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on Labor Markets - Supply, Demand, and Wages |
| By: | Fabian Kindermann; Carla Krolage; Sebastian Kunz; Manuel Pannier; Karoline Ströhlein |
| Abstract: | This paper provides causal evidence on how pension income affects labor supply after retirement. We exploit the introduction of the German Earned Income Pension Credit (Grundrente), which permanently increased pension income for retirees with long contribution histories and comparatively low lifetime earnings. The reform generates exogenous variation in non-labor income without creating additional labor supply distortions, allowing us to isolate pure income effects. Using administrative data covering the universe of German retirees and a difference-in-differences design, we find that a 1, 200 euro increase in annual pension income reduces unconditional labor earnings by approximately 122 euros, implying a marginal propensity to earn out of unearned income of −0.1. Two thirds of this response reflects extensive margin adjustments, which operate through both increased exit and reduced re-entry, with the remainder driven by intensive margin reductions. Effects are stronger for younger, more labor-market-attached cohorts. |
| Keywords: | post-retirement labor supply, pension income, income effects, older workers, pension reform, Grundrente, labor force participation, administrative data |
| JEL: | H31 H55 J14 J22 J26 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12757 |
| By: | Andy Chung (Department of Economics, University of Reading); Junsen Zheng (Zhejiang University and Chinese University of Hong Kong) |
| Abstract: | This paper develops and tests a life-cycle hypothesis of sleep investment. Motivated by evidence from psychology, aging, and sleep research that the consequences of insufficient sleep become increasingly severe with age, we argue that individuals facing stronger productivity incentives should increasingly preserve sleep as they age. We formalize this idea in a simple life-cycle framework in which sleep is a productive activity that competes with work and leisure for time. We test the framework using longitudinal data from the National Longitudinal Study of Adolescent to Adult Health (Add Health). We focus on adolescent physical attractiveness and college education as two characteristics associated with occupational sorting and long-run productivity incentives. While both characteristics exhibit little association with sleep duration in early adulthood, their relationships with sleep become increasingly positive over the life cycle. Attractive individuals and college graduates experience substantially less negative declines in sleep duration with age and increasingly sleep longer relative to their counterparts in later adulthood. Additional analyses show that these patterns are strongest among workers and are not readily explained by mental health, sleep difficulties, social participation, or reverse causality through sleep affecting later attractiveness. More broadly, the findings suggest that differences in long-run productivity incentives contribute to divergent sleep trajectories over adulthood and support a life-cycle perspective on sleep investment. |
| Keywords: | sleep, life cycle, health investment, physical attractiveness, college education |
| JEL: | I12 J22 J24 |
| Date: | 2026–07–22 |
| URL: | https://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2026-07 |
| By: | Pawel Adrjan; Mária Balgova; Simon Jäger; Jonas Jessen; Jason Sockin |
| Abstract: | Discrete choice experiments are widely used to estimate workers’ willingness to pay (WTP) for job amenities under the assumption that varying an attribute does not change workers’ beliefs about other job attributes. We test this assumption by embedding an amenity with a known market price—a popular monthly public transport pass—in a largescale discrete choice experiment with German workers. Many workers, including public transport users, overvalue the ticket by more than 100%, despite WTP for other attributes aligning with the literature. A complementary belief-elicitation experiment shows that advertising an amenity, such as the pass but also common amenities like work from home, causally shifts beliefs about unlisted attributes of the job. Posted wages similarly signal unlisted attributes so that wage variation, the money metric for WTP calculation, is itself contaminated by belief spillovers—such as higher pay signaling heightened stress. These spillovers imply that discrete choice estimates capture perceived bundles rather than isolated attributes, and distort current estimates of non-wage compensation and monopsony power. |
| JEL: | C25 C83 D83 D84 D91 J0 J31 J32 J42 J64 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35457 |
| By: | Joonkyo Hong, Davide Luparello |
| Abstract: | New exporters often adopt new technology, which may reorganize production rather than lift output uniformly, so efficiency gains can land unevenly across inputs. We examine such gains across worker types in Colombian manufacturing, 1981–1991. We develop a model of exporters that measures how efficiently firms use each input and grounds a comparison of new exporters with non-exporters matched on export likelihood. We find that export entry raises the plant-level efficiency of unskilled labor by about 9.4% per year, with no detectable change for skilled labor, implying a 2% annual rise in total factor productivity. We estimate that the two worker types are complements. Exporters thus produce more with relatively less unskilled labor, raising skill intensity. |
