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on Labor Markets - Supply, Demand, and Wages |
| By: | MA, Xinxin; HAN, Jiachen; LI, Shi |
| Abstract: | This study uses national survey data from the Chinese Household Income Project from 2002, 2013, and 2023 and constructs an indicator of non-routine task intensity to examine the influence of task-based factors on the gender wage gap (GWG) in China. We employ decomposition methods to explore the two channels through which tasks influence the GWG. The results indicate that the wage premium for non-routine tasks is higher for women than for men, and several robustness checks support this conclusion. The gender differences in the non-routine task wage premium differ by age and education groups, and across the wage distribution. The decomposition results suggest that gender disparities in wage premiums for non-routine tasks (price effect) helped to narrow the GWG in the three sample periods, while their effects decreased from 2002 to 2023. The gender differences in the allocation of non-routine tasks (endowment effect) widened the GWG in 2002 and 2023 and narrowed it in 2013. Additionally, both the endowment and price effects on GWG differ across the wage distribution in each period. |
| Keywords: | non-routine task, gender wage gap (GWG), wage premium, China |
| JEL: | J31 J71 J24 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:hit:hituec:779 |
| By: | Leanne Cass (UK Health Security Agency); Federico Fabio Frattini (Fondazione Eni Enrico Mattei); Aurélien Saussay (London School of Economics and OFCE Sciences-Po); Misato Sato (London School of Economics); Francesco Vona (University of Milan and Fondazione Eni Enrico Mattei) |
| Abstract: | There is growing evidence that green jobs have higher skill requirements, but whether they offer sufficient wage incentives to encourage workers to acquire those skills remains unclear. We study the green wage premium and its drivers to isolate the average return to green tasks using online job vacancy (OJV) data for EU countries over the period 2018-2023. We develop a transparent LLM-based approach to classify job vacancies as green when they list at least one green task. Green jobs pay a premium of 5.5% relative to comparable postings within the same occupation, and this estimate is little changed when controlling for nonmonetary job attributes making these jobs more attractive. Roughly half of this premium is explained by firm fixed effects, consistent with an important role for firm rents. An Oaxaca-Blinder decomposition shows that the higher skill complexity explains a further one tenth of the premium, leaving a residual return to green tasks of around 2%. The green wage premium is higher outside the manufacturing sector, and for low-carbon roles. |
| Keywords: | Green wage premium, Skill gaps, Green tasks, LLM |
| JEL: | J24 J6 F64 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2026.17 |
| By: | André Diegmann; Steffen Müller; Benjamin Schoefer |
| Abstract: | We revisit the employer size wage effect (ESWE)—arguably the most basic and influential departure from the law of one price for labor. Our main result is that this canonical fact disappears completely across establishments within the same firm, even though they operate in different local labor markets. We uncover and dissect this fact by including a firm fixed effect in otherwise standard cross-sectional regressions of wages on establishment size. We implement this demanding specification in population-wide triple-linked firm-establishment-employee data in Germany. This result is new in the ESWE literature (for which our paper also provides the first systematic meta-analysis). This wage-size decoupling is hard to square with the view that employment is determined along a finitely elastic employer-specific labor supply curve—i.e., employers pay exactly the minimum needed for the quantity of labor, but no more—the foundation of the monopsony view. By contrast, large multi-establishment firms (MEF) appear to hire off their labor supply curves (or those curves are very elastic), pay wage premia above the monopsonistic minimum, and leave excess labor supply. We find some evidence for a reemergence of the ESWE within low-premium MEFs. Overall, at least for the 25% of German employment in large firms for which the ESWE disappears, wage setting and employment determination may be better accounted for by alternative models, namely accommodating above-market-clearing wage premia and rationing of labor supply, such as efficiency wage theories. |
| JEL: | E2 E20 J2 J3 M50 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35265 |
| By: | Adermon, Adrian (IFAU - Institute for Evaluation of Labour Market and Education Policy); Ek, Simon (IFAU - Institute for Evaluation of Labour Market and Education Policy); Graetz, Georg (University of Edinburgh); Yakymovych, Yaroslav (Institute for Housing and Urban Research (IBF), Uppsala University) |
| Abstract: | We jointly estimate growth in occupational wage premia as well as time-varying occupation-specific life-cycle profiles for Swedish workers 1996–2013. Our novel identification strategy is based on re-centering of life-cycle profiles around their flat spot. We document a substantial increase in between-occupation wage inequality due to differential growth in premia, and show that changes in worker composition partly counteracted this trend. The association of wage premium growth and employment growth is positive, suggesting that premium growth is predominantly driven by demand-side factors. We also find that wage growth due to occupation-specific skill acquisition was more dispersed in the early years of the sample period. Our results are robust to varying the assumed flat spot over a reasonable range, as well as to allowing for occupation-level changes in returns to cognitive and psycho-social skills. The results suggest that Swedish wage setting institutions have not prevented wages and quantities from adjusting to technological change or consumer demand shifts. |
| Keywords: | Wage Growth; Inequality; Occupational Mobility |
| JEL: | C23 J24 J31 J62 |
| Date: | 2026–06–05 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ifauwp:2026_012 |
| By: | Whelan, Adele (Economic and Social Research Institute, Dublin); Brosnan, Luke (Economic and Social Research Institute, Dublin); McGuinness, Seamus (Economic and Social Research Institute, Dublin) |
| Abstract: | We analyse the gender gap in digital skills use at work across Europe. We find a substantial gap, with women significantly less likely to perform advanced digital tasks. A raw gender gap of around 16 percentage points is observed, of which only 30 per cent is attributable to observable factors. Oaxaca-Blinder decompositions using unconditional decile regressions reveal that the gap is most pronounced at the upper end of the digital intensity distribution, where women are substantially underrepresented. The explained component of the gender digital skills gap increases with digital task intensity, suggesting that access to highly digital jobs is shaped by gendered educational and occupational sorting. However, persistent unexplained gaps from intermediate levels indicate potential structural, cultural, or other organisational barriers at play. Furthermore, we find that younger women already face larger gaps in advanced digital skill use than older workers, suggesting that it is not a legacy issue. |
