Additional references: Organisation of work (Part 1)

Additional references: Organisation of work (Part 1)

Phuah Eng Chye (6 April 2019)

Technology and productivity

Jacques Bughin, Jeongmin Seong, James Manyika, Michael Chui, Raoul Joshi (September 2018) “Notes from the frontier: Modeling the impact of AI on the world economy”. McKinsey Global Institute.

Adrian Peralta-Alva, Agustin Roitman (28 September 2018) “Technology and the future of work”. IMF.

Using a DSGE model, this paper finds technological advances offers prospects for stronger productivity and growth, but brings risks of increased income polarization. It calls for inclusive policies such as investment in human capital to assist low-skilled workers to partake in the gains of technological change and redistributive policies.

Mark Muro, Robert Maxim, Jacob Whiton (January 24, 2019) “Automation and artificial intelligence: How machines are affecting people and places”. Brookings.

The report develops backward and forward-looking analyses of the impact of automation over the years 1980 to 2016 and 2016 to 2030 to assess past and future trends in the United States. The report focuses on areas of potential occupational change rather than net employment losses or gains. The report suggests a comprehensive response framework for national and state-local policymakers.

David Autor, Anna Salomons (July 2018) “Is automation labor-displacing? Productivity growth, employment, and the labor share”. NBER.

Capital-labor substitution need not reduce aggregate labor demand because it induces four countervailing responses: own-industry output effects; cross-industry input–output effects; between-industry shifts; and final demand effects. TFP analysis shows automation displaces employment and reduces labor’s share of value-added in the industries in which it originates. Own-industry employment losses are reversed by indirect gains in customer industries and induced increases in aggregate demand. By contrast, own-industry labor share losses are not recouped elsewhere. Our framework can account for a substantial fraction of employment reallocation across industries and the fall in labor share but does not explain not why labor share fell more rapidly during the 2000s.

Daron Acemoglu, Pascual Restrepo (March 2019) “Automation and new tasks: How technology displaces and reinstates labor”. NBER.

We present a framework based on the task content of production for understanding the effects of automation and other technological changes on labor demand, and use it to interpret recent changes in US employment. Automation shifts the task content of production against labor in favour of capital. As a result, automation always reduces the labor share in value added and may reduce labor demand even as it raises productivity. The effects of automation are counterbalanced by the creation of new tasks in which labor has a comparative advantage. The introduction of new tasks changes the task content of production in favor of labor because of a reinstatement effect, and always raises the labor share and labor demand. Our empirical decomposition of industry-level data suggests the slower growth of employment is accounted for by an acceleration in the displacement effect, especially in manufacturing, a weaker reinstatement effect, and slower growth of productivity.

Daron Acemoglu, Pascual Restrepo (March 2019) “The wrong kind of AI? Artificial intelligence and the future of labor demand”. NBER.

Recent technological change has been biased towards automation, with insufficient focus on creating new tasks where labor can be productively employed. This meant missing out on the promise of the “right” kind of AI with better economic and social outcomes.

David Autor (19 March 2019) “Work of the past, work of the future”.

Labour markets in US cities today are vastly more educated and skill-intensive than 50 years ago, but urban non-college workers now perform much less skilled work than they did. This column shows that automation and international trade have eliminated many of the mid-skilled non-college jobs that were disproportionately based in cities. This has contributed to a secular fall in real non-college wages.

Bill Snyder (7 March 2019) “Our misplaced fear of job-stealing robots”. Insights by Stanford Business.

Hal Varian (June 2018) “Automation v procreation aka bots v tots”. NBER.

The net outcome on wages and employment will depend on the relative magnitude of the impact of automation on demand for labour relative to the impact of demographic ageing on the supply of labour.

Cevat Giray Aksoy, Ralph De Haas (21 January 2019) “Automation in the transition region”.

Technological innovation shifts labour from sectors with low productivity (agriculture) to higher-productivity sectors (manufacturing and services) with a profound impact on the nature of work and the types of skills. This column examines how this transformation is impacting jobs and employment across emerging Europe. The findings suggest robotisation can explain only 13% of the total decline in the employment rate observed in these countries between 2010 and 2016.

EBRD (2018) Work in Transition, Transition Report 2018-2019.

Giovanni Gallipoli, Christos A. Makridis (August 2018) “Structural transformation and the rise of information technology”. Journal of Monetary Economics Volume 97.

