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on Labor Markets - Supply, Demand, and Wages |
| By: | Frederiksen, Anders (Aarhus University); Junker-Jensen, Louis (Aarhus University) |
| Abstract: | We study the part-time penalty. Using Danish register data, the Danish Labor Force Survey, and hospital personnel records, we show that the pay gap between part-time and full-time workers is sizable and increases over the career because the two groups accumulate different levels of human capital over time. Our best estimates of the part-time penalty are for nurses. The penalty is 14 percent at the beginning of the career and increases by 0.5 percent each year. This pay gap is closely related to the development of nurses' competence level, highlighting the persistent effects that part-time work has on lifetime earnings. |
| Keywords: | part-time penalty, career, gender, pay gap |
| JEL: | M5 J3 J16 J22 J24 J31 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18401 |
| By: | Grenz, Sabrina (Utrecht University); Gregory, Terry (LISER); Lehmer, Florian (IAB Nueremberg) |
| Abstract: | The rapid evolution of technology is reshaping labor markets by altering skill demands and job profiles. This paper introduces a novel skill-based measure of occupational technology intensity -- the Occupational Technology Skill Share (OTSS) -- that distinguishes between manual, digital, and frontier technologies. Using natural language processing, generative AI, and supervised machine learning, we develop an AI-powered skill classification that enriches occupation-linked skill labels with standardized GenAI-generated descriptions and structured indicators of technological content, enabling transparent classification by technology intensity. We compute OTSS for all occupations in the German labor market. For the average worker in 2023, manual technologies account for the largest share of skill content (42\%), followed by digital (38\%) and frontier technologies (20\%). Frontier technologies remain concentrated in specialized occupations, while digital technologies are widespread. Linking these measures to administrative data from 2012–2023 shows a broad shift from manual and digital toward frontier skills across occupations, and reveals a U-shaped relationship between changes in frontier skill intensity and employment growth. |
| Keywords: | artificial intelligence, digitalization, skills, employment growth |
| JEL: | J21 J24 O33 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18415 |
| By: | Deng, Haotian (Ghent University); Desiere, Sam (Ghent University); Cockx, Bart (Ghent University); Bijnens, Gert (National Bank of Belgium) |
| 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: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18414 |
| By: | Manuel A. Hidalgo-Pérez (Universidad Pablo de Olavide) |
| Abstract: | This paper models the impact of Generative AI on labor inequality by endogenizing technological complementarity (β) as a function of human capital (h) and supervision costs (σ). I introduce "Positional Capital" (W) -workers' material conditions'- as a key determinant of adaptation capacity, showing how precarity generates transition traps. The framework accounts for the "expert paradox", cognitive decapitalization through AI dependency, and the micro-macro productivity disconnect. Calibrated simulations indicate that the wage inequality ratio rises from 1.33x to 2.12x within a decade under current technological trajectories. |
| Keywords: | Generative AI, Technological Complementarity, Inequality, Positional Capital, Cognitive Decapitalization. |
| JEL: | J24 J31 O33 J62 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pab:wpaper:26.01 |
| By: | Giménez-Nadal, José Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Velilla, Jorge (University of Zaragoza) |
| Abstract: | Worker productivity depends not only on hours worked, but also on how work time is actually used, and time-use evidence shows that non-work at work is non-trivial. This paper provides a data-driven characterization of shirking, and studies which observable characteristics best predict shirking behavior using American Time Use Survey data over 2003–2024. We implement a machine-learning forward selection procedure based on out-of-sample predictive performance. Our results suggest that shirking strongly depends on stochastic or unobserved factors, and that the determinants of the extensive and intensive margins are different. Moreover, the most informative predictors are predominantly job-related and time-allocation variables, whereas macro and labor-market indicators seem less relevant. This suggests that policies or managerial approaches to improve worker efficiency relying on observables face important limitations. |
| Keywords: | shirking, non-work at work, ATUS data, prediction |
| JEL: | J22 C53 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18432 |
| By: | John R. Grigsby; Nathan Zorzi |
| Abstract: | Sectoral shifts require costly labor reallocation for workers, fueling concerns about how quickly they occur. We study how the pace of such sectoral shifts affects workers at risk of displacement. We develop a life-cycle model with skill heterogeneity and job ladders where labor demand gradually rises in one sector and declines in another. The model reveals three novel insights. First, workers’ lifetime earnings are strongly non-linear and even nonmonotonic in the horizon over which the transition unfolds. Second, more and more workers benefit on the extensive margin as the transition accelerates, but the tail of losses becomes thicker on the intensive margin. Third, labor market frictions are important to quantify these non-linearities. We apply our model to the climate transition and find substantial earnings losses from a transition ending in 2060. Completing the transition ten years earlier reduces average losses, but raises losses in the tail by a fifth. |
