Jobs lost and found
Do Recessions Accelerate Routine-Biased Technological Change? Evidence from Vacancy Postings
Brad Hershbein & Lisa Kahn
NBER Working Paper, October 2016
Abstract:
We show that skill requirements in job vacancy postings differentially increased in MSAs that were hit hard by the Great Recession, relative to less hard-hit areas, and that these differences across MSAs persist through the end of 2015. The increases are prevalent within occupations, more pronounced in the non-traded sector, driven by both within-firm upskilling and substitution from older to newer firms, accompanied by increases in capital stock, and are evident in realized employment. We argue that this evidence reflects the restructuring of production toward more-skilled workers and routine-labor saving technologies, and that the Great Recession accelerated this process.
---------------------
A New Approach to the Study of Jobless Recoveries
Fabio Méndez, Jared Reber & Jeremy Schwartz
Southern Economic Journal, October 2016, Pages 573–589
Abstract:
This article is concerned with the measurement of jobless recoveries and the elements that may explain their emergence. We first introduce a measure that maps the various elements that define a jobless recovery into a single number that we label the jobless recovery depth. We then construct a database of 389 state-level observations and study the cross-sectional variations that emerge. We find that jobless recoveries in the United States are not nation-wide phenomena, but a local event confined within a cluster of states that expands slowly between 1975 and 2015. We find the state-level evidence to be consistent with theories that link jobless recoveries to unusually long expansionary periods, less dynamic labor markets, and the advent of the great moderation. The evidence is not consistent with theories that link them to decreases in union power, increases in income inequality, or increases in health care costs.
---------------------
Disappearing Routine Jobs: Who, How, and Why?
Guido Matias Cortes, Nir Jaimovich & Henry Siu
NBER Working Paper, December 2016
Abstract:
We study the deterioration of employment in middle-wage, routine occupations in the United States in the last 35 years. The decline is primarily driven by changes in the propensity to work in routine jobs for individuals from a small set of demographic groups. These same groups account for a substantial fraction of both the increase in non-employment and employment in low-wage, non-routine manual occupations observed during the same time period. We analyze a general neoclassical model of the labor market featuring endogenous participation and occupation choice. We show that in response to an increase in automation technology, the model embodies an important tradeoff between reallocating employment across occupations and reallocation of workers towards non-employment. Quantitatively, we find that advances in automation technology on their own account for a relatively small portion of the joint decline in routine employment and associated rise in non-routine manual employment and non-employment.
---------------------
U.S. Productivity Growth Flowing Downstream
Michael Sposi & Kelvinder Virdi
Federal Reserve Working Paper, October 2016
Abstract:
Measurements of U.S. productivity growth have declined, particularly in the high-tech sector. This may reflect increased U.S. specialization in upstream activities in the global supply chain. Those activities tend to experience slower productivity growth.
---------------------
Raising the standard: Minimum wages and firm productivity
Rebecca Riley & Chiara Rosazza Bondibene
Labour Economics, forthcoming
Abstract:
This paper exploits the introduction of the National Minimum Wage (NMW) in Britain and subsequent increases in the NMW to identify the effects of minimum wages on productivity. We find that the NMW increased average labour costs for companies that tend to employ low paid workers, both upon the introduction of the NMW and more recently following the Great Recession when many workers experienced pay freezes or wage cuts, but the NMW continued to rise. We find evidence to suggest that companies responded to these increases in labour costs by raising labour productivity. These labour productivity changes did not appear to come about via a reduction in firms' workforce or via capital-labour substitution. Rather they were associated with increases in total factor productivity, as theories of organisational change, training and efficiency wages would suggest.
---------------------
An Analysis of the Labor Market for Uber's Driver-Partners in the United States
Jonathan Hall & Alan Krueger
NBER Working Paper, November 2016
Abstract:
Uber, the ride-sharing company launched in 2010, has grown at an exponential rate. This paper provides the first comprehensive analysis of the labor market for Uber’s driver-partners, based on both survey and administrative data. Drivers who partner with Uber appear to be attracted to the platform largely because of the flexibility it offers, the level of compensation, and the fact that earnings per hour do not vary much with the number of hours worked. Uber’s driver-partners are more similar in terms of their age and education to the general workforce than to taxi drivers and chauffeurs. Most of Uber’s driver-partners had full- or part-time employment prior to joining Uber, and many continued in those positions after starting to drive with the Uber platform, which makes the flexibility to set their own hours all the more valuable. Uber’s driver-partners also often cited the desire to smooth fluctuations in their income as a reason for partnering with Uber.
---------------------
Forming Wage Expectations through Learning: Evidence from College Major Choices
Xiaoyu Xia
Journal of Economic Behavior & Organization, December 2016, Pages 176–196
Abstract:
How do college students choose their majors, and what role does the family play in their choices? I use data from two major longitudinal surveys to develop and estimate a model in which students learn about earning opportunities associated with different majors through the wages of older siblings and parents. The probability of a student choosing a major that corresponds to the occupation of a family member is strongly correlated with the family member's wage at the time the major choice is made. This correlation remains strong after controlling for family-correlated abilities or preferences, and additional empirical evidence suggests that the observed correlation arises through a family-based wage information channel.
---------------------
Isabel Cairó & Tomaz Cajner
Economic Journal, forthcoming
Abstract:
Why do more-educated workers experience lower unemployment rates and lower employment volatility? Empirically, these workers have similar job finding rates but much lower and less volatile separation rates than their less-educated peers. We argue that on-the-job training, being complementary to formal education, is the reason for this pattern. Using a search and matching model with endogenous separations, we show that investments in match-specific human capital reduce incentives to separate but leave the job finding rate essentially unaffected. The model generates unemployment dynamics quantitatively consistent with the data. Finally, we provide novel empirical evidence supporting the mechanism studied in the paper.
