Labor Economics Research Articles

Incentivizing Top-Musicians

Part I explores the challenge that COPYRIGHT’S EXCESS tackles. It explains the core of copyright’s incentive theory, why it is difficult to test it empirically, and how COPY- RIGHT’S EXCESS rises to that challenge, especially by exploring the lack of correlation between sales and productivity, and, in particular, superstars’ productivity in the music industry. Parts II-IV of this Essay consider several explanations for the lack of correlation. Part II addresses the sometimes-neglected role of the recording companies. Those intermediaries profoundly affect the art- ists’ compensation and their creative decisions. Therefore, any analysis of the connection between sales, artistic income, and artistic output (i.e., productivity), needs to consider their role. Part III addresses one of Lunney’s theories for explaining the discrepancy between sales and productivity. Labor economists have long held that while low-paid workers will wish to work more as their compensation increases, highly-paid workers will instead substitute work time for leisure time as their compensation increases and work less. Can this phenomenon explain why superstars became less productive when the music industry’s sales peaked? In Part III, I explain why I find this explanation unlikely. Superstars, this Part suggests, are probably too wealthy to be affected by this phenomenon. Part IV focuses on the superstars’ incentives to continue to create even after their previous successes have made them very wealthy. It suggests that the main driving forces of top musicians are likely their internal joy from creating, and possibly more importantly, the social- psychological reward that is attached to their success. Ultra-wealthy businessmen present a similar phenomenon: They continue to work even when they already accumulate enough wealth to meet all their material needs because, as studies suggest, they enjoy their work, and they love to be considered successful by their reference group. It is reasonable to expect wealthy musicians to act similarly for corre- sponding motivations. Part V briefly considers some of the possible implications. If top- artists are not primarily motivated by money, putting aside the status that is attached thereto, then society should be hesitant to devise a copyright system that makes those wealthy individuals even richer. It might get very little in return. In that respect, this Essay ends close to where COPYRIGHT’S EXCESS does: with the call for copyright law to focus on incentivizing marginal artists and not the super-rich.

Education, skill training, and lifelong learning in the era of technological revolution: a review

Rapid technological development makes skills depreciate faster than in the past while new technologies generate gaps in workers' skills and call for the acquisition of appropriate skills and lifelong learning. Proper skill mixes for future jobs include strong cognitive skills, basic information and communication technology, and analytical skills, as well as a range of non‐cognitive skills such as creativity, problem‐solving, critical thinking, and communication. Retraining and reskilling workers are also crucial, particularly as life expectancy increases. All these changes lead to a major rethinking of education and skill training throughout a person's life. This paper reviews the recent studies on human capital and skill formation in the era of rapid technological progress. Findings from these studies, particularly in labour economics, can shed light on new directions for lifelong education policies, for example (1) parental investment in pre‐school learning is reflected in highly positive adult outcomes; (2) as far as education inputs are concerned, teacher quality is far more important than additional school resources; and (3) government workforce training programs are largely ineffective as compared to private training, which contribute significantly to worker productivity.

MIGRATION AND SECURITIZATION: AN ASSESSMENT IN THE CONTEXT OF HUMAN SECURITY

Migration has become a popular subject in many fields such as international relations, political science, sociology, psychology, security studies, labor economics and public administration. As the number of immigrants in the world gradually increases, the saturation of immigrants in the receiving societies and the irregular and illegal dimension of the process comes to the forefront, the issue of migration has reached at the top of the agenda. Individual or mass mobility, seen as a natural process of humanity, has been subjected to politicization and then to securitization, especially in the late and immediately after the Cold War. Migrants, previously encouraged for the development of national economies, have been mentioned with various security problems and have been expressed as threats through discourse. Immigration, which has started to be seen as a process affecting individual, society, state, region and international security areas, has become an area where the state authorities have focused on as an important subject of discussion. While the national security concerns are more involved in the security-migration relationship, it is remarkable that the relationship between migration and individual security is less talked about. The security threats forcing individuals to migration, they face during the route, they confront in receiving countries and the problems expressed by individuals in the receiving communities should be addressed in this context. In this study, first of all, the securitization approach and the process of migration getting into the security field will be examined. Then, the relationship between migration and individual security will be considered within four headings. This study is thought to contribute to the field in terms of systematically dealing with the process of establishing the relationship between migration and security and revealing the ways in which individuals are affected from this process.