| Keywords: | digitalisation, digital skills gap, gender inequality, labour markets, technological change, task-based analysis, decomposition analysis, inclusive growth |
| JEL: | J16 J24 O33 I25 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18675 |
| By: | Ji, Zihao; Zhang, Hongru |
| Abstract: | When do labor-market shocks become lasting health inequality? We develop and estimate a continuous-time lifecycle model of wealth, health, and skill in which medical care combines smooth maintenance with threshold-crossing repair. Adverse wage shocks push financially fragile households toward subsistence, increase toxic labor effort, delay repair, and convert temporary earnings losses into persistent biological damage. Estimated with PSID, MEPS, and RAND HRS data, the model shows that skill-biased technical change generates concentrated lower-tail losses in health, survival, and welfare. A meaningful share of this damage reflects endogenous repair failure, and the mechanism remains visible in a parsimonious general-equilibrium environment. |
| Keywords: | Life-Cycle Model, Continuous Time, Health Capital, Lifetime Inequality, Deaths of Despair, Overwork, Skill-Biased Technical Change |
| JEL: | E21 I14 I24 J22 J24 |
| Date: | 2026–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128530 |
| By: | Teresa Backhaus; Mattis Beckmannshagen |
| Abstract: | Labour market inequality over the life cycle reflects differences not only in wages, but also in employment stability, and career progression. While a large liter ature documents that personality traits predict wages and other labour market out comes, little is known about how they shape accumulated earnings over the working life. This paper studies the relationship between personality traits, risk preferences, locus of control, and accumulated labour earnings up to age 45. We combine German administrative social-security records with long-running survey data, allowing us to link complete employment and earnings biographies to established measures of personality. We show that personality traits are strongly associated with long-run earnings, but through different mechanisms. Conscientiousness and an internal locus of con trol are positively related to accumulated earnings, whereas agreeableness, neuroticism, and, particularly for women, extraversion are negatively associated with earnings accumulation. Decomposing accumulated earnings into wage and employ ment components reveals substantial heterogeneity in the channels through which personality shapes long-run outcomes. The results highlight that the role of person ality for economic success cannot be fully understood from cross-sectional wage measures alone. |
| Keywords: | life cycle, earnings, personality traits, Big Five, employment trajectories |
| JEL: | D91 J31 J60 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_752 |
| By: | Pu, Zhizhong (Harvard Business School); Abel, Martin (Bowdoin College); Carpenter, Jeffrey (Middlebury College) |
| Abstract: | We study how grading policies shape employers' interpretations of labor market signals embedded in academic credentials. In our experiment, hiring managers observe letter grades assigned to math tests taken by job candidates and make wage offers to match their beliefs about each candidate's underlying ability. We exogenously vary the coarseness of the grading scheme while holding candidate performance constant. As predicted, coarser grading leads managers to place less weight on grade signals and more on prior beliefs, reducing match efficiency. Departing from predictions, managers extract systematically higher signals from inflated grades, behaving as if candidates with As represent a positively selected pool. Furthermore, managers place greater decision weight on inflated As than on compressed Bs, creating a compounding wage advantage for candidates even though grade inflation is common knowledge. Considering the broader implications of our results, the shift toward prior-based evaluation under coarser grading falls disproportionately on female candidates, contributing to a wider gender wage gap among managers with gendered priors. |
| Keywords: | grade inflation, signaling, hiring experiment, gender wage gap, statistical discrimination |
| JEL: | J31 J71 D83 C91 I24 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18654 |
| By: | André Diegmann (IWH, IAB, ZEW, CESifo); Steffen Müller (IWH, OvGU, CESifo, IZA); Benjamin Schoefer (UC Berkeley; Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | We revisit the employer size wage effect (ESWE)—arguably the most basic and influential departure from the law of one price for labor. Our main result is that this canonical fact disappears completely across establishments within the same firm, even though they operate in different local labor markets. We uncover and dissect this fact by including a firm fixed effect in otherwise standard cross-sectional regressions of wages on establishment size. We implement this demanding specification in population-wide triple-linked firm-establishment-employee data in Germany. This result is new in the ESWE literature (for which our paper also provides the first systematic meta-analysis). This wage-size decoupling is hard to square with the view that employment is determined along a finitely elastic employer-specific labor supply curve—i.e., employers pay exactly the minimum needed for the quantity of labor, but no more—the foundation of the monopsony view. By contrast, large multi-establishment firms (MEF) appear to hire off their labor supply curves (or those curves are very elastic), pay wage premia above the monopsonistic minimum, and leave excess labor supply. We find some evidence for a reemergence of the ESWE within low-premium MEFs. Overall, at least for the 25% of German employment in large firms for which the ESWE disappears, wage setting and employment determination may be better accounted for by alternative models, namely accommodating above-market-clearing wage premia and rationing of labor supply, such as efficiency wage theories. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:mag:wpaper:26013 |
| By: | Yi Chen; Chao Fu; Hongbin Li; Teng Li; Siyan Tang |
