Labour markets

Nicholas Bloom, Paul Mizen, Shivani Taneja, 15 June 2021

The COVID-19 pandemic prompted a collective shift to working from home. This column argues that though the shift was surprisingly easy, returning to the office will be hard. New evidence from a survey of 2,500 employees in the UK shows a preference in favour of home working 2-3 days a week, with lingering concerns of overcrowded transport and offices. But allowing workers to choose when to work from home will leave empty offices Monday and Friday, and many tasks such as large group meetings are more effective in person than online. Hybrid working will be the solution.

Asger Lau Andersen, Amalie Jensen, Niels Johannesen, Claus Thustrup Kreiner, Søren Leth-Petersen, Adam Sheridan, 08 June 2021

To what extent do households self-insure to avoid cutting back on consumption following income losses, and which self-insurance channels are most important? This column reviews evidence on household responses to job loss using comprehensive high-frequency data from multiple sources in Denmark. Over the two years following job loss, 30% of the decline in disposable income is accounted for by a drop in household spending, leaving a gap of 70% that reflects the effects of self-insurance. This gap is filled by lower accumulation of liquid assets (~50%), increases in private transfers and other inflows (~10%), higher spousal labour supply (~5%), and lower net debt repayments (~5%). Mortgage borrowing and refinancing play only a small role.

Niklas Engbom, Gustavo Gonzaga, Christian Moser, Roberta Olivieri, 07 June 2021

Relatively little is known about the patterns of inequality in developing countries, despite their importance for designing social and economic policies. This column analyses administrative and household data to describe the trends in earnings inequality and dynamics in Brazil since late 1980s. The findings suggest that the observed fall in earnings inequality and volatility may have been driven by the process of formalisation and other changes within the informal sector. 

Benjamin Artz, David Blanchflower, Alex Bryson, 28 May 2021

The US labour market is producing too few jobs and those it is producing are often low paid and of poor quality. This is exacerbated by the fact that workers do not have the means to fix their problems at work because of a precipitous decline in union membership over the last half century, particularly in the private sector. Using panel data from the National Longitudinal Survey of Youth 1979 and 1997 cohorts and from the Bureau of Labor Statistics, this column shows that union density is now on the rise and that union workers are now more satisfied than non-union workers. Unions’ ability to help workers avoid underemployment suggests that what seems to have changed is the value attached to the insurance component of the union good.

Pierre Cahuc, Francis Kramarz, Sandra Nevoux, 26 May 2021

The Covid-19 crisis transformed short-time work into the first choice of policymakers across Europe. But this newfound enthusiasm should not obscure the dearth of studies addressing short-time work’s long-term consequences. Using detailed data covering the universe of French firms during the 2008-2009 Great Recession, this column finds that short-time work saved jobs in firms hit by powerful negative revenue shocks, but not in firms hit less severely. Still, short-time work remains a more cost-efficient way than wage subsidies to save jobs. 

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