| JEL: | E0 E20 E24 E60 E64 J20 J23 J24 J3 J62 Q52 Q58 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34922 |
| By: | El Haj, Morien (Ghent University); Moens, Eline (Ghent University); Verhofstadt, Elsy (Ghent University); Van Ootegem, Luc (Ghent University); Baert, Stijn (Ghent University) |
| Abstract: | In tight labour markets, where employers compete not only on wages but also on amenities such as job family friendliness, employer-provided childcare arrangements serve as a powerful tool to attract and retain working parents. Yet little causal evidence exists on how employees evaluate such benefits. Therefore, this study uses a scenario experiment among working parents of young children to examine how job attractiveness is shaped by variations in employer-provided childcare arrangements – in terms of location, opening hours, and price – along with the possibility of teleworking. Our results show that all forms of employer-provided childcare increase job attractiveness, with childcare facilities operating on schedules explicitly aligned with employees’ working hours having the strongest effects. Working parents are willing to forego a 20% wage increase in a new job to obtain this latter amenity. They expect such amenity to improve their job satisfaction, performance, stress management, and work–family balance. Our results imply that the policy offers mutual gains for both employees and employers. |
| Keywords: | childcare, telework, job attractiveness, willingness to pay, factorial survey experiment |
| JEL: | C91 J13 J16 J24 J81 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18430 |
| By: | Petri Böckerman; Mika Haapanen; Christopher Jepsen; Hannu Karhunen |
| Abstract: | We estimate the effect of receiving a higher grade on an academic high school exit exam on labor-market outcomes in adulthood. Identification is based on comparing students on different sides of grade cutoffs. Using nationwide Finnish register data, we find that better grades lead to higher income, although the effects are heterogeneous across the grade distribution. The largest and most precise income gains are concentrated among students in the middle of the grade scale. In contrast, we find little evidence of an income increase for those who barely passed, and the estimates for men with the highest grade are large but imprecise. |
| Keywords: | high school exit exam, regression discontinuity, earnings, income |
| JEL: | I21 I26 J24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12532 |
| By: | Erik Brynjolfsson; J. Frank Li; Javier Miranda; Robert Seamans; Andrew J. Wang |
| Abstract: | This paper studies how minimum wage policy affects firms’ adoption of automation technologies. Using both state-level measures of robot exposure and novel plant-level data on industrial robot imports linked to U.S. Census microdata from 1992–2021, we show that increases in minimum wages raise the likelihood of robot adoption in manufacturing. Our preferred identification exploits discontinuities at state borders, comparing otherwise similar firms exposed to different wage floors. Across specifications, a 10 percent increase in the minimum wage increases robot adoption by roughly 8 percent relative to the mean. |
| JEL: | J38 O33 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34895 |
| By: | Ursula Berresheim |
| Abstract: | The rise of work-from-home (WfH) has become a durable feature of 21st-century labor markets, raising a key question for gender equality: Is WfH a stepping stone or a stumbling block for women’s careers? While WfH could help women reconcile professional and family responsibilities, it may also slow career advancement through productivity losses and lead to stronger specialization in domestic work. To study the short- and long-run macroeconomic implications of an expansion in WfH opportunities, I develop a quantitative general-equilibrium, overlapping-generations model calibrated to pre-COVID U.S. data. Couples jointly choose their time allocation between market and domestic work, WfH adoption, and occupation. The model predicts that expanding WfH opportunities strengthens mothers’ careers in the long-run: women’s earnings growth between ages 25 and 40 increases by 7.2 percentage points, and the gender earnings gap narrows by 7.4 percent. Women benefit both from their own and their spouses’ WfH adoption as well as through re-sorting into higher-paying occupations. However, some women experience career losses when working in occupations where WfH entails high productivity penalties. At the aggregate level, welfare rises by 11.1 percent and output by 0.5 percent. Important for the current policy debate, I find short-run losses in women’s earnings from WfH adoption, as occupational choices are fixed and the expansion of WfH is large and unexpected. |
| Keywords: | Work from Home, Gender Inequality, Occupational Sorting, Human Capital, General Equilibrium, Life-Cycle Model, Time allocation, Productivity Penalties |
| JEL: | J16 J22 J24 J31 D13 O33 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_733 |
