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on Labor Markets - Supply, Demand, and Wages |
| By: | Lukas Althoff; Hugo Reichardt |
| Abstract: | Artificial intelligence is changing which tasks workers do and how they do them. Predicting its labor market consequences requires understanding how technical change affects workers’ productivity across tasks, how workers adapt by changing occupations and acquiring new skills, and how wages adjust in general equilibrium. We introduce a dynamic task-based model in which workers accumulate multidimensional skills that shape their comparative advantage and, in turn, their occupational choices. We then develop an estimation strategy that recovers (i) the mapping from skills to task-specific productivity, (ii) the law of motion for skill accumulation, and (iii) the determinants of occupational choice. We use the quantified model to study generative AI’s impact via augmentation, automation, and a third and new channel — simplification — which captures how technologies change the skills needed to perform tasks. Our key finding is that AI substantially reduces wage inequality while raising average wages by 21 percent. AI’s equalizing effect is fully driven by simplification, enabling workers across skill levels to compete for the same jobs. We show that the model’s predictions line up with recent labor market data. |
| Keywords: | artificial intelligence, technology, labor markets, growth, inequality, wages, employment |
| JEL: | J24 J31 O33 J23 E24 D31 I26 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12403 |
| By: | Markus Nagler; Erwin Winkler |
| Abstract: | A large literature investigates the employment effects of minimum wages, with comparatively little evidence on other adjustment margins. In this paper, we analyze the impact of a nationwide introduction of minimum wages in Germany on employer-induced work pressure, using detailed worker-level survey data. Applying a difference-in-differences approach, we show that the introduction of minimum wages increased work pressure in occupations more exposed to the minimum wage. The increase in work pressure cannot be explained by compositional changes in terms of demographics, job complexity, or hours worked. |
| Keywords: | minimum wage, work pressure, non-wage amenities, working conditions, compensating differentials |
| JEL: | J28 J31 J32 J33 J81 H80 I31 I38 K31 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12460 |
| By: | Daron Acemoglu; David Autor; Simon Johnson |
| Abstract: | This paper defines pro-worker technologies, including Artificial Intelligence, as technologies that make human skills and expertise more valuable by expanding worker capabilities. Our conceptual framework distinguishes among five categories of technological change: labor-augmenting, capital-augmenting, automating, expertise-leveling, and new task-creating. Only the last category is unambiguously pro-worker, generating demand for novel human expertise rather than commodifying it. We illustrate these distinctions through hypothetical and real-world examples spanning aviation maintenance, electrical services, custodial work, education, patent examination, and gig delivery. While AI’s capacity to automate work is substantial, we argue that its potential to serve as a collaborator, by extending human judgment, enabling new tasks, and accelerating skill acquisition, is equally transformative and currently underexploited. We identify market failures, including misaligned firm and developer incentives, path dependence, and a pervasive pro-automation ideology, that may lead to underinvestment in pro-worker AI. We consider nine policy directions that would change incentives, including targeted investments in health care and education, tax code reform, antitrust enforcement, and intellectual property protections for worker expertise. |
| JEL: | J23 J24 J31 M50 O33 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34854 |
| By: | Haotian Deng; Sam Desiere; Bart Cockx; Gert Bijnens |
| Abstract: | This paper studies how employment subsidies for start-ups shape their performance. We exploit an unexpected policy reform in Belgium that permanently exempted start-ups hiring their first employee from payroll taxes for that employee. Using firm-level administrative data and a regression-discontinuity-in-time design, we find that subsidized post-reform startups employed fewer workers and generated lower output, value added, and profits compared to pre-reform start-ups. However, post-reform start-ups were more likely to survive as employers. These effects emerged within the first year after hiring and remained stable over a medium horizon of three years. Our findings indicate a compositional shift: the subsidy primarily induced low-productivity firms to enter the market. As most firms nowadays are nonemployers, our results meaningfully generalize the theoretical implications of standard neoclassical entrepreneurship models (employee–employer margin) and fill the important gap of the nonemployer–employer margin. |
| Keywords: | entrepreneurship, start-up, employment subsidy, tax reduction, labor demand; small firms |
| JEL: | H25 J23 J24 J38 L25 L26 M51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12484 |
| By: | Stefan Leknes (Statistics Norway); Hildegunn E. Stokke (Department of Economics, Norwegian University of Science and Technology); Eric Myran Wee (Department of Economics, Norwegian University of Science and Technology) |
| Abstract: | Superior employment matching is considered a key source of agglomeration economies, yet little is known about how urban scale affects matching over workers’ careers. Using full-count Norwegian registry data from 1995-2019, we estimate two-way worker and plant fixed effects to construct a worker-level measure of assortative matching. We find that job matches are more assortative in cities and that city workers progress more rapidly toward increasingly better matches over the career. These gains are concentrated among high-ability workers, while low-ability workers become increasingly mismatched in cities. For migrants, assortative matching initially declines following relocation but improves with subsequent job transitions. |