Fuzzy System Model of Ocean Labor Demand Based on Industrial IOT Network

Xing, H. and Yang, H., 2020. Fuzzy system model of ocean labor demand based on industrial IOT network. In: Yang, D.F. and Wang, H. (eds.), Recent Advances in Marine Geology and Environmental Oceanography. Journal of Coastal Research, Special Issue No. 108, pp. 183–187. Coconut Creek (Florida), ISSN 0749-0208.Labor demand has been one of the core issues of labor economics. Reasonable analysis and utilization of labor can improve labor structure and regional and national industrial structure. This can effectively reduce unemployment and increase overall productivity and gross domestic product. Marine and fishery resources are very important for modern societies, and the demand for labor has a very strong seasonality with fishery production. Therefore, it is important to reasonably and accurately predict and judge the trends of labor demand. Previous research theories have focused on qualitative analysis, but quantitative analysis of labor demand is rare. Based on the mobile Internet big data and cloud computing methods, a fuzzy system model for the prediction of marine labor demand was established in this study. Using vector data, the model was improved, and then the model was used to predict the marine labor demand in a certain area, and a good prediction effect was obtained.

Survey of Members of the Indian Society of Labour Economics on the COVID-19 Crisis and Employment.

Survey of Members of the Indian Society of Labour Economics on the COVID-19 Crisis and Employment.

Distributional Arguments, In Reverse

What should the government do about the distribution of resources and outcomes in the society? Two arguments have shaped academic debates about this question for several decades. The first argument states that economic regulation should focus on efficiency alone, leaving distributional considerations for the tax-and-transfer system. The second argument objects to government assistance for people unintentionally harmed by legal reforms. Taken together, the two arguments impose major restrictions on the range of possible distributional policies. This Article contends that a growing body of research in the economics of trade, immigration, industrial organization, labor, and environmental regulation reveals that the core assumptions underlying the two distributional arguments do not hold. Moreover, once these assumptions are changed to reflect reality, the analytical machinery underlying the arguments goes in reverse: The conclusions become not merely indeterminate but opposite of those originally advanced. The revised distributional arguments support enacting a broad-based transitional assistance program for low-skill workers, embracing some distributionally informed legal rules, and replacing our complex, obscure, state-specific social safety net with simpler, transparent, nationally uniform one. More generally, reversing the normative thrust of the two distributional arguments shifts the focus of the academic inquiry. Instead of debating whether the government should actively shape distributional outcomes in a variety of ways, the question becomes how should the government do so given institutional, informational, and political constraints. Finding and refining answers to this question would help policymakers to craft better policy responses to major economic shocks, whether these shocks arise from legal reforms, technological transformations, or a deadly pandemic.

The employment double dividend of environmental tax reforms: exploring the role of agent behaviour and social interaction

ABSTRACT It has been long debated whether environmental tax reform (ETR), i.e. a revenue-neutral shift of the tax burden from labour to carbon emissions, can have a double dividend, in terms of climate and economic goals. So far this question has been addressed in public finance and environmental economics using models with rational and representative agents. Here we examine the relevance of deviating from these standard behavioural assumptions. Our motivation is that research from other fields indicates that impacts of both environmental and income taxation on households are sensitive to behavioural biases, such as habits, imitation or status seeking. A related feature is that consumers and firms are heterogeneous with respect to many characteristics, some of which are crucial for the distributional effects of a tax reform. We combine insights from social psychology and behavioural, evolutionary and labour economics to identify behavioural cases in which the impacts of an ETR is likely to differ significantly from those in the traditional framework. Our findings show that households’ time use patterns and the distinction between extensive and intensive labour supply are relevant and deserve more attention.

The empty nests of elderly only-child parents in urban China—an analysis based on survey data from five provinces

This paper studies the status of empty nest only-child families in urban China, using data about these families taken from a 2015 survey conducted by the Institute of Population and Labor Economics, Chinese Academy of Social Sciences. Factors that determine the timing of empty nest periods and their duration for only-child parents are also analyzed. The data shows that more than half of the only-child parents surveyed in 2015 lived in empty nests. Some of these parents had been empty-nesters for as many as 25 years. During the life cycle of families, the empty nest status of elderly only-child parents shows different characteristics at different stages, as the only-children begin attending universities, start to work, get married, and have children of their own. There are empty nest periods in only-child families when the only-child leaves the parents for several years and periods when the child returns home and lives with parents for years. The living arrangements of only-child parents depend mainly on changes in the life needs of their only-children. Intergenerational support is focused on meeting the needs of only-children.

