|
on Labor Markets - Supply, Demand, and Wages |
| By: | Badalyan, Sona (IAB, CERGE-EI) |
| Abstract: | "I study how delayed retirements reshape firms internal labor markets, leveraging a German reform that raised womens early retirement age by at least three years. The reform increased retention of older women and reduced both internal promotions and external hiring of younger coworkers, with the greatest losses among middle-aged workers who were near to older workers on the career ladder. Spillovers are structured: promotion crowd-outs arise in thick internal labor markets with intense competition, while hiring declines are largest in thin external markets with high turnover costs. Crowd-out effects concentrate within jobcells, whereas coworkers in different jobcells can benefit when retained older workers possess specific human capital. Taken together, the evidence supports slot-constraint theoriesaugmented by firm-specific human-capital mechanisms." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | H55 J21 J23 J24 J26 J31 J63 M51 |
| Date: | 2026–01–28 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabdpa:202601 |
| By: | Piotr Lewandowski (Institute for Structural Research); Karol Madoń (Institute for Structural Research); Albert Park (Asian Development Bank) |
| 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 data from the Programme for the International Assessment of Adult Competencies (PIAAC) 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 United States (US) 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 information and communications technology 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: | job tasks;occupations;AI;technology;skills |
| JEL: | J21 J23 J24 |
| Date: | 2026–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:022156 |
| By: | Jeff Biddle; Daniel S. Hamermesh |
| Abstract: | We demonstrate nearly steady trends from 1973-2023 in the U.S. in the timing of when people work for pay, away from evening and night hours toward “usual” daytime hours. The trend is related to changes in rising educational attainment, to increased real incomes, and the increased wage premium for undesirable work times—evenings and nights—that we document. The trend exists in all major industries except retail, in which changes in technology biased work away from daytime hours. The trend was accelerated by the sharp increase in telework that occurred after the Covid pandemic, an increase that was especially concentrated during daytime hours. While we observe the same phenomenon in France from 1966 to 2010, we do not in the U.K. from 1974-2015, arguably because of the very sharp decline in unionization in the U.K. and the changes in retailing. |
| JEL: | J22 J23 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34732 |
| By: | Anthony Le (University of Chicago - Booth School of Business); Parth Shah (London School of Economics and Political Science) |
| Abstract: | We study the e!ect of licensing-induced, occupation-specific education requirements on workers’ occupational mobility and earnings. We study this question in the context of Certified Public Accountants’ (CPAs) licensing rules, exploiting the staggered introduction of a change in the number and composition of CPAs’ educational requirements across states. We find that an increase in mandatory accounting-specific credit hours leads to more time spent in accounting jobs, less cross-occupation job switching, and a reduction in the licensing earnings premium. Supplemental analyses indicate that the e!ects represent a specialization of worker skills rather than a general decline in CPAs’ accounting performance. The collective findings suggest that by imposing occupationspecific course requirements, licensing regimes can create less portable human capital, reducing both occupational mobility and the licensing earnings premium. |
| Keywords: | Occupational Licensing; Occupational Mobility; Coursework Requirements; CPAs; Human Capital; 150-Hour Rule |
| JEL: | D45 I21 J24 J44 J62 M41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-16 |
| By: | Aldasoro, Iñaki; Gambacorta, Leonardo; Pal, Rozalia; Revoltella, Debora; Weiss, Christoph; Wolski, Marcin |
| Abstract: | This paper provides new evidence on how the adoption of artificial intelligence (AI) affects productivity and employment in Europe. Using matched EIBIS-ORBIS data on more than 12, 000 non-financial firms in the European Union (EU) and United States (US), we instrument the adoption of AI by EU firms by assigning the adoption rates of US peers to isolate exogenous technological exposure. Our results show that AI adoption increases the level of labor productivity by 4%. Productivity gains are due to capital deepening, as we find no adverse effects on firm-level employment. This suggests that AI increases worker output rather than replacing labor in the short run, though longer-term effects remain uncertain. However, productivity benefits of AI adoption are unevenly distributed and concentrate in medium and large firms. Moreover, AI-adopting firms are more innovative and their workers earn higher wages. Our analysis also highlights the critical role of complementary investments in software and data or workforce training to fully unlock the productivity gains of AI adoption. |
