Labour economics

• 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

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  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.
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  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?

• WINNIPEG, MB, Jan. 16, 2024 /CNW/ - Federal, Provincial and Territorial labour market Ministers met in Winnipeg today to discuss a wide range of priorities concerning Canada's labour market, including the changing labour market outlook, the importance of renewed collaboration on Labour Market Transfer Agreements (LMTAs), improving labour market mobility and credential recognition, and innovation and developments in supports that strengthen the workforce in all jurisdictions.
• During their discussions, Ministers reaffirmed the importance of working together to ensure that Canadians have the skills and training they need to enter the workforce and remain adaptable and competitive within today's labour market.
• Ministers also shared information about on-going work in their jurisdictions and best practices to support Canadians and grow the economy.
• FLMM will meet again in June 2024, and on a minimum of an annual basis thereafter, to discuss labour market priorities and best practices.

• The degrowth movement’s belief is that other approaches to the ecological crisis, such as green growth and the sustainable development goals, are futile.
• That’s because these approaches are rooted in democratic capitalism, which is obsessed with economic growth.
• Therefore the movement calls for a “radical political project” that would displace capitalism and “de-grow” the west.
• So far, the economic mainstream has been dismissive of degrowth, considering it perhaps not even worth engaging with.

Flaws in the argument

• But my argument is that merely reducing the GDP of developed countries would have no significant impact on the world’s overall material footprint.
• Many of the world’s major carbon pollutors – fossil fuel companies – are located in the global south.
• They include Saudi Aramco, National Iranian Oil, Petroleos Mexicanos, PetroChina, Petroleos de Venezuela and Kuwait Petroleum.
• First, redistribution towards less developed countries, as degrowth proposes, would stimulate economic growth and aggregate consumption growth in developing countries.
• The impact of the pandemic indicated how difficult it would be for the south to decouple from the north.

Degrowth and dictatorship

• Democracy and degrowth are inherently uncomfortable bedfellows.
• The only example in history of a sustainable and thriving stationary (non-growing) society was Japan during the Edo (Tokugawa) period (1603-1868).
• Given that a democracy is unlikely to choose degrowth voluntarily, the degrowth movement may set the west on a dangerous path towards rejecting democracy and reverting to an authoritarian collective.
• The degrowth movement thinks that material use and carbon emissions cannot be decoupled from economic growth, but that innovation, creativity, happiness and social progress can.

• 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.