Impact of the Expansion of Job Search Scope on the Labor Market

With the development of information technology and transportation, people’s ability to obtain information and the scope of commuting space have been improved. The search behavior of job seekers has also changed greatly, and people’s job search scope has expanded rapidly. In this paper, a labor market model is established by using the agent-based model （ABM）. Based on the model, four experimental groups are set up to study the impact of the collective expansion of workers’ search scope on workers, enterprises and labor market.Simulation experiments show that the expansion of workers’ search scope is conducive to reducing the unemployment rate and increasing the growth rate of workers’ wages, but there is a phenomenon of diminishing marginal effects. More specifically, although the expansion of job search scope can increase the employment opportunities of workers and increase the probability of final application success, it will also bring about negative effects such as increased application costs, tight search resources, and increased expected wage. In addition, the profit environment of enterprises will also improve as the search scope of workers expands, and enterprises will provide more jobs. The expansion of workers’ search scope will also improve the matching efficiency of the market, allowing more workers to find jobs, but due to the increase in labor demand, more vacancies will appear in the market.This article believes that vigorously developing Internet job recruitment and urban rail transit, and expanding the space scope and information channels for job seekers will have a positive impact on the labor market. The government can effectively reduce the application cost of job seekers by developing various low-cost recruitment methods and subsidizing the transportation expenses of applicants, so that job seekers are willing to try more job opportunities.Compared with the existing literature, this article has two innovations: First, it is different from the previous discussion about the advancement of production technology. This article focuses on the expansion of job search scope brought by the advancement of search technology, and studies its impact on the labor market. Second, it analyzes worker unemployment in a more detailed and microscopic manner through the methods of ABM and multi-agent simulation experiment, which involves the distinction between different types of unemployment. We hope to take this research to make more labor economics scholars pay attention to the ABM method.

Risk Shifts in the Gig Economy: The Normative Case for an Insurance Scheme against the Effects of Precarious Work*

Risk Shifts in the Gig Economy: The Normative Case for an Insurance Scheme against the Effects of Precarious Work*

The CEO Beauty Premium

We apply insights from research in social psychology and labor economics to the domain of entrepreneurial finance and investigate how founder chief executive officers’ (founder CEOs’) facial attractiveness influences firm valuation. Leveraging the novel context of initial coin offerings (ICOs), we document a pronounced founder CEO beauty premium, with a positive relationship between founder CEO attractiveness and firm valuation. We find only very limited evidence of stereotype-based evaluations, through the association of founder CEO attractiveness with latent traits such as competence, intelligence, likeability, or trustworthiness. Rather, attractiveness seems to bear economic value per se, especially in a context in which investors base their decisions on a limited information set. Indeed, attractiveness has a sustainable effect on post- ICO performance.

Depression, Risk Preferences, and Risk-Taking Behavior

Deborah A. Cobb-Clark1,3,4, Sarah C. Dahmann1,3,4 and Nathan Kettlewell2,3,4 1School of Economics, The University of Sydney 2Economics Discipline Group, University of Technology Sydney 3ARC Centre of Excellence for Children and Families over the Life Course 4Institute of Labor Economics (IZA)

Analyzing the returns to entrepreneurship by a modified Lazear model

A modified version of Lazear’s model (in American Economic Review, 94, 208-211, 2004, Journal of Labor Economics, 23, 649–680, 2005) for occupational choice is formulated. It includes a utility adjustment factor that captures the combined effect of nonpecuniary benefits and uncertainty associated with entrepreneurship. We show that the counterfactual income returns to entrepreneurship are lower than the market value of entrepreneurial talent and higher than the inverse of the utility adjustment factor. Moreover, if the skill profiles in the population are Fréchet-distributed, the ratio between the expected incomes of entrepreneurs and observationally similar wage employees is lower than the inverse of the utility adjustment factor. Thus, entrepreneurs will on average earn less than wage employees if the utility adjustment factor is greater than or equal to one. It is also shown that the self-selection bias related to this income ratio or returns measure increases with the observed percentage of entrepreneurs. Swedish employment data are used to calibrate the modified Lazear model. The empirical results indicate that uncertainty considerations might be more important for the occupational choices than nonpecuniary benefits.

