A common feature of public sector labor markets is the use of pay scales. This paper examines how the removal of pay scales impacts productivity, by exploiting a reform that compelled all schools in England to replace pay scales with school-designed performance related pay schemes. We find that schools in labor markets with better outside options for teachers saw relatively higher increases in teacher pay. Schools in these areas relatively increase their spending on teachers, have higher teacher retention and larger improvements in student tests scores. These effects are largest in schools with the high proportions of disadvantaged students. We conclude that the pay rigidities in the form of centralized pay schedules result in a misallocation of resources, by preventing such schools from retaining their teachers.
{"title":"Deregulating Teacher Labor Markets","authors":"S. Burgess, E. Greaves, R. Murphy","doi":"10.2139/ssrn.3449586","DOIUrl":"https://doi.org/10.2139/ssrn.3449586","url":null,"abstract":"A common feature of public sector labor markets is the use of pay scales. This paper examines how the removal of pay scales impacts productivity, by exploiting a reform that compelled all schools in England to replace pay scales with school-designed performance related pay schemes. We find that schools in labor markets with better outside options for teachers saw relatively higher increases in teacher pay. Schools in these areas relatively increase their spending on teachers, have higher teacher retention and larger improvements in student tests scores. These effects are largest in schools with the high proportions of disadvantaged students. We conclude that the pay rigidities in the form of centralized pay schedules result in a misallocation of resources, by preventing such schools from retaining their teachers.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"59 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88815688","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the time spent commuting to/from work by workers in fifteen European countries, during the last three decades, with the aim of analyzing recent trends in commuting and the factors affecting commuting behavior in those countries. Using data from several waves of the European Working Conditions Survey, results show a significant gender gap in commuting time in Austria, Belgium, France, Germany, Italy, Ireland, Luxembourg, the Netherlands, and the UK, with male workers devoting more time to commuting than their female counterparts. We further explore the factors related to commuting time, documenting a level of heterogeneity in commuting behavior as certain determinants of commuting time differ across countries. By analyzing the evolution of commuting time in Europe in recent decades, and the factors associated with commuting time, our analysis may serve to guide future planning programs.
本文研究了过去三十年来15个欧洲国家的工人上下班通勤所花费的时间，目的是分析这些国家通勤的最新趋势和影响通勤行为的因素。根据欧洲工作条件调查(European Working Conditions Survey)的几轮数据，结果显示，在奥地利、比利时、法国、德国、意大利、爱尔兰、卢森堡、荷兰和英国，通勤时间存在显著的性别差异，男性员工比女性员工花在通勤上的时间更长。我们进一步探讨了与通勤时间相关的因素，记录了通勤行为的异质性水平，因为通勤时间的某些决定因素在不同国家有所不同。通过分析近几十年来欧洲通勤时间的演变，以及与通勤时间相关的因素，我们的分析可能有助于指导未来的规划方案。
{"title":"Trends in Commuting Time of European Workers: A Cross-Country Analysis","authors":"José Ignacio Giménez, J. Molina, J. Velilla","doi":"10.2139/ssrn.3525244","DOIUrl":"https://doi.org/10.2139/ssrn.3525244","url":null,"abstract":"This paper examines the time spent commuting to/from work by workers in fifteen European countries, during the last three decades, with the aim of analyzing recent trends in commuting and the factors affecting commuting behavior in those countries. Using data from several waves of the European Working Conditions Survey, results show a significant gender gap in commuting time in Austria, Belgium, France, Germany, Italy, Ireland, Luxembourg, the Netherlands, and the UK, with male workers devoting more time to commuting than their female counterparts. We further explore the factors related to commuting time, documenting a level of heterogeneity in commuting behavior as certain determinants of commuting time differ across countries. By analyzing the evolution of commuting time in Europe in recent decades, and the factors associated with commuting time, our analysis may serve to guide future planning programs.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"6 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80498454","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Turan G. Bali, Joon Woo Bae, Ali Sharifkhani, Xiaofei Zhao
This paper proposes a measure of labor market connectivity based on the similarity in the composition of occupational knowledge characteristics across industries and provides evidence of return predictability in the cross-section of industries that are connected through the labor market. In long-short portfolios, an industry's return is strongly predicted by the past return of its labor-market-connected neighboring industries with an annualized return of up to 9%, which is not explained by established asset pricing models. The return predictability remains significant after controlling for the supply chain momentum as well as the industry lead-lag effect, and is concentrated in stocks with higher arbitrage costs and higher ownership of uninformed investors. We find similar predictive relations for the labor productivity, wages, employment, and profitability of labor connected industries. Our findings are consistent with positive spillover of productivity shocks among industries that are connected through the labor market. Informational frictions, costly arbitrage, and investors' limited attention magnify the delayed response of stock prices to the spillover of labor productivity shocks, which results in the observed return predictability.