| Abstract: | Extensive discussion centers around the question of whether affirmative action (AA) in higher education “works, ” despite AA being in practice a continuous policy instrument. We study the dose effects of AA on its intended beneficiaries by exploiting the ethnic minority bonus-point policy in China's centralized college admissions system, where targeted students receive explicit point advantages. Exploring cohort-level fluctuations in exam score distributions that generate plausibly exogenous variation in the effective dose of AA, we show that higher AA doses increase recipients' admissions to colleges and elite colleges, but lower their academic rankings, shift them toward lower-earning majors, and reduce their satisfaction with college life. From data linking college entrance exam (CEE) records to comprehensive card transaction records 10–23 years after CEE, we find that low AA doses increase long-term consumption by 19% but high doses reduce it by 25%. Such non-monotonic dose responses exist across expenditure categories, including child-related expenditure, suggesting potential impacts on future generations. Heterogeneity analysis reveals that while the positive effects of low AA doses persist across student groups, students from stronger academic backgrounds are more resilient to the negative effects of high AA doses. Overall, our results suggest that careful calibration of AA policies is crucial for achieving their intended goals. |
| JEL: | H75 I2 I3 J24 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35281 |
| By: | Opeyemi Afolabi Femi-Oladunni (Universidad Carlos III de Madrid; Universidad Europea de Madrid; Universidad Pontificia Comillas) |
| Abstract: | This article reconceptualises literacy as a household resource rather than an individual endowment, using linked census and fiscal microdata from rural Spain (1906–1920) to estimate its returns for illiterate co-residents and test whether the economic boom induced literacy adoption. Findings revealed that co-residing with a literate household member raised illiterate individuals' income by 1.2 percent in the pooled sample and 2.1 percent during the Vineyard Boom, with women gaining up to 4 percent compared with 2 percent for men. Wealth effects were absent or negative, and illiterate members' income and wealth shares fell by 3 and 6–9 percentage points respectively, revealing that literate members captured a disproportionate share of the gains. Farm households, where spillover returns were highest, increased literacy adoption by 12.7 percentage points by 1920 in response to the boom. The household emerges as the arena in which literacy's benefits are both generated and contested. |
| Keywords: | Literacy spillovers, Rural Spain, Human capital, Rural Households |
| JEL: | N33 J24 D13 I24 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0304 |
| By: | Nieuwenhuis, Aukje; Postepska, Agnieszka; Alessie, Rob |
| Abstract: | The Netherlands has the highest rate of female part-time employment among OECD countries, yet it remains unclear whether this patterns reflects limited opportunities to work full-time or a preference for part-time work. The first explanation refers to labor market restrictions, such as job-specific hour constraints and employer preferences, while the second points to individual labor supply preferences. This study examines these competing explanations for the persistent gender gap in working hours. We exploit a Dutch policy reform that granted employees the right to adjust their hours freely. A two-way fixed effects analysis using administrative data finds no change in working hours following the reform, suggesting either that hour constraints persist or that women were already working their preferred hours. To further investigate restrictions, we analyze survey data on working-hour mismatches (gaps between preferred and actual hours) and subsequent hour adjustments. Women seeking to work more adjust their hours toward preferred levels more successfully when changing jobs than when staying in the same job, indicating that within-job constraints limit opportunities to increase hours. In contrast, we find no evidence of enduring constraints for women who prefer to work fewer hours, reflecting the widespread availability of part-time contracts. These findings highlight structural barriers for underemployed women and challenge the assumption that part-time work is purely a matter of choice. |
| Keywords: | Part-time employment, Female labor supply, Preferences, Labor market frictions, Policy evaluation |
| JEL: | J16 J22 J28 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1770 |
| By: | Ilse Lindenlaub; Ryungha Oh; Maria Alejandra Rodriguez; Laura Veldkamp |
| Abstract: | We document and explain the gap between measures of AI exposure and measures of AI adoption in the workplace. This leads us to propose a new AI adoption index based on comparative advantage. Using the representative German DiWaBe employee survey linked to worker and establishment information, we compare worker-reported AI use to prominent exposure measures and find that the relationship is weak. Motivated by this gap, we develop a framework in which adoption depends not only on technical feasibility (i.e., AI’s absolute advantage measured by exposure) but on profitability (i.e., AI’s comparative (dis)advantage relative to a specific worker), balancing AI productivity against AI user costs and worker productivity against wages. We operationalize this framework at the task level by (i) estimating worker productivity relative to pay, (ii) mapping exposure indices into AI productivity, and (iii) inferring task-specific AI user costs from revealed-preference adoption. The resulting occupation-level index accounts for almost 60% of cross-occupation variation in observed AI adoption, compared to 14% for an exposure-only model. The two approaches diverge substantially for approximately 30% of workers, highlighting that comparative advantage—not exposure alone—is crucial for assessing AI’s labor-market impact. |
| JEL: | E0 J2 J3 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35271 |
| By: | Lambert, Peter John (University of Warwick); Schindler, Yannick (Ellison Institute of Technology, Oxford) |
| Abstract: | Is generative AI replacing junior workers? A growing literature answers yes, citing large declines in early-career hiring concentrated in GenAI-exposed occupations. We argue that this verdict is premature because GenAI exposure is strongly correlated with another post pandemic shock, working from home(WFH). Using two data sources spanning 243 million new hires and 407 million online job postings, collected across the US, UK, Canada, and Australia during 2017-2025, we estimate difference-in-difference designs at the occupation, region, and firm level. When estimated separately, a two-standard-deviation increase in GenAI and WFH exposure each predicts, by 2025, a fall of around 5pp in the junior-share of new hires and around 3pp in the share of job ads requiring limited experience. Estimated jointly, the WFH effect remains, while the GenAI coefficient attenuates sharply and is often statistically indistinguishable from zero. Alternative exposure measures, residualization designs, flexible non-parametric co-treatment controls, and replacing exposure-measures with actual WFH adoption as the treatment all support our finding that WFH is a robust predictor of the decline in early-career hiring. |
| Keywords: | Remote Work, Generative AI, Junior Hiring, Technology Exposure, Omitted Variable Bias JEL Classification: J23, J24, J31, O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:808 |
