Jobs for Life
Macroeconomic Conditions When Young Shape Job Preferences for Life
Maria Cotofan et al.
Review of Economics and Statistics, forthcoming
Preferences for monetary and non-monetary job attributes are important for understanding workers' motivation and the organization of work. Little is known, however, about how those job preferences are formed. We study how macroeconomic conditions when young shape workers' job preferences for life. Using variation in income-per-capita across US regions and over time since the 1920s, we find that job preferences vary in systematic ways with experienced macroeconomic conditions during young adulthood. Recessions create cohorts of workers who give higher priority to income, whereas booms make cohorts care more about job meaning, for the rest of their lives.
Who Paid Los Angeles' Minimum Wage? A Side-by-Side Minimum Wage Experiment in Los Angeles County
Christopher Esposito, Edward Leamer & Jerry Nickelsburg
NBER Working Paper, June 2021
In the restaurant industry, the incidence of an increase in the minimum wage may fall on restaurant owners, customers, landlords, and/or employees. We analyze the first two in this study, with implications for the incidence borne by landlords and employees. We exploit a geographical discontinuity in Los Angeles County, where in 2015 the City of Los Angeles passed a minimum wage law and in 2016 the State of California passed a different minimum wage law. This created two minimum wage schedules in the county that remained unequal for over five years. Using a novel data set from a multi-year price survey, our analysis shows that the incidence of Los Angeles City's higher minimum wage fell on customers in high-income neighborhoods, and on landlords and restaurant owners in low-income neighborhoods. We further show that the mix of responses at restaurants subject to the LA City minimum wage, including price increases, menu changes, and restaurant closures, was affected by proximity to restaurants subject to the lower California State minimum wage. The effect of neighborhood income levels and distance to lower-wage competition has important implications for designing minimum wage policies.
The Effect of the Minimum Wage on Employer-Sponsored Insurance for Low-Income Workers and Dependents
Michael Dworsky et al.
American Journal of Health Economics, forthcoming
Economic theory suggests that a binding minimum wage increase may reduce the generosity of employer-sponsored insurance (ESI) or other fringe benefits, yet previous empirical studies reach conflicting conclusions about the existence of a tradeoff between minimum wages and ESI. We study whether recent state and federal minimum wage increases affect the level or the source of health insurance coverage for low-income families using the 2005-2016 Current Population Survey. Our research design uses state and year fixed effects to isolate within-state minimum wage changes while controlling for Medicaid eligibility and other changes in health policy related to implementation of the Affordable Care Act. Because dependent coverage might also be affected by minimum wage hikes, we examine ESI coverage for both low-wage workers and their dependents. We find robust evidence that minimum wage increases lead to reductions in employer-sponsored insurance (ESI) coverage in families below 300% FPL, with a nominal $1 increase in the minimum wage reducing the probability of ESI coverage by 0.99 percentage points. Reductions in coverage were observed both for workers and for their dependents.
Evidence of The Unintended Labor Scheduling Implications of The Minimum Wage
Qiuping Yu, Shawn Mankad & Masha Shunko
Georgia Tech Working Paper, June 2021
Using a highly granular dataset from a chain of fashion retail stores, we estimate that a $1 increase in the minimum wage, while having a negligible impact on the total labor hours used by the stores, leads to a 27.7% increase in the number of workers scheduled per week, but a 20.8% reduction in weekly hours per worker. For an average store in California, these changes translate into four extra workers and five fewer hours per worker per week. Such scheduling adjustment not only reduces the total wage compensation per worker but also reduces workers' eligibility for benefits. We also show that the minimum wage increase reduces the consistency of weekly and daily schedules for workers. For example, the absolute (relative) deviation in weekly hours worked by each worker increases by up to 33.0% (6.7%) and by up to 9.5% (2.0%) in daily hours, as the minimum wage increases by $1.
Does Minimum Wage Increase Labor Productivity? Evidence from Piece Rate Workers
Journal of Labor Economics, forthcoming
We examine worker effort as a potential margin of adjustment to a minimum wage hike using unique data on piece rate workers who perform a homogenous task and whose individual output is rigorously recorded. By employing a difference-in-differences strategy that exploits the increase in Florida's minimum wage from $6.79 to $7.21 on January 1, 2009, and worker location on the pre-2009 productivity distribution, we provide evidence consistent with incumbent workers' positive effort responses.
Why Are Some Recoveries Short and Others Long?
NBER Working Paper, July 2021
Using the recession recovery point equal to the month when private payrolls first exceeded their previous peak level, this paper argues that it was the negative secular trend in manufacturing jobs that was the most important determinant of the length and depth of the last three recessions/recoveries. This negative secular trend changed the layoff/recall pattern of jobs in manufacturing into permanent displacements, a malady that lengthened the recovery periods and that is not the explicit target of either traditional monetary policy or traditional fiscal policy. Using the ideas gathered from an examination of the US two-digit sectoral data for the US overall, attention turns to the recession/recoveries of the 50 US states in the last three national recession periods. Regressions that explain the lengths and depths of the recessions in 50 US states reveal the importance of construction jobs, but the most important predictor was manufacturing jobs: the greater the share of manufacturing jobs prior to the recession, the worse was the recession/recovery.
