Productive Debate
Attitudes toward automation and the demand for policies addressing job loss: The effects of information about trade-offs
Beatrice Magistro et al.
Political Science Research and Methods, forthcoming
Abstract:
Does providing information about the costs and benefits of automation affect the perceived fairness of a firm's decision to automate or support for government policies addressing automation's labor market consequences? To answer these questions, we use data from vignette and conjoint experiments across four advanced economies (Australia, Canada, the UK, and the US). Our results show that despite people's relatively fixed policy preferences, their evaluation of the fairness of automation -- and therefore potentially the issue's political salience -- is sensitive to information about its trade-offs, especially information about price changes attributable to automated labor. This suggests that the political impact of automation may depend on how it is framed by the media and political actors.
Applying AI to Rebuild Middle Class Jobs
David Autor
NBER Working Paper, February 2024
Abstract:
While the utopian vision of the current Information Age was that computerization would flatten economic hierarchies by democratizing information, the opposite has occurred. Information, it turns out, is merely an input into a more consequential economic function, decision-making, which is the province of elite experts. The unique opportunity that AI offers to the labor market is to extend the relevance, reach, and value of human expertise. Because of AI's capacity to weave information and rules with acquired experience to support decision-making, it can be applied to enable a larger set of workers possessing complementary knowledge to perform some of the higher-stakes decision-making tasks that are currently arrogated to elite experts, e.g., medical care to doctors, document production to lawyers, software coding to computer engineers, and undergraduate education to professors. My thesis is not a forecast but an argument about what is possible: AI, if used well, can assist with restoring the middle-skill, middle-class heart of the US labor market that has been hollowed out by automation and globalization.
The Determinants of Declining Internal Migration
William Olney & Owen Thompson
NBER Working Paper, February 2024
Abstract:
Internal migration in the United States has declined substantially over the past several decades, which has important implications for individual welfare, macroeconomic adjustments, and other key outcomes. This paper studies the determinants of internal migration and how they have changed over time. We use administrative data from the IRS covering the universe of bilateral moves between every Commuting Zone (CZ) in the country over a 23 year period. This data is linked to information on local wage levels and home prices, and we estimate bilateral migration determinants in rich regression specifications that contain CZ-pair fixed effects. Consistent with theoretical predictions, results show that migration is decreasing with origin wages and destination home prices, and is increasing with destination wages and origin home prices. We then examine the contributions of earnings and home prices to the noted overall decline in internal migration. These analyses show that wages on their own would have led to an increase in migration rates, primarily because migrants are increasingly responsive to high earnings levels in potential destination CZs. However, these wage effects have been more than offset by housing related factors, which have increasingly impeded internal mobility. In particular, migration has become much less responsive to housing prices in the origin CZ, such that many households that would have left in response to high home prices several decades ago now choose to stay.
Certifiably employable? Occupational regulation and unemployment duration
Ilya Kukaev & Edward Timmons
Southern Economic Journal, forthcoming
Abstract:
Occupational regulation is a labor market institution that has received a growing amount of attention. However, there is a gap in the literature regarding the relationship between occupational credentials and unemployment duration in the United States. Thus, we propose a random search model to explain differences in unemployment duration resulting from heterogeneous effects from licenses and certification. Our model predicts that an occupational credential with a stronger signaling/human capital effect results in a shorter individual unemployment duration. To estimate the relationship between occupational credentials and spells of unemployment, we perform a survival analysis using panel data from the Survey of Income and Program Participation (SIPP) for the years 2013-2019. We find that both licensing and certification are associated with reductions in unemployment spells for Black males that are similar in magnitude. Our results provide some suggestive guidance to policymakers since certification is less costly and not mandatory like occupational licensing.
Occupational Licensing and Labor Market Fluidity
Morris Kleiner & Ming Xu
Journal of Labor Economics, forthcoming
Abstract:
We show that occupational licensing has significant negative effects on labor market fluidity, defined as cross-occupation mobility, and positive effects on wage growth. We find that occupational licensing represents a barrier to entry for both non-employed workers and employed ones. The effect is more prominent for employed workers than those entering from non-employment. We also find that average wage growth is higher for licensed workers than non-licensed workers. We find significant heterogeneity in the licensing effect across different occupation groups. These results hold across various data sources, time spans, and indicators of being licensed.
Financing the Gig Economy
Greg Buchak
Journal of Finance, February 2024, Pages 219-256
Abstract:
Unlike traditional firm production, gig economy workers provide their own physical capital. As a consequence, the low-income households for whom gig economy opportunities are most valuable often borrow to participate. In the context of ride share, difference-in-difference analysis reveals increased vehicle purchases, borrowing, utilization, and employment around entry, but financially constrained individuals cannot participate. To assess the equilibrium importance of financing, I build and estimate a structural model of the gig economy. Access to finance proves critical for the gig economy's growth: without finance, equilibrium quantities would be 40% lower and prices 90% higher, and only higher-income households could participate as drivers.
Destabilizing search technology
Tristan Potter
Journal of Monetary Economics, forthcoming
Abstract:
Modern job search technologies enable job seekers to monitor the arrival of newly posted vacancies. This paper conceptualizes search as a monitoring decision and shows that monitoring technologies give rise to a novel source of strategic complementarities in search and can thus lead to potentially destabilizing multiplicity of equilibria. The model provides a theory of belief-driven fluctuations in labor supply that can permanently shift the path of the economy, and offers an explanation for persistently weak wage growth despite low unemployment during the recovery from the Great Recession.
Happiness Is In The Air If It Grows: Growing Places Are Happier Than Shrinking Ones
Adam Okulicz-Kozaryn, Brian Everett & Ebshoy Mikhaeil
Urban Affairs Review, forthcoming
Abstract:
We study the effect of population change on subjective wellbeing (SWB) using over 100,000 observations from behavioral risk factor surveillance system representative of 392 US counties. SWB correlates higher with population change (0.4) than with county-level crime (-0.25) and income (0.2). The relative ecological strong effect size holds in regressions controlling for person-level and county-level predictors of SWB -- population change is one of the strongest ecological predictors of SWB. While ecological variables have a smaller effect on individual SWB than person-level variables, their total combined population effect is large. This is only the second study on the effect of population change of a city/county on its residents' happiness. Such a gap in the literature is remarkable -- we call for more research in this area and present directions for future research. As in any nonexperimental study, results are not causal. And results may not generalize beyond the US population studied.