Labor Markets
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Michael Hout -
Gregory Acs -
David Card -
Jesse Rothstein
Leaders: Gregory Acs, David Card, Michael Hout, Jesse Rothstein
The labor market was of course hit very heavily by the Great Recession, as evidenced by (a) the slow recovery of the unemployment rate, (b) and the even slower recovery of the long-term unemployment rate and the prime-age employment ratio (defined as the ratio of employed 25-54 year-olds to the population of that same age). This “jobs problem,” which is especially prominent among low-skill workers, has led to a sharp rise in the number of poor households without any working adults. It also underlies, in part, the sharp increase in the number of disability insurance claims and awards, which in turn has further reduced the supply of labor among low-skilled individuals.
If the first type of “jobs problem” is that there still are not enough of them, the second is that the jobs that are available do not always provide the requisite hours, wages, or security that are needed for a sure pathway out of poverty. As a result, low-skill individuals are not just working less but, even when they are working, there is no guarantee that their jobs will lift them and their families out of poverty. The Labor Markets RG is tasked with conducting research on these and related problems and exploiting administrative and other data to assess possible policy responses to them. We list below a few examples of the work being carried out in this group.
Long-run effects of work incentives: As nonworking poverty increases, the U.S. might well want to turn to new types of work incentive programs. Have these programs worked elsewhere?
Minimum wages and poverty: Throughout the west coast, there are a host of minimum wage “experiments” underway, experiments that have the potential to reset the low-wage labor market in quite fundamental ways. How are these experiments playing out?
Featured Examples
Labor Markets - CPI Research
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| COVID-19 Is Also a Reallocation Shock | Jose Maria Barrero, Nicholas Bloom, Steven J. Davis |
COVID-19 Is Also a Reallocation ShockAuthor: Jose Maria Barrero, Nicholas Bloom, Steven J. DavisPublisher: National Bureau of Economic Research Date: 05/2020 Drawing on firm-level expectations at a one-year forecast horizon in the Survey of Business Uncertainty (SBU), we construct novel, forward-looking reallocation measures for jobs and sales. These measures rise sharply after February 2020, reaching rates in April that are 2.4 (3.9) times the pre-COVID average for jobs (sales). We also draw on special questions in the April SBU to quantify the near-term impact of the COVID-19 shock on business staffing. We find 3 new hires for every 10 layoffs caused by the shock and estimate that 42 percent of recent layoffs will result in permanent job loss. Our survey evidence aligns well with anecdotal evidence of large pandemic-induced demand increases at some firms, with contemporaneous evidence on gross business formation, and with a sharp pandemic-induced rise in equity return dispersion across firms. After developing the evidence, we consider implications of our evidence for the economic outlook and for policy responses to the pandemic. Unemployment benefit levels that exceed worker earnings, policies that subsidize employee retention, occupational licensing restrictions, and regulatory barriers to business formation will impede reallocation responses to the COVID-19 shock. |
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| Are Referees and Editors in Economics Gender Neutral? | David Card, Stefano DellaVigna, Patricia Funk, Nagore Iriberri |
Are Referees and Editors in Economics Gender Neutral?Author: David Card, Stefano DellaVigna, Patricia Funk, Nagore IriberriPublisher: The Quarterly Journal of Economics Date: 02/2020 We study the role of gender in the evaluation of economic research using submissions to four leading journals. We find that referee gender has no effect on the relative assessment of female- versus male-authored papers, suggesting that any differential biases of male referees are negligible. To determine whether referees as a whole impose different standards for female authors, we compare citations for female- and male-authored papers, holding constant referee evaluations and other characteristics. We find that female-authored papers receive about 25% more citations than observably similar male-authored papers. Editors largely follow the referees, resulting in a 1.7 percentage point lower probability of a revise and resubmit verdict for papers with female authors relative to a citation-maximizing benchmark. In their desk rejection decisions, editors treat female authors more favorably, though they still impose a higher bar than would be implied by citation maximization. We find no differences in the informativeness of female versus male referees or in the weight that editors place on the recommendations of female versus male referees. We also find no differences in editorial delays for female- versus male-authored papers. |
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| Beveridgean Unemployment Gap | Pascal Michaillat, Emmanuel Saez |
Beveridgean Unemployment GapAuthor: Pascal Michaillat, Emmanuel SaezPublisher: National Bureau of Economic Research Date: 12/2019 This paper measures the unemployment gap (the difference between actual and efficient unemployment rates) using the Beveridge curve (the negative relationship between unemployment and job vacancies). We express the unemployment gap as a function of current unemployment and vacancy rates, and three sufficient statistics: elasticity of the Beveridge curve, recruiting cost, and nonpecuniary value of unemployment. In the United States, we find that the efficient unemployment rate started around 3% in the 1950s, steadily climbed to almost 6% in the 1980s, fell just below 4% in the early 1990s, and remained at that level until 2019. These variations are caused by changes in the level and elasticity of the Beveridge curve. Hence, the US unemployment gap is almost always positive and highly countercyclical—indicating that the labor market tends to be inefficiently slack, especially in slumps. |
