nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2018‒08‒27
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. Matching, Sorting, and Wages By Thibaut Lamadon; Costas Meghir; Jean Marc Robin; Jeremy Lise
  2. Inequality, Social Distance, and Giving By Nicolas J. Duquette; Enda Hargaden
  3. Narratives, Imperatives and Moral Reasoning By Roland Bènabou; Armin Falk; Jean Tirole
  4. What Causes Labor Turnover To Vary? By Edward P. Lazear; Kristin McCue
  5. Fertility Discrimination in Hiring? Evidence from a Field Experiment By Sascha O. Becker; Ana Fernandes; Doris Weichselbaumer
  6. Is Automation Labor-Displacing? Productivity Growth, Employment, and the Labor Share By David Autor; Anna Salomons
  7. Older Americans Would Work Longer If Jobs Were Flexible By John Ameriks; Andrew Caplin; Christopher Tonetti; Joseph Briggs; Matthew Shapiro; Minjoon Lee
  8. XX>XY?: The Changing Female Advantage in Life Expectancy By Claudia Goldin; Adriana Lleras-Muney
  9. Shift-Share Instruments and the Impact of Immigration By David A. Jaeger; Joakim Ruist; Jan Stuhler

  1. By: Thibaut Lamadon (University of Chicago); Costas Meghir (Yale University); Jean Marc Robin (Sciences Po); Jeremy Lise (University of Minnesota)
    Abstract: This paper the non-parametric identification of models with production complementarities and search frictions. We develop a model with two sided unobserved heterogeneity, mobility costs, on-the-job search and vacancy cre- ation. The mobility cost is borne by the worker. The assumption here is that the worker pays the moving cost and the firm compensates her through a higher wage. Essentially we assume that firms can make wage payments, but not lump sum payments. The mobility cost is introduced to provide a structural source of wage randomness given worker and firm heterogeneity. We develop a constructive proof for the non-parametric identification of the production function from matched employer-employee data. We evaluate the properties of the associated estimator with a Monte-Carlo simulation. We estimate the model on the matched employer-employee data from Sweden to estimate the complementarity between unobserved worker and firm hetero- geneity, decompose the sources of income inequality and quantify the output loss due to search friction
    Date: 2018
  2. By: Nicolas J. Duquette (Sol Price School of Public Policy, University of Southern California); Enda Hargaden (Department of Economics, University of Tennessee)
    Abstract: This paper demonstrates that economic inequality has a negative, causal effect on prosocial behavior, specifcally, charitable giving. Standard theories predict that greater inequality increases giving, though income tax return data suggest the opposite may be true. We develop a new theory which, incorporating insights from behavioral economics and social psychology, predicts when greater inequality will lower charitable giving. We test the theory in an experiment on donations to a real-world charity. By randomizing the income distribution, we identify the effect of inequality on giving behavior. Consistent with our model, heightened inequality causes total giving to fall. Policy agendas that rely on charitable giving and other voluntary, prosocial behaviors to mitigate income and wealth inequality are likely to fail.
    Keywords: Inequality; charitable giving; social distance; lab experiments
    JEL: C91 D31 D64 H23 N32
    Date: 2018–07
  3. By: Roland Bènabou (Princeton University); Armin Falk (University of Bonn); Jean Tirole (Toulouse School of Economics)
    Abstract: By downplaying externalities, magnifying the cost of moral behavior, or suggesting not being pivotal, exculpatory narratives can allow individuals to maintain a positive image when in fact acting in a morally questionable way. Conversely, responsibilizing narratives can help sustain better social norms. We investigate when narratives emerge from a principal or the actor himself, how they are interpreted and transmitted by others, and when they spread virally. We then turn to how narratives compete with imperatives (general moral rules or precepts) as alternative modes of communication to persuade agents to behave in desirable ways.
    Keywords: moral behavior, prosocial behavior, narratives, imperatives, justifications, rules, Kantian reasoning, deontology, consequentialism, utilitarianism, norms, organizations
    JEL: D62 D64 D78 D83 D85 D91 H41 K42 L14 Z13
    Date: 2018–07
  4. By: Edward P. Lazear; Kristin McCue
    Abstract: Most turnover reflects churn, where hires replace departures. Churn varies substantially by employer, industry and worker characteristics. In the LEHD (QWI) data, permanent employer differences account for 36% of the variation in churn. For example, leisure and hospitality turnover is more than double that of manufacturing. The cost of churn is proxied by the mean wage and the benefit by the variance in wages. QWI and JOLTS data confirm predictions. High mean wage occupations and industries experience less churn and high wage-variance ones experience more churn. Additionally, less educated, younger and male workers have higher separation and churn rates.
