The rise of automation and, more generally, IT-driven structural change in the labour market have made policymakers and researchers worry about ‘disappearing jobs’ and a dire future for employment. This column examines data from several countries to get a long-term view of labour supply. To the extent that productivity improvements continue, hours worked will indeed likely fall. But this will not necessarily be a bad thing and jobs will not necessarily disappear.
Timo Boppart, Per Krusell, 21 May 2016
David Cesarini, Erik Lindqvist, Matthew Notowidigdo, Robert Östling, 24 January 2016
Cash welfare programmes are widely thought to discourage work because unearned income reduces the labour supply even when it does not alter work incentives. This column discusses recent evidence from Swedish lottery players suggesting that this ‘income effect’ is economically significant, but modest in magnitude and surprisingly similar across various demographic groups. Introducing ‘unconditional basic income’ programmes in developed countries may reduce the labour supply across a broad cross-section of the population.
Matteo Picchio, Sigrid Suetens, Jan van Ours, 06 December 2015
The impact of wage and income shocks on labour supply is difficult to measure. Some studies therefore use lottery prizes as an exogenous shock on income. This column looks at the effect of the size of the prize won on employment status and salaried earnings, using data from Dutch lotteries. The findings show that lottery prizes lead to a reduction of working hours but not to a decrease in the employment rate.
Charles Manski, 23 August 2012
Does a high income tax rate cause people to work less, work more, or continue unaffected? This is a question that divides politicians and the public. And, according to this column, it is also a question that economists do not know the answer to. It is time to say so.
Dale Jorgenson, 08 August 2008
Dale Jorgenson of Harvard University talks to Romesh Vaitilingam about his projections for the growth of the US economy over the next 10 to 25 years, focusing particularly on the impact of information technology and labour supply. The interview was recorded at the American Economic Association meetings in New Orleans in January 2008.
Alberto Alesina, Andrea Ichino, Loukas Karabarbounis, 09 January 2008
Women have a more elastic labor supply than men and participate less in the market because of intra-family bargaining. Their labor income should be taxed less to achieve optimal taxation and to change the allocation of family chores in a way that allows females to work more in the market if they want. This tax approach may be fiscally cheaper, less distortionary and would directly address the source of labor market gender differences: intra-family bargaining.