| By: | Bastien Chab´e-Ferret; Zainab Iftikhar; JungJae Park |
| Abstract: | This paper quantifies the contributions of social norms and economic incentives to the 350-hour annual gap in maternal labor supply between East and West Germany. Using a collective model of family formation and labor supply estimated on GSOEP data from 2000–2017, we find that the working-mother stigma accounts for 73 percent of the gap. Economic factors partially offset the norm: higher Western wages raise the opportunity cost of staying home, so equalizing wages in West to the levels in East would nearly double the gap. We show that standard policy reforms may actually widen the regional disparity, and that their effectiveness is conditional on the norm being present once removed, the same policies have negligible effects. |
| Keywords: | social norms, economic incentives, marriage, cohabitation, working mothers |
| JEL: | J01 J08 J12 J13 J22 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_753 |
| By: | Kambayashi, Ryo (Musashi University); Kato, Takao (Colgate University) |
| Abstract: | This paper revisits long-term employment practices in Japan and provides new evidence on their evolution over 1982–2022, extending prior work to cover the most recent decades marked by the global Great Recession and the COVID-19 pandemic (postwar Japan's two largest recessions). Contrary to the widespread view that Japan’s long-term employment system has eroded since the 1990s, we find that the estimated 10-year job retention rates have remained remarkably stable over the past four decades. In particular, prime-age workers with at least five years of tenure (core employees) continue to exhibit consistently high retention rates even during postwar Japan's two largest recessions. Although job stability among young entry-level workers has declined significantly, cohort analysis shows that this early-career instability does not persist. Most workers eventually transition into long-term employment as they age. We also find no evidence of a decline in the overall share of core employees, although younger male cohorts exhibit temporary delays in accumulating long tenure. Overall, our findings point to the resilience of Japan’s long-term employment system and suggest that policy discussions should be grounded in its continued relevance. |
| Keywords: | long-term employment, job retention rates, Japanese labor market, employment stability, cohort analysis, Employment Status Survey (ESS) |
| JEL: | J21 J23 J63 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18665 |
| By: | Atz, Ulrich (Bocconi University); Eliason, Blake (University of Utah); Lipsitz, Michael (University of Pennsylvania); Norlander, Peter (Loyola University Chicago); Pinto, Sérgio (OECD); Steinbaum, Marshall (University of Utah) |
| Abstract: | We measure how the contractual balance of power between franchisors and franchisees has shifted over 2009-2024 by analyzing a large corpus of Franchise Disclosure Documents and surveying over 300 franchisees. Coding more than 20 provisions across 4, 500 chains, we find that franchisee autonomy declined systematically: exclusive territories fell from a majority of chains to around 20\%, while restrictions on pricing, sourcing, product offerings, and post-term competition each rose to near-universal prevalence. Franchisees appear not to have been compensated for this loss of autonomy: franchise fees rose with franchisor control, chain growth did not increase, and complaint rates to the Federal Trade Commission did not decline. We additionally find that chains that adopt franchisor-favoring provisions became 2-5 percentage points more likely to be acquired by private equity within five years. We interpret this finding as one plausible explanation for reductions in franchisee autonomy. |
| Keywords: | vertical restraints, franchising, text analysis, survey |
| JEL: | J42 K21 L42 J31 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18660 |
| By: | Vsevolod Iakovlev |
| Abstract: | This paper analyses the distinction between educational and skill types of labour mismatch and their association with earnings. Drawing on cross-sectional data for 26 countries from the 1st Cycle of the OECD (2012) Survey of Adult Skills (PIAAC), I examine educational and skill mismatch using a comprehensive set of education- and skill-based indicators, explore heterogeneity across worker characteristics, and investigate the sources of conflicting country-level correlations with earnings through an error components model. The results show that country-level unobserved heterogeneity induces endogeneity bias, with both its direction and magnitude varying across mismatch measures. Once unobserved heterogeneity is controlled for, over-education and over-skilling are associated with wage penalties, whereas under-education and under-skilling are linked to wage premiums. These findings highlight both conceptual and empirical distinctions between educational and skill mismatch and demonstrate the importance of indicator choice in the analysis. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.13506 |
| By: | Riccarda Rosenball (Department of Economics, University of Graz); Tobias Eibinger (Department of Economics, University of Graz); Joern Kleinert (Department of Economics, University of Graz); Ismir Mulalic (Department of Economics, Copenhagen Business School) |
| Abstract: | This paper studies the role of occupational segregation in shaping gender differences in firm sorting and wages. We show theoretically and in simulations that standard AKM models that omit occupations misattribute part of occupation-specific wage premia to worker and firm effects, thereby inflating the gender pay gap. Using Danish register data, we find that accounting for occupations reduces the estimated contribution of firm sorting by up to 30%. Occupational segregation itself is of comparable importance to firm sorting in explaining the gender gap. Our findings suggest that gender differences in firm sorting are closely linked to occupational and industry segregation. |
| Keywords: | wages, gender wage inequality, occupational segregation, AKM |
| JEL: | J16 J70 J81 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:grz:wpaper:2026-11 |
| By: | Johannes Kochems (University of Cologne); Jakob Schmidhäuser (ZEW Mannheim) |
| Abstract: | This paper analyzes the local economic impacts of troop deployments. We exploit variation from the historic large-scale US troop withdrawal from Germany triggered by the end of the Cold War, to estimate the effect on local labor markets and public finances. We use administrative data provided by the US Department of Defense to quantify the size of the troop withdrawal at the municipal level. Using a synthetic difference-in-differences estimator, we find negative effects on local labor markets: for each withdrawn US soldier, the number of local jobs decreases by 0.53. The decrease in economic activity results in a reduction of revenues which municipalities balance by lowering their expenditures, while increasing business and property tax multipliers. In individual-level analyses, we document that workers displaced by the closure of a US military base have persistently lower employment rates. Moreover, their daily wages remain around 9.2 percent lower fifteen years after the layoff. The negative impact on labor outcomes is particularly pronounced for women, older workers, and those employed in regions with more unfavorable initial labor market conditions. |