Their research show (i) the bulk of productivity growth is concentrated in IT intensive sectors; (ii) the share of workers in IT jobs has expanded significantly and IT jobs enjoy a large and growing earnings premium; and (iii) the rise of the IT intensive employment share is closely associated with declines in the manufacturing employment share. They estimated industry-specific elasticities of substitution between IT and non-IT intensive labor, finding values of 1.6 in manufacturing and 1.3 in services. Finally, they provide evidence that occupation-level IT intensity is positively associated with output growth, especially in the services sector.

Oxford Economics, CISCO (September 2018) “Technology and the future of ASEAN jobs: The impact of AI on workers in ASEAN’s six largest economies”.

Geoff Weir (September 2018) “Wage growth puzzles and technology”. Reserve Bank of Australia.

This paper suggests the reason for the relatively slow growth of real and nominal wages lies at the individual firm level, rather than at the macro level. It is due to the uneven take-up of new technology which results in increasing dispersion in productivity performance across firms in a given industry.

Zsofia Barany, Christian Siegel (25 July 2018) “Understanding the bias in technological change and its impact on the labour market”.

Structural transformation and job polarisation are mainly caused by biased technological progress. US data is used to estimate the extent to which technological change is biased across sectors and across occupations. It finds that for improved labour market outcomes, policies targeting occupational choice for workers might be better than industrial policies to protect sectors of the economy.

Josh Bivens (23 January 2019) “Updated employment multipliers for the U.S. economy”. Economic Policy Institute.

This brief calculates employment multipliers by industry with strong backward and forward linkages. Employment multipliers measure how the creation or destruction of output or employment in an industry translates into wider employment changes.

Ying Feng, David Lagakos, James E. Rauch (October 2018) “Unemployment and development”. NBER.

Drawing on household survey data, they show unemployment increases with GDP per capita. This is accounted for almost entirely by low-educated workers, whose unemployment rates are strongly increasing in GDP per capita, rather than by high-educated workers, whose unemployment rates are not correlated with income. Their model predicts that as productivity rises, the traditional sector shrinks, as progressively less-able workers enter the modern sector, leading to a rise in overall unemployment and in the ratio of low-educated to high-educated unemployment rates.

Lance Taylor, Özlem Ömer (8 August 2018) “Race to the bottom: Low productivity, market power, and lagging wages”. Institute for New Economic Thinking (INET).

Dualism in the structure of production across sectors of the US economy, employment by sector, productivity levels and growth, real wages, and intersectoral terms-of trade increased markedly between 1990 and 2016. Of 16 sectors, seven were stagnant – construction, education and health, other services, entertainment, accommodation and food, business services, and transportation and warehousing. They had low productivity levels, productivity growth rates hovering around zero, and low real wages. Their share of total employment rose from 47% in 1990 to 61% in 2016. The other “dynamic” sectors had higher and positively growing productivity while the terms-of- trade shifted against them. This bifurcation between industries is discussed in terms of a simple model. Increasing duality and secular stagnation are possibilities.

Giuseppe Berlingieri, Sara Calligaris, Chiara Criscuolo (19 September 2018) “The productivity-wage premium: It’s productivity, not size, that matters in a service economy”.

The evidence that bigger firms pay higher wages and have higher productivity is mainly based on manufacturing, which nowadays accounts for a small share of the economy. This column reveals that while the size premia for both wages and productivity are significantly weaker in market services than in manufacturing, the link between wages and productivity is stronger – the most productive firms at the top are not necessarily the largest ones in terms of employment, but they do pay the best. This increases the likelihood of productivity and wage gains being shared with fewer workers, a challenge to achieving inclusive growth in the new service economy.

Richard Hornbeck, Enrico Moretti (May 2018) “Who benefits from productivity growth? Direct and indirect effects of local TFP growth on wages, rents, and inequality”. NBER.

We estimate the effects of TFP growth on US workers’ earnings, housing costs, and purchasing power. When a city experiences productivity gains in manufacturing, there are substantial local increases in employment and average earnings. For renters, increased earnings are largely offset by increased cost of living; for homeowners, the benefits are substantial. Strikingly, local productivity growth reduces local inequality, as it raises earnings of local less-skilled workers more than the earnings of local more-skilled workers. Local productivity growth also has important effects through worker mobility with 38% of the overall increase in workers’ purchasing power occuring outside cities directly affected by local TFP growth. Summing direct and indirect effects, we find TFP growth from 1980 to 1990 increased purchasing power for the average US worker by 0.5-0.6% per year from 1980 to 2000. These gains do not depend on a worker’s education; rather, the benefits from productivity growth mainly depend on where workers live.

