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on Labor Markets - Supply, Demand, and Wages |
| By: | Daniel Goller; Enzo Brox; Stefan C. Wolter |
| Abstract: | Why do people sort into poorly fitting occupations? This paper shows that imperfect self-knowledge about skills is an important source of skill mismatch at labor market entry. We use unique data from standardized professional aptitude tests linked to administrative records on educational trajectories and early labor market outcomes in Switzerland. The data allow us to observe objective skills and subjective skill beliefs for many productivity-relevant skills in a high-stakes setting. We document large differences among individuals in how well their beliefs align with their skills. Imperfect self-knowledge predicts misaligned occupational aspirations, higher realized skill mismatch, and a higher probability of dropout. Guided by a Roy-style model of occupational choice with imperfect self-knowledge, we interpret these findings as evidence that distorted self-assessments at the school-to-work transition contribute to the misallocation of talent. |
| Keywords: | information frictions, occupational choice, skill mismatch, self-knowledge |
| JEL: | D83 J24 J41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12814 |
| By: | Chiara Zisler; Uschi Backes-Gellner |
| Abstract: | Will generative AI (GenAI) displace entry-level IT workers, or change the work they do? The answer depends on whether AI substitutes for or complements the tasks that make up entry-level jobs, a distinction that demand-side employment data cannot resolve because they do not capture task content. We study the intensive margin of entry-level IT work-i.e., how AI shapes the job content conditional on employment-rather than the extensive margin of hiring or job displacement. Using survey data on entry-level IT workers with migration backgrounds, we introduce a worker-side measure of AI-attributed task change: for each task, workers report how their working time has changed and how much of this change they attribute to AI. The measure therefore isolates AI-attributed reallocations of working time across tasks. Within-worker comparisons point more strongly to task complementarity than substitution: Workers spend more time on tasks for which they report AI-related changes, and their task portfolios shift toward a more complex core. These complementarity patterns are strongly associated with AI use, but not with education background or wages, thereby suggesting that the benefits of GenAI in entry-level IT work may depend less on formal credentials than on active engagement with the technology. Our findings provide implications for firms' decisions on job design, task allocation, and AI-related training in IT jobs. |
| Keywords: | Generative AI, task recomposition, entry-level work, substitution or complementarity, job crafting, on-the-job learning |
| JEL: | J23 J24 M51 O33 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iso:educat:0258 |
| By: | Colin Caines; Florian Hoffmann; Gueorgui Kambourov |
| Abstract: | We document a strong, positive relationship between occupational problem complexity, measured from US data on problem-solving requirements, and occupational wage growth since 1980. In contrast, employment shifts toward more complex occupations have been modest, suggesting a race between the demand for and supply of complex skills. We rationalize these findings by formulating and structurally estimating a quantitative general equilibrium model on the granular occupational level. In our model, workers have heterogeneous comparative advantages in solving complex problems and physical capital admits capital-skill complementarity in occupation space. The equilibrium features Positive Assortative Matching of worker skills to occupational problem complexity, and the model quantitatively explains the evolution of the occupational wage- and employment structure over the last four decades. The model estimates uncover two distinct periods of technological change. Until around 2000, rising complexity premia were driven by capital-skill complementarity and declining equipment capital prices. Post-2000 patterns reflect supply-side technological change whereby occupations became more efficient in utilizing worker skills for complex problem-solving. Our framework helps unify distinct approaches to studying task automation and task augmentation on the one hand and skill-biased technological change on the other. |
| Keywords: | Occupational Task Content; Complex Tasks; Wage Polarization; Skills |
| JEL: | E24 J21 J23 J24 J31 |
| Date: | 2026–07–24 |
| URL: | https://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-825 |
| By: | Diegmann, André; Müller, Steffen; Schoefer, Benjamin |
| 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 firmestablishment-employee data in Germany. This result is new to 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 lowpremium 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. |
| Keywords: | Employer Size Wage Effect, Multi-Establishment Firms, Wage Setting, Monopsony |
| JEL: | J31 D22 L23 M50 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:341993 |
| By: | Arenas, Andreu (University of Barcelona (IEB, IPERG)); Bosch, Marc (Ivà lua); Frias, Nerea (National Institute of Economic and Social Research) |
| Abstract: | We estimate the effect of work from home (WFH) on public-sector productivity by evaluating a mandatory return-to-office (RTO) policy in the Catalan judiciary. Leveraging cross-court variation in pre-mandate WFH intensity, difference-in-differences estimates show that terminating WFH reduced procedural output by 5.6 percent, with no offsetting changes in document quality or absenteeism. Evidence from a multi-stakeholder survey suggests a multitasking reallocation: filing tasks are performed on a digital platform and become easier under WFH, whereas coordination with lawyers is synchronous and harder to monitor. WFH thus shifted effort toward filing tasks and away from coordination. Perceived impacts follow a gradient: case managers and supervisors, who benefit from bureaucratic efficiency, are positive about WFH, while lawyers, who depend on service coordination, are clearly negative. |
| Keywords: | WFH, public-sector productivity, multitasking, judiciary |
| JEL: | J22 J45 M54 D73 H83 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18795 |
| By: | F. Cerina; S. Nobili; M. Rosso |
| Abstract: | We study how the release of ChatGPT affected posted U.S. labor demand, using 368 million Lightcast job postings (2016–2025) and a usage-anchored measure of LLM exposure. While we find a negative and causal effect on the volume of postings in AI-exposed occupations, we find no post-release effect on their seniority composition. After November 2022, posting volume in top-quartile-exposed occupations contracts by 9 log points (approximately 8.6 percent) relative to less-exposed occupations within the same metropolitan market, industry and month. The estimate survives an extensive battery of robustness checks and is concentrated in measured LLM usage rather than AI capability. In exposed occupations, junior postings fall considerably more than senior postings after the release, but the divergence predates ChatGPT - it opens in 2021–22, during the COVID recovery, and shows no break at the release. The differential that a simple pre/post comparison would attribute to ChatGPT is absorbed by predetermined remote-work exposure. Our results caution against reading exposure-based entry-level declines as evidence of AI-driven seniority-biased technological change. |
| Keywords: | Generative AI, ChatGPT, labor demand, seniority, job postings, difference-in-difference |
| JEL: | J23 J24 O33 M51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cns:cnscwp:202613 |
| By: | Johan Fourie; Kris Inwood; Martine Mariotti |