---------------------
Agglomeration, Urban Wage Premiums, and College Majors
Shimeng Liu
Journal of Regional Science, forthcoming
Abstract:
The aim of this paper is to examine the manner and extent to which worker skill type affects agglomeration economies that contribute to productivity in cities. I use college majors to proxy for skill types among workers with a bachelor's degree. Workers with college training in information-oriented and technical fields (e.g., STEM areas such as engineering, physical sciences, and economics) are associated with economically important within-field agglomeration economies and also generate sizeable spillovers for workers in other fields. In contrast, within-field and across-field spillovers for workers with college training in the arts and humanities are much smaller and often nonexistent. While previous research suggests proximity to college-educated workers enhances productivity, these findings suggest that not all college-educated workers are alike. Instead, positive spillover effects appear to derive mostly from proximity to workers with college training in information-oriented and technical fields.
---------------------
Gender, race & the veteran wage gap
Brandon Vick & Gabrielle Fontanella
Social Science Research, January 2017, Pages 11–28
Abstract:
This paper analyzes earnings outcomes of Iraq/Afghanistan-era veterans. We utilize the 2009–2013 American Community Survey and a worker-matching methodology to decompose wage differences between veteran and non-veteran workers. Among fully-employed, 25-40 year-olds, veteran workers make 3% less than non-veteran workers. While male veterans make 9% less than non-veterans, female and black veterans experience a wage premium (2% and 7% respectively). Decomposition of the earnings gap identifies some of its sources. Relatively higher rates of disability and lower rates of educational attainment serve to increase the overall wage penalty against veterans. However, veterans work less in low-paying occupations than non-veterans, serving to reduce the wage penalty. Finally, among male and white subgroups, non-veterans earn more in the top quintile due largely to having higher educational attainment and greater representation in higher-paying occupations, such as management.
---------------------
The Impact of Consumer Credit Access on Employment, Earnings and Entrepreneurship
Kyle Herkenhoff, Gordon Phillips & Ethan Cohen-Cole
NBER Working Paper, November 2016
Abstract:
How does consumer credit access impact job flows, earnings, and entrepreneurship? To answer this question, we build a new administrative dataset which links individual employment and entrepreneur tax records to TransUnion credit reports, and we exploit the discrete increase in consumer credit access following bankruptcy flag removal. After flag removal, individuals flow into self-employment. New entrants earn more, borrow significantly using unsecured and secured consumer credit, and are more likely to become an employer business. In addition, after flag removal, non-employed and self-employed individuals are more likely to find unemployment-insured "formal" jobs at larger firms that pay greater wages. These estimates imply that firms believe previously bankrupt workers are 3.8% less productive than non-bankrupt workers, on average. These results suggest that consumer credit access matters for each stage of entrepreneurship and that credit-checks may be limiting formal sector employment opportunities.
---------------------
Locked in by Leverage: Job Search during the Housing Crisis
Jennifer Brown & David Matsa
NBER Working Paper, December 2016
Abstract:
This paper examines how housing market distress affects job search. Using data from a leading online job search platform during the Great Recession, we find that job seekers in areas with depressed housing markets apply for fewer jobs that require relocation. With their search constrained geographically, job seekers broaden their search to lower level positions nearby. These effects are stronger for job seekers with recourse mortgages, which we confirm using spatial regression discontinuity analysis. Our findings suggest that housing market distress distorts labor market outcomes by impeding household mobility.
---------------------
The Immediate Hardship of Unemployment: Evidence from the US Unemployment Insurance System
Mark Stater & Jeffrey Wenger
Eastern Economic Journal, January 2017, Pages 17–36
Abstract:
We examine how the reservation wage varies with the waiting time to apply for unemployment benefits. We find that the waiting time has a negative effect on the reservation wage, suggesting that unemployment generates significant and immediate harm for the unemployed. Our results are unique in that they are based on short-term, incomplete spells of unemployment that are precisely measured in weeks. We address the endogeneity of the waiting time using instrumental variables associated with errors in the unemployment insurance (UI) claim, and note that our estimates are likely a lower bound for the welfare declines experienced by the unemployed.
---------------------
Swept Out: Measuring Rurality and Migration Intentions on the Upper Great Plains
Jeffrey Jacquet, Eric Guthrie & Hayven Jackson
Rural Sociology, forthcoming
Abstract:
Rural America has long been conceptualized as a place of out-migration, a process that is the subject of many popular sociological works and remains a dominating narrative that describes rural life in the United States today. Population trends demonstrate this migration pattern for nearly the past century; however, emerging data paint a complex picture of migration behavior and intentions in rural areas. In this article, we utilize several measures of rurality to analyze the results of a 2012 mail survey (n = 2487) that describe the migration intentions of both rural and urban South Dakotans. Our findings show that urban residents are more likely to have intentions to migrate than rural residents, and that drivers of migration intentions appear similar in both urban and rural contexts. The survey also sheds light on the influence of community attachment, community satisfaction, quality of life, and other community strengths and weaknesses that rural and urban residents perceive in their communities. Supporting recent research on rural migration intentions, these results do not suggest high rates of out-migration in rural areas. We discuss rural America's recent identity as a place of out-migration, share our survey results, and discuss implications for future rural migration research.