| Keywords: | Military base closure, local labor markets, worker displacement, fiscal multipliers, spatial spillovers, public finance |
| JEL: | J21 J23 J63 H56 H71 H72 R11 R51 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:413 |
| By: | Fatima, Freeha (World Bank); Ozen, Efsan (World Bank); Raju, Dhushyanth (World Bank) |
| Abstract: | We examine whether eligibility for a large-scale humanitarian cash transfer program affects employment outcomes among displaced populations. Exploiting deterministic demographic thresholds governing eligibility for the Emergency Social Safety Net (ESSN) in Türkiye, a nationwide unconditional cash transfer program established primarily to support Syrian refugees, we implement a local-randomization regression discontinuity design to estimate causal effects at the program’s administrative eligibility frontier. We find no statistically significant discontinuities in employment probabilities for either women or men across multiple employment outcomes, including overall employment, wage employment, full-time employment, and nonfarm employment. Estimated effects are small, economically modest, and stable across specifications. Overall, the findings provide little evidence that sustained unconditional cash transfers under the ESSN generated economically meaningful labor supply disincentives at the eligibility margin. |
| Keywords: | unconditional cash transfers, refugees, labor supply, social assistance, regression discontinuity, rule-based eligibility |
| JEL: | C21 F22 H53 I38 J22 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18670 |
| By: | Mert Demirer; Leon Musolff; Liyuan Yang |
| Abstract: | How do the productivity effects of AI evolve across successive generations of tools, and to what extent do task-level gains ultimately translate into final output? We study these questions in the context of software development, using data on more than 100, 000 GitHub developers combined with their AI usage telemetry. In a matched event study design, we find that autocomplete, interactive coding agents, and autonomous coding agents each significantly increase coding activity (“commits”), with respective cumulative effects of 40%, 140%, and 180%. These gains, however, attenuate sharply across the production hierarchy: the 180% cumulative effect falls to 50% for the number of projects, and to 30% for actual releases. This pattern is consistent with the weak-link hypothesis: the strong productivity gains from AI are attenuated by human bottlenecks in the production chain, with an estimated elasticity of substitution of 0.25 between AI and human effort, which indicates strong complementarities. We further confirm these results across four major app marketplaces, finding a moderate increase in the number of new apps but no increase in total usage. Large task-level AI productivity gains have therefore translated only partially into shipped and used software thus far. |
| JEL: | D24 L86 O33 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35275 |
| By: | Fakih, Ali (Lebanese American University); Kassab, Sara (Concordia University) |
| Abstract: | This paper examines the gender pay gap among youth aged 15–29 in Egypt, Jordan, and Palestine using the 2021 Labor Force Surveys. The analysis identifies the main determinants of wages for young men and women and estimates the extent of gender-based wage disparities. The Oaxaca-Blinder decomposition is used to distinguish the share of the wage gap explained by observable characteristics from the unexplained component, often associated with discrimination. Melly’s quantile decomposition is applied from the 10th to the 90th percentile. The findings show that youth wages are positively associated with higher education and professional experience. A significant gender pay gap favoring young men is found in Egypt and Palestine, with Egypt showing the largest disparity. In Jordan, the average gap is small and statistically insignificant, with young women slightly out-earning young men. However, the decomposition results reveal a significant positive unexplained component across all three countries, suggesting persistent disparities after accounting for observable factors. The quantile analysis further shows a “sticky floor†effect in Egypt and a “glass ceiling†effect in Palestine. |
| Keywords: | gender pay gap, youth employment, Oaxaca-Blinder decomposition, wage quantile analysis |
| JEL: | J16 J31 J71 C21 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18649 |
| By: | Eunsik Chang; María Padilla-Romo; Cecilia Peluffo |
| Abstract: | This paper estimates the effects of early academic rank in elementary school on later cognitive and noncognitive outcomes in the context of Mexico. We use linked administrative records to compare students with similar third-grade achievement but different ordinal positions. These rank differences arise from idiosyncratic variation in the achievement distributions of elementary-school cohorts. We find that a higher third-grade rank increases performance on a high-stakes high school admission exam. Both broader school-cohort rank and classroom rank contribute to this achievement gain when estimated jointly. Higher rank leads to more selective high school choices and improves self-reported measures of self-perception, academic aspirations, classroom responsibility, learning strategies, and teamwork attitudes by the end of ninth grade. We also provide evidence that higher elementary school rank improves students' high school placement outcomes. |
| JEL: | I21 I25 J24 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35267 |
| By: | Michaël Sicsic |
| Abstract: | This paper analyses the impact of introducing progressivity into the Hungarian personal income tax (PIT) system on tax revenues, growth and inequality. This reform would strengthen labour market participation by reducing the labour tax wedge for low-income earners and improve the responsiveness of tax revenues to economic growth. Using a framework combining static effects and behavioural responses along both the extensive margin (employment effects) and the intensive margin (substitution and income effects), and accounting for tax buoyancy, the analysis shows that the reform becomes revenue-enhancing once these dynamic effects are considered. Aligning capital income taxation more closely with labour taxation further strengthens tax revenues. The comprehensive reform would raise the tax-to-GDP ratio by 0.4–0.8pp by 2040, depending on the specific reform scenario and assumed parameters. By stimulating employment among low- and middle-income workers and despite moderate disincentives for higher-income earners, the reform would boost potential GDP in all scenarios. The reform would also significantly reduce income inequality and strengthen redistribution. |
