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on Unemployment, Inequality and Poverty |
| By: | Lamadon, Thibaut (University of Chicago); Lise, Jeremy (Cornell University); Meghir, Costas (Yale University); Robin, Jean-Marc (Sciences Po.) |
| Abstract: | This paper develops the nonparametric identification of models with production complementarities, worker-firm specific disutility of labor and search frictions. Mobility in the model is subject to preference shocks, and we assume that firms can write wage contracts. We develop a constructive proof for the nonparametric identification of the model primitives from matched employer-employee data. We use the estimated model to decompose the sources of wage dispersion into worker heterogeneity, compensating differentials, and search frictions that generate between-firm and within-firm dispersion. We find that compensating differentials are substantial on average, but the contribution differs greatly betweenthe lowest and highest types of workers. Finally, we use the model to provide an economic interpretation of several empirical regularities. |
| Keywords: | workfirm; labor; searchfrictions; |
| JEL: | A00 |
| Date: | 2024–09–06 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ifauwp:2024_013 |
| By: | Rhea Ravenna Sohst; Alessio Fusco; Philippe Van Kerm |
| Abstract: | We provide evidence on the relative differences in the disposable incomes of native and foreign-born households in 21 European countries using EU-SILC data for 2008, 2013 and 2018. Using influence function regression, we derive the contribution of foreign-born households to host country indicators of income inequality and polarization. Individuals living in foreign-born households tend to be over-represented in the lower tails of the income distribution. Although there is heterogeneity in the incomes of foreign-born households, their generally disadvantaged positions tend to push national income inequality upward. This pattern persists in many countries, albeit mitigated in magnitude, when we account for the differences in socio-demographic characteristics. The effect on the Foster-Wolfson index of polarization is more mixed, with immigrants in many countries showing no significant contribution to polarization. Using tools adapted from meta-analysis, we find a strong association between welfare regimes and the contribution of immigrant households to inequality and polarization. |
| Keywords: | migration; inequality; Europe; bi-polarization; EU-SILC; RIF regressions; meta-analysis |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:irs:cepswp:2024-06 |
| By: | Bastani, Spencer (Institute for Evaluation of Labour Market and Education Policy (IFAU), Uppsala); Waldenström, Daniel (Research Institute of Industrial Economics (IFN)) |
| Abstract: | This chapter examines the implications of Artificial Intelligence (AI) and automation for the taxation of labor and capital in advanced economies. It synthesizes empirical evidence on worker displacement, productivity, and income inequality, as well as theoretical frameworks for optimal taxation. Implications for tax policy are discussed, focusing on the level of capital taxes and the progressivity of labor taxes. While there may be a need to adjust the level of capital taxes and the structure of labor income taxation, there are potential drawbacks of overly progressive taxation and universal basic income schemes that could undermine work incentives, economic growth, and long-term household welfare. |
| Keywords: | AI; Automation; Inequality; Labor Share; Optimal Taxation; Tax Progressivity |
| JEL: | H20 H21 |
| Date: | 2024–10–03 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1501 |
| By: | Eric A. Hanushek; Lavinia Kinne; Frauke Witthoeft; Ludger Woessmann |
| Abstract: | Cross-sectional age-skill profiles suggest that workers' cognitive skills start declining by their thirties if not earlier. If accurate, such age-driven skill losses pose a major threat to the human capital of societies with rapidly aging populations. We estimate actual age-skill profiles from individual changes in skills at different ages. We use the unique German longitudinal component of the Programme of the International Assessment of Adult Competencies (PIAAC-L) that retested a large representative sample of adults after 3.5 years. Two main results emerge. First, correcting for measurement error, average skills increase into the forties before decreasing slightly in literacy and more strongly in numeracy. Second, skills decline at older ages only for those with below-average skill usage. White-collar and higher-educated workers with above-average usage show increasing skills even beyond their forties. Women have larger skill losses at older age, particularly in numeracy. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.00790 |