|
on Labor Markets - Supply, Demand, and Wages |
| By: | Eugenia Gonzalez Ehlinger; Fabian Stephany |
| Abstract: | For emerging professions, such as jobs in the field of Artificial Intelligence (AI) or sustainability (green), labour supply does not meet industry demand. In this scenario of labour shortages, our work aims to understand whether employers have started focusing on individual skills rather than on formal qualifications in their recruiting. By analysing a large time series dataset of around one million online job vacancies between 2019 and 2022 from the UK and drawing on diverse literature on technological change and labour market signalling, we provide evidence that employers have started so-called “skill-based hiring” for AI and green roles, as more flexible hiring practices allow them to increase the available talent pool. In our observation period the demand for AI roles grew twice as much as average labour demand. At the same time, the mention of university education for AI roles declined by 23%, while AI roles advertise five times as many skills as job postings on average. Our analysis also shows that university degrees no longer show an educational premium for AI roles, while for green positions the educational premium persists. In contrast, AI skills have a wage premium of 16%, similar to having a PhD (17%). Our work recommends making use of alternative skill building formats such as apprenticeships, on-the-job training, MOOCs, vocational education and training, micro-certificates, and online bootcamps to use human capital to its full potential and to tackle talent shortages. |
| Keywords: | future of work, labour markets, skills, education, AI, sustainability |
| JEL: | C55 I23 J23 J24 J31 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10817&r=lma |
| By: | Goller, Daniel (University of Bern); Wolter, Stefan C. (University of Bern) |
| Abstract: | We analyze the causal influence a positive reputation shock for a particular occupation may have on career choice. The measure of the positive reputation shock is the unpredictable event that a young adult from one's own country wins a (gold) medal in a particular occupation at the World Skills - the world championship of vocational skills. In an occupation with a gold medal won, searches for apprenticeship vacancies increase significantly by around 7 percent compared to occupations that do not win a competition. In occupations where only a silver or bronze medal is awarded, the effect is also positive and statistically significant, but less pronounced. More importantly, the increase in searches for apprenticeship vacancies in the current year has also led to around 2.5 percent more contracts being signed in the winning occupation, and there are indications that these apprenticeships have a better match between employers and employees (trainees). |
| Keywords: | role models, reputation shock, career choice, labor supply, apprenticeship |
| JEL: | I21 J22 J24 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16607&r=lma |
| By: | Francesca Melillo (Skema Business School; CNRS, GREDEG, France) |
| Abstract: | While the literature documents a wage loss for entrepreneurs that return to paid employment, we examine how these entrepreneurs are re-integrated into the labor market. We consider which type of employers hire entrepreneurs and their satisfaction with the new corporate job. Using matched employer-employee data from Belgium combined with an ad-hoc survey, we find that entrepreneurs are hired by smaller employers that offer fewer employee benefits and pay less, contributing to explaining the wage loss. We also find that entrepreneurs are more satisfied than observationally equivalent employees when they are assigned to jobs that involve higher task variety. This effect is more pronounced for entrepreneurs who sort into better employers. Our findings highlight the importance for managers to assign entrepreneurs to the "right" job tasks. |
| Keywords: | Entrepreneurs, job satisfaction, task variety, employee benefits, wage loss |
| JEL: | J23 J24 L26 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2023-21&r=lma |
| By: | Daniel Goller; Stefan C. Wolter |
| Abstract: | We analyze the causal influence a positive reputation shock for a particular occupation may have on career choice. The measure of the positive reputation shock is the unpredictable event that a young adult from one's own country wins a (gold) medal in a particular occupation at the World Skills—the world championship of vocational skills. In an occupation with a gold medal won, searches for apprenticeship vacancies increase significantly by around 7 percent compared to occupations that do not win a competition. In occupations where only a silver or bronze medal is awarded, the effect is also positive and statistically significant, but less pronounced. More importantly, the increase in searches for apprenticeship vacancies in the current year has also led to around 2.5 percent more contracts being signed in the winning occupation, and there are indications that these apprenticeships have a better match between employers and employees (trainees). |
| Keywords: | role models, reputation shock, career choice, labor supply, apprenticeship |
| JEL: | I21 J22 J24 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10791&r=lma |
| By: | Goller, Daniel (University of Bern); Gschwendt, Christian (University of Bern); Wolter, Stefan C. (University of Bern) |