| Keywords: | Artificial intelligence, firm productivity, Europe, digital transformation |
| JEL: | D22 J24 L25 O33 O47 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:eibwps:335876 |
| By: | Serdar Birinci; Miguel Faria-e-Castro; Kurt See |
| Abstract: | We use an overlapping-generations model with incomplete markets and a frictional labor market to study how assumptions about agents’ expectations of changes in returns to wealth affect labor supply and retirement decisions. Focusing on 2020–23, when returns fluctuated sharply and retirements rose above trend, we find that when individuals internalize the dependence of returns on wealth and view changes in returns as persistent, the model generates counterfactual labor-market outcomes. Retirements fall because expectations of persistently high returns boost labor supply, outweighing wealth effects, and the model predicts retirements concentrated among the very wealthy, contrary to the microdata. |
| Keywords: | labor supply; retirement; heterogeneous returns; incomplete markets |
| JEL: | E24 G11 J21 J22 J26 |
| Date: | 2025–11–17 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlwp:102353 |
| By: | Sam Desiere; Rigas Oikonomou; Tiziano Toniolo; Bruno Van der Linden; Gert Bijnens (-) |
| Abstract: | Belgium’s 2016 payroll tax exemption for first-time employers triggered a sharp increase in firms hiring their first worker but little growth among larger firms. To account for this pattern, we develop and estimate a directed search model—with discrete hiring, firm heterogeneity, and endogenous entry—using Belgian microdata. The exemption reduces the high marginal cost of the first hire, enabling many previously non-hiring entrepreneurs to become employers, but most lack the productivity needed to expand beyond one worker. The model matches the post-reform size distribution and identifies the conditions under which size-dependent hiring subsidies can foster sustained firm growth. |
| Keywords: | payroll taxes, size-dependent policies, hiring frictions, wage subsidies, competitive search theory |
| JEL: | H25 J08 J23 J38 L25 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:26/1133 |
| By: | Scott A. Imberman; Michael F. Lovenheim; Patrick Massey; Kevin M. Stange; Rodney J. Andrews |
| Abstract: | Gender and racial/ethnic gaps in labor market earnings remain large, even among college-goers. Cross-gender and race/ethnic differences in choice of and returns to college major are potentially important contributors. Following Texas public high school graduates for up to 20 years through college and the labor market, we assess gender and racial differences in college major choices and the consequences of these choices. Women and underrepresented minorities are less likely than men, Whites, and Asians to major in high earning fields like business, economics, engineering, and computer science, however we also show that they experience lower returns to these majors. Differences in major-specific returns relative to liberal arts explain about one quarter of the gender, White-Black, and White-Hispanic (but not White-Asian) earnings gaps among four-year college students and become larger contributors to earnings gaps than differential major distributions as workers age. We present suggestive evidence that differences in occupation choices within field are a key driver of the differences in returns across groups. The work shines light on the roles that college major choice and returns by gender and race contribute to inequality. |
| JEL: | I23 I26 J24 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34726 |
| By: | James J. Heckman; Haihan Tian; Zijian Zhang; Jin Zhou |
| Abstract: | This paper discusses a fundamental problem in measuring the growth of knowledge and comparing the skills of people. New skills emerge that are not just more of the previously acquired skills. Psychometric convention forces these skills into arbitrarily constructed scales, which can severely distort measurement. To formally address this problem, we measure skills using a novel measurement scheme, estimate a stochastic learning process and reject the common scale assumption across levels for language and cognitive skills. Furthermore, we estimate dynamic complementarity without imposing arbitrary scales for skills. |
| JEL: | C18 J24 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34737 |
| By: | Susan Athey; Emil Palikot |
| Abstract: | We evaluate two interventions facilitating technology-sector transitions for women in Poland: Mentoring, focused on expanding professional networks, and Challenges, focused on building credible skill signals. Randomizing oversubscribed admissions, we find both programs substantially increase technology employment at twelve months-by 15 percentage points for Mentoring and 11 p.p. for Challenges. The distinct mechanisms through which the programs operate translate to heterogeneous treatment effects across geography, career stage, and baseline credentials. These differential effects create scope for improved allocation: algorithmic targeting across programs outperforms random assignment by 86% and outperforms experts' selection into Mentoring by 11%. |
| JEL: | J24 J44 J62 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34750 |