| By: | Aydemir, Abdurrahman (Sabanci University); Girisken, Ahmet (Stockholm School of Economics) |
| Abstract: | This paper studies the causal impact of language skills on human capital accumulation, labor market outcomes, and job characteristics of childhood immigrants across European countries. Using PIAAC data, we adopt an instrumental variable strategy based on the critical age hypothesis and linguistic distance. Our IV results show that higher language proficiency boosts human capital accumulation through formal schooling and actual labor market experience, resulting in improved labor market outcomes in terms of earnings and hours of work. Language proficiency also affects job tasks, increasing employment of reading and abstract tasks while decreasing physical work, and reduces education-job mismatch. These results indicate that language proficiency plays a significant role in enhancing productivity of immigrants in the European context. |
| Keywords: | immigration, language proficiency, labor market, job tasks, PIAAC |
| JEL: | F22 J15 J24 J31 J32 J61 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18421 |
| By: | Lorenzo Cappellari (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Marco Morelli |
| Abstract: | This paper estimates the causal effects of the Bologna Process reform in Italy, analyzing the impact of the introduction of the “3+2” degree structure at different stages of the educational system. We implement multiple Difference-in-Differences designs on a nationally representative dataset composed of more than 140, 000 high school graduates and 220, 000 university graduates. We find that the reform increased graduations from the academic-oriented high school track by +5.50 p.p., revealing a “backward spillover effect” on high school completion. For university-related outcomes, we estimate a positive effect on enrollments (+5.53 p.p.) and in-time graduations (+7.22 p.p.) and a negative effect on dropout (–2.70 p.p.). The effects are always larger for students coming from the most disadvantaged parental backgrounds, particularly when combined with high ability. These findings suggest that the Bologna Process was effective in reducing barriers to educational investment, especially for talented students with financial constraints, thus challenging the narrative of the reform attracting low ability students. Finally, descriptive labor-market analyses show a convergence of performances for graduates with different parental backgrounds, but only among Bachelor’s graduates. |
| Keywords: | Earning ability, AKM model, ageing. |
| JEL: | J31 J21 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ctc:serie1:def149 |
| By: | Christa Deneault; Evan Riehl; Jian Zou |
| Abstract: | We use Texas administrative data to assess the long-standing claim that teacher certification exams discriminate against underrepresented minority (URM) candidates. In a regression discontinuity design, we find that failing a certification exam delays entry into teaching and costs the average candidate $10, 000 in forgone earnings. These costs fall disproportionately on URM candidates both because they are more likely to fail and because their earnings losses from failing are 50 percent larger on average. To examine whether these disparities are justified by racial/ethnic differences in teaching quality, we develop a new measure of disparate impact and estimate it using a policy change that increased the difficulty of Texas’ elementary certification exam. The harder exam reduced the URM share of new teachers but had no significant benefits for teaching quality or student achievement. Taken together, our findings show that certification exams have a disparate impact in the sense that they impose much larger economic costs on URM teaching candidates than on white candidates with similar potential teaching quality. |
| Keywords: | Occupational licensing; teacher labor markets; occupational choice |
| Date: | 2026–02–10 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:102853 |
| By: | Naudé, Wim (RWTH Aachen University) |
| Abstract: | This paper provides an explanation of the theory of innovation and economic growth, in light of the 2025 Bank of Sweden Prize in Memory of Alfred Nobel, awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt. Their scholarship is critically evaluated, and the useful, less useful, and most problematic aspects highlighted. The verdict is that it is largely a collection of anthropocentric stories of innovation and growth. It avoids spelling out why sustained growth is desirable, it reduces innovation’s ultimate goal to the pursuit of economic growth, it is based on a deep seated notion of human exceptionalism, and it promotes directed technical change - based on the assumption that all resources are fungible and can be substituted - as a way to sustain economic growth without causing environmental destruction. Their analysis of growth is useful for highlighting the importance of scientific knowledge, for showing that creative destruction can be more destructive than creative, and that economic growth will only be sustained under very special conditions. However, the failure to address energy remains a glaring gap. For economics to become more useful, it would require becoming an Earth Systems Science based on biocentric holism. |
| Keywords: | innovation, economic growth, technology, sustainability, energy |
| JEL: | O31 O33 J11 J24 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18408 |
