Pub Date : 2025-11-03DOI: 10.1016/j.labeco.2025.102814
Paul Schüle
Career decisions, that is educational and occupational choice, are not only taken by comparing expected incomes, but also by considering non-monetary rewards such as social impact, chances of promotion, or the compatibility of work and family. In this paper, I use rich panel data from Germany and the UK to demonstrate that preferences about such aspects of a career as stated at age 17 are strong predictors of future earnings in the labor market. At the same time, these preferences differ significantly by gender and socio-economic background, and intergenerational income persistence is reduced by 7 to 28 percent when accounting for career preferences.
{"title":"Career preferences and socio-economic background","authors":"Paul Schüle","doi":"10.1016/j.labeco.2025.102814","DOIUrl":"10.1016/j.labeco.2025.102814","url":null,"abstract":"<div><div>Career decisions, that is educational and occupational choice, are not only taken by comparing expected incomes, but also by considering non-monetary rewards such as social impact, chances of promotion, or the compatibility of work and family. In this paper, I use rich panel data from Germany and the UK to demonstrate that preferences about such aspects of a career as stated at age 17 are strong predictors of future earnings in the labor market. At the same time, these preferences differ significantly by gender and socio-economic background, and intergenerational income persistence is reduced by 7 to 28 percent when accounting for career preferences.</div></div>","PeriodicalId":48153,"journal":{"name":"Labour Economics","volume":"98 ","pages":"Article 102814"},"PeriodicalIF":2.6,"publicationDate":"2025-11-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145600360","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-02DOI: 10.1016/j.labeco.2025.102817
Shira Buzaglo-Baris
This paper analyzes the gender wage gap across various margins in the labor market: between industries, between firms within industries, and within firms, with a particular focus on parenthood — an event that significantly shapes the gender wage gap. Using comprehensive Employer-Employee administrative data from Israel, the study finds that industry sorting is the primary driver, explaining 22% of the overall gender wage gap, with an additional 4% attributable to women sorting into lower-paying firms within the same industry. Sorting intensifies following parenthood, as mothers are less likely to move to higher-paying firms, especially within the industry. In high-paying industries, mothers tend to accept positions in lower-paying firms while maintaining their relative industry position, whereas in low-paying industries, fathers advance faster up the industry ladder, reinforcing a motherhood penalty at the industry-level. These findings suggest that women’s initial sorting into industries has long-lasting consequences.
{"title":"Firms, industries and the gender wage gap","authors":"Shira Buzaglo-Baris","doi":"10.1016/j.labeco.2025.102817","DOIUrl":"10.1016/j.labeco.2025.102817","url":null,"abstract":"<div><div>This paper analyzes the gender wage gap across various margins in the labor market: between industries, between firms within industries, and within firms, with a particular focus on parenthood — an event that significantly shapes the gender wage gap. Using comprehensive Employer-Employee administrative data from Israel, the study finds that industry sorting is the primary driver, explaining 22% of the overall gender wage gap, with an additional 4% attributable to women sorting into lower-paying firms within the same industry. Sorting intensifies following parenthood, as mothers are less likely to move to higher-paying firms, especially within the industry. In high-paying industries, mothers tend to accept positions in lower-paying firms while maintaining their relative industry position, whereas in low-paying industries, fathers advance faster up the industry ladder, reinforcing a motherhood penalty at the industry-level. These findings suggest that women’s initial sorting into industries has long-lasting consequences.</div></div>","PeriodicalId":48153,"journal":{"name":"Labour Economics","volume":"97 ","pages":"Article 102817"},"PeriodicalIF":2.6,"publicationDate":"2025-11-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145465497","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-01DOI: 10.1016/j.labeco.2025.102818
Guilherme de Oliveira Lima Cagliari Marques , Mateus Gonzalez de Freitas Pinto
We investigate the persistence of US unemployment applying seasonal fractional integration (FARISMA) models to assess both seasonal and non-seasonal long-range dependence. The analysis is carried out at three levels of data aggregation: state, regional census division, and national aggregation. Using wavelet multiresolution decomposition, we separate out irregular components to assess changes in persistence in unemployment dynamics. Our findings indicate strong evidence of hysteresis in US unemployment rates, with both seasonal and non-seasonal long memory contributing to the persistence of unemployment. These results are evidence that challenges the NAIRU hypothesis, suggesting that exogenous shocks to unemployment have prolonged effects that do not dissipate within a finite time horizon.