| Keywords: | Assortative matching, agglomeration economies, career progression, wage decomposition, skills, mobility, AKM-estimation |
| JEL: | J24 J31 J61 R23 |
| Date: | 2026–02–16 |
| URL: | https://d.repec.org/n?u=RePEc:nst:samfok:20626 |
| By: | Guillermo Cruces; Diego Fernández Meijide; Sebastian Galiani; Ramiro H. Gálvez; María Lombardi |
| Abstract: | Does generative artificial intelligence (AI) reinforce or reduce productivity differences across workers? Existing evidence largely studies AI within firms and occupations, where organizational selection compresses educational heterogeneity, leaving unclear whether AI narrows productivity gaps across individuals with substantially different levels of formal education. We address this question using a randomized online experiment conducted outside firms, in which 1, 174 adults ages 25–45 with heterogeneous educational backgrounds complete an incentivized, workplace-style business problem-solving task. The task is a general (not domain specific) exercise, and participants perform it either with or without access to a generative-AI assistant. Unlike prior work that studies heterogeneity within relatively homogeneous worker samples, our design targets the between–education-group productivity gap as the primary estimand. We find that AI increases productivity for all participants, with substantially larger gains for lower-education individuals. In the absence of AI access, higher-education participants outperform lower-education participants by 0.548 standard deviations; with AI access, this gap falls to 0.139 standard deviations, implying that generative AI closes about three quarters of the initial productivity gap. We interpret this pattern as evidence that generative AI narrows effective productivity differences in task execution by relaxing cognitive constraints that are more binding for lower-education individuals, even though underlying skill differences remain, as reflected in persistent education gaps in task performance and in a follow-up exercise without AI assistance. |
| JEL: | J24 O33 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34851 |
| By: | Mert Demirer; John J. Horton; Nicole Immorlica; Brendan Lucier; Peyman Shahidi |
| Abstract: | Production is a sequence of steps that can be executed (1) manually, (2) augmented with AI, or (3) fully automated within contiguous AI-executed steps called “chains.” Firms optimally bundle steps into tasks and then jobs, trading off specialization gains against coordination costs. We characterize the optimal assignment of humans and AI to steps and the firm’s resulting job structure, showing that comparative advantage logic can fail with AI chaining. The model implies non-linear productivity gains from AI quality improvements and admits a CES representation at the macro level. Empirical evidence supports the model’s key predictions that (1) AI-executed steps co-occur in chains, (2) dispersion of AI-exposed steps lowers AI execution at the job level, and (3) adjacency to AI-executed steps increases the likelihood that a step is AI-executed. |
| JEL: | D24 J23 J24 O33 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34859 |
| By: | Piera Bello; Vincenzo Galasso; Alessandro Izzo |
| Abstract: | This paper examines how policy uncertainty influences retirement decisions. We develop a simple model in which individuals face a one-time choice between immediate retirement and continued employment until the statutory retirement age. In the absence of policy uncertainty, retirement decisions depend solely on the standard income–leisure trade-off. When future pension reforms are uncertain, however, individuals also take into account the perceived risk of increases in the retirement age or reductions in benefit generosity, and may choose to accept the offer in order to lock in current pension rules. Using administrative data from a large Italian bank that offered a one-time early-retirement scheme in 2017, we find that acceptance rates decline with the expected income loss but rise with the number of years to retirement. These patterns are consistent with workers using early retirement as an insurance against potential policy changes, underscoring the importance of incorporating behavioural responses to policy uncertainty in the design of pension systems. Our findings suggest that individuals with an average annual income of €35, 000 are willing to pay an annual premium of €481 to insure against the probability that the pension system is reformed. |
| Keywords: | retirement, social security, loss aversion, uncertainty, pension reform |
| JEL: | D91 H55 J14 J26 J38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12488 |
| By: | Ioannis Laliotis; Christos A. Makridis |
| Abstract: | This paper documents the labour market position of artists across Europe and examines how it co-varies with public cultural spending. Using EU-LFS micro-data for 2009-2023, we compare artists to non-artists using harmonised measures of wage rank, employment, and non-standard work. Using within-country variation and controlling for demographic factors, artists rank substantially lower in the wage distribution: in the pooled sample, the estimated penalty is about 0.46 wage deciles relative to other salaried workers and about 0.28 deciles relative to other professionals. These earnings gaps coexist with higher exposure to non-standard employment, including part-time work, temporary contracts, and multiple job holding, with patterns that persist over the life cycle and appear in most countries. We then link individual outcomes to a country-year panel of real per capita public expenditure on cultural services. Higher cultural spending is associated with modest improvements in aggregate employment and lower part-time incidence, but these associations do not systematically differ for artists or arts graduates. The only consistent differential correlation is an increase in multiple job holding among arts graduates in higher-spending environments. Thus, changes in aggregate cultural spending are not sufficient on their own to narrow wage or job-quality gaps for artists, motivating a rethinking of cultural policy instruments toward mechanisms that more directly address labour market risks faced by cultural workers. |