{"title":"Labor Market Networks and Asset Returns","authors":"Turan G. Bali, Joon Woo Bae, Ali Sharifkhani, Xiaofei Zhao","doi":"10.2139/ssrn.3951333","DOIUrl":"https://doi.org/10.2139/ssrn.3951333","url":null,"abstract":"This paper proposes a measure of labor market connectivity based on the similarity in the composition of occupational knowledge characteristics across industries and provides evidence of return predictability in the cross-section of industries that are connected through the labor market. In long-short portfolios, an industry's return is strongly predicted by the past return of its labor-market-connected neighboring industries with an annualized return of up to 9%, which is not explained by established asset pricing models. The return predictability remains significant after controlling for the supply chain momentum as well as the industry lead-lag effect, and is concentrated in stocks with higher arbitrage costs and higher ownership of uninformed investors. We find similar predictive relations for the labor productivity, wages, employment, and profitability of labor connected industries. Our findings are consistent with positive spillover of productivity shocks among industries that are connected through the labor market. Informational frictions, costly arbitrage, and investors' limited attention magnify the delayed response of stock prices to the spillover of labor productivity shocks, which results in the observed return predictability.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"13 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-10-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89139457","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economic freedom is often defined as a negative liberty – freedom from interference. This contrasts with positive liberty which is defined as freedom to do which refers to capacities. A well-established literature argues that income inequality reduces positive liberty by limiting the capacities of those at the bottom of the income ladder. This limitation generates the byproduct of a greater persistence of socio-economic status as measured by statistics of intergenerational income mobility. Thus, a case is made for policies that could reduce negative liberty (i.e. reductions in economic freedom) in order to enhance positive liberty. However, this argument neglects the issue of whether economic freedom generates positive liberty by increasing economic growth and the number of options available for people to escape from their initial condition. In this paper, we empirically evaluate – using new data on intergenerational income mobility – this question and argue that economic freedom does strongly relate to positive liberty. Even more interestingly, the (positive) effect of economic freedom is found to be stronger than the (negative) effect of inequality.
{"title":"Intergenerational Income Mobility and Economic Freedom as Positive Liberty","authors":"Justin T. Callais, Vincent J. Geloso","doi":"10.2139/ssrn.3939909","DOIUrl":"https://doi.org/10.2139/ssrn.3939909","url":null,"abstract":"Economic freedom is often defined as a negative liberty – freedom from interference. This contrasts with positive liberty which is defined as freedom to do which refers to capacities. A well-established literature argues that income inequality reduces positive liberty by limiting the capacities of those at the bottom of the income ladder. This limitation generates the byproduct of a greater persistence of socio-economic status as measured by statistics of intergenerational income mobility. Thus, a case is made for policies that could reduce negative liberty (i.e. reductions in economic freedom) in order to enhance positive liberty. However, this argument neglects the issue of whether economic freedom generates positive liberty by increasing economic growth and the number of options available for people to escape from their initial condition. In this paper, we empirically evaluate – using new data on intergenerational income mobility – this question and argue that economic freedom does strongly relate to positive liberty. Even more interestingly, the (positive) effect of economic freedom is found to be stronger than the (negative) effect of inequality.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"47 6 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-10-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89593840","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Bertrand, Kamenica, and Pan (2015) document that in the United States there is a discontinuity to the right of 0.5 in the distribution of households according to the female share of total earnings, which they attribute to the existence of a gender identity norm. We provide an alternative explanation for this discontinuity. Using linked employer-employee data from Finland, we show that the discontinuity emerges as a result of equalization and convergence of earnings in coworking couples, and it is associated with an increase in the relative earnings of women, rather than a decrease as predicted by the norm. (JEL D12, J12, J16, J22, J31, Z13)
{"title":"Gender Identity, Co-Working Spouses and Relative Income within Households","authors":"N. Zinovyeva, Maryna Tverdostup","doi":"10.1257/app.20180542","DOIUrl":"https://doi.org/10.1257/app.20180542","url":null,"abstract":"Bertrand, Kamenica, and Pan (2015) document that in the United States there is a discontinuity to the right of 0.5 in the distribution of households according to the female share of total earnings, which they attribute to the existence of a gender identity norm. We provide an alternative explanation for this discontinuity. Using linked employer-employee data from Finland, we show that the discontinuity emerges as a result of equalization and convergence of earnings in coworking couples, and it is associated with an increase in the relative earnings of women, rather than a decrease as predicted by the norm. (JEL D12, J12, J16, J22, J31, Z13)","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73572472","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Declining worker power has been advanced as an explanation for dramatic generational changes in the U.S. macroeconomic environment such as the substantial decline in labor's share of the national income, the loss of consumer purchasing power, and growing income and wealth inequality. In this paper, we consider microeconomic implications by examining the extent to which declining working power affects firm-level investment decisions as reflected in firm responses to mandated increases in the minimum wage. Over our sample period, we find that investment-wage sensitivities go from negative (when worker power constrains management) to insignificant (when management becomes less constrained and can pursue outside options). We also provide evidence on the channel through which declining worker power affects firm investment responses, by showing that changes in investment-wage sensitivities are more significant for firms that are more exposed to globalization, technological change, and declining unionization.
