Labor Markets, Skills and Imperfect Competition
Paper Session
Saturday, Jan. 4, 2025 8:00 AM - 10:00 AM (PST)
- Chair: Michael Patrick Keane, University of New South Wales
The Labor Market Effects of Disability Hiring Quotas
Abstract
People with disabilities are underemployed across the world. To increase their representation, more than 100 countries have established quota regulations requiring firms to hire people with disabilities. This paper studies the labor market consequences of enforcing modest disability hiring quotas. Using the introduction of a reform in Brazil that enhanced enforcement of a new hiring quota regulation, my market-level analysis finds that people with disabilitiesin local labor markets more exposed to the reform experienced larger increases in employment and earnings. Leveraging variation in enforcement across firms, I document three key margins along which firms respond to the quota scheme. First, firms hire more workers with disabilities into low-paying jobs. Second, workers with disabilities experience reduced wage growth. Third, the quota also does not come at a cost to workers without disabilities in
terms of wages or employment, or to firms in terms of closure. Through the lens of a simple model, I show that the policy generates aggregate welfare gains. My findings support that, in labor markets characterized by discrimination in hiring, mandating modest increases in
employment for the disadvantaged can promote redistribution and improve welfare.
Monopsony Power in the Gig Economy
Abstract
Many workers provide services for customers via platforms that may exert monopsony power. Typical expositions of this phenomenon are inapplicable because platforms post prices, rather than wages, to both sides of a two-sided market. Further, platform-specific labor supply is hard to measure. This paper develops a model of a ridesharing gig market that explicitly incorporates these issues. Intermediaries exploit monopsony power to markup commission and reduce equilibrium wages. A driver union sets the first-best commission rate when the passenger market is competitive. Estimating the model with public data on Uber suggests this is relevant; the platform faces competition for passengers but leverages monopsony power to depress wages by 14 percent. First-best commission rates increase the welfare of Uber’s 1.5 million US drivers by 20 percent. Conversely, minimum wages on utilized hours fail to benefit workers.Identification and Estimation of Continuous-Time Job Search Models with Preference Shocks
Abstract
This paper applies some of the key insights of dynamic discrete choice models to continuous-time job search models. We propose a novel framework that incorporates preference shocks into search models, resulting in a tight connection between value functions and conditional choice probabilities. Including preference shocks allows us to establish constructive identification of all the model parameters. Our method also makes it possible to estimate rich nonstationary job search models in a simple and tractable way, without having to solve any differential equations. We apply our framework using rich longitudinal data from Hungarian administrative records, allowing for nonstationarities in offer arrival rates, wage offers, and in the flow payoff of unemployment. Longer unemployment durations are associated with substantially worse wage offers and lower offer arrival rates, which results in accepted wages falling over time.JEL Classifications
- J14 - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
- J42 - Monopsony; Segmented Labor Markets