|
on Unemployment, Inequality and Poverty |
|
Issue of 2019‒05‒06
nine papers chosen by |
| By: | Richard Blundell (University College London and Institute for Fiscal Studies); Monica Costa Dias (Institute for Fiscal Studies and University of Porto); David Goll (University College London and Institute for Fiscal Studies); Costas Meghir (Cowles Foundation, Yale University, NBER, IZA, CEPR, and Institute for Fiscal Studies) |
| Abstract: | We investigate the role of training in reducing the gender wage gap using the UK- BHPS which contains detailed records of training. Using policy changes over an 18 year period we identify the impact of training and work experience on wages, earnings and employment. Based on a lifecycle model and using reforms as a source of exogenous variation we evaluate the role of formal training and experience in defining the evolution of wages and employment careers, conditional on education. Training is potentially important in compensating for the effects of children, especially for women who left education after completing high school. |
| Keywords: | Workplace training, On the job training, Female labor supply, Gender wage differentials, Human capital, Fertility and the gender wage gap, Lifecycle labor supply |
| JEL: | E24 H24 I28 J16 J22 J24 J31 J71 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2174&r=all |
| By: | Richard Blundell; Monica Costa Dias; David A. Goll; Costas Meghir |
| Abstract: | We investigate the role of training in reducing the gender wage gap using the UK-BHPS which contains detailed records of training. Using policy changes over an 18 year period we identify the impact of training and work experience on wages, earnings and employment. Based on a lifecycle model and using reforms as a source of exogenous variation we evaluate the role of formal training and experience in defining the evolution of wages and employment careers, conditional on education. Training is potentially important in compensating for the effects of children, especially for women who left education after completing high school. |
| JEL: | H2 J16 J22 J24 J3 J31 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25776&r=all |
| By: | Adermon, Adrian (IFAU); Lindahl, Mikael (University of Gothenburg); Palme, Mårten (Stockholm University) |
| Abstract: | We study the importance of the extended family – the dynasty – for the persistence in inequality across generations. We use data including the entire Swedish population, linking four generations. This data structure enables us to identify parents' siblings and cousins, their spouses, and the spouses' siblings. Using various human capital measures, we show that traditional parent-child estimates of intergenerational persistence miss almost one-third of the persistence found at the dynasty level. To assess the importance of genetic links, we use a sample of adoptees. We then find that the importance of the extended family relative to the parents increases. |
| Keywords: | intergenerational mobility, extended family, dynasty, human capital |
| JEL: | I24 J62 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12300&r=all |
| By: | Benjamin Friedrich (Northwestern University, Kellogg School of Management); Lisa Laun (IFAU); Costas Meghir (Cowles Foundation, Yale University); Luigi Pistaferri (Stanford University, NBER, CEPR and SIEPR) |
| Abstract: | We use matched employer-employee data from Sweden to study the role of the firm in affecting the stochastic properties of wages. Our model accounts for endogenous participation and mobility decisions. We ?nd that firm-specific permanent productivity shocks transmit to individual wages, but the e?ect is mostly concentrated among the high-skilled workers; firm-specific temporary shocks mostly affect the low-skilled. The updates to worker-firm specific match effects over the life of a firm-worker relationship are small. Substantial growth in earnings variance over the life cycle for high-skilled workers is driven by firms accounting for 44% of cross-sectional variance by age 55. |
| Keywords: | Earnings dynamics, Inequality, Earnings dispersion, Rent sharing, Matched employer-employee data, competition in labor markets, Lifecycle wage growth, Lifecycle wage dispersion |
| JEL: | J24 J31 J62 J63 J64 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2175&r=all |
| By: | Hardardottir, Hjördis (Department of Economics, Lund University); Gerdtham, Ulf-G. (Department of Economics, Lund University); Wengström, Erik (Department of Economics, Lund University) |
| Abstract: | When measuring inequality using conventional inequality measures, ethical assumptions about distributional preferences are often implicitly made. In this paper, we ask whether the ethical assumptions underlying the concentration index for income-related inequality in health and the Gini index for income inequality are supported in a representative sample of the Swedish population using an internet-based survey. We find that the median subject has preferences regarding income-related inequality in health that are in line with the ethical assumptions implied by the concentration index, but put higher weight on the poor than what is implied by the Gini index of income inequality. We find that women and individuals with a poorer health status put higher weight on the poor than men and healthier individuals. Ethically flexible inequality measures, such as the s-Gini index and the extended concentration index, imply that researchers have to choose from a toolbox of infinitely many inequality indices. The results of this paper are indicative of which indices (i.e. which parameter values) reflect the views of the population regarding how inequality should be defined. |
| Keywords: | Socioeconomic inequality in health; Income inequality; Extended concentration index; S-Gini index; Distributional preferences |
| JEL: | D31 D63 D90 I14 |
| Date: | 2019–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2019_007&r=all |
| By: | Hornbeck, Richard (Harris School, University of Chicago); Moretti, Enrico (University of California, Berkeley) |
