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on Labor Markets - Supply, Demand, and Wages |
| By: | Kroczek, Martin; Koch, Andreas |
| JEL: | I11 J21 J22 J31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc24:302406 |
| By: | Martins, Pedro S.; Dai, Li; Duan, Wenjing |
| Abstract: | Local labour market concentration may influence firms' employment responses to minimum wages. We evaluate this hypothesis using comprehensive 1998-2007 data on China's manufacturing sector and about 1, 400 hand-collected county-level minimum wages. We find that, consistently with monopsony views, the negative effects of minimum wages on employment are reduced when labour market concentration is higher. We also find positive employment effects of minimum wages, but only in some specifications and in highly concentrated labour markets (representing a relatively small share of employment). Firms' training provision is also harmed less by minimum wages in more concentrated local markets. Our findings highlight the heterogeneity of policy impacts across local labour markets. |
| Keywords: | Minimum wages, labour market concentration, employment, monopsony, training |
| JEL: | J31 J38 J42 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1504 |
| By: | Andrew Caplin; David J. Deming; Shangwen Li; Daniel J. Martin; Philip Marx; Ben Weidmann; Kadachi Jiada Ye |
| Abstract: | We use a controlled experiment to show that ability and belief calibration jointly determine the benefits of working with Artificial Intelligence (AI). AI improves performance more for people with low baseline ability. However, holding ability constant, AI assistance is more valuable for people who are calibrated, meaning they have accurate beliefs about their own ability. People who know they have low ability gain the most from working with AI. In a counterfactual analysis, we show that eliminating miscalibration would cause AI to reduce performance inequality nearly twice as much as it already does. |
| JEL: | D81 J24 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33021 |
| By: | Carola Stapper (University of Cologne) |
| Abstract: | Disruptions of labor market trajectories have lasting effects on later economic success. One type of disruption that is understudied is displacement due to forced labor conscription, despite it still being a frequent event nowadays. I study the consequences of exposure to forced labor conscription for individuals' long-term labor market outcomes. I exploit that cohorts of Dutch civilians faced a differential probability of temporary labor coercion in Nazi Germany during WWII in a Regression Discontinuity Design. Using Dutch census data from 1971, I find that conscripted individuals have lower education, income, and likelihood of employment. Studying heterogeneous effects, I find that facing harsher conditions in Germany is associated with lower labor force participation and worse health. My findings suggest that the negative impact on labor force participation is mitigated when individuals are forced to work in similar sectors to those in the Netherlands, enhancing their ability to reintegrate into the workforce. |
| Keywords: | Labor economic history, labor market careers, coercive labor market, forced labor, health, skills |
| JEL: | N34 N44 J24 J47 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:338 |
| By: | Lindsey Macmillan (UCL Centre for Education Policy & Equalising Opportunities); Richard Murphy (Department of Economics, University of Texas at Austin); Gill Wyness (UCL Centre for Education Policy & Equalising Opportunities) |
| Abstract: | In this paper we depart from traditional skills-based measures of occupational mismatch. Whereas skill-based measures are typically non-hierarchical, and involve comparing an individual's skills to those required by their occupation, we devise a new hierarchical method. Specifically, we create two continuous, measures of occupational quality: an `input' measure derived from the initial qualifications of others in an occupation, and an `output' measure derived from the realized wages of others, alongside a corresponding measure of individual ability. We use these detailed, comparable measures to examine the extent to which individuals mismatch into occupations, for the first time in the literature. We explore the nature of mismatch throughout the ability distribution, focusing on systematic differences by socio-economic status (SES) and gender. We find low SES individuals are employed in lower wage and lower qualification occupations compared to their similarly qualified peers. Meanwhile, while females match to occupation groups with higher achieving employees than males, they are employed in lower wage occupations. Educational routes between compulsory education and occupations at age 25 can explain around 33% of these SES gaps among high achievers, but persistent sizeable difference remain, conditional on all post-16 activity. By contrast the gender gap in mismatch remains stable, suggesting that education choices are not driving the differences. Instead, industry worked in accounts for most of the gender gap, though only among low achievers. |
| Keywords: | mismatch, inequalities, occupational choices, education, gender |