| Abstract: | Audit studies show that employers discriminate at hiring, and firm-sorting evidence shows that they segregate workers across employers. Less is known about discrimination after hiring, within the firm, because personnel data rarely observe initial assignment, later performance, and separation jointly. We use records from the South African Constabulary, a mounted police force whose pay was fixed within rank and class, to isolate the within-firm assignment margin. The cleaned sample contains 354 Afrikaner recruits and more than 10, 000 other men enlisted between 1900 and 1908; 300 of the Afrikaner recruits enlisted after the May 1902 Treaty of Vereeniging. Afrikaners were placed in shorter contracts and lower job classes than observably similar non-Afrikaners. The wage gap disappears once assignment is held fixed. Within rank, character ratings are statistically equivalent across groups, and the early Afrikaner dismissal hazard attenuates sharply with tenure, consistent with slow employer learning. Voluntary separations peak in the second half of the first year, after the early dismissal threat has receded. The misallocation is costly on both sides: the firm loses 26, 000 to 176, 000 service-days, and the worker loses tenure, retention, and re-enlistment. |
| Keywords: | within-firm discrimination; misallocation; employer learning; personnel economics; turnover; sorting |
| JEL: | J15 J24 J62 J63 J71 M51 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:auu:hpaper:139 |
| By: | Mehrotra, Santosh (Higher School of Economics); sing, Ashutosh (Independent skills specialist with 15 yrs of research, practitioner and consultancy experience) |
| Abstract: | Traditional Technical and Vocational Education and Training (TVET) systems are often misaligned with labour-market needs because they rely on supply-side financing and fragmented labour-market information. This paper addresses these institutional failures by reconstructing the first comprehensive estimate of India's aggregate TVET expenditure, triangulating fragmented data sources to estimate annual spending at US$6.7–9.4 billion. We propose a dual-pillar institutional architecture, integrated with India's Digital Public Infrastructure, comprising the Integrated Labour Contribution Base (ILCB), which links formal, payroll and informal-worker records into a unified labour-market information system, and the Reimbursable Industry Contribution (RIC), a mandatory 2% payroll-linked levy–grant mechanism for formal-sector firms. Macro-fiscal modelling shows that an annual allocation of US$2.2 billion can sustainably co-finance enterprise and apprenticeship training while expanding Recognition of Prior Learning, skill loans and training vouchers. By reducing information failures and employer free-riding, the proposed framework offers a scalable institutional model for financing skills development across India and the Global South. |
| Keywords: | TVET, human capital, Levy–Grant system, digital public infrastructure, informal economy, lifecycle fiscal projection |
| JEL: | H25 I25 J24 O15 O38 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18805 |
| By: | Costa-Font, Joan (London School of Economics); Wang, Wanying (Department of Health Policy, London School of Economics) |
| 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: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18800 |
| By: | Sven A. Hartmann (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University); Andrea Bernini (University of Houston) |
| Abstract: | When autocracies tie human capital to political loyalty, schooling functions as a costly signal contingent on regime survival. Exploiting topography-driven variation in East Germans’ reception of West German television, we examine how foreign media, by eroding regime legitimacy, reshapes schooling. Exposure reduced schooling by 0.5 years and post-primary attainment by 10.7 percentage points—voluntary withdrawal driven by collapsing legitimacy, not screening, cognition, time use, preferences, or economic anxiety. After reunification, the employment and income gaps closed, the exposed proved less overeducated, and a 1959 reform raising attainment moved neither earnings nor employment—confirming the forgone schooling was political, not productive. |
| Keywords: | Human capital, mass media, authoritarian institutions, institutional legitimacy, signaling |
| JEL: | I21 J24 P16 D83 O15 N44 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iaa:dpaper:202606 |
| By: | Immordino, Giovanni (University of Naples Federico II); Macis, Mario (The Johns Hopkins Carey Business School); Marino, Immacolata (University of Naples Federico II); Panebianco, Fabrizio (Università Cattolica del Sacro Cuore, Milano) |
| Abstract: | When a new technology promises large private benefits but may impose social costs that markets do not price, demand need not reveal how citizens want it governed. We examine this in a nationally representative U.S. survey experiment (N=5, 556) on human enhancement technologies (HET). Vignettes randomize benefit domain, mechanism, heritability, purpose, and risk; we elicit stated adoption, preferred regulation, and ethical and societal concerns. About 53% would adopt. An enhancing rather than restorative framing lowers adoption by about five percentage points, as much as a severe side-effect profile. About 28% would not adopt at any benefit, a refusal driven overwhelmingly by the enhancing framing, not risk, consistent with a non-compensatory constraint. Most who would adopt still favor strict regulation, and most who would never adopt do not wish to forbid others. Productivity enhancement generates the most ethical concern but attracts the least regulation, and respondents favor subsidizing rather than taxing its adoption, consistent with a concern about access rather than safety. Private demand is an unreliable guide to the governance citizens want, informing regulators seeking to align technical change with societal values. |
| Keywords: | human enhancement technologies, survey experiment, private–policy alignment, distributional effects and inequality, productivity, moral foundations and ethics |
| JEL: | I18 O33 D81 D63 J24 L51 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18804 |
| By: | Pascal Heß (Institute for Employment Research (IAB) and IZA@LISER); Armando Miano (University of Naples Federico II and CSEF) |
| Abstract: | We study how employed workers perceive and respond to opportunities for occupational mobility. Using a large-scale survey of 4, 500 full-time workers in Germany, linked with administrative employment data, we measure workers’ beliefs about the transferability of their skills, the similarity of alternative occupations to theirs, the benefits— potential earnings—and costs—retraining and licensing requirements—of moving to other occupations. We also capture respondents’ beliefs about exposure of their own and alternative occupations to automation and AI. The results reveal that workers are imperfectly informed about opportunities in other occupations: they systematically underestimate task similarity and wages in alternative occupations while overestimating the need for retraining or licensing. These misperceptions are more severe for bluecollar workers and for workers in commercial and administrative occupations, and are strongly negatively correlated with intentions to seek jobs in other occupations. Randomized information treatments providing data on wages, retraining requirements, and displacement risk meaningfully alter workers’ beliefs and mobility intentions, even nine months after the intervention. |
| Keywords: | Occupational mobility, Information frictions, Job search, Beliefs, Automation, AI. |
| JEL: | J01 J24 J62 D91 D83 |
| Date: | 2026–07–28 |
| URL: | https://d.repec.org/n?u=RePEc:sef:csefwp:792 |
| By: | Mahlberg, Bernhard; Mara, Isilda; Prskawetz, Alexia; Gerstner, Isabel |
