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on Labour Economics |
| By: | Dodini, Samuel (Federal Reserve Bank of Dallas); Willén, Alexander (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | This paper examines the relationship between labor market power and employer discrimination, providing new causal evidence on when and where discriminatory outcomes arise. We leverage job displacements from mass layoffs and firm closures as a source of exogenous job search and combine this with an exact matching approach. We compare native–immigrant worker pairs who held the same job at the same firm, in the same occupation, industry, location, and wage prior to displacement. By tracking post-displacement outcomes across labor markets with differing levels of employer concentration, we identify the causal effect of labor market power on discriminatory behavior. We document four main findings. First, wage and employment discrimination against immigrants is substantial. Second, discrimination is amplified in concentrated labor markets and largely absent in highly competitive ones. Third, product market power has no independent effect, consistent with the idea that wage-setting power is necessary for discriminatory outcomes. Fourth, observed gaps fade with sustained employer–immigrant interactions, consistent with belief-based discrimination and employer learning. Together, these findings show that discrimination is not fixed, but shaped by market structure and firm-level dynamics. |
| Keywords: | Discrimination; Immigration; Market Power |
| JEL: | J17 J42 J61 J63 |
| Date: | 2025–04–07 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2025_010 |
| By: | Isabel Cairó; Hess T. Chung; Francesco Ferrante; Cristina Fuentes-Albero; Camilo Morales-Jimenez; Damjan Pfajfar |
| Abstract: | Standard macroeconomic models find it difficult to reconcile slow recoveries and missing disinflations after deep deteriorations in the labor market. We develop and estimate a New-Keynesian model with search and matching frictions in the labor market, endogenous intensive and extensive labor supply decisions, and financial frictions. We conclude that the estimated combination of a low degree of nominal wage rigidities and a high degree of real wage rigidities, together with a small role for pre-match costs relative to post-match costs, is key in successfully forecasting slow recoveries in unemployment and missing disinflations in the aftermath of recessions, such as the Great Recession. We find that data on endogenous labor supply decisions (participation and hours) are very informative about the relative degree of nominal and real wage rigidities and the slope of the Phillips curve. We also show that none of the model-based labor market gaps are a sufficient statistic of labor market slack, but all contain relevant information about the state of the economy summarized in a new indicator for labor market slack that we propose. |
| Keywords: | search and matching; labor supply; labor force participation; missing disinflation; Great Recession |
| JEL: | E32 J64 J20 E37 |
| Date: | 2025–03–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedcwq:99658 |
| By: | Dodini, Samuel (Federal Reserve Bank of Dallas); Lundborg, Petter (Dept. of Economics, Lund University); Løken, Katrine (Dept. of Economics, Norwegian School of Economics and Business Administration); Willén, Alexander (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | This paper examines the welfare consequences of reallocating high-skilled labor across borders. A labor demand shock in Norway—driven by a surge in oil prices—substantially increased physician wages and sharply raised the incentive for Swedish doctors to commute across the border. Leveraging linked administrative data and a dose-response difference-in-differences design, we show that this shift doubled commuting rates and significantly reduced Sweden’s domestic physician supply. The result was a persistent rise in mortality, with no corresponding health gains in Norway. These effects were unevenly distributed, disproportionately harming certain places and populations. The underlying mechanism was a severe strain on Sweden’s healthcare system: shortages of young, high-skilled generalists led to more hospitalizations, premature discharges, higher readmission rates, and delayed care. Mortality effects were larger in low-density physician regions and concentrated in older individuals and acute conditions—circulatory, respiratory, and infectious diseases. Our findings show that even temporary, intensive-margin shifts in skilled labor can generate large and unequal welfare losses when public services are already capacity-constrained. |
| Keywords: | Brain Drain; Worker Mobility; Mortality |
| JEL: | H11 J12 J16 |
| Date: | 2025–04–02 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2025_009 |