| Abstract: | In this paper, we show the causal influence of the launch of generative AI in the form of ChatGPT on the search behavior of young people for apprenticeship vacancies. There is a strong and long-lasting decline in the intensity of searches for vacancies, which suggests great uncertainty among the affected cohort. Analyses based on the classification of occupations according to tasks, type of cognitive requirements, and the expected risk of automation to date show significant differences in the extent to which specific occupations are affected. Occupations with a high proportion of cognitive tasks, with high demands on language skills, and those whose automation risk had previously been assessed by experts as lower are significantly more affected by the decline. However, no differences can be found with regard to the proportion of routine vs. non-routine tasks. |
| Keywords: | artificial intelligence, occupational choice, labor supply, technological change |
| JEL: | J24 O33 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16638&r=lma |
| By: | Daniel Graeber; Viola Hilbert; Johannes König |
| Abstract: | While inequality of opportunity (IOp) in earnings is well studied, the literature on IOp in individual net wealth is scarce to non-existent. This is problematic because both theoretical and empirical evidence show that the position in the wealth and income distribution can significantly diverge. We measure ex-ante IOp in net wealth for Germany using data from the Socio-Economic Panel (SOEP). Ex-ante IOp is defined as the contribution of circumstances to the inequality in net wealth before effort is exerted. The SOEP allows for a direct mapping from individual circumstances to individual net wealth and for a detailed decomposition of net wealth inequality into a variety of circumstances; among them childhood background, intergenerational transfers, and regional characteristics. The ratio of inequality of opportunity to total inequality is stable from 2002 to 2019. This is in sharp contrast to labor earnings, where ex-ante IOp is declining over time. Our estimates suggest that about 62% of the inequality in net wealth is due to circumstances. The most important circumstances are intergenerational transfers, parental occupation, and the region of birth. In contrast, gender and individuals’ own education are the most important circumstances for earnings. |
| Keywords: | Inequality, Wealth, Inequality of Opportunity, Decomposition |
| JEL: | D63 J62 D31 J24 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1193&r=lma |
| By: | Karina Doorley; Jan Gromadzki; Piotr Lewandowski; Dora Tuda; Philippe Van Kerm |
| Abstract: | We study the effects of robot penetration on household income inequality in 14 European countries between 2006–2018, a period marked by the rapid adoption of industrial robots. Automation reduced relative hourly wages and employment of more exposed demographic groups, similarly to the results for the United States. Using robot-driven wage and employment shocks as input to the EUROMOD microsimulation model, we find that automation had minor effects on income inequality. Household labour income diversification and tax and welfare policies largely absorbed labour market shocks caused by automation. Transfers played a key role in cushioning the transmission of these shocks to household incomes. |
| Keywords: | robots; automation; tasks; income inequality; wage inequality; microsimulation |
| JEL: | J23 J24 O33 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2023-11&r=lma |
| By: | Abbate Nicolás; Depetris Chauvin Nicolas; Velasquez Agustin |
| Abstract: | Workers in developing countries tend to spend more time at work than those in developed countries. This can be explained by preferences with prevalent income effects: as income rises, workers reduce their supply of labor hours to consume more leisure. However, not all workers benefit alike. In this study, we estimate the heterogeneous effects of trade, as a shifter of aggregate income, on workers’ labor supply by age, education, and gender. We find that all workers benefit from more leisure caused by the income boost triggered by trade. However, young and elder workers benefit significantly more than prime-age workers. In addition, following increased trade openness women and less educated workers tend to reduce their labor supply relatively more. |
| JEL: | F16 J22 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:aep:anales:4645&r=lma |
| By: | Matteo Cacciatore; Daniela Hauser; Stefano Gnocchi |
| Abstract: | We study the effects of uncertainty on time use and their macroeconomic implications. Employing data from the American Time Use Survey and the Bureau of Labor Statistics, we document that heightened uncertainty increases housework and reduces market work hours, mildly impacting leisure. We then propose a model that quantitatively accounts for these estimates. We show that substitution between market and housework provides self-insurance to households, weakening precautionary savings. However, it also reduces aggregate demand, ultimately amplifying uncertainty's recessionary impact. Time reallocation can lead to higher inflation, particularly when uncertainty couples with policies redirecting time use towards housework (e.g., lockdown restrictions). |
| JEL: | E21 E32 J22 J23 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31954&r=lma |
| By: | Goerke, Laszlo (IAAEU, University of Trier); Pannenberg, Markus (Bielefeld University of Applied Sciences) |
| Abstract: | We analyse in what way co-determination affects non-compliance with the German minimum wage, which was introduced in 2015. The Works Constitution Act (WCA), the law regulating co-determination at the plant level, provides works councils with indirect means to ensure compliance with the statutory minimum wage. Based on this legal situation, our theoretical model predicts that non-compliance is less likely in co-determined firms because works councils enhance the enforcement of the law. The economic correlates of co-determination, such as higher productivity and wages, affect non-compliance in opposite directions. The empirical analysis, using data from the German Socio-economic Panel (SOEP) for the years 2016 and 2019, demonstrates that non-compliance occurs less often for employees in co-determined establishments, while there is no impact on the difference between the minimum wage and the amount, which was actually paid. Therefore, co-determination helps to secure the payment of minimum wages. |
