find robust evidence consistent with limited commitment: positive own past wage shocks increase current leisure, while positive current husband wage shocks reduce the wife’s leisure. Additionally, changes in the wife’s private savings have lasting negative effects on the husband’s leisure time, as limited commitment predicts. These findings extend previous tests of commitment and underscore the importance of accounting for historical changes in the household’s economic environment. |
| Keywords: | dynamic collective model, commitment, leisure, JPSC data |
| JEL: | D13 D14 J16 J22 J31 H31 |
| Date: | 2025–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:boc:bocoec:1099 |
| By: | Luisa Alama (Universitat Jaume I and IIDL); Joan Crespo (Universitat de València); Miguel A. Márquez (Universidad de Extremadura); Emili Tortosa-Ausina (Universitat Jaume I, IIDL and Ivie) |
| Abstract: | We empirically evaluate how the efficiency of Spanish public universities impacts regional economic performance in Spain during the period 2010–2019. Efficiency is measured using activity analysis methods that attempt to capture reflect how universities perform in their respective missions— namely, teaching, research, and knowledge transfer. We analyse the geography of higher education by examining efficiency at the provincial (NUTS3) and regional (NUTS2) levels, as well as for groups of regions (NUTS1). Our results offer several key insights. First, we find that geography plays a differential role primarily when knowledge transfer activities are considered, while geographical patterns are similar for teaching and research activities. Second, the impact of universities’ efficiency on regional economic activity varies across different outcome measures. While provinces with more efficient public university systems show higher labor productivity and capital intensity levels, there is no significant relationship with per capita income. The spatial analysis indicates that efficiency gains generate indirect and positive spillovers, particularly for capital intensity, suggesting that improvements in university performance can benefit broader regional areas. Additionally, institutional quality, measured through regional government performance indicators, reinforces these effects. Our findings suggest that policies aimed at enhancing university efficiency should prioritise the research mission. Among the three university missions, research has the greatest impact on improving productive processes and is the most effective in fostering regional economic development. |
| Keywords: | bias-corrected efficiency; capital intensity; higher education institutions; regional growth; productivity |
| JEL: | C61 J24 R11 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:eec:wpaper:2510 |
| By: | Mariano Bosch (Inter American Development Bank); Guillermo Cruces (Universidad de San Andrés-CONICET, University of Nottingham); Stephanie González (CEDLAS-FCE-UNLP); María Teresa Silva-Porto (Inter American Development Bank) |
| Abstract: | In developing countries, informal labor is not only employed by illegal or unregistered firms but also by legal firms that hire workers informally, known as the intensive margin of labor informality. Reducing this type of work may have ambiguous effects on formal employment, depending on factors such as firm size and productivity. In collaboration with Peru’s labor inspection authority, we conducted a randomized mailing experiment targeting large firms with a high propensity for employing workers informally. The authority sent letters with either deterrence messages detailing fines for non-compliance or social norms messages highlighting the positive impacts of formality. We analyzed the impact of this intervention on formal employment levels over the following two years using monthly administrative data. The treated firms (particularly those in the deterrence treatment arm) and larger firms increased their formal employment levels. However, these increases followed a seasonal pattern coinciding with the high labor demand during the tourist season, suggesting that prior to the intervention, firms were employing temporary workers informally. The higher perceived cost of non-compliance led them to formalize some of these workers. The informal hiring of seasonal workers by these firms appears to have been motivated by basic tax evasion, and the absence of a negative effect on firm-level formal employment indicates that the firms were exploiting rents from low enforcement of regulations. |
| Keywords: | Randomized Controlled Trial, Social Security, Tax Audit, Tax Evasion, Mailing, Informality, Labor formalization |
| JEL: | C93 D91 H55 J46 O17 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:sad:wpaper:172 |
| By: | John M. Barrios; Jessie Jianwen Guo; Yanping Zhu |