| Abstract: | The aim of this study is to estimate the age–productivity profile of Austrian firms using a linked employer–employee dataset for the years 2013–2022. The OLS and FE estimates indicate a highly significant relationship between workforce age structure and labour productivity. Across both estimation methods, we find an inverted U-shaped age–productivity profile. We also account for capital intensity and the share of automation-related assets (ADRA). The estimation results show that firms with greater capital intensity and higher levels of automation consistently exhibit higher productivity across the distribution. In addition, the marginal effect of the share of ADRA-related capital is greater than that of the agerelated variables. These findings have important implications for both firm strategy and public policy, highlighting the role of technology diffusion, education, and potentially organisational change in sustaining productivity in ageing societies. The empirical strategy is complemented by panel data methods and robustness checks to account for persistence, unobserved heterogeneity, and potential reverse causality. |
| Keywords: | Age-productivity profile, Labour productivity, Automation-related assets, Principal component analysis |
| JEL: | D24 J14 J24 J82 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:tuweco:342377 |
| By: | Christl, Michael; Sologon, Denisa M.; Montes-Viñas, Ana; Wagener, Raymond |
| Abstract: | Cross-border labour markets integrate European regions economically, but welfare analysis remains constrained by national institutional systems. This paper develops a framework for measuring disposable income, redistribution, and inequality in functionally integrated but institutionally fragmented cross-border regions. We build on the European tax-benefit model EUROMOD to incorporate cross-border taxation, social insurance coordination, and family benefit allocation, and apply it to hypothetical household scenarios for workers residing in France and Belgium and employed in Luxembourg, the core of the Greater Region. We find that the disposable income consequences of cross-border employment are substantial and vary by household type and residence country. The cross-border premium is compressed at high earnings by France's exemption-with-progression mechanism, while Belgium's full exemption lets it persist and grow across the distribution. Modelling cross-border workers under residence-country rules alone likely overstates income equality, with the bias concentrated among households with children and at the lower end of the income distribution. These findings illustrate how territorial integration and welfare fragmentation coexist within functional cross-border regions. Combining country-specific EUROMOD models through a harmonised counterfactual approach, the paper offers a replicable method for measuring disposable income in cross-border contexts, and shows that inequality measurement remains tied to national welfare institutions even where labour markets operate at a regional scale. |
| Keywords: | cross-border workers, disposable income, microsimulation, tax-benefit systems, Luxembourg, Greater Region, income inequality, regional integration |
| JEL: | J20 J38 J48 H24 H55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1790 |
| By: | Cappellari, Lorenzo (Università Cattolica del Sacro Cuore); Fanfani, Bernardo (University of Turin) |
| Abstract: | We study how updates in pay floors set by collective bargaining agreements (CBAs) shape the wage structure in Italy. We estimate stacked event-panel difference-indifferences models around changes of contractual minima and trace distributional impacts. Pay-floor hikes of 2.2% on average raise mean log FTE daily wages by 2.2%, but effects are near zero at the 10th percentile and stronger at the 90th, implying inequalityenhancing wage-rate responses. This asymmetry reflects both within-agreement heterogeneity, as lower-paid workers within CBAs respond less, and between-agreement heterogeneity, as low-wage CBAs exhibit weaker pass-through. Non-compliance with pay floors is higher in low-wage CBAs, thus it is a potential driver of asymmetries even if its level is not affected by wage updates. Pay-floor hikes reduce employment and days worked only among low-wage workers and only among full-time jobs, which may further contribute to the muted wage response in the lower tail through selection mechanisms. |
| Keywords: | collective bargaining, contractual minimum wages, wage structure |
| JEL: | J31 J38 J51 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18797 |
| By: | David Neumark; Antonio Rodriguez-Lopez |
| Abstract: | Two prominent publications in the recent minimum wage literature argue that estimation of the employment effects of minimum wages should use "clean" event-study designs, and that doing so leads to the conclusion that minimum wages have very limited, if any, effects on employment. We explore the use of event-study designs in this context, using the event-study stacked design of Cengiz, Dube, Lindner and Zipperer (2019a) and the related local projections difference-in-differences approach in Dube and Lindner (2024), along with their same data sources and period coverage. We generally find negative and significant employment effects of minimum wages in the United States, both overall and - more strongly - in the restaurant industry. The null results in these two papers are fragile and depend critically on a number of choices regarding variables, events, sample definitions, and weighting; they are not attributable to using an event-study design. |
| Keywords: | minimum wage, employment, event study |
| JEL: | J23 J38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12791 |
| By: | Anjali Adukia; Richard Hornbeck; Daniel Keniston; Ben Lualdi |
| Abstract: | We examine the social construction of race in the United States, from Reconstruction to the modern day, and show how this affects statistical differences across and within racial categories. During the Reconstruction era, people with the same light brown skin tones, recorded by the Freedman's Bank (1865-1874), were more likely racialized as White or Mulatto in the 1870 Census if they were wealthier or literate. Racial assignment of descendants remained fluid through the 1940 Census. In modern data, self-reported race also varies with income and college completion among people with light brown skin tones. This endogenous racial assignment increases cross-race wealth gaps, which we show can be adjusted using sub-samples with data on skin tone or ancestry. Endogenous race also induces selection when controlling for race that, for example, attenuates the relationship between wealth and skin tone. |
| Keywords: | social construction of race, skin color, racialization, reconstruction, nlsy, statistical adjustments |
| JEL: | J15 J31 J71 K38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12812 |
| By: | Wicht, Leonie (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "Dual vocational education and training (VET) plays a central role in the school-to-work transition in Germany, yet a substantial share of training contracts is terminated prematurely. Estimating the causal effects of such disruptions is challenging due to endogenous selection into dropout. This study exploits training firm closures as unexpected shocks that displace apprentices during VET. Using administrative data on the universe of German apprentices between 2008 and 2022, a matched event study design estimates the impact of displacement on employment outcomes over the subsequent eight years. The results show that displacement during VET leads to small but persistent earnings losses. Relative to non-displaced apprentices, earnings from regular employment fall by up to 780e per year (about 4.5 percent) four years after displacement and by roughly 2 percent in later years. These losses are modest compared to displacement from regular employment, consistent with strong institutional support that helps affected apprentices to continue with a new training firm and complete VET. However, apprentices without a school degree experience substantially larger and increasing earnings losses. A decomposition analysis indicates that the overall earnings losses are largely driven by substantial penalties among apprentices who drop out after displacement. In contrast, those who complete VET experience only small earnings losses, and displacement increases the risk of dropout only marginally. Overall, the findings highlight the protective role of institutional arrangements in the German VET system, while also showing that not all apprentices access or benefit from these supports equally." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | IAB-Betriebs-Historik-Panel ; Integrierte Erwerbsbiografien |