| By: | Guillen Sanchez, Jorge; Molina, Jose Alberto; Gimenez-Nadal, Jose Ignacio |
| Abstract: | Recent economic literature suggests that increases in the minimum wage can lead to parents spending more time in childcare through easing financial constraints such as the income effect. However, most evidence from past research does not analyse the disruptions of the COVID 19 pandemic. This research examines the impact of state-level minimum wage increases on parental childcare time in the United States during the mentioned period of 2019 to 2023. Through the use of microdata from the American Time Use Survey (ATUS), we analyse a sample of 4043 working age parents and find that, contrary to findings from the 2003 to 2019 period, there is no statistical-ly significant effect on childcare time across aggregate or subgroup specifications, including mothers, fathers and low education parents among others. This null result diverges from pre-2019 literature. We attribute this lack of significance to the unique structural rigidities of the post-pandemic labor market (2019–2023) and the erosion of real wages due to high inflation, which likely neutralized the behavioral incentives typically associated with wage floors. |
| Keywords: | Minimum Wage Time Allocation Childcare Labor Supply ATUS (American Time Use Survey) |
| JEL: | D1 D13 |
| Date: | 2026–01–19 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127777 |
| By: | Tuda, Dora (Economic and Social Research Institute); Doorley, Karina (Economic and Social Research Institute, Dublin); Sandorova, Simona (Maastricht University) |
| Abstract: | We examine the labour market, welfare receipt and health effects of a reform to the Irish State Pension system which increased the age at which some workers could claim a State Pension. We use longitudinal data on ageing in Ireland and a causal identification strategy based on the random date of birth threshold around which workers with adequate contributions are differently affected by the reform. We find that the reform does not increase the employment probability of those affected. However, we find an increased probability of disability payment receipt for those affected by the reform (+12-13 pp). This effect is robust to extensive sensitivity analysis, multiple hypothesis testing and alternative identification methods. We also find an increase in the probability of receiving unemployment benefit. We find little evidence of worsening mental health outcomes and no effect on subjective or objective physical health outcomes for those affected by the reform. |
| Keywords: | pension age, labour supply, welfare, health |
| JEL: | I10 J14 J18 J26 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18411 |
| By: | Atabay, Zeynep (Uppsala University and UCLS); Åslund, Olof (Uppsala University, IFAU, RF Berlin) |
| Abstract: | We examine the wage returns to host-country work experience among immigrants by reconstructing full employment histories using Swedish pension records and longitudinal matched employer–employee data. Our findings show that: (i) returns to experience are sizable and concave, consistent with standard models, and vary by gender, education, and region of origin; (ii) returns for immigrant workers have risen since the early 2000s; (iii) returns differ across industries and occupations, with experience in high-skill and high-wage workplaces being especially valuable; (iv) returns are generally greater for natives than for immigrants; and (v) potential experience serves as a reasonable proxy at lower experience levels but tends to overstate returns for more experienced workers. |
| Keywords: | experience; wages; immigrants |
| JEL: | J31 J61 |
| Date: | 2026–03–09 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ifauwp:2026_006 |
| By: | José Alves; João Jalles; Lucas Menescal |
| Abstract: | This paper examines how expansions of the public-sector wage bill and employment affect government performance when political incentives and institutional constraints shape bureaucratic behaviour. Using data for 41 emerging and developing economies over 1997-2019, we construct annual measures of public-sector efficiency based on frontier methods and analyses how different sources of payroll growth translate into subsequent efficiency. To distinguish politically discretionary payroll expansions from externally induced adjustments, we decompose wage-bill changes into a component driven by natural disasters and a residual component reflecting policy-driven variation. This distinction contrasts emergency-driven administrative responses with payroll growth more likely to reflect patronage, weak accountability, or soft budget constraints. We find that discretionary increases in the wage bill are systematically followed by declines in public-sector efficiency, whereas disaster-driven payroll changes have small and transitory effects. These effects are conditioned by fiscal decentralization and institutional quality: stronger governance and subnational accountability mitigate efficiency losses. The results contribute to the public choice literature on bureaucratic incentives and the political economy of government size. |
| Keywords: | Government Efficiency; Public Sector Employment; Fiscal Decentralization; Government Wages; Panel Data Analysis; Local Projections; Nonlinear Effects. |
| JEL: | C23 H11 H72 H77 E62 J45 O43 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp04082026 |
| By: | Benjamin W. Cowan; Joe M. Spearing |