Anna Stansbury, Lawrence H. Summers (June 2018) “Productivity and pay: Is the link broken?” Petersen Institute for International Economics.

The authors find substantial evidence of linkage between productivity and compensation: Over 1973–2016, 1% higher productivity growth has been associated with 0.7-1 percentage point higher median and average compensation growth and with 0.4-0.7 percentage point higher production/nonsupervisory compensation growth. These results suggest other factors orthogonal to productivity have been acting to suppress compensation even as productivity growth has been acting to raise it. However, there is no substantial evidence of co-movement between productivity growth and either the labor share or the mean/median compensation ratio. This tends to militate against pure technology-based theories of the productivity-compensation divergence. Together these results suggest faster future productivity growth is likely to boost median and average compensation growth close to one-for-one.

James Manyika, Jaana Remes, Jan Mischke, Mekala Krishnan (2017) “The productivity puzzle: A closer look at the United States”. McKinsey Global Institute.

Thomas Piketty (9 January 2017) “Of productivity in France and in Germany”. Le Monde.

Aaron Steelman (2nd Quarter 2018) “Interview: Chad Syverson”. Federal Reserve Bank of Richmond.

Sushant Acharya, Shu Lin Wee (June 2018) “Replacement hiring and the productivity-wage gap”. Federal Reserve Bank of New York.

In the US, the growing share of replacement hires coincides with a growing productivity-wage gap. We connect these trends by building a model where firms post long-lived vacancies and engage in on-the-job search for more productive workers. These features improve a firm’s bargaining position while raising workers’ job insecurity and the wedge between hiring and meeting rates. All three channels lower wages while raising productivity. Quantitatively, increased replacement hiring explains half the increase in the productivity-wage gap. The socially efficient outcome features fewer low-productivity jobs and a 10 percent narrower productivity-wage gap.

Ernest Liu, Atif R. Mian, Amir Sufi (22 January 2019) “Low interest rates, market power, and productivity growth”.

This study provides a new theoretical result that low interest rates encourage market concentration by giving industry leaders a strategic advantage over followers, and this effect strengthens as the interest rate approaches zero. The model provides a unified explanation for why the fall in long-term interest rates has been associated with rising market concentration, reduced dynamism, a widening productivity-gap between industry leaders and followers, and slower productivity growth.

Daniel E. Sichel (February 2019) “Productivity measurement: Racing to keep up”. NBER.

This paper provides a non-technical review of the literature on the measurement of aggregate productivity. One section frames the issues in relation to improving the accuracy of measuring the prices used to deflate nominal output to keep up with a changing economy. Another section covers issues relating to GDP measurement.

David Baqaee, Emmanuel Farhi (March 2019) “A short note on aggregating productivity”. NBER.

This paper provides two simple decompositions for aggregate productivity analysis in the presence of distortions and in general equilibrium.

Gabriel Di Bella, Francesco Grigoli, Francisco Ramirez (24 July 2018) “Is unemployment on steroids in advanced economies?”. IMF.

The theory of hysteresis challenges the view demand shocks have only temporary effects on unemployment and that, under certain conditions, demand disturbances can have permanent effects. Our results indicate strengthening labor market institutions that promote a faster adjustment of real wages, removing disincentives for firms to hire and for workers to be employed, and improving the matching between labor supply and labor demand can lessen the effects of adverse demand shocks and lead to a faster reversion of unemployment rates.

Adalet McGowan, M, D Andrews, V Millot (2017), “The walking dead: Zombie firms and productivity performance in OECD countries” OECD.

This paper explores the extent to which “zombie” firms are stifling labour productivity. The resources sunk in zombie firms have risen since the mid-2000s and the survival of these low productivity firms at the margins of exit congests markets and constrains the growth of more productive firms. We link the rise of zombie firms to the decline in OECD potential output growth through two key channels: business investment and multi-factor productivity growth.

Labour share of income

Matthieu Charpe, Slim Bridji, Peter McAdam (March 2019) “Labor share and growth in the long run”. European Central Bank.

Dilyana Dimova (22 March 2019) “The structural determinants of the labor share in Europe”. IMF.