| Keywords: | co-determination, labour law, minimum wages, Socio-economic Panel (SOEP), non-compliance, works councils |
| JEL: | J30 J53 K31 K42 M54 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16621&r=lma |
| By: | Picchio, Matteo; Ours, Jan C. van |
| Abstract: | High temperatures can have a negative effect on work-related activities because workers may experience difficulties concentrating or have to reduce effort in order to cope with heat. We investigate how temperature affects performance of professional tennis players in outdoor singles matches in big tournaments. We find that performance significantly decreases with ambient temperature. This result is robust to including wind speed and air pollution in the analysis. There are no differences between men and women. However, there is some heterogeneity in the magnitude of the temperature effect in other dimensions. In particular, we find that the temperature effect is smaller when there is more at stake. Our findings also suggest that the negative temperature effect is smaller if the heat lasts, i.e. there is some adaptation to high temperatures. |
| Keywords: | Climate change, temperatures, tennis, performance, productivity |
| JEL: | J24 J81 Q51 Q54 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1353&r=lma |
| By: | Samuel Bentolila (CEMFI, Centro de Estudios Monetarios y Financieros); Antonio Cabrales (Universidad Carlos III de Madrid); Marcel Jansen (Universidad Autónoma de Madrid) |
| Abstract: | This paper analyzes the causal impact of dual vocational education and training (VET) on the labor market insertion of youth. Using matched education and social security records, we estimate the causal impact of a major reform that introduced a new dual track, which combines firm- and school-based training, on the labor market outcomes of the first three dual VET cohorts in the Spanish rregion of Madrid. The control group is composed of individuals who graduated in the same fields and years in school-based VET. Selection into dual VET is dealt with using a distance-based instrumental variable. Dual VET is found to generate sizable improvements in employment and earnings, but no significant impact on job quality. The results are not driven by pre-reform differences in the quality of the schools that adopted dual VET and the higher retention rate of dual VET graduates only partly explains the dual premium. |
| Keywords: | Dual vocational education and training, school-to-work transition, Spain. |
| JEL: | D92 G33 J23 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2023_2307&r=lma |
| By: | Tristany Armangué-Jubert (IDEA, UAB, BSE); Nezih Guner (CEMFI, Centro de Estudios Monetarios y Financieros); Alessandro Ruggieri (CUNEF) |
| Abstract: | Imperfect competition in labor markets can lead to efficiency losses and lower aggregate output. In this paper, we study whether differences in competitiveness of labor markets can help explain differences in GDP per capita across countries. We structurally estimate a model of oligopsony with free entry for countries at different stages of development and show that the labor supply elasticity, which determines the extent of firms’ labor market power, is increasing with GDP per capita. Wage mark-downs range from 55 percent among low-income countries to around 23 percent among the richest. Output per capita in poorer countries would increase by up to 69 percent if their labor markets were as competitive as in countries at the top of the development ladder. |
| Keywords: | Labor market power, oligopsony, development, inequality. |
| JEL: | J42 L13 O11 E24 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2023_2306&r=lma |
| By: | Zuzanna Kowalik; Piotr Lewandowski; Tomasz Geodecki; Maciej Grodzicki |
| Abstract: | The offshoring-fuelled growth of the Central and Eastern European business services sector gave rise to shared service centres (SSCs), quasi-autonomous entities providing routine-intensive tasks for the central organisation. The advent of technologies like Intelligent Process Automation, Robotic Process Automation, and Artificial Intelligence jeopardises SSCs’ employment model, necessitating workers’ skills adaptation. The study challenges the deskilling hypothesis and reveals that automation in the Polish SSCs is conducive to upskilling and worker autonomy. Drawing on 31 in-depth interviews, we highlight the negotiated nature of automation processes shaped by interactions between headquarters, SSCs, and their workers. Workers actively participated in automation processes, eliminating the most mundane tasks. This resulted in upskilling, higher job satisfaction and empowerment. Yet, this phenomenon heavily depends upon the fact that automation is triggered by labour shortages, which limit the expansion of SSCs. This situation encourages companies to leverage the specific expertise entrenched in their existing workforce. The study underscores the importance of fostering employee-driven automation and upskilling initiatives for overall job satisfaction and quality. |
| Keywords: | automation, Shared Service Centres, skills, job quality |
| JEL: | J24 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:wpaper:wp082023&r=lma |
| By: | Charlie Joyez (Université Côte d'Azur, CNRS, GREDEG, France); Raja Kali (University of Arkansas, Fayetteville, USA); Catherine Laffineur (Université Côte d'Azur, CNRS, GREDEG, France) |