| Keywords: | elasticity of taxable income, Hungary, income inequality, labour supply elasticity, personal income tax, tax buoyancy, tax progressivity, tax reform |
| JEL: | H21 H24 H31 J22 D31 |
| Date: | 2026–06–19 |
| URL: | https://d.repec.org/n?u=RePEc:oec:ecoaaa:1868-en |
| By: | Manasi Deshpande; Maxwell Kellogg; Magne Mogstad; Kuan-Ju Tseng |
| Abstract: | After substantial growth in the 1990s and 2000s, enrollment in the U.S. Social Security Disability Insurance (SSDI) program has been declining since 2013. We use detailed administrative data to quantify the contributions of various factors to trends in SSDI enrollment, focusing especially on the decline in the 2010s. A statistical decomposition suggests that the vast majority of the decline in SSDI enrollment since 2013 is attributable to declines in application rates—and, to a lesser extent, award rates—within demographic groups. There is very little contribution from changes over time in demographic characteristics, eligibility, or exit from SSDI. The decline in SSDI enrollment rates is disproportionately driven by low-to-middle-skilled men who, over time, have become less likely to apply for SSDI and more likely to work. Consistent with this descriptive evidence, we present results from a causal analysis suggesting that improved labor market opportunity for less-skilled men is a key explanation for the decline in SSDI enrollment. We also investigate several other popular hypotheses for the decline in SSDI applications, including lower award rates at the appeals level, and find evidence at odds with them. |
| JEL: | I30 J14 J2 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35300 |
| By: | Nieuwenhuis, Aukje; Postepska, Agnieszka; Alessie, Rob; Voloshyna, Anastasiia |
| Abstract: | The Russian invasion of Ukraine on 24 February 2022 triggered one of the largest refugee movements in Europe since World War II, with millions of Ukrainians seeking safety abroad. Czechia, Germany, and Poland emerged as primary destinations. Activation of the EU's Temporary Protection Directive granted Ukrainian refugees immediate access to host-country labor markets, creating substantial labor supply shocks. This study examines the impact of the inflow of Ukrainian refugees into the workforce in these three countries using quarterly individual-level microdata from the European Union Labor Force Survey (EU-LFS) between 2017 and 2023. Leveraging regional variation in exposure to Ukrainian employees, we estimate the effects of refugee employment on local employment, unemployment, inactivity, and working hours. We find no population-wide displacement effects, consistent with prior evidence for Czechia. However, subgroup analyses reveal heterogeneous impacts across countries. In Czechia, low-educated men benefited from increased labor demand, whereas in Poland, low-educated men experienced adverse effects. In Germany, secondary-educated men faced greater competitive pressure, reflected in an acceleration of early retirement. These differences likely stem from cross-country variation in refugee skill composition and bureaucratic barriers to labor market entry. Our findings highlight how institutional context shapes refugee integration and mediates the effects of large labor supply shocks on vulnerable segments of the local workforce. |
| Keywords: | Ukrainian refugees, Immigrants, Local labor market, Labor supply |
| JEL: | F22 J15 J21 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1769 |
| By: | Brosch, Hanna (Technical University of Munich); Grewenig, Elisabeth (KfW); Lergetporer, Philipp (Technical University of Munich); Werner, Katharina (Pforzheim University); Zeidler, Helen (Technical University of Munich) |
| Abstract: | Gender norms about parental labor supply are central to explaining persistent gender inequalities in the labor market, yet their causal determinants remain poorly understood. We examine whether people’s gender attitudes are driven by mothers’ and fathers’ earnings, which may shape views about the efficient allocation of paid work and care. In a large-scale representative vignette experiment in Germany (N > 10, 000), we randomly vary pre-childbirth earnings and measure whether respondents recommend that the mother (father) stay home with the child while the father (mother) works full-time. Without specifying earnings, 90% recommend that the mother stay home. This share remains high when we specify that the mother earns less (93%). When she earns more, the share drops sharply to 47%, yet nearly half of respondents still recommend that the mother stay home. This asymmetric response rejects a purely income-based explanation of gender norms. Thus, economic circumstances shape gender attitudes, but deeply rooted norms persist even when they conflict with financial incentives. |
| Keywords: | gender norms, labor supply, gender, survey experiment |
| JEL: | C90 D13 J16 J22 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18661 |
| By: | Delgado-Cubillo, Pablo; Moral-Arce, Ignacio; Martín-Román, Ángel Luis |
| Abstract: | In the context of the growing share of public workers in the Spanish labour force, this paper analyses opportunistic behaviour in sick leave duration and return-to-work probabilities among teachers. We use administrative microdata (2011-2019), transformed into an original monthly spell-level panel. The analysis employs a tailored regression within a difference-in-differences framework exploiting the academic calendar and comparing professional sick leaves among pre-university teachers in public and private schools. Results show that the timing of sick leave endings systematically responds to the school calendar. Public-school teachers display longer sick leave durations and lower return-to-work probabilities than private-school teachers, consistent with ex post moral hazard under more generous employment protection and sick leave coverage. Around the summer break, these differences become more pronounced: public-school teachers extend their leaves further relative to private-school teachers. Simultaneously, the usual gap in return-to-work probabilities temporarily reverses, with public-school teachers becoming more likely to end their leave immediately after summer. These patterns are especially strong among mid-career workers, women, and cases involving more subjective or difficult-to-diagnose injuries. |
| Keywords: | Sickness insurance, Workplace accidents, Absenteeism, Impact evaluation, Moral hazard, Opportunistic behaviour |
| JEL: | K32 I18 J28 I13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1773 |
| By: | Lara, Jaime; Suárez Martínez, Juan Francisco |
