Margins of Multinational Labor Substitution

By Marc-Andreas Muendler and Sascha O. Becker

American Economic Review, December 2010

Employment at a multinational enterprise (MNE) responds to wages at the extensive margin, when an MNE enters a foreign location, and at the intensive margin, when an MNE operates existing affiliates. We present an MNE model and conditions for parametric a...

The Relative Power of Employment-to-Employment Reallocation and Unemployment Exits in Predicting Wage Growth

By Giuseppe Moscarini and Fabien Postel-Vinay

American Economic Review, May 2017

We study the cyclical comovement nominal wage growth (either monthly earnings or hourly wage rate) and labor market flows. We use microdata from the Survey of Income and Program Participation over 1996-2013 to purge composition effects in worker and job c...

Using State Pension Shocks to Estimate Fiscal Multipliers since the Great Recession

By Daniel Shoag

American Economic Review, May 2013

Has government spending raised income and employment since 2008? I use new data on state pension returns during the Great Recession to recover exogenous changes in spending. Instrumenting with these return shocks, I estimate that each dollar of windfall-f...

Firm Dynamics, Job Turnover, and Wage Distributions in an Open Economy

By A. Kerem Coşar, Nezih Guner, and James Tybout

American Economic Review, March 2016

This paper explores the combined effects of reductions in trade frictions, tariffs, and firing costs on firm dynamics, job turnover, and wage distributions. It uses establishment-level data from Colombia to estimate an open economy dynamic model that li...

Measuring What Employers Do about Entry Wages over the Business Cycle: A New Approach

By Pedro S. Martins, Gary Solon, and Jonathan P. Thomas

American Economic Journal: Macroeconomics, October 2012

Rigidity in real hiring wages plays a crucial role in some recent macroeconomic models. But are hiring wages really so noncyclical? We propose using employer/employee longitudinal data to track the cyclical variation in the wages paid to workers newly hir...

Are Your Wages Set in Beijing?

[Symposium: Income Inequality and Trade]

By Richard B. Freeman

Journal of Economic Perspectives, Summer 1995

The economic troubles of less-skilled workers in the United States. and OECD-Europe during a period of rising manufacturing imports from third world countries has created a debate about whether, in a global economy, wages or employment are determined by t...

Minimum Wage Laws: Are They Overrated?

By Charles Brown

Journal of Economic Perspectives, Summer 1988

I think there is a reasonably high degree of agreement in studies of the impact of the minimum wage on employment, unemployment, and the distribution of income -- though I will also point to a few areas where further work could refine our understanding of...

Trade and the Diffusion of the Industrial Revolution

By Robert E. Lucas

American Economic Journal: Macroeconomics, January 2009

This paper proposes a model to describe the evolution of real gross domestic product (GDP) in the world economy that is intended to apply to all open economies. The parameters of the model are calibrated using evidence from Sachs and Warner on economie...

Integration of Trade and Disintegration of Production in the Global Economy

[Symposium: Globalization in Perspective]

By Robert C. Feenstra

Journal of Economic Perspectives, Fall 1998

The last few decades have seen a spectacular integration of the global economy through trade. The rising integration of world markets has brought with it a disintegration of the production process, however, in which manufacturing or services activities do...

Is Probability Theory Relevant for Uncertainty? A Post Keynesian Perspective

By Paul Davidson

Journal of Economic Perspectives, Winter 1991

Mainstream perspectives involving uncertainty presume that expectations are based on either a statistical analysis of past data, with market signals providing information about objective probabilities, or on subjective perceptions of these probabilities f...

Racial Discrimination in the Labor Market: Theory and Empirics

By Kevin Lang and Jee-Yeon K. Lehmann

Journal of Economic Literature, December 2012

We review theories of race discrimination in the labor market. Taste-based models can generate wage and unemployment duration differentials when combined with either random or directed search even when strong prejudice is not widespread, but no existing ...

The Contribution of Large and Small Employers to Job Creation in Times of High and Low Unemployment

By Giuseppe Moscarini and Fabien Postel-Vinay

American Economic Review, October 2012

We document a negative correlation, at business cycle frequencies, between the net job creation rate of large employers and the level of aggregate unemployment that is much stronger than for small employers. The differential growth rate of employment betw...

Trade and Manufacturing Jobs in Germany

By Wolfgang Dauth, Sebastian Findeisen, and Jens Suedekum

American Economic Review, May 2017

The German economy exhibits rising service and declining manufacturing employment, but this decline is much sharper in import-competing than export-oriented branches. We first document the individual-level job transitions behind those trends. They are not...

Whom or What Does the Representative Individual Represent?

By Alan P. Kirman

Journal of Economic Perspectives, Spring 1992

Macroeconomic models often assume that the choices of all the diverse agents in one sector—consumers for example—can be considered as the choices of one "representative" standard utility maximizing individual whose choices coincide with the ag...

Structural Change Out of Agriculture: Labor Push versus Labor Pull

By Francisco Alvarez-Cuadrado and Markus Poschke

American Economic Journal: Macroeconomics, July 2011

A declining agricultural employment share is a key feature of economic development. Its main drivers are: improvements in agricultural technology combined with Engel's law release resources from agriculture ("labor push"), and improvements in industrial t...

Does Extending Unemployment Benefits Improve Job Quality?

By Arash Nekoei and Andrea Weber

American Economic Review, February 2017

Contrary to standard search models predictions, past studies have not found a positive effect of unemployment insurance (UI) on reemployment wages. We estimate a positive UI wage effect exploiting an age-based regression discontinuity design in Austria. A...

The Best of Times, the Worst of Times: Understanding Pro-cyclical Mortality

By Ann H. Stevens, Douglas L. Miller, Marianne E. Page, and Mateusz Filipski

American Economic Journal: Economic Policy, November 2015

It is well-known that mortality rates are pro-cyclical. In this paper, we attempt to understand why. We find little evidence that cyclical changes in individuals' own employment-related behavior drives the relationship; own-group employment rates are not ...

A Lost Generation? Education Decisions and Employment Outcomes during the US Housing Boom-Bust Cycle of the 2000s

By Luc Laeven and Alexander Popov

American Economic Review, May 2016

We exploit regional variations in U.S. house price fluctuations during the boom-bust cycle of the 2000s to study the impact of the housing cycle on young Americans' choices related to education and employment. We find that in MSAs which experienced large ...

Real Wages and the Business Cycle: Accounting for Worker, Firm, and Job Title Heterogeneity

By Anabela Carneiro, Paulo Guimarães, and Pedro Portugal

American Economic Journal: Macroeconomics, April 2012

Using a longitudinal matched employer-employee dataset for Portugal over the 1986-2007 period, this study analyzes the wage responses to aggregate labor market conditions for newly hired workers and existing workers within the same firm. Accounting for w...

Moving to a Job: The Role of Home Equity, Debt, and Access to Credit

By Yuliya Demyanyk, Dmytro Hryshko, María Jose Luengo-Prado, and Bent E. Sørensen

American Economic Journal: Macroeconomics, April 2017

We use individual-level credit reports merged with loan-level mortgage data to estimate how home equity interacted with mobility in relatively weak and strong labor markets in the United States during the Great Recession. We construct a dynamic model of h...