Questions tagged [labor-economics]

Labor economics is the branch of microeconomics that studies labor markets and its peculiarities. Labor economists usually study topics such as career choice, returns to schooling, determinants of labor productivity, wages, gender and racial gaps.

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What (and how) to control for in adjusted wage-gap regressions?

Background: The unconditional wage gap between some group and the rest is often estimated using a regression of the form $$ w_{it} = \alpha + g_{it}'\theta +\epsilon_{it} $$ where $w_{it}$ is log of ...
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Calculation of labor, capital and productivity deviation

In Ohanian (2010): The Economic Crisis from a Neoclassical Perspective ( https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.24.4.45 ) I read about labor, capital and productivity deviation. I would like ...
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Diff-in-diff treatment problem

I have a cuestion about a possible aplication of a diff in diff in labor economics. I'm thinking for my master's thesis of comparing the effects of a reduction of the payroll tax in Argentina, which ...
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Labor economics / econometric survey on employee satisfaction surveys

I'm a neophyte to the domain, so I would like to learn from survey-type resources that focus on labor economic / econometric analyses of "employee satisfaction surveys." Quotations for "...
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When wages aren't keeping up with prices, where does the money go?

Is it the case that quantity sold is going down, such that revenues are growing only as fast as wages? Or would that be ruled out since the national income is going up even when adjusted for inflation?...
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Labor=1 in standard growth model

In every standard growth model, we suppose labor=1. I learnd that this is because optimization solution of labor is equal to 1. How to derive that optimazation solution? For example, consider that ...
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Stock-Wise Option Value model

Is there any programming application or algorithm to compute Stock-Wise (1990) Option Value model?
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Measures on the composition of the unemployed by educational attainment in the US

I am trying to find statistics on the profile of unemployed individuals in the U.S. categorized by educational attainment. I have found statistics on the unemployment rate for each education group (e....
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Did online learning affect the returns to education?

I am interested to know if online learning during the pandemic affected the returns to university education. Anecdotally, education quality suffered from online learning, I wonder if this harmed ...
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Competitive equilibrium for an economy with a consumer and a producer

A representative agent’s preference over consumption $(c)$ and labour supply $(l)$ is given by the utility function $$ u(c_D, l_S)= c_D^a .(24-l_S)^{1-a}$$ Production of the consumption good $c$ is ...
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labor supply model

Consider a concave utility function $u(c, l)$ where $c$ represents consumption good and $l$ represents labour supply (working hours, to be precise). While utility increases as level of consumption ...
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Why did Heckman sample selection models fall out of fashion?

Nowadays most people run wage regressions conditional on being employed rather than using Heckman selection models. So what are its drawbacks and why did this approach fall out of fashion?
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Is there a long-run tradeoff between inflation and unemployment?

In most first-year undergrad macroeconomics courses, students are taught about the Phillips curve and how whilst there may exist a tradeoff between inflation and unemployment in the short-run, there ...
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Changes in TFP and wage rates across firms

Assume that you have two firms, firm A and firm B. Firm A faces the production function: $$ Y_{A}=A_{A}F\left(K_{A},L_{A}\right) $$ and firm B faces: $$ Y_{B}=A_{B}F\left(K_{B},L_{B}\right) $$ Factors ...
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High frequency measures of labor productivity

For a research project I am looking for a measure of labor productivity which is available at a higher frequency than conventional indicators (ideally weekly or even daily). As far as I know, most ...
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Combining 990 and 990-EZ Data

I've collected 990 and 990-EZ data from the IRS's Annual Extract of Tax-Exempt Organization Financial Data on American Federation of Musicians locals. The data are split about half and half between ...
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Derive Value Functions in Job Search Model

I am reading a paper using the common job search framework, which has functions $\begin{aligned} &V_{r}\left(e_{r}\right)=w_{r}-e_{r}+\beta\left(q V_{u}+(1-q) V_{r}\left(e_{r}\right)\right) \\ &...
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What value does a worker whose job could be automated provide to society?

Has anyone calculated the global benefit of non-workers on government assistance and found their contribution to be less than the assistance they were provided? I'm looking for scientific studies ...
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Job Market Signaling w/Continuous Ability

I am currently trying to brush up on job signaling models for the upcoming semester, and came across this old exam question. There are no solutions to the question (that I am aware of), and I'm having ...
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Insights from Labor Demand Research

A few years ago during my PhD, I remember listening to a provocative keynote talk at a conference by Francis Kramarz who criticized the progress in labor demand research. He summarizes his opinion in ...
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Comparative statics when price of an input increases

Let us assume a very basic model of profit maximization of firms, wherein their output depends on labour and capital: $$ Y=f\left(K,L\right)=K^{\alpha}L^{1-\alpha} $$ Their aim is to maximize profits, ...
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Salop (1979) model for labor markets

Can the Salop (1979) model also be applied to labor markets or is there any reason why it should not be?
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Is there sound economic reasoning behind the assertion that automation will not lead to mass unemployment?

Many people are optimistic that for every job eliminated by automation, new jobs will be created so that people will always find work that pays them a reasonable wage. Is there sound economic ...
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How accepted is the theory that high marginal tax rates on the on corporations encourages higher labor wages/innovation?

I was watching a David Graeber and he put forward the idea that Bell Labs and high wages existed in the 50's and 60's in large part because there was a high corporate and marginal tax rate, so rather ...
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Examples efficiency wage papers using observational data

In one answer in this great discussion on efficiency wages it is claimed the reason that efficiency wages fell out of fashion is that we can't measure it in normal data. I agree that it is difficult ...
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5 votes
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Are there any general rules that can be used to assess the consequences of a significant minimum wage increase in a country's economy?