| Keywords: | exporting; factor-biased technical change; production-function estimation; skill intensity. |
| JEL: | D24 F14 O33 J24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp26279 |
| By: | Joan Costa-i-Font; Wanying Wang |
| Abstract: | Although flexible employment policies can help employed individuals balance caregiving and paid work, limited evidence has been devoted to examining the effect of working flexibly on the supply of care to older adults. In this paper, we study the impact of flexible working conditions on the supply of informal adult care and mental health. We exploit variation from the 2014 expansion of the Right to Request Flexible Work (RRFW) to employees in the UK. Our findings point to a gendered response to increased employment flexibility. We document a 1.3-percentage-point increase in the likelihood that men provide informal care within the household, alongside less regular daytime work, greater control over working hours, and higher engagement in home production. In contrast, among potential female caregivers, we find that the reform reduced the probability of high-intensity caregiving, which is typically incompatible with employment or related activities. We document that the increased workplace flexibility not only encourages caregiving but also helps reduce gender disparities in unpaid care. We additionally find suggestive evidence of improved mental health outcomes, particularly among men. |
| Keywords: | flexible working, informal care, right to request flexible work, mental health, United Kingdom |
| JEL: | J14 J22 I13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12825 |
| By: | Auyon Siddiq; Niuniu Zhang |
| Abstract: | Has generative AI changed how labor markets value human capital? We study this question using data from Upwork, a large online labor market. Representing worker profiles with high-dimensional text embeddings, we compute the importance of human capital information and price in predicting labor demand, and incorporate these measures into a difference-in-differences design around the release of ChatGPT. We find that in more AI-exposed job categories, the importance of human capital declines and the importance of price rises, suggesting a commoditization effect of AI on labor. Two additional findings support commoditization as a mechanism: The demand premium enjoyed by workers with strong human capital declines in more AI-exposed categories, and demand reallocates toward lower-priced workers. Our results have implications for the design of online labor markets, workers' incentives to invest in human capital, and labor welfare. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.21880 |
| By: | Brad Hershbein; Katherine Lim; Douglas Webber; Mike Zabek |
| Abstract: | We examine how labor market tightness affects workers' job amenities and quality. Using novel data from the Survey of Household Economics and Decisionmaking (SHED), and multiple measures of labor market tightness, we estimate that a 10 percent increase in job vacancies per thousand residents leads to a 7-12 percent increase in the probability of changing jobs, an 11-18 percent increase in the (unconditional) probability of switching to a self-assessed overall better job, and similar-size increases in pay and benefits, interest in the work, and better opportunities for advancement. Tight labor markets thus not only improve worker pay, in line with earlier studies, but also improve job amenities more broadly, and by roughly the same proportion. Consequently, the benefits to workers of a tight labor market are likely underestimated when based on pay alone. |
| Keywords: | job quality, labor market tightness, shed, jolts, Lightcast, local shocks |
| JEL: | J23 J28 J32 J62 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12762 |
| By: | Edcleutson de Souza Silva (Federal University of Paraíba); André Luis Squarize Chagas (Department of Economics, University of São Paulo); Carlos Roberto Azzoni (Department of Economics, University of São Paulo); Aléssio Tony Cavalcanti de Almeida (Federal University of Paraíba); Wallace Patrick Santos de Farias Souza (Federal University of Paraíba) |
| Abstract: | Wind power deployment is often framed as a source of regional job creation, but its local economic incidence may be sectorally uneven and spatially dispersed. This paper estimates the effects of wind farm expansion on formal labor markets in North eastern Brazil from 2004 to 2019. Using an annual panel of 1, 478 municipalities and a spatial difference-in-differences design, we estimate direct effects on host municipalities and spillover effects on nearby municipalities across industry, commerce and services, and agriculture. The results indicate a pattern of sectoral reallocation rather than broad-based employment growth. Host municipalities experience large short-run gains in industrial employment and establishment counts, while agricultural employment declines, with the strongest evidence in the short run and persistent negative point estimates at longer horizons. Neighboring municipalities also exhibit negative labor market spillovers, especially in industrial wages and wage bills and in short-run agricultural employment and wage bills. Exploratory analyses suggest more negative point estimates in inland municipalities and among low-skilled agricultural workers, although these results are based on smaller effective samples. The findings show that wind farms operate not only as energy-capacity investments, but also as spatially targeted infrastructure shocks with uneven distributive effects across sectors, workers, and municipalities. They also underscore the importance of accounting for spatial spillovers when designing quasi-experimental evaluations of renewable energy infrastructure. |
