Productivity Shocks, Long-Term Contracts, and Earnings Dynamics

By Neele Balke and Thibaut Lamadon

American Economic Review, July 2022

This paper examines how employer- and worker-specific productivity shocks transmit to earnings and employment. We develop an equilibrium search model and characterize the optimal contract offered by firms. Risk-neutral firms provide partial insurance agai...

The Impact of Childhood Social Skills and Self-Control Training on Economic and Noneconomic Outcomes: Evidence from a Randomized Experiment Using Administrative Data

By Yann Algan, Elizabeth Beasley, Sylvana Côté, Jungwee Park, Richard E. Tremblay, and Frank Vitaro

American Economic Review, August 2022

A childhood intervention to improve the social skills and self-control of at-risk kindergarten boys in the 1980s had positive impacts over the life course: higher trust and self-control as adolescents; increased social group membership, education, and red...

The Human Side of Structural Transformation

By Tommaso Porzio, Federico Rossi, and Gabriella Santangelo

American Economic Review, August 2022

We document that nearly half of the global decline in agricultural employment was driven by new cohorts entering the labor market. A new dataset of policy reforms supports an interpretation of these cohort effects as human capital. Using a model of fricti...

Child Marriage Bans and Female Schooling and Labor Market Outcomes: Evidence from Natural Experiments in 17 Low- and Middle-Income Countries

By Nicholas Wilson

American Economic Journal: Economic Policy, August 2022

I measure the effect of child marriage bans on female educational attainment and employment using a difference-in-differences approach employing subnational spatial and cohort variation in a sample of over 250,000 female respondents from 17 low- and middl...

Learning on the Job and the Cost of Business Cycles

By Karl Walentin and Andreas Westermark

American Economic Journal: Macroeconomics, October 2022

We show that business cycles reduce welfare through a decrease in the average level of employment in a labor market search model with learning on the job and skill loss during unemployment. Empirically, unemployment and the job-finding rate are negatively...

Job Search and Hiring with Limited Information about Workseekers' Skills

By Eliana Carranza, Robert Garlick, Kate Orkin, and Neil Rankin

American Economic Review, November 2022

We assess South African workseekers' skills and disseminate the assessment results to explore how limited information affects firm and workseeker behavior. Giving workseekers assessment results that they can credibly share with firms increases workseekers...

Human Capital Depreciation and Returns to Experience

By Michael Dinerstein, Rigissa Megalokonomou, and Constantine Yannelis

American Economic Review, November 2022

Human capital can depreciate if skills are unused. But estimating human capital depreciation is challenging, as worker skills are difficult to measure and less productive workers are more likely to spend time in nonemployment. We overcome these challenges...

The Psychosocial Value of Employment: Evidence from a Refugee Camp

By Reshmaan Hussam, Erin M. Kelley, Gregory Lane, and Fatima Zahra

American Economic Review, November 2022

Employment may be important to well-being for reasons beyond its role as an income source. This paper presents a causal estimate of the psychosocial value of employment in refugee camps in Bangladesh. We involve 745 individuals in a field experiment with ...

Protecting vulnerable kids

[Research Highlight]

August 18, 2022

Joseph Doyle discusses the history and economics of foster care in the United States.

Sadie T. M. Alexander: Black Women and a "Taste of Freedom in the Economic World"

By Nina Banks

Journal of Economic Perspectives, Fall 2022

The employment history of African American women is notable because of their higher labor force participation rates compared to other women in the US. This essay discusses Sadie T. M. Alexander's analysis of Black women and work based on her 1930s speec...

The German Model of Industrial Relations: Balancing Flexibility and Collective Action

[Symposium: Labor Market Institutions]

By Simon Jäger, Shakked Noy, and Benjamin Schoefer

Journal of Economic Perspectives, Fall 2022

We give an overview of the "German model" of industrial relations. We organize our review by focusing on the two pillars of the model: sectoral collective bargaining and firm-level codetermination. Relative to the United States, Germany outsources colle...

Danish Flexicurity: Rights and Duties

[Symposium: Labor Market Institutions]

By Claus Thustrup Kreiner and Michael Svarer

Journal of Economic Perspectives, Fall 2022

Denmark is one of the richest countries in the world and achieves this in combination with low inequality, low unemployment, and high-income security. This performance is often attributed to the Danish labor market model characterized by what has become...

Earnings Inequality and the Minimum Wage: Evidence from Brazil

By Niklas Engbom and Christian Moser

American Economic Review, December 2022

Increases in the minimum wage can substantially reduce earnings inequality. To demonstrate this, we combine administrative and survey data with an equilibrium model of the Brazilian labor market. We find that a 128 percent increase in the real minimum wag...

The Employee Costs of Corporate Debarment in Public Procurement

By Christiane Szerman

American Economic Journal: Applied Economics, January 2023

This paper studies an anticorruption policy—corporate debarment, or blacklisting—to understand how disclosing illicit corporate practices and the sanctions for these practices affect firm and worker outcomes. Exploiting a policy change in Brazil that ...

Strategic Formal Layoffs: Unemployment Insurance and Informal Labor Markets

By Bernardus Van Doornik, David Schoenherr, and Janis Skrastins

American Economic Journal: Applied Economics, January 2023

Exploiting an unemployment insurance reform in Brazil, we study incentive effects of UI in the presence of informal labor markets. We find that eligibility for UI benefits increases formal layoffs by 11 percent. Most of the additional layoffs are related ...

The Effects of Working While in School: Evidence from Employment Lotteries

By Thomas Le Barbanchon, Diego Ubfal, and Federico Araya

American Economic Journal: Applied Economics, January 2023

Does working while in school smooth students' transition into the labor market? We provide evidence on this question by leveraging a one-year work-study program that randomized job offers among over 90,000 student applicants in Uruguay. Program rules forb...

Women, Wealth Effects, and Slow Recoveries

By Masao Fukui, Emi Nakamura, and Jón Steinsson

American Economic Journal: Macroeconomics, January 2023

Business cycle recoveries have slowed in recent decades. This slow-down comes entirely from female employment, as women's employment rates converged toward men's during the past half-century. But does the slowdown in the growth of female employment rates ...

Teacher diversity in the classroom

[Research Highlight]

January 04, 2023

Does exposure to same-race teachers help students in the long run?

The Employment Effects of Countercyclical Public Investments

By Lukas Buchheim and Martin Watzinger

American Economic Journal: Economic Policy, February 2023

This paper estimates the causal impact of a sizable German public investment program on employment at the county level. The program focused on improving the energy efficiency of school buildings, making it possible to use the number of schools as an instr...