| Abstract: | The large increase in remote work since 2020 has prompted concerns about adverse effects on population loneliness and mental health. We show that any such adverse effects were small, in a UK context. We use data from UKHLS and differences-in-differences estimators that flexibly control for a rich set of covariates to compare changes in key variables amongst two groups: those who worked in teleworkable occupations in 2019, and those who worked in non-teleworkable occupations in 2019. While the former experience large and persistent increases in their probability of working remotely compared to the latter, any relative changes in self-reported loneliness or adverse mental health symptoms are transitory and disappear by the year 2023. |
| JEL: | I12 I18 J22 J32 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34914 |
| By: | Maré, David (Motu Economic and Public Policy Research Trust); Alimi, Omoniyi (University of Waikato and World Bank) |
| Abstract: | We estimate intergenerational earnings persistence for 6 ethnic groups using linked administrative data for approximately 288, 000 individuals in New Zealand born between 1986 and 1992. Linking data from administrative datasets, censuses, and surveys, we focus on 198, 000 parent-child pairs actively participating in the labour market. Our preferred IV rankrank slope which adjusts for earnings measurement error is 0.27, suggesting that children inherit roughly one-quarter of parental earnings advantage or disadvantage. We analyse relative and absolute persistence, variations by ethnicity and gender, and explore the role of observable characteristics. Finally, we discuss underlying factors influencing persistence, including the potential role of discrimination and racism in labour markets and broader society. |
| Keywords: | intergenerational earnings persistence, ethnicity, Aotearoa New Zealand |
| JEL: | J62 J70 J15 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18422 |
| By: | Aftab, Fari (University of Reading); Della Giusta, Marina (University of Turin); Jewell, Sarah (University of Reading); Rawlings, Samantha (University of Reading) |
| Abstract: | Decisions about whether and for how long to breastfeed are shaped by mothers’ ability to combine care with paid work under institutional and workplace constraints. While breastfeeding provides welldocumented benefits for mothers and children, continuation after return to work may be difficult. We develop a formal economic model of breastfeeding and work decisions, accounting for physical, social and workplace constraints and document the role of mother’s return to work in determining breastfeeding behaviour using data from the UK Household longitudinal study (UKHLS). We employ an event study methodology to study breastfeeding behaviour around the time a mother returns to work. Accounting for differential timing of return to work by child age, we find that return to work leads to a 9.6 percentage point reduction in the probability of continuing to breastfeed. Such effects are partly driven by mothers whose jobs do not allow flexible working or working from home, and those who face longer commuting times. We also document industry differences with the strongest effects in retail, education and health, which we show are driven more by workplace constraints than workplace attitudes. We discuss implications for workplace policies. |
| Keywords: | breastfeeding, work, identity |
| JEL: | J13 J22 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18427 |
| By: | Karl Bergemann (Department of Economics, Stellenbosch University); Gabriel Brown (Department of Economics, Stellenbosch University); Johan Fourie (Department of Economics, Stellenbosch University) |
| Abstract: | Recent scholarship on slave escapes has increasingly emphasised economic motivation, but few studies have empirically investigated how market incentives influenced the decision-making of enslaved individuals during transitions from coerced to wage labour. This paper fills that gap by exploring whether runaway slaves at the British Cape Colony were driven by the desire to improve their labour market opportunities as slavery gave way to emancipation. To answer this question, we construct a novel dataset of 689 runaway advertisements published between 1830 and 1838, drawn from two major colonial newspapers, and link these records to individual-level valuations compiled at the time of de jure emancipation in December 1834. Using both difference-in-differences and regression discontinuity in time analyses, we find that escapes increased markedly among higher-valued, more productive enslaved individuals immediately after de jure emancipation, rising by over 100 per cent relative to the pre-emancipation average. These escape attempts gradually declined, however, as de facto emancipation approached in 1838. Our results suggest that enslaved individuals responded rationally to shifts in labour market conditions, challenging the conventional view of escape as solely a reaction to harsh treatment. By quantifying the relationship between institutional change and labour coercion, this paper contributes directly to theoretical debates on how market incentives shape behaviour under conditions of economic unfreedom. |
| Keywords: | Slavery, desertion, labour market, runaway, Cape Colony, emancipation |
| JEL: | J47 N37 D74 J15 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:sza:wpaper:wpapers393 |