| Abstract: | This study analyzed how the international migration of household heads affects the labor supply of household members who remain in their communities of origin. We used data from the National Survey of Occupation and Employment in Mexico, covering the first quarter of 2021 through the last quarter of 2024. We estimated the impact by observing whether the household experienced a migration event involving the household head or their partner in the four quarters following the first interview and by using an empirical strategy that leverages the structure of this short-term panel. The results indicate that a migration event increases hours worked, especially in the first quarters after the event. Moreover, migration has heterogeneous effects depending on the gender of migrants and household members who remain, age group, and household position. A migration event tends to increase the household's labor supply, particularly for men across all age groups. The exception is when the migrant is the man's spouse; in that case, his labor supply decreases. Meanwhile, the increase in women's labor force participation is concentrated among migrant partners. The results indicate a short-term increase, likely due to liquidity constraints that require an increase in labor supply to compensate for lost income. Regarding female migration, such an increase may also require a decrease in the partner's labor supply to replace work within the home. |
| Keywords: | Labor supply, child labor, Mexico. |
| JEL: | F22 J22 O15 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128952 |
| By: | Britto, Diogo (Bocconi University); De Holanda, Caio (University of California, Berkeley); Ferman, Bruno (Sao Paulo School of Economics, FGV); Fonseca, Alexandre (Federal Revenue of Brazil); Sampaio, Breno (Universidade Federal de Pernambuco); Warwar, Lucas (Stanford University) |
| Abstract: | Does parenthood impair workers’ on-the-job productivity? We study this question and its implications for understanding the child penalties in employment observed for mothers. We focus on judges, a profession that helps overcome key empirical challenges: output can be measured precisely, it can be observed for all workers before and after childbirth because virtually no parent leaves the profession, and workloads are evenly distributed, limiting scope for selective task allocation. Using a difference-in-differences design, we find no evidence that mothers’ -- and fathers’ -- output declines during pregnancy or after they return from parental leave, and we can rule out moderate declines. We validate this result using a broad set of measures capturing both the quantity and quality of judicial work, and we document similar patterns for self-employed labor lawyers. Our findings show that motherhood need not reduce on-the-job productivity and suggest that, at least in some contexts, child penalties in employment may not be driven by lasting declines in on-the-job productivity. |
| Keywords: | child penalty, productivity, gender gap |
| JEL: | J16 J24 J31 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18658 |
| By: | Merino Troncoso, Carlos |
| Abstract: | This paper analyzes the structural challenges facing Panama in escaping the middleincome trap (MIT). Despite recording average real GDP growth above 4.7% per annum over the past decade, Panama exhibits unambiguous MIT symptoms: a productive structure concentrated in technologically unsophisticated services, a labor informality rate of 48.2% (2024), persistently high income inequality with a Gini coefficient above 0.50—the second highest in Latin America (CEPAL, 2025)— chronically insufficient investment in research and development, and deteriorating fiscal sustainability with public debt reaching 61.6% of GDP in 2024. We develop a multidimensional analytical model integrating four theoretical frameworks: (i) the MIT concept of Gill and Kharas (2007) and Kharas and Kohli (2011); (ii) the overlapping-generations model of Ag´enor and Canuto (2015), which formalizes multiple steady-state equilibria driven by talent misallocation and infrastructure quality; (iii) the growth diagnostics methodology of Hausmann et al. (2008); and (iv) the economic complexity framework of Hidalgo and Hausmann (2009). We argue that Panama’s “decade of gold” (2004–2014)—during which the country led Latin American growth—was driven by an extensive accumulation boom (Canal expansion, Metro construction, real estate) that generated high output but failed to build the technological capabilities required for sustained convergence. Since 2015, the structural exhaustion of this model has produced a persistent deceleration that COVID-19 recovery has not reversed. We derive a policy agenda centered on advanced infrastructure investment, human capital transformation, innovation financing, and fiscal consolidation. |
| Keywords: | middle-income trap, Panama, growth diagnostics, economic complexity, total factor productivity, Ag´enor–Canuto model, labor informality, productive transformation. |
| JEL: | H54 J24 O11 O14 O40 O54 |
| Date: | 2026–05–02 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128984 |
| By: | Erik Bengtsson (Lund University); Jakob Molinder (Uppsala University); Svante Prado (University of Gothenburg) |
| Abstract: | We study the relationship between the structural transformation of the economy and the income distribution, focusing on the case of Sweden from 1870 to 1970, with extra attention paid to the 1870–1950 period, for which we produce extensive new data. Average income increased fivefold between 1870 and 1950, and the share employed in agriculture declined from 72 to 23 per cent. To study the evolution of the income distribution, we collected new data, including 232, 000 individual income tax returns, 13, 000 property tax returns, and a rich set of complementary sources. Using these micro data, we calculate Gini coefficients, top income shares, capital shares, skill premia, and occupation- and gender-specific income levels and ratios, providing new evidence on the long-run evolution of income and inequality. Our income data and decomposition analyses demonstrate that the movement out of agriculture, which was a severely unequal sector in Sweden in the late nineteenth and early twentieth centuries, accounts for much of the decline in income inequality, together with the expansion of more productive jobs in manufacturing and offices. This process was aided by the migration of labour out of agriculture, as well as by educational and other policies that facilitated structural transformation. Focusing on structural transformation can help explain two paradoxes in the literature on twentieth century income inequality: that much equalisation occurred before the growth of the welfare state, and that non-belligerents in the World Wars, like Sweden, saw similar levels of equalisation as belligerent countries. |
| Keywords: | incomes, inequality, Sweden, structural transformation, economic history |
| JEL: | D31 J30 N30 O52 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0305 |
| By: | Filip, Marinela-Daniela; Setzer, Ralph; Peréz-González, Diego |