| Abstract: | Why do labor markets in some regions recover faster from an adverse economic shock than others? We conjecture that regions with occupations offering greater redeployment opportunities to other occupations are less at risk of long-term unemployment. We examine this by creating a network of inter-occupation relatedness from worker mobility data that provides occupational transitions for a representative sample of French workers. Superimposing local occupational composition on to this "occupation space" yields a measure of occupational coherence for 304 commuting zones in France. We find that regions with stronger occupational coherence are more sensitive to a shock but recover faster. |
| Keywords: | occupational mobility, regional occupational composition, occupational coherence, economic shocks, unemployment dynamics |
| JEL: | E24 E32 J21 J24 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2023-20&r=lma |
| By: | Germán Reyes |
| Abstract: | Cognitive endurance-the capacity to sustain performance on a cognitively-demanding task over time-is thought to be a crucial productivity determinant. However, a lack of data on this variable has limited researchers' ability to understand its role for success in college and the labor market. This paper uses college-admission-exam records from 15 million Brazilian high-school students to measure cognitive endurance based on changes in performance during the exam. By exploiting exogenous variation in the order of exam questions, I first show that students are significantly more likely to correctly answer a given question when it appears at the beginning of the test versus the end. Motivated by this fact, I develop a method to decompose test scores into fatigue-adjusted ability and cognitive endurance. I then link these measures to college and employment records to quantify the association between endurance and long-run outcomes. I find that cognitive endurance has a significant wage return. Controlling for fatigue-adjusted ability and other student characteristics, an increase of one standard deviation in endurance predicts a 5.4% wage increase. This wage return is equivalent to a third of the wage return to fatigue-adjusted ability. I also document positive associations between endurance and college attendance, college graduation, firm quality, and other outcomes. Finally, I show that, due to systematic differences in endurance among students, the exam design can impact income-based test-score gaps and the informational content of the exam. I discuss the implications of these findings for designing more informative cognitive assessments to select talent and more effective interventions to build human capital. |
| Keywords: | Cognitive Endurance; Returns to Education; Human Capital; Wage Level and Structure |
| JEL: | I26 J24 J31 M54 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2023_490&r=lma |
| By: | Baum, Christopher F. (Boston College, DIW Berlin and CESIS); Lööf, Hans (Royal Institute of Technology and CESIS); Stephan, Andreas (Linnaeus University and DIW Berlin); Zimmermann, Klaus F. (UNU-MERIT, Maastricht University, CEPR and GLO) |
| Abstract: | This paper examines the wage earnings of fully-employed refugee immigrants in Sweden. Using administrative employer-employee data from 1990 and onwards, about 100, 000 refugee immigrants who arrived between 1980 and 1996 and were granted asylum are compared to a matched sample of native-born workers. Employing recentered influence function (RIF) quantile regressions for the period 2011–2015 to wage earnings, the occupational task-based Oaxaca–Blinder decomposition approach shows that refugees perform better than natives at the median wage, controlling for individual and firm characteristics. This overperformance is due to female refugee immigrants, who have higher wages than comparable native-born female peers up to the 8th decile of the wage distribution. Refugee immigrant females perform better than native females across all occupational tasks studied, including non-routine cognitive tasks. A remarkable similarity exists in the relative wage distributions among various refugee groups, suggesting that cultural differences and the length of time spent in the host country do not significantly affect their labor market performance. |
| Keywords: | refugees; wage earnings gap; occupational sorting; employer-employee data; correlated random effects model; Blinder–Oaxaca decomposition |
| JEL: | C23 F22 J24 J60 O15 |
| Date: | 2023–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0496&r=lma |
| By: | Mattis Beckmannshagen; Rick Glaubitz |
| Abstract: | Existing research has found little to no evidence for an added workereffect. However, studies to date have only analysed individuals’ actual labor supply responses to their partners’ job loss, neglecting to consider a potential mismatch between desired and actual labor supply adjustments. Using data from the German Socio-Economic Panel (SOEP), we study individuals’ changes in actual and desired working hours after their partners’ involuntary job loss in an event study design. Our results show that neither desired nor actual working hours change significantly. Thus, we provide first evidence that the absence of the added worker effect is in line with individuals’ stated labor supply preferences and is not the result of an inability to realise desired working hours |
| Keywords: | labor supply, desired working hours, added worker effect, event study |
| JEL: | J22 H55 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1200&r=lma |
| By: | Loukas Karabarbounis |
| Abstract: | As of 2022, the share of U.S. income accruing to labor is at its lowest level since the Great Depression. Updating previous studies with more recent observations, I document the continuing decline of the labor share for the United States, other countries, and various industries. I discuss how changes in technology and product, labor, and capital markets affect the trend of the labor share. I also examine its relationship with other macroeconomic trends, such as rising markups, higher concentration of economic activity, and globalization. I conclude by offering some perspectives on the economic and policy implications of the labor share decline. |