| Keywords: | wind power deployment; renewable energy infrastructure; local labor markets; spatial spillovers; difference-in-differences; just transition |
| JEL: | Q42 Q43 R11 R23 J21 C23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ris:nereus:023114 |
| By: | Marco Caliendo (University of Potsdam, CEPA, BSoE, IZA@LISER, DIW, IAB, RFBerlin); Katrin Huber (University of Potsdam, CEPA, IZA@LISER, BSoE); Ingo E. Isphording (Max Planck Institute for Behavioral Economics, IZA@LISER, CESifo, GLO); Jakob Wegmann (Rockwool Foundation Berlin) |
| Abstract: | We study the extent, correlates, and consequences of reporting bias in survey wages using German linked survey-administrative data (SOEP-CMI-ADIAB). Survey wages differ systematically from administrative records: mean survey wages are 7% lower, and discrepancies follow a mean-reverting pattern. Individual characteristics explain little of the reporting bias, whereas firm context explains most of the variation. Since neither data source alone is sufficient, we construct a hybrid wage that combines their respective strengths. Measurement choice matters, but in ways that depend on how administrative top-coding is handled across the full wage distribution: when wages are outcomes, censoring administrative wages at the assessment limit understates returns to education by 4–11% and the gender wage gap by up to 23%, while imputation reverses the bias for returns to education. When wages are regressors, wage-satisfaction gradients are 9–28% steeper with survey than with administrative wages below the assessment limit, a pattern inconsistent with classical attenuation bias and pointing to non-classical, context-dependent misreporting. We provide guidance for choosing between administrative, survey, and hybrid wages depending on the application, with lessons that extend to any setting where self-reported wages are collected alongside top-coded administrative records. |
| Keywords: | reporting bias, measurement error, wage, income, administrative data, survey data, data linkage |
| JEL: | J30 C81 D31 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:pot:cepadp:103 |
| By: | Böhme, Fabian |
| Abstract: | This paper investigates the labor supply effects of unconditional cash transfers aimed at young families, using the Bavarian Family Allowance (Familiengeld ), introduced in 2018. The policy provides € 250-300 monthly to families with children aged 13-36 months regardless of employment status or childcare use. Combining difference-in-differences estimates from two complementary panel datasets, I find no statistically significant effect on maternal employment: the pooled estimate is a small and imprecise +4.2 percentage points (95% CI [-1.8, +10.2]). Because Bavaria is the only treated state, I complement the difference-in-differences with randomization inference over placebo states and a synthetic difference-in-differences design that matches Bavaria's pre-policy trajectory; both confirm that Bavaria's estimate falls within the normal range of untreated states, and the specifications that most directly address an imperfect pre-trend-individual fixed effects and the synthetic estimator-center on zero. A triple-difference specification points to a larger positive response among single and low-income mothers, but this pattern does not survive randomization inference and is best read as suggestive. Given that the unconditional design generates only a modest income effect without altering the relative price of employment, the evidence does not support concerns that transfers of this size meaningfully reduce maternal labor supply, nor does it establish a positive activation effect. |
| Keywords: | Family policy, maternal labor supply, cash transfers, difference-in-differences, heterogeneous treatment effects |
| JEL: | J13 J22 H31 I38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwqwdp:341986 |
| By: | Paul Bingley; Lorenzo Cappellari; Konstantinos Tatsiramos |
| Abstract: | We study how assortative mating shapes the composition of education–outcome gradients and how these gradients relate to intergenerational transmission. Using Danish administrative data on family quartets, we decompose own gradients in long-run earnings, disposable income, assets, and wealth into jointly transmitted parental factors, parent-specific transmission, nonparental shared influences, and individual-specific heterogeneity. Earnings and income gradients mainly reflect jointly transmitted parental factors and individual-specific heterogeneity; assets and especially wealth mainly reflect parent-specific transmission. Comparing families facing different parental access to middle schools, we show that the composition of financial gradients varies by educational opportunity, while labor market gradients are largely invariant. |
| Keywords: | assortative mating, education gradients, Intergenerational mobility |
| JEL: | J62 D31 J12 I24 E21 J24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12763 |