The decline in labor share in Europe is concentrated in manufacture and among low- to mid-skilled workers. The shifting nature of employment away from full-time jobs and a rollback of employment protection, unemployment benefits and unemployment benefits have been the main contributors. Technology and globalization hurt sectors where jobs are routinizable but helped others that require specialized skills. High-skilled professionals gained labor share driven by productivity aided by flexible work environments, while low- and mid-skilled workers lost labor share owing to globalization and the erosion of labor market safety nets.

OECD (4 July 2018) “OECD employment outlook 2018”.

This report reviews labour market trends and prospects. Chapter 1 presents recent developments. Chapter 2 explains the decline of labour share is partially related to the “superstar” firms. Chapter 3 investigates the role of collective bargaining institutions for labour market performance. Chapter 4 examines the role of policy to facilitate the transition towards new jobs of workers who were dismissed. Chapter 5 analyses jobseekers’ access to unemployment benefits. Chapter 6 investigates the reasons why the gender gap in labour income increases over the working life.

Peter Bakvis (12 April 2018) “The World Development Report produced by the World Bank almost completely ignores workers’ rights”. Committee for the Abolition of Illegitimate Debt.

Juan Pablo Bohoslavsky (3 August 2018) “Mandate of the Independent Expert on the effects of foreign debt and other related international financial obligations of states on the full enjoyment of all human rights, particularly economic, social and cultural rights”. Independent Expert appointed by the United Nations Human Rights Council.

Andrew Stewart, Jim Stanford and Tess Hardy (editors) (2018) The wages crisis in Australia: What it is and what to do about it. University of Adelaide Press.

Sayuri Shirai (23 October 2018) “Considering new monetary policy frameworks and the case of Japan, Part 2: Nominal GDP targeting and nominal wage targeting”.

Contains an analysis of technical issues related to nominal wage targeting in Japan; particularly the likely wage adjustment responses for full-time and part-time employees in reaction to various policy initiatives.

Cristiano Cantore, Filippo Ferroni, Miguel León-Ledesma (27 March 2019) “The missing link: Monetary policy and the labour share”.

Using data for five developed economies, this column finds that standard models to analyse the distributional effects of monetary generate the wrong sign when compared to the empirical results, and that the labour share temporarily increases following a positive shock to the interest rate.

Heather Boushey (December 2018) “In conversation with Karen Dynan”. Washington Center for Equitable Growth.

Boushey and Dynan discuss the marginal propensities to consume and to save, and how those trends vary up and down the income distribution. They examine the importance of understanding these trends for effective fiscal and monetary policymaking.

Stumbling and Mumbling (8 September 2018) “Doubts about wage-led growth”.

Daniel Olah, Viktor Varpalotai (6 August 2018) “There is no such thing as low-wage competitiveness”. Economic Questions.

Philipp Hartmann, Peter McAdam (29 October 2018) “Price and wage-setting in advanced economies: Selected takeaways from the ECB’s Sintra Forum”.

Highlights the main points from discussions, including why measured economic slack did not translate into more vivid price and wage growth, which role inflation expectations play in the conduct of monetary policy, as well as where the challenges lie in reconciling changes in micro price-setting with aggregate inflation dynamics.

Josh Bivens (30 January 2019) “The Fed shouldn’t give up on restoring labor’s share of income – and measure it correctly”. Economic Policy Institute.

Christopher Ingraham (21 February 2019) “Income inequality is rising so fast, data can’t keep up”. Washington Post.

Economic Questions (26 August 2018) “Is the falling wage share simply a statistical phenomenon?”

Matthias Kehrig, Nicolas Vincent (November 2018) “The micro-level anatomy of the labor share decline”. NBER.

The aggregate labor share in U.S. manufacturing declined from 62 percentage points in 1967 to 41 ppt in 2012. The labor share of the typical U.S. manufacturing establishment, in contrast, rose by over 3 ppt during the same period. Using micro-level data, we document a number of striking facts: (1) there has been a dramatic reallocation of value added to “hyper-productive” (HP) low-labor share establishments (2) HP establishments have only a temporarily lower labor share that rebounds after five to eight years to the level of their peers; (3) selection into HP status has become increasingly correlated with past size; (4) labor share dynamics are driven by revenue total factor labor productivity, not wages or capital intensity; (5) employment has become less responsive to positive technology shocks over time; and (6) HP establishments enjoy a product price premium relative to their peers that causes their high (revenue) productivity. Counterfactual exercises indicate that selection along size rather than shocks is the primary driver of the labor share decline.