| JEL: | D2 D33 E0 J2 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31854&r=lma |
| By: | David Koll; Dominik Sachs; Fabian Stürmer-Heiber; Hélène Turon |
| Abstract: | We formalize and estimate the dynamic marginal efficiency cost of redistribution (MECR) in the spirit of Okun’s “leaky bucket”. We analyze the MECR of an income-contingent childcare subsidy program and the income tax within the German context, using a dynamic structural heterogeneous-household model of childcare demand and maternal labor supply. This allows us to compare which of these two policies is more efficient in achieving redistributive goals. Our analysis identifies two competing forces. (i) Labor supply responses increase the MECR of the childcare subsidy relative to the income tax. (ii) Child development effects decrease the MECR of the childcare subsidy relative to the income tax. For reasonably large Pareto weights on children, we find that (ii) dominates (i) and therefore the childcare subsidy is the more efficient redistribution tool. |
| Keywords: | female labor supply, childcare, family policies, fiscal externalities, dynamic discrete choice, redistribution |
| JEL: | H23 H31 J13 J22 J24 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10793&r=lma |
| By: | Ricardo Espinoza; Nerea Martinez-Yarza |
| Abstract: | In recent years, provision of relevant up-skilling and re-skilling opportunities for adults has become a necessity due to global megatrends affecting labour markets. As a result, countries are looking to strengthen these opportunities throughout the life course. The successful deployment of these initiatives requires a coherent set of policies, with quality assurance being critically important. This paper provides an overview of quality assurance mechanisms from the perspective of the 38 OECD member countries. It proposes a framework to characterise and compare the governance, processes and outcomes of these mechanisms. The paper's contribution is to facilitate understanding of quality assurance across OECD countries, presenting a visual cross-country mapping that classifies existing mechanisms. |
| JEL: | I21 I28 J24 J44 |
| Date: | 2023–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:302-en&r=lma |
| By: | Congressional Budget Office |
| Abstract: | The Department of Veterans Affairs (VA) compensates veterans for medical conditions or injuries that occurred or worsened while they were on active duty. For this report, CBO compared the earnings, personal income, and household income of working-age male veterans who have a VA disability rating with those of veterans who do not have one. Most veterans in both groups work. |
| JEL: | H51 H55 H56 I18 I38 J32 J33 J38 J45 M52 N32 N42 |
| Date: | 2023–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:59380&r=lma |
| By: | Axana Dalle; Louis Lippens; Stijn Baert (-) |
| Abstract: | As age discrimination hampers the OECD’s ambition to extend the working population, an efficient antidiscrimination policy targeted at the right employers is critical. Therefore, the context in which age discrimination is most prevalent must be identified. In this study, we thoroughly review the current theoretical arguments and empirical findings regarding moderators of age discrimination in different demand-side domains (i.e. decision-maker, vacancy, occupation, organisation, and sector). Our review demonstrates that the current literature is highly fragmented and often lacks field-experimental evidence, raising concerns about itsinternal and external validity.To addressthis gap, we conducted a correspondence experiment and systematically linked the resulting data to external data sources. In so doing, we were able to study the priorly determined demand-side moderators within a single multi-level analysis and simultaneously control multiple correlations between potential moderators and discrimination estimates. Having done so, we found no empirical support for any of these moderators. |
| Keywords: | Ageism; Hiring discrimination; Heterogeneity;Literature review;Field experiment; Administrative data |
| JEL: | J71 J23 J14 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:23/1081&r=lma |
| By: | Dalmazzo, Alberto (University of Siena); Leombruni, Roberto (University of Turin); Razzolini, Tiziano (University of Siena) |
| Abstract: | Regulations in host countries often impose heavy limitations on the opportunities of migrant workers. Here, we analyse how (the anticipation of) a change in the legal status of foreign workers may affect their terms of employment. Building on a simple theoretical model, we consider a sample of non-EU immigrants in Italy over the period which led to the accession of Romania and Bulgaria to the European Union in 2007. We find that the expectation of achieving EU citizenship increased Romanians' and Bulgarians' bargaining power over wages and job attributes, relative to other non-EU migrants, and also stimulated business venture. |
| Keywords: | migration, labor market restrictions, EU accession, workplace safety |
| JEL: | J28 J32 J71 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16614&r=lma |
| By: | Pascual Restrepo |
