Working for People
Creative Destruction? Impact of E-Commerce on the Retail Sector
Sudheer Chava et al.
Management Science, forthcoming
Abstract:
Using an administrative payroll data set for 2.6 million retail workers, we find that the staggered rollout of a major e-commerce firm's fulfillment centers reduces traditional retail workers' income in geographically proximate counties by 2.4%. Wages of hourly workers, especially part-time hourly workers, decrease significantly driven by a drop in the number of hours worked. We observe a U-shaped pattern in which both young and old workers experience a sharper decrease in wage income. Consequently, some workers experience an increase in credit card delinquency. Using data for 3.2 million stores, we find that sales (employment) at proximate stores decrease by 4% (2.1%). Exits, especially of young and small stores, increase, and entry decreases. Our results highlight how creative destruction led by e-commerce impacts local labor markets.
Time Use, College Attainment, and The Working-from-Home Revolution
Benjamin Cowan
NBER Working Paper, July 2023
Abstract:
I demonstrate that the profound change in working from home (WFH) in the wake of the COVID-19 pandemic is concentrated among individuals with college degrees. Relative to 2015-19, the number of minutes worked from home on fall 2021 weekdays increased by over 90 minutes for college graduates; for non-graduates, it was 17 minutes. The share of work done at home (for those who worked at all) increased by 21% for graduates and 6% for non-graduates. Average minutes worked changed little for either group. Daily time spent traveling (e.g., commuting) fell by 24 minutes for college graduates but did not change for non-graduates. I examine how time-use patterns change for college graduates relative to non-graduates over the same period. Preliminary evidence suggests that time spent with children has risen for college graduates relative to non-graduates, potentially a sign that gaps in children's outcomes by college attainment will be exacerbated by the WFH revolution.
Measuring Job Loss During the Pandemic Recession in Real Time with Twitter Data
Anbar Aizenman et al.
Federal Reserve Working Paper, May 2023
Abstract:
We present an indicator of job loss derived from Twitter data, based on a fine-tuned neural network with transfer learning to classify if a tweet is job-loss related or not. We show that our Twitter-based measure of job loss is well-correlated with and predictive of other measures of unemployment available in the official statistics and with the added benefits of real-time availability and daily frequency. These findings are especially strong for the period of the Pandemic Recession, when our Twitter indicator continues to track job loss well but where other real-time measures like unemployment insurance claims provided an imperfect signal of job loss. Additionally, we find that our Twitter job loss indicator provides incremental information in predicting official unemployment flows in a given month beyond what weekly unemployment insurance claims offer.
What do Right-to-Work Laws do to Unions? Evidence from Six Recently-Enacted RTW Laws
Kyung-nok Chun
Journal of Labor Research, June 2023, Pages 94-144
Abstract:
Right-to-work (RTW) laws prohibit union security agreements in many U.S. states, and are frequently portrayed as a mortal threat to unionism in the country. This paper sheds new light on the old debate surrounding the effects of RTW legislation by evaluating their impacts in six U.S. states that adopted such laws in the 21st century. Using a mix of panel data methods, I find evidence that in the private sector, RTW laws decrease union coverage by more than 10 percent, all else equal. I find RTW laws to have only a small and insignificant effect on free-riding behavior as measured by the share of unionized workers who are nonmembers. Union formation through NLRB-administered elections do not appear to be adversely affected. RTW laws are also found to increase union wages and their premium over non-union wages, which plausibly reflect changes in union bargaining behavior. In the public sector, RTW laws are associated with declines in union coverage but may be confounded by other state-level policies aimed at weakening public sector unions. Separately evaluating the effects of the 2018 U.S. Supreme Court decision in Janus v. AFSCME, which effectively made the entire U.S. public sector right-to-work, I find no evidence of any impact on union-related outcomes. Some of these findings are quite novel, and challenge conventional assumptions about how RTW laws impact unions.
Bottlenecks: Sectoral Imbalances and the US Productivity Slowdown
Daron Acemoglu, David Autor & Christina Patterson
NBER Working Paper, July 2023
Abstract:
Despite the rapid pace of innovation in information and communications technologies (ICT) and electronics, aggregate US productivity growth has been disappointing since the 1970s. We propose and empirically explore the hypothesis that slow growth stems in part from an unbalanced sectoral distribution of innovation over the last several decades. Because an industry's success in innovation depends on complementary innovations among its input suppliers, rapid productivity growth that is concentrated in a subset of sectors may create bottlenecks and consequently fail to translate into commensurate aggregate productivity gains. Using data on input-output linkages, citation linkages, industry productivity growth and patenting, we find evidence consistent with this hypothesis: the variance of suppliers' Total Factor Productivity growth or innovation adversely affects an industry's own TFP growth and innovation. Our estimates suggest that a substantial share of the productivity slowdown in the United States (and several other industrialized economies) can be accounted for by a sizable increase in cross-industry variance of TFP growth and innovation. For example, if TFP growth variance had remained at the 1977-1987 level, US manufacturing productivity would have grown twice as rapidly in 1997-2007 as it did -- yielding a counterfactual growth rate that would have been close to that of 1977-1987 and 1987-1997.