| Keywords: | artists, cultural employment, public arts funding, creative economy, Europe, wage premium, culture |
| JEL: | Z11 J44 J31 J68 H52 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12483 |
| By: | Antonio Cabrales; Esther Hauk |
| Abstract: | Many workers value purpose and meaning in their jobs alongside income, and firms need to align these preferences with profit goals. This paper develops a dynamic model in which firms invest in ”purpose” to enhance job meaning and motivate effort. Workers, who differ in productivity, choose both productive and socialization effort, gaining utility from income and meaning. Purpose accumulates over time through firm investment and interacts with socialization to generate meaning, which boosts productivity. Firms invest in purpose only insofar as it raises profits. We characterize the unique equilibrium, including steady state and transition dynamics. Meaning and purpose rise with the importance workers place on meaning and with firm’s patience, but fall with depreciation and socialization costs. The relationship with workers’ share of output is nonmonotonic. We also show that some intermediate level of heterogeneity in skills is best for performance. Compared to a worker-owned firm, profit-maximizing firms underinvest in purpose, highlighting a misalignment between firm incentives and worker preferences. The model provides insight into when and why firms adopt purpose-driven practices and underscores the role of diversity in fostering meaning at work. |
| Keywords: | meaning at work, personnel motivation, diversity in work, investment in purpose |
| JEL: | M50 M52 L23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12381 |
| By: | Matthew A. Kraft; John P. Papay; Jessalynn K. James; Manuel Monti-Nussbaum |
| Abstract: | We examine how performance changes when teachers transfer across very different school contexts. The Talent Transfer Initiative program created a rare natural experiment to study such transfers by randomly assigning low-achieving schools the ability to offer high-performing teachers at higher-achieving schools a $20, 000 transfer stipend. Forecast tests show that these high-performing teachers’ prior value added is only moderately predictive of their effectiveness in low-achieving schools. Using a difference-in-differences framework, we estimate that incentivized-transfer teachers’ value added dropped by 0.12 student standard deviations. This decline appears to be driven by lower match quality, negative indirect school effects, and the loss of student-specific human capital. |
| JEL: | I2 I21 I24 J24 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34845 |
| By: | Marina Tverdostup (The Vienna Institute for International Economic Studies, wiiw); Dora Walter |
| Abstract: | Immigrants across Europe earn less and work in lower-quality jobs than natives, but the mechanisms underlying these disparities remain poorly understood. This paper asks whether immigrant disadvantage reflects barriers to accessing good jobs or skill deficits that persist even within similar positions. Using PIAAC Cycle 2 data (2018-2023) for eight European countries, we compare immigrants and natives working in the same occupation-industry cells and performing the same types of tasks. We find that immigrants score 35 to 40 points lower in literacy and numeracy than natives overall, with 70 to 75 percent of this gap persisting within jobs. Immigrants also perform fewer cognitively demanding tasks than natives in similar jobs. However, these task differences disappear entirely once we account for within-job skill gaps, while manual task use shows no immigrant-native differences at all. The evidence points to a skill-mediated mechanism immigrants perform fewer complex tasks because they have lower cognitive proficiency, not because employers restrict their access to such work. This finding redirects policy attention from workplace discrimination toward skill development and credential recognition as the key margins for improving immigrant labour market integration. |
| Keywords: | Immigration; cognitive skills; job tasks; skill mismatch; labour market integration; PIAAC |
| JEL: | J15 J24 J23 C81 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:wii:wpaper:271 |
| By: | Edward Freeland; Andrew Garin; Dmitri K. Koustas |
| Abstract: | We examine how workers perceive the trade-offs of freelancing using a novel survey design that explores the nature of workers' perceptions of their own jobs and the implications of work arrangements for their take-home pay. We find that, across several alternative classifications of freelance work, workers in such arrangements make less per hour than traditional employees, but report having greater control of when, where, and how they work. We find that on average, self-employed workers spend an additional 5 to 8 percentage points of gross pay covering unreimbursed expenses relative to traditional employees. However, when asked about expectations of net pay in freelance and traditional employment jobs with the same gross pay, respondents who received no quantitative information expected net pay to be higher in freelance arrangements than in employment arrangements, on average. This pattern reversed among respondents who were randomly assigned to receive customized estimates of their expected total expense and tax burdens in each arrangement, who estimated that freelance arrangements would generate lower net lower earnings than employment arrangements (consistent with the estimates we provided to them). This suggests that workers may not be fully aware of the tax and expense burdens freelance workers are responsible for. Interestingly, we find similar results both for workers who are currently employees in their main job and those who are currently self-employed, suggesting that the low salience of the tax and expense burdens associated with freelance work are not merely driven by those with no self-employment experience. |
| JEL: | H22 J33 J46 J48 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34843 |
| By: | Sonia Bhalotra; Damian Clarke; Atheendar Venkataramani |