| Abstract: | This article reviews the literature on automation and its impact on labor markets, wages, factor shares, and productivity. I first introduce the task model and explain why this framework offers a compelling way to think about recent labor market trends and the effects of automation technologies. The task model clarifies that automation technologies operate by substituting capital for labor in a widening range of tasks. This substitution reduces costs, creating a positive productivity effect, but also reduces employment opportunities for workers displaced from automated tasks, creating a negative displacement effect. I survey the empirical literature and conclude that there is wide qualitative support for the implications of task models and the displacement effects of automation. I conclude by discussing shortcomings of the existing literature and avenues for future research. |
| JEL: | E24 J20 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31910&r=lma |
| By: | Florian Englmaier (LMU Munich, CEPR, CESifo); Stefan Grimm (LMU Munich); Dominik Grothe (LMU Munich); David Schindler (Tilburg University, CESifo); Simeon Schudy (Ulm University, CESifo) |
| Abstract: | Despite the prevalence of non-routine analytical team tasks in modern economies, little is understood regarding how incentives influence performance in these tasks. In a series of field experiments involving more than 5, 000 participants, we investigate how incentives alter behavior in teams working on such a task. We document a positive effect of bonus incentives on performance, even among teams with strong intrinsic motivation. Bonuses also transform team organization by enhancing the demand for leadership. Exogenously increasing teams' demand for leadership results in performance improvements comparable to those seen with bonus incentives, rendering it as a likely mediator of incentive effects. |
| Keywords: | team work; bonus; incentives; leadership; non-routine; exploration; |
| JEL: | C92 C93 J33 D03 M52 |
| Date: | 2023–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:468&r=lma |
| By: | Herzog, Sabrina (Heinrich Heine University Düsseldorf); Schildberg-Hörisch, Hannah (Heinrich Heine University Düsseldorf); Trieu, Chi (Düsseldorf Institute for Competition Economics (DICE)); Willrodt, Jana (Düsseldorf Institute for Competition Economics (DICE)) |
| Abstract: | Although affirmative action remains controversial, little is known about who supports or opposes it and why. This paper investigates preferences for affirmative action by combining causal evidence from an experiment on the role of self-serving motives and in-group favoritism with survey data on three different affirmative action policies. Our results rely on a population-representative sample from the US. We find that support for affirmative action is based both on self-serving motives and principled grounds (e.g., related to an individual's altruism, fairness perceptions, concerns for efficiency, and political views). By contrast, in-group favoritism and socio-demographic characteristics play a much smaller role. |
| Keywords: | support for affirmative action, self-serving motives, in-group favoritism, altruism, efficiency, fairness, discrimination |
| JEL: | C99 D01 D63 J78 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16640&r=lma |
| By: | Luisa Gagliardi; Enrico Moretti; Michel Serafinelli |
| Abstract: | We investigate the employment consequences of deindustrialization for 1, 993 cities in France, Germany, Great Britain, Italy, Japan, and the United States. In all six countries we find a strong negative relationship between a city’s share of manufacturing employment in the year of its country’s manufacturing peak and the subsequent change in total employment, reflecting the fact that cities where manufacturing was initially more important experienced larger negative labor demand shocks. But in a significant number of cases, total employment fully recovered and even exceeded initial levels, despite the loss of manufacturing jobs. Overall, 34% of former manufacturing hubs–defined as cities with an initial manufacturing employment share in the top tercile–experienced employment growth faster than their country’s mean, suggesting that a surprisingly large number of cities was able to adapt to the negative shock caused by deindustrialization. The U.S. has the lowest share, indicating that the U.S. Rust Belt communities have fared relatively worse compared to their peers in the other countries. We then seek to understand why some former manufacturing hubs recovered while others didn’t. We find that deindustrialization had different effects on local employment depending on the initial share of college-educated workers in the labor force. While in the two decades before the manufacturing peak, cities with a high college share experienced a rate of employment growth similar to those with a low college share, in the decades after the manufacturing peak, the employment trends diverged: cities with a high college share experienced significantly faster employment growth. The divergence grows over time at an accelerating rate. Using an instrumental variable based on the driving distance to historical colleges and universities, we estimate that a one standard deviation increase in local college share results in a rate of employment growth per decade that is 9.1 percentage points higher. This effect is in part explained by faster growth in human capital-intensive services, which more than offsets the loss of manufacturing jobs. |
| Keywords: | local labor markets, cities, manufacturing, human capital |
| JEL: | J21 R12 J24 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10826&r=lma |
| By: | HORIE, Norio; Iwasaki, Ichiro; KUPETS, Olga; MA, Xinxin; MIZOBATA, Satoshi; SATOGAMI, Mihoko |
| Abstract: | This paper conducts a comparative meta-analysis using 3098 estimates reported in 125 research works to explore the wage–experience profile in China and Eastern Europe as they experience a systemic transformation from the planned system to a market economy. The results indicate that the relationship between years of work experience and wage levels in China and Eastern Europe in the transition period was structured consistently with economic theories. It is also revealed that both China and Eastern Europe have experienced a flattening of their wage– experience profiles over time. These findings are statistically robust beyond issues of heterogeneity and publication selection bias in the literature. |
