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on Labour Economics |
| By: | Lamadon, Thibaut (University of Chicago); Lise, Jeremy (Cornell University); Meghir, Costas (Yale University); Robin, Jean-Marc (Sciences Po.) |
| Abstract: | This paper develops the nonparametric identification of models with production complementarities, worker-firm specific disutility of labor and search frictions. Mobility in the model is subject to preference shocks, and we assume that firms can write wage contracts. We develop a constructive proof for the nonparametric identification of the model primitives from matched employer-employee data. We use the estimated model to decompose the sources of wage dispersion into worker heterogeneity, compensating differentials, and search frictions that generate between-firm and within-firm dispersion. We find that compensating differentials are substantial on average, but the contribution differs greatly betweenthe lowest and highest types of workers. Finally, we use the model to provide an economic interpretation of several empirical regularities. |
| Keywords: | workfirm; labor; searchfrictions; |
| JEL: | A00 |
| Date: | 2024–09–06 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ifauwp:2024_013 |
| By: | Federica Meluzzi |
| Abstract: | Gender norms are widely recognized as key determinants of persistent gender gaps in the labor market. However, our understanding of the drivers of gender norms, and their implications for preferences, remain lacking. This paper addresses this gap by examining how cultural assimilation from college peers influences women's early-career labor market decisions. For identification of causal effects, I exploit cross-cohort idiosyncratic variation in peers' geographical origins within Master's programs, combined with unique administrative and survey data covering the universe of college students in Italy. The main finding is that exposure to female classmates originating from areas with more egalitarian gender culture significantly increases women's labor supply, primarily through increased uptake of full-time jobs. A one standard deviation increase in peers' culture increases female earnings by 3.7%. The estimated peer effects are economically significant, representing more than a third of the gender earnings gap. Drawing on comprehensive data on students' job search preferences and newly collected data on their beliefs, I shed novel light on two distinct mechanisms driving peer influence: (1) shifts in preferences for non-pecuniary job attributes, and (2) social learning, particularly on the characteristics of the job offer distribution. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.20225 |
| By: | Hall, Caroline (IFAU - Institute for Evaluation of Labour Market and Education Policy); Kotakorpi, Kaisa (Tampere University); Liljeberg, Linus (IFAU - Institute for Evaluation of Labour Market and Education Policy); Pirttilä, Jukka (University of Helsinki) |
| Abstract: | We examine the health effects of a labor market activation policy, the Youth Job Guarantee, implemented in Sweden in 2007. To estimate the causal effects of this policy on health, we implement an RD-design using the age-eligibility threshold of the policy, together with detailed administrative data on health outcomes including measures of mental health. Health effects could arise indirectly via effects on employment, or directly, e.g., via an improved daily routine. In contrast to most of the existing literature on the health effects of ALMPs, our results indicate that the activation policy did not have clear positive effects on health one year after the start of the unemployment spell, measured by prescribed medication or healthcare visits. |
| Keywords: | Labor market programs; activation; youth unemployment; mental health |
| JEL: | H51 I12 I18 J68 |
| Date: | 2024–09–27 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ifauwp:2024_015 |
| By: | Philipp Ager; Viktor Malein |
| Abstract: | The paper evaluates the long-run impact of charity nurseries for disadvantaged children in early 20th-century New York. Access to charity nurseries with kindergarten instruction raised children’s years of education and reduced their likelihood of working in low-skilled jobs later in life. Instead, exposed children were more likely to work in jobs requiring higher cognitive and language skills. The effects were strongest for children from the most disadvantaged immigrant groups at that time. Our findings suggest that kindergarten instruction in charity nurseries helped immigrant children better understand teachers’ instructions and learning materials which improved their economic outcomes in adulthood. |
| Keywords: | Age of Mass Migration; Charity Nurseries; Child Care; Disadvantaged Children; Kindergarten Instruction; New York City |
| JEL: | I21 I26 J13 J15 N31 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_596 |
| By: | Jacopo Bassetto; Giuseppe Ippedico |
