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Elvery, Joel A., C. Lockwood Reynolds & Shawn M. Rohlin (2023): Employer Wage Subsidy Caps and Part-Time Work. In: ILR review, Jg. 76, H. 1, S. 189-209. DOI:10.1177/00197939221102865

Abstract

"Using tract-level US Census data and triple-difference estimators, the authors test whether firms increase their use of part-time workers when faced with capped wage subsidies. By limiting the maximum subsidy per worker, such subsidies create incentives for firms to increase the share of their payroll that is eligible for the subsidy by increasing use of part-time or low-wage workers. Results suggest that firms located in federal Empowerment Zones in the United States responded to the program’s capped wage subsidies by expanding their use of part-time workers, particularly in locations where the subsidy cap is likely to bind. Results also show a shift toward hiring lower-skill workers." (Author's abstract, IAB-Doku) ((en))

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Gerritsen, Aart (2023): To Redistribute or to Predistribute? The Minimum Wage versus Income Taxation When Workers Differ in Both Wages and Working Hours. (CESifo working paper 10734), München, 53 S.

Abstract

"I consider the case for the minimum wage alongside (optimal) income taxes when workers differ in both wages and working hours, such that a given level of income corresponds to multiple wage rates. The minimum wage is directly targeted at the lowest-wage workers, while income taxes are at most targeted at all low-income workers, regardless of their hourly wage rates. This renders the minimum wage unambiguously desirable in a discrete-type model of the labor market. Desirability of the minimum wage is a priori ambiguous in a continuous-type model of the labor market. Compared to the minimum wage, income taxes are less effective in compressing the wage distribution but more effective in redistributing income. Desirability of the minimum wage depends on this trade-off between the “predistributional advantage” of the minimum wage and the “redistributional advantage” of the income tax. I derive a desirability condition for the minimum wage and write it in terms of empirical sufficient statistics. A numerical application to the US suggests a strong case for a higher federal minimum wage – especially if social preferences for the lowest-wage workers are relatively strong and the wage elasticity of labor demand relatively small." (Author's abstract, IAB-Doku) ((en))

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Rose, Evan K. & Yotam Shem-Tov (2023): How Replaceable Is a Low-Wage Job? (NBER working paper / National Bureau of Economic Research 31447), Cambridge, Mass, 104 S.

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." (Author's abstract, IAB-Doku) ((en))

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Siddique, Abu Bakkar (2023): Job market polarization and American poverty. In: Journal for labour market research, Jg. 57. DOI:10.1186/s12651-023-00356-5

Abstract

"The article posits that the puzzles of stagnating poverty rates amidst high growth and declining unemployment in the United States can be substantially explained by polarized job markets characterized by job quality and job distribution. In recent decades, there has been an increased number of poor-quality jobs and an unequal distribution of jobs in the developed world, particularly in the United States. I have calculated measures of uneven job distribution indices that account for the distribution of jobs across households. A higher value of the uneven job distribution indices implies that there are relatively large numbers of households with multiple employed people and households with no employed people. Similarly, poor-quality jobs are those jobs that do not offer full-time work. Two-way fixed-effect models estimate that higher uneven job distribution across households worsens aggregated poverty at the state level. Similarly, good-quality jobs help households escape poverty, whereas poor-quality jobs do not. This paper suggests that eradicating poverty requires the government to direct labor market policies to be tailored more toward distributing jobs from individuals to households and altering bad jobs into good jobs, rather than merely creating more jobs in the economy. This paper contributes by elaborating on relations of employment and poverty, addressing employment quality and distribution, and providing empirical evidence." (Author's abstract, IAB-Doku, © Springer-Verlag) ((en))

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Torosyan, Karine, Sicheng Wang, Elizabeth A. Mack, Jenna A. Van Fossen & Nathan Baker (2023): Assessing the impact of technological change on similar occupations: Implications for employment alternatives. In: PLoS ONE, Jg. 18. DOI:10.1371/journal.pone.0291428