{"title":"Persistence and seasonal long memory in unemployment in the United States","authors":"Guilherme de Oliveira Lima Cagliari Marques , Mateus Gonzalez de Freitas Pinto","doi":"10.1016/j.labeco.2025.102818","DOIUrl":"10.1016/j.labeco.2025.102818","url":null,"abstract":"<div><div>We investigate the persistence of US unemployment applying seasonal fractional integration (FARISMA) models to assess both seasonal and non-seasonal long-range dependence. The analysis is carried out at three levels of data aggregation: state, regional census division, and national aggregation. Using wavelet multiresolution decomposition, we separate out irregular components to assess changes in persistence in unemployment dynamics. Our findings indicate strong evidence of hysteresis in US unemployment rates, with both seasonal and non-seasonal long memory contributing to the persistence of unemployment. These results are evidence that challenges the NAIRU hypothesis, suggesting that exogenous shocks to unemployment have prolonged effects that do not dissipate within a finite time horizon.</div></div>","PeriodicalId":48153,"journal":{"name":"Labour Economics","volume":"97 ","pages":"Article 102818"},"PeriodicalIF":2.6,"publicationDate":"2025-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145416836","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-30DOI: 10.1016/j.labeco.2025.102819
Dongmin Kong , Yifan Jin , Shasha Liu
This paper investigates the impact of labor costs on the domestic value added (DVA) at the firm-level. To establish causality, we use the quasi-natural experiment of the implementation of China’s new Labor Contract law, which leads to a sudden increase in labor costs, to conduct a difference-in-differences (DID) estimation. We find that an increase in labor costs significantly and persistently increases firms’ DVA. Mechanism analyses suggest that these effects are mainly driven by improvement of management efficiency, changes in firms’ trading patterns (from processing trades to ordinary trades), progress in process innovation, and further increased product market power. Moreover, our results are stronger for upstream firms far from final consumption, firms with low product quality, non-state-owned firms, and firms located in areas with low market competition or less legal environmental protection. Overall, this paper investigates a determinant of DVA and adds evidence to the economic implications of China’s new Labor Contract law.
{"title":"Labor costs and domestic value added: Evidence based on the China’s new Labor Contract law","authors":"Dongmin Kong , Yifan Jin , Shasha Liu","doi":"10.1016/j.labeco.2025.102819","DOIUrl":"10.1016/j.labeco.2025.102819","url":null,"abstract":"<div><div>This paper investigates the impact of labor costs on the domestic value added (DVA) at the firm-level. To establish causality, we use the quasi-natural experiment of the implementation of China’s new <em>Labor Contract law</em>, which leads to a sudden increase in labor costs, to conduct a difference-in-differences (DID) estimation. We find that an increase in labor costs significantly and persistently increases firms’ DVA. Mechanism analyses suggest that these effects are mainly driven by improvement of management efficiency, changes in firms’ trading patterns (from processing trades to ordinary trades), progress in process innovation, and further increased product market power. Moreover, our results are stronger for upstream firms far from final consumption, firms with low product quality, non-state-owned firms, and firms located in areas with low market competition or less legal environmental protection. Overall, this paper investigates a determinant of DVA and adds evidence to the economic implications of China’s new Labor Contract law.</div></div>","PeriodicalId":48153,"journal":{"name":"Labour Economics","volume":"97 ","pages":"Article 102819"},"PeriodicalIF":2.6,"publicationDate":"2025-10-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145519856","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We conducted an experiment on a major international online freelancing platform to examine how increased flexibility in daily work hours affects female participation. We post identical job advertisements (for 320 jobs) covering a wide range of tasks (80 distinct tasks) that differ only in flexibility and the wage offered. Comparing the numbers of applicants for these jobs, we find that, while both men and women prefer flexibility, the elasticity of response for women is twice that for men. Flexible jobs attracted 24% more women and 12% more men than inflexible ones. Importantly, these increases did not compromise the quality of the applications. In contrast, there is suggestive evidence that flexible jobs attracted higher-quality female candidates. Our findings have significant implications for understanding gender disparities in labor market outcomes and for shaping equity-focused policies of organizations.