| JEL: | I20 I24 J16 J24 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ucl:cepeow:24-06 |
| By: | Paweł Strawiński (University of Warsaw, Faculty of Economic Sciences); Aleksandra Majchrowska (University of Lodz) |
| Abstract: | Research background: The number of research regarding employment effects of minimum wages is enormous. Another problem examined by prior studies is the impact of minimum wage increases on the wages. The evidence shows that minimum wage increases compress the wage distribution. The same literature brings conflicting evidence regarding minimum wage spill-over effects. Purpose of the article: The study analyses the effects of a minimum wage increase on the wage distribution of low- and high-wage sectors and possible spill-overs. The analysed period 2014-2018 is characterized by relatively stable economic conditions, while the minimum wage increased by 25%. Methods: We follow case study method and as example Poland, the EU country with high share of minimum wage workers. We use individual data on wages and worker characteristics from the Structure of Earnings Survey in Poland for 2014–2018. We use reweighting and decompose counterfactual wage distribution. Findings & value added: In low-wage sector, a wage increase in the left tail of the distribution is almost entirely due to the increase in the minimum wage level and spill-over effects are present throughout the distribution. In high-wage sector the role of the minimum wage growth is weaker and also the workers’ characteristics have substantial impact on wages; no spill-over effects of a minimum wage increase are observed. We demonstrate that the conflicting evidence on the effects of minimum wage changes on the wage distribution may occur because the effects differ across the low- and high-paid economic sectors. They depend on sector productivity and openness. |
| Keywords: | Minimum wage, wage distribution, reweighting, low-wage sector, high-wage sector, spill-over effects |
| JEL: | J21 J31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:war:wpaper:2024-17 |
| By: | Cong T. Gian; Sumedha Gupta; Kosali I. Simon; Ryan Sullivan; Coady Wing |
| Abstract: | When mortality risks of a job increase, economic theory predicts that wages will rise to compensate workers. COVID-19 became a new source of mortality risk from close contact with other workers and customers. Real wages have risen during the COVID-19 era, but research to date has been sparse on how much of this increase reflects compensating wage differentials for COVID-19 risk on the job. We use 2020- 2021 death certificate data which for the first time includes the decedent’s occupation and industry, together with other occupational and industry mortality for previous years from the Census of Fatal Occupational Injuries (CFOI) and wage data from the Current Population Survey (CPS) to examine whether compensating wage differentials for COVID-19 occupational risks are in line with prior estimates of Values of Statistical Life (VSL). First, we find that there are substantial differences in the compensating differentials associated with COVID-19 vs other sources of job-related mortality risk. Full time workers’ pay is higher by $24 per week in jobs with a 1 in 1, 000 higher risk of COVID-19 mortality, but their pay is $320 higher in jobs with 1 in 1, 000 higher risk of non-COVID-19 workplace mortality. The non-COVID-19 mortality wage premiums imply that workers trade off money and mortality risk using a VSL of about $18 million, which is near the upper range of the most cited VSL estimates in the literature. In contrast, the COVID-19 wage premium implies that workers make decisions using a VSL of the range $1.24 - $1.54 million, much lower than standard VSL measures. The results are consistent with workers substantially underestimating or undervaluing the risk of COVID-19 mortality. |
| JEL: | I1 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33031 |
| By: | Najam, Rafiuddin (American University); Patrinos, Harry Anthony (University of Arkansas, Fayetteville); Kattan, Raja Bentaouet (World Bank) |
| Abstract: | This paper uses microdata from the Labor Force and Household Surveys conducted in Afghanistan to show the wage premium differences for education between men and women, documenting a significantly larger premium for women. This sharp distinction is causal as demonstrated by analysis of the compulsory schooling law. Recent bans on women's education and employment are projected to have significant negative impacts on women's future schooling, wage growth, and national income growth. |
| Keywords: | returns to schooling, returns to experience, investments in education, Afghanistan |
| JEL: | C13 J31 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17279 |
| By: | Anna Airoldi; Petra Moser |
