Many employers link wages at the firm’s establishments outside of the home region to the level at headquarters. Multinationals that anchor-to-the headquarters also transmit wage changes arising from shocks to minimum wages and exchange rates in the home country/state to their foreign establishments. Such multinationals fire more low-skill workers and hire fewer new workers abroad after a permanent (minimum wage-induced) foreign establishment wage increase originating in shocks to headquarter wages, but not after a temporary (exchange rate-induced) one. We show this using data on 1,060 multinationals’ establishments across the world and in employee-level data on the same employers’ establishments in Brazil.
{"title":"Across-Country Wage Compression in Multinationals","authors":"Jonas Hjort, Xuan Li, Heather Sarsons","doi":"10.2139/ssrn.3548038","DOIUrl":"https://doi.org/10.2139/ssrn.3548038","url":null,"abstract":"Many employers link wages at the firm’s establishments outside of the home region to the level at headquarters. Multinationals that anchor-to-the headquarters also transmit wage changes arising from shocks to minimum wages and exchange rates in the home country/state to their foreign establishments. Such multinationals fire more low-skill workers and hire fewer new workers abroad after a permanent (minimum wage-induced) foreign establishment wage increase originating in shocks to headquarter wages, but not after a temporary (exchange rate-induced) one. We show this using data on 1,060 multinationals’ establishments across the world and in employee-level data on the same employers’ establishments in Brazil.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75173141","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}
Arpita Patnaik, Joanna Venator, Matthew Wiswall, basit. zafar
Abstract We estimate a rich model of college major choice using a panel of experimentally-derived data. Our estimation strategy combines two types of data: data on self-reported beliefs about future earnings from potential human capital decisions and survey-based measures of risk and time preferences. We show how to use these data to identify a general life-cycle model, allowing for rich patterns of heterogeneous beliefs and preferences. Our data allow us to separate perceptions about the degree of risk or about the current versus future payoffs for a choice from the individual’s preference for risk and patience. Comparing our estimates of the general model to estimates of models which ignore heterogeneity in risk and time preferences, we find that these restricted models overstate the importance of earnings to major choice. Additionally, we show that while men are less risk averse and patient than women, gender differences in expectations about own-earnings, risk aversion, and patience cannot explain gender gaps in major choice.
{"title":"The Role of Heterogeneous Risk Preferences, Discount Rates, and Earnings Expectations in College Major Choice","authors":"Arpita Patnaik, Joanna Venator, Matthew Wiswall, basit. zafar","doi":"10.3386/w26785","DOIUrl":"https://doi.org/10.3386/w26785","url":null,"abstract":"Abstract We estimate a rich model of college major choice using a panel of experimentally-derived data. Our estimation strategy combines two types of data: data on self-reported beliefs about future earnings from potential human capital decisions and survey-based measures of risk and time preferences. We show how to use these data to identify a general life-cycle model, allowing for rich patterns of heterogeneous beliefs and preferences. Our data allow us to separate perceptions about the degree of risk or about the current versus future payoffs for a choice from the individual’s preference for risk and patience. Comparing our estimates of the general model to estimates of models which ignore heterogeneity in risk and time preferences, we find that these restricted models overstate the importance of earnings to major choice. Additionally, we show that while men are less risk averse and patient than women, gender differences in expectations about own-earnings, risk aversion, and patience cannot explain gender gaps in major choice.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"10 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82343966","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}
Low employability among specific populations (e.g., religious/traditional women, the elderly, disabled workers, immigrants) has unfavorable consequences on the: unemployed individual, society, and the state economy. The latter include: poverty, a heavy toll on welfare budgets, diminished growth, and an increase in the "dependency ratio". We suggest a rather novel policy (borrowed from the field of Career Psychology) that could lead to successful integration into the labor market of low-employability populations: the design of tailor-made training programs that respond to work motives; coupled with a working environment that caters to special needs/restrictions; and complemented with counseling and monitoring. The suggested strategy was illustrated and investigated using a case study of Israeli ultra-religious women, who exhibit lower employment rates than other Israeli women. The motives behind their occupational choices were explored based on data collected by a field experiment. Factor Analysis was then employed to sort out the motives behind their occupational choices, and regression analysis was used to associate job satisfaction with work motivation. Policy implications were suggested based on the findings. There is already some evidence on the successful outcomes of the proposed strategy.