| Abstract: | This paper examines whether differences in the composition of investment help explain economic growth disparities in the EU and other advanced economies from 1996 to 2021. While overall investment levels in the EU and the US are broadly similar, the EU invests less in intangible and tangible ICT capital. This difference in composition is associated with part of the EU’s productivity gap with the US. Employing panel fixed effects and local projection methods, we find that intangible and tangible ICT investments -particularly in communications equipment, R&D, and other intellectual property products- are associated with higher GDP per capita growth than other forms of investment. To quantify these differences, we construct a novel investment efficiency ratio that relates the estimated economic growth contribution of each asset to its share in total investment. The results are robust across empirical methods, country samples, and time periods, and reveal substantial heterogeneity: the growth association of ICT-related investment is stronger in countries with higher income levels and greater human capital. Overall, the findings suggest that improving the allocation and efficiency of investment, rather than simply increasing its volume, is key to enhancing long-term growth. JEL Classification: E22, O47, O50, J24, C23 |
| Keywords: | intangible investment, investment efficiency, investment human capital, panel data, tangible ICT |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263242 |
| By: | Rui Castro; Jiyoung Kim; Fabian Lange; Jérôme Larivière; Markus Poschke |
| Abstract: | A small group of people accounts for a large majority of flows between labor market states and of spells in un- and non-employment. In this paper, we ask whether it is possible to identify those weakly attached to the labor market during their prime working-age years using information available early in their lives. First, we use information on labor force transitions between ages 30 and 50 contained in the long panel provided by the NLSY79 to identify those weakly connected to the labor market during their prime age. To do so, we use k-means clustering on moments describing observed spells in employment, unemployment, and non-employment between 30 and 50. This points to a group of less attached individuals who are disproportionally female, less educated, and in poor health. In a second step we predict, using information collected at various points before age 30—which we do not use in clustering—whether individuals will turn out to belong to the weakly attached type in their prime age. We find that information from ages 22 to 29 allows predicting membership of the low-attachment group with high precision. Particularly influential is information on early labor market experiences and health. The fact that we can predict weak and strong labor market attachment during prime working age using variables observed in individuals’ twenties suggests the presence of persistent heterogeneity that shapes labor market experiences throughout the life cycle. |
| JEL: | J0 J21 J64 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35295 |
| By: | Desai, Zakariyya |
| Abstract: | This paper investigates whether South Africa’s nine provinces are experiencing economic convergence or divergence over the period 2014 to 2024, drawing on novel administrative data from the South African Revenue Service (SARS) merged with Statistics South Africa’s Quarterly Labour Force Survey (QLFS). Despite three decades of democratic governance and redistributive fiscal policy, the spatial structure of the South African economy remains profoundly unequal. Gauteng and the Western Cape concentrate the majority of formal economic activity, while provinces such as the Eastern Cape, Limpopo, and the North West languish in persistent structural poverty. The central question this paper addresses is whether market forces and existing policy frameworks are generating a natural catch-up process among provinces, or whether the spatial divide is permanently widening. Employing a multi-method convergence framework, the analysis proceeds through sigma-convergence, absolute and conditional beta-convergence, and panel fixed-effects estimation across provincial, district, and municipal levels. The sigma-convergence analysis reveals a 25 per cent increase in income dispersion across provinces (coefficient of variation rising from 0.136 to 0.170), decisively rejecting the hypothesis of narrowing spatial inequality. Cross-sectional beta-convergence tests yield a positive coefficient for GDP (beta = +0.012), indicating divergence, though the result is not statistically significant due to the small sample of nine provinces. Panel fixed-effects models show unconditional convergence (β = 0.342 for GDP, β = 0.767 for income), and conditional models with structural controls yield qualitatively similar convergence signals (β = 0.391 for GDP, β = 0.712 for income). However, robustness checks reveal this apparent convergence to be mechanical mean reversion that vanishes at a five-year lag horizon (β = 0.975, p = 0.905 for GDP). The integration of QLFS data demonstrates that a one percentage point increase in provincial unemployment decreases real GDP by 4.7 per cent (p = 0.036), confirming unemployment as an econometrically verified structural barrier to convergence. The district-level analysis reveals a devastating new phenomenon: apparent convergence is a statistical mirage driven by the collapse of formerly higher-income districts, not the rise of poor ones. In the Eastern Cape, metropolitan areas have lower median incomes than surrounding rural districts, destroying the assumption that provincial metros serve as engines of convergence. At the municipal level, the paper identifies a “Low-Wage Formalization Trap” where formal employment (FTE) grows while median income collapses and inequality rises, fundamentally undermining the national “job creation” KPI. The trap is most vividly illustrated by Mnquma municipality, where an 18 per cent increase in FTE employment was accompanied by a 52.2 per cent collapse in median income over the same period. The policy implications are significant and demand urgent attention. Spatial trickle-down economics has failed, and the Government of South Africa requires forced economic decentralisation, hyper-SEZs with zero corporate taxation, geofenced employment tax incentives, and sub-provincial infrastructure decoupling to arrest the deepening spatial crisis. The paper further recommends reforming the national job creation KPI to incorporate employment quality metrics, addressing the Eastern Cape metropolitan anomaly through targeted industrial policy, and investigating the promising growth trajectories observed in the Overberg and iLembe districts for potential replication. These findings contribute to the academic literature on convergence in developing countries and provide actionable evidence for the Government of the Republic of South Africa. |
| Keywords: | spatial convergence, beta-convergence, sigma-convergence, South Africa, provincial inequality, QLFS, SARS, structural unemployment, low-wage formalization, district-level analysis, panel data, core-periphery model |
| JEL: | C21 C23 E26 H77 J31 J64 O15 O18 O47 R11 R12 R58 |
| Date: | 2026–05–24 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:129255 |