| Abstract: | We estimate direct and indirect effects of total factor productivity growth in manufacturing on US workers' earnings, housing costs, and purchasing power. Drawing on four alternative instrumental variables, we consistently find that when a city experiences productivity gains in manufacturing, there are substantial local increases in employment and average earnings. For renters, increased earnings are largely offset by increased cost of living; for homeowners, the benefits are substantial. Strikingly, local productivity growth in manufacturing reduces local inequality, as it raises earnings of local less-skilled workers more than the earnings of local more-skilled workers. This is due, in part, to lower geographic mobility of less-skilled workers. However, local productivity growth also has important indirect effects through worker mobility. We estimate that 38% of the overall increase in workers' purchasing power occurs outside cities directly affected by local TFP growth. The indirect effects on worker earnings are substantially greater for more-skilled workers, due to greater geographic mobility of more-skilled workers, which increases inequality in other cities. Neglecting these indirect effects would both understate the overall magnitude of benefits from productivity growth and misstate their distributional consequences. Overall, US workers benefit substantially from manufacturing productivity growth. Summing direct and indirect effects, we find that manufacturing TFP growth from 1980 to 1990 increased purchasing power for the average US worker by 0.5-0.6% per year from 1980 to 2000. These gains do not depend on a worker's education; rather, the benefits from productivity growth mainly depend on where workers live. |
| Keywords: | local labor markets |
| JEL: | J20 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12277&r=all |
| By: | Acemoglu, Daron (MIT); Restrepo, Pascual (Boston University) |
| Abstract: | Artificial Intelligence is set to influence every aspect of our lives, not least the way production is organized. AI, as a technology platform, can automate tasks previously performed by labor or create new tasks and activities in which humans can be productively employed. Recent technological change has been biased towards automation, with insufficient focus on creating new tasks where labor can be productively employed. The consequences of this choice have been stagnating labor demand, declining labor share in national income, rising inequality and lower productivity growth. The current tendency is to develop AI in the direction of further automation, but this might mean missing out on the promise of the "right" kind of AI with better economic and social outcomes. |
| Keywords: | automation, artificial intelligence, jobs, inequality, innovation, labor demand, productivity, tasks, technology, wages |
| JEL: | J23 J24 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12292&r=all |
| By: | Becker, Sascha O. (University of Warwick); Fernandes, Ana (University of Bern); Weichselbaumer, Doris (University of Linz) |
| Abstract: | Due to conventional gender norms, women are more likely to be in charge of childcare than men. From an employer's perspective, in their fertile age they are also at "risk" of pregnancy. Both factors potentially affect hiring practices of firms. We conduct a large-scale correspondence test in Germany, Switzerland, and Austria, sending out approx. 9,000 job applications, varying job candidate's personal characteristics such as marital status and age of children. We find evidence that, for part-time jobs, married women with older kids, who likely finished their childbearing cycle and have more projectable childcare chores than women with very young kids, are at a significant advantage vis-avis other groups of women. At the same time, married, but childless applicants, who have a higher likelihood to become pregnant, are at a disadvantage compared to single, but childless applicants to part-time jobs. Such effects are not present for full-time jobs, presumably, because by applying to these in contrast to part-time jobs, women signal that they have arranged for external childcare. |
| Keywords: | experimental economics, discrimination, fertility |
| JEL: | C93 J16 J71 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12308&r=all |
| By: | Acemoglu, Daron (MIT); Restrepo, Pascual (Boston University) |
| Abstract: | We present a framework for understanding the effects of automation and other types of technological changes on labor demand, and use it to interpret changes in US employment over the recent past. At the center of our framework is the allocation of tasks to capital and labor – the task content of production. Automation, which enables capital to replace labor in tasks it was previously engaged in, shifts the task content of production against labor because of a displacement effect. As a result, automation always reduces the labor share in value added and may reduce labor demand even as it raises productivity. The effects of automation are counterbalanced by the creation of new tasks in which labor has a comparative advantage. The introduction of new tasks changes the task content of production in favor of labor because of a reinstatement effect, and always raises the labor share and labor demand. We show how the role of changes in the task content of production – due to automation and new tasks – can be inferred from industry-level data. Our empirical decomposition suggests that the slower growth of employment over the last three decades is accounted for by an acceleration in the displacement effect, especially in manufacturing, a weaker reinstatement effect, and slower growth of productivity than in previous decades. |
| Keywords: | automation, displacement effect, labor demand, inequality, productivity, reinstatement effect, tasks, technology, wages |
| JEL: | J23 J24 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12293&r=all |