| JEL: | J24 J63 M53 |
| Date: | 2026–07–21 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabdpa:202605 |
| By: | Lorenzo Cappellari (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Bernardo Fanfani |
| Abstract: | We study how updates in pay floors set by collective bargaining agreements (CBAs) shape the wage structure in Italy. We estimate stacked event-panel difference-indifferences models around changes of contractual minima and trace distributional impacts. Pay-floor hikes of 2.2% on average raise mean log FTE daily wages by 2.2%, but effects are near zero at the 10th percentile and stronger at the 90th, implying inequalityenhancing wage-rate responses. This asymmetry reflects both within-agreement heterogeneity, as lower-paid workers within CBAs respond less, and between-agreement heterogeneity, as low-wage CBAs exhibit weaker pass-through. Non-compliance with pay floors is higher in low-wage CBAs, thus it is a potential driver of asymmetries even if its level is not affected by wage updates. Pay-floor hikes reduce employment and days worked only among low-wage workers and only among full-time jobs, which may further contribute to the muted wage response in the lower tail through selection mechanisms. |
| Keywords: | collective bargaining, contractual minimum wages, wage structure. |
| JEL: | J31 J38 J51 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:ctc:serie1:def155 |
| By: | Antonio Cabrales; Wenhao Cheng |
| Abstract: | This paper studies how organizations should jointly design evaluation rules and assign workers when performance depends on both effort and non-discretionary advantage. Agents choose effort in positions linked by a competition network, while their effective advantage depends on own type and spillovers through a second network. The planner chooses both the assignment and the effort weight in evaluation. Equilibrium effort rises with a position's Katz-Bonacich centrality and falls with effective advantage. The optimal evaluation rule generally differs from true output. When effort is more important in production, the planner lowers the effort weight and uses negative assortative assignment to strengthen incentives. When advantage is more important, the planner raises the effort weight and uses positive assortative assignment to exploit spillovers. We also study a constraint requiring assignments to be pairwise stable, which creates an output loss depending on the intensity of competition. |
| Keywords: | relative performance evaluation, worker assignment, organizational design, incentives; contests, network games, peer effects, spillovers, assortative matching |
| JEL: | D23 D85 C72 J33 M52 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12816 |
| By: | Lihan Chen; Shaojie Lai; P. Raghavendra Rau; Qing Sophie Wang (University of Canterbury) |
| Abstract: | We study how binding executive pay compression affects managerial behavior and firm outcomes. Using China's 2015 executive pay-cap reform for state-owned enterprises, we compare SOEs with non-SOEs around a policy that sharply reduced executive compensation and limited common substitution channels. Treated firms exhibit lower work effort and CEO engagement, fewer unrelated acquisitions, less risk-related language in disclosure, lower investment, weaker investment efficiency, higher cash holdings, slower cash adjustment, and lower Tobin's Q and total factor productivity. We find little evidence that executives respond by increasing observable perks or tunneling. Instead, the results are more consistent with a passive “quiet life” response, in which weaker monetary incentives reduce managerial initiative and responsiveness. The effects are stronger for older CEOs and in more competitive industries, where performance incentives are likely more salient. CEO turnover rises, especially among high-performing executives, and pay-performance sensitivity declines, suggesting that selection effects and weaker formal incentives reinforce the behavioral response. Treated firms also increase ESG and CSR scores and employment, consistent with greater attention to politically salient outcomes. Overall, the evidence suggests that binding pay compression can generate real efficiency costs even when alternative career, reputational, and political incentives remain in place. |
| Keywords: | Executive compensation, Pay regulation, Managerial incentives, Corporate investment, Firm performance |
| JEL: | G30 G38 J33 M52 |
| Date: | 2026–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:cbt:econwp:26/05 |
| By: | OECD |
| Abstract: | Despite the rapid growth of cross-border trade in services, the evidence on how trade affects workers remains predominantly focused on manufacturing. This paper sheds new light on underexplored channels through which services trade reshapes labour markets, highlighting nuanced impacts not captured by aggregate employment effects. Expansions in services trade are found to be associated with shifts in demographic workforce composition. They are also linked to greater labour market dynamism, reflected in shorter job durations, but not to higher likelihood of switching between sectors or entering and exiting employment, nor of greater reliance on temporary contracts. At the regional level, services trade contributes to higher employment by drawing workers into the labour force and an increased probability of workers moving between regions. Moreover, jobs created by services trade are not limited to the tradable services sectors, as they generate positive spillovers to non-tradable services through sizeable local job multipliers. Collectively, the findings of this paper underscore the importance of services trade as a driver of local labour market dynamics and provide new evidence relevant for debates on gains from trade in an increasingly interconnected world. |
| Keywords: | Employment effects, Job multipliers, Labour market, Regional development, Services tradability |
| JEL: | F14 F16 F66 J21 L80 |
| Date: | 2026–08–11 |
| URL: | https://d.repec.org/n?u=RePEc:oec:traaab:301-en |
| By: | Sofoklis Goulas Silvia Griselda Rigissa Megalokonomou Yves Zenou |
| Abstract: | How do disruptive peers shape academic and career paths? We examine this question by leveraging the random assignment of students to classrooms in Greece and identifying the effects of peer disruptiveness on academic performance and career paths. Using suspen- sion hours as a measure of disruptiveness, we find that students assigned to more disruptive classrooms have lower academic achievement, a higher risk of grade retention, and reduced likelihood of graduating from high school on time. They are also less likely to pursue compet- itive STEM fields or enroll in selective postsecondary programs. The adverse effects are more pronounced for students from low-income areas, in larger classrooms, or with fewer female peers. Using a lab-in-the-field experiment, we find that exposure to multiple disruptors, com- pared with just one, reduces students’ study motivation, college aspirations, and readiness for science studies and careers, especially for those seated closer to disruptive peers. |
| Keywords: | disruption, suspension, random classroom assignment, high school graduation, STEM careers, lab-in-the-field experiment |
| JEL: | I24 I26 J16 J24 |
| Date: | 2026–07–27 |
| URL: | https://d.repec.org/n?u=RePEc:mos:moswps:paper_1785128387068_55 |
| By: | Lorenzo Cappellari (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Tommaso Colussi (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro CuoreAuthor-Name: Lorenzo Cappellari); Marco Ovidi (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore) |