| By: | Wang, Weijia (Dept. of Economics, Norwegian School of Economics and Business Administration); Valasek, Justin (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | The experimental literature on preferences for redistribution has established that individual perceptions of what earning distributions are fair depend greatly on context. In this paper, we study an important and novel dimension of context: whether the choice to redistribute occurs before workers work and accrue earnings, or after. Contrary to the predictions of our theoretical framework, we fi nd no evidence that spectators are less likely to equalize earnings ex ante than to equalize earnings ex post. Interestingly, our study also suggests that, relative to American subjects, Scandinavian subjects are more likely to equalize ex post earnings, but we find no evidence that Scandinavian and American subjects make different choices ex ante. A follow-up analysis suggests that the latter result is largely due to Scandinavian and American subjects having similar preferences over ex ante redistribution when equalizing earnings comes at a cost to efficiency. Overall, our results suggest that context-dependent preferences for redistribution are sensitive to the relative timing of the redistribution choice. |
| Keywords: | Inequality; Fairness; Institutions; Experiment |
| JEL: | C91 D63 J16 |
| Date: | 2025–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2025_008 |
| By: | Adermon, Adrian (Institute for Evaluation of Labour Market and Education Policy (IFAU), UCLS, and UCFS); Brandén, Gunnar (Center for Epidemiology and Community Medicine and Department of Global Public Health, Global and Sexual Health, Karolinska Institutet); Nybom, Martin (Institute for Evaluation of Labour Market and Education Policy (IFAU), SOFI, and UCLS.) |
| Abstract: | Among economists, empirical analysis of social mobility and the role of parental background is largely carried out in two separate strands of research. The intergenerational mobility literature estimates parent-child persistence in a certain outcome of interest, such as income. In contrast, the equality of opportunity literature is rooted in a normative framework, and has only more recently started generating empirical evidence. Intergenerational mobility regressions are relatively straightforward to estimate, but their normative implications are less obvious. In contrast, measures of equality of opportunity have a policy-relelvant interpretation, but are demanding in terms of data, requiring the researcher to observe a large set of determinants of socioeconomic status for large samples. But maybe the two approaches capture similar underlying dynamics? We compare the two approaches by estimating both equality of opportunity and intergenerational mobility measures — as well as sibling correlations — across 16 birth cohorts within 126 Swedish local labor markets. Using these estimates, we test to what extent the different measures correlate, resulting in insights on the plausibility of interpreting intergenerational mobility measures as informative about equality of opportunity. |
| Keywords: | Equality of opportunity; Intergenerational mobility; Sibling correlations |
| JEL: | D31 D63 J62 |
| Date: | 2025–03–20 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ifauwp:2025_002 |
| By: | Daniel Fehrle (Kiel University, Department of Economics); Vasilij Konysev (University of Augsburg, Department of Economics) |
| Abstract: | The comparative economic performance between the former socialist German Democratic Republic (GDR) and the capitalist Federal Republic of Germany (FRG) remains inconclusive due to valuation problems. We address these problems by applying wedge-growth accounting to a newly compiled dataset. More precisely, we compare the allocation efficiency using wedges between marginal utility and productivity, as well as Total Factor Productivity (TFP) growth. Wedges in marginal utility account for binding quantity constraints in GDR’s goods and FRG’s labor market. We analyze the resulting unitless wedges and swap them in an equivalent growth model for the two Germanies to quantify their impact on output and economic welfare. The analysis reveals that the consequences of GDR’s rationing were multiple times more drastic than FRG’s unemployment. An observed faster output growth in the GDR stems from excessive labor input—depressing consumption-based welfare by a fourth—rather than from physical capital or TFP. Instead, GDR’s economic activity fell comparatively ten years further behind due to lower TFP growth. Lastly, persistent, substantial net inflows increase GDR’s welfare by 25 %. |
| Keywords: | Wedge-growth accounting, central planner allocation, quantity constraints |
| JEL: | E13 N14 O11 O47 P51 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:aug:augsbe:347 |
| By: | Zveglich, Jr., Joseph (Asian Development Bank); King, Elizabeth (Brookings Institution); Molina-Lapid, Ana Kristel (Asian Development Bank) |
