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on Labor Markets - Supply, Demand, and Wages |
| By: | Arntz, Melanie; Lipowski, Cäcilia; Neidhöfer, Guido; Zierahn, Ulrich |
| Abstract: | This paper analyzes whether technological change improves equality of labor market opportunities by decreasing returns to parental background. We find that in Germany during the 1990s, computerization improved the access to technologyadopting occupations for workers with low-educated parents, and reduced their wage penalty within these occupations. We also show that this significantly contributed to a decline in the overall wage penalty experienced by workers from disadvantaged parental backgrounds over this time period. Competing mechanisms, such as skill-specific labor supply shocks and skill- upgrading, do not explain these findings. |
| Keywords: | skill-biased technical change,wage inequality,equality of opportunity,intergenerational persistence,parental background,class ceiling |
| JEL: | J21 J23 J24 J31 J62 O33 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:22014&r= |
| By: | David Autor |
| Abstract: | This review considers the evolution of economic thinking on the relationship between digital technology and inequality across four decades, encompassing four related but intellectually distinct paradigms, which I refer to as the education race, the task polarization model, the automation-reinstatement race, and the era of Artificial Intelligence uncertainty. The nuance of economic understanding has improved across these epochs. Yet, traditional economic optimism about the beneficent effects of technology for productivity and welfare has eroded as understanding has advanced. Given this intellectual trajectory, it would be natural to forecast an even darker horizon ahead. I refrain from doing so because forecasting the “consequences” of technological change treats the future as a fate to be divined rather than an expedition to be undertaken. I conclude by discussing opportunities and challenges that we collectively face in shaping this future. |
| JEL: | J23 J24 O33 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30074&r= |
| By: | Peichl, Andreas (Ludwig-Maximilians-Universität München); Popp, Martin (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | In recent decades, many industrialized economies have witnessed a pattern of job polarization. While shifts in labor demand, namely routinization or offshoring, constitute conventional explanations for job polarization, there is little research on whether shifts in labor supply along the labor demand curve may equally result in job polarization. In this study, we assess the impact of labor supply shifts on job polarization. To this end, we determine unconditional wage elasticities of labor demand from a unique estimation of a profit-maximization model on linked employer-employee data from Germany. Unlike standard practice, we explicitly allow for variations in output and find that negative scale effects matter. Both for a skill- and a novel task-based division of the workforce, our elasticity estimates show that supply shifts from immigration and a decline in collective bargaining successfully explain occupational employment patterns during the 1990s. |
| Keywords: | labor demand, job polarization, skills, tasks |
| JEL: | J23 J31 D22 L60 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15361&r= |
| By: | Berlingieri, Francesco (European Commission Joint Research Centre (JRC)); Gathmann, Christina (LISER); Quinckhardt, Matthias (Heidelberg University) |
| Abstract: | We study how the presence of a college affects the local economy using administrative data. Our analysis exploits the opening of new institutions of tertiary education across Germany in the 1980s and 1990s. The new college substantially increased the student population and share of high-skilled workers in the region. Yet, we find no effect on regional wages or employment indicating that the local economies did not experience additional growth through skill-biased technological change, for instance. Instead, there is sizable heterogeneity in the local gains: high-tech firms in manufacturing absorb most of the new college graduates, esp. in engineering professions. We find little impact on the low- or high-skilled service sector or employment in managerial professions. Finally, we show that local labor market conditions prior to the opening matter: in regions with a more dynamic labor market, the opening encourages firm creation and a permanent upskilling of the workforce. Areas with a less dynamic labor market experience little sustained growth in high-skilled workers who are absorbed by incumbent firms. |
| Keywords: | colleges, local labor markets, human capital, substitutability |
| JEL: | J24 J31 J61 I23 I25 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15364&r= |
| By: | Sterkens, Philippe (Ghent University); Sharipova, Adelina (Ghent University); Baert, Stijn (Ghent University) |