{"title":"Gender differences in preferences for flexible work hours: Experimental evidence from an online freelancing platform","authors":"Rakesh Banerjee , Tushar Bharati , Adnan M.S. Fakir , Yiwei Qian , Naveen Sunder","doi":"10.1016/j.labeco.2025.102813","DOIUrl":"10.1016/j.labeco.2025.102813","url":null,"abstract":"<div><div>We conducted an experiment on a major international online freelancing platform to examine how increased flexibility in daily work hours affects female participation. We post identical job advertisements (for 320 jobs) covering a wide range of tasks (80 distinct tasks) that differ only in flexibility and the wage offered. Comparing the numbers of applicants for these jobs, we find that, while both men and women prefer flexibility, the elasticity of response for women is twice that for men. Flexible jobs attracted 24% more women and 12% more men than inflexible ones. Importantly, these increases did not compromise the quality of the applications. In contrast, there is suggestive evidence that flexible jobs attracted higher-quality female candidates. Our findings have significant implications for understanding gender disparities in labor market outcomes and for shaping equity-focused policies of organizations.</div></div>","PeriodicalId":48153,"journal":{"name":"Labour Economics","volume":"97 ","pages":"Article 102813"},"PeriodicalIF":2.6,"publicationDate":"2025-10-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145578762","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-11DOI: 10.1016/j.labeco.2025.102812
Brock M. Wilson
I exploit a policy change for U.S. federal workers’ pension benefits to estimate the effect of pension generosity on worker retirement, retention and recruitment. The policy increased pensions by 16%–25%. I find there is a 30.3% decrease in job quits for permanent workers. However, there is little evidence that pension generosity has an effect on new hires. This suggests salience may play a role in how workers value pensions. Additionally, I find a large heterogeneous labor supply response to pension generosity. Altogether, this shows that pension generosity is effective in retaining workers and may have important implications for workforce planning.
{"title":"Retirement, retention, recruitment: Evidence from a federal pension policy","authors":"Brock M. Wilson","doi":"10.1016/j.labeco.2025.102812","DOIUrl":"10.1016/j.labeco.2025.102812","url":null,"abstract":"<div><div>I exploit a policy change for U.S. federal workers’ pension benefits to estimate the effect of pension generosity on worker retirement, retention and recruitment. The policy increased pensions by 16%–25%. I find there is a 30.3% decrease in job quits for permanent workers. However, there is little evidence that pension generosity has an effect on new hires. This suggests salience may play a role in how workers value pensions. Additionally, I find a large heterogeneous labor supply response to pension generosity. Altogether, this shows that pension generosity is effective in retaining workers and may have important implications for workforce planning.</div></div>","PeriodicalId":48153,"journal":{"name":"Labour Economics","volume":"97 ","pages":"Article 102812"},"PeriodicalIF":2.6,"publicationDate":"2025-10-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145362298","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-08DOI: 10.1016/j.labeco.2025.102810
Katharina Pfeil , Matthias Kasper , Sarah Necker , Lars P. Feld
We study how individuals adjust their labor supply in response to tax reforms that alter income tax progressivity. In an online experiment with 522 participants, we compare responses to reforms that replace a progressive tax system with a flat tax and vice versa. We find asymmetric effects: labor supply increases when a progressive regime is replaced by a flat tax system, but does not decline when progressivity is introduced. This increase in labor provision occurs only when the reform lowers the marginal tax rate, not when it raises it. Our results suggest that labor supply responses to tax reforms are nuanced and path-dependent: reforms change behavior when they ease tax burdens for individuals who were previously discouraged from working more due to progressive thresholds.
