Labor Markets and Wage Growth
Paper Session
Monday, Jan. 5, 2026 8:00 AM - 10:00 AM (EST)
- Chair: Danielle H. Sandler, U.S. Census Bureau
It's About Time (Series): A Simple Correction for Difference-in-Differences Estimators
Abstract
This paper reconsiders the difference-in-differences (DiD) research design for panel data, particularly when serial correlation stems from first-order model misspecification (i.e., dependence in yt rather than exclusively in ϵt). When time-series issues like this are overlooked, the traditional parallel trends assumption is insufficient. In fact, for most panel applications (T > 2 periods), DiD designs will misidentify and inflate a time-invariant treatment effect. To correct this, we show that DiD assumptions should be modified for dynamic panels and how explicitly accounting for temporal dependence in the design can recover the true, dynamically-robust effect. We evaluate a simple modification to DiD designs through Monte Carlo simulations and then explore its implications with empirical examples. Two examples leverage a policy shock used in recent literature to reevaluate the impact of household credit constraints on outcomes like state-level GDP growth and labor market participation. When we implement the proposed modification, which can be as simple as incorporating a lagged outcome and group interaction into a DiD model, the results illustrate a reduction in bias predicted by theory, yielding a more generalizable estimator for most applications. Finally, we find synthetic DiD and synthetic control methods do not remedy this particular issue, as similar modifications (e.g., pre-whitening) are needed to address temporal dependence in the outcome.Does Remote Work Slow Wage Growth and Promotions?
Abstract
Using post-pandemic data on work-from-home intensity from the Current Population Survey (CPS), we examine wage growth, promotions, and work location arrangements for full-time, white-collar employees working in the private nonfarm sector. A novelty in the paper is that we examine differences between hybrid and fully remote workers and examine changes over time using the short CPS panel component in data from October 2022 to September 2025. We find that remote work is associated with slower annual wage growth for mothers, but hybrid/remote work are associated with faster wage growth for women without household children. Looking at month-to-month transitions, we find that remote work is associated with a 0.2–0.4 percentage-point lower likelihood of promotion to management for men and women without children compared with an average 0.8–1% promotion rate for men working on-site, whereas hybrid work is associated with a 0.2–0.3 percentage-point lower likelihood of promotion to management for men overall. Looking at workers in sales and office and administrative support occupations, we find remote work is associated with a 0.2 percentage-point lower probability of promotion to a supervisory role for women without children compared with an average 0.5% promotion rate for women working on-site.Unemployment Insurance Generosity and the Wages of New Hires
Abstract
The federal government made unemployment insurance (UI) benefits substantially more generous in response to the Covid-19 pandemic, leading some observers to worry that emergency UI programs were reducing labor supply and forcing firms to bid up wages excessively, especially for low-wage jobs. Were they, and did the effects of pandemic UI programs differ from the effects of UI at more typical levels of generosity? Prior to 2020, we find that increases in UI generosity modestly increased the wages of new hires from unemployment, with larger effects at the bottom of the wage distribution, and reduced hiring rates. New hires from employment and continuously employed workers also experience wage gains due to increases in UI generosity, suggesting that macroeconomic channels are likely important for transmitting wage effects. During and after the pandemic, however, wages were minimally responsive UI generosity throughout the distribution and for all types of workers, and we find no evidence of effects on hiring.Discussant(s)
Scott Wentland
,
U.S. Bureau of Economic Analysis
Douglas Miller
,
Cornell University
Danielle H. Sandler
,
U.S. Census Bureau
Michael Navarrete
,
Federal Reserve Bank of Atlanta and NBER
JEL Classifications
- J3 - Wages, Compensation, and Labor Costs
- J0 - General