Andrew Glover, Jacob Short (January 2019) “Can capital deepening explain the global decline in labor’s share?” Bank of Canada.

We estimate an aggregate elasticity of substitution between capital and labor near or below one, which implies that capital deepening cannot explain the global decline in labor’s share. Previous cross-country estimates of this elasticity were substantially greater than one, which we show was partly due to omitted variable bias: earlier studies used investment prices alone to proxy for the rental rate, whereas the growth model relates rental rates to investment prices and consumption growth.

David W. Berger, Kyle F. Herkenhoff, Simon Mongey (March 2019) “Labor market power. NBER.

We develop a tractable quantitative, general equilibrium, oligopsony model of the labor market and estimate key parameters using within-firm-state, across-market differences in wage and employment responses to state corporate tax changes in U.S. Census data. The model implies welfare losses from labor market power that range from 2.9 to 8.0 percent of lifetime consumption. Despite large contemporaneous losses, labor market power has not contributed to the declining labor share. We show minimum wages can deliver moderate, and limited, welfare gains by reallocating workers from smaller to larger, more productive firms.

Alex Tabarrok (17 January 2019) “Declining labor force growth explains declining dynamism”. Marginal Revolution.

Hugo Hopenhayn, Julian Neira, Rish Singhania (December 2018) “From population growth to firm demographics: implications for concentration, entrepreneurship and the labor share”. NBER.

This paper shows changes in population growth provide a unified explanation for long-term changes in the US economy – the larger share of large firms, the slower creation of new firms, and workers are getting paid a smaller share of GDP. A decrease in population growth lowers firm entry rates, shifting the firm-age distribution towards older firms. Aging firm distribution fully explains i) the concentration of employment in large firms, ii) and trends in average firm size and exit rates, key determinants of the firm entry rate and also explains the decline in labor’s share of GDP.

Andreas Hornstein, Marianna Kudlyak, Annemarie Schweinert (10 November 2018) “The labor force participation rate trend and its projections”. FRBSF Economic Letter. Federal Rserve Bank of New York.

Mary C. Daly, Joseph H. Pedtke, Nicolas Petrosky-Nadeau, Annemarie Schweinert (13 November 2018) “Why Aren’t U.S. Workers Working?” FRBSF Economic Letter.

Rene Chalom, Fatih Karahan, Laura Pilossoph, Giorgio Topa (10 September 2018) “Whither labor force participation?” Liberty Street Economics.

Ariel J. Binder, John Bound (February 2019) “The declining labor market prospects of less-educated men”. NBER.

This paper highlights the declining labor-force participation rate of males without college education may arise from frictions associated with labor demand shocks and effects of the changing marriage market – the fact that fewer less-educated men are forming their own stable families – on male labor supply incentives.

Robert L. Clark, Steven Nyce, Beth Ritter, John B. Shoven (February 2019) “Employer concerns and responses to an aging workforce”. NBER.

We report findings from three employer surveys in relation to how organizations are responding to the aging of their workforces. First, employer concerns vary considerably across the economy, some view it as an immediate and significant risk while others are more concerned about the potential productivity and cost effect. Second, in anticipation of growing workforce aging, a significant number of firms are making changes to working conditions and compensation policies. Third, firms remain reluctant to adopt formal phased retirement policies but are more willing to offer part-time employment, return to work, and other policies on a case by case basis.

Rob Valletta, Nathaniel Barlow (10 September 2018) “The prime-age workforce and labor market polarization”. FRBSF Economic Letter.

In the US, the continued depressed labor force participation reflect it is not the lingering effects of the recession but longer-term developments such as labor market polarization which is related to declining worker attachment. This is reinforced by other long-term economic and social trends, such as health considerations, that also have eroded prime-age labor force attachment.

NewDealdemocrat (October 26, 2018) “A follow-up on the reasons for prime age labor force non-participation”. Originally published at Angry Bear.

Adam Harris (9 March 2019) “Where have all the men without college degrees gone?” The Altantic.

Lionel Cottier, Yves Flückiger, Pierre Kempeneers, Rafael Lalive (27 October 2018) “Job search assistance does not boost employment: New evidence”.

This study examines the effects of the job search assistance programme targeting the long-term unemployed in Geneva. It found participants experienced a short-term increase in employment compared to other job seekers, but this gain evaporates in the second year after assignment. These results suggest the programme places job seekers in lower-quality jobs.