| Abstract: | To study hiring discrimination against cancer survivors, we conduct a vignette experiment in which American and British recruiters evaluate fictitious job candidates. Candidates differed by periods of non-employment in their career, including non-employment due to suffering from cancer. We study the effect of cancer experiences on the recruiters' hiring decisions, as well as its effect on underlying candidate perceptions, related to various potential forms of stigma identified in the literature. We find that employment opportunities are lower for candidates with a history of cancer, compared to candidates without such a gap. This penalty is particularly explained by perceptions that these candidates will have higher sick leave probabilities and create additional costs. However, relative to candidates with a comparable gap due to depression or personal reasons, former cancer patients are less stigmatised, with relatively favourable assessments of their emotional abilities, social abilities, motivation and positive impact on workplace culture. |
| Keywords: | hiring discrimination, cancer, depression, signalling |
| JEL: | I10 I12 J70 J71 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15349&r= |
| By: | Fedotenkov, Igor (European Commission); Kvedaras, Virmantas (European Commission); Sanchez-Martinez, Miguel (European Commission) |
| Abstract: | The paper investigates the relationship between employment protection legislation (EPL hereafter) and labour productivity growth in the EU in the context of the Great Recession. We consider the crisis and recovery periods, evaluate the relevance of both levels and changes in EPL for productivity growth, establish the presence of some nonlinearities, and explore the conditioning role played by the skills of the labour force, captured by different levels of education. We find that stricter labour protection reduces labour productivity growth in sectors with a large share of workers with tertiary education, whereas this effect is negligible or positive in sectors where workers with secondary or only primary education are more prevalent, respectively. We establish that overly strict regulation is more harmful, whereas its moderate level can be even beneficial in regular (non-crisis) times. In the long run, we document that an increase in EPL stimulates employers to substitute labour with capital, partially mitigating the overall negative effect on labour productivity growth. We provide several hypotheses that could explain our findings and discuss potential policy implications supported by a back-of-the-envelope calculation. |
| Keywords: | Labour productivity, employment protection legislation, skills, education, Great Recession |
| JEL: | E24 I25 J24 J88 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:jrs:wpaper:202204&r= |
| By: | Xu, Lei; Zhu, Yu |
| Abstract: | We examine the impact of increasing minimum wage on employment by exploiting variation in the age-dependent National Minimum Wage (NMW) in the UK. We extend the Regression Discontinuity model to evaluate the procyclicality of employment effect and show that previous estimates may be biased due to failure to account for the local non-employment rate. Contrary to the existing literature, we report a positive employment elasticity after accounting for the effect of local labour market conditions. The results suggest that the positive employment effect of increasing minimum wage is strongly procyclical, i.e. is more pronounced in areas with low non-employment rates. Under an assumption that employers have no direct impact around the cut-off point, the results suggest that a higher minimum wage increases labour supply of young workers. |
| Keywords: | minimum wage,macroeconomic fluctuation,regression discontinuity,age dependent,procyclicality |
| JEL: | J22 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1109&r= |
| By: | Robert L. Clark; Olivia S. Mitchell |
| Abstract: | One of the most important financial decisions that pension participants make concerns how they access their pension assets when they terminate employment with their plan sponsor. Their choices depend both on own preferences and the options offered by their retirement plan. This paper examines both past and future pension withdrawal choices for those with defined benefit and defined contribution pensions, separately. Our data are drawn from a set of pension distribution questions we fielded in the Understanding American Study. Results show significant differences in distribution choices based on the type of retirement plan, with individuals covered by defined benefit plans significantly more likely to select annuities compared to similar employees covered by defined contribution plans. We also find differences in how higher annual income affects annuity choices based on coverage by DB plans. Individuals with lower levels of financial literacy and lower annual income have less knowledge of basic pension characteristics. |
| JEL: | D12 J26 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30115&r= |
| By: | Daniel S. Hamermesh; Jeff Biddle |