| Abstract: | Brain drain is a key policy concern for many countries. In this paper we study whether tax incentives are an effective policy to attract high-skilled expatriates back to their home country, exploiting a generous income tax break for Italian returnees. Using administrative data and a Triple Differences design, we find that eligible individuals are 27% more likely to return to Italy. Additionally, we uncover significant effects throughout the wage distribution, revealing that tax-induced migration is a broad phenomenon beyond top earners. A cost-benefit analysis shows that the tax scheme can pay for itself by targeting young high-skilled individuals. |
| Keywords: | tax incentives, return migration, wage distribution |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:not:notgep:2024-05 |
| By: | Kristina Czura (Groningen); Florian Englmaier (LMU Munich); Hoa Ho (LMU Munich); Lisa Spantig (RWTH Aachen) |
| Abstract: | The positive role of transformational leadership for productivity and mental wellbeing has long been established. Transformational leadership behavior may be particularly suited to navigate times of crisis which are characterized by high levels of complexity and uncertainty. We exploit quasi-random assignment of employees to managers and study the role of frontline managers’ leadership styles on employees’ performance, work style, and mental well-being in times of crisis. Using longitudinal administrative data and panel survey data from before and during the Covid-19 pandemic, we find that the benefits of different leadership styles depend on the environment: Employees of more transactional managers outperform those of more transformational leaders before the onset of the pandemic. During the pandemic, however, more transformational managers lead employees to better performance and mental well-being. We discuss potential explanations and implications. |
| Keywords: | leadership, frontline managers, labor-management relations, organizational behavior, crisi; |
| JEL: | M54 M12 J53 |
| Date: | 2024–10–06 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:512 |
| By: | Maximiliano Dvorkin; Brian Greaney |
| Abstract: | The spatial distribution of wealth in the United States is very heterogeneous, with important differences within and across US states. We study the distribution of wealth in a country and how it is shaped by the characteristics earnings across regions, and by the frictions individuals face to move and reallocate across space. For this, we develop a tractable model of consumption, savings, and location choice with many regions, incomplete markets, and heterogeneous agents facing persistent and transitory income shocks. Our analysis focuses on the role of income shocks, precautionary savings, mobility, and sorting in shaping the geographic distribution of income and wealth over time. Our theory extends the workhorse macroeconomic model of consumption and savings under uncertainty and risk to an economy with multiple labor markets and costly mobility. Despite the complex spatial and individual heterogeneity, we can characterize the optimal consumption, savings, and mobility decisions of workers in closed form. Mobility frictions increase precautionary savings as workers hedge against sharp fluctuations in consumption generated by their mobility decisions. The spatial distribution of wealth is primarily driven by the interaction between persistent income shocks, saving behavior, and worker sorting across locations. The results highlight the importance of accounting for worker mobility and regional heterogeneity in earnings dynamics when studying the spatial distribution of wealth. |
| Keywords: | mobility; precautionary savings; spatial equilibrium; wealth; inequality |
| JEL: | R12 R23 E21 J61 F16 |
| Date: | 2024–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlwp:98888 |
| By: | Gabriele Cappelli; Johannes Westberg |
| Abstract: | The relationship between gender inequality and occupational segregation is a fascinating puzzle. New microdata on all primary-school teachers in Sweden in c. 1890 show that the gender wage gap in the profession was 10 percent when holding observable features constant, and occupational segregation was strong. Women worked in minor and junior schools receiving low wages – yet higher than those paid in other occupations –, while men mostly taught in regular primary schools that paid competitive wages for men. Gender wage inequality and occupational segregation were the price for the feminization of schooling, i.e., part of the Swedish “quiet revolution.†|
| Keywords: | gender inequality; wages; occupational segregation; white-collar; teachers; Sweden |
| JEL: | J16 J22 N33 I24 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:usi:wpaper:913 |
| By: | Anton A. Cheremukhin; Sewon Hur; Ron Mau; Karel Mertens; Alexander W. Richter; Xiaoqing Zhou |
| Abstract: | The U.S. experienced an extraordinary postpandemic surge in unauthorized immigration. This paper combines administrative data on border encounters and immigration court records with household survey data to document two new facts about these immigrants: They tend to be hand-to-mouth consumers and low-skilled workers that complement the existing workforce. We build these features into a model with capital, household heterogeneity and population growth to study the inflationary effects of this episode. Contrary to the popular view, we find little effect on inflation, as the increase in supply was largely offset by an increase in demand. |
