Labour markets

Clément Bosquet, Henry Overman, 29 April 2016

The effect of an individual’s place of residence on their life chances has long been discussed in public policy debates. This column uses British Household Panel Survey data to assess whether birthplace plays a role in determining future earnings. On average, an individual born in London in the 1970s will earn around 7% more than an individual of the same age and gender born in Manchester; who in turn will earn 5.5% more than an individual born in Cardiff. Parental sorting and the influence of birthplace in decisions about current location both play a role in explaining this effect.

Scott Carrell, Mark Hoekstra, Elira Kuka, 25 April 2016

Bad behaviour by peers is well-known to worsen educational outcomes in the short run. This column investigates the long-run effects of peers from families marked by domestic violence. Individual-level US data linking middle and high school test scores, college enrolment, and earnings at ages 24–28 show that students exposed to more disruptive peers experience worse adult outcomes. Policies that mitigate exposure to disruptive peers could pay high dividends.

Luca Fumarco, Giambattista Rossi, 23 April 2016

A vast cross-discipline literature provides evidence that — in both education and sports — the youngest children in their age group are usually at a disadvantage because of within-group-age maturity differences, known as the ‘relative age effect’. This column asks whether this effect could last into adulthood. Looking at Italian professional footballers’ wages, the evidence suggests that the relative age effect is inescapable.

Stefano Scarpetta, Sandrine Cazes, Andrea Garnero, 20 April 2016

Job quality plays a significant role in individuals’ well-being as well as promoting labour force participation, productivity, and economic performance. But it can be an elusive concept if not grounded in hard data. This column presents a new OECD framework to measure and assess the quality of jobs based on three measurable dimensions – earnings quality, labour market security, and quality of the working environment. The data reveal a great deal of heterogeneity in job quality across OECD countries and also across socioeconomic groups. Furthermore, the relationship between the quantity and quality of jobs is more complex in the short term, especially in the aftermath of the Global Crisis.

Markus Poschke, Barış Kaymak, 17 April 2016

Recent decades have seen a remarkable increase in the concentration of wealth in the hands of the wealthiest in the US. This column examines which factors may have driven this increase. The evidence points to higher wage inequality, often attributed to new developments in the technology of production, as the main driving force, followed by tax cuts for top earners and more generous public transfers as secondary factors.

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