| Abstract: | The Asian Development Bank has adopted internal practices aligned with its commitment to help its members achieve gender equality. This study analyzes panel data on its staff spanning 2000–2022 to understand gender differences in salaries and career paths of its three staff groups. A decomposition of gender pay differences reveals that this wage gap has narrowed for international staff, but has widened for local staff over time, in favor of men. While most of the salary gap of international staff and local staff in field offices can be explained by staff characteristics, this is not the case for local staff at headquarters. Analyses of career dynamics show that hiring practices have contributed significantly to the unexplained current earnings gap across all staff groups, while retention patterns appear to have helped close the gender pay gap across all staff groups. Gender policies adopted by the organization appear to have influenced these shifts. |
| Keywords: | gender pay gaps; panel data; career events; multilateral development bank |
| JEL: | J16 J31 J45 J62 |
| Date: | 2025–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0772 |
| By: | Fabrice Gilles |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:tep:teppwp:wp25-05 |
| By: | Chiplunkar, Gaurav; Tatjana Kleineberg |
| Abstract: | The representation and significance of women in the labor force have grown significantly over the past five decades around the globe. Using nationally representative data from more than 90 countries, this paper documents distinct gender patterns in employment transitions across both sectors and occupations during this period. Using a model of occupational and sectoral choice and focusing on six major economies, the paper finds that declining gender barriers — defined as gender-specific distortions in employment and wages — were a key driver of the observed rise in female labor force participation, expansion of the service sector, and increases in real GDP per capita from 1970 to 2018, but with substantial variation across countries. |
| Date: | 2025–03–10 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11083 |
| By: | Hochleitner, Anna (Centre for Applied Research, Norwegian School of Economics and Business Administration); Tufano, Fabio (Dept. of Economics, Finance and Accounting, University of Leicester); Facchini, Giovanni (School of Economics, University of Nottingham); Rueda, Valeria (School of Economics, University of Nottingham); Eberhardt, Markus (School of Economics, University of Nottingham) |
| Abstract: | We study the gendered impact of recommendations at different stages of the hiring process. First, using a large sample of reference letters from the academic job market for economists, we document that women receive fewer ‘ability’ and more ‘grindstone’ letters. Next, we conduct two experiments — with academic economists and a broader, college-educated, population — analyzing both recommendation and recruitment stages. These confirm that recommendations are gendered and impact recruitment. We elicit gender views and beliefs about the effectiveness of different letter types, uncovering that gender attitudes and strategic behavior based on erroneous beliefs explain referees’ choices. Finally, we decompose gender recruitment gaps into two components: one capturing differences in treatment of candidates with identical qualities, the other reflecting recruiters’ failure to account for gendered patterns in recommendations. We show that recruiters’ failure to recognize the gendered nature of reference letters undermines visible efforts to improve diversity in hiring. |
| Keywords: | Gender; Recruitment; Diversity; Experiments |
| JEL: | A11 D19 J16 |
| Date: | 2025–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2025_007 |
| By: | Craig Sylvera |
| Abstract: | Do Black communities economically benefit from the election of a Black mayor? I find majority-Black ZIP codes experience gains in all areas of economic activity relative to non-Black communities following the first election of a Black mayor. Across industries, the number of establishments in majority-Black ZIP codes increases, including those that rely on foot traffic. Before breakthrough elections, Black residents are less likely than white residents to identify as self-employed across all cities, but this difference is reduced after an election; however, the cities in which the pre-breakthrough self-employment difference is larger experience no changes to the B–W self-employment gap post-election, suggesting institutional and historical factors may limit Black economic progress in places of higher disparity. |
| Keywords: | Local government; mayors; community development |
| JEL: | J1 H7 J7 R5 |
| Date: | 2025–02–26 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedcwq:99618 |
| By: | Bilbiie, F. O.; Galaasen, S. M.; Gurkayna, R. S.; Maehlum, M.; Molnar, K |