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| Overwork, Specialization, and Wealth | Brian Aronson, Lisa A. Keister |
Overwork, Specialization, and WealthAuthor: Brian Aronson, Lisa A. KeisterPublisher: Journal of Marriage and Family Date: 07/2019 Objective: This study examines how overwork and traditional household specialization—defined as households with one dedicated female homemaker and one dedicated male breadwinner—are associated with wealth across socioeconomic strata. Background: Although overwork and household specialization are clearly associated with income, less is known about how these behaviors affect household wealth. Household wealth is only moderately correlated with household income and is influenced by many factors that do not affect income, suggesting that overwork and specialization have different associations with wealth than with income. Moreover, because wealth is so unevenly distributed, overwork and specialization likely have different associations with wealth across socioeconomic strata. Method: With data from the Survey of Consumer Finances, a nationally representative survey of households that includes an oversample of high‐wealth households, the authors estimate unconditional quantile regression models to investigate how overwork and household specialization are associated with household wealth across socioeconomic strata and over time. Results: Overwork has the greatest absolute benefits at the top of the wealth distribution but the greatest relative benefits in lower portions of the wealth distribution. Specialization yields distinct advantages for high‐wealth households that have grown over time, whereas specialization comes with trade‐offs for low‐wealth households that outweigh its benefits. Conclusion: The financial trade‐offs associated with overwork and specialization vary considerably across the wealth distribution. Contrary to findings in income‐based research, overwork premiums appear most crucial to the financial well‐being of underprivileged households, whereas specialization premiums are evident only for the economic elite.
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| Babies, Work, or Both? Highly Educated Women's Employment and Fertility in East Asia | Mary C. Brinton, Eunsil Oh |
Babies, Work, or Both? Highly Educated Women's Employment and Fertility in East AsiaAuthor: Mary C. Brinton, Eunsil OhPublisher: American Journal of Sociology Date: 07/2019 Highly educated women’s likelihood of combining childrearing with continuous employment over the life course has increased among recent U.S. cohorts. This trend is less evident in many postindustrial countries characterized by very low fertility. Among such countries, Japan and Korea have exceptionally low proportions of women who remain employed after having children, despite aggressive government policies designed to encourage this. We draw on over 160 in-depth interviews with highly educated Japanese and Korean men and women of childbearing age to uncover the central incompatibilities between married women’s employment and childrearing. Individuals’ narratives reveal how labor market structure and workplace norms contribute to a highly gendered household division of labor, leading many married women to either forsake employment or to consider having only one child. |
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labor markets - CPI Affiliates
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David Card |
Labor Markets Research Group Leader, Class of 1950 Professor of Economics; Director of the Labor Studies Program at the National Bureau of Economic Research; Director, Center for Labor Economics (CLE); Director, Econometrics Laboratory (EML) |
University of California, Berkeley |
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Gregory Acs |
Labor Markets Research Group Leader, Vice President of Income and Benefits Policy Center |
The Urban Institute |
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Jesse Rothstein |
Labor Markets Research Group Leader; Professor of Public Policy and Economics; Director of Institute for Research on Labor and Employment (IRLE); Research Associate, National Bureau of Economic Research; Co-Director, California Policy Lab |
University of California, Berkeley |
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Michael Hout |
Labor Markets Research Group Leader, Professor of Sociology |
New York University |
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Mark Granovetter |
Joan Butler Ford Professor of Sociology; Joan Butler Ford Professor in the School of Humanities and Sciences |
Stanford University |
Pages
Labor Markets - Other Research
| Title | Author | Media | |
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| The Opioid Epidemic Was Not Caused by Economic Distress But by Factors that Could be More Rapidly Addressed | Janet Currie, Hannes Schwandt |
The Opioid Epidemic Was Not Caused by Economic Distress But by Factors that Could be More Rapidly AddressedAuthor: Janet Currie, Hannes SchwandtPublisher: National Bureau of Economic Research Date: 08/2020 Without the opioid epidemic, American life expectancy would not have declined prior to 2020. In turn, the epidemic was sparked by the development and marketing of a new generation of prescription opioids and provider behavior is still helping to drive it. There is little relationship between the opioid crisis and contemporaneous measures of labor market opportunity. Cohorts and areas that experienced poor labor market conditions do show lagged increases in opioid mortality, but the effect is modest relative to the scale of the epidemic. Instead, we argue that there are specific policies and features of the U.S. health care market that led to the current crisis. It will not be possible to quickly reverse depressed economic conditions, but it is possible to implement policies that would reduce the number of new opioid addicts and save the lives of many of those who are already addicted. |
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| Do Unemployment Insurance Benefits Improve Match Quality? Evidence from Recent U.S. Recessions | Ammar Farooq, Adriana D. Kugler, Umberto Muratori |
