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on Unemployment, Inequality and Poverty |
| By: | Prati, Alberto (University College of London); Senik, Claudia (Paris School of Economics) |
| Abstract: | We revisit the famous Easterlin paradox by considering that life evaluation scales refer to a changing context, hence they are regularly reinterpreted. We propose a simple model of rescaling based on both retrospective and current life evaluations, and apply it to unexploited archival data from the USA. When correcting for rescaling, we find that the well-being of Americans has substantially increased, on par with GDP, health, education, and liberal democracy, from the 1950s to the early 2000s. Using several datasets, we shed light on other happiness puzzles, including the apparent stability of life evaluations during COVID-19, why Ukrainians report similar levels of life satisfaction today as before the war, and the absence of parental happiness. |
| Keywords: | happiness, life satisfaction, subjective well-being, rescaling, Easterlin paradox, Cantril ladder, Gallup |
| JEL: | I31 N32 O10 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18536 |
| By: | Bryson, Alex (University College London); Kauhanen, Antti (ETLA); Rouvinen, Petri (ETLA) |
| Abstract: | Utilizing nationally representative cross-sectional and longitudinal data from Finland (2018-2023), we provide a population-level assessment of the relationship between AI and worker well-being. Contrary to international evidence suggesting a positive or an inverted U-shaped relationship, we find no systematic association between AI use intensity and job satisfaction. However, we do find that work engagement is higher among employees who are personally involved with AI, with the strongest association among intensive users for whom AI is an essential part of their work. Furthermore, technology-replacement fears have remained stable despite rapid AI advancement and do not predict subsequent labour market transitions. An interpretation is that Finland's high-trust institutional environment and robust social safety nets may effectively moderate the disruptive psychological and economic shocks typically associated with rapid technological change. |
| Keywords: | artificial intelligence, job satisfaction, work engagement, technology-related fears, labour market transitions |
| JEL: | J28 L23 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18540 |
| By: | Gabriel Burdin; Ryo Kambayashi; Takao Kato |
| Abstract: | How do limits on working hours affect firms, workers, and households? This paper answers this question by analyzing Japan's 2018Work Style Reform (WSR), which introduced the first binding cap on overtime hours. Using establishment payroll data and worker surveys in a difference-in-differences design, we show that the reform reduced monthly overtime by 5 hours (25%) and compressed the distribution of overtime within firms. Total earnings fell by 1.4% due to the effect of lower overtime pay. The reform also narrowed overtime gaps between standard and nonstandard jobs and reduced gender differences in long hours. Consistent with a reduction in the importance of extreme overtime as a screening device, women gained increased access to standard, career-track positions. We further document improvements in life and leisure satisfaction among female workers, but not among men. These gender differences are not explained by changes in perceived work intensification or time use. Instead, men partially substituted unpaid for paid overtime, consistent with the absence of well-being gains among male workers. Finally, exploiting information on spouses’ working hours, we find suggestive evidence of cross-spousal spillovers on women’s well-being, consistent with household-level complementarities. |
| Keywords: | Working Time Regulations, Overtime, Wages, Employment, Subjective Well-being, Gender, Japan, Work Style Reform Jel Classification: J16, J22, J23, J41 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:usi:wpaper:942 |
| By: | Lindner, Attila (University College London); Muraközy, Balázs (University of Liverpool); Reizer, Balázs (ELTE - Centre for Economic and Regional Studies); Schreiner, Ragnhild (University of Oslo) |
| Abstract: | We quantify the contribution of firm-level technological change to skill demand and aggregate inequality in the presence of imperfect competition in the labor market. We show that skill-biased technological change increases both the firm-level skill ratio and the skill premium, while other shocks (e.g. firm-specific output demand shocks) cannot explain the increase in both outcomes. We exploit administrative data and a large survey measuring a broad class of firm-level technological changes from Hungary and Norway. We estimate that the aggregate college premium increases by 3.4% in Norway and by 4.9% in Hungary as a result of the skill bias in technological change. |
| Keywords: | skill-biased technological change, innovation, skill premiums, imperfect competition |
| JEL: | J31 J24 O30 O33 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18516 |
| By: | Gallen, Yana (Harris School, University of Chicago); Joensen, Juanna (University of Chicago); Johansen, Eva (the Chairmanship of the Danish Economics Councils); Veramendi, Gregory (Royal Holloway, University of London) |
| Abstract: | We study the labor market impact of unplanned pregnancy among women using long-acting reversible contraceptives to delay pregnancy. While most women successfully delay, some have unplanned pregnancies, providing quasi-random variation in pregnancy timing. Analyzing linked health and labor market data from Sweden, we find that unplanned pregnancies halt women's career progression, resulting in income losses of 19% five years later. We find similar effects of unplanned births among women using short-acting reversible contraceptives. Using pregnancy as an instrument for birth in a dynamic treatment effect framework, effects of unplanned children are more detrimental for younger women and those enrolled in education. |
| Keywords: | labor market costs of motherhood, fertility, contraceptives, unplanned pregnancy |
| JEL: | J13 J22 J24 J31 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18529 |
| By: | Fernández, Gastón P. (Luxembourg Institute of Socio-Economic Research (LISER)); Kovaleva, Mariia (London School of Economics) |
| Abstract: | This paper examines how personality shapes intra-household bargaining, marital stability, and the allocation of resources within marriages. We use rich data from the HILDA Survey that combines information on spouses' personalities, wages, time use, and marital histories. In the data, personality is strongly associated with labor-market productivity, marriage and divorce patterns, and the division of paid work and childcare within couples. To interpret these patterns, we estimate a life-cycle collective household model with limited commitment and endogenous marriage and divorce. Within this framework, personality affects: individual wage processes, the quality of marital matches, and preferences over home production. We use the estimated model to quantify the mechanisms through which personality generates heterogeneity in household behavior. The results show that personality matters not only through wage differences but also by altering spouses' outside options and the set of feasible allocations. Counterfactual simulations highlight how personality influences specialization patterns, the evolution of bargaining power over the life cycle, and the way welfare losses from adverse shocks are shared between spouses. |
| Keywords: | marriage, limited commitment, personality, intra-household bargaining |
| JEL: | D10 D13 D91 J12 J22 R20 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18519 |