| Abstract: | We study how committee dynamics affect the recognition of academic excellence and its consequences in the labour market. Using administrative records from a major Italian university and exploiting exogenous variation in the gender composition of graduation committees, we show that equally prepared female graduates are significantly less likely to receive laude honors when evaluated by male-majority committees, while males are unaffected. The effect is concentrated among students advised by female or early-career faculty and disappears when a woman chairs the committee, pointing to the role of authority and influence in deliberations. We show pre-defense gender gaps in adivsors’ official laude requests in male-majority committees, consistent with nominations responding to expected committee support. Gaps in academic distinction translate into meaningful entry-wage penalties, contributing to gender gaps at labor-market entry. |
| Keywords: | Gender bias, academic evaluation, labor market outcomes. |
| JEL: | J16 I23 J24 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:ctc:serie1:def154 |
| By: | Adam Bloomfield; Ngoc Dao; Kyung Min Lee; Sita Slavov |
| Abstract: | We examine how state policies requiring firms to facilitate workplace retirement saving affect household balance sheets. Using data from the Survey of Income and Program Participation (SIPP), we compare private-sector workers likely exposed to Oregon’s Automatic-Enrollment Individual Retirement Account (Auto-IRA) policy with similar workers in not-yet-adopting states. We find that the Auto-IRA policy is associated with increases in IRA and employer-sponsored retirement plan ownership and assets. We also find increases in checking or savings account ownership and balances, as well as higher credit card debt. The results suggest that Auto-IRA policies spill over to household liquidity management and borrowing. |
| JEL: | D14 G51 J32 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35373 |
| By: | Dean R. Lillard; Joseph J. Sabia; Zihao Sheng; Casey Warman |
| Abstract: | This study explores the effects of COVID-19 school closures on labor market outcomes of Canadian parents of school-aged children. Using newly collected data on grade-level-specific school closures across 141 Canadian cities along with individual-level panel data from the Labour Force Survey, difference-in-differences estimates provide robust evidence that restrictions on in-person schooling reduced employment among partnered mothers of school-aged children by approximately 2 percentage points. For fathers, labor supply adjustments are much weaker and concentrated on single fathers. Finally, auxiliary analyses using administrative tax records provide suggestive evidence that school closures increased public benefit receipt among single parents. |
| JEL: | I24 I28 J21 J22 J30 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35432 |
| By: | Karen Dynan; Douglas Elmendorf; Louise Sheiner |
| Abstract: | Artificial intelligence will probably generate major changes in the US economy, although the nature, timing, and magnitude of those changes are highly uncertain. We analyze a set of long-term scenarios involving different combinations of faster productivity growth, greater income inequality, job displacement, and a higher capital share of income. For each scenario, we assess the implications for federal debt and potential policy responses related to faster economic growth, the distribution of income, support for workers who are laid off, and taxation and ownership of capital. Given the uncertainty surrounding AI’s economic effects, policies that are robust to different scenarios would be especially valuable. |
| JEL: | E62 H20 H60 H68 J24 O30 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35437 |
| By: | Berfin Kardaslar; Alexander S. Kritikos; Lukas Menkhoff |
| Abstract: | In this study, we examine the relationship between personality traits, captured by risk tolerance and the Big Five traits, and firm size, as measured by the number of employees. We show that the personality of entrepreneurs matters for the size of their firm they operate. We use a novel add-on to the German Socio-Economic Panel that includes a sub-sample of owner-managers running larger firms. High levels of risk tolerance – associated with an increased likelihood of firm exit in existing research – is positively associated with firm size for entrepreneurs in the market. High scores in extraversion are also associated with larger firms. However, a high level of openness for experience, a main driver of founding ventures, is negatively related to firm size. Overall, we show that running larger firms is associated with traits that are partially different from those that increase the likelihood of entrepreneurial entry or survival. |
| Keywords: | Entrepreneurship, risk tolerance, Big Five personality traits, firm size |
| JEL: | L26 D81 J24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2173 |
| By: | Gabriel Montes-Rojas (IIEP-UBA/CONICET); Fernando Toledo (UNLP); Juan Manuel Rodríguez Repeti (IIEP-UBA) |
| Abstract: | This paper studies what happens when AI gets cheaper, with emphasis on the labor market outcomes, whether it creates formal jobs or whether it pushes workers into informality. We argue that the answer depends on the elasticity of substitution between imported AI capital and formal labor. We build a small open economy DSGE model with a dual labor market, imported AI capital, and country risk, calibrated to an economy where informality is pervasive. The same decline in AI prices produces sharply different labor-market outcomes depending on whether AI substitutes or complements formal workers. Under substitution, cheaper AI weakens formal labor demand and increases the role of the informal sector as an employment buffer. Under complementarity, it expands formal employment and amplifies output, wages, investment, and capital accumulation. The model therefore shows that AI can become either a source of displacement pressure or a driver of formal-sector expansion, depending on how it interacts with human labor. |
| Keywords: | Artificial Intelligence, Informal Economy, Dual Labor Markets, DSGE, Latin America |
| JEL: | E26 F41 O33 J46 C68 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:aoz:wpaper:401 |
| By: | Campante-Vale, Ricardo; Fontes, Luiz Felipe; Roost, Stefanie; Tebaldi, Raquel |
| Abstract: | We study the labor market effects of a major flood disaster in Brazil and whether a temporary labor-retention schemePrograma Emergencial de Apoio Financeiro (PEAF)mitigated these effects by providing wage subsidies while requiring firms to retain covered workers. Drawing on administrative data, we use a matched event-study design that compares workers in flood-affected establishments with and without PEAF coverage to matched workers in non-affected establishments. Direct flood exposure reduced formal employment among unprotected workers by about 2 percentage points and increased job switching, indicating rapid reallocation to other formal employers. PEAF increased employment by 2.4 percentage points relative to the counterfactual of flood exposure without program protection. It also reduced reliance on unemployment insurance, consistent with its effect on employment retention. Earnings effects are more nuanced: PEAF mitigated unconditional earnings losses through employment preservation, but earnings among retained workers declined, consistent with downward compensation adjustment within continuing jobs. Effects are concentrated in very small establishments and in sectors more exposed to disruption. The results show that labor-retention schemes can preserve employment after climate disasters, but that need not imply full income protection, a difference that is central to the design of policies aimed at mitigating the economic consequences of climate shocks. |
| JEL: | H25 J38 J65 J68 Q54 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14660 |
| By: | Hattori, Keisuke |