Make your own luck: The wage gains from starting college in a bad economy
Alena Bičáková, Guido Matias Cortes & Jacopo Mazza
Labour Economics, forthcoming
Abstract:
Using data for nearly 40 cohorts of American college graduates and exploiting regional variation in economic conditions, we show robust evidence of a positive relationship between the unemployment rate at the time of college enrollment and subsequent annual earnings, particularly for women. This positive relationship is not driven by selection into employment or by economic conditions at the time of labor market entry. It also cannot be explained by differential sorting into college majors or post-graduate education. Up to one third of the effect is accounted for by sorting towards more remunerative locations. The results are consistent with a behavioral change that induces individuals who experience bad economic times at the beginning of their studies to exert more effort toward obtaining higher paying jobs.
New Technologies and Jobs in Europe
Stefania Albanesi et al.
NBER Working Paper, June 2023
Abstract:
We examine the link between labour market developments and new technologies such as artificial intelligence (AI) and software in 16 European countries over the period 2011- 2019. Using data for occupations at the 3-digit level in Europe, we find that on average employment shares have increased in occupations more exposed to AI. This is particularly the case for occupations with a relatively higher proportion of younger and skilled workers. This evidence is in line with the Skill Biased Technological Change theory. While there exists heterogeneity across countries, only very few countries show a decline in employment shares of occupations more exposed to AI-enabled automation. Country heterogeneity for this result seems to be linked to the pace of technology diffusion and education, but also to the level of product market regulation (competition) and employment protection laws. In contrast to the findings for employment, we find little evidence for a relationship between wages and potential exposures to new technologies.
The Impact of the Retirement Slowdown on the U.S. Youth Labor Market
Paul Mohnen
Journal of Labor Economics, forthcoming
Abstract:
Exploiting cross-commuting zone differences in age composition among the old, this paper estimates the impact of retirements on youth labor market outcomes over the period 1980-2017. In commuting zones where fewer workers retire due to the initial age structure, there is no evidence of significant effects on youth employment, but the share of younger workers in high-skill jobs declines, while the share of younger workers in low-skill jobs rises. Fewer retirements also leads to declining youth wages and lower job mobility. This suggests the retirement slowdown in recent decades has contributed to deteriorating early career outcomes.
The Urban Wage Premium in Historical Perspective
Kyle Butts, Taylor Jaworski & Carl Kitchens
NBER Working Paper, June 2023
Abstract:
We estimate the urban wage premium in the United States from 1940 to 2010. Drawing on recent advances in the literature on selection on unobservables, we show how to control for heterogeneity in the characteristics of individuals that choose to live in cities to address endogenous sorting. Estimates from naive comparisons of individuals living in urban versus non-urban areas substantially overstate the urban wage premium. We find that the premium is highest in the middle of the twentieth century (about 12 percent in 1940 and 1950) relative to the early twenty-first century (declining to a few percent by 2010). Overall, the urban wage premium is decreasing and sorting explains a larger fraction of the difference in urban versus non-urban earnings across our sample period.
Salary History Bans and Healing Scars from Past Recessions
Joshua Mask
Labour Economics, forthcoming
Abstract:
In a recession, increased competition forces inexperienced job market entrants to accept lower wages than those who start their careers during an economic boom. Despite years of improvement in labor market conditions following a recession, a wage disparity, known as scarring, persists between these cohorts. Recently implemented Salary History Ban laws (SHBs) are intended to reduce wage disparities between advantaged and disadvantaged groups. In this study, I test how these laws affect a unique and often less salient disadvantaged group -- scarred workers. For scarred workers who began their careers during a moderate-to-severe recession, or a five percentage point higher state unemployment rate, I find SHBs increase job mobility by 0.6%, hourly wages by 2.65%, and weekly earnings by 5% relative to cohorts who graduated in baseline labor market conditions. These estimates represent a substantial reduction in the original scarring effect and provide a broader understanding of the mechanisms behind both scarring and SHB laws.
De-skilling: Evidence from Late Nineteenth Century American Manufacturing
Jeremy Atack, Robert Margo & Paul Rhode
NBER Working Paper, June 2023
Abstract:
The long-standing view in US economic history is the shift in manufacturing in the nineteenth century from the artisan shop to the mechanized factory led to "labor deskilling." Craft workers were displaced by mix of semi-skilled operatives, unskilled workers, and a reduced force of mechanics to maintain the powered machines. Investigating the Department of Labor's 1899 Hand and Machine Labor Study using causal inference statistical techniques, we show the adoption of inanimate power did indeed induce deskilling. While the effects were statistically significant, they accounted for only 7-15 percent of the deskilling observed in the sample. Broadening the scope of our inquiry, we find the increased division of labor as captured by the increase in scale of operations and the ratio of workers to tasks accounts for a larger fraction.
How Replaceable Is a Low-Wage Job?
Evan Rose & Yotam Shem-Tov
NBER Working Paper, July 2023
Abstract:
We study the long-run consequences of losing a low-wage job using linked employer-employee wage records and household surveys. For full-time workers earning $15 per hour or less, job loss due to an idiosyncratic, firm-wide contraction generates a 13% reduction in earnings six years later and over $40,000 cumulative lost earnings. Most of the long-run decrease stems from reductions in employment and hours as opposed to wage rates: job losers are twice as likely to report being unemployed and looking for work. By contrast, workers initially earning $15-$30 per hour see comparable long-run earnings losses driven primarily by reductions in hourly wages. Calibrating a dynamic job ladder model to the estimates implies that the rents from holding a full-time $15 per hour job relative to unemployment are worth about $20,000, more than seven times monthly earnings.