The Labor Market Impact of Immigration: Job Creation versus Job Competition

By Christoph Albert

American Economic Journal: Macroeconomics, January 2021

This paper studies the labor market effects of both documented and undocumented immigration in a search model featuring nonrandom hiring. As immigrants accept lower wages, they are preferably chosen by firms and therefore have higher job finding rates tha...

The Elusive Employment Effect of the Minimum Wage

[Symposium: Minimum Wage]

By Alan Manning

Journal of Economic Perspectives, Winter 2021

It is hard to find a negative effect on the employment effect of rises in the minimum wage: the elusive employment effect. It is much easier to find an impact on wages. This paper argues the elusive employment effect is unlikely to be solved by better dat...

How Do Firms Respond to Minimum Wage Increases? Understanding the Relevance of Non-employment Margins

[Symposium: Minimum Wage]

By Jeffrey Clemens

Journal of Economic Perspectives, Winter 2021

This paper discusses non-employment margins through which firms may respond to minimum wage increases.  Margins of interest include evasion, output prices, noncash compensation, job attributes including effort requirements, the firm’s mix of low- and h...

The Rise of American Minimum Wages, 1912–1968

[Symposium: Minimum Wage]

By Price V. Fishback and Andrew J. Seltzer

Journal of Economic Perspectives, Winter 2021

This paper studies the judicial, political, and intellectual battles over minimum wages from the early state laws of the 1910s through the peak in the real federal minimum in 1968. Early laws were limited to women and children and were ruled unconstitutio...

City Limits: What Do Local-Area Minimum Wages Do?

[Symposium: Minimum Wage]

By Arindrajit Dube and Attila Lindner

Journal of Economic Perspectives, Winter 2021

Cities are increasingly setting their own minimum wages, and this trend has accelerated sharply in recent years. While in 2010 there were only three cities with their own minimum wages exceeding the state or federal standard, by 2020 there were 42. This n...

The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland

By Andreas Beerli, Jan Ruffner, Michael Siegenthaler, and Giovanni Peri

American Economic Review, March 2021

We study a reform that granted European cross-border workers free access to the Swiss labor market and had a stronger effect on regions close to the border. The greater availability of cross-border workers increased foreign employment substantially. Altho...

Job Displacement Insurance and (the Lack of) Consumption-Smoothing

By François Gerard and Joana Naritomi

American Economic Review, March 2021

We study the spending profile of workers who experience both a positive transitory income shock (lump-sum severance pay) and a negative permanent income shock (layoff ). Using de-identified expenditure and employment data from Brazil, we show that workers...

Trade Shocks and Labor Market Adjustment

By Ryan Kim and Jonathan Vogel

American Economic Review: Insights, March 2021

We develop a framework to analyze the impact of trade shocks on a range of labor market adjustment margins in economies with a large number of sectors and labor groups. We provide analytic results characterizing equilibria. We show that labor groups earni...

The unemployment insurance tax hangover

[Research Highlight]

February 25, 2021

A tax spike on companies after layoffs is discouraging them from rehiring when business turns around.

Unemployment Insurance Taxes and Labor Demand: Quasi-Experimental Evidence from Administrative Data

By Andrew C. Johnston

American Economic Journal: Economic Policy, February 2021

To finance unemployment insurance, states raise payroll tax rates on employers who engage in layoffs. Tax rates are, therefore, highest for firms after downturns, potentially hampering labor-market recovery. Using full-population, administrative records f...

Planning on the Potomac: A Review Essay on Jason E. Taylor's Deconstructing the Monolith: The Microeconomics of the National Industrial Recovery Act

By Joshua K. Hausman

Journal of Economic Literature, March 2021

Taylor (2019) details heterogeneity in the effects of the National Industrial Recovery Act (NIRA) across industries and across time. Through first the President's Reemployment Act (PRA) and then industry-specific "codes of fair competition," the NIRA rais...

Monetary Policy and Inequality under Labor Market Frictions and Capital-Skill Complementarity

By Juan J. Dolado, Gergő Motyovszki, and Evi Pappa

American Economic Journal: Macroeconomics, April 2021

We provide a new channel through which monetary policy has distributional consequences at business cycle frequencies. We show that an unexpected monetary easing increases labor income inequality between high-skilled and less-skilled workers. To rationaliz...

Risk-Based Selection in Unemployment Insurance: Evidence and Implications

By Camille Landais, Arash Nekoei, Peter Nilsson, David Seim, and Johannes Spinnewijn

American Economic Review, April 2021

This paper studies whether adverse selection can rationalize a universal mandate for unemployment insurance (UI). Building on a unique feature of the unemployment policy in Sweden, where workers can opt for supplemental UI coverage above a minimum manda...

Connecting buyers and sellers in the countryside

[Research Highlight]

April 02, 2021

E-commerce development in rural China may not be as promising as many expected.

Free movement and labor markets

[Page]

A policy reform in Switzerland helped estimate the effect of foreign workers on native employment and wages.

Stock Market Wealth and the Real Economy: A Local Labor Market Approach

By Gabriel Chodorow-Reich, Plamen T. Nenov, and Alp Simsek

American Economic Review, May 2021

We provide evidence of the stock market consumption wealth effect by using a local labor market analysis. An increase in local stock wealth driven by aggregate stock prices increases local employment and payroll in nontradable industries and in total, wit...

Migration and Labor Market Integration in Europe

[Symposium: European Union]

By David Dorn and Josef Zweimüller

Journal of Economic Perspectives, Spring 2021

The European labor market allows for the border-free mobility of workers across 31 countries that cover most of the continent's population. However, rates of migration across European countries remain considerably lower than interstate migration in the Un...

Initial Industry and Long-Term Earnings Growth

By Stephen L. Ross and Patralekha Ukil

AEA Papers and Proceedings, May 2021

We test whether employment growth in a male worker's initial industry influences earnings growth using the 1979 National Longitudinal Survey of Youth. We follow workers for 20 years after reporting their first industry, finding that lower employment growt...

The Distributional Impacts of Active Labor Market Programs for Indigenous Populations

By Donna Feir, Kelly Foley, and Maggie E. C. Jones

AEA Papers and Proceedings, May 2021

We evaluate the distributional impacts of active labor market programming for indigenous peoples in Canada. Using administrative data and an empirical strategy that compares participants in high-intensity programs—skills interventions, job-creation part...

Field Specializations among Beginning Economists: Are There Gender Differences?

By Eva Sierminska and Ronald L. Oaxaca

AEA Papers and Proceedings, May 2021

We examine the process underlying field specialization among beginning economists. Our multivariate logit framework accommodates single- and dual-field specializations with correlated choices. Including field-specific relative salaries and expected probab...