Hie Joo Ahn, James Hamilton, 14 August 2020

The COVID-19 crisis in the US sent the unemployment rate soaring just as labour force participation crashed. A closer look at the data reveals several inconsistencies across labour force measures and the resulting unemployment estimates. This column highlights large discrepancies between the number of unemployment insurance claims and the count of unemployed in recent months, as well as in the number of people outside the labour force who wanted a job at the time. It argues that the actual unemployment rate was two percentage points higher prior to the pandemic than reported, and this gap has likely widened since the crisis.

Mai Dao, Mitali Das, Zsoka Koczan, 20 July 2020

The declining labour share of income is a global phenomenon that has affected primarily low-skilled and middle-skilled workers. This column examines the effects of trade and technology on the labour shares of different skill groups using a new dataset covering both advanced and developing economies. Both trade and technology have contributed to the declining labour share of middle-skilled workers but have had little effect on low-skilled and high-skilled labour. Policies should be designed with the goal of spreading the benefits of globalisation to the entire labour force.

Francesco Fasani, Tommaso Frattini, Luigi Minale, 09 June 2020

The COVID-19 pandemic has brought to light how much societies rely on migrants for key labour while highlighting the vulnerabilities of already weaker groups. Easing the socio-economic integration of migrants is beneficial to both migrants and host countries; yet, many European countries ban asylum seekers from legal employment upon arrival. This column examines the effect of such employment bans. The bans have large and lasting negative effects on refugees’ future labour-market integration and constitute an economic loss for the host country. Allowing early labour market access is an easily implementable and financially costless policy that effectively accelerates refugee integration.

Shigeru Fujita, Giuseppe Moscarini, Fabien Postel-Vinay, 15 May 2020

Current government policies addressing the COVID-19 crisis protect the hardest-hit workers and jobs. The world economy, however, is already experiencing needs for employment reallocation towards certain essential activities. This column proposes a policy framework to resolve the trade-off between protecting valuable match-specific capital and restoring the desired pace of healthy reallocation. The scheme leverages the distinct age profile of COVID-19 health risks, matching capital, and worker reallocation, by tailoring furlough subsidies, wage subsidies, and unemployment insurance to worker age.

Ewout Frankema, Marlous van Waijenburg, 02 May 2020

Despite a clear positive relationship between education and income at the micro-level, raising educational attainment rates in the developing world have so far failed to lead to substantial and sustained economic growth. This column collects data on skill premia for 50 African and Asian countries for 1870-2010 and presents evidence of a dramatic fall in skill premia from initially very high levels for both Asia and Africa over the course of the 20th century. This convergence of skill premia to Western levels is shown to be negatively related to the relative supply of educated workers in those economies.

Tilman Tacke, Anu Madgavkar, Hans‐Helmut Kotz, 30 April 2020

The first two decades of the 21st century saw job opportunities expand and prices for discretionary consumer goods drop. But these gains came at the cost of social contracts in many countries, where working arrangements became more fragile, wages stagnated, and the labour share of income fell. This column argues that the severe economic consequences of the COVID-19 pandemic have revealed vulnerabilities in the social contract. When the immediate crisis is over, risk may need rebalancing towards an increasing role for institutions and mutualisation.

Brian Bell, Nicholas Bloom, Jack Blundell, Luigi Pistaferri, 06 April 2020

The COVID-19 pandemic is turning into a global recession – probably the biggest drop in economic activity since the Great Depression of the 1930s. This column uses over 3 million earnings observations drawn from more than 400,000 UK workers between 1975 and 2016 to identify groups of workers who are most exposed to aggregate risk. This findings suggest that young male workers at small firms could see earnings losses of 8% to 9%, with older women at large firms seeing little or no change in their earnings.

Enghin Atalay, Phai Phongthiengtham, Sebastian Sotelo, Daniel Tannenbaum, 23 January 2020

Since the late 20th century, middle-wage occupations have shrunk as a share of total employment, while occupations requiring social and analytic tasks have grown. However, little is known about the degree to which individual occupations or job titles have changed over time and the extent to which these changes have been driven by new technologies. Analysing approximately 8.7 million job ads published in newspapers during 1940–2000, this column finds that non-routine analytic and interactive tasks in jobs increased, while manual tasks declined. The majority of changes have occurred within rather than between occupations. New technologies are linked to increased intensity of non-routine analytic job tasks.

Daniel Oesch, Giorgio Piccitto, 04 January 2020

The consensus view in economics is that labour markets are polarising as jobs are created in high-skilled and low-skilled occupations but disappear in mid-skilled ones. This column shows empirical evidence against the polarisation theory in Western Europe. Between 1992 and 2015, job growth in Germany, Spain, Sweden, and the UK was strongest in top-end occupations and, except in the UK, weakest in low-end occupations. 