| Abstract: | How does a person’s childhood socioeconomic status (SES) influence their chances to participate and succeed in science? To investigate this question, we use machine-learning methods to link scientists in a comprehensive biographical dictionary, the American Men of Science (1921), with their childhood home in the US Census and with publications. First, we show that children from low-SES homes were already severely underrepresented in the early 1900s. Second, we find that SES influences peer recognition, even conditional on participation: Scientists from high-SES families have 38% higher odds of becoming stars, controlling for age, publications, and disciplines. Using live-in servants as an alternative measure for SES confirms the strong link between childhood SES and becoming a star. Applying text analysis to assign scientists to disciplines, we find that mathematics is the only discipline in which SES influences stardom through the number and the quality of a scientist’s publications. Using detailed data on job titles to distinguish academic from industry scientists, we find that industry scientists have lower odds of being stars. Controlling for industry employment further strengthens the link between childhood SES and stardom. Elite undergraduate degrees explain more of the correlation between SES and stardom than any other control. At the same time, controls for birth order, family size, foreign-born parents, maternal education, patents, and connections with existing stars leave estimates unchanged, highlighting the importance of SES. |
| JEL: | J24 N0 N32 O3 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33063 |
| By: | Enriqueta Aragonès |
| Abstract: | This paper analyzes the demand based causes of gender discrimination in the labor market and it aims to explain the currently existing gender gaps in terms of labor market participation and lab or income. I propose a formal model to analyze the gender discrimination that individuals face at work due to statistical discrimination and taste-based discrimination. I study the effects of discrimination on the lab or market participation, income, and utility distributions and compare these effects between the female and male sectors of the society. I show that the conditions that dissipate the gender gaps are also good to improve efficiency. However, in order to reach a first best it is necessary to eliminate all kinds of gender related idiosyncratic preferences that are based on stereotypes and conscious and unconscious biases. |
| Keywords: | statistical discrimination, taste-based discrimination, active labor market policies |
| JEL: | J7 J31 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1460 |
| By: | John Eric Humphries; Christopher Neilson; Xiaoyang Ye; Seth D. Zimmerman |
| Abstract: | This paper asks whether universal pre-kindergarten (UPK) raises parents' earnings and how much these earnings effects matter for evaluating the economic returns to UPK programs. Using a randomized lottery design, we estimate the effects of enrolling in a full-day UPK program in New Haven, Connecticut on parents' labor market outcomes as well as educational expenditures and children's academic performance. During children's pre-kindergarten years, UPK enrollment increases weekly childcare coverage by 11 hours. Enrollment has limited impacts on children's academic outcomes between kindergarten and 8th grade, likely due to a combination of rapid effect fadeout and substitution away from other programs of similar quality but with shorter days. In contrast, parents work more hours, and their earnings increase by 21.7%. Parents' earnings gains persist for at least six years after the end of pre-kindergarten. Excluding impacts on children, each dollar of net government expenditure yields $5.51 in after-tax benefits for families, almost entirely from parents' earnings gains. This return is large compared to other labor market policies. Conversely, excluding earnings gains for parents, each dollar of net government expenditure yields only $0.46 to $1.32 in benefits, lower than many other education and children's health interventions. We conclude that the economic returns to investing in UPK are high, largely because of full-day UPK's effectiveness as an active labor market policy. |
| JEL: | H43 I20 J13 J24 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33038 |
| By: | Robert Breunig; Wei Cheng; Laura Montenovo; Kyoung Hoon Lee; Bruce A. Weinberg; Yinjunjie Zhang |
| Abstract: | The authors study employment outcomes during the early stages of the COVID-19 pandemic in eight countries with different case levels and policy responses: the United States, Australia, France, Denmark, Italy, South Korea, Spain, and Sweden. While the share of people not at work increased in all countries, safety net policies seem to influence whether people remained employed (but absent from work) versus unemployed or left the labor force. The authors find large employment decreases among middle-educated and young workers, increasing disparities in countries with the largest labor market declines. A variety of evidence suggests that labor demand was likely a larger driver of employment declines than labor supply and that stringent social distancing policies were sufficient to reduce employment even in the absence of high cases. Lastly, job characteristics - the importance of face-to-face interactions and the ability to work remotely - were closely related to labor market outcomes, with these relationships being stronger in countries with more cases. |
| JEL: | I1 J10 J23 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33029 |