| Keywords: | immigration; population growth; inflation; skills; hand-to-mouth |
| JEL: | E21 E22 E31 F22 J11 J15 |
| Date: | 2024–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:98919 |
| By: | Ivan Luzardo-Luna (University of Pennsylvania); Meredith M. Pake (Grinnell College) |
| Abstract: | his paper assesses the distributional and poverty mitigation impacts of the British unemployment insurance system at the peak of the Great Depression. Initially designed as a true insurance program, by 1928 it had evolved into a large-scale social welfare program providing flat-rate benefits to up to two million workers. Using a novel dataset of wages at the industry and county level from January 1928 to December 1932, we analyze the extent to which the program redistributed income across earnings quantile, industry, and geographic groups. Our findings indicate that the program reduced earnings inequality across industries and counties by up to 32% and mitigated much of the economic distress of the Great Depression, especially for lower-paid workers and those in industries with high unemployment rates. This suggests that generalized, relatively cheap social welfare programs can be effective tools for providing broad-based support and mitigating poverty during crises. |
| Keywords: | unemployment insurance, Great Depression, interwar Britain, wages, inequality |
| JEL: | J65 N34 J31 N14 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:pen:papers:24-027 |
| By: | Volha Audzei; Ivan Sutoris |
| Abstract: | In this paper, we investigate whether inflation-targeting monetary policy affects households' incentives to build resilience against energy price shocks. We utilize a stylized heterogeneous agent New Keynesian model with search and matching frictions in the labor market and nominal asset holdings. We modify the model to include energy in consumption and production, and energy conservation capital, so that energy price fluctuations affect both the supply and demand side of the economy. In such a framework, we study the responses of energy conservation to monetary policy, rising energy prices, and their interaction. We find that monetary policy influences energy intensity of consumption through both the intertemporal elasticity of substitution and labor market allocations. Our model predicts that a weaker policy response to rising energy prices is beneficial in terms of welfare to firm owners, borrowers and workers despite higher consumer price inflation. Such a policy stimulates energy conservation, and results in lower energy intensity and higher resilience against energy price fluctuations. We further find that a policy of looking through energy prices does not yield welfare benefits as it underreacts to consumer prices initially, but overreacts in later periods. Ramsey optimal policy predicts a strong immediate rise in the policy rate with a decline afterwards. |
| Keywords: | Distributional aspects of monetary policy, energy intensity of consumption, energy prices, heterogeneous agent New Keynesian models |
| JEL: | E12 E24 E52 Q43 Q50 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cnb:wpaper:2024/4 |
| By: | Jaan Masso; Jaanika Meriküll; Liis Roosaar; Kärt Rõigas; Tiiu Paas |
| Abstract: | This paper focuses on two mechanisms that could explain the persistence of the gender pay gap – child penalty and bargaining. We concentrate on academia and use administrative data from the University of Tartu, the largest university in Estonia. The context of the academic sector allows us to control for worker productivity through indicators of research and teaching activities. Administrative data on academic staff from 2012 to 2021 has been linked with the population register and web-scraped data from SCOPUS. We follow the quasi-experimental approach proposed by Kleven et al. (2019a) to identify child penalty and derive outside option wages for all the detailed institutes to estimate the role of bargaining. Despite no penalty in hourly wages, the decrease in the working hours for mothers equals two years of full-time work spread over four years after childbirth. Compared to the penalty for the whole population, the child penalty in academia is shorter-lived, and no statistically significant effect on women's publications or citations was found. Men, in contrast, do not experience any penalties related to children. Women's worse bargaining skills seem to be an important factor behind the gender pay gap in academia, whereas the institute's higher outside option wage is related to relatively higher wages for men and is a less important factor for the wages of women. |
| Keywords: | Gender wage gap, child penalty, event study, bargaining, outside option, academic sector |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:mtk:febawb:147 |
