Is it Labor Supply or Labor Demand?
Sunday, Jan. 6, 2019 10:15 AM - 12:15 PM
- Chair: Erin Wolcott, Middlebury College
Employment Inequality: Why Do the Low-Skilled Work Less Now?
AbstractLow-skilled prime-age men are less likely to be employed than high-skilled prime-age men, and the differential has increased since the 1970s. I build a search model encompassing three explanations: (1) factors increasing the value of leisure, such as welfare and recreational gaming/computer technology, reduced the supply of low-skilled workers; (2) automation and trade reduced the demand for low-skilled workers; and (3) factors affecting job search, such as online job boards, reduced frictions for high-skilled workers. I find a supply shift had little effect, while a demand shift away from low-skilled workers was the leading cause, and search frictions actually reduced employment inequality.
Trends in Work and Leisure: It’s a Family Affair
AbstractIn recent decades, the correlation between U.S. men's wages and hours worked has reversed: low-wage men used to work the longest hours, whereas today it is men with the highest wages who work the most. This changing correlation accounts for roughly 30 percent of the rise in the variance of male earnings between 1975 and 2015. In this paper, we rationalize these trends in a model of joint household labor supply. Our quantitative model generates similar changes to what is observed in the data as a reaction to shifts in women’s education and labor supply, the gender gap, and assortative mating. Our model is consistent with the observations that the changing wage-hours correlation among men is driven by married men, and that there is little change in the wage-hours correlation among employed women and at the household level. The results suggest that taking into account joint household decision making is essential for understanding the dynamics of labor supply.
Trade Liberalization and Mortality: Evidence from United States Counties
AbstractWe investigate the impact of a large economic shock on mortality. We find that counties more exposed to a plausibly exogenous trade liberalization exhibit relative increases in drug overdoses and suicide, specifically among whites. We show that these results are not driven by pre-existing trends in mortality rates, that the estimated relationships are robust to controls for state-level legislation pertaining to opioid availability and health care, and that the impact of the policy change on mortality coincides with a deterioration in labor market conditions.
- J2 - Demand and Supply of Labor