Quite recently the EU Parliament discussed upon a new draft EU law that will ensure a minimum level of wage protection in all member states. The minimum relative to average wages of full-time workers ...
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Why do oil-rich countries need expats?

In particular, why did/do the smaller states in the GCC need expats in their country? Ignoring the history of the country prior to oil discovery (which can be approximated for many of the smaller GCC ...
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3 votes
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Cobb-Douglas Production Function - Finding units of labour to maximise production

Given production function $f(L,K)=16L^\frac{1}{4}K^\frac{3}{4}$, where each unit of labour costs £50 and each unit of capital costs £100 and you have a budget of £500,000. Find the number of units of ...
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3 votes
1 answer
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Consistent estimation of fixed effects

Estimating firm fixed effects is very popular in labor economics. I wonder why this is legit? The estimates shouldn't be consistent, the more firms we have the more parameters we have to estimate.
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1 vote
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Wages are lower than 30 years ago in Italy, why?

Recently I've seen some statistics about wage growth in the European Union in the last 30 years and surprisingly, Italy is the only country with a negative value. So, what is the root of this problem? ...
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What is the author trying to imply in this sentence? what is employment per unit of capital?

"The usage of extra machinery does not cause unemployment since, employment per unit of capital is large in labor-intensive products that the country exports and the vast world market allows ...
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A Simple Question about Labor Capital Ratios

I do not have much training in macroeconomics, so I want to know if this statement is accurate: "A \$30M dollar decrease in lending to businesses leads to a $45M decrease in aggregate labor ...
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Harrington Emerson and his 12 principles of labor productivity

Are these principles currently relevant? Which principles would you add or, on the contrary, exclude? Which principles are observed today, and which are not? Why? Which of the principles would you ...
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Does only search-and-matching predict bunching around minimum wage?

I heard a comment that search and matching models are empirically more valid than job-posting (even though the predictions are very similar) because with posting it is not possible to rationalize the ...
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US minimum wage beyond $15 per hour

Current policy debate among US lawmakers includes proposals for raising the minimum wage nationwide to \$15. It is currently \$7.25 by federal statute, which is the amount in effect except in states ...
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How to combine two different populations from two different surveys?

I have 2 surveys, each is representative of different populations living in the same country: Survey 1 – Survey of Peruvians living in Peru Survey 2- Survey of Venezuelans living in Peru. Each survey ...
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4 votes
1 answer
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Labor market discrimination - help me understand this passage in call-back study

I'm reading up on discrimination in the labor market. In this study by Bertrand & Mullainathan (2004) they note the following: Perhaps the skills of African-Americans are discounted because ...
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Variance Decomposition of Wage Equation

I am reading two recent papers studying between-firm and within-firm wage inequality, Barth et al 2016 (hereafter BBDF) and Song et al 2019 (hereafter SPGBV). I am confused by the different variance ...
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3 votes
1 answer
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What is being meant by "cohort-specific fixed effect for each state of birth" in Card&Krueger(1992)? What does the following equation mean?

I am referring to this paper on school quality and returns to schooling. The econometric specification has been described by eqn (1) on page 4. The authors have taken "cohort specific fixed ...
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Nonlinear Least-Squares Estimation in Practice

I am reading Jeong, Kim, Manovskii 2015 and in the paper they apply "a nonlinear least-squares method" to estimate a log-wage equation, , where $D, \Pi$, all $\lambda$s $\theta$s, and $\...
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6 votes
1 answer
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Doraszelski and Jaumandreu (2018) Intuition

Doraszelski and Jaumandreu (2018) estimate a CES production function with two forms of productivity shocks (1) labor augmenting and (2) Hicks neutral. They claim that the increase in labor augmenting ...
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2 votes
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Nash Bargain VS. Rubinstein Game with Outside Option

I am reading a paper, Kessier & Lulfesmann 2006, and find that its main result totally depends on that the model setting is based on a Rubinstein game with outside option rather than a Nash ...
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Literature recommendation

Classic economic theory suggests people earn wages according to their productivity. Over time CEO's, directors, managers and the like seem to earn more relative to the 'normal worker'. Lets call this ...
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2 votes
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Event study by Kleven

I was reading the following paper by Henrik Kleven et al. https://www.henrikkleven.com/uploads/3/7/3/1/37310663/kleven-landais-sogaard_nber-w24219_jan2018.pdf The estimate the child penalty on wage ...
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Is the pooling equilibrium profit maximising for the firm?

Is the pooling equilibrium profit maximising for the firm? I understand that when there are no ways for the firm to distinguish among highly productive and low productive worker the best the firm can ...
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1 vote
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What does it mean "non-Walrasian" or "quasi-Walrasian"?

In a recent NBER workshop, Robert Hall started a discussion with his first slide summarizing the macro literature. I am not very familiar with either DMP model or New Keynesian model and have no idea ...
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1 vote
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What impact does the paid vacation leave have on labor productivity?

I'm asking just one question (it's in bold). If you treat any sentence with a question mark as another question and thus violating the policy on "focusedness", please steer clear of the text ...
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4 votes
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Solve the Ben-Porath Model (Optimal Control Problem)

Suppose we have a Ben-Porath style human capital investment model, in which the representative agent maximize her lifetime earnings: $$V(h, a)=\max \int_{a}^{R} e^{-r(t-a)}\left[ w h(t)(1-n(t))-px(t)\...
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Basic question i guess

I'm not in economics, I'm actually studying sociology and I'm doing a subject about labor economics. I'm reading an article that talks about automation and says "The employment impact of ...
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7 votes
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Lab experiments of labour markets

I have been searching for papers that conduct lab experiments simulating a labour market, that means for a minimum there are both participants taking the role of firms, and participants taking the ...
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