Abstract

"Background: The fast-changing labor market highlights the need for an in-depth understanding of occupational mobility impacted by technological change. However, we lack a multidimensional classification scheme that considers similarities of occupations comprehensively, which prevents us from predicting employment trends and mobility across occupations. This study fills the gap by examining employment trends based on similarities between occupations. Method: We first demonstrated a new method that clusters 756 occupation titles based on knowledge, skills, abilities, education, experience, training, activities, values, and interests. We used the Principal Component Analysis to categorize occupations in the Standard Occupational Classification, which is grouped into a four-level hierarchy. Then, we paired the occupation clusters with the occupational employment projections provided by the U.S. Bureau of Labor Statistics. We analyzed how employment would change and what factors affect the employment changes within occupation groups. Particularly, we specified factors related to technological changes. Results: The results reveal that technological change accounts for significant job losses in some clusters. This poses occupational mobility challenges for workers in these jobs at present. Job losses for nearly 60% of current employment will occur in low-skill, low-wage occupational groups. Meanwhile, many mid-skilled and highly skilled jobs are projected to grow in the next ten years. Conclusion: Our results demonstrate the utility of our occupational classification scheme. Furthermore, it suggests a critical need for skills upgrading and workforce development for workers in declining jobs. Special attention should be paid to vulnerable workers, such as older individuals and minorities." (Author's abstract, IAB-Doku) ((en))

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Bergman, Nittai K., David Matsa & Michael Weber (2022): Inclusive Monetary Policy: How Tight Labor Markets Facilitate Broad-Based Employment Growth. (CESifo working paper 9512), München, 45 S.

Abstract

"This paper analyzes the heterogeneous effects of monetary policy on workers with differing levels of labor force attachment. Exploiting variation in labor market tightness across metropolitan areas, we show that the employment of populations with lower labor force attachment—Blacks, high school dropouts, and women—is more responsive to expansionary monetary policy in tighter labor markets. The effect builds up over time and is long lasting. We develop a New Keynesian model with heterogeneous workers that rationalizes these results. The model shows that expansionary monetary shocks lead to larger increases in the employment of less attached workers when the central bank follows an average inflation targeting rule and when the Phillips curve is flatter. These findings suggest that, by tightening labor markets, the Federal Reserve’s recent move from a strict to an average inflation targeting framework especially benefits workers with lower labor force attachment." (Author's abstract, IAB-Doku) ((en))

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Duggan, Mark, Audrey Guo & Andrew C. Johnston (2022): Would Broadening the UI Tax Base Help Low-Income Workers? (IZA discussion paper 15020), Bonn, 12 S.

Abstract

"The tax base for state unemployment insurance (UI) programs varies significantly in the U.S., from a low of $7,000 annually in California to a high of $52,700 in Washington. Previous research has provided surprisingly little guidance to policy makers regarding the tradeoffs associated with this variation. In this paper, we use 37 years of data for all 50 states and Washington, D.C. to estimate the impact of the UI tax base on labor-market outcomes. We find that the low tax base that exists in California and many other states (and the necessarily higher tax rates that accompany these) negatively affects labor market outcomes for part-time and other low-earning workers." (Author's abstract, IAB-Doku) ((en))

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Katz, Lawrence F., Jonathan Roth, Richard Hendra & Kelsey Schaberg (2022): Why Do Sectoral Employment Programs Work? Lessons from WorkAdvance. In: Journal of labor economics, Jg. 40, H. S1, S. S249-S291. DOI:10.1086/717932

Abstract

"This paper examines the evidence from randomized evaluations of sector-focused training programs that target low-wage workers and combine up-front screening, occupational and soft-skills training, and wraparound services. The programs generate substantial and persistent earnings gains (12%–34%) following training. Theoretical mechanisms for program impacts are explored for the WorkAdvance demonstration. Earnings gains are generated by getting participants into higher-wage jobs in higher-earning industries and occupations, not just by raising employment. Training in transferable and certifiable skills (likely underprovided from poaching concerns) and reductions of employment barriers to high-wage sectors for nontraditional workers appear to play key roles." (Author's abstract, IAB-Doku) ((en))

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Kupfer, Antonia (2022): Supermagd : Arbeitsaneignung im Niedriglohnsektor im Ländervergleich. In: Arbeits- und industriesoziologische Studien, Jg. 15, H. 1, S. 26-39.