| By: | Suphanit Piyapromdee; Tanisa Tawichsri; Nada Wasi |
| Abstract: | This paper investigates the effects of the introduction of a nationwide minimum wage in Thailand on earnings and sorting. Using Thai matched employer-employee data, we first show that there is a great degree of mobility differential even among workers with similar wages and this relationship is complex. To evaluate the policy and understand its mechanism, we therefore adopt a flexible semi-parametric framework from Lentz et al. (2023) that allows for double-sided heterogeneity in workers and firms in both wages and mobility. Our results show that there is no disemployment effect on workers who were employed before the policy took place. However, there is an adverse effect on workers who were not employed for a period of time before the policy where their re-employment probability declined. Sorting among new employment matches after the policy became less positive. Low type or less productive firms exited the market and workers reallocated from these firms to more productive ones. Overall, we find that the minimum wage raised earnings for all worker types but with variation in sizes of the gains. We use the model to decompose sources of earnings gains. We find that mobility accounts for a substantial fraction of earnings gains in the short-term, but post policy job-to-job transitions can affect earnings of some worker types negatively. This makes the long-term income implication of the policy unclear as mobility evolves over time. We therefore use the model to simulate the net present value of lifetime income of workers. Despite the negative effect of mobility, the long-term gains on net present value of lifetime income over 20 years are substantial. |
| Keywords: | Minimum wage; Sorting; Mobility; Lifetime income; Double-sided heterogeneity |
| JEL: | J31 J60 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:pui:dpaper:222 |
| By: | Kitae Cho (Yonsei University); Eunseong Ma (Yonsei University) |
| Abstract: | This paper investigates the effects of hours constraints on optimal progressive tax structures. To this end, we present a heterogeneous-agent model with a nonlinear progressive tax system. As a form of hours constraints, we introduce a wage penalty for those working below 40 hours per week, generating a realistic distribution of work hours predominantly concentrated at 40 hours. Our findings indicate that optimal tax progressivity should be significantly higher than the current level. Poor households benefit from the reform, while the rich experience welfare losses, primarily due to productive households being unable to adjust their labor supply under hours constraints. The optimal tax reform reduces overall inequality, albeit at the cost of decreased economic activity. Uncovering the Pareto weights in the social welfare functions, under the current tax system, the weight assigned to the richest households is approximately twice the average. |
| Keywords: | hours constraints, optimal tax progressivity, labor supply elasticity, redistribution |
| JEL: | E21 H21 H23 J22 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:yon:wpaper:2024rwp-231 |
| By: | Ethan Krohn |
| Abstract: | In this paper, I explore the impact of generalized coverage error, item non-response bias, and measurement error on measures of earnings and earnings inequality in the CPS ASEC. I match addresses selected for the CPS ASEC to administrative data from 1040 tax returns. I then compare earnings statistics in the tax data for wage and salary earnings in samples corresponding to seven stages of the CPS ASEC survey production process. I also compare the statistics using the actual survey responses. The statistics I examine include mean earnings, the Gini coefficient, percentile earnings shares, and shares of the survey weight for a range of percentiles. I examine how the accuracy of the statistics calculated using the survey data is affected by including imputed responses for both those who did not respond to the full CPS ASEC and those who did not respond to the earnings question. I find that generalized coverage error and item nonresponse bias are dominated by measurement error, and that an important aspect of measurement error is households reporting no wage and salary earnings in the CPS ASEC when there are such earnings in the tax data. I find that the CPS ASEC sample misses earnings at the high end of the distribution from the initial selection stage and that the final survey weights exacerbate this. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-52 |
| By: | Jennifer Hunt; Iain M. Cockburn; James Bessen |
| Abstract: | Using our own data on Artificial Intelligence publications merged with Burning Glass vacancy data for 2007-2019, we investigate whether online vacancies for jobs requiring AI skills grow more slowly in U.S. locations farther from pre-2007 AI innovation hotspots. We find that a commuting zone which is an additional 200km (125 miles) from the closest AI hotspot has 17% lower growth in AI jobs' share of vacancies. This is driven by distance from AI papers rather than AI patents. Distance reduces growth in AI research jobs as well as in jobs adapting AI to new industries, as evidenced by strong effects for computer and mathematical researchers, developers of software applications, and the finance and insurance industry. 20% of the effect is explained by the presence of state borders between some commuting zones and their closest hotspot. This could reflect state borders impeding migration and thus flows of tacit knowledge. Distance does not capture difficulty of in-person or remote collaboration nor knowledge and personnel flows within multi-establishment firms hiring in computer occupations. |