Dany Bahar, Andreas Hauptmann, Cem Özgüzel, Hillel Rapoport, 22 November 2019

The economic debate on immigration has focused on migration’s short-term labour market and fiscal effects. Less attention has been given to the long-run economic opportunities linked to migration. This column uses the case of refugees returning to the former Yugoslavia from Germany after the end of the Yugoslav wars to explore the role that returning migrants play in shaping the industrial development of their home country. The findings support the idea that migrants are drivers of knowhow and technology transfers between countries.

Rui Costa, Swati Dhingra, Stephen Machin, 01 October 2019

Some commentators argue that globalisation is systematically connected to the real-wage and productivity stagnation seen across the developed world. This column analyses the relationship between international trade and worker outcomes in the immediate aftermath of the Brexit referendum, when the value of the sterling fell massively against other nations’ currencies. It finds that the rise in import costs from the sterling depreciation hurt wages and training. This relative decline in real earnings of workers has reinforced pre-existing real-wage stagnation; UK workers have not fared well since the referendum price rise.

Benjamin Friedrich, Lisa Laun, Costas Meghir, Luigi Pistaferri, 08 August 2019

We know little about how much fluctuations in a firm’s fortunes are passed on in wages. The column uses Swedish data from 1997 to 2008 that identifies individual workers to show that shocks to firm productivity are passed on as variation in worker wages. The variation is high for high-skilled workers. Unskilled workers, perhaps due to union or minimum wage protection, experience smaller fluctuations.

Sascha O. Becker, Ana Fernandes, Doris Weichselbaumer, 05 June 2019

The arrival of a child affects women and men differently in terms of labour market outcomes, but it is difficult to separate out the causal impact of discrimination from other factors. This column uses empirical evidence from Germany, Switzerland, and Austria to show that women are most affected in part-time job applications if they signal a ‘risk’ of having young children soon.

Bas van der Klaauw, Lennart Ziegler, 02 May 2019

Although temporary jobs are often characterised by lower pay, advocates of temporary work argue that taking up such jobs can increase the chances to find regular work in the long run. This column reviews evidence on the effectiveness of a labour market ‘speed date’ programme in the Netherlands, where unemployed job seekers are matched with temporary work agencies. The speed dates are effective in reducing the costs of unemployment insurance but, in the long run, temporary work does not serve as a stepping stone towards regular employment. 

Elizabeth Caucutt, Nezih Guner, Christopher Rauh, 06 April 2019

In 2006, 67% of white women in the US between the ages of 25 and 54 were married, compared with only 34% of black women. This column examines the link between this and the decline in low-skilled jobs and the era of mass incarceration that have disproportionately affected black communities. It finds that differences in incarceration and employment dynamics between black and white men account for half of the black–white marriage gap.

Joan Monras, 03 March 2019

Arguments over the effect of immigration on labour market outcomes focus on a single number: the impact on low-skill wages. The column uses a model of the adjustment process of labour markets in the US to the peso crisis of 1995 to show there is a difference between short-run and long-run effects. The model suggests that state-level policies are unlikely to be effective.

Martín González Rozada, Eduardo Levy Yeyati, 07 September 2018

It is often assumed that the gender wage gap is driven by a demand bias. Using a large new dataset of job applications in Argentina, this column demonstrates that there is also supply bias – women ask for less pay than men for the same exact job. The analysis shows that this ‘ask gap’ is related to the job’s level, the occupation’s degree of female/male dominance, and the applicant’s age, and suggests that women may be acting on internalised stereotypes of the labour market.

Hans Hvide, Paul Oyer, 22 March 2018

The majority of male entrepreneurs in Norway start a firm in an industry closely related to the one in which their father is employed. These entrepreneurs outperform others in the same industry. This column uses longitudinal data to argue that 'dinner table human capital' – that is, industry knowledge learned through their parents – is an important factor. This form of capital also has effect on employee performance in the wider labour market.

Marc Piopiunik, Guido Schwerdt, Lisa Simon, Ludger Woessmann, 23 February 2018

Applicants use CVs to signal cognitive and non-cognitive skills to potential employers, but we know little about how effective those signals are. Based on an experiment in which HR managers chose between CVs, this column argues that signals of cognitive skills, social skills, and maturity matter for successful entry into the labour market. The relevant signals depend on gender and entry stage.

Katja Mann, Lukas Püttmann, 07 December 2017

Researchers disagree over whether automation is creating or destroying jobs. This column introduces a new indicator of automation constructed by applying a machine learning algorithm to classify patents, and uses the result to investigate which US regions and industries are most exposed to automation. This indicator suggests that automation has created more jobs in the US than it has destroyed.

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