| Abstract: | Financial misconduct is often a team activity, facilitated by face-to-face interactions, shared norms, and trust. We exploit the sudden shift to remote work during COVID-19 to examine how workplace organization shapes collusion and financial misconduct. Using a novel firm-level measure of work-from-home feasibility, we find that firms that are more able to operate remotely experienced large post-2020 declines in misconduct. This decline is found across multiple misreporting proxies and is robust to various alternative measures of remote work. Cross-sectional tests indicate stronger declines in teamwork-intensive firms, firms with effective internal controls, and firms with weaker pre-COVID employee perceptions of culture and leadership. Overall, our findings reflect that financial misconduct is a team activity, sensitive to the organizational structure of the firm, with important implications for governance and organizational design. |
| JEL: | D23 G30 G38 G39 J24 K22 M2 M4 M40 M41 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34417 |
| By: | Alessandra Fenizia; Nicholas Y. Li; Luca Citino |
| Abstract: | This paper studies the cost-effectiveness of targeted payroll taxes for stimulating labor demand. It uses rich administrative data to study the effects of an Italian reform that raised social security contributions for apprenticeship contracts but granted a substantial discount for firms with 9 employees or less. The discount does not increase demand for apprenticeship contracts. Instead, it subsidizes inframarginal hiring. This reform is not cost-effective. Point estimates imply that each million euros of foregone social security contributions supports the employment of 29 apprentices for one year and no permanent contracts (these estimates are not statistically different from zero). |
| JEL: | H20 H32 J23 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34437 |
| By: | Johannes Geyer; Peter Haan; Mia Teschner |
| Abstract: | The price of institutional long-term care is a key determinant of the demand for both formal and informal long-term care. In this paper, we examine how the regional unemployment rate as a proxy for macroeconomic conditions influences these prices. Our analysis draws on administrative data that provide detailed information on all nursing homes and ambulatory care services, as well as all recipients of long-term care benefits in Germany. For identification, we exploit variation in macroeconomic conditions - measured by district-level unemployment rates over time - using a panel data approach with facility and time fixed effects. Our empirical findings indicate that higher unemployment rates lead to increased prices for permanent long-term care, including accommodation and meal costs in nursing homes. We provide evidence for the mechanisms underlying these price effects. While we find no significant impact of macroeconomic conditions on employment, working hours, or quality of care in nursing homes, our results suggest that higher unemployment rates raise nursing home prices through changes in the composition of patients. Specifically, economic downturns trigger a shift from recipients with lower levels of impairment to those requiring more labor-intensive care. Additionally, we observe a substitution effect, whereby low-impairment patients increasingly opt for ambulatory and informal home care instead of institutional care. |
| Keywords: | Long-Term Care, Nursing Home Prices, Unemployment Rate, Macroeconomic Conditions, Informal Care |
| JEL: | E32 I11 J20 |
| Date: | 2025–10–28 |
| URL: | https://d.repec.org/n?u=RePEc:bdp:dpaper:0080 |
| By: | Zhiwu Wei (University of Cambridge); Neil Lee (London School of Economics and Political Science); Yohan Iddawela (Asian Development Bank) |
| Abstract: | Mobile internet has become a fundamental component of modern infrastructure. In this paper, we consider the impact of mobile internet connectivity on household wealth in the Philippines. We construct a granular measure of local mobile internet connectivity using comprehensive information on approximately 0.27 million geocoded cell towers, and identify causal impact through a novel instrumental variable based on proximity to submarine cable landing points. Our results suggest that mobile internet connectivity significantly increases household wealth, with effects that persist across education levels and are more pronounced in urban areas compared to rural ones. Combining individual survey datasets with Points-of-Interest data, we investigate mechanisms and demonstrate that improved connectivity stimulates activities in several key economic sectors that create employment opportunities. Additionally, mobile internet connectivity enhances individual educational outcomes and promotes female labor force participation, though predominantly in occasional or seasonal roles. |
| Keywords: | mobile internet;cell tower;wealth inequality;Philippines |
| JEL: | F14 J24 J63 L86 O33 |
| Date: | 2025–11–07 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:021753 |
| By: | Jonathan Gruber; Núria Mas; Judit Vall Castelló; Jaume Vives-i-Bastida |
| Abstract: | Most nations in the world have side-by-side private and public health care systems. Policymakers worry that “dual practice” across sectors might reduce care to the public sector. This concern led regions in Spain to offer “exclusivity bonuses” to physicians who practice exclusively in the public sector. We show theoretically that the impact of these bonuses on the public sector is ambiguous. We demonstrate empirically that the bonuses backfired: they did increase exclusive participation in the public sector, but significantly reduced hours of work. When regions added offsetting bonuses for dual practice, they were largely ineffective. |