| Abstract: | We leverage the introduction of the first antibiotic therapies in 1937 to examine the long-run effects of early childhood pneumonia on adult educational attainment, employment, income, and work-related disability. Using census data, we document large average gains on all outcomes, alongside substantial heterogeneity by race and gender. On average, Black men exhibit smaller schooling gains than white men but larger employment and earnings gains. Among Black men (and women), we identify a pronounced gradient in gains linked to systemic racial discrimination in the pre–Civil Rights era: individuals born in more discriminatory Jim Crow states realized much smaller gains than those born in less discriminatory states. There is no similar gradient among white Americans. Women of both races exhibit smaller education and earnings gains than men on average, consistent with cultural and institutional barriers to women's work. Our findings highlight the role of opportunities in shaping the extent to which investments in early-life health translate into longer run economic gains. |
| Keywords: | early childhood, medical innovation, race, human capital production, education, income, disability, systemic discrimination, institutions, infectious disease, pneumonia, antibiotics, sulfa drugs |
| JEL: | I10 I14 J71 H70 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12387 |
| By: | Arntz, Melanie; Baum, Myriam; Brüll, Eduard; Dorau, Ralf; Hartwig, Matthias; Matthes, Britta; Meyer, Sophie-Charlotte; Schlenker, Oliver; Tisch, Anita; Wischniewski, Sascha |
| Abstract: | Artificial intelligence (AI) is diffusing rapidly in the workplace, yet aggregate productivity gains remain limited. This paper examines the dual diffusion of AI - through both formal, employer-led and informal, employee-initiated adoption - as potential explanation. Using a representative survey of nearly 10, 000 employees in Germany, we document a high extensive but low intensive margin of usage: while 64 percent use AI tools, only 20 percent use them frequently. This diffusion is strongly skill-biased and depends less on establishment and regional characteristics. While formality is associated with more frequent usage, training, AI-based supervision, and higher perceived productivity gains, it does not broaden access. These patterns suggest that widespread informal usage can coexist with limited productivity effects when complementary investments and organizational integration lag behind. |
| Keywords: | artificial intelligence, AI, technology diffusion, formal and informal adoption, training, algorithmic management, productivity, inequality |
| JEL: | O33 O32 J24 J81 C83 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:336765 |
| By: | Florian Misch; Ben Park; Carlo Pizzinelli; Galen Sher |
| Abstract: | The discussion on Artificial Intelligence (AI) often centers around its impact on productivity, but macroeconomic evidence for Europe remains scarce. Using the Acemoglu (2024) approach we simulate the medium-term impact of AI adoption on total factor productivity for 31 European countries. We compile many scenarios by pooling evidence on which tasks will be automatable in the near term, using reduced-form regressions to predict AI adoption across Europe, and considering relevant regulation that restricts AI use heterogeneously across tasks, occupations and sectors. We find that the medium-term productivity gains for Europe as a whole are likely to be modest, at around 1 percent cumulatively over five years. While economically still moderate, these gains are still larger than estimates by Acemoglu (2024) for the US. They vary widely across scenarios and countries and are substantially larger in countries with higher incomes. Furthermore, we show that national and EU regulations around occupation-level requirements, AI safety, and data privacy combined could reduce Europe’s productivity gains by over 30 percent if AI exposure were 50 percent lower in tasks, occupations and sectors affected by regulation. |
| Keywords: | artificial intelligence, productivity, technology, regulation |
| JEL: | E24 J24 O30 O47 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12401 |
| By: | Zhengyi Yu |
| Abstract: | This paper studies the impact of AI on productivity and inequality by focusing on the introduction of AlphaFold2. This AI algorithm can accurately predict protein structures, which were traditionally characterized by structural biologists through experiments. To capture the impact of AI on structural biologists at scale, I implement a difference-in-differences strategy comparing them to life scientists in other fields. While structural biologists did not change their overall number of publications with the availability of AlphaFold2, they experienced a 10% increase in citations to their new projects, a 4% rise in publications in high-impact journals, and a shift from their original research trajectory. However, the emergence of AI intensifies citation polarization between highly cited and less-cited researchers. Consistent with this growing inequality, highly cited scientists are twice as likely to incorporate AlphaFold2 successfully into their research as their less-cited peers. In addition, AI affects the next generation of researchers: the average years of experience of leading authors in protein structure papers increase after the emergence of AI. |
| Keywords: | AI, technology, labor productivity, inequality |
| JEL: | J21 J24 O33 D63 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12462 |
| By: | Brahma, Dweepobotee; Sangwan, Nikita |
| Abstract: | We study whether digital platforms for high-skilled professionals level the playing field or reproduce traditional gender inequalities. Using high-frequency data on physicians, we examine gender differences in labor supply, pricing, patient engagement, and platform visibility. Although the platform equalizes supply-side margins of working hours and fees, female physicians experience lower demand, reduced search visibility, and lower reputation metrics. Investigating the underlying mechanisms, experimental evidence indicates taste-based discrimination, while text-analysis of patient reviews finds no gender differential. These findings underscore the potential role of platforms in reducing institutional constraints but not demand-side biases, with reputation metrics playing a crucial mitigation role. |