| Abstract: | HANK Sufficient Statistics Out of Norway (HANKSSON) answers a core question of the heterogeneity in macroeconomics literature: does heterogeneity amplify the aggregate effects of demand policies and shocks? We provide two sufficient statistics (SS) and test them using individual-level matched data for personal characteristics, income, wealth and non-imputed, actual consumption for the Norwegian population. The first SS gauges whether heterogeneity drives a wedge between the (representative agent) average MPC and a model-consistent (heterogeneous agent) aggregate MPC. The second SS elicits whether the consumption of constrained, "hand-to-mouth, " agents is more exposed to aggregate fluctuations. Our key finding is that to analyze aggregate behavior, one does not need to keep track of heterogeneity: the average and the aggregate are about the same. We show that the amplification result currently prevalent in the literature is due to using labor earnings and is overturned when using model-consistent disposable income. This is due to the strong insurance effect of taxes and transfers; when applied to our data, even the much less progressive US tax and transfer system produces no amplification due to heterogeneity. The same “close to irrelevance†conclusion arises based on the second statistic using consumption data directly. Not even during the Great Recession do we see heterogeneity contribute meaningfully to demand shock amplification. |
| Date: | 2025–03–28 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2516 |
| By: | Mahony, Michael; Rowe, Francisco (University of Liverpool) |
| Abstract: | The ways in which enclaves affect residents labour market outcomes are not fully understood, with outcomes varying substantially across countries, migrant and ethnic groups. In this study, we examine how co-national and co-ethnic enclaves influence migrants’ and ethnic minorities’ labour market outcomes within England. We account for residential sorting through a computational causal modelling framework. Our analysis reveals three key findings. First, migrants and ethnic minorities with poor human capital were disproportionately found in neighbourhoods with high co-ethnic and co-national concentration. This suggests residential sorting occurs in UK enclaves. Second, co-national enclaves were associated with higher employment probabilities (but not higher incomes) amongst male migrants, and neutral to negative employment probabilities and incomes amongst female migrants. Third, co-ethnic enclaves were generally not associated with higher employment probabilities or income, suggesting UK co-ethnic networks do not help most minority ethnic groups to find work. To our knowledge, this study represents the first evidence of positive co-national employment effects within the UK context. These findings could inform policy by highlighting groups whose employment rates are negatively affected by enclaves. These include female migrants and women of Indian, Pakistani and Bangladeshi ethnicity. |
| Date: | 2025–03–24 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:834ad_v1 |
| By: | Benjamin S. Kay; Albina Khatiwoda |
| Abstract: | This study examines the demographic characteristics of U.S. state border counties, comparing them with those of nonborder counties. The demographic representativeness of border counties is essential for the interpretation of the results in state border-county difference-in-difference analyses, used in state policy evaluations. Our findings reveal that border counties generally have higher proportions of White, older, and disabled populations. We also see occasional instances of wide demographic differences across state boundaries. These differences potentially undermine the external validity and identification of policy evaluations. We illustrate the implications of these finding through a case study, highlighting the need for robustness checks and demographic considerations in border-county policy research. |
| Keywords: | Demographics; Difference-in-Difference Estimates; Event Studies; Natural Experiments; Policy Experiments; US state border counties |
| JEL: | D78 J15 C21 C23 |
| Date: | 2025–03–07 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:2025-18 |
| By: | Alex Armand; Frederica Mendonca; Wayne Aaron Sandholtz; Pedro C. Vicente |
| Abstract: | Urbanization is a force for structural change. However, it has been slow in Sub-Saharan Africa, possibly due to conflicting political interests of national incumbents. We study the political impacts of a randomized program integrating rural migrants in a Mozambican city with the participation of local leaders. We find that the program increases the mobilization of local leaders, who conduct more electoral campaigning. We observe migrants to be more politically active and more supportive of the city incumbent (national opposition). Migrants’ contacts at the origin align with the national opposition and migrate to the city. We conclude that urbanization is political.. |
| Keywords: | Political economy, Urbanization, Rural migrants, Migrant integration, Political behavior, Mozambique, Africa |
| JEL: | D72 O18 J61 O12 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unl:unlfep:wp670 |