| By: | Raffaele Fiorentino; Simona Mandile |
| Abstract: | This paper examines the unintended consequences of policies perceived as inequitable by leveraging Italy’s Quota 100 pension reform, which denied early retirement to workers with identical contribution histories who did not meet an age cutoff. Using SHARE data and a difference-in-differences design, we first establish that excluded workers experienced no change in unemployment or disability status, while their relative probability of being retired fell mechanically. We then document a significant deterioration in their mental health, with effects emerging immediately upon the reform’s introduction and persisting for at least two years. These effects are concentrated among workers who satisfy the contribution requirement but are denied eligibility solely on the basis of age, implicating perceived unfairness as a primary channel. Using European Social Survey data and a regression discontinuity design, we find that the reform led to a reduction in trust in institutions among age-ineligible workers. Finally, electoral data show that the League, the reform’s principal architect, suffered vote share losses in municipalities with higher concentrations of excluded workers, with penaltiesexceeding any gains accrued in areas with more beneficiaries. |
| Keywords: | pension reform, mental health, perceived unfairness, institutional trust, electoral accountability |
| JEL: | J26 I10 D3 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12518 |
| By: | Neha Bairoliya (University of Southern California); Ray Miller (Colorado State University); Zhixiu Yu (Louisiana State University) |
| Abstract: | Unpaid parental caregiving often arrives when older workers make largely irreversible Social Security benefit claiming decisions. Using the Health and Retirement Study linked to Social Security administrative records, we examine how parental caregiving is related to claiming and labor supply. In married households, caregiving is associated with specialization: when one spouse provides care, the caregiver is 12 percentage points more likely to claim by age 64 and 11 percentage points less likely to work full time, while the non-caregiving spouse is about 10 percentage points less likely to claim early and 10 percentage points more likely to delay retirement. These patterns are robust to rich controls, individual fixed effects, subjective survival beliefs, and an instrumental-variables strategy using the presence of living parents and in-laws. Administrative benefit-type data further show that sole married caregivers are about 10 percentage points more likely to claim spousal benefits consistent with intra-household insurance through Social Security’s spousal provisions. We find no comparable effects of caregiving among non-married individuals. The results suggest that spousal benefits may buffer the retirement-income costs of family caregiving, and that reducing them could weaken this insurance channel. |
| Keywords: | informal care, retirement, Marriage, insurance |
| JEL: | I14 J12 J14 J26 H55 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:hka:wpaper:2026-003 |
| By: | Cevat Giray Aksoy; Jose Maria Barrero; Nicholas Bloom; Katelyn Cranney; Steven J. Davis; Mathias Dolls; Pablo Zarate |
| Abstract: | We investigate how fertility relates to work from home (WFH) in the post-pandemic era, drawing on original data from our Global Survey of Working Arrangements and U.S. Survey of Working Arrangements and Attitudes. Realized fertility from 2023 to 2025 and future planned fertility are higher among adults who WFH at least one day a week and, for couples, higher yet when both partners do so. Estimated lifetime fertility is greater by 0.32 children per woman when both partners WFH one or more days per week as compared to the case where neither does. The implications for national fertility rates differ across countries due mainly to large differences in WFH rates. In a complementary analysis using other U.S. data before and after the pandemic, one-year fertility rates rise with WFH opportunities in one’s own occupation and, for couples, in the partner’s occupation. |
| Keywords: | remote work, fertility and fertility intentions, global survey, working arrangements |
| JEL: | J13 J22 D13 C83 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12533 |
| By: | Eric Crettaz; Lukas Schlittler; Rudolf Farys; Oliver Hümbelin; Olivier Lehmann |
| Abstract: | This article examines the evolution of working poverty in Switzerland during the Covid-19 pandemic using detailed administrative register data, linked with survey data collected from over 200, 000 people. Switzerland represents a distinctive case, as containment measures were comparatively short and less restrictive, while extensive policy support—most notably short-time work schemes with an 80 per cent replacement rate—helped stabilise labour incomes. Consistent with this institutional context, results show that working poverty did not increase during the pandemic; rather, all three indicators used in this study point to a modest decline in 2020. This pattern mirrors earlier findings from the Great Recession, suggesting that when downturns are neither deep nor prolonged, absolute and relative poverty indicators tend to converge. The analysis further highlights heterogeneous effects across worker groups. Solo self-employed workers and domestic workers recorded no rise in working poverty, reflecting the protective role of targeted business support measures, although undeclared domestic workers remain outside the scope of the data. Essential workers experienced declining poverty risks in 2020 but a rebound in 2021 despite improving macroeconomic conditions, pointing to possible delayed effects of heightened work strain and health risks. By contrast, workers with high teleworkability were largely shielded from working poverty. The findings underline the importance of crisis-specific income stabilisation policies and raise broader questions about extending social protection to solo self-employed workers in future downturns. |