| Abstract: | We examine patterns of work in the U.S. from 1973-2018 with the novel focus on days per week, using intermittent CPS samples and one ATUS sample. Among full-time workers the incidence of four-day work tripled during this period, with over 8 million more full-time workers on four-day weeks. The same growth occurred in the Netherlands, Germany, and South Korea. The rise was not due to changes in demographics or industrial structure. Four-day full-time work is more common among less educated, younger, and white non-Hispanic workers, among men, natives, and people with young children; and among police and firefighters, health-care workers, and in eating/drinking places. Based on an equilibrium model of its prevalence, we show that it results more from workers’ preferences and/or daily fixed costs of working than from employers' production costs. We verify the implication that the wage penalty for four-day work is greater where such work is more prevalent, and we show that the penalty has diminished over time. |
| JEL: | J11 J22 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30106&r= |
| By: | Veronique Salins; Urban Sila |
| Abstract: | Switzerland has a well-functioning labour market with low unemployment, a highly skilled workforce and well-paid jobs. It has proved resilient during the COVID-19 crisis, helped by extensive government support to employment and incomes. As activity recovers, the authorities face the challenge of adapting support measures to avoid hindering job reallocation and productivity growth while ensuring adequate support to vulnerable firms and workers. The pandemic has also reinforced certain pre-existing challenges. The already sizeable gender pay gap risks widening, and older workers face a higher risk of long-term unemployment. Making the labour market more inclusive would help the recovery and raise productivity. Switzerland would benefit from bringing under-represented groups more effectively into the labour market. Raising skills and lowering inequities in education and training will also be essential to facilitate job transitions and ensure that workers and firms benefit from technological change and the digital transformation. |
| Keywords: | active labour market policies, ageing, coronavirus, covid-19, employment, gender, labour market, short time working scheme, skills and education, social protection, work incentives |
| JEL: | H53 H55 J2 J3 J6 I2 |
| Date: | 2022–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1720-en&r= |
| By: | Abby E. Alpert; Steve Schwab; Benjamin D. Ukert |
| Abstract: | There is significant interest in understanding the labor market consequences of the opioid epidemic, but little is known about how opioid use impacts on-the-job productivity. We analyze the impact of opioid initiation in the emergency department (ED) on workforce outcomes in the Military using linked medical and administrative personnel data for active duty service members from 2008 to 2017. Exploiting quasi-random assignment of patients to physicians in the ED, we find that assignment to a high-intensity opioid prescribing physician increases the probability of long-term opioid use and leads to subsequent negative effects on work capacity, job performance, and productivity. We also analyze the mechanisms underlying these negative workforce outcomes. While opioid use does not negatively affect measures of physical job performance, we find large increases in behavioral problems which lead to disciplinary actions and job separation. |
| JEL: | I1 I18 J21 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30110&r= |
| By: | Sudheer Chava; Alexander Oettl; Manpreet Singh; Linghang Zeng |
| Abstract: | Using an administrative payroll dataset for 2.6 million retail workers, we find that the staggered rollout of a major e-commerce firm's fulfillment centers reduces traditional retail workers' income in geographically proximate counties by 2.4%. Wages of hourly workers, especially part-time hourly workers, decrease significantly, driven by a drop in the number of hours worked. We observe a U-shaped pattern in which both young and old workers experience a sharper decrease in wage income. Consequently, some workers experience an increase in credit card delinquency. Using data for 3.2 million stores, we find that sales (employment) at proximate stores decrease by 4% (2.1%). Exits, especially of young and small stores, increase, and entry decreases. In aggregate, the retail sector loses 938 jobs per county per quarter, and the transportation-warehousing sector (food services sector) gains 256 (143) jobs. Our results highlight how creative destruction led by e-commerce impacts local labor markets. |
| JEL: | J30 L81 O33 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30077&r= |
| By: | Cyprien Batut; Andrea Garnero; Alessandro Tondini |
| Abstract: | Working time legislation is a key labour market regulation and the subject of heated and recurrent debates. A first-order concern is how this legislation may impact employment. In this paper, we exploit a panel of industry-level data in European countries to study the economic impact of national reductions in usual weekly working hours between 1995 and 2007. Our identification strategy relies on the five national reforms that took place over this period and on initial differences across sectors in the share of workers exposed to the reforms. We show that, on average, the number of hours worked in more affected sectors fell relative to less affected sectors but employment did not increase, while the impact on wages and value-added per hour worked appears to be positive but insignificant. |
| Keywords: | working time, work sharing, employment, wages, value-added |