| JEL: | I18 J30 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34433 |
| By: | Han Ye; Cristina Bellés Obrero; Sergi Jiménez-Martín |
| 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: | delaying retirement, early retirement, heterogeneity, mortality, work conditions |
| JEL: | I10 I12 J14 J26 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1528 |
| By: | Aipoh, Godwin; Yusuff, Olanrewaju |
| Abstract: | This paper examines the causal impact of higher education expansion on regional labor markets and human capital development. Exploiting the 2011 establishment of nine federal universities across previously underserved Nigerian states, we implement a difference-in-differences approach to analyze effects on employment, wages, job quality, and sectoral composition. Our results show significant positive effects on employment and wages, with particularly strong impacts for youth and in urban areas. We find evidence of both direct employment effects and broader spillovers to private sector activity such as self-employment, suggesting universities can serve as catalysts for regional economic development. Our findings contribute to understanding the role of higher education institutions in human capital formation and labor market development in emerging economies |
| Keywords: | Higher Education, Labor Markets, Economic Development, Regional Growth, Universities, Employment, Wages, Nigeria, Africa |
| JEL: | H5 H52 I25 J21 O15 R11 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126532 |
| By: | Yousuf Daas; Sameh Hallaq; Danilo Leite Dalmon; Jennifer Olmsted |
| Abstract: | This study examines the impact of the Gaza blockade on private returns to education, with a focus on regional and gender disparities in the Palestinian territories. Using data from the Palestinian Labor Force Survey (2000-2014). Results show that, generally, education yields higher returns in Gaza compared to the West Bank. Gender disparities are pronounced, with women consistently experiencing higher returns to education than men despite systemic barriers to equitable labor market participation. The Gaza blockade itself negatively impacted wages, years of schooling, and returns to education, though women exhibited resilience by increasing their educational investment during this period. These findings show the importance of addressing structural barriers and promoting inclusive policies to mitigate the long-term consequences of conflict on human capital development. |
| Keywords: | labor market; conflict economics; Gaza blockade; Gender equality; Gender wage gap; returns to education |
| JEL: | I25 J16 O15 J31 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1090 |
| By: | Antonio Cutanda (Universidad de Valencia, Valencia, Spain); Juan A. Sanchis (Universidad de Valencia and ERICES, Valencia, Spain) |
| Abstract: | In this paper, we investigate the heterogeneity in the intertemporal behaviour of Spanish households by estimating the intertemporal elasticity of substitution of consumption (IESC) across different groups of households. Using data from the Spanish Survey of Household Finances for the period 2002–2022, we categorise households based on their consumption patterns relative to income and wealth. Our findings show that most Spanish households react to changes in the real interest rate, with an estimated IESC of approximately 0.8 to 0.9. However, certain groups, specifically renters and individuals whose total wealth is less than two months of their labour income and whose expenditure exceeds their liquid wealth, exhibit a lower IESC, around 0.6 to 0.7, or display no reaction at all. These results support the hypothesis put forward by Aguiar et al. (2025) that hand-to-mouth consumers tend to have a higher IESC than the general population. Overall, our findings reinforce the view that monetary policy is an effective tool for influencing non-durable consumption. |
| Keywords: | Euler Equation, Instrumental variables, Intertemporal Substitution for consumption, Panel data. |
| JEL: | C23 C26 D12 D15 J22 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:eec:wpaper:2513 |
| By: | Elizabeth Dhuey; A. Abigail Payne; Justin Smith |
| Abstract: | We estimate the long-term consequences of math and reading rank within an elementary school on short and long-term outcomes. We find that higher rank leads to better outcomes. Students ranked at the top in grade 7 perform up to 0.33 standard deviations higher on future school exams, are more likely to graduate high school and university, and earn significantly more at age 28. Math rank is especially predictive of high school completion and income. Reading rank is more strongly associated with university graduation. We find differences in the effect of rank on trajectories by gender for both top and bottom ranks. Our findings suggest that classroom position, even conditional on ability, has persistent effects, with implications for equity and early intervention. |
| Keywords: | post-secondary education, school rank, gender, earnings |
| JEL: | I22 I26 I21 J3 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12227 |