| Keywords: | gender bias, digital platforms, healthcare, high-skilled professionals |
| JEL: | J16 J24 I11 O33 L86 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:qmsrps:202602 |
| By: | Katia Gallegos Torres; Jakob Lehr |
| Abstract: | This paper studies the impact of the 2022 energy price shock on German manufacturing using newly available administrative data. We construct a Bartik-type exposure measure based on pre-shock energy use and relate it to sector-, establishment-, and region-level outcomes. While highly exposed sectors experienced sizable declines in production, we find no evidence of adverse effects on employment. Instead, we consistently document negative effects on wages. Our baseline estimates suggest that moving from the 25th to the 75th percentile of the exposure distribution at the four-digit sector level is associated with an average annual wage loss of about 2.5% over 2022–2023, corresponding to roughly €1, 250 per worker. These average effects mask substantial heterogeneity, with considerably larger wage declines for new hires. At the local labor market level, we find evidence of spillovers from manufacturing to other sectors. |
| Keywords: | Energy Crisis, Manufacturing, Labor Markets, Ex-Post Analysis |
| JEL: | Q40 Q41 O12 L60 J31 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_730 |
| By: | Thomas Dohmen; Bart Golsteyn; Hans Grönqvist; Edvin Hertegård; Gerard Pfann; Gerard A. Pfann |
| Abstract: | This study examines how parenting styles predict children’s lifetime outcomes. Using a Swedish dataset which combines rich survey information on parenting styles with administrative records tracking children over five decades, we find that authoritarian parenting is negatively associated with children’s long-term success, especially regarding their educational attainment. The results for other parenting styles are more mixed. Authoritarian parenting remains a robust predictor of adverse outcomes even when accounting for ability and family background. We identify children’s knowledge accumulation and parental educational expectations as key mechanisms explaining these results. |
| Keywords: | child rearing, human capital, skill formation |
| JEL: | I24 J13 J24 R20 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12407 |
| By: | Alexis Antoniades; Chuan He; Zheming Liang; Mingzhi Jimmy Xu |
| Abstract: | Early adoption of artificial intelligence (AI) reshaped how firms responded to market dynamics by enhancing data collection and analysis. Linking China's universe of customs shipments to millions of online job ads, we tracked AI hiring in sales, marketing, and analytics to build a firm-level proxy for non-production AI and map its exposure across products within firms. To structure our analysis, we introduce a model in which firms confront asymmetric information about heterogeneous consumer preferences and show that AI mitigates these frictions by sharpening firms' ability to learn demand patterns across markets. The model predicts — and the data confirm — that AI-intensive firms fine-tune their product mix and prices with greater precision: they are more likely to export, expand their product lines, and adjust market choices. Crucially, this refinement appears as narrower price dispersion but wider quantity dispersion across destinations — effects strongest for differentiated goods, larger firms, and sales to high-income economies. Together, the evidence shows that AI eases demand-side information frictions, allowing firms to optimize their global reach strategies. |
| Keywords: | artificial intelligence, export behavior, product differentiation |
| JEL: | F14 O14 J24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12456 |
| By: | Nicolò Barbieri (Department of Economics and Management, University of Ferrara, Ferrara, Italy); Pietro Casavecchia (Department of Mathematics and Computer Science, University of Ferrara, Ferrara, Italy; Applied Computational Logic and Artificial Intelligence (ACLAI) Lab, University of Ferrara, Ferrara, Italy); Fabio Landini (University of Parma); Giacomo Roberto Lupi (Department of Mathematics and Computer Science, University of Ferrara, Ferrara, Italy); Alberto Marzucchi (Gran Sasso Science Institute); Giovanni Pagliarini (Applied Computational Logic and Artificial Intelligence (ACLAI) Lab, University of Ferrara, Ferrara, Italy); Ugo Rizzo (Department of Economics and Management, University of Ferrara, Ferrara, Italy; Department of Mathematics and Computer Science, University of Ferrara, Ferrara, Italy); Daniele Rotolo (Department of Mechanics, Mathematics and Management, Polytechnic of Bari, Bari, Italy; SPRU – Science Policy Research Unit, University of Sussex Business School, Brighton, United Kingdom); Guido Sciavicco (Department of Mathematics and Computer Science, University of Ferrara, Ferrara, Italy; Applied Computational Logic and Artificial Intelligence (ACLAI) Lab, University of Ferrara, Ferrara, Italy) |
| Abstract: | This paper develops a novel empirical framework to measure the skill content of higher education programmes. Using natural language processing techniques, we link the official descriptions of Italian degree programmes to the ESCO taxonomy of labour-market skills, constructing a high-dimensional skill provision matrix covering more than 48, 000 programme-year observations over 2013–2022. We exploit this skill-based representation in two applications. First, we map the distribution and evolution of green skills across disciplines and territories. Second, we construct measures of programme-level uniqueness and examine their association with first-year enrolment. While abstract skill-based uniqueness is not significantly related to enrolment, a geographically weighted measure—capturing differentiation relative to proximate alternatives—is positively and robustly associated with student demand. The proposed methodology provides a scalable and flexible tool to open the “black box†of curricular content and can be readily extended to a wide range of applications, including the analysis of skill alignment, institutional adaptation, and the evolving geography of higher education provision. |