| Keywords: | wage–experience profile, research synthesis, meta-regression analysis, publication selection bias, China, Eastern Europe |
| JEL: | D31 I26 J16 J31 P23 P36 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rrcwps:103&r=lma |
| By: | Osborne Jackson |
| Abstract: | Occupational licensing—mandatory credentialing that allows a worker to practice a particular profession—varies greatly throughout New England and the United States in terms of which occupations require a license in a given state and the scope of the necessary qualifications. Given a growing share of US workers who are licensed, it is increasingly important to understand how these differences in licensing policy affect markets. Such knowledge can then be used to guide how occupational licensing regulations are structured. The research in this report shows that a labor market implication of licensing policy existence is a 24 percent reduction in occupational mobility, and that effect is driven by licensing qualifications that stipulate fees and minimum thresholds for education and age. These qualifications likely differ in their connection to worker skills, which may help explain mixed findings in research on how licensing affects the safety and quality of goods and services. Policymakers considering occupational licensing to facilitate such product market benefits may also wish to assess labor market costs, such as reduced occupational mobility, using a joint evaluation of those markets to determine the form of licensing regulation, if any, that is most likely to improve societal welfare. More specifically regarding policy recommendations, this report’s findings have multiple implications for future occupational licensing policy in New England. For instance, for occupations in which labor market costs are likely high and product market benefits are likely low, policymakers should consider potentially eliminating licensing altogether and perhaps replacing it with less restrictive forms of regulation such as certification or public inspections. More nuanced assessment is required for occupations in which the labor market costs of licensure are likely low (or high) but the product market benefits of licensure are also likely low (or high). In these cases, policymakers should consider an arrangement of licensing qualifications that better amplifies product market benefits and mitigates labor market costs. Lastly, for occupations in which labor market costs are likely low and product market benefits are likely high, policymakers should consider retaining existing licensing policy or, absent a policy, remain open to establishing licensure or less restrictive policy alternatives if the case for improved consumer protection is sufficiently compelling. |
| Keywords: | New England; NEPPC; mobility; Current Population Survey |
| JEL: | J63 J24 |
| Date: | 2023–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbcr:97498&r=lma |
| By: | Osea Giuntella; Johannes König; Luca Stella |
| Abstract: | This study explores the relationship between artificial intelligence (AI) and workers’ well-being and mental health using longitudinal survey data from Germany (2000-2020). We construct a measure of individual exposure to AI technology based on the occupation in which workers in our sample were first employed and explore an event study design and a difference-in-differences approach to compare AI-exposed and non-exposed workers. Before AI became widely available, there is no evidence of differential pre-trends in workers’ well-being and concerns about their economic futures. Since 2015, however, with the increasing adoption of AI in firms across Germany, we find that AI-exposed workers have become less satisfied with their life and job and more concerned about job security and their personal economic situation. However, we find no evidence of a significant impact of AI on workers’ mental health, anxiety, or depression. |
| Keywords: | Artificial Intelligence, Future of Work, Well-being, Mental Health |
| JEL: | I10 J28 O30 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1194&r=lma |
| By: | Yvonne Jie Chen; Deniz Dutz; Li Li; Sarah Moon; Edward J. Vytlacil; Songfa Zhong |
| Abstract: | This paper develops a partial-identification methodology for analyzing self-selection into alternative compensation schemes in a laboratory environment. We formulate a model of self-selection in which individuals select the compensation scheme with the largest expected valuation, which depends on individual- and scheme-specific beliefs and non-monetary preferences. We characterize the resulting sharp identified sets for individual-specific willingness-to-pay, subjective beliefs, and preferences, and develop conditions on the experimental design under which these identified sets are informative. We apply our methods to examine gender differences in preference for winner-take-all compensation schemes. We find that what has commonly been attributed to a gender difference in preference for performing in a competition is instead explained by men being more confident than women in their probability of winning a future (though not necessarily a past) competition. |
| JEL: | C25 C91 J16 J31 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31930&r=lma |
| By: | Sara Calligaris; Gabriele Ciminelli; Hélia Costa; Chiara Criscuolo; Lilas Demmou; Isabelle Desnoyers-James; Guido Franco; Rudy Verlhac |