{"title":"Asymmetric labor supply responses to tax rate reform: Experimental evidence","authors":"Katharina Pfeil , Matthias Kasper , Sarah Necker , Lars P. Feld","doi":"10.1016/j.labeco.2025.102810","DOIUrl":"10.1016/j.labeco.2025.102810","url":null,"abstract":"<div><div>We study how individuals adjust their labor supply in response to tax reforms that alter income tax progressivity. In an online experiment with 522 participants, we compare responses to reforms that replace a progressive tax system with a flat tax and vice versa. We find asymmetric effects: labor supply increases when a progressive regime is replaced by a flat tax system, but does not decline when progressivity is introduced. This increase in labor provision occurs only when the reform lowers the marginal tax rate, not when it raises it. Our results suggest that labor supply responses to tax reforms are nuanced and path-dependent: reforms change behavior when they ease tax burdens for individuals who were previously discouraged from working more due to progressive thresholds.</div></div>","PeriodicalId":48153,"journal":{"name":"Labour Economics","volume":"97 ","pages":"Article 102810"},"PeriodicalIF":2.6,"publicationDate":"2025-10-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145320496","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-08DOI: 10.1016/j.labeco.2025.102811
Pengzhan Qian
Until the early 1990s, jobs were assigned by the government in urban China, and education opportunities were limited. Under these constraints, talented people, especially women, may not have been educated or assigned to occupations that suited their abilities best, resulting in a misallocation of human capital. Over the years, market-oriented reforms, such as abolishing the job assignment system and expanding college education, have changed people’s occupational and educational choices significantly. This paper investigates the macroeconomic consequences of market-oriented reforms between 1990 and 2010. I build a quantitative model of occupational and educational choice with wedges to measure the degrees of misallocation. I find that market-oriented reforms have significantly reduced misallocations. Without any market-oriented reforms, 19% of young people in 2010 would have chosen different occupations. Consequently, the human capital of the young cohort would have been 1.6% lower, and economic output would have been 0.8% lower.
{"title":"Market-oriented reforms and human capital reallocation in urban China: A gender perspective","authors":"Pengzhan Qian","doi":"10.1016/j.labeco.2025.102811","DOIUrl":"10.1016/j.labeco.2025.102811","url":null,"abstract":"<div><div>Until the early 1990s, jobs were assigned by the government in urban China, and education opportunities were limited. Under these constraints, talented people, especially women, may not have been educated or assigned to occupations that suited their abilities best, resulting in a misallocation of human capital. Over the years, market-oriented reforms, such as abolishing the job assignment system and expanding college education, have changed people’s occupational and educational choices significantly. This paper investigates the macroeconomic consequences of market-oriented reforms between 1990 and 2010. I build a quantitative model of occupational and educational choice with wedges to measure the degrees of misallocation. I find that market-oriented reforms have significantly reduced misallocations. Without any market-oriented reforms, 19% of young people in 2010 would have chosen different occupations. Consequently, the human capital of the young cohort would have been 1.6% lower, and economic output would have been 0.8% lower.</div></div>","PeriodicalId":48153,"journal":{"name":"Labour Economics","volume":"97 ","pages":"Article 102811"},"PeriodicalIF":2.6,"publicationDate":"2025-10-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145320495","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-04DOI: 10.1016/j.labeco.2025.102806
Stanislav Rabinovich , Brenda Samaniego de la Parra , Ronald Wolthoff
We theoretically and empirically examine how firms’ choices of wage-setting protocols respond to labor market conditions. We develop a simple model in which workers can send multiple job applications and firms choose between posting wages and Nash bargaining. Posting a wage allows the firm to commit to lower wages than would be negotiated ex-post, but eliminates the ability to respond to a competing offer, should the worker have one. The model makes predictions about the joint correlation between the application–vacancy ratio, the number of applications per worker, and the incidence of wage posting. We find empirical support for these predictions in a novel dataset from an online job board. Our theory also implies that an increase in labor market competition may manifest itself through the incidence of wage posting rather than a change in the posted wages themselves; and that labor market regulations such as pay transparency laws have redistributive equilibrium effects by disproportionately benefiting workers with few applications.