| By: | Kevin André Pineda-Hernández; François Rycx; Mélanie Volral; Alexandre Waroquier |
| Abstract: | While rent-sharing is known to vary according to worker characteristics, the impact of profits on the gender wage gap warrants closer examination. Most studies adopt a single-gender view, neglecting factors tied to bargaining power. Our paper aims to fill this gap by leveraging rich matched employer-employee data covering the Belgian private sector from 1999 to 2016 and by examining whether the relationship between rent-sharing and gender depends on variables reflecting bargaining power, i.e. level of education, field of study, tenure, occupation and type of wage agreement. Accounting for a wide range of individual, job and firm characteristics, and addressing potential endogeneity issues, we find a wage-profit elasticity of 2.8%, which does not differ statistically between women and men. Our results further indicate that firms share more of their profits with workers who have greater bargaining power, as assessed by our moderators. This result holds overall for both women and men, so that the price effect associated with rent-sharing is generally insignificant in explaining the gender wage gap. Conversely, given that women, regardless of their bargaining power, tend to be employed in less profitable firms than their male counterparts, the quantity effect associated with rent-sharing appears to play a non-negligible role. In short, our findings suggest that it is not so much the unequal sharing of profits within companies that fuels the gender pay gap, but rather the segregation of women, particularly those with limited bargaining power, into less profitable companies. |
| Keywords: | Rent-sharing; linked employer-employee data; wage decompositions; instrumental variables; gender wage gap; bargaining power |
| JEL: | C26 J16 J24 J31 |
| Date: | 2026–01–29 |
| URL: | https://d.repec.org/n?u=RePEc:sol:wpaper:2013/402522 |
| By: | Patricia Cortés; Jisoo Hwang; Jessica Pan; Uta Schönberg |
| Abstract: | Despite substantial convergence in men’s and women’s economic roles, gender gaps in labor market outcomes persist across countries. This article provides a unified framework for understanding how gender norms shape economic behavior, distinguishing between internalized norms—preferences and beliefs tied to gender identity—and external norms arising from peer pressure and social coordination. We first document cross-country and within-country variation in gender attitudes, alongside gradual but uneven shifts toward more egalitarian views. We then review empirical evidence on the origins, persistence, and transmission of gender norms, and their effects on human capital accumulation, labor supply, wages, and policy take-up. The review highlights both the durability of gender norms and the mechanisms through which policies, institutions, and media can induce norm change, with implications for the design of effective interventions. |
| JEL: | J16 J22 J24 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34716 |
| By: | Sueyoul Kim; Ginger Zhe Jin; Eungik Lee |
| Abstract: | Using a comprehensive dataset of posts from a major platform for anime- and manga-style artwork, we study the impact of the launch of a prominent text-to-image generative AI. Focusing on the majority of incumbent creators who do not adopt AI as a primary tool, we show that the AI launch led to a significant decline in post uploads by illustrators, whereas comic artists were less affected, reflecting the need for tight stylistic alignment across sequential images in comics. We present empirical evidence for two underlying mechanisms. First, illustration posts experience a loss of viewer attention, measured by bookmarks, following the AI launch, which can significantly harm creators’ business models. Second, direct competition from AI-generated content plays an important role: illustrators working on intellectual properties (IPs, such as Pokémon) that are more heavily invaded by AI reduce their uploads disproportionately more. We further examine creators’ responses and show that illustrators with greater exposure to AI avoid using tags favored by AI-generated content after the AI launch and broaden the range of IPs they work on, consistent with a risk-hedging response to AI invasion. |
| JEL: | D22 J24 L86 O14 O33 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34733 |
| By: | Hundsdoerfer, Jochen; Löwe, Maren |
| Abstract: | We analyze how value added taxes (VATs) affect labor market outcomes (firms' employee costs, wages, hours worked, employment). While VATs are designed to tax consumption, they are levied at the firm level, which creates potential spillovers to labor markets. We hypothesize that VATs affect wages and employment through two channels: an inflation adjustment effect, where employees demand higher wages to compensate for VAT-induced price increases; and a profitability effect, where incomplete pass-through reduces firms' net sales and profits, putting downward pressure on wages and employment. We exploit variation in VAT rates, measuring labor market outcomes at the firm and country level. We find economically significant negative effects of VAT rates at the firm level on employee costs and at the country level on wages and employment. At the firm level, a one percentage point increase in the standard VAT rate corresponds to a 3.886% reduction in employee costs. At the country level, the same increase is associated with a 2.802% decline in average nominal wages. We find a 1.444% decline in employment at the country level following a one percentage point increase in the VAT rate. For working hours, the evidence is inconclusive and at most suggests a reduction. Heterogeneity analyses suggest that small firms and firms with high profit margins react stronger; among the employees, the age group 15-24 years is hit hardest. Our study provides the first systematic cross-country evidence on the labor market consequences of VATs. |