{"title":"How Does Declining Worker Power Affect Investment Sensitivity to Minimum Wage?","authors":"Sreedhar T. Bharath, DuckKi Cho, M. Hertzel","doi":"10.2139/ssrn.3931948","DOIUrl":"https://doi.org/10.2139/ssrn.3931948","url":null,"abstract":"Declining worker power has been advanced as an explanation for dramatic generational changes in the U.S. macroeconomic environment such as the substantial decline in labor's share of the national income, the loss of consumer purchasing power, and growing income and wealth inequality. In this paper, we consider microeconomic implications by examining the extent to which declining working power affects firm-level investment decisions as reflected in firm responses to mandated increases in the minimum wage. Over our sample period, we find that investment-wage sensitivities go from negative (when worker power constrains management) to insignificant (when management becomes less constrained and can pursue outside options). We also provide evidence on the channel through which declining worker power affects firm investment responses, by showing that changes in investment-wage sensitivities are more significant for firms that are more exposed to globalization, technological change, and declining unionization.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"4 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-09-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79041230","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This Online Appendix provides supporting materials to the paper 'Asymmetries in aggregate income risk over the business cycle: evidence from administrative data of Argentina' (Camusso and Navarro, 2021).
{"title":"Online Appendix to 'Asymmetries in Aggregate Income Risk Over the Business Cycle: Evidence from Administrative Data of Argentina'","authors":"Jorge Camusso, Ana Inés Navarro","doi":"10.2139/ssrn.3923655","DOIUrl":"https://doi.org/10.2139/ssrn.3923655","url":null,"abstract":"This Online Appendix provides supporting materials to the paper 'Asymmetries in aggregate income risk over the business cycle: evidence from administrative data of Argentina' (Camusso and Navarro, 2021).","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"56 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73889793","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
As a newly emerging factor, data has been widely utilized in producing goods and services, and the nonbalanced growth between digital industries and non-digital industries is significant in recent years. In the digital economy, data has two unique features. One is the fact that data in one industry is the by-product of economic activities not only in its own industry but also in other industries, and it accumulates and depreciates like capital. Another is that, because of the strongly skilled-biased property, data only can be operated by skilled workers from high-tech companies. More importantly, data utilization within and across sectors can spur new ideas and promote technological innovation. We provide a novel growth model with two sectors differing in the degree of data deepening and the factor structure of production function. Our model indicates that an increase in data stock in two sectors has opposite effects on the allocation of skilled labor across sectors, and the skill premium (i.e., the wage of skilled labor relative to that of unskilled labor) decreases with an increase in the fraction of skilled labor employed in the data-extensive sector. With credible parameter values, model calibration shows that faster growth of output occurs in the more data-intensive sector and the high-level skill premium persists as the data accumulates in the long run.
{"title":"Data Deepening and Nonbalanced Economic Growth","authors":"Richard B. Freeman, Buyuan Yang, Baitao Zhang","doi":"10.2139/ssrn.3894511","DOIUrl":"https://doi.org/10.2139/ssrn.3894511","url":null,"abstract":"As a newly emerging factor, data has been widely utilized in producing goods and services, and the nonbalanced growth between digital industries and non-digital industries is significant in recent years. In the digital economy, data has two unique features. One is the fact that data in one industry is the by-product of economic activities not only in its own industry but also in other industries, and it accumulates and depreciates like capital. Another is that, because of the strongly skilled-biased property, data only can be operated by skilled workers from high-tech companies. More importantly, data utilization within and across sectors can spur new ideas and promote technological innovation. We provide a novel growth model with two sectors differing in the degree of data deepening and the factor structure of production function. Our model indicates that an increase in data stock in two sectors has opposite effects on the allocation of skilled labor across sectors, and the skill premium (i.e., the wage of skilled labor relative to that of unskilled labor) decreases with an increase in the fraction of skilled labor employed in the data-extensive sector. With credible parameter values, model calibration shows that faster growth of output occurs in the more data-intensive sector and the high-level skill premium persists as the data accumulates in the long run.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"48 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-08-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76499571","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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