| By: | OECD |
| Abstract: | Artificial intelligence (AI) is increasingly shaping labour markets, bringing both significant opportunities and risks for workers, firms and societies, and making it a growing policy priority. This publication reviews recent policy measures related to AI in the labour market in G7 countries, the European Union and selected Latin American economies across six policy areas: automation, productivity, skills and inclusiveness; privacy and data protection; non-discrimination; occupational safety and health; transparency, explainability and accountability; and social dialogue. Across most policy areas, AI-related issues are primarily addressed through existing labour market policy frameworks, rather than through stand-alone AI policies. Policies explicitly targeted at AI in the labour market are most developed for AI skills and adoption, while measures and guidance are still emerging in other policy areas, particularly privacy, transparency and accountability. |
| Keywords: | Artificial Intelligence, Employment |
| JEL: | J2 J5 J7 J8 M1 M5 |
| Date: | 2026–07–24 |
| URL: | https://d.repec.org/n?u=RePEc:oec:comaaa:63-en |
| By: | Adamopoulou, Efi; Galenianos, Manolis; Giannakopoulos, Nicholas; Kammas, Pantelis; Laliotis, Ioannis |
| Abstract: | This paper documents the evolution of labor earnings and earnings dynamics in Greece during 2002–2023 using administrative matched employer–employee data from the Greek social security system. The data span the expansion of the 2000s, the deep recession of 2009–2013, and the subsequent recovery. We show that earnings, volatility, and inequality closely tracked macroeconomic conditions. Real earnings rose during the pre-crisis expansion, declined sharply during the recession (particularly among lower earners), and only partially recovered afterward. Earnings volatility and downside risk increased substantially during the crisis, while inequality rose both in the cross-section and within cohorts. Workers entering the labor market during the recession experienced unusually weak initial earnings and persistently lower subsequent earnings. Using regional variation in unemployment rates, we show that weaker local labor-market conditions at entry are associated with lower early-career earnings. |
| Keywords: | labor earnings;inequality;volatility;mobility;administrative data;Greece |
| JEL: | J30 D31 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:139054 |
| By: | Achyuta Adhvaryu; Levina Adiputri; Valentina Brailovskaya; Priyanka Dua; Jenny Susan John; Pratibha Joshi; Terry Muthahhari; Rivandra Royono; Jack Thunde |
| Abstract: | We provide descriptive evidence on women's experiences in platform-based driving and delivery work using survey and administrative data from India and Indonesia. Partnering with major two-wheeler platforms, we study representative samples of drivers, oversampling women to examine gender differences (India: 404 women, 2, 153 men; Indonesia: 892 women, 2, 114 men). Female participation is extremely low -- 0.8% in India and 1.5% in Indonesia -- consistent with barriers related to safety concerns, cultural norms, and limited access to required assets. Among women who do enter, platform work is used differently than by men: women work fewer hours, are more likely to log in during free time, and place greater value on flexibility and supplemental earnings. Women earn less per hour than men -- by 6-8% in India and 8-22% in Indonesia -- differences that align with gendered choices over working times, locations, and service types, likely shaped by safety and domestic constraints. Women also face distinct challenges: higher reported harassment in both countries and, in Indonesia, widespread customer discrimination and higher accident rates. At the same time, a disproportionate share of women were unemployed before joining the platform, and women are more likely than men to report higher current earnings relative to prior work. Together, the evidence highlights how flexibility coexists with persistent gender-specific risks, constraints, and unequal returns in location-based platform work in low- and middle-income country contexts. |
| JEL: | J22 J46 O12 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35467 |
| By: | Balázs Pálvölgyi; Dirk Neumann; Martijn Hoogeland; János Varga |
| Abstract: | Demographic ageing and slow growth are putting pressure on the sustainability of the German pension system as well as on the adequacy of pensions. This discussion paper takes stock of the functioning and challenges of the German pension system and provides an overview of the main reform options currently discussed in the public debate. In practice, a combination of reforms will be best suited to deliver on the objectives of fiscal sustainability, adequacy and social fairness. This combination could consist of (i) labour market reforms to increase hours worked and enable longer careers with fewer interruptions, thus contributing to increasing social security contributions, (ii) adjusting pension indexation by accounting for demographic ageing in particular, (iii) increasing the effective retirement age by reducing early retirement pathways and raising the statutory retirement age, and (iv) an enhanced role for supplementary pensions. |
| JEL: | J26 J32 H55 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:250 |
| By: | Dan Andrews; Andrea Garnero; Sara Holttinen |