| Keywords: | VAT, Labor Supply, Labor Demand, Wages, VAT Incidence, Inflation, Wage Bargaining |
| JEL: | D22 D24 H22 H25 M51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:arqudp:335902 |
| By: | Leonardo Bursztyn (University of Chicago Department of Economics and NBER); Ewan Rawcliffe (Harvard University); Hans-Joachim Voth (University of Zurich Department of Economics and UBS Center for Economics in Society) |
| Abstract: | We study the ability of a firm to elicit repeated effort from workers by creating a “rat race†of hierarchical status-based incentives. We examine performance using data on over 5, 000 German air force pilots during World War II. Pilots’ effort is hard to monitor; motivation is key to success. Fighter pilot performance increases markedly as they approach eligibility for a medal before falling off upon receipt of the award. The same effort path repeats itself as the pilot nears the next higher prestige medal. Status-conscious pilots also exert more effort when new medals are introduced. We show that medals serve as substitutes for other forms of status. Medal cachet declines over time as lower-ability pilots receive them, making the introduction of new medals desirable. These results suggest that a tiered, expanding system of status-based incentives can repeatedly leverage worker status concerns to extract effort. |
| JEL: | D22 D91 M52 N44 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-18 |
| By: | Yueran Ma (University of Chicago – Booth School of Business); Mengdi Zhang (Northwestern University); Kaspar Zimmermann (Kiel Institute for the World Economy and University of Hamburg) |
| Abstract: | We collect new data to document the long-run evolution of the firm size distribution in ten marketbased economies in Asia, Europe, North America, and Oceania, where we can obtain comprehensive coverage of the population of firms. Around the world, we observe prevalent increases in the concentration of sales, net income, and equity capital over the past century. These trends hold in the aggregate and at the industry level. Meanwhile, employment concentration has been stable over the long run in most cases. The evidence shows that the rising dominance of large firms is a pervasive phenomenon, not limited to the recent decades or the United States, and that large firms often achieve greater scale without proportionally more workers. |
| JEL: | E01 L1 N1 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-13 |
| By: | Kauhanen, Antti; Rouvinen, Petri |
| Abstract: | Abstract We examine the impact of generative AI on the youth labor market in Finland by replicating the key analyses of Brynjolfsson et al. (2025) with comprehensive population-level data. Contrary to the US findings, we find no systematic displacement effects linked to AI exposure among youth in Finland. Employment trends reflect demographic shifts rather than AI-driven changes, with early career groups showing modest declines and senior workers experiencing growth. Wage trajectories show no persistent differences across AI exposure levels. These results suggest that Finland’s labor market is resilient to immediate AI-induced disruptions in entry-level roles, likely because of structural and policy factors. |
| Keywords: | Generative artificial intelligence, Technological change, Employment, Wages, Occupations |
| JEL: | E24 J21 O33 |
| Date: | 2026–01–27 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:135 |
| By: | Huiyu Li; Julien Sauvagnat; Tom Schmitz |
| Abstract: | Using administrative data from France, we document that within the same detailed occupation, industry, and commuting zone, workers who work from home earn on average 12% higher hourly wages than fully on-site workers. Approximately half of this wage premium is accounted for by observable worker characteristics (such as education, gender, and age) and firm characteristics (such as size and productivity). The remaining 6% wage premium largely reflects selection: workers who work from home after the COVID-19 pandemic already earned higher wages before the pandemic. |
| Keywords: | wage premium |
| Date: | 2026–02–02 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedfwp:102384 |
| By: | Margarida Duarte; Diego Restuccia |