Abstract

"Im vorliegenden Beitrag wird ein Konzept der Arbeitsaneignung vorgestellt, das die Subjektperspektive Beschäftigter eingebettet in soziale Kontexte erfasst und analysiert. Damit geraten strukturelle Einflüsse auf die Art und Weise wie Beschäftigte ihre Arbeit wahrnehmen, bewerten und bewältigen in den Blick. Am Beispiel von Supermarktverkäufer_innen in Deutschland und den USA wird das Konzept mit seinen drei Dimensionen sozialer Status der Tätigkeit, Gebrauchswert und Tätigsein entfaltet. Ihr Beschäftigtenanteil ist hoch und – nicht erst in der Corona-Pandemie – systemrelevant. Auf der Grundlage zweier kontrastierender Fälle werden Thesen zur unterschiedlichen Arbeitsaneignung in einem ausgewählten Niedriglohnsektor vorgestellt. Im Ergebnis wird deutlich, dass Arbeitsaneignung in Deutschland im Vergleich zu den USA arbeitnehmerinnenfreundlicher stattfindet. Für eine Verbesserung von Lebensverhältnissen sind daher politische Veränderungen und nicht subjektive Anrufungen erforderlich." (Autorenreferat, IAB-Doku)

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Ortigueira, Salvador & Nawid Siassi (2022): The U.S. tax-transfer system and low-income households: Savings, labor supply, and household formation. In: Review of Economic Dynamics, Jg. 44, S. 184-210. DOI:10.1016/j.red.2021.02.010

Abstract

"Eligibility and benefits for anti-poverty income transfers in the U.S. are based on both the means and the household characteristics of applicants, such as their filing status, living arrangement, and marital status. In this paper we develop a dynamic structural model to study the effects of the U.S. tax-transfer system on the decisions of non-college-educated workers with children. In our model workers face uninsurable idiosyncratic risks and make decisions on savings, labor supply, living arrangement, and marital status. We find that the U.S. anti-poverty policy distorts the cohabitation/marriage decision of single mothers, providing incentives to cohabit. We also find quantitatively important effects on savings, and on the labor supply of husbands and wives. Namely, the model yields a U-shaped relationship between the earnings of one spouse and the labor supply of the other spouse, a result that we also find in the data. We show that these U-shaped relationships stem in part from the current design of anti-poverty income programs, and that the introduction of an EITC deduction on the earnings of secondary earners—as proposed in the 21st Century Worker Tax Cut Act—would increase the employment rate of the spouses of workers earning between $15K and $35K, especially of female spouses." (Author's abstract, IAB-Doku, © 2022 Elsevier) ((en))

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Carr, Michael D. & Emily E. Wiemers (2021): The role of low earnings in differing trends in male earnings volatility. In: Economics Letters, Jg. 199. DOI:10.1016/j.econlet.2020.109702

Abstract

"Trends in male earnings volatility vary across studies. Volatility is flat or increasing in most studies using survey data but falling in recent studies using administrative data. This paper uses Survey of Income and Program Participation data linked to administrative earnings histories from the Detailed Earnings Records to investigate the effect of the treatment of low earnings on earnings volatility. We show that volatility trends are sensitive to the treatment of low earnings: when low earnings are treated as is typically done with survey data, volatility is flat or increasing slightly, but when low earnings are treated as in recent studies using administrative earnings data, volatility declines." (Author's abstract, IAB-Doku, © 2021 Elsevier) ((en))

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Dorn, David & Peter Levell (2021): Trade and Inequality in Europe and the US. (IZA discussion paper 14914), Bonn, 65 S.

