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on Unemployment, Inequality and Poverty |
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Issue of 2022‒08‒29
two papers chosen by |
| By: | David G. Blanchflower (Bruce V. Rauner Professor of Economics, Dartmouth College, Adam Smith Business School, University of Glasgow; NBER and Bloomberg); Alex Bryson (University College London; IZA, Bonn; NIESR, London); Jason Spurling (Member of the Dartmouth Class of 2023) |
| Abstract: | Most economists maintain that the labor market in the United States (and elsewhere) is ‘tight’ because unemployment rates are low and the Beveridge Curve (the vacancies-to-unemployment ratio) is high. They infer from this that there is potential for wage-push inflation. However, real wages are falling rapidly at present and, prior to that, real wages had been stagnant for some time. We show that unemployment is not key to understanding wage formation in the USA and hasn’t been since the Great Recession. Instead, we show rates of under-employment (the percentage of workers with part-time hours who would prefer more hours) and the rate of non-employment which includes both the unemployed and those out of the labor force who are not working significantly reduce wage pressures in the United States. This finding holds in panel data with state and year fixed effects and is supportive of a wage curve which fits the data much better than a Phillips Curve. We find no role for vacancies; the V:U ratio is negatively not positively associated with wage growth since 2020. The implication is that the reserve army of labor which acts as a break on wage growth extends beyond the unemployed and operates from within the firm. |
| Keywords: | unemployment; labor market inactivity; under-employment |
| JEL: | J30 J20 J60 E24 |
| Date: | 2022–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:2206&r= |
| By: | Bottasso, Anna (University of Genova); Cerruti, Gianluca (University of Genoa); Conti, Maurizio (University of Genova); Stancanelli, Elena G. F. (Paris School of Economics) |
| Abstract: | A vast literature studies the behavioural impacts of health care reforms, often coming to controversial conclusions. Here we examine the time allocation effects of the Affordable Care Act, also known as Obama Care, focusing on two ACA pillars: Medicaid expansion, which increased access to public health insurance, and the Tax Credit Premium, subsidizing the purchase of private health insurance. Using 2012-2015 daily diary data from the American Time Use Survey, we take a triple differences-in-differences approach, which exploits the cross-state variation in the timing of ACA implementation, together with differences in income eligibility thresholds, to identify the effects at stake. Considering a sample of childless adults, a group not eligible to public health insurance before ACA, we find that the Medicaid expansion reduced their labour supply by over an hour per day, increasing part-time work, while the Premium Tax Credit raised employment by about 7 percentage points. The implications for other uses of time are also studied. |
| Keywords: | Affordable Care Act, labor supply, time allocation |
| JEL: | I13 J08 J22 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15415&r= |