| Abstract: | This paper analyses employment dynamics across firms during the COVID-19 pandemic and the role of job retention schemes (JRS) in shaping these dynamics. It relies on a novel collection of high-frequency harmonised micro-aggregated statistics, computed using administrative data on employment and wages from electronic payroll records across 12 countries linked to monthly information on policy support during COVID-19, as well as on a new indicator of JRS de-jure generosity. The analysis highlights four key findings: i) the employment adjustment margins varied over time, adjusting mainly through the intensive margin in 2020, while both the intensive and the extensive margins contributed to employment changes in 2021; ii) the reallocation process remained productivity enhancing, although to a lower extent on average compared to 2019; iii) JRS were successful in their purpose of cushioning the effect of the crisis on employment growth and firm survival; iv) JRS support did not distort the productivity-enhancing nature of reallocation. |
| Keywords: | COVID-19, Employment dynamics, Job retention schemes, Productivity, Reallocation |
| JEL: | D22 D24 J08 J2 O47 |
| Date: | 2023–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1788-en&r=lma |
| By: | Nisvan Erkal (Department of Economics, University of Melbourne); Lata Gangadharan (Department of Economics, Monash University); Boon Han Koh (Department of Economics, University of Exeter) |
| Abstract: | Using incentivized experiments, we investigate whether different criteria are used in evaluating male and female leaders when outcomes are determined by unobservable choices and luck. Evaluators form beliefs about leaders' choices and make discretionary payments. We find that while payments to male leaders are determined by both outcomes and evaluators' beliefs, those to female leaders are determined by outcomes only. We label this new source of gender bias as the gender criteria gap. Our findings imply that high outcomes are necessary for women to get bonuses, but men can receive bonuses for low outcomes as long as evaluators hold them in high regard. |
| Keywords: | gender gaps, discrimination, evaluation criteria, biases in beliefs, outcome bias, social preferences, laboratory experiments |
| JEL: | C92 D91 J71 |
| Date: | 2023–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:exe:wpaper:2316&r=lma |
| By: | Lukas Kiessling (Max Planck Institute for Research on Collective Goods); Pia Pinger (University of Cologne; Institute on Behavior and Inequality (briq)); Philipp Seegers (Maastricht University); Jan Bergerhoff (Maastricht University) |
| Abstract: | This paper presents evidence from a large-scale study on gender differences in expected wages before labor market entry. Based on data for over 15, 000 students, we document a significant and large gender gap in wage expectations that resembles actual wage differences, prevails across subgroups, and along the entire distribution. Over the life-cycle this gap amounts to roughly half a million Euros. Our findings further suggest that expected wages relate to expected asking and reservation wages and that a difference in plans about ``boldness'' during prospective wage negotiations pertains to gender difference in expected and actual wages. Given the importance of wage expectations for labor market decisions, household bargaining, and wage setting, our results provide an explanation for persistent gender inequalities. |
| Keywords: | Wage expectations, gender gap, negotiations |
| JEL: | D81 D84 I21 I23 J13 J30 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:268&r=lma |
| By: | Kanninen, Ohto; Kortelainen, Mika; Tervonen, Lassi |
| Abstract: | This paper analyzes the effects of selective schools on students’ educational and labor market outcomes. We utilize regression discontinuity design based on the centralized admission system of upper secondary schools in Finland to obtain quasi-random variation for selective high school offers and attendance. By using nationwide administrative data, we first show that the selective schools do not improve high school exit exam scores, even though there is a large jump in peer quality for students attending selective schools. Despite lacking short-term effects, we find that selective schools increase university enrollment and graduation in the long run. Yet, we do not observe positive effects on income. Importantly, our results suggest that selective high schools or better peer groups do not improve students’ human capital or skills, but affect their preferences on educational choices after the secondary school. |
| Keywords: | Labour markets and education, I24, I26, J24, fi=Koulutus|sv=Utbildning|en=Education|, fi=Työmarkkinat|sv=Arbetsmarknad|en=Labour markets|, |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:161&r=lma |
| By: | Karim M Abadir (American University in Cairo and Imperial College London); Michel Lubrano (Aix-Marseille Univ., CNRS, AMSE, Marseille, France) |
| Abstract: | We show that least squares cross-validation (CV) methods share a common structure which has an explicit asymptotic solution, when the chosen kernel is asymptotically separable in bandwidth and data. For density estimation with a multivariate Student t(ν) kernel, the CV criterion becomes asymptotically equivalent to a polynomial of only three terms. Our bandwidth formulae are simple and non-iterative (leading to very fast computations), their integrated squared-error dominates traditional CV implementations, they alleviate the notorious sample variability of CV, and overcome its breakdown in the case of repeated observations. We illustrate with univariate and bivariate applications, of density estimation and nonparametric regressions, to a large dataset of Michigan State University academic wages and experience. |
| Keywords: | Bandwidth Choice, Cross Validation, Explicit Analytical Solution, Nonparametric Density Estimation, Academic Wages |
| JEL: | C14 J31 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:2336&r=lma |