Abstract

"The share of low-income countries in global exports nearly tripled between 1990 and 2015, driven largely by the rapid emergence of China as an exporting powerhouse. While research in economics had long acknowledged that trade with lower-income countries could raise income inequality in Europe and the US, empirical estimates indicated only a modest contribution of trade to growing national skill premia. However, if workers are not highly mobile across firms, industries and locations, then the unequal impacts of trade can manifest along different margins. Recent evidence from countries across Europe and the US shows that growing import competition from China differentially reduced earnings and employment rates for workers in more trade-exposed industries, and for the residents of more trade-exposed geographic regions. These adverse impacts were often largest for lower-skilled individuals. We show that domestic manufacturing employment declined much more in countries that saw a large growth of net imports from China (such as the UK and the US), than in countries that maintained relatively balanced trade with China (such as Germany and Switzerland). Drawing on a new analysis for the UK, we further show that trade with China contributed to job loss in manufacturing, but also to substantial declines in consumer prices. However, while the adverse labour market impacts were concentrated on specific groups of workers and regions, the consumer benefits from trade were widely dispersed in the population, and appear similarly large for high-income and low-income households. Globalisation has thus created pockets of losers, and recent evidence indicates that in addition to financial losses, residents of regions with greater exposure to import competition also suffer from higher crime rates, a deterioration of health outcomes, and a dissolution of traditional family structures. We argue that new import tariffs such as those imposed by the US in 2018 and 2019 are unlikely to help the losers from globalisation. Instead, displaced workers may be better supported by a combination of transfers to avert financial hardship, skills training that facilitate reintegration into the labour market, and place-based policies that stimulate job creation in depressed locations." (Author's abstract, IAB-Doku) ((en))

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Engelhardt, Gary V. & Patrick J. Purcell (2021): The minimum wage and annual earnings inequality. In: Economics Letters, Jg. 207. DOI:10.1016/j.econlet.2021.110001

Abstract

"We estimate the impact of the minimum wage on U.S. male annual earnings inequality, using administrative Social Security earnings records from 1981-2015. The minimum wage reduces inequality in the bottom quartile of the earnings distribution, and especially in the bottom decile." (Author's abstract, IAB-Doku, © 2021 Elsevier) ((en))

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Farmand, Aida & Owen Davis (2021): Who Does the Earned Income Tax Credit Benefit? A Monopsony View. (Working paper / Schwartz Center for Economic Policy Analysis 2021-02), New York, NY, 45 S.

Abstract

"The Earned Income Tax Credit (EITC) targets refundable tax credits to low-income workers, incentivizing labor supply and raising the incomes of tens of millions of Americans. One possible consequence of subsidizing low-wage work, however, is to reduce wage growth. A monopsony model of the EITC is developed in order to analyze its impacts on labor market outcomes, which are identified by exploiting variation in state EITC supplements. A first set of results focused on the food service industry find that the EITC increases employment and reduces turnover among young women. Further results suggest that the EITC reduces wages for workers without college degrees. These findings prompt a reconsideration of the redistributive effects of the EITC, particularly for groups like older low-wage workers who face slower wage growth as a result of the policy but do not receive the same level of benefits on average." (Author's abstract, IAB-Doku) ((en))

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Struffolino, Emanuela & Zachary Van Winkle (2021): Gender and race differences in pathways out of in-work poverty in the US. In: Social science research, Jg. 99. DOI:10.1016/j.ssresearch.2021.102585

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Grimes, Donald R., Penelope B. Prime & Mary Beth Walker (2019): Geographical variation in wages of workers in low-wage service occupations. A U.S. metropolitan area analysis. In: Economic Development Quarterly, Jg. 33, H. 2, S. 121-133. DOI:10.1177/0891242419836493

Abstract

"Low-wage, service-providing occupations accounted for almost half of all U.S. net job growth between 2006 and 2016. The authors study the variation in wages of low-wage service employees across U.S. metropolitan statistical areas, using cross-sectional estimations for 2016 for the 10th, 50th, and 90th percentile wage rates. New data are used to examine the impact of different cost-of-living adjustments on model results, arguing that the preferred adjustment separates housing costs from other costs. The main results are that strong labor market conditions positively contribute to real wages in most of the categories; minimum wages contribute positively to the 10th percentile of four occupations with evidence of influencing higher wages in the 50th and 90th percentiles; and using the authors' cost-of-living adjustment and controlling for housing costs, the presence of an educated population did not substantially raise wages in the four low-wage, low-skill occupations." (Author's abstract, IAB-Doku) ((en))