| By: | David Dorn; Florian Schoner; Moritz Seebacher; Lisa Simon; Ludger Woessmann |
| Abstract: | We measure human capital using the self-reported skill sets of 8.75 million U.S. college graduates from professional profiles on the online platform LinkedIn. We establish that these skills are systematically related to human capital investments such as different types of schooling and work experience. The average profile of the number of reported skills by age looks remarkably similar to the well-established concave age-earnings profiles. More experienced workers and those with higher educational degrees have larger shares of occupation-specific skills, consistent with their acquisition through professional-degree programs and on-the-job experience. Workers who report more, and particularly more specific and managerial, skills are more likely to hold highly paid jobs. Skill differences across workers can account for more earnings variation than detailed vectors of education and experience. We also document a substantial gender gap in reported skills, which starts to manifest when young women reach typical ages of first motherhood. Gender differences in skill profiles can rationalize a substantial proportion of the gender gap in the propensity to work in highly paid jobs. Overall, the results are consistent with an important role of multidimensional skills in accounting for several well-known basic labor-market patterns. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.18638 |
| By: | Anton A. Cheremukhin; Paulina Restrepo-Echavarria; Antonella Tutino |
| Abstract: | We examine shifts in the U.S. marriage market, assessing how online dating, demographic changes and evolving societal norms influence mate choice and broader sorting trends. Using a targeted search model, we analyze mate selection based on factors such as education, age, race, income and skill. Intriguingly, despite the rise of online dating, preferences, mate choice and overall sorting patterns showed negligible change from 2008 to 2021. However, a longer historical view from 1960 to 2020 reveals a trend toward preferences for similarity, particularly concerning income, education and skills. Our findings refute two out of three potential explanations – reduced search costs and growing spatial segregation – as potential causes of these long-term shifts. In particular, we conclude that people’s capacity to process and evaluate information hasn’t improved despite technological advancements. Among the remaining demographic factors, we identify enhanced workforce participation and college attainment among women as the primary drivers of the U.S. marriage market transformation. Furthermore, we find that the corresponding changes in mate preferences and increased assortativeness by skill and education over this timeframe account for about half of the increased income inequality among households. |
| Keywords: | marriage; sorting; online dating |
| JEL: | J12 D83 C78 |
| Date: | 2024–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:98837 |
| By: | Musina, Sofiya (Warwick University) |
| Abstract: | Large Language Models (LLMs), such as ChatGPT, demonstrate an unprecedented applicability in a variety of domains, and, unlike previous waves of innovation, are capable of nonroutine cognitive tasks - leaving educated, white-collar workers most exposed. However, few studies address the relevant labour market implications outside controlled experimental environments. This project investigates the effects of LLMs on knowledge worker competency requirements using a difference-in-difference model based on a sample of 105, 912 online job advertisements (Luxembourg, 2020-2024). The findings contain weak evidence that LLMs cause a reduction in demand for experience, education, cognitive skills and creativity, while leaving soft skills unaffected. |
| Keywords: | Employment ; Skills Demand ; Technology ; AI JEL classifications: J01 ; J23 ; J24 ; O33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:wrkesp:75 |
| By: | Scervini, Francesco; Trucchi, Serena (Cardiff Business School) |
| Abstract: | Alcohol consumption among older adults has been drawing public health interest due to the rising use of alcohol in the growing elderly population. This paper adds to the understanding of alcohol consumption in later life by investigating the impact of a specific life event: the transition to an empty nest, when adult children leave the parental home. Our findings show a significant increase in alcohol consumption in an empty nest, equivalent to approximately one additional drink every one to three weeks. This change is characterised by more regular drinking patterns and a modest rise in daily intake. The groups most affected by this change include couples, individuals with high income, those actively employed, and respondents aged 45-60. We also provide evidence on the mechanisms underlying this relationship, supporting a key role of relaxation and changes in time use. |
| Keywords: | Empty nest, alcohol consumption, longitudinal data. |
| JEL: | D1 I12 J14 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cdf:wpaper:2024/20 |