| JEL: | O33 R12 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33022 |
| By: | Julien Albertini (Université Lumière Lyon 2, CNRS, Université Jean Monnet Saint-Etienne, emlyon business school, GATE, 69007, Lyon, France); Xavier Fairise (GAINS, Le Mans Université); Anthony Terriau (GAINS, Le Mans Université) |
| Abstract: | This paper explores the differentiated effects of corporate tax changes based on firm characteristics and evaluates the potential impact of a tax system modulated by both firm size and age. Using tax rate variations across U.S. states and comparing adjacent counties across state borders, we find that corporate taxes significantly reduce employment in small and young firms, while having no notable impact on large and older firms. We then develop a model to analyze firm dynamics throughout their life cycle under different tax regimes. Our simulations show that a corporate tax system adjusted by both firm size and age is more effective than one based solely on size (and even more so than a system with a single rate). This approach lightens the tax burden on highly productive young firms and shifts it toward less productive older firms, ultimately boosting employment and welfare without reducing the fiscal surplus. |
| JEL: | H25 H32 J21 J23 E61 E62 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:gat:wpaper:2410 |
| By: | Marie Briere; James Poterba; Ariane Szafarz |
| Abstract: | This paper presents new evidence on how employees respond to tax incentives for retirement saving. Using administrative data from a large retirement plan administrator in France, we examine the voluntary saving choices of approximately 1.4 million workers before and after the implementation of the 2019 Loi Pacte, a reform that introduced tax-deductible voluntary contributions into employer-sponsored retirement plans. One of the features of this multi-part reform was a change in the provisions for voluntary individual contributions to employer-sponsored saving plans. Prior to the implementation of the Loi Pacte, voluntary contributions could only be made on a post-tax basis. Wage earnings, for example, would be taxed before a worker could make a contribution, so that the contribution was post-tax. The reform introduced the possibility of making pre-tax contributions. In this case, labor income could be contributed to the plan without any payment of tax. The tax liability on this income was deferred until the funds were withdrawn from the account, typically when the worker was retired. This postpones the tax payment, often by several decades, and, given the progressivity of income tax rates and the fact that the income of many retirees is lower than their income while working, can also result in a lower tax burden on the earned income. The net effect the Loi Pacte was therefore to increase the rate of return on saving through employer-sponsored plans. On a net-of-tax return basis, post-tax contributions often dominate pre-tax contributions. The reform increased contributions to retirement saving accounts, especially among higher-income, older workers and those who contributed to a voluntary saving plan on a post-tax basis before the pre-tax option became available. There was no decline in contributions to “medium term” saving plans, which are provided by employers and can be accessed after five years, suggesting little substitution between these accounts. |
| Keywords: | Retirement savings; Tax incentives; France; Long-term savings; Rothification; Voluntary contributions |
| JEL: | E21 G28 J32 H24 G41 H31 |
| Date: | 2024–10–17 |
| URL: | https://d.repec.org/n?u=RePEc:sol:wpaper:2013/378653 |
| By: | Víctor Caballero (BANCO DE ESPAÑA); Corinna Ghirelli (BANCO DE ESPAÑA); Ángel Luis Gómez (BANCO DE ESPAÑA); Javier J. Pérez (BANCO DE ESPAÑA) |
| Abstract: | The most recent fiscal adjustment episode in the euro area occurred during the so-called euro area sovereign debt crisis. It affected many countries and was quite significantly impacted by the public wage bill. The austerity measures contributed, in particular, to an immediate partial correction of positive public–private pay differentials, most notably in countries subject to the EU’s financial assistance programmes. An important aspect of the debate on public wage bill restraint concerns how long such policies can be sustained over time. In this paper, we investigate whether the downward corrections that were initially observed in many countries were permanent or ended up being transitory (i.e. whether they were reversed in subsequent years). To do so, we focus on euro area countries over the 2007-2021 period, so as to have sufficient observations in both the pre- and post- adjustment periods. We estimate the wage differential, controlling for observable differences between individuals using cross-sectional microdata from a harmonized survey (the European Union Statistics on Income and Living Conditions (EU-SILC)). We show that the lower wage premiums only partially reverted to pre-fiscal consolidation levels over the subsequent decade and that more sustained policy achievements are linked to larger fiscal adjustment efforts during the 2010–2014 crisis. |
