Journal of Labor Economics

Isabel Schnabel: From laggard to leader? Closing the euro area’s technology gap

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Sabato, Febbraio 17, 2024

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This paper, by means of a DSGE model including heterogeneous firms and banks, financial frictions and prudential regulation, first shows the need of climate-related capital requirements in the existing prudential framework.

Key Points:

This paper, by means of a DSGE model including heterogeneous firms and banks, financial frictions and prudential regulation, first shows the need of climate-related capital requirements in the existing prudential framework.
We further show that relying on microprudential regulation alone would not be enough to account for the systemic dimension of transition risk.

Demographics, labor market power and the spatial equilibrium

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Martedì, Febbraio 13, 2024

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Abstract

Key Points:

Abstract
This paper studies how demographics affect aggregate labor market power, the urban wage
premium and the spatial concentration of population.
I develop a quantitative spatial model
in which labor market competitiveness depends on the demographic composition of the local
workforce.
If these factors differ across workers, labor market power has a role to
play in explaining wage inequality.
This paper contributes to the literature on differences in labor market power by analyzing a
new dimension of heterogeneity: demographics.
Since older workers are less mobile in terms of
switching workplaces, firms have more labor market power over older workers.
I start by estimating labor market power by measuring the sensitivity of worker turnover to
the wage paid.
I find a strong
role of demographics in determining the degree of labor market power enjoyed by firms.
Next, I provide evidence of the importance of differences in labor market power for spatial
wage inequality.
To explore the consequences of labor market sorting, I build a spatial general equilibrium
model in which labor market competitiveness depends on the demographic composition of the
ECB Working Paper Series No 2906

2

local workforce.
If these factors differ across workers, labor market power has a role to
play in explaining wage inequality.
In
the model, geographic sorting by age matters and leads to higher labor market power in rural
areas, which implies an urban wage premium that is 4% larger than with uniform labor supply
elasticities.
I follow Manning (2013) and estimate labor market power by measuring the sensitivity of worker
turnover to the wage paid.
Bachmann et al., 2021; Ahlfeldt et al., 2022a; Berger et al.,
2022) that nest a monopsonistic labor market in a spatial general equilibrium model (Redding
and Rossi-Hansberg, 2017).
As firms have more labor market power
over older workers, they face an upward-sloping labor supply curve that is less elastic in regions
with an older workforce.
Firms choose in which labor market to operate in the sense that there is free
entry at fixed costs into all locations.
How are differences in labor market competitiveness across space sustained in spatial equilibrium?
I use the model to quantify the importance of heterogeneity
in labor market power for the urban wage premium and the spatial concentration of population.
My work is complementary to but quite different
from this paper since I argue that population aging increases labor market power rather than
product market power.
By analyzing the effects of a changing age composition of the workforce in the context
of labor market power, I relate to literature on the labor market effects of population aging.
ECB Working Paper Series No 2906
7

after controlling for age, differences in labor market power between East and West Germany
vanish.
They conclude that higher
concentration is associated with higher labor market power (as in the model of Jarosch et al.,
forthcoming).
I offer an alternative explanation why labor market power differs across regions:
Since denser regions have a younger workforce, workers are more mobile in terms of switching
jobs which implies lower labor market power of firms.
In this case, I infer a
high labor supply elasticity and low labor market power of firms.
I contribute to this growing debate by
quantifying differences in labor market power across worker groups and their effects on regional
inequality.
While the model shows how demographics affect labor market power, the urban wage premium and agglomeration, one fundamental question remains open for future research: What
are the policy implications of (differences in) labor market power?

Exposure to Violence Creates Gender Disparity for Students

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Giovedì, Ottobre 27, 2022

New research finds that the stress from this threat puts female students at a long-term disadvantage in school and beyond.

Key Points:

New research finds that the stress from this threat puts female students at a long-term disadvantage in school and beyond.
Exposure to violent crime within 0.1 miles in the week before the exam lowers female students' test scores by approximately 11 percent compared to female students not exposed to such an environment.
Similar exposure has no such effect on male students' test scores.
Mexico City students at elite high schools enjoy privileges such as smaller class sizes, fewer students per computer and more college-educated teachers.

BRG Bolsters Labor and Employment Practice with Addition of Four Managing Directors

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Lunedì, Settembre 19, 2022

The group significantly expands and complements the existing expertise of BRG's Labor and Employment practice, which includes managing directors Lewin, Thornton and Stefan Boedeker .

Key Points:

The group significantly expands and complements the existing expertise of BRG's Labor and Employment practice, which includes managing directors Lewin, Thornton and Stefan Boedeker .
The arrival of these new experts marks the evolution of BRG's Labor and Employment practice into one of the most robust in the marketplace today.
In addition, Shippen has experience in building and managing large and complex employment databases to analyze the effects of employment practices and policies.
"This group's arrival further cements our market-leading Labor and Employment practice and represents a significant milestone for the practice's growth."