{"title":"Wage setting protocols and labor market conditions: Theory and evidence","authors":"Stanislav Rabinovich , Brenda Samaniego de la Parra , Ronald Wolthoff","doi":"10.1016/j.labeco.2025.102806","DOIUrl":"10.1016/j.labeco.2025.102806","url":null,"abstract":"<div><div>We theoretically and empirically examine how firms’ choices of wage-setting protocols respond to labor market conditions. We develop a simple model in which workers can send multiple job applications and firms choose between posting wages and Nash bargaining. Posting a wage allows the firm to commit to lower wages than would be negotiated ex-post, but eliminates the ability to respond to a competing offer, should the worker have one. The model makes predictions about the joint correlation between the application–vacancy ratio, the number of applications per worker, and the incidence of wage posting. We find empirical support for these predictions in a novel dataset from an online job board. Our theory also implies that an increase in labor market competition may manifest itself through the incidence of wage posting rather than a change in the posted wages themselves; and that labor market regulations such as pay transparency laws have redistributive equilibrium effects by disproportionately benefiting workers with few applications.</div></div>","PeriodicalId":48153,"journal":{"name":"Labour Economics","volume":"97 ","pages":"Article 102806"},"PeriodicalIF":2.6,"publicationDate":"2025-10-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145267339","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-29DOI: 10.1016/j.labeco.2025.102808
Thimo De Schouwer , Elisabeth Gsottbauer , Iris Kesternich , Heiner Schumacher
Work meaning can be an important driver of labor supply. Since, by definition, work meaning is associated with benefits for others, it also has an important fairness dimension. In a theoretical model, we show that workers’ willingness to pay for work meaning can be positive or negative, depending on the relative strength of fairness concerns and meaning preferences. To examine the importance of these behavioral motives for labor supply, we conduct a survey experiment with representative samples from The Netherlands and Germany in which we vary within-subject the benefits that a job creates for others. We find that only a minority of workers are actually willing to sacrifice wage for work meaning. The average willingness to pay for work meaning is positive, but substantially lower than the willingness to pay for job flexibility. There is a strong negative relationship between fairness concerns and willingness to pay for work meaning. Thus, individuals who prioritize fairness are less likely to accept lower wages for meaningful work.
{"title":"Work meaning and fair wages","authors":"Thimo De Schouwer , Elisabeth Gsottbauer , Iris Kesternich , Heiner Schumacher","doi":"10.1016/j.labeco.2025.102808","DOIUrl":"10.1016/j.labeco.2025.102808","url":null,"abstract":"<div><div>Work meaning can be an important driver of labor supply. Since, by definition, work meaning is associated with benefits for others, it also has an important fairness dimension. In a theoretical model, we show that workers’ willingness to pay for work meaning can be positive or negative, depending on the relative strength of fairness concerns and meaning preferences. To examine the importance of these behavioral motives for labor supply, we conduct a survey experiment with representative samples from The Netherlands and Germany in which we vary within-subject the benefits that a job creates for others. We find that only a minority of workers are actually willing to sacrifice wage for work meaning. The average willingness to pay for work meaning is positive, but substantially lower than the willingness to pay for job flexibility. There is a strong negative relationship between fairness concerns and willingness to pay for work meaning. Thus, individuals who prioritize fairness are less likely to accept lower wages for meaningful work.</div></div>","PeriodicalId":48153,"journal":{"name":"Labour Economics","volume":"97 ","pages":"Article 102808"},"PeriodicalIF":2.6,"publicationDate":"2025-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145220500","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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