Philipp Hergovich, Monika Merz (August 2018) “The price of capital, factor substitutability, and corporate profits”. The IZA Institute of Labor Economics. IZA DP No. 11791.

Since the 1970s, the rise in the capital-to-labor ratio has been accompanied by a rise in the level and variability of corporate profits whereas the labor share of income has declined. We find that the declining relative price of capital and the increase in factor substitutability each causes the capital-to-labor ratio and the level and volatility of corporate profits to rise, but only increased factor substitutability generates the observed decrease in the labor share of income.

Lenore Palladino (January 2018) “Corporate financialization and worker prosperity: A broken link.” Roosevelt Institute.

This paper explores the roots of corporate financialization for America’s large public companies. America’s public companies have moved away from investing in the productivity of workers (by paying stable wages and rewarding skill growth and longevity), thus decreasing their innovation and their share of profits. Therefore, along with policies to raise minimum wage and to improve the bargaining power of wages through unionization, it is critical to rewrite tax, corporate governance, and other public policies that have driven firms to financialize.

Jan De Loecker, Jan Eeckhout (August 2017) “The rise of market power and the macroeconomic implications”. NBER.

We analyze the macroeconomic implications of the rise in market power on the secular decline in the 1) labor share; 2) capital share; 3) low skill wages; 4) labor force participation; 5) labor market flows; 6) migration tates; and 7) the slowdown in aggregate output.

David Weil (2 September 2018) “Why we should worry about monopsony”. Institute for New Economic Thinking (INET).

Marshall Steinbaum, Maurice E. Stucke (25 September 2018) “The effective competition standard: A new standard for antitrust”. Roosevelt Institute.

The authors offer an alternative to the consumer welfare standard. The effective competition standard would restore the primary aim of antitrust laws including throughout supply chains and in the labor market. The proposed changes are to amend the Sherman Act and the Clayton Act.

Marshall Steinbaum, Eric Harris Bernstein, John Sturm (27 March 2018) “Powerless: How lax antitrust and concentrated market power rig the economy against American workers, consumers, and communities”. Roosevelt Institute.

They argue the economic threat of market power demonstrates the disastrous consequences that unrestrained market power has had on workers, communities and democracy. The authors propose policy remedies to rebuild inclusive growth, foster economic innovation, and restore an equitable economy.

Ioana Marinescu, Eric A. Posner (10 January 2019) “A proposal to enhance antitrust protection against labor market monopsony”. Roosevelt Institute.

Though legal tools are in place, generally there has been virtually no enforcement against abuses of monopsony power in labor markets. The authors propose draft legislation to facilitate workers, antitrust agencies, and attorneys general to more easily bring lawsuits against labor monopsonists.

Eric A. Posner (5 November 2018) “Why the FTC should focus on labor monopsony”. Pro-market Blog.

Mark Stelzner, Mark Paul (20 December 2018) “How does market power affect wages? Monopsony and collective action in an institutional context”. Washington Center for Equitable Growth.

We construct a monopsony-wage-model that integrates strategic interaction between workers and employers in the wage setting process into an institutional context. We show workers’ collective action and efficient contract bargaining reduces rents to firms and increases overall social efficiency. However, such outcomes are contingent on institutional support for workers, and in an environment that does not support workers, inefficient outcomes dominate.

Josh Bivens and Heidi Shierholz (12 December 2018) “What labor market changes have generated inequality and wage suppression”? Economic Policy Institute.

Scott Alexander (25 February 2019) “Wage stagnation: Much more than you wanted to know”. Slate Star Codex.

JORDAN WEISSMANN (25 February 2019) “How I learned to stop worrying and maybe love the $15 minimum wage”. Slate.

Ekaterina Jardim, Mark C. Long, Robert Plotnick, Emma van Inwegen, Jacob Vigdor, Hilary Wething (October 2018) “Minimum wage increases and individual employment trajectories”. NBER.

A study on the impact of Seattle’s minimum wage on individuals employed in low-wage jobs based on Washington state data. They found, on a net basis, the minimum wage increase from $9.47 to $13 per hour raised earnings by an average of $8-$12 per week. The entirety of these gains accrued to workers with above-median experience; less-experienced workers saw no significant change to weekly pay. Approximately one-quarter of the earnings gains can be attributed to experienced workers making up for lost hours in Seattle with work outside the city limits. We associate the minimum wage ordinance with an 8% reduction in job turnover rates as well as a significant reduction in the rate of new entries into the workforce.