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Phelan, Brian J. (2019): Hedonic-based labor supply substitution and the ripple effect of minimum wages. In: Journal of labor economics, Jg. 37, H. 3, S. 905-947. DOI:10.1086/702651

Abstract

"This paper analyzes a new explanation of the 'ripple effect' of minimum wages based on how minimum wages affect hedonic compensation. Minimum wage hikes lower compensating differentials at low-skill undesirable jobs because they raise wages at the most desirable low-skill job, the minimum wage job. This change in hedonic compensation may cause some individuals to optimally leave low-wage undesirable jobs and seek more desirable employment. If labor supply falls at low-wage undesirable jobs, employers would raise wages, consistent with the ripple effect. Empirically, I provide evidence that hedonic-based labor supply substitution is taking place and contributing to the ripple effect." (Author's abstract, IAB-Doku) ((en))

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Struffolino, Emanuela & Zachary Van Winkle (2019): Is there only one way out of in-work poverty? Difference by gender and race in the US. (Wissenschaftszentrum Berlin für Sozialforschung. Discussion papers SP 1 2019-601), Berlin, 41 S.

Abstract

"The persistency of in-work poverty during the last decades challenges the idea that employment is sufficient to escape poverty. Research has focused on the risk factors associated with in-work poverty, but scholars know little about individuals' experiences after exiting it. The Sequence Analysis Multistate Model procedure is applied to three high-quality longitudinal data sources (NLSY79, NLSY97, and PSID) to establish a typology of employment pathways out of in-work poverty and estimate how gender and race are associated with each pathway. We identify five distinct pathways characterized by varying degrees of labor market attachment, economic vulnerability, and volatility. White men are most likely exit in-work poverty into stable employment outside of poverty, while Black men and women likely remain vulnerable and at-risk of social exclusion as well as recurrent spells of in-work poverty. Gender and race differences persist even after controlling for labor market related characteristics and family demographic behavior." (Author's abstract, IAB-Doku) ((en))

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Leung, Pauline & Alexandre Mas (2018): Employment effects of the affordable care act medicaid expansions. In: Industrial relations, Jg. 57, H. 2, S. 206-234. DOI:10.1111/irel.12207

Abstract

"We examine whether the recent expansions in Medicaid from the Affordable Care Act reduced 'employment lock' among childless adults who were previously ineligible for public coverage. We compare employment in states that chose to expand Medicaid versus those that chose not to expand, before and after implementation. We find that although the expansion increased Medicaid coverage by 3.0 percentage points among childless adults, there was no significant impact on employment." (Author's abstract, Published by arrangement with John Wiley & Sons) ((en))

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Abrassart, Aurélien (2015): Low-skill jobs or jobs for low-skilled workers? An analysis of the institutional determinants of the employment rates of low-educated workers in 19 OECD countries, 1997 - 2010. In: Journal of European social policy, Jg. 25, H. 2, S. 225-241. DOI:10.1177/0958928715573485

Abstract

"We often hear that the high unemployment rates of low-educated workers in Europe are due to the rigidities of the institutions increasing the labour costs that burden employers. In this article, we challenge this traditional view and offer alternative explanations to the cross-national variation in the employment rate of low-educated workers. Using macro-data and an error correction model, we analyse the determinants of the creation of jobs for low-educated workers in 19 countries between 1997 and 2010. Our findings tend to invalidate the neoliberal view, while also pointing to the positive impact of investing in public employment services and the predominant role of economic growth, which can be weakened by union density and employment protection in the case of male workers. Last but not least, creating low skill jobs has no or little impact on the employment outcomes of low-educated workers, thus indicating job displacement issues." (Author's abstract, IAB-Doku) ((en))