{"title":"Enhancing Employability by Responding to Work Motives: Lessons from a Field Experiment Among Israeli Ultra-Religious Women","authors":"Y. Goldfarb, S. Neuman","doi":"10.2139/ssrn.3525249","DOIUrl":"https://doi.org/10.2139/ssrn.3525249","url":null,"abstract":"Low employability among specific populations (e.g., religious/traditional women, the elderly, disabled workers, immigrants) has unfavorable consequences on the: unemployed individual, society, and the state economy. The latter include: poverty, a heavy toll on welfare budgets, diminished growth, and an increase in the \"dependency ratio\". We suggest a rather novel policy (borrowed from the field of Career Psychology) that could lead to successful integration into the labor market of low-employability populations: the design of tailor-made training programs that respond to work motives; coupled with a working environment that caters to special needs/restrictions; and complemented with counseling and monitoring. The suggested strategy was illustrated and investigated using a case study of Israeli ultra-religious women, who exhibit lower employment rates than other Israeli women. The motives behind their occupational choices were explored based on data collected by a field experiment. Factor Analysis was then employed to sort out the motives behind their occupational choices, and regression analysis was used to associate job satisfaction with work motivation. Policy implications were suggested based on the findings. There is already some evidence on the successful outcomes of the proposed strategy.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"74 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-01-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80814182","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}
We examine whether and how retirement affects migration decisions in China. Using a regression discontinuity (RD) design approach combined with a nationally representative sample of 228,855 adults aged between 40 and 75, we find that retirement increases the probability of migration by 12.9 percentage points. Approximately 38% of the total migration effects can be attributed to inter-temporal substitution (delayed migration). Retirement-induced migrants are lower-educated and have restricted access to social security. Household-level migration decisions can reconcile different migration responses across gender. Retirees migrate for risk sharing and family protection mechnisms, reducing market production of their families in the receiving households.
{"title":"The Retirement Migration Puzzle in China","authors":"Simiao Chen, Zhangfeng Jin, K. Prettner","doi":"10.2139/ssrn.3526088","DOIUrl":"https://doi.org/10.2139/ssrn.3526088","url":null,"abstract":"We examine whether and how retirement affects migration decisions in China. Using a regression discontinuity (RD) design approach combined with a nationally representative sample of 228,855 adults aged between 40 and 75, we find that retirement increases the probability of migration by 12.9 percentage points. Approximately 38% of the total migration effects can be attributed to inter-temporal substitution (delayed migration). Retirement-induced migrants are lower-educated and have restricted access to social security. Household-level migration decisions can reconcile different migration responses across gender. Retirees migrate for risk sharing and family protection mechnisms, reducing market production of their families in the receiving households.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"4 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-01-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89443077","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}
We describe the socio-economic characteristics of street-gang areas in London, explore gang formation dynamics, and analyse the spatial correlation between gangs and violent crime. Gang areas form in areas with higher unemployment, lower education, and a higher proportion of lone-parent families. Social housing is one of the key predictors of gang areas. Areas that are gang territories have higher levels of crime in various crime categories. Both having a gang in an area and proximity to a gang correlate positively with violent crime. We estimate the short-term effect of disrupting a gang within a borough as decreasing knife crime on ward level by about 15%.
{"title":"Gangs and Knife Crime in London","authors":"Tom Kirchmaier, S. Machin, Carmen Villa-Llera","doi":"10.2139/ssrn.3521766","DOIUrl":"https://doi.org/10.2139/ssrn.3521766","url":null,"abstract":"We describe the socio-economic characteristics of street-gang areas in London, explore gang formation dynamics, and analyse the spatial correlation between gangs and violent crime. Gang areas form in areas with higher unemployment, lower education, and a higher proportion of lone-parent families. Social housing is one of the key predictors of gang areas. Areas that are gang territories have higher levels of crime in various crime categories. Both having a gang in an area and proximity to a gang correlate positively with violent crime. We estimate the short-term effect of disrupting a gang within a borough as decreasing knife crime on ward level by about 15%.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"36 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90344874","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}
The traditional literature treat wage dispersion and firm dynamics, which are closely connected to each other, in isolation. This paper delivers a unified treatment to wage dispersion and firm-size distribution by developing a real-option-theoretic approach. The model is tractable with analytic solution, generating the following testable implications. Firstly, the distribution of firm size is a uni-modal, right-skewed with a Paretian tail, which is in line the empirical findings, in particular the Zipf Law. So is that of wage dispersion. Secondly, as in Mortensen and Pissarides (1994), the incumbents prefer to preserve the pattern of labor hoarding rather than exiting the market when hit by (not too severely) negative productivity shock. Thirdly, in addition to the effect in standard search and matching theory, the labor market tightness is also found to produce additional transition mechanisms to the unemployment rate. Fourthly, the model predicts that, the larger the firm is, the longer the firm will survive at the market.