Arindrajit Dube (November 2018) “Minimum wages and the distribution of family incomes”. NBER.

There is robust evidence that higher minimum wages increase family incomes at the bottom of the distribution. The long run (3 or more years) minimum wage elasticity of the non-elderly poverty rate with respect to the minimum wage ranges between -0.220 and -0.459 across alternative specifications. A reduction in public assistance partly offsets these income gains, which are on average 66% as large when using an expanded income definition including tax credits and non-cash transfers.

David Glasner (20 October 2018) “More on sticky wages”.

Michael W. Elsby, Gary Solon (December 2018” “How prevalent is downward rigidity in nominal wages? International evidence from payroll records and pay slips”. NBER.

Macroeconomic analyses have generally been premised on the assumption workers’ nominal wage rates cannot be cut. This article summarizes a recent wave of studies based on payroll records and pay slips which indicate that, except in extreme circumstances, nominal wage cuts appear quite common, typically affecting 15-25 percent of job stayers in periods of low inflation.

Jordan Yadoo (1 November 2018) “Americans are willing to forgo a 56% pay raise for best job perks”. Bloomberg.

Leonardo Castañeda (18 November 2018) “Silicon Valley wages have dropped for all except highest-paying jobs: Report”. The Mercury News.

Michael Morris, Robert Rich, Joseph Tracy (26 March 2019) “How much do movers move average wage growth?” Federal Reserve Bank of Dallas.

Jason Furman (11 August 2018) “The real reason you’re not getting a pay raise. Solving the “wage puzzle”: It’s not about inequality”. Vox.

Sylvia Allegretto, Anna Godoey, Carl Nadler, Michael Reich (6 September 2018) “The new wave of local minimum wage policies: Evidence from six cities.” Center on Wage and Employment Dynamics (CWED).

David Cooper (5 February 2019) “Raising the federal minimum wage to $15 by 2024 would lift pay for nearly 40 million workers”. Economic Policy Institute.

Tim Worstall (8 December 2016) “Apparently Barry Ritholtz doesn’t understand the minimum wage argument and Seattle’s evidence”. Forbes.

Ben Ramanauskas (29 October 2018) “What the minimum wage does to food prices (and job hiring)”. Foundation for Economic Education (FEE).

Isobel Asher Hamilton, Jake Kanter (1 February 2019) “Amazon’s minimum wage hike barely made a dent in its operating costs, and it might explain why some workers say they’re actually earning less”. Business Insider.

Mark J. Perry (22 February 2019) “Restaurant Recession hits NYC following $15 minimum wage”. Foundation for Economic Education.

Cynthia Kim, Heekyong Yang (17 July 2018) “Moonwalking: South Korea’s wage, hours policies backfire for jobless, low income workers”. Reuters.

Jeffrey Clemens, Lisa B. Kahn, Jonathan Meer (May 2018) “The minimum wage, fringe benefits, and worker welfare”. NBER.

This paper explores the relationship between minimum wage, the structure of employee compensation, and worker welfare. We advance a conceptual framework that describes the conditions under which a minimum wage increase will alter the provision of fringe benefits, alter employment outcomes, and either increase or decrease worker welfare.

Alicia Sasser Modestino, Daniel Shoag, Joshua Ballance (5 January 2019). “Upskilling: Do employers demand greater skill when workers are plentiful?” Presented at the American Economic Association annual meeting.


Using a database of online job postings, we find education and experience requirements rose during the Great Recession. These increases were larger in states and occupations that experienced greater increases in the supply of available workers. Our results imply the increase in unemployed workers can account for 18 to 25 percent of the increase in skill requirements between 2007 and 2010.

Maria Molina-Domene (October 2018) “Labor specialization as a source of market frictions”. Center for Economic Performance (CEP).

This paper investigates why labor specialization adds frictions to the labor market. The intuition is that labor specialized firms rely on complementarity and firm-specific human capital, assigning high value to the worker-employer match. Consistent with employees’ importance, the findings show specialized firms preserve their workforce: these firms labor hoard and increase wages during slow-downs. Additionally, when specialized firms unexpectedly face a labor supply shock albeit managing to decrease the wages of the remaining co-workers, they become less productive. The empirical evidence suggests that frictions introduce bilateral monopoly rents.