| Abstract: | Restraint clauses that prevent workers from joining or starting a competing firm – commonly known as non-compete clauses – are traditionally justified to protect legitimate business interests. Yet, such clauses may suppress job mobility, business dynamism and competition, with adverse consequences for productivity growth. This paper presents the first harmonised cross-country evidence on the link between non-compete clauses and productivity performance. Merging novel data on industry-country-level prevalence of non-compete clauses with firm-level data from Orbis, we find that a higher non-compete prevalence is associated with weaker productivity enhancing labour-reallocation and slower knowledge diffusion. The estimates translate into meaningful aggregate productivity losses (1.9% for a 10 percentage point increase in non-compete incidence). While the economic “bite” of non-competes on productivity seems larger in countries where firms have greater freedom to deploy them, it remains negative in countries where non-competes are more tightly regulated. This underscores the idea that non-compete clause can exert “chilling effects” even when they are unlikely to be upheld by courts, raising questions about whether current regulatory frameworks are fit for purpose. |
| Keywords: | Job mobility, Misallocation, Non-compete clauses, Productivity growth |
| JEL: | J24 J41 J62 |
| Date: | 2026–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:oec:ecoaaa:1873-en |
| By: | María Pia Iocco; María Lombardi |
| Abstract: | We study the effect of selectivity on university degree completion. Using data from the centralized university admission system in Chile, which includes students’ ranked options, we use a regression discontinuity design with students at the margin of admission between relatively more and less selective university programs. We find that students marginally admitted to a more selective program are 2.3 percentage points less likely to graduate from their initial program, compared to marginally rejected students who were instead admitted to the relatively less selective option. We also find a 1.9 percentage point drop in the likelihood of obtaining any university degree. For students who graduate, we find a one-month increase in time to graduation. This decline in overall graduation rates is driven by lower-income students, who face greater challenges in transferring and completing a degree elsewhere. We find suggestive evidence that these results are driven by higher academic rigor, rather than by ordinal rank. |
| Keywords: | university, selectivity, degree completion, inequality |
| JEL: | I23 I24 I31 J24 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:udt:wpgobi:wp_gob_2026_10 |
| By: | Lovisa Reiche; Nicolò Maffei-Faccioli |
| Abstract: | Inflationary shocks do not affect all workers equally. Comparing men and women, we document two facts. First, both demand- and supply-driven inflationary shocks widen the gender wage gap within industries and occupations. Because these shocks imply opposite business-cycle conditions, their common effect points to inflation as the relevant force. Second, women and men perceive the same inflationary shocks as having different labor-market consequences: women expect conditions to worsen, while men expect them to improve. This asymmetry creates an expectations channel linking inflation to unequal wage growth. We formalize this channel in a New Keynesian search-and-matching model with male and female workers, imperfect information, and gender-specific ambiguity attitudes. Common macroeconomic signals lead ambiguity-averse women to place greater weight on adverse supply-driven states. For inflationary signals, this lowers their perceived outside options and wage demands relative to men's. Divergent perceptions translate common inflationary shocks into divergent pay. |
| Keywords: | consumer expectations, gender wage gap, inflation, business cycle dynamics |
| JEL: | C32 E24 E32 J16 J31 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12835 |
| By: | Giray Gozgor; Thang Ho; Jing Li |
| Abstract: | This paper examines how local opioid exposure affects firms’ debt structure. Motivated by evidence that the opioid crisis weakens labor supply, impairs human capital, and increases operating uncertainty, we argue that firms exposed to greater local opioid distress rely more heavily on bank debt because bank lenders provide monitoring, private information production, and renegotiation flexibility that become more valuable when borrower risk is harder to assess. Using a panel of 5, 424 U.S. public firms from 2003 to 2020, we find that greater local opioid exposure, measured by county-level opioid-related mortality, is associated with a greater share of bank debt and a lower share of public debt. To strengthen identification, we exploit the staggered adoption of state-level Prescription Drug Monitoring Programs (PDMPs) in a stacked difference-in-differences design. PDMP adoption is followed by reductions in local opioid exposure and a subsequent decline in firms’ reliance on bank debt. The effect is stronger among labor-intensive firms, firms located in tighter local labor markets, firms with higher R&D intensity, and firms facing greater bankruptcy and information risk. Overall, our findings suggest that opioid-related local distress alters corporate financing choices by increasing the relative attractiveness of bank debt. |