| Abstract: | This paper studies costly information sharing in teams where members may duplicate one another's work. Members first decide whether to share their intended task assignments and then choose productive effort. Sharing allows a teammate to direct effort toward nonoverlapping tasks, while the sharer benefits only through complementary team production. This creates strategic complementarity in sharing and can sustain both a low-sharing, low-effort equilibrium and a high-sharing, high-effort equilibrium. The incentive to initiate sharing is strongest at an intermediate level of duplication risk: when duplication is limited, sharing prevents little wasted work; when duplication is severe, a lone sharer retains too little effective output to gain much from the teammate's response. Yet the value of coordinated sharing rises with duplication risk. A leader who shares first can select the high-sharing equilibrium, while larger teams may require a critical mass of initial sharers. The main equilibrium structure also survives with continuous sharing. The analysis identifies when communication platforms must be supplemented by visible first movers or coordinated initial participation to prevent duplicate work. |
| Keywords: | information sharing, duplicate work, team production, coordination failure, leadership |
| JEL: | C72 D23 J24 M12 M54 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:342325 |
| By: | Makany, Milan (Erasmus University Rotterdam & Tinbergen Institute); Zinovyeva, Natalia (Department of Economics, University of Warwick) |
| 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' subse quent 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 Classification: I23, D71, D83, M51, J45 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:815 |
| By: | Kevin Rinz |
| Abstract: | This paper introduces new measures of the overtime exemption status of individual tasks measured by O*NET. Task-based measures reveal that about 60 percent of salaried workers are in occupations in which either all or no O*NET tasks are exempt. While workers with higher earnings tend to be employed in occupations in which a larger share of tasks are exempt, there is substantial variation in exempt task shares across occupations at all levels of earnings. The task content of job ads shows a similar pattern. Incorporating task-based exemption measures into extensions of prior work reveals that workers in high-exemption occupations were more likely to transition out of salaried jobs affected by changes to state overtime rules, and managerial jobs just above the federal salary level test threshold have exempt task content similar to those just below it. |
| JEL: | J38 J88 |
| Date: | 2026–07–13 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedcwq:103568 |
| By: | Gianluca Orefice; Giovanni Peri; Gianluca Santoni |
| Abstract: | Using employer-employee Italian data over the period 1998-2018 we analyze the impact of the largest regularization of undocumented immigrant workers in Italy on wage, employment and mobility outcomes of natives. Our empirical strategy takes advantage of the 2002 Bossi-Fini law that unexpectedly regularized 634, 000 undocumented non-EU immigrants, with variation across firms and provinces that was not correlated with previous economic performance. We find that the policy had a small effect on the average wage of native workers and positive effects on their employment at the local labor market level. Additionally, native co-workers in firms more affected by the policy were more likely to change employers in the post-policy period. Such higher mobility resulted in a heterogeneous wage effect across switchers: workers that managed to transition towards better firms experienced wage gains in the medium- and long-run, while other workers experienced wage losses. This implied an increase in wage dispersion for natives and some losers among Italian workers. |
| Keywords: | workers, firms, immigrant regularization, local labor market |
| JEL: | F16 J20 J61 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12817 |
| By: | Andreas Haller; Stefan Staubli |
| Abstract: | The central trade-off for designing Disability Insurance (DI) is between providing insurance to those in need while maintaining incentives to work. This paper develops a novel revealed-preference approach to identify the insurance value of DI benefits. We show that comparing the DI take-up response to a change in benefits versus a change in wages identifies the insurance value. Implementing our framework in Canada, we estimate that increasing DI benefits by $1 creates an additional disincentive cost of $0.60 but creates an insurance value of $2.20. Thus, our approach suggests that DI benefits are not overly generous in the Canadian context. |
| JEL: | H53 H55 J14 J21 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35438 |
| By: | Makarski, Krzysztof (FAME|GRAPE & Warsaw School of Economics); Tyrowicz, Joanna (FAME|GRAPE, University of Warsaw and IZA/LISER); Komada, Oliwia (FAME|GRAPE) |
| Abstract: | This paper studies the role for progressive labor income taxation in the context of social security reform. We propose a novel reform that replaces redistributive pensions with a contribution-based system while simultaneously increasing the progressivity of labor income taxation to preserve social insurance. Using a stylized model, we show that the benefit of such reform is derived from the Frisch elasticity of labor supply. For sufficiently high values, the reform can be fiscally neutral and Pareto-improving. We then evaluate the reform in a full general equilibrium model calibrated to the U.S. economy. Quantitative results on the efficiency-insurance trade-offs are in line with our theoretical predictions. In the steady-state, for plausible values of the Frisch elasticity, the fiscal space generated by increased labor supply is sufficient to compensate through lump-sum transfers the loss of pension-based insurance. These results carry over to transition dynamics: the reform yields a Pareto improvement along the transition path. Our findings highlight the potential for tax-based redistribution to replace pension-based insurance. |
| Keywords: | social security reform, labor income tax, redistribution, insurance, welfare effects |
| JEL: | C68 E62 H55 J26 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18810 |
| By: | Rashidghalam, Masoomeh; Heshmati-Kim, Jieun; Heshmati, Almas |
| Abstract: | AI is becoming a driving force in Vietnam's economic transformation. The country is moving beyond a growth model based on low-cost labour and export-led industries. Adoptions of the widespread generative AI and AI-powered assistants have accelerated the transformation. AI by reshaping the nature and future of work, it redefines the rules and productivity. This research overviews the recent research investigating how AI is transforming work, demand for digital skills, and productivity gains in AI-adopting Vietnamese industries. Optimal blend of AI and human collaboration influence positively its productivity impacts. Application of AI enable use of its potentials, but it has also significance challenges and risks of skill gaps, training costs, trust, job quality and distribution of its effects. Focus on adaptability, lifelong learning, and integration of AI ensures a positive future of work. This study identifies factors determining adoption of AI and heterogeneity in its productivity and future of work impacts. |
| Keywords: | AI application, Nature of work, Future of work, Economic transformation, Skill requirements, AI productivity impacts, Vietnam |
| JEL: | D24 E24 F63 J24 L52 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1796 |
| By: | Liana Bomm (first name last name) (Paderborn University); ... (first name last name of second author) (... (workplace of second author)) |