| Abstract: | We study the sectoral reallocation of employment over time and across countries, with a focus on the rise of services. We document substantial changes in the ratio of aggregate employment to working-age population across countries that are not systematically related to productivity growth or income levels, yet tightly linked to the rise in services employment. We assess the quantitative contribution of changes in aggregate employment to the rise of services using an otherwise standard model of sectoral reallocation calibrated to time-series for the United States. The calibrated model implies a high elasticity of changes in aggregate employment to services: a one percentage point change in aggregate employment generates on average a 0.7 percentage point change in services employment. The implication is that actual changes in aggregate employment account for one-third of the rise in services, on average across countries, and up to one-half in countries with sustained employment increases. |
| Keywords: | employment, goods, services, productivity, structural transformation, working-age population. |
| JEL: | E1 E24 J11 J16 J21 J22 O11 O41 O51 |
| Date: | 2026–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-817 |
| By: | Andre Mouton (Department of Economics, Wake Forest University) |
| Abstract: | This paper develops methods and tools for measuring the exposure of occupational tasks to technological substitution. Patent abstracts and task statements are matched and classified by a small, open-source language model. The model is fine-tuned and validated against a foundation AI, achieving accuracy improvements of roughly 5X over conventional ‘word embedding’ approaches. Model fine-tuning and a rules-based match threshold are critical for realizing these gains. The approach replicates stylized facts about IT exposure, but diverges sharply from survey-based measures of AI automation risk, which systematically understate exposure among high-wage occupations. A living dataset and Python package allow researchers to measure exposure across user-defined technology and task categories, with minimal time lag and at fine temporal resolution. |
| Keywords: | Technological Exposure; Task Automation; Language Models; Patent Analysis |
| JEL: | C45 C82 J20 O33 |
| Date: | 2026–02–02 |
| URL: | https://d.repec.org/n?u=RePEc:ris:wfuewp:022172 |
| By: | Berlinski, Samuel; Cruces, Guillermo; Galiani, Sebastián; Gertler, Paul; Gonzalez, Fabian Enrique |
| Abstract: | We study the long-run effects of a large public expansion of pre-primary education in Argentina. Between 1993 and 1999, the federal government financed the construction of new preschool classrooms targeted to departments with low baseline enrollment and high poverty, creating roughly 186, 000 additional places. We link administrative records on classroom construction to four population censuses and estimate difference-in-differences models that compare treated and untreated cohorts across high- and low-construction departments. An additional preschool seat per child increases post-kindergarten schooling by about 0.5 years, raising the probability of completing secondary school by 11.9 percentage points and of enrolling in post-secondary education by 7.1 percentage points. For women, access to the program also reduces completed fertility: an additional seat lowers the number of live births per woman by 0.18. We find no evidence that selective migration biases these estimates. Our results show little impact on labor-market outcomes at the census date, consistent with beneficiaries still being in school or in the early stages of their careers. A benefit-cost analysis based on the estimated schooling gains, standard Mincer returns, and observed construction and operating costs yields a benefit-cost ratio of about 11 and an internal rate of return of 13%. Our findings show that universal at-scale pre-primary expansions in middle-income countries can generate sizable improvements in human capital and demographic outcomes at relatively low fiscal cost. |
| JEL: | J13 J16 J38 O15 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14483 |
| By: | Adrienne Sabety; Ariella K. Spitzer |
| Abstract: | Adult Black men persistently do not report to household-based surveys, with demographers estimating non-reporting rates of 7-14% from 1970-2020. We derive a method to account for incomplete data and show that non-reporting rates are up to 5.5 percentage points (pp) larger than prior estimates, with significant heterogeneity by year. We then show that Black men at risk of incarceration drive non-reporting. We use state-year variation in incarceration rates to estimate that 35-83% of the incarcerated population would have been non-reporting if not incarcerated. Adjusting for previously uncorrected non-reporting shows that the Black-white gap in high-school completion is 20-39% (3.0-5.9 pp) larger, college attendance is 8-18% (3.1-6.1 pp) larger, and earnings is 10-20% (2.8-5.7 pp) larger. In contrast, the gap in employment is 4-8% (0.6-1.6 pp) smaller than previously thought. |
| JEL: | J1 J2 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34724 |
| By: | Kabir Dasgupta; Brenden J. Mason |
| Abstract: | We exploit the spatiotemporal variation in US states’ interest rate ceilings on small-dollar loans to identify the effect of liquidity constraints on labor supply. Exogenously-capped interest rates lead to consumers being shut out of the market for cash loans. In response, labor supply increases by approximately 0.4 hours per week. We also find that the propensity to take personal leaves decreases. Labor supply, therefore, is used to overcome financial constraints, but is not the only method: the effect on earnings is less than many small-dollar loans, suggesting that borrowers employ multiple mechanisms to cope with tightened credit conditions. |