Another Look at the Macroeconomic Information Content of Aggregate Earnings: Evidence from the Labor Market

ABSTRACTWe examine the macroeconomic information content of aggregate earnings from the labor market's perspective. We use insights from the labor economics literature to characterize the information contained in aggregate GAAP earnings and its components that is relevant for predicting aggregate job creation and destruction. Our results suggest that not only does aggregate earnings news convey information about future labor market aggregates, but its information content is incremental to other macroeconomic variables at near-term horizons. Further, the source of this information stems primarily from two earnings components: aggregate core earnings and special items. Shocks to core earnings signal persistent changes in economy-wide profitability that predict aggregate job creation up to four quarters ahead, while shocks to special items predict job destruction up to one quarter. Taken together, our results suggest that aggregate earnings contain useful information about future labor market conditions, with the nature of such information varying across earnings components.JEL Classifications: E37; E44; G17; G24; M41.

New Directions in Gender and Organizations: Closing the Gender Gap in Career Advancement

As long observed by Kanter (1977), climbing the corporate ladder is not a gender-neutral endeavor. Since then, improvement on women’s career advancement within organizations has continued to be disturbingly slow. Research in management, sociology, and labor economics has highlighted the existence of gender bias and the lack of female representation in management positions (Bertrand and Duflo, 2017; Castilla and Benard, 2010; Heilman, 2012) and has put forward a set of explanations for the phenomenon, such as gender stereotypes and status beliefs (Correll, 2004; Bertrand, 2011, Eagly and Karau, 2002, Rudman and Glick, 2001). Gender bias and discrimination, in their contemporary forms, reveal themselves to be complex and subtle. After uncovering the phenomenon and its primary mechanisms, the literature is now focusing on building a more specific and detailed knowledge of the ways gender inequality is perpetuated through organizational mechanisms, such as task allocation and recruitment processes (Babcock et al., 2017; Brands and Fernandez-Mateo, 2017; Chang et al., 2019, Sarsons, 2017) and the ways it can be lessened (Flabbi et al., 2019; Parker et al, 2019). The four papers in our symposium contribute to this literature by exploring various organizational mechanisms, including structure, culture, and hiring practices, in relation to women’s career advancement within organizations. In addition, some of these studies consider the interaction of such organizational mechanisms with individual factors, such as perceptions of the organization, and social capital through marriage ties. More broadly, the studies also situate organizations in the ongoing context of the knowledge economy and globalization. Employers (Think They) Know Best: A Comparison of Hiring Practices on Career Outcomes Presenter: Jennifer M. Merluzzi; George Washington U. Presenter: Damon J. Phillips; Columbia Business School Presenter: James Wade; George Washington U. Same-Occupation Marriage, Gender, and Career Achievement Presenter: Sue Hyun Moon; State U. of New York (SUNY) Farmingdale Presenter: Colleen Stuart; Johns Hopkins U. New Owner, New Rules? Impact of Cross-Border Acquisitions on Gender Diversity Presenter: Tatiana Lluent; Duke U. Sex Segregation in the Knowledge Economy Presenter: Trevor Daniel Young-Hyman; U. of Pittsburgh Presenter: Oliver Hahl; Carnegie Mellon U. - Tepper School of Business Presenter: Evan Gilbertson; U. of Pittsburgh

Drivers of independent migration among adolescents from selected West African countries

Independent migration among adolescents is an issue of public concern in West Africa. Thus, drawing on the neoclassical economics, new economics of labour and social networks perspectives, this study explored the reasons for independent migration among adolescents. Employing a qualitative research design, 41 adolescents participated in the study. Focus Group Discussions (FGDs) and In-depth Interviews (IDIs) were conducted to gather data, which were analyzed thematically. The findings of the study indicated that the adolescents migrated due to diverse reasons (poverty and hardship; social support and networks; peer-pressure and escapade; and maltreatment and abuse). Also, it was found that generally, poverty and hardships drove adolescents to migrate from their countries of origin with the aim of finding and starting work in Ghana, which was perceived as an important source of economic opportunities. Furthermore, evidence showed that while some adolescents had positive experiences in Ghana, others were confronted with challenges, a push factor to their return and integration decisions respectively. Based on the findings of the study, conclusions were drawn.

Factors That Contribute to Cost Differences Based on ICU of Admission in Neonates Undergoing Congenital Heart Surgery: A Novel Decomposition Analysis.