| Keywords: | Skill Provision; Higher Education; Green Skills; Programme Uniqueness |
| JEL: | I23 I25 J24 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:srt:wpaper:0626 |
| By: | Jin, Wenchao; Jin, Zhangfeng |
| Abstract: | How do institutional barriers to migration shape fertility in developing economies? We analyze the staggered removal of institutional barriers to rural-to-urban migration across 283 Chinese cities. We find that reducing these frictions led to a significant and persistent increase in fertility in sending rural communities. The average treatment effect is 0.011 newborns per household per year, representing approximately one-third of the sample mean. To interpret this result, we develop a unified household model endogenizing fertility and partial migration. The model identifies a positive income effect (higher expected lifetime earnings) that dominates the substitution effect (opportunity cost of time). Empirically, we show that the fertility response is concentrated in households with available grandparents and prior migration experience. This suggests that informal childcare provision is critical in neutralizing the time costs of migration, allowing rural households to realize the fertility gains from improved economic opportunities. These findings challenge the view that urbanization necessarily reduces fertility, highlighting instead how mobility restrictions acted to suppress fertility. |
| Keywords: | migration barriers, fertility, China |
| JEL: | R23 J13 J22 J24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1718 |
| By: | Negar Khaliliaraghi; Petter Lundborg; Johan Vikström |
| Abstract: | Gender gaps in earnings persist even among high-skilled workers, partly because men and women often perform different tasks within and across jobs. We study a rare setting in which high-skilled men and women perform the same tasks under comparable conditions, allowing us to assess gender differences in productivity and pay without confounding from task or client allocation. Using administrative data from the Swedish Public Employment Service between 2003 and 2014, we exploit a rotation scheme that quasi-randomly assigns job seekers to employment caseworkers. This ensures male and female caseworkers are matched with comparable clients. We find productivity differences are small: job seekers assigned to female and male caseworkers exit unemployment at similar rates, with no evidence of job-quality differences. Consistent with this, hourly wages—conditional on productivity—are nearly identical across genders. Despite this, female caseworkers earn about 8 percent less per year, due to differences in contracted and actual hours worked. We also find suggestive evidence that male caseworkers are more likely to be promoted than equally productive female colleagues. Overall, when tasks are standardized and performance is measured objectively, gender differences in productivity and hourly pay are minimal, while gaps in annual earnings and career progression persist. |
| Keywords: | gender gaps, productivity, wages, task allocation |
| JEL: | D84 I12 J12 J21 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12413 |
| By: | Oscar Iván Ávila-Montealegre; Anderson Grajales-Olarte; Juan J. Ospina-Tejeiro; Mario A. Ramos-Veloza |
| Abstract: | We examine the role of labor informality in shaping macroeconomic volatility in a small open economy. Using a DSGE model calibrated to Colombia, we focus on worker-level rather than firm-level informality. The model features heterogeneous households and a segmented labor market with formal and informal workers, incorporating wage rigidities and productivity differences. Our results show that higher informality amplifies the volatility of consumption and investment, which is consistent with the empirical evidence. The mechanism operates through the interaction of wage rigidities in the formal sector with lower productivity of informal workers. Quantitatively, the model accounts for a significant share of the observed link between informality and volatility. These findings highlight how labor market frictions magnify business cycle fluctuations in emerging economies. *****RESUMEN: En este trabajo, examinamos el papel de la informalidad laboral en la volatilidad macroeconómica en una economía pequeña y abierta. Para ello, utilizamos un modelo DSGE calibrado para Colombia en el que nos centramos en la informalidad a nivel de los trabajadores, en lugar de a nivel de las empresas. El modelo considera hogares heterogéneos y un mercado laboral segmentado, con trabajadores formales e informales, rigideces salariales y diferencias de productividad. Los resultados muestran que una mayor informalidad aumenta la volatilidad del consumo y la inversión, lo que concuerda con la evidencia empírica. Este efecto se produce a través de la interacción entre las rigideces salariales del sector formal y la menor productividad de los trabajadores informales. Cuantitativamente, el modelo explica una parte significativa de la relación observada entre la informalidad y la volatilidad. Estos resultados ponen de manifiesto cómo las fricciones del mercado laboral amplifican las fluctuaciones del ciclo económico en las economías emergentes. |
| Keywords: | DSGE, small open economy, informality, business cycles, economía pequeña y abierta, informalidad, ciclos de los negocios. |
| JEL: | E26 E32 J46 O17 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:bdr:borrec:1345 |
| By: | Giuseppe Di Giacomo |
| Abstract: | This paper studies the long-run effects of foreign tourism on local labor markets and economic development in advanced economies, using Italy as a case study. To isolate plausibly exogenous variation in tourist arrivals, I construct a shift-share measure that interacts changes in outbound tourism by country of origin with historical destination preferences across Italian locations. Higher exposure to tourism reduces employment and labor-force participation rates. It also induces structural transformation by expanding employment rates in hospitality and entertainment while contracting them in manufacturing and in non-tourism-related services. Average per-capita and labor income decline, whereas property income increases. Estimates in log-levels indicate that tourism raises local population, shrinks the manufacturing sector, and expands tourism-related services. Evidence on underlying mechanisms points to two main channels. First, tourism alters the composition of the local labor supply. Population growth is driven by young, low-skilled non-Italians, limiting the ability of productive, non-tourism firms to benefit from agglomeration forces. Second, rising land costs crowd out non-touristic activities. Consistent with this, nearly all net firm entry is accounted for by tourism-related establishments. Overall, results suggest that, in advanced economies, tourism may hinder long-run development by reallocating resources from more to less productive sectors. |