| JEL: | J20 J30 J80 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:fbk:wpaper:2022-04&r= |
| By: | David J. Deming |
| Abstract: | This paper synthesizes what economists have learned about human capital since Becker (1962) into four stylized facts. First, human capital explains at least one-third of the variation in labor earnings within countries and at least half of the variation across countries. Second, human capital investments have high economic returns throughout childhood and young adulthood. Third, we know how to build foundational skills such as literacy and numeracy, and resources are often the main constraint. Fourth, higher-order skills such as problem-solving and teamwork are increasingly valuable, and the technology for producing these skills is not well-understood. We know that investment in education works and that skills matter for earnings, but we do not always know why. |
| JEL: | I25 I26 J24 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30149&r= |
| By: | Gallen, Yana (Harris School, University of Chicago); Wasserman, Melanie (University of California, Los Angeles) |
| Abstract: | It is common for mentorship programs to use race, gender, and nationality to match mentors and mentees. Despite the popularity of these programs, there is little evidence on whether mentees value mentors with shared traits. Using novel administrative data from an online college mentoring platform connecting students and alumni, we document that female students indeed disproportionately reach out to female mentors. We investigate whether female students make costly trade-offs in order to access a female mentor. By eliciting students' preferences over mentor attributes, we find that female students are willing to trade off occupational match in order to access a female mentor. This willingness to pay for female mentors declines to zero when information on mentor quality is provided. The evidence suggests that female students use mentor gender to alleviate information problems, but do not derive direct utility from it. We discuss the implications of these results for the design of initiatives that match on shared traits. |
| Keywords: | homophily, mentorship, preference elicitation, gender |
| JEL: | J16 J24 J71 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15362&r= |
| By: | Nicole Fortin; Thomas Lemieux; Neil Lloyd |
| Abstract: | This paper uses two complementary approaches to estimate the effect of right-to-work (RTW) laws on wages and unionization rates. The first approach uses an event study design to analyze the impact of the adoption of RTW laws in five U.S. states since 2011. The second approach relies on a differential exposure design that exploits the differential impact of RTW laws on industries with high unionization rates relative to industries with low unionization rates. Both approaches indicate that RTW laws lower wages and unionization rates. Under the assumption that RTW laws only affect wages by lowering the unionization rate, RTW can be used as an instrumental variable (IV) to estimate the causal effect of unions on wages. In our preferred specification based on the differential exposure design, the IV estimate of the effect of unions on wages is 0.35, which substantially exceeds the corresponding OLS estimate of 0.16. This large wage effect suggests that RTW may also directly affect wages due to a reduced union threat effect. |
| JEL: | J31 J51 J83 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30098&r= |
| By: | Delaney, Judith (University of Bath); Devereux, Paul J. (University College Dublin) |
| Abstract: | Much attention is focused on finding ways to encourage females to study STEM in school and college but what actually happens once women complete a STEM degree? We use the UK Quarterly Labour Force Survey to trace out gender differences in STEM persistence over the career. We find a continuous process whereby women are more likely to exit STEM than men. Among holders of STEM undergraduate degrees, women are more likely to obtain a non- STEM master's degree. Then, after entering the labour market, there is a gradual outflow of females during the first 15 years post-graduation so that females are about 20 percentage points less likely to work in STEM compared to their male counterparts. Conditional on leaving STEM, we find that females are more likely to enter the education and health sectors while males are more likely to enter the more lucrative business sector and that this can partly explain the gender pay gap for STEM graduates. Overall, our results suggest that policies that aim to increase the proportion of females studying STEM in school and college may have less effect than expected due to the lower attachment of females to STEM after graduation. Such policies may need to be augmented with efforts to tackle the greater propensity of females to exit STEM throughout the career. |
| Keywords: | STEM, gender, STEM gender gap, labour market, gender pay gap |
| JEL: | I23 I26 J16 J24 J31 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15352&r= |
| By: | Cabanillas-Jiménez, Guillermo; Galanakis, Yannis |
