nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2023‒10‒09
six papers chosen by
Maximo Rossi, Universidad de la República

  1. Automation and Polarization By Daron Acemoglu; Jonas Loebbing
  2. Social skills and the individual wage growth of less educated workers By Philippe Aghion; Antonin Bergeaud; Richard Blundell; Rachel Griffith
  3. How to support adult caregivers? By Costa-font, Joan
  4. Gender Differences in Returns to Beauty By Kimberly Scharf; Oleksandr Talavera; Linh Vi
  5. Labor Supply Response to Windfall Gains By Dimitris Georgarakos; Tullio Jappelli; Geoff Kenny; Luigi Pistaferri
  6. Differences in On-the-Job Learning across Firms By Arellano-Bover, Jaime; Saltiel, Fernando

  1. By: Daron Acemoglu (MIT); Jonas Loebbing (LMU Munich)
    Abstract: We develop an assignment model of automation. Each of a continuum of tasks of variable complexity is assigned to either capital or one of a continuum of labor skills. We characterize conditions for interior automation, whereby tasks of intermediate complexity are assigned to capital. Interior automation arises when the most skilled workers have a comparative advantage in the most complex tasks relative to capital, and because the wages of the least skilled workers are sufficiently low relative to their productivity and the effective cost of capital in low-complexity tasks. Minimum wages and other sources of higher wages at the bottom make interior automation less likely. Starting with interior automation, a reduction in the cost of capital (or an increase in capital productivity) causes employment and wage polarization. Specifically, further automation pushes workers into tasks at the lower and upper ends of the task distribution. It also monotonically increases the skill premium above a skill threshold and reduces the skill premium below this threshold. Moreover, automation tends to reduce the real wage of workers with comparative advantage profiles close to that of capital. We show that large enough increases in capital productivity ultimately induce a transition to low-skill automation and qualitatively alter the effects of automation - thereafter inducing monotone increases in skill premia rather than wage polarization.
    Keywords: assignment; automation; inequality; polarization; tasks; wages;
    JEL: J23 J31 O33
    Date: 2023–08–31
  2. By: Philippe Aghion (Institute for Fiscal Studies); Antonin Bergeaud (Institute for Fiscal Studies); Richard Blundell (Institute for Fiscal Studies); Rachel Griffith (Institute for Fiscal Studies)
    Date: 2023–09–19
  3. By: Costa-font, Joan
    Keywords: informal caregiving; employment; care substitution; employment regulation; care leaves; flexible work times; mental health; well-being
    JEL: R14 J01
    Date: 2023–06–01
  4. By: Kimberly Scharf (University of Nottingham); Oleksandr Talavera (University of Birmingham); Linh Vi (Aston University)
    Abstract: We employ a sample of nearly 40, 000 gender-targeted online job vacancies in Vietnam from February 2019 to July 2020 to investigate gender differences in returns to physical attractiveness. In particular, we compare the monthly offered wage in matched vacancies with and without beauty preferences of the same characteristics among job ads directed at men and women separately. We find evidence that better-looking women enjoy a wage premium of 3.7 percentage points, whereas better-looking men do not. Further analysis shows that the gender differences in returns to beauty are mainly driven by gender role attitudes and the perceived lack of fit rather than productivity-enhancing effect or employers' negligence in job postings.
    Keywords: FinTech; physical attractiveness, online vacancies, gender, beauty premium
    JEL: J16 J23 J24 J71
    Date: 2023–09
  5. By: Dimitris Georgarakos (European Central Bank and University of Glasgow); Tullio Jappelli (Università di Napoli Federico II, CSEF, and CEPR); Geoff Kenny (European Central Bank); Luigi Pistaferri (Stanford University, SIEPR, NBER and CEPR)
    Abstract: Using a large survey of euro area consumers, we design an experiment in which respondents report how they would change the decision to participate in the labor market, the hours worked, and their search effort (if not employed) in response to randomly assigned windfall gain scenarios. Windfall gains reduce labor supply, but only if they are significant in size. At the extensive margin, we find no effect for gains below €25, 000, and a decline in the probability of working of 3 percentage points for gains between €25, 000 and €100, 000. At the intensive margin, there is no effect for small gains, and a drop of roughly one weekly hour for gains above €50, 000. Women and workers closer to retirement respond more strongly to windfall gains. Finally, the proportion of those who stop searching for a job or search less intensively falls by 1 percentage point for each €10, 000 gain, and the effect is more pronounced for older individuals receiving the largest prize.
    Keywords: Survey Experiment; Labor Supply; Job Search; Wealth Shocks; Consumer Expectations Survey.
    JEL: E24 D10 J22 J68
    Date: 2023–09–18
  6. By: Arellano-Bover, Jaime (Tor Vergata University of Rome, Einaudi Institute for Economics and Finance (EIEF), and IZA); Saltiel, Fernando (McGill University and IZA)
    Abstract: We present evidence consistent with large disparities across firms in the on-the-job learning their young employees experience, using administrative datasets from Brazil and Italy. We categorize firms into discrete “classes†—which our conceptual framework interprets as skill-learning classes—using a clustering methodology that groups together firms with similar distributions of unexplained wage growth. Mincerian returns to experience vary widely across experiences acquired in different firm classes. Moreover, past experiences at firms with better on-the-job learning lead to subsequent jobs featuring greater non-routine task content. Three empirical tests leveraging firm stayers and movers, hiring wages, and displaced workers point towards a portable and general human capital interpretation. Heterogeneous employment experiences explain an important share of wage variance by age 35, thus contributing to shape wage inequality. Lastly, we show that firms’ observable attributes only mildly predict on-the-job learning opportunities.
    Keywords: JEL Classification:
    Date: 2023

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