Gintautas Dumcius (21 June 2018) “Massachusetts is on the verge of eliminating time-and-a-half pay”. Mass Live.

Giulia Giupponi, Camille Landais (25 January 2019) “Subsidising labour hoarding in recessions: New evidence from Italy’s Cassa Integrazione”.

Labour hoarding – the retention of excess employees during a negative shock – could potentially help firms avoid re-hiring and training costs when economic conditions improve and act as a form of insurance for workers. This column uses Italian micro data to show how labour hoarding in the form of short-term work programmes can be beneficial despite being ineffective in the long term.

Pierre Cahuc, Francis Kramarz, Sandra Nevoux (16 July 2018) “When short-time work works.”

Short-time work programmes aim to preserve jobs at firms experiencing temporarily low revenues. This column assesses the short-time work programme implemented in France during the Great Recession saved jobs and increased hours worked, and that participating firms recovered faster than non-participating firms.

John Pencavel (September 2018) “The future of hours of work?” Stanford Institute for Economic Policy Research (SIEPR).

Pavlina R. Tcherneva (April 2018) “The job guarantee: Design, jobs, and implementation”. Levy Institute.

This working paper provides a blueprint for operationalizing job guarantee programs. It addresses frequently asked questions and common concerns. The paper presents the core objectives and expected benefits of the program, and suggests an institutional structure, funding mechanism, and project design and administration.

L. Randall Wray, Flavia Dantas, Scott Fullwiler, Pavlina R. Tcherneva, Stephanie A. Kelton (April 2018) “Public service employment a path to full employment”. Levy Institute.

Proposes the creation of a Public Service Employment (PSE) program or “job guarantee” program to provide employment to the unemployed during recessions. Federally funded but with a decentralized administration, the PSE program would pay $15 per hour for both full- and part-time positions and offer benefits that include health insurance and childcare. In addition to guaranteeing access to work on projects that serve a public purpose, the PSE program establishes effective minimum standards for wages and benefits.

Max Gulker (18 October 2018) “The job guarantee: A critical analysis”. American Insitute for Economic Tesearch (AIER).

Jordan Weissmann (27 July 2018) “Ro Khanna has an ambitious plan to put the unemployed to work. Just don’t call it a job guarantee”. Slate.

Martin Ravallion (March 2019) “Is a decentralized right-to-work policy feasible?” NBER.

Evidence on the implementation of India’s National Rural Employment Guarantee Act suggests available work is often rationed by local leaders in poor areas and this limits the scheme’s impact on poverty. The paper offers explanations and show that rationing of work opportunities can arise under decentralized implementation in poor places sue to local administrative costs and local corruption. Policy implications are drawn for how to better assure that the stipulated rights are attained in practice.

The Council of Economic Advisers (July 2018) “Expanding work requirements in non-cash welfare programs”.

Ryan Nunn (15 March 2018) “How occupational licensing matters for wages and careers”. Brookings.

Sean P. Redmond (11 May 2018) “Right-to-work laws: The economic evidence (2018 update)”. U.S. Chamber of Commerce.

Karen A. Goldman (September 2018) “Policy perspectives: Options to enhance occupational license portability”. Federal Trade Commission.

Leigh Anne Schriever (23 January 2019) “Stealing from the poor and giving to the rich in the workplace”. The Regulatory Review.

Highlights the findings of a report by Philip Mattera and Adam Shah covering violations of US federal laws and regulations governing wage standards. Small companies may find difficulty understanding and complying with the laws but large companies are often the culprits.

Brian Callaci (13 December 2018) “New research shows the franchise business model harms workers and franchisees, with the problem rooted in current antitrust law”. Washington Center for Equitable Growth.

Alan B. Krueger, Orley Ashenfelter (July 2018) “Theory and evidence on employer collusion in the franchise sector”. NBER.

We study the role of covenants in franchise contracts restricting the hiring of employees within the same franchise chain. We find that “no-poaching of workers agreements” are included in a surprising 58 percent of major franchisors’ contracts. The implications of the no-poaching agreements for models of oligopsony are discussed. No-poaching agreements are more common for franchises in low-wage and high-turnover industries.

Talent Daily (14 August 2018) “Massachusetts enacts new restrictions on non-compete agreements”. Gartner.

Mark Ames (23 January 2014) “The Techtopus: How Silicon Valley’s most celebrated CEOs conspired to drive down 100,000 tech engineers’ wages”. Pando.