| Abstract: | Historically, the Spanish labor market has been quite unstable. The unexpected arrival of COVID-19 in 2020 has stressed these vulnerabilities. In this paper, we analyze the immediate impact of the pandemic on Spanish labor market outcomes. We find that, during the lockdown period, individuals work 3 hours less per week. Moreover, results show that the labor force participation reduced by 2.3% due to the pandemic. Finally, sectors of activity present heterogeneous effects. |
| Keywords: | Labor market,COVID-19,Spain |
| JEL: | C01 C23 C26 C93 J22 J43 O12 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1104&r= |
| By: | Natasha Burns; Kristina Minnick; Jeffry Netter; Laura Starks |
| Abstract: | We employ a cross-country sample to examine whether cultural differences help explain gender compensation variations across corporate executives. The results show that the cultural differences, which are embedded in societies from long prior to the compensation decisions, provide significant explanatory power to the observed gender gap in executive compensation. Using an Oaxaca-Blinder decomposition with variables that have previously been shown to be significant determinants of executive compensation, we find that adding cultural measures to the model increases the explanatory power from 44% to 95% of the gender compensation gap. |
| JEL: | J71 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30100&r= |
| By: | Katharine G. Abraham; Justine Mallatt |
| Abstract: | There are many reasons to want measures of countries’ investments in human capital and especially their investments in formal education. We review the existing literature on the measurement of human capital. Broadly speaking, economists have proposed three approaches to the measurement of human capital—the indicator approach, the cost approach and the income approach. Studies employing the indicator approach have used single measures such as average years of schooling or created indexes of multiple measures as human capital proxies. The cost approach values human capital investments based on spending. The income approach values human capital investments by looking forward to the increment to expected future earnings they produce. The latter two approaches have the significant advantage of consistency with national income accounting practices and measures of other types of capital, but there are also challenges to their implementation. Measures based on the income approach typically yield far larger estimates of the value of human capital than measures based on the cost approach. We outline possible reasons for this discrepancy and show how changes in assumptions can reconcile estimates based on the two approaches. |
| JEL: | E01 I26 J24 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30136&r= |
| By: | Getik, Demid (Department of Economics, Lund University) |
| Abstract: | The share of couples where the wife out-earns the husband is increasing in many countries. In this paper, I investigate how this income dynamic affects mental health. Using data on all Swedish couples who married in 2001, I show that mental health is positively associated with own and spousal income. However, it is negatively linked to the wife’s relative income. Crossing the threshold where the wife starts earning more increases the likelihood of a mental health diagnosis by 8-12 per cent. This effect does not appear driven by divorce or spouses being on different income trajectories. |
| Keywords: | gender; mental health; income; relative income |
| JEL: | I12 I19 I21 I31 J16 J24 |
| Date: | 2022–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2022_010&r= |
| By: | Borowiecki, Karol Jan (Department of Economics); Ford, Nicholas Martin (Department of Economic History, Lund University); Marchenko, Maria (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | Most creatives acquire professional talents by learning from others, but in most settings it is difficult to estimate the existence of long-term effects. This paper explores the transmission of skills over a period of more than seven centuries by focusing on the case of music composers. We ask the question: how does a composer’s quality influence the quality of the composers he or she teaches? Our analysis builds on a unique dataset of 17,433 composers from around the world since the fourteenth century. By comparing actual teacher–student pairs with plausible counterfactual pairs and by using a two-stage framework, we show a strong effect of quality transmission. Moreover, we find quality transmission persists across multiple generations: from teacher to student, and subsequently to student’s student and so on. Our results provide new insights on drivers of creativity over the very long term, as well as the influence of teachers on students’ achievements. |
| Keywords: | creativity; transmission of ideas; music history; teacher influence |
| JEL: | I21 J24 N30 O31 Z11 |
| Date: | 2022–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2022_007&r= |
| By: | Georgellis, Yannis (University of Kent); Clark, Andrew E. (Paris School of Economics); Apergis, Emmanuel (University of Huddersfield); Robinson, Catherine (University of Kent) |