| Keywords: | Working poverty, Covid-19, social protection |
| JEL: | I32 J38 J21 H55 |
| Date: | 2026–03–04 |
| URL: | https://d.repec.org/n?u=RePEc:bss:wpaper:59 |
| By: | Yaming Cao; Björn Fischer-Weckemann; Johannes Geyer; Nicolas Ziebarth |
| Abstract: | In 2001, Germany abolished public occupational disability insurance (ODI)—the second tier of its public DI system—for cohorts born after 1960. Using administrative data, we first document that, in the long run, overall DI inflows declined by roughly one-third. Second, using representative survey data, we document at best modest ODI insurance take-up responses in the private individual, risk-rated market, which lacks guaranteed issue. Third, an equilibrium model incorporating interactions between the public safety net, the first-tier public DI, and the private market reveals that coverage denials and weak insurance demand, driven by complementary social insurance, can explain the modest private ODI take-up response. Coverage gradients by income and health are thus substantial. Finally, counterfactual simulations highlight the limited scope of incremental reforms. |
| Keywords: | Occupational disability insurance, individual private DI, coverage denials, risk rating, private information, adverse selection, social safety net |
| JEL: | D14 D82 H53 H55 I14 I18 J14 J26 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2157 |
| By: | Jongkwan Lee; Seoyoung Kwon; Joan Monràs |
| Abstract: | High-skilled migration programs exist around the world in the hope that immigrants complement native workers, allow firms to grow, and boost innovation. We study the effect of one such program by exploiting the 2016 extension of the Optional Practical Training (OPT) program, which significantly prolonged the work authorization period for international STEM graduates. Using a synthetic difference-in-differences approach, we find that the policy successfully increased the local supply of high-skilled immigrants in exposed Commuting Zones. This local inflow stimulated firm creation and the demand for native high-skilled workers. The program might have also boosted innovation in certain sectors and startup investment, especially in Commuting Zones hosting top-ranked universities, where, overall, the effects tend to be larger. |
| Keywords: | firm dynamics, high-skilled migration, immigration, Labor demand |
| JEL: | F22 J31 J61 R11 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1564 |
| By: | Maurizio Strazzeri; Oliver Hümbelin; Olivier Lehmann |
| Abstract: | The COVID-19 pandemic triggered an unprecedented economic shock, raising concerns that the pandemic may reinforce existing labor market inequalities. Theories on social stratification suggest that such disruptions can amplify structural disadvantages faced by migrant groups. Using linked administrative data from social security and population registry records for 2016–2022, we construct a balanced panel of more than two million prime-age workers with stable prepandemic labor market attachment. We estimate difference-in-differences event-study models to examine how labor earnings of native and foreign workers evolved before and after the onset of the pandemic across the labor earnings distribution. In the lower part of the labor earnings distribution, the labor earnings gap between natives and non-EU/EFTA workers at the onset of the pandemic did not differ from pre-pandemic years. However, this gap widened thereafter, indicating that the pandemic exacerbated disadvantages for this group. Moreover, analyses using linked survey data suggest that differential sorting into occupations or sectors does not fully account for these results. Overall, our findings indicate that large economic shocks can reproduce or intensify existing labor market inequalities. |
| Keywords: | COVID-19 Pandemic, Inequality, Cumulative Disadvantage, Migration |
| JEL: | J61 J31 J15 |
| Date: | 2026–03–04 |
| URL: | https://d.repec.org/n?u=RePEc:bss:wpaper:54 |
| By: | Portes, Jonathan (King's College London) |
| Abstract: | Immigration was central both to the 2016 Brexit referendum campaign and to the political narratives that followed it. Yet the trajectory of migration to the UK since the referendum bears little resemblance to the expectations—or promises—articulated at the time. This paper provides an overview and interpretation of developments since 2016, focusing on three interrelated themes. First, it describes trends in migration flows and stocks, highlighting the sharp fall in EU migration, the compensating increase in non-EU migration, and the role of both policy and economic developments in driving these trends. Second, it examines the economic and labour market impacts of these changes over 2016–25. Third, it analyses the post-Brexit policy framework and, in particular, the Labour government’s approach since 2024. The paper concludes by reflecting on the implications for future UK migration policy and for the wider political economy of Brexit. |