| Keywords: | opioid crisis, debt structure, bank debt, public debt, labor market frictions, corporate financing |
| JEL: | G32 G21 J21 I18 R11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12831 |
| By: | Zinovyeva, Natalia (University of Warwick); Makany, Milan (Erasmus University Rotterdam) |
| Abstract: | Science disproportionately relies on top researchers to evaluate the work of others, potentially diverting their scarce time from research, mentoring, and other service. We study this trade-off in Italy’s national academic qualification system, where evaluators are randomly assigned to committees. Committees with better-published evaluators select candidates with stronger subsequent citation and career outcomes; they also place greater weight on publication impact rather than quantity. These effects partly reflect spillovers within committees: evaluators assigned to serve alongside more accomplished colleagues exert more effort and adjust their criteria. Assignment to a committee, however, reduces evaluators’ subsequent publication output and PhD supervision, especially among top researchers. Research losses are especially large in the Social Sciences and Humanities, and among those working in small teams. More productive researchers are also disproportionately less likely to volunteer for service again. |
| Keywords: | expert evaluation, committees, academic promotions, decision quality, peer effects, opportunity costs JEL codes: I23, D71, D83, M51, J45 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1622 |
| By: | Paul Gregg (Department of Social & Policy Sciences, University of Bath); Yuyan Jiang (UCL Social Research Institute); Lindsey Macmillan (UCL Centre for Education Policy & Equalising Opportunities); Nikki Shure (UCL Social Research Institute); Gill Wyness (UCL Centre for Education Policy & Equalising Opportunities) |
| Abstract: | This paper provides new evidence on intergenerational income persistence for a recent UK cohort. Using Next Steps, a longitudinal study of people born in England in 1989-90 linked to administrative education records, we estimate the association between parental income in adolescence and sons' earnings at age 32, compare the results with the 1970 British Cohort Study, and decompose persistence by early cognitive skills, noncognitive traits and educational attainment. Our preferred estimates show an intergenerational income elasticity of 0.214 and a rank-rank coefficient of 0.287. The rank-rank estimate is almost identical to the comparable estimate for the 1970 cohort, suggesting little change in relative income persistence across cohorts, although age-32 elasticities are likely to understate lifetime persistence. Education is the main observed mechanism: GCSE attainment, A-level attainment and degree completion account for a substantial share of persistence, while measured noncognitive traits explain little once education is included. The findings show that, despite educational expansion, family-income gradients in attainment remain central to the intergenerational transmission of economic advantage. |
| Keywords: | intergenerational income mobility, socioeconomic inequality, education, skills |
| JEL: | I24 J62 J13 J31 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:ucl:cepeow:26-06 |
| By: | Gonzalo López Molina; David Martínez Turégano; Victor Pedrero Bohnet; José Salvado Garcia |
| Abstract: | Spain's labour market has long combined structural unemployment well above the EU average with exceptionally high temporary employment, weak activation policies and persistent skills mismatches. Spain's Recovery and Resilience Plan, initiated in 2021, sought to address these accumulated weaknesses through a comprehensive package of regulatory reforms and flanking measures across four interconnected pillars: i) reducing the excessive use of temporary contracts, ii) rebalancing firms' capacity to manage cyclical and structural shocks, iii) modernising the collective bargaining framework and iv) strengthening labour rights and reforming active labour market policies, public employment services and vocational education and training. These reforms were implemented against a backdrop of strong macroeconomic momentum, with Spain's employment and GDP growth consistently outpacing the euro area average between 2021 and 2025. While this favourable context partly reflects global post-pandemic dynamics, Spain's labour market performance over this period was notably stronger than the EU average, with employment growing at more than twice the EU rate. This paper examines the design of the reform package, contrasts it with previous attempts at reforming the labour market and discusses evidence on its effects. Evidence to date demonstrates significant positive effects on contractual outcomes: since early 2022, the temporary employment rate has fallen by over 10 percentage points, new hiring has reoriented decisively towards open-ended contracts, and Spain has substantially closed a gap with the EU average that had persisted for decades. Evidence on the remaining aspects is more tentative and largely institutional in nature, reflecting in part the limited scope of activations of the new internal flexibility mechanism to date and the longer time horizons over which collective bargaining, activation and skills-related reforms produce observable labour market effects. |
| JEL: | J24 J41 J48 J64 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:245 |