We leveraged decomposition analysis, commonly used in labor economics, to understand determinants of cost differences related to location of admission in children undergoing neonatal congenital heart surgery. A retrospective cohort study. Pediatric Health Information Systems database. Neonates (<30 d old) undergoing their index congenital heart surgery between 2004 and 2013. A decomposition analysis with bootstrapping determined characteristic (explainable by differing covariate levels) and structural effects (if covariates are held constant) related to cost differences. Covariates included center volume, age at admission, prematurity, sex, race, genetic or major noncardiac abnormality, Risk Adjustment for Congenital Heart Surgery-1 score, payor, admission year, cardiac arrest, infection, and delayed sternal closure.Of 19,984 infants included (10,491 [52%] to cardiac ICU/PICU and 9,493 [48%] to neonatal ICU), admission to the neonatal ICU had overall higher average costs ($24,959 ± $3,260; p < 0.001) versus cardiac ICU/PICU admission. Characteristic effects accounted for higher costs in the neonatal ICU ($28,958 ± $2,044; p < 0.001). Differing levels of prematurity, genetic syndromes, hospital volume, age at admission, and infection contributed to higher neonatal ICU costs, with infection rate providing the most significant contribution ($13,581; p < 0.001). Aggregate structural effects were not associated with cost differences for those admitted to the neonatal ICU versus cardiac ICU/PICU (p = 0.1). Individually, prematurity and age at admission were associated with higher costs due to structural effects for infants admitted to the neonatal ICU versus cardiac ICU/PICU. The difference in cost between neonatal ICU and cardiac ICU/PICU admissions is largely driven by differing prevalence of risk factors between these units. Infection rate was a modifiable factor that accounted for the largest difference in costs between admitting units.

Türkiye’de Bölgesel Genç İşsizlik: Belirleyiciler Cinsiyete Göre Değişken mi?

Economic theory addresses unemployment as one of the crucial macroeconomic problems. Given the contributions to the production process, labor market integration of youth population is one of the main focuses of the labor economics literature. In this direction, a great number of studies have analyzed the dynamics of youth unemployment in the Turkish economy. However, a limited number of studies have investigated the issue in the case of Turkey with respect to gender using micro-level data. Given this knowledge, this study attempts to examine the determinants of the youth unemployment in 26 regions categorized under NUTS-2 over the period 2014-2019, and investigate whether those determinants vary by gender. Estimation results indicate that per capita income negatively affects both the total youth unemployment and youth unemployment by gender. Relative cohort size and internal migration positively affects all of the three youth unemployment categories. An increase in inflation rate increases youth female unemployment whereas youth male unemployment decreases with inflation. In addition, while an increase in age at first marriage increases youth female unemployment, it decreases youth male unemployment. Overall, the findings reveal that the impact that regional youth unemployment dynamics has on youth female unemployment is greater than on youth male unemployment. This study emphasizes that gender-based differences should be taken into account while developing policies towards the integration of youth into the labor market.

Box–Cox power transformation unconditional quantile regressions with an application on wage inequality

This study proposes a semi-parametric estimation method, Box–Cox power transformation unconditional quantile regression, to estimate the impact of changes in the distribution of the explanatory variables on the unconditional quantile of the outcome variable. The proposed method consists of running a nonlinear regression of the recentered influence function (RIF) of the outcome variable on the explanatory variables. We also show the asymptotic properties of the proposed estimator and apply the estimation method to address an existing puzzle in labor economics–why the 50th/10th percentile wage gap has been falling in the USA since the late 1980s. Our results show that declining unionization can explain approximately 10% of the decline in the 50/10 wage gap in 1990–2000 and 23% in 2000–2010.

F.O.G. and Teleworking: Some Labor Economics of Covid-19

FOG (« fear of going back to work ») is a new acronym reflecting workers stress to become contamined by COVID-19. In response, firms have been offering protections, extending teleworking as a way to continue to work during the pandemics. Leveraging a classical epidemiologic SIR model, we study how pandemics such as COVID-19 affect labor market, when the labor productivity is tied to the value of interactions, and under wage negotiations. Despite relatively schematic, our modelling highlights that workers participation during pandemics is dependent on reservation wages, and that the final dynamics are also critically dependent on a mix of health and wealth factors such as age, work interactions, workers power, and productivity of interactions. In general, teleworking may be a way to restore work participation, even if teleworking may be less productive, to the extent that the productivity gap can be compensated by a much higher protection of workers.