| Abstract: | Executive compensation increasingly relies on long-term incentives (LTIs) to align managerial decision-making with firms' long-term objectives. Prior research provides mixed evidence on the relationship between LTIs and firm performance, with most studies relying on aggregate measures of long-term incentives. Using panel data on executives from 80 German DAX and MDAX firms covering the period 2006–2021, this study employs fixed-effects panel regressions to distinguish between equity- and cash-based LTIs, examine the relative weighting of LTIs within executive compensation, and analyze differences across organizational contexts proxied by compensation regimes. The results reveal systematically different relationships between equity- and cash-based LTIs across accounting- and market-based performance measures and across different time horizons. The relative weighting of LTIs provides information beyond compensation levels, and the relationships between executive incentive structures and firm performance vary across organizational contexts. Overall, the findings demonstrate the importance of moving beyond aggregate measures toward a more differentiated understanding of executive incentive design by jointly considering the form of long-term incentives, their relative weighting within the overall compensation package, and the organizational context in which they operate. (abstract of the paper) |
| Keywords: | Executive Compensation, Long-Term Incentives, Incentive Design, Compensation Structure, Firm Performance (keywords) |
| JEL: | G30 G34 J33 M12 |
| URL: | https://d.repec.org/n?u=RePEc:pdn:dispap:181 |
| By: | Joshua Brault; Maryam Haghighi; Jing Yang |
| Abstract: | We study the monetary policy response to AI adoption in a two-sector New Keynesian model with a task-based microfoundation, sticky prices, and downward nominal wage rigidity. We distinguish between two forms of AI-driven technological change: augmentation, which raises the productivity of labor within existing tasks, and automation, which displaces labor by reallocating tasks from workers to machines, contracting the set of tasks requiring human input. In the short run, both shocks lower labor demand on net, and with downward nominal wage rigidity, unemployment emerges unless monetary policy provides accommodation. But because monetary policy operates through aggregate demand and cannot target sectors differentially, accommodation that reduces unemployment in the AI-affected sector raises inflationary pressure in the unaffected one, opening a sectoral wedge between the policy rates required to clear the two labor markets. Since, for output-equivalent shocks, automation generates a larger decline in labor demand, the associated wedge is wider and the Phillips curve lies above and to the right of the curve for augmentation---restoring full employment comes at a greater cost of inflation. In addition to the nature of the shock, the aggregate inflationary consequences depend on the breadth of AI adoption across the economy. Under augmentation, as the AI-affected sector grows, its falling sectoral price increasingly offsets the inflation generated elsewhere by monetary accommodation---making aggregate inflation an unreliable signal of the underlying trade-off. For automation both sectoral prices rise and no such offset exists. In our framework, sector-specific AI adoption poses an unambiguous short-run labor market stabilization problem, while its implications for aggregate inflation depend on the nature of technological change, the breadth of adoption, and the response of monetary policy. |
| Keywords: | Monetary policy; Inflation dynamics and pressures; Monetary policy framework and transmission; Structural challenges; Digitalization and productivity |
| JEL: | E E2 E24 E3 E31 E32 E5 E52 J J2 J23 O O3 O33 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:26-27 |
| By: | Kaur, Sarvnipun; Arora, Anshika; Singh, Prakarsh |
| Abstract: | Night-shift bans prevent women from working nights on equal terms with men. Though most countries repealed such bans, India retains gender-based restrictions. After 2017, several states permitted women in service-establishments to work nightshifts under administrative requirements. Exploiting this staggered rollout, we find reforms reshaped female employment composition without affecting its level. Women in treated-states were 10.1% more likely to be employed in services and 5.3% less likely in non-services. This effect is stronger in safer districts, robust to placebos and contemporaneous manufacturing reforms. Lifting this constraint may expand employment, but administrative-costs can offset these gains. We find the former dominates. |
| Keywords: | Gender, Labor law, Sectoral employment |
| JEL: | J16 J21 J78 K31 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1791 |
| By: | Berg, K.; Danyu-Zhang, J.; Gaviano, L. G.; Yannelis, C. |
| Abstract: | For most households, human capital is the largest asset they own, and rapid advances in artificial intelligence (AI) may change its value. This paper studies whether workers whose occupations are more exposed to AI use financial and labor markets to hedge this risk, by investing in firms that gain from the new technology. We develop a portfolio-choice model with nontradable human capital in which AI-related equity pays off in states where exposed workers’ labor income falls through technological unemployment. The model predicts that more exposed workers should hold more equity, especially when human capital is large relative to financial wealth. We test these predictions using linked Norwegian administrative data on workers’ occupations, employers, income, wealth, and equity holdings. Workers in more AI-exposed occupations are more likely to participate in equity markets and, conditional on participation, hold more equity, especially from firms located in countries with firms more exposed to the AI boom. The exposure–equity relationship is stronger for younger workers, consistent with life-cycle hedging. Following the release of ChatGPT, workers with greater AI exposure also become more likely to move into lower-exposure industries and senior management roles. Our results highlight a channel through which financial markets may partially insure workers against technological unemployment. |
| Keywords: | Artificial Intelligence, Portfolio Allocation, Income Risk, Stock Market Participation |
| JEL: | G11 G51 J32 |
| Date: | 2026–07–27 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2660 |
| By: | Takahiro (Department of Economics, Keio University); Kazuhiko Shinoda (Department of Economics, Nagoya University); Taisuke Otsu (Department of Economics, London School of Economics) |
| Abstract: | This paper develops an auxiliary-measurement approach to identifying average treatment effects in generalized Roy environments where treatment choice may depend directly on potential outcomes. Identification is formulated as a primal–dual inverse problem. A latent selection-odds representer anchors a causally correct element in an observed calibration set, which may be nonunique. An adjoint outcome representer certifies that the target mean is invariant over that set, so identification does not require point identification of the calibrating function itself. This separation yields a trichotomy between non-invariance, irregular identification, and regular orthogonal-moment representation, according to the position of the outcome signal in the adjoint range. The same geometry delivers an orthogonal estimating equation and an exact product-bias identity, supporting sieve GMM and cross-fitted estimation. Simulations illustrate regular, weak, and failed range regimes. An application to retirement and cognition in the Health and Retirement Study shows that specifications restricted to observed adjustment and those allowing selection on gains yield materially different estimates, illustrating the framework’s empirical content under maintained calibration and adjoint-representation assumptions. |
| Keywords: | Roy model; selection on gains; average treatment effect; auxiliary measurements; inverse problems; sieve GMM; orthogonal moments |
| JEL: | C14 C21 C26 C36 J24 |
| Date: | 2026–06–10 |
| URL: | https://d.repec.org/n?u=RePEc:keo:dpaper:dp2026-012 |