| JEL: | D15 G23 G50 J22 |
| Date: | 2025–12–22 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:102370 |
| By: | Franziska L. Ohnsorge; Richard Rogerson; Zoe Xie |
| Abstract: | Benchmark models of structural transformation focus on the reallocation of employment across sectors while assuming that overall employment stays constant. We show that this assumption does not match facts for developing economies. We study a panel of 48 mostly developing economies over the period 1990--2018 and document a strong positive relationship between the share of the population employed in agriculture and the overall employment rate. That is, the early part of the development process is associated with a substantial decline in the total employment rate. Motivated by this finding, we extend a benchmark model of structural change featuring Stone-Geary preferences to allow for endogenous labor supply. We show that this model can account for the patterns we document in the data both qualitatively and quantitatively. We use a calibrated version of our model to study the employment dynamics in several developing economies and show that structural change is a quantitatively important source of employment changes during the early stages of development. |
| JEL: | E24 J22 O11 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34718 |
| By: | Holmberg, Johan (Department of Economics, Umeå University); Simmons, Michael (Department of Economics, Umeå University); Telemo, Paul (Department of Economics, University of Strathclyde) |
| Abstract: | We study the role of liquid wealth in job displacement costs using Swedish administrative data. Low-wealth hand-to-mouth workers experience substantially larger earnings losses after job loss than wealthier peers. Because earnings losses are largest for individuals least able to smooth consumption, standard estimates understate heterogeneity in welfare losses. The relationship between wealth and displacement costs persist after controlling for worker and employer characteristics that are highlighted in the displacement literature. Using parental death as an instrument for liquid wealth growth, we show that inheritances significantly reduce displacement costs for hand-to-mouth individuals but have no effect for wealthier workers. |
| Keywords: | Job displacement; Wealth; Hand-to-mouth; Job search; Earnings losses |
| JEL: | E24 J31 J62 J63 J64 J65 |
| Date: | 2026–02–03 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:umnees:1043 |
| By: | Dorn, Franziska |
| Abstract: | Time poverty is a key yet conceptually contested dimension of household living standards. Both univariate and bivariate measures remain debated because there is no clear consensus on how to define and quantify socially necessary unpaid work, the time that money cannot substitute for, across household types and income levels. Existing approaches typically adjust monetary poverty lines for unpaid work responsibilities or rely on average unpaid work time, while assuming a fixed substitutability between time and money. Such measures fail to capture the joint constraints that shape household living standards. Using household-level data from the 2017 and 2019 Panel Study of Income Dynamics (PSID), the analysis supports setting 60 percent of the median as the threshold for socially necessary unpaid work in single-adult households without children and applying equivalence scales for other household types. The bivariate relative poverty line (BRPL) framework further defines nonlinear bundles of unpaid household work and food expenditure that mark the threshold for living above the poverty line. The results show that 10.1 percent of oneand two-adult households fall below the BRPL despite not being poor according to univariate measures, underscoring the importance of jointly considering time and money in assessing household living standards and poverty. |
| Keywords: | Bivariate relative poverty line, time and income poverty, unpaid work, time poverty, living standards |
| JEL: | C46 D13 I3 J22 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifsowp:335884 |
| By: | Miyu Iwasaki; Kozo Ueda |
| Abstract: | To what extent can households buffer cost-of-living shocks by shopping more efficiently? Using novel retailer scanner data linked to individual shoppers, we isolate the savings generated by the intensive margin of shopping. We develop a structural model of endogenous shopping frequency and estimate the elasticity of substitution between time and market goods to be approximately 0.3, which is significantly lower than the values exceeding unity typically assumed in macroeconomics. This implies that households are rigid in their ability to smooth consumption. Welfare analysis shows that increases in fixed time costs lead to sizable welfare losses. |
| Keywords: | household production, time allocation, price, elasticity of substitution |
| JEL: | D13 E32 E52 J22 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2026-04 |