| Keywords: | Brexit, immigration, employment, UK |
| JEL: | F22 J22 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18419 |
| By: | Ursula Berresheim; David Koll |
| Abstract: | In the United States, 35–40% of all marriages end in divorce. Yet, we provide survey evidence that, on average, married respondents expect a divorce likelihood of 15%, with most respondents significantly underestimating their predicted divorce risk. Our survey reveals that individuals with more overoptimistic divorce expectations exhibit higher within-couple inequality in market hours and earnings and accumulate significantly less wealth than their rational counterparts. Building on this evidence, we incorporate overoptimistic divorce expectations into a household life-cycle model with endogenous accumulation of human capital, assets, and ex-ante heterogeneity in spouses’ wages. Couples jointly choose their market hours, home production, and joint savings. We quantify the model using U.S. microdata and show that overoptimism leads to (1) higher within-couple specialization and (2) lower savings, as overoptimistic lower-wage spouses fail to internalize the insurance value of human capital and assets in the event of divorce. Overoptimism during marriage persists beyond divorce through lower assets and human capital upon divorce, with particularly adverse consequences for the lower-wage spouse. The model thus provides a novel explanation for the high poverty rates observed among divorced mothers. Finally, we show that joint taxation of married couples amplifies specialization among overoptimistic couples. |
| Keywords: | Intra-household decisions, Divorce, Subjective Expectations, Human Capital, Savings, Gender Equality, Taxation |
| JEL: | D10 D84 E24 J12 J18 J22 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_734 |
| By: | Mdhlalose, Dickson; Appiah Amo, Francis; Agyeibea Amo, Wendy |
| Abstract: | There is a dearth of cultural studies on how individualism and collectivism affect employee engagement. With an emphasis on individualistic and collectivistic cultures as moderating factors in a public sector organization, this study attempts to analyze the effect of employee financial rewards on employee engagement. Standardized in-person, open-ended interviews were used in this study. To address the goals of this study, the research instrument consists of five open-ended questions centered on a single subject. The continual comparative data analysis approach was applied in conjunction with content analysis. The data was categorized by the researchers according to differences and similarities. According to this study, the municipality provides financial incentives to its workers; yet, because of political interference, inequity, injustice, and favoritism, workers are not compensated properly, which causes dissatisfaction and disengagement from the company and their jobs. Neither an individualistic nor a collectivistic culture is practiced by the municipality. Financial incentives have less of an effect on employee engagement when individualistic and collectivistic cultures are out of balance. The results of this study highlight how an organization's practices and the balance between individualistic and collectivistic cultures determine how well financial rewards affect employee engagement. |
| Keywords: | Employee Engagement, Financial Rewards, Individualism-Collectivism, Perceived Fairness, Public Sector |
| JEL: | M14 M52 M54 H83 J28 Z13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:337869 |
| By: | André Kurmann; Étienne Lalé; Julien Martin |
| Abstract: | This article provides the first systematic assessment of the labor market effects of a 25% decline in travel by Canadians to the United States in 2025. We combine mobile phone data measuring the presence of Canadian visitors at the zip code × industry level with real-time employment data at the establishment level. Using a difference-in-differences approach, we estimate that establishments in the most exposed markets experienced employment declines of about 6%, implying a loss of between 13, 900 and 42, 100 jobs in the United States. These effects are spatially concentrated and should be interpreted as lower bounds, as our analysis is limited to small and medium-sized enterprises and does not account for spillover effects. Cet article fournit la première évaluation systématique des effets sur le marché du travail de la diminution de 25 % des voyages de Canadiens vers les États-Unis en 2025. Nous combinons des données de téléphonie mobile mesurant la présence de visiteurs canadiens au niveau code postal × industrie avec des données d’emploi en temps réel au niveau des établissements. À l’aide d’une approche en différences-en-différences, nous estimons que les établissements situés dans les marchés les plus exposés ont connu des baisses d’emploi d’environ 6 %, ce qui implique une perte comprise entre 13 900 et 42 100 emplois aux États-Unis. Ces effets sont concentrés spatialement et doivent être interprétés comme des bornes inférieures puisque notre analyse se limite aux petites et moyennes entreprises et fait abstraction des effets de débordement. |
| Keywords: | Tourism, Smartphone Data, Employment, Business Dynamics, Tourisme, dynamique des entreprises, Smartphone Data, Emploi |
| JEL: | F14 J21 |
| Date: | 2026–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:cir:cirwor:2026s-01 |