| By: | Riccarda Rosenball (University of Graz, Austria) |
| Abstract: | This paper examines the effect of export entry on the within-firm gender wage gap. Existing studies provide mixed evidence on this relationship. I show that part of this inconsistency reflects how the standard worker-level empirical approach aggregates firm-level treatment effects. When linked employer-employee data are used to estimate effects that operates at the firm level, ordinary least squares (OLS) does not recover a simple average across firms. Instead, firms receive implicit OLS weights that are proportional to the number of worker observations they contribute, giving disproportionate influence to large firms. Applying the standard empirical approach on German data, I estimate that export entry reduces the within-firm gender wage gap by approximately 1.2 percentage points. However, this average effect disappears once the estimation is reweighted by inverse firm size, thereby removing the mechanical firm-size component of the implicit OLS weights. The apparent reduction in the gender wage gap is therefore driven by a small number of large exporters rather than representing a general pattern across firms. The paper highlights an important issue that arises whenever individual-level data are used to estimate treatment effects operating at the group level: in the presence of heterogeneous group-level effects, OLS estimates reflect implicit weighting schemes rather than simple averages across groups. Recognizing these implicit weighting structures is therefore essential for interpreting empirical estimates and drawing policy conclusions. |
| Keywords: | Gender Wage Gap, Exporting Firms, Linked Employer-Employee Data, Heterogenous Effects |
| JEL: | F16 J16 J70 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:grz:wpaper:2026-14 |
| By: | Emek Basker; Lucia Foster; Martha Stinson |
| Abstract: | We study the importance of bunching in the context of tip-income reporting by workers at full-service, single-unit restaurants in the United States. Using tax reports at both the individual and the employer levels, we show that reported tip income varies with minimum-wage laws that provide an incentive for tipped workers to report some, but not necessarily all, of their tips. As a result, reported tips bunch at the minimum required threshold. We quantify missing tips due to bunching at nearly $63 million per year in 2018 dollars, on average over the period 2005-2018. Bunching is stronger for jobs at small employers and in the earlier part of the time series and declined monotonically from 2010 to 2018. Using restaurant-level revenue data, we also estimate the total value of unreported tips assuming an average tip rate of 12%. We find that tips are missing throughout the distribution. All told, missing tips exceed $4 billion per year, implying that bunching explains only 1.5% of all missing tips. |
| Keywords: | Tipping, Restaurants, Tip Reporting, Bunching, Minimum Wage, Tip Credit |
| JEL: | J33 L82 H26 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-40 |
| By: | Bruns, Daniel (Leibniz University Hannover); Meier, Dennis (Leibniz University Hannover); Thomsen, Stephan (Leibniz University Hannover); Wolf, Felix (Leibniz University Hannover) |
| Abstract: | Health workforce projections support needs-aligned and geographically equitable care by anticipating service demand, workforce supply, and regional gaps. We develop two indicators: the replacement requirement, measuring capacity needed to offset demand and workforce exits, and the projected supply ratio, assessing provision under workforce-entry scenarios. We project general practitioner (GP) care in Lower Saxony, Germany, across 105 planning areas from 2025 to 2040. By 2040, the cumulative GP replacement requirement needed to maintain the 2025 supply ratio ranges from about 50% to more than 90% of baseline capacity across planning areas and is concentrated in the next decade. Under the baseline scenario, 4, 872 GP full-time equivalents (FTEs) remain in 2040 against a requirement of 5, 131. The number of planning areas with a supply ratio below 75% rises from two in 2025 to 16 in 2040. Securing GP care is therefore primarily a challenge of allocation, requiring education and recruitment policies to be combined with targeted measures to improve overall supply. |
| Keywords: | health workforce planning, health workforce projection, general practitioners, primary health care, physician supply and demand, regional health planning |
| JEL: | C53 I11 J44 R23 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18801 |
| By: | José-Víctor Ríos-Rull; Josef Schroth; Tamon Takamura; Yaz Terajima |
| Abstract: | The empirical literature emphasizes the importance of protecting shareholder rights by encouraging managers to deliver a high present value of payouts. We show that this alignment is dynamically self-defeating: whenever access to outside equity is possible, even if costly, and commitment is limited, compensation tied to total payouts inadvertently generates endogenous managerial short-termism through time inconsistency. Paradoxically, a manager who cannot commit to restrain future equity issuance raises substantial outside funding yet invests too little today. When managers cannot commit ex ante, they rationally discount the marginal benefit of investment at a rate below the subjective discount factor, even though managers and shareholders share the same information and discount factor. The resulting wedge raises the manager’s perceived cost of capital and reduces long-run investment. Rewarding the manager for per-share rather than total payouts removes the incentive to dilute incumbent shareholders and restores efficient issuance and investment. Among implementable contracts it maximizes the value accruing to incumbent shareholders and converges to the first-best steady state, so per-share indexing dominates absolute-payout pay for the firm’s existing shareholders. |
| Keywords: | Financial markets and funds management; Market functioning; Models and tools; Economic models |
| JEL: | G G3 G32 G34 J J3 J33 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:26-25 |
| By: | Santiago Caballero, Carlos; Sánchez Alonso, Blanca |
| Abstract: | When a conflict breaks out, some people escape, and others remain. Who can escape, and how does it depend on where they live? The most recent literature suggests that Spanish exiles who moved to Mexico, escaping the effects of the Civil War, were very positively selected in terms of human capital. This paper addresses whether this positive selection was homogeneous all around Spain, or if the ability to escape the war presented regional differences. Using an original database at the microeconomic level created from the Mexican National Registry of Foreigners and estimations of regional stature benchmarks from Spanish military records, we compare the height of each male exile with the average height of the conscripts from the same region and birth cohort. We show that positive selection was indeed high on average, but also that significant regional differences exist. We then test if these differences could be explained by differences in the cost and possibilities to escape. Our results indicate that exiles born in regions farther from international land frontiers were more positively selected. On the other hand, exiles from regions that remained longer under the control of the Republic, with stronger potential networks in Mexico before the war and access to subsidised ships to travel to Mexico, show a lower degree of selection. These findings suggest that forced migrations are not only shaped by the direct effects of repression and violence, but also by the ability of those suffering it to escape. This situation created unequal opportunities: in some regions, escaping became not just a necessity but also a privilege. |
| Keywords: | Anthropometric history; Forced migration; Spanish Civil War; Human capital |
| JEL: | D74 F22 J24 N34 O15 |
| Date: | 2026–07–23 |
| URL: | https://d.repec.org/n?u=RePEc:cte:whrepe:50544 |