Labor Market Outcomes and Reforms in China

[Symposium: China's Economy]

By Xin Meng

Journal of Economic Perspectives, Fall 2012

Over the past few decades of economic reform, China's labor markets have been transformed to an increasingly market-driven system. China has two segregated economies: the rural and urban. Understanding the shifting nature of this divide is probably the k...

Organized Crime and Economic Growth: Evidence from Municipalities Infiltrated by the Mafia

By Alessandra Fenizia and Raffaele Saggio

American Economic Review, July 2024

This paper studies the long-run economic impact of dismissing city councils infiltrated by organized crime. Applying a matched difference-in-differences design to the universe of Italian social security records, we find that city council dismissals (CCDs)...

Asymmetric Reciprocity and the Cyclical Behavior of Wages, Effort, and Job Creation

By Marco Fongoni

American Economic Journal: Macroeconomics, July 2024

This paper develops a search and matching framework in which workers are characterized by asymmetric reference-dependent reciprocity and firms set wages by considering the effect that these can have on workers' effort and, therefore, on output. The cyclic...

Macroeconomic Frameworks: Reconciling Evidence and Model Predictions from Demand Shocks

By Alan J. Auerbach, Yuriy Gorodnichenko, and Daniel Murphy

American Economic Journal: Macroeconomics, July 2024

How do demand shocks affect the economy? We exploit detailed data on US defense spending to examine a large set of outcome variables in response to well-identified local demand shocks, jointly examining new outcomes (e.g., firm entry and housing rents) an...

Local Economic and Political Effects of Trade Deals: Evidence from NAFTA

By Jiwon Choi, Ilyana Kuziemko, Ebonya Washington, and Gavin Wright

American Economic Review, June 2024

Why have white, less-educated voters left the Democratic Party? We highlight the role of the 1994 North American Free Trade Agreement (NAFTA). In event-study analysis, we demonstrate that counties whose 1990 employment depended on industries vulnerable to...

The political consequences of NAFTA

[Research Highlight]

June 27, 2024

Jiwon Choi and Gavin Wright discuss the economic and political fallout of the North American Free Trade Agreement.

The distributional consequences of recessions

[Research Highlight]

July 15, 2024

How do local labor markets recover after economic shocks?

The Evolution of Local Labor Markets after Recessions

By Brad Hershbein and Bryan A. Stuart

American Economic Journal: Applied Economics, July 2024

This paper studies how US local labor markets respond to employment losses that occur during recessions. Following recessions from 1973 through 2009, we find areas that lose more jobs during the recession experience persistent relative declines in employm...

Why Didn't the College Premium Rise Everywhere? Employment Protection and On-the-Job Investment in Skills

By Matthias Doepke and Ruben Gaetani

American Economic Journal: Macroeconomics, July 2024

Why has the college wage premium risen rapidly in the United States since the 1980s but not in European economies such as Germany? We argue that differences in employment protection can account for much of the gap. We develop a model in which firms and wo...

Explaining differences in the college wage premium across countries

[Research Highlight]

August 14, 2024

Do employment protection policies help buoy the wages of less educated workers relative to their more educated counterparts?

Broader economic impacts of the Paycheck Protection Program

[Research Highlight]

August 27, 2024

Brent Ambrose discusses the spillover effects of the PPP on the commercial real estate market.

Spending and Job-Finding Impacts of Expanded Unemployment Benefits: Evidence from Administrative Micro Data

By Peter Ganong, Fiona Greig, Pascal Noel, Daniel M. Sullivan, and Joseph Vavra

American Economic Review, September 2024

We show that the largest increase in unemployment benefits in US history had large spending impacts and small job-finding impacts. This finding has three implications. First, increased benefits were important for explaining aggregate spending dynamics—b...

The Labor Market Impacts of Reducing Felony Convictions

By Amanda Agan, Andrew Garin, Dmitri Koustas, Alexandre Mas, and Crystal S. Yang

American Economic Review: Insights, September 2024

We study the labor market impacts of retroactively reducing felonies to misdemeanors in San Joaquin County, California, where criminal justice agencies implemented Proposition 47 reductions in a quasi-random order, without requiring input or action from a...

Temporary Employment in Markets with Frictions

By Tito Boeri and Pietro Garibaldi

Journal of Economic Literature, September 2024

Temporary employment has spiked in OECD countries over the last 40 years and is now a common feature of their labor market landscape. A large body of empirical literature examines the spread of temporary employment, but no systematic review and interpreta...

Unintended Consequences of Welfare Cuts on Children and Adolescents

By Christian Dustmann, Rasmus Landersø, and Lars Højsgaard Andersen

American Economic Journal: Applied Economics, October 2024

This paper studies the effects of a large welfare benefit reduction on the children in the affected families. The welfare cut targeted adult refugees who received residency in Denmark, and it reduced their disposable income by 30 percent on average over t...

Rising Top, Falling Bottom: Industries and Rising Wage Inequality

By John Haltiwanger, Henry R. Hyatt, and James R. Spletzer

American Economic Review, October 2024

Most of the rise in overall earnings inequality from 1996 to 2018 is accounted for by rising between-industry dispersion. The contribution of industries is right-skewed with the top 10 percent of four-digit NAICS industries dominating. The top 10 percent ...

A Simple Explanation of Countercyclical Uncertainty

By Joshua Bernstein, Michael Plante, Alexander W. Richter, and Nathaniel A. Throckmorton

American Economic Journal: Macroeconomics, October 2024

This paper documents that labor search and matching frictions generate countercyclical uncertainty because the inherent nonlinearity in the flow of new matches makes employment uncertainty increasing in the number of people searching for work. Quantitativ...

Automation, Bargaining Power, and Labor Market Fluctuations

By Sylvain Leduc and Zheng Liu

American Economic Journal: Macroeconomics, October 2024

We argue that the threat of automation weakens workers' bargaining power in wage negotiations, dampening wage adjustments and amplifying unemployment fluctuations. We make this argument based on a business cycle model with labor market search frictions, g...

Is There a Stable Relationship between Unemployment and Future Inflation?

By Terry Fitzgerald, Callum Jones, Mariano Kulish, and Juan Pablo Nicolini

American Economic Journal: Macroeconomics, October 2024

Evaluating the stability of the Phillips curve using aggregate data is challenging due to the bias that endogenous monetary policy imparts on estimated Phillips curve coefficients. We argue that regional data can be used to identify the structural relatio...

Job search and unemployment insurance

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Do expanded unemployment benefits lower job-finding rates?