| Keywords: | tourism, structural transformation, local economic shocks, Dutch disease |
| JEL: | D31 E24 J21 L60 L83 O14 O18 R11 Z32 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12434 |
| By: | David Gill; Victoria Prowse; J. Lucas Reddinger |
| Abstract: | Teamwork and collaboration are increasingly important. To understand the dynamics of teamwork skill formation, we provide the first systematic analysis of dynamic investment in teamwork skill. First, adopting a dynamic game approach, we develop a novel theoretical framework where investment in team skill creates persistent benefits and externalities for teammates, but where investment is risky because the benefits depend on successful team coordination. Second, we take this framework to the laboratory to study empirically the factors that influence dynamic investment in team skill. We find underinvestment compared to the efficient benchmark. However, investment in team skill responds strongly to incentives, in line with specific patterns predicted by our theory. We also find that people’s theory of mind and propensity to coordinate predict how much they invest in team skill. We conclude that careful design of team incentives and selection of team members can facilitate the dynamic development of teamwork skills. |
| Keywords: | Teamwork, investment, skill, coordination, theory of mind, dynamic game, repeated game, basin of attraction, subgame-perfect Nash equilibrium, Stag Hunt game, experiment, machine learning |
| JEL: | C73 C92 D91 J24 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:pur:prukra:1355 |
| By: | Ronald B. Davies; Margarita Lopez-Forero; Benjamin Michallet; Johannes Scheuerer |
| Abstract: | Despite their advantages, multinational enterprises (MNEs) receive significant criticism, particularly with regard to offshoring jobs and shifting profits abroad to avoid taxation. Using administrative data for the universe of Norwegian and French firms and workers, we link these two issues by documenting a negative relation between MNE investment in a tax haven and employment in the high-tax country. In particular, exploiting the 2006 European Court of Justice (ECJ) decision on the Cadbury-Schweppes case which upheld the use of EU tax havens, we are able to establish a causal link in which tax haven use lowers domestic employment by 6%. Heterogeneity analyses reveal that the effects are mainly concentrated among high-skilled workers. We further link the employment changes to the substance requirements mandated by the ECJ's ruling and the secrecy inherent to tax havens. |
| Keywords: | tax havens, multinational firms, employment, mass layoffs, economic substance |
| JEL: | F23 H26 J21 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12464 |
| By: | Hannah Landel; David A. Love; Paul A. Smith |
| Abstract: | We create an annualized measure of comprehensive household wealth using the 1998–2022 waves of the Health and Retirement Study and examine heterogeneity in retirement resources across households, cohorts, and time. We augment traditional net worth with the actuarial present values of expected future payment streams from labor-market earnings, Social Security, defined-benefit pensions, annuities, life insurance, and government transfers. We then calculate an annualized measure of that lump sum by converting it into an actuarially fair joint life annuity that we call annualized comprehensive wealth (ACW). We find that the median ACW increases throughout retirement, indicating that the median household is spending down its total resources more slowly than its joint life expectancy is shortening. In addition, we document considerable heterogeneity in the levels and trajectories of ACW across cohorts, education groups, and race. Notably, we find that the pattern of rising ACW is largely driven by college-educated and white households. Other groups show relatively flat or declining trajectories of ACW after retirement. We further explore the heterogeneity of ACW with the help of recentered influence function regressions. We show that inequality in ACW is associated with higher household-specific rates of return, higher education, and greater concentrations of single-headed and Black and Hispanic households. |
| Keywords: | Distribution (economics); Wealth; Pensions; Social security; Retirement |
| JEL: | D14 D91 I24 J11 J14 J15 J26 |
| Date: | 2026–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:102440 |
| By: | Michael P. Cameron (University of Waikato); Courtenay Baker (University of Waikato) |
| Abstract: | This paper quantifies the demographic drivers of change in New Zealand's working-age population (ages 15-6)) across 66 territorial authorities and 21 Auckland local boards over 1998-2023. Using Stats NZ population estimates and subnational mortality data, we implement a demographic accounting decomposition in five-year intervals that separates working-age population change into cohort turnover (entries aged 15-19 minus exits aged 60-64), working-age deaths, and residual net migration. Nationally, the working-age population expanded in every period, but the dominant component shifted. Positive cohort turnover accounted for most growth through 2013, whereas residual net migration contributed over 90% of growth after 2013. Subnationally, negative cohort turnover spread from being experienced by no areas in 1998-2003, to a substantial minority of areas by 2018-2023. The number of areas with declining working-age populations fluctuated substantially from one period to the next. A four-category typology and analysis of residual migration offset ratios for areas with negative cohort turnover shows that positive migration offsets negative cohort turnover in some places but not consistently, leaving local labour-supply trajectories increasingly contingent on volatile and spatially uneven migration. |