Do Unemployment Insurance Benefits Improve Match Quality? Evidence from Recent U.S. RecessionsAuthor: Ammar Farooq, Adriana D. Kugler, Umberto MuratoriPublisher: National Bureau of Economic Research Date: 07/2020 We present new evidence on the impact of more generous unemployment insurance (UI) on workers’ ability to find jobs better suited to their skills. Using Longitudinal Employer-Household Dynamics data, we find the UI extensions introduced in the U.S. improved the quality of worker-job matches. Using Current Population Survey data, we also find that longer UI benefit durations decrease the mismatch between workers’ educational attainments and the educational requirements of jobs. We find bigger effects of UI on match quality for those more likely to be liquidity constrained—women, non-whites and less-educated workers—,suggesting UI extensions improve the functioning of the labor market. |
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| The Impact of COVID-19 on Gender Equality | Titan M. Alon, Matthias Doepke, Jane Olmstead-Rumsey, Michèle Tertilt |
The Impact of COVID-19 on Gender EqualityAuthor: Titan M. Alon, Matthias Doepke, Jane Olmstead-Rumsey, Michèle TertiltPublisher: National Bureau of Economic Research Date: 04/2020 The economic downturn caused by the current COVID-19 outbreak has substantial implications for gender equality, both during the downturn and the subsequent recovery. Compared to “regular” recessions, which affect men’s employment more severely than women’s employment, the employment drop related to social distancing measures has a large impact on sectors with high female employment shares. In addition, closures of schools and daycare centers have massively increased child care needs, which has a particularly large impact on working mothers. The effects of the crisis on working mothers are likely to be persistent, due to high returns to experience in the labor market. Beyond the immediate crisis, there are opposing forces which may ultimately promote gender equality in the labor market. First, businesses are rapidly adopting flexible work arrangements, which are likely to persist. Second, there are also many fathers who now have to take primary responsibility for child care, which may erode social norms that currently lead to a lopsided distribution of the division of labor in house work and child care. |
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| Culture and Gender Allocation of Tasks: Source Country Characteristics and the Division of Non-market Work among US Immigrants | Francine D. Blau, Lawrence Kahn, Matthew L. Comey, Amanda R. Eng, Pamela A. Meyerhofer, Alexander Willén |
Culture and Gender Allocation of Tasks: Source Country Characteristics and the Division of Non-market Work among US ImmigrantsAuthor: Francine D. Blau, Lawrence Kahn, Matthew L. Comey, Amanda R. Eng, Pamela A. Meyerhofer, Alexander WillénPublisher: National Bureau of Economic Research Date: 04/2020 There is a well-known gender difference in time allocation within the household, which has important implications for gender differences in labor market outcomes. We ask how malleable this gender difference in time allocation is to culture. In particular, we ask if US immigrants allocate tasks differently depending upon the characteristics of the source countries from which they emigrated. Using data from the 2003-2017 waves of the American Time Use Survey (ATUS), we find that first-generation immigrants, both women and men, from source countries with more gender equality (as measured by the World Economic Forum’s Global Gender Gap Index) allocate tasks more equally, while those from less gender equal source countries allocate tasks more traditionally. These results are robust to controls for immigration cohort, years since migration, and other own and spouse characteristics. There is also some indication of an effect of parent source country gender equality for second-generation immigrants, particularly for second-generation men with children. Our findings suggest that broader cultural factors do influence the gender division of labor in the household. |
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| Unpacking Skill Bias: Automation and New Tasks | Daron Acemoglu, Pascual Restrepo |
Unpacking Skill Bias: Automation and New TasksAuthor: Daron Acemoglu, Pascual RestrepoPublisher: National Bureau of Economic Research Date: 01/2020 The standard approach to modeling inequality, building on Tinbergen's seminal work, assumes factor-augmenting technologies and technological change biased in favor of skilled workers. Though this approach has been successful in conceptualizing and documenting the race between technology and education, it is restrictive in a number of crucial respects. First, it predicts that technological improvements should increase the real wages of all workers. Second, it requires sizable productivity growth to account for realistic changes in relative wages. Third, it is silent on changes in job and task composition. We extend this framework by modeling the allocation of tasks to factors and allowing richer forms of technological changes in particular, automation that displaces workers from tasks they used to perform, and the creation of new tasks that reinstate workers into the production process. We show that factor prices depend on the set of tasks that factors perform, and that automation: (i) powerfully impacts inequality; (ii) can reduce real wages; and (iii) can generate realistic changes in inequality with small changes in productivity. New tasks, on the other hand, can increase or reduce inequality depending on whether it is skilled or unskilled workers that have a comparative advantage in these new activities. Using industry-level estimates of displacement driven by automation and reinstatement due to new tasks, we show that displacement is associated with significant increases in industry demand for skills both before 1987 and after 1987, while reinstatement reduced the demand for skills before 1987, but generated higher demand for skills after 1987. The combined effects of displacement and reinstatement after 1987 explain a significant part of the shift towards greater demand for skills in the US economy. |
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Labor Markets - Multimedia
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