Most research on poverty focuses on the damage caused by persistent unemployment. But what actually happens when jobs are plentiful and workers are hard to come by? Moving the Needle examines how very low unemployment boosts wages at the bottom, improves job quality, lengthens job ladders, and pulls the unemployed into a booming job market. Drawing on over seventy years of quantitative data as well as interviews with employers, jobseekers, and longtime residents of poor neighborhoods, this lecture investigates the most durable positive consequences of tight labor markets and focus on the mechanisms that produce positive outcomes: matching processes that include the dispossessed, job ladders that grow within the low wage sector, and increasing human capital that can be parlayed into internal and external upward mobility. Dr. Newman will also consider the downside of overheated economies, which can fuel surging rents and ignite outmigration. She will conclude with a discussion of policies and practices that can sustain the benefits of tight labor markets when unemployment begins to rise.
Archives: IAB-Veranstaltungen
Marriage and Divorce under Labor Market Uncertainty
Married women’s greater allocation of time towards household chores and childcare suggests that an increase in their labor supply may result in reduced marital surplus and stability. This mechanism can explain persistent gender gaps in labor supply if the potential reduction is considered in decisions about reservation wages and job search efforts. An implication is that divorces may be caused by transitions into employment. This paper analyzes these “labor market divorces” in a novel model of simultaneous search in labor and marriage markets. Labor market search intensity choices depend on marital status and the partner’s type. The model matches key trends in German household survey data: declining marriage rates, increasing employment rates of married women, and a reduction of married women’s domestic time inputs. Our laboratory to quantify the role of labor market divorces is a period of rapid employment growth in Germany that started in the mid-2000s. This development in the labor market was not neutral with respect to marriage. Although more married women entering employment led to more divorces, the decrease in divorces caused by job loss among married men was greater, resulting in a net decrease in the overall divorce rate.
Matching Workers’ Skills and Firms’ Technologies: From Bundling to Unbundling
Estimating returns to special education: combining machine learning and text analysis to address confounding
Leveraging unique insights into the special education placement process through written individual psychological records, I present results from the first ever study to examine short- and long-term returns to special education programs with causal machine learning and computational text analysis methods. I find that special education programs in inclusive settings have positive returns in terms of academic performance as well as labor-market integration. Moreover, I uncover a positive effect of inclusive special education programs in comparison to segregated programs. This effect is heterogenous: segregation has least negative effects for students with emotional or behavioral problems, and for nonnative students with special needs. Finally, I deliver optimal program placement rules that would maximize aggregated school performance and labor market integration for students with special needs at lower program costs. These placement rules would reallocate most students with special needs from segregation to inclusion.
The Care-Dependent are Less Averse to Care Robots: An Empirical Comparison of Attitudes
A growing gap is emerging between the supply of and demand for professional caregivers, not least because of the ever-increasing average age of the world’s population. One strategy to address this growing gap in many regions is the use of care robots. Although there have been numerous ethical debates about the use of robots in nursing and elderly care, an important question remains unexamined: how do the potential recipients of such care perceive situations with care robots compared to situations with human caregivers? Using a large-scale experimental vignette study, we investigated people’s affective attitudes toward care robots. Specifically, we studied the influence of the caregiver’s nature on participants’ perceived comfort levels when confronted with different care scenarios in nursing homes. Our results show that the care-robot-related views of actual care recipients (i.e., people who are already affected by care dependency) differ substantially from the views of people who are not affected by care dependency. Those who do not (yet) rely on care placed care robots’ value far below that of human caregivers, especially in a service-oriented care scenario. This devaluation was not found among care recipients, whose perceived level of comfort was not influenced by the caregiver’s nature. These findings also proved robust when controlled for people’s gender, age, and general attitudes toward robots.
Performance costs and benefits of collective turnover: A theory-driven measurement framework and applications
Building on job matching theory, we model the effect of collective turnover on workplace performance as the sum of its costs and possible benefits occurring through changes in workforce match quality. The resulting theoretical turnover-performance relationship is generally curvilinear, nesting all the hitherto known patterns -- linear, ``U-shape'' and ``inverted U-shape'' -- as special cases. We show how one can estimate this relationship empirically, for matched worker-plant data, and calculate the implied costs and benefits of turnover. Applications to data from two retail networks reveal that turnover is more costly than beneficial.
Automated classification for open-ended questions + Hammock Plots
Answers to open-ended questions are often manually coded into different categories. This is time consuming. Automated coding uses statistical/machine learning to train on a small subset of manually coded text answers. The state of the art in NLP (natural language processing) has shifted: A general language model is first pre-trained on vast amounts of unrelated data, and then this model is adapted to a specific application data set. After reviewing some earlier results, we empirically investigate whether BERT, the currently dominant pre-trained language model, is more effective at automated coding of answers to open-ended questions than non-pre-trained statistical learning approaches. In the second part of the talk, I discuss the hammock plot for visualizing categorical or mixed categorical data.
Regional economies in times of crises, demographic ageing and structural change
Household Labor Supply Elasticities: Evidence from Cross-Border Workers
After the Swiss National Bank unexpectedly abandoned a minimum exchange rate policy in 2015, the Swiss franc appreciated by more than 10 percent against the Euro. The appreciation implied a sudden increase in real wage incomes for over 40,000 German cross-border commuters into Switzerland. We use this exchange rate shock to estimate the own-wage and cross-spouse labor supply elasticities from administrative tax returns data and find a 5% drop in taxable income for cross-border workers and a 1.5% reduction in taxable income for cross-border worker spouses. We provide evidence for intensive margin adjustments in hours worked consistent with these estimates.
Labor and Wealth Dynamics in Equilibrium
This paper develops a macroeconomic model that combines an incomplete-markets overlapping-generations economy with a job ladder featuring strategic wage bargaining and endogenous search effort of employed and non-employed workers. The model is able to capture the empirical relationships between search activity, labor market transition, earnings and wealth that we document in German data. We use the calibrated model to analyze the determinants of job mobility, earnings and wealth dynamics over the life cycle. We further examine the impact of unemployment insurance and progressive taxation for labor market dynamics, wage inequality and macroeconomic outcomes.