| Keywords: | fiscal consolidation, government spending, public sector wage gap |
| JEL: | C21 J31 J45 E62 H2 H5 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2433 |
| By: | Draca, Mirko (CEP, London School of Economics ; Warwick University and CAGE Research Centre); Nathan, Max (CEP, London School of Economics ; Warwick University and CAGE Research Centre ; University College London); Nguyen-Tien, Viet (CEP, London School of Economics ; POID, London School of Economics); Oliveira-Cunha, Juliana (CEP, London School of Economics ; IGC, London School of Economics); Rosso, Anna (CEP, London School of Economics ; University of Insubria); Valero, Anna (CEP, London School of Economics ; POID, London School of Economics) |
| Abstract: | Which types of human capital influence the adoption of advanced technologies? We study the skill-biased adoption of information and communication technologies (ICT) across two waves in the UK. Specifically, we compare the new wave of cloud and machine learning / AI technologies during the 2010s - pre-LLM - with the previous wave of personal computer adoption in the 1990s and early 2000s. At the area-level we see the emergence of a distinct STEM-biased adoption effect for the second wave of cloud and machine learning / AI technologies (ML/AI), alongside a general skill-biased effect. A one-standard deviation increase in the baseline share of STEM workers in areas is associated with around 0.3 of a standard deviation higher adoption of cloud and ML/AI. We find similar effects at the firm level where we are able to test for the influence of a wide range of skills. In turn, this STEM-biased adoption pattern has encouraged the concentration of these technologies, leading to more acute differences between high-tech and low-tech areas and firms. In contrast with classical technology diffusion, recent cloud and ML/AI adoption in the UK seems more likely to widen inequalities than reduce them |
| Keywords: | Technology Diffusion ; ICT ; Human Capital ; STEM JEL Codes: D22 ; J24 ; O33 ; R11 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1521 |
| By: | Ajay Mahal (National Council of Applied Economic Research, Delhi); Anup Karan (Public Health Foundation of India, Gurugram, India) |
| Abstract: | WWe evaluate the earnings and conversion disadvantages that persons with disabilities face in India, which has amongst the highest number of persons with disabilities globally. Our study is unique in that we use two major nationally representative household surveys consisting of over 85 thousand households, alongside a qualitative study to explore the nature and the magnitude of these disadvantages. We find that persons with disabilities and the households they live in experience lower earnings (earnings gap) and incur higher costs of translating those earnings into living standards (conversion gap). Because of such costs, persons with disabilities and the households to which they belong are likely to be at disproportionately higher risk of being poor. These disadvantages vary across gender, by rural-urban residence and by severity of disability and considerably exceed government contributions to the wellbeing of people with disabilities. |
| Keywords: | Disability, Employment, Conversion Gap, Earnings, India |
| JEL: | I15 I18 I31 J3 J7 |
| Date: | 2024–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:nca:ncaerw:175 |
| By: | Anthony Brassil (Reserve Bank of Australia); Yahdullah Haidari (Reserve Bank of Australia); Jonathan Hambur (Reserve Bank of Australia); Gulnara Nolan (Reserve Bank of Australia); Callum Ryan (Reserve Bank of Australia) |
| Abstract: | This paper explores the formation of households' wage and inflation expectations using a common dataset and framework, documenting a number of stylised facts. We find that households tend to form wage and inflation expectations somewhat differently. Households associate higher wages growth with good economic outcomes, but higher inflation with worse economic outcomes. Wages expectations also tend to be somewhat more forward looking, while inflation expectations are more backward looking, especially for lower income households, and place a disproportionate weight on past fuel prices. These findings paint a picture of households having a somewhat 'supply-side' view of inflation, where shocks that push up inflation also weaken the economy, but a more 'demand-side' view of wages, where shocks that push up wages also strengthen the economy, which may make communication of monetary policy and the outlook more challenging. |
| Keywords: | inflation expectations; wage growth |
| JEL: | D84 E31 J31 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:rba:rbardp:rdp2024-07 |