Misattributed blame? Attitudes toward globalization in the age of automation
Political Science Research and Methods, forthcoming
Many, especially low-skilled workers, blame globalization for their economic woes. Robots and machines, which have led to job market polarization, rising income inequality, and labor displacement, are often viewed much more forgivingly. This paper argues that citizens have a tendency to misattribute blame for economic dislocations toward immigrants and workers abroad, while discounting the effects of technology. Using the 2016 American National Elections Studies, a nationally representative survey, I show that workers facing higher risks of automation are more likely to oppose free trade agreements and favor immigration restrictions, even controlling for standard explanations for these attitudes. Although pocket-book concerns do influence attitudes toward globalization, this study calls into question the standard assumption that individuals understand and can correctly identify the sources of their economic anxieties. Accelerated automation may have intensified attempts to resist globalization.
The Decline of Drudgery and the Paradox of Hard Work
Brendan Epstein & Miles Kimball
NBER Working Paper, July 2021
We develop a theory that focuses on the general equilibrium and long-run macroeconomic consequences of trends in job utility - the process benefits and costs of work. Given secular increases in job utility, work hours per population can remain approximately constant over time even if the income effect of higher wages on labor supply exceeds the substitution effect. In addition, secular improvements in job utility can be substantial relative to welfare gains from ordinary technological progress. These two implications are connected by an equation flowing from optimal hours choices: improvements in job utility that have a significant effect on labor supply tend to have large welfare effects.
A New Measure of Multiple Jobholding in the U.S. Economy
Keith Bailey & James Spletzer
Labour Economics, forthcoming
We create a measure of multiple jobholding from the U.S. Census Bureau's Longitudinal Employer-Household Dynamics data. This new series shows that 7.8 percent of persons in the U.S. are multiple jobholders, this percentage is pro-cyclical, and has been trending upward during the past several decades. The data also show that earnings from secondary jobs are, on average, 27.8 percent of a multiple jobholder's total quarterly earnings. Multiple jobholding occurs at all levels of earnings, with both higher- and lower-earnings multiple jobholders earning more than 25 percent of their total earnings from multiple jobs. In a regression analysis that controls for age, gender, and industry, multiple jobholders earn more at all jobs than do non-multiple jobholders. These new statistics tell us that multiple jobholding is more important in the U.S. economy than we knew.
Forecasting unemployment insurance claims in realtime with Google Trends
Daniel Aaronson et al.
International Journal of Forecasting, forthcoming
Leveraging the increasing availability of "big data" to inform forecasts of labor market activity is an active, yet challenging, area of research. Often, the primary difficulty is finding credible ways with which to consistently identify key elasticities necessary for prediction. To illustrate, we utilize a state-level event-study focused on the costliest hurricanes to hit the U.S. mainland since 2004 in order to estimate the elasticity of initial unemployment insurance (UI) claims with respect to search intensity, as measured by Google Trends. We show that our hurricane-driven Google Trends elasticity leads to superior real-time forecasts of initial UI claims relative to other commonly used models. Our approach is also amenable to forecasting both at the state and national levels, and is shown to be well-calibrated in its assessment of the level of uncertainty for its out-of-sample predictions during the Covid-19 pandemic.
Outcome Mechanisms for Improved Employment and Earnings Through Screened Job Training: Evidence from an RCT
Matthew Baird, John Engberg & Italo Gutierrez
RAND Working Paper, June 2021
This study fills a gap in the literature on the outcome mechanisms in which successful training programs improve employment and earnings, such as raises on the job or longer job duration. The city of New Orleans implemented a job training program as an RCT for low-income workers. Individuals in the treatment group were more likely to work in the target industries and move out of low-skill industries. In the first 9 months after training, the treatment group experienced higher earnings with new employers and with existing employments. After 9 months, the effects were driven by higher probability of staying with an employer (with now-higher earnings). Findings encourage patience on the part of trainees and the government, as workers may not find their stable, target employment immediately. Government may also want to find ways to improve early connections with employers after training.
California's Paid Family Leave Law and the Employment of 45-64 Year Old Adults
Soohyun Kim et al.
Columbia University Working Paper, May 2021
Paid family leave allows workers to take time off from work to care for a family member with a serious health condition, with reduced financial risk and increased job continuity. In 2004, California was the first state in the nation to implement a paid family leave program allowing workers to take up to eight weeks off work with partial pay to care for their own or a family member's serious health condition. While the effects of California's law on the labor supply of parents of newborns have been extensively studied, the role of paid family leave in the labor supply of workers who may need to provide care for a spouse has not been studied widely. We examine the effects of California's law on the employment of workers who are aged 45-64 and have a disabled spouse, using the 2001-2008 American Community Survey. Our preferred estimates suggest the paid leave program increased the employment of 45-64 year old women with a disabled spouse in California by around 0.9 percentage points (or 1.4% on a pre-law base rate of 65.9%) in the post-law period compared to their counterparts in other states, with a 2.9 percentage point rise in private sector employment. The employment of men with a disabled spouse in California also increased, but by a smaller amount: 0.7 percentage points (or 0.8% on a pre-law base 86.8%) (with a non-significant 0.4 percentage point decrease in private sector employment).