    JEL: E24 J0 J6 J63 M50 M51
    Date: 2018–07
  5. By: Sascha O. Becker (University of Warwick); Ana Fernandes (Berner Fachhochschule; University of Fri); Doris Weichselbaumer (University of Linz)
    Abstract: We conducted a large scale correspondence test in Switzerland, Germany, and Austria to examine whether employers discriminate among job candidates concerning family status. In German speaking countries, CVs routinely include detailed information about the job candidate's personal characteristics. We considered thirty-year-old job applicants seeking secretarial or accounting positions. We found that having a family (indicated by marriage and the presence of children and their ages, or by being married but childless) does not affect the job candidate's chances of being called back for an interview for a full-time job. However, women were significantly less likely to receive a callback compared to men if the applicant's skills were not a good fit for the advertised position, if they lived far from the workplace, or when applying to large companies. Such gender asymmetric callback decisions are likely the result of subconscious decision making. Our results remain even after controlling for differences in the variance of unobservable determinants of productivity across applicants with and without a family.
    Date: 2018
  6. By: David Autor; Anna Salomons
    Abstract: Many technological innovations replace workers with machines, but this capital-labor substitution need not reduce aggregate labor demand because it simultaneously induces four countervailing responses: own-industry output effects; cross-industry input–output effects; between-industry shifts; and final demand effects. We quantify these channels using four decades of harmonized cross-country and industry data, where we measure automation as industry-level movements in total factor productivity (TFP) that are common across countries. We find that automation displaces employment and reduces labor's share of value-added in the industries in which it originates (a direct effect). In the case of employment, these own-industry losses are reversed by indirect gains in customer industries and induced increases in aggregate demand. By contrast, own-industry labor share losses are not recouped elsewhere. Our framework can account for a substantial fraction of the reallocation of employment across industries and the aggregate fall in the labor share over the last three decades. It does not, however, explain why the labor share fell more rapidly during the 2000s
    JEL: D33 J23 O33 O57
    Date: 2018–07
  7. By: John Ameriks (The Vanguard Group, Inc.); Andrew Caplin (New York University); Christopher Tonetti (Stanford University); Joseph Briggs (Federal Reserve Board of Governors); Matthew Shapiro (University of Michigan); Minjoon Lee (Carleton University)
    Abstract: Older Americans, even those who are long retired, have strong willingness to work, especially in jobs with flexible schedules. For many, labor force participation near or after normal retirement age is limited more by a lack of acceptable job opportunities or low expectations about finding them than by unwillingness to work longer. This paper establishes these findings using an approach to identification based on strategic survey questions (SSQs) purpose-designed to complement behavioral data. These findings suggest that demand-side factors are important in explaining late-in-life labor market behavior and may be the most appropriate target for policy aimed at promoting working longer.
    Date: 2018
  8. By: Claudia Goldin; Adriana Lleras-Muney
    Abstract: Females live longer than males in most parts of the world today. Among OECD nations in recent years, the difference in life expectancy at birth is around four to six years (seven in Japan). But have women always lived so much longer than men? The answer is that they have not. We ask when and why the female advantage emerged. We show that reductions in maternal mortality and fertility are not the reasons. Rather, we argue that the sharp reduction in infectious disease in the early twentieth century played a role. The primary reason is that those who survive most infectious diseases carry a health burden that affects organs, such as the heart, as well as impacting general well-being. We use new data from Massachusetts containing information on causes of death from 1887 to show that infectious diseases disproportionately affected females between the ages of 5 and 25. Increased longevity of women, therefore, occurred as the burden of infectious disease fell for all. Our explanation does not tell us why women live longer than men, but it does help understand the timing of the increase.
    JEL: J1 J16 N0
    Date: 2018–06
  9. By: David A. Jaeger (City University of New York Graduate Center); Joakim Ruist (University of Gothenburg); Jan Stuhler (Universidad Carlos III de Madrid)
    Abstract: A large literature exploits geographic variation in the concentration of immigrants to identify their impact on a variety of outcomes. To address the endogeneity of immigrants’ location choices, the most commonly-used instrument interacts national inflows by country of origin with immigrants’ past geographic distribution. We present evidence that estimates based on this “shift-share” instrument conflate the short- and long-run responses to immigration shocks. If the spatial distribution of immigrant inflows is stable over time, the instrument is likely to be correlated with ongoing responses to previous supply shocks. Estimates based on the conventional shift-share instrument are therefore unlikely to identify the short-run causal effect. We propose a “multiple instrumentation” procedure that isolates the spatial variation arising from changes in the country-of-origin composition at the national level and permits us to estimate separately the short- and long-run effects. Our results are a cautionary tale for a large body of empirical work, not just on immigration, that rely on shift-share instruments for causal inference.
    Keywords: immigration, geographic variation, shocks, multiple instrumentation, spatial analysis
    JEL: C36 J15 J21 J61
    Date: 2018–02

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