{"title":"A Tale of Two Dispersions: Wage and Firm Size","authors":"Feng Dong, Fei Zhou","doi":"10.2139/ssrn.3513727","DOIUrl":"https://doi.org/10.2139/ssrn.3513727","url":null,"abstract":"The traditional literature treat wage dispersion and firm dynamics, which are closely connected to each other, in isolation. This paper delivers a unified treatment to wage dispersion and firm-size distribution by developing a real-option-theoretic approach. The model is tractable with analytic solution, generating the following testable implications. Firstly, the distribution of firm size is a uni-modal, right-skewed with a Paretian tail, which is in line the empirical findings, in particular the Zipf Law. So is that of wage dispersion. Secondly, as in Mortensen and Pissarides (1994), the incumbents prefer to preserve the pattern of labor hoarding rather than exiting the market when hit by (not too severely) negative productivity shock. Thirdly, in addition to the effect in standard search and matching theory, the labor market tightness is also found to produce additional transition mechanisms to the unemployment rate. Fourthly, the model predicts that, the larger the firm is, the longer the firm will survive at the market.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"6 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84765624","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}
Pub Date : 2020-01-01DOI: 10.7551/mitpress/11728.003.0009
{"title":"The Key Importance of Consumption and Saving","authors":"","doi":"10.7551/mitpress/11728.003.0009","DOIUrl":"https://doi.org/10.7551/mitpress/11728.003.0009","url":null,"abstract":"","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"10 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87323047","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}
The added worker effect (AWE) measures the entry of individuals into the labor force due to their partners' job loss. We propose a new method to calculate the AWE, which allows us to estimate its effect on any labor market outcome. We show that without the AWE reduces the fraction of households with two non-employed members. The AWE also accounts for why women's employment is less cyclical and symmetric compared to men. In recessions, while some women lose their employment, others enter the labor market and find jobs. This keeps the female employment relatively stable.
{"title":"Does the Added Worker Effect Matter?","authors":"Nezih Guner, Yuliya Kulikova, Arnau Valladares-Esteban","doi":"10.2139/ssrn.3806537","DOIUrl":"https://doi.org/10.2139/ssrn.3806537","url":null,"abstract":"The added worker effect (AWE) measures the entry of individuals into the labor force due to their partners' job loss. We propose a new method to calculate the AWE, which allows us to estimate its effect on any labor market outcome. We show that without the AWE reduces the fraction of households with two non-employed members. The AWE also accounts for why women's employment is less cyclical and symmetric compared to men. In recessions, while some women lose their employment, others enter the labor market and find jobs. This keeps the female employment relatively stable.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"35 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88185963","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}
In this paper we use detailed job vacancy data to estimate changes in skill demand in the years since the Great Recession. The share of job vacancies requiring a bachelor’s degree increased by more than 60 percent between 2007 and 2019, with faster growth in professional occupations and high-wage cities. Since the labor market was becoming tighter over this period, cyclical “upskilling” is unlikely to explain our findings.
Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
{"title":"Structural Increases in Skill Demand after the Great Recession","authors":"Peter Q. Blair, D. Deming","doi":"10.3386/w26680","DOIUrl":"https://doi.org/10.3386/w26680","url":null,"abstract":"In this paper we use detailed job vacancy data to estimate changes in skill demand in the years since the Great Recession. The share of job vacancies requiring a bachelor’s degree increased by more than 60 percent between 2007 and 2019, with faster growth in professional occupations and high-wage cities. Since the labor market was becoming tighter over this period, cyclical “upskilling” is unlikely to explain our findings.<br><br>Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at <a href=\"http://www.nber.org/papers/w26680\" TARGET=\"_blank\">www.nber.org</a>.<br>","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"189 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79469717","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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