| Keywords: | Working-age population; Cohort turnover; Migration; Population ageing; New Zealand |
| JEL: | J11 J21 J61 R12 R23 |
| Date: | 2026–02–18 |
| URL: | https://d.repec.org/n?u=RePEc:wai:econwp:26/02 |
| By: | Mark Setterfield (Department of Economics, New School for Social Research, USA) |
| Abstract: | Inspired by feminist macroeconomics, this paper shows how a Marx-Keynes-Schumpeter (MKS) macrodynamic system can be augmented by simple models of the care economy. To this end, an MKS model of steady-state growth and distribution is extended to include: first, a model of unpaid domestic care-giving within the household; and second, a model of household acquisition of marketed care services. It is shown that the care economy affects basic macroeconomic outcomes, such as labour productivity, aggregate demand formation, and the steady-state growth rate. The chief conclusion is that the care economy should be the subject of more routine attention in macroeconomic theory. |
| Keywords: | Care economy, human capacities, wage-led growth, profit-led growth, natural rate of growth |
| JEL: | B54 E11 E12 J16 J24 O33 O41 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2603 |
| By: | Schlenker, Oliver |
| Abstract: | Healthcare systems worldwide face increasing nurse shortages, but the consequences remain poorly understood. This paper studies how nurse scarcity in hospitals affects care provision and patient health. I exploit the 2011 Swiss franc stabilization, which increased the salience to cross-border commute from Germany to Switzerland and led to an outflow of nurses in German hospitals depending on their distance to the border. Using rich universal patient-, hospital-, and county-level German and Swiss administrative data in a matched difference-in-differences design, I show that border hospitals lose around 12 percent of their nursing staff. This leads to lower care intensity and a reallocation of services towards urgent cases (triage) while healthcare demand or supply outside hospitals remains unchanged. Consequently, in-hospital mortality rises by 4.4 percent - concentrated among emergency and older patients - and life expectancy decreases by 0.28 statistical life years, with no evidence of offsetting gains in Switzerland. These results highlight that nurse scarcity shapes hospital production and widens health disparities across patients and regions. |
| Keywords: | Labor scarcity, cross-border commuting, nurse shortages, hospital production, healthcare provision, triage, patient mortality |
| JEL: | F22 I11 I18 J22 J61 R23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:336756 |
| By: | Chloe Gibbs; Esra Kose; Maria Rosales-Rueda |
| Abstract: | Women’s employment remains highly sensitive to childcare constraints, making childcare availability a critical lever for supporting mothers’ labor force attachment. We study the effects of expanded full-day programming in Head Start, using the 2016 federal funding initiative that targeted grantees with low full-day enrollment. Linking administrative program data, geo-coded center locations, and household data on employment, we estimate a difference-in-differences design by comparing mothers of young children in treated and untreated areas. The policy increased full-day enrollment by 19 percent and raised single mothers’ employment (1.9%), hours (2.5%), and earnings (6.5%). Results show that extending program duration meaningfully improves maternal labor market outcomes. |
| JEL: | I28 J13 J22 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34831 |
| By: | Jana Gallus; Sandy Campbell; Uri Gneezy |
| Abstract: | Awards are widely used as incentives. This paper situates awards in the broader incentives landscape and shows how the motivational value of awards can be understood through a framework that considers three sources of value: the tangible component of an award, the social signals it emits, and its self-signaling function. We identify and discuss several major characteristics of awards through the lenses of these three dimensions: the audience, scarcity, the giver’s status, and the selection process. Based on our framework, we integrate the awards literature published across economics, psychology, management, and sociology journals to elucidate what has been learned and offer a roadmap for future experimental research on awards and incentives. |
| Keywords: | awards, incentives, self-signaling, social signaling, tangibility |
| JEL: | D01 D91 J3 M12 Z13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12393 |
| By: | Krafft, Caroline |
| Abstract: | Despite rising educational attainment, women's employment rates have declined in Egypt, falling to just 15% as of 2023. This chapter explores the determinants of declining female employment rates in Egypt. The research considers demand side factors, including potential discrimination and the changing structure of the economy, as well as supply side factors, such as gender norms, domestic responsibilities, and education mismatch. Analyses illustrate trends in women's employment and review the rich literature on drivers of women's employment in Egypt. A particular focus is how the policy environment shapes both supply and demand for women's labor. While women have become increasingly educated, restrictive gender norms and disproportionate care responsibilities limit what types of employment they can accept. Those types of jobs have become decreasingly available since structural reform curtailed public sector hiring. The private sector has not created sufficient "women-friendly" employment. Policy and programmatic interventions that try to increase women's employment will have to either create woman-friendly jobs or shift gender norms that restrict women's employment. |
| Keywords: | Employment, gender, Egypt |
| JEL: | J21 J22 J23 J16 B54 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1719 |