| Abstract: | We use British panel data to explore the link between occupational status and life satisfaction. We find puzzling evidence, for men, of a U-shaped relationship in cross-section data: employees in medium-status occupations report lower life satisfaction scores than that of employees in either low- or high-status occupations. This puzzle disappears in panel data: the satisfaction of any man rises as he moves up the status ladder. The culprit seems to be immobility: the miserable middle is caused by men who (in our data) have always been in medium-status occupations. There is overall little evidence of a link between occupational status and life satisfaction for women. |
| Keywords: | occupational status, life satisfaction, occupational mobility |
| JEL: | I31 J24 Z13 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15360&r= |
| By: | Isabelle Sin (Motu Economic and Public Policy Research); Shannon Minehan (Motu Economic and Public Policy Research); Nicholas Watson (Motu Economic and Public Policy Research) |
| Abstract: | This literature review provides background for a forthcoming empirical investigation of the pathways through education that lead to successful labour market outcomes for M?ori students with different aptitudes in high school. It summarises three main areas of existing literature. The first is the pathways students can take through the Aotearoa New Zealand education system. This includes summary statistics on the proportion of students who pursue each pathway, and the differences in these by ethnicity and gender. The second is the relationship between higher education and labour market outcomes internationally, in Aotearoa, and for M?ori in Aotearoa specifically. It also highlights non-financial potential benefits that may motivate students to pursue higher education. The third is the value in the labour market of M?ori-medium education and te reo-English bilingualism. |
| Keywords: | education, M?ori, New Zealand education system, bilingual education |
| JEL: | I20 I30 I23 I26 J15 J24 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:22_05&r= |
| By: | Lucrezia Fanti (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Milano, Italia); Marcelo C. Pereira (Institute of Economics, University of Campinas, Campinas, Brazil); Maria Enrica Virgillito (Institute of Economics, Scuola Superiore Sant’Anna, Pisa, Italia – Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Milano, Italia) |
| Abstract: | Building on the labour-augmented K+S framework (Dosi et al., 2010, 2017, 2020), we address the analysis of North-South divide by means of an agent-based model (ABM) endogenously reproducing the divergence between two artificial macro-regions. The latter are characterized by identical initial conditions in terms of productive and innovation structures, but different labour market organizations. We identify the role played by different labour markets functioning on the possible divergence across the two regions, by finding that divergences in labour market reverberate into asymmetric productive performance due to negative reinforcing feedback loop dynamics. We then compare alternative policies by showing that investment schemes aimed at increasing machine renewal and higher substitutionary investment are the most effective in fostering the convergence. |
| Keywords: | Agent-Based Models; Technology Gap; Labour Market |
| JEL: | C63 J3 E24 O1 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie5:dipe0027&r= |
| By: | Robert Dunn |
| Abstract: | The Office for National Statistics (ONS) has for over 10 years produced annual stock estimates of human capital assets, in real and nominal terms with a variety of demographic decompositions. Similarly, most published papers from both academic and national statistical institutions have focused on the production and analysis of human capital stock estimates. This paper looks to move beyond this by considering the economic flows associated with incorporating human capital assets into the UK Economic Accounts within the context of an experimental satellite account; thereby explaining the movement between two human capital stock positions and the resulting effect on the main national accounts aggregates such as gross value added, savings, net worth, etc. In doing this we draw on the UNECE Guide to measuring human capital (UNECE; 2016) and the examples of the Human Capital Accounts produced by Canada and the United States, as its starting points for integrating the "production" of human capital assets into the economic accounts and then looks at extending that to include the production of services arising from those human capital assets by looking at parallels with how the System of National Accounts treats other produced assets used within a production process where the economic ownership of the asset resides with another institutional unit. This constitutes a key contribution to the existing body of work, and the estimates presented here are the first of their kind for the UK and demonstrates the importance of human capital assets for the economic accounts due to their magnitude in comparison with current total non-financial assets on the UK balance sheet; on average human capital assets are 220 per cent of total non-financial assets for the reference period 2005-2018. |
| Keywords: | human capital, national accounts |
| JEL: | E10 I26 J24 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:escoed:escoe-dp-2022-12&r= |