Found 444 article(s) in category 'Jobs and Unemployment'

Nominal and Opportunity Effects of Managerial Discretion

Nominal and Opportunity Effects of Managerial Discretion. Susanna Gallani, 2020, Paper, “We examine the performance consequences of managerial discretion when compensation payoffs are interdependent; that is, when rewards or penalties given to some employees cause others not to get them. Using proprietary data from a company that gives monthly rewards and penalties based on a combination of objective metrics and subjective performance assessments, we document both a nominal and an opportunity effect of managerial discretion. The former refers to performance consequences associated with workers who receive rewards or penalties due to managerial discretion (actual recipients). The latter refers to performance consequences associated with workers who would have received rewards or penalties had there been no managerial discretion (would-be recipients). Our study is, to our knowledge, the first to provide empirical evidence of performance consequences associated with the opportunity effect of managerial discretion. In additional tests, we explore theory-consistent explanations of our results. Our findings contribute to the literature on subjectivity in performance evaluations and have important practical implications for the design of incentive systems.Link

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Automatic stabilizers in a low-rate environment

Automatic stabilizers in a low-rate environment. Lawrence Summers, 2020, Paper, “With interest rates persistently low or even negative in advanced countries, policymakers have barely any room to ease monetary policy when the next recession hits. Fiscal policy will have to play a major and likely dominant role in stimulating the economy, requiring policymakers to fundamentally reconsider fiscal policy. Blanchard and Summers argue for the introduction of what they call “semiautomatic” stabilizers. Unlike purely automatic stabilizers (mechanisms built into government budgets that automatically—without discretionary government action or explicit triggers—increase spending or decrease taxes when the economy slows or enters a recession), semiautomatic stabilizers are targeted tax or spending measures that are triggered if, say, the output growth rate declines or the unemployment rate increases beyond a specified threshold. The authors argue that the trigger should be changes in unemployment rather than changes in output, and the design of semiautomatic stabilizers, whether they focus on mechanisms that rely primarily on income or on intertemporal substitution effects (changing the timing of consumption), depends crucially on the design of discretionary policy.Link

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You Get What You Pay For: Sources and Consequences of the Public Sector Premium in Albania and Sri Lanka

You Get What You Pay For: Sources and Consequences of the Public Sector Premium in Albania and Sri Lanka. Ricardo Hausmann, 2020, “We study the factors behind the public sector premium in Albania and Sri Lanka, the group heterogeneity in the premium, the sources of public sector wage compression, and the impact of this compression on the way individuals self-select between the public and the private sector. Similar to other countries, the public sectors in Albania and Sri Lanka pay higher wages than the private sector, for all but the most valued employees. While half of the premium of Sri Lanka and two-thirds of it in Albania are explained by differences in the occupation-education-experience mix between the sectors, and the level of private sector informality, the unexplained part of the premium is significant enough to affect the preferences of working in the public sector for different groups. We show that the compressed distributions of public sector wages and benefits create incentives for positive sorting into the public sector among most employees, and negative sorting among the most productive ones.Link

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Status and Mortality: Is there a Whitehall Effect in the United States?∗

Status and Mortality: Is there a Whitehall Effect in the United States? Tom Nicholas, January 31, 2020, Paper, “Do white collar workers with lower social status in the occupational hierarchy die younger? The influential Whitehall studies of British civil servants identified a strong inverse relationship between employment rank and mortality, but we do not know if this effect generalizes. Using personnel files, census data and death records, I profile the lifespan and socioeconomic characteristics of a 1930 cohort of white collar workers employed at a leading American firm— General Electric. All had access to a corporate health and wellness program during a critical period associated with the health transition in the United States. I measure status using position in the managerial hierarchy, attendance at prestigious management training camps, and promotions, none of which is associated with a Whitehall-like rank-mortality gradient. Senior managers and executives appear to be the most susceptible to a mortality penalty. I discuss potential explanations for these contrasting findings.Link

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Within Occupation Changes Dominate Changes in What Workers Do: A Shift-Share Decomposition, 2005-2015

Within Occupation Changes Dominate Changes in What Workers Do: A Shift-Share Decomposition, 2005-2015. Richard Freeman, January 2020, Paper, “Recent analyses of the potential effects of advanced technology on jobs has tended to focus on possible reductions in routine cognitive white-collar jobs due to computer algorithms and in blue-collar jobs due to robots and factory automation. This paper provides a different perspective on the possible future of work by: (1) measuring changes in job attributes/tasks from 2005 to 2015, straddling the boundary between the pre-AI and AI eras; and (2) decomposing those changes via a shift-share analysis into the changes that occurred within occupations and changes in the shares of employment between occupations with different characteristics. Our primary source of information on job characteristics over time is the Occupational Information Network (O*NET) database developed by U.S. Department of Labor’s Employment and Training Administration. While prior research has used O*NET data cross-sectionally, we create a new panel dataset that allows us to analyze changes over time for 170 job characteristics from four O*NET questionnaires completed consistently by workers (job incumbents) since 2003. Per our title, we find that within-occupation changes dominate, raising doubts about the ability of projections based on expected changes in the occupational composition of employment to capture the likely future of work. Indeed, our data show only weak relationships between automatability, repetitiveness, and other job attributes and changes in occupational employment. The results suggest that analysts give greater attention to within-occupation impacts of technology in assessing the future of work.Link

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Measuring the Macroeconomic Impact of Carbon Taxes

Measuring the Macroeconomic Impact of Carbon Taxes. James Stock, 2020, Paper, “Economists have long argued that a carbon tax is a cost effective way to reduce greenhouse gas emissions. Increasingly, members of Congress agree. In 2019, seven carbon tax bills were filed in Congress (Kaufman et al., 2019). In addition, the Climate Leadership Council has built bipartisan support for a carbon tax and dividend plan (Baker et al., 2017). In contrast, the Trump Administration is retreating from any climate policy and has taken steps to withdraw from the Paris Accord, citing heavy economic costs to the U.S. economy from meeting the U.S. commitments made during the Obama Administration. In his June 1, 2017 statement on the Accord, for example, the President claimed that the cost to the economy would be “close to $3 trillion in lost GDP and 6.5 million industrial jobs…” Link

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How do Private Equity Fees Vary Across Public Pensions?

How do Private Equity Fees Vary Across Public Pensions? Emil Siriwardane, January 2020, Paper, “We document large variation in net-of-fee performance across public pension funds investing in the same private equity fund. In aggregate, these differences imply that the pensions in our sample would have earned $45 billion more – equivalent to $8.50 more per $100 invested – had they each received the best observed terms in the irrespective funds. There are also large pension-effects in the sense that some pensions systematically pay more fees than others when investing in the same fund. With better terms, the 95th percentile pension would have earned $14.91 more per $100 invested compared to $1.12 for the 5th percentile pension. Attributes like size, relationships, and governance account for a modest amount of the pension effects, meaning similar pensions consistently pay different fees.” Link

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Diffusing Political Concerns: How Unemployment Information Passed Between Social Ties Influences Danish Voters

Diffusing Political Concerns: How Unemployment Information Passed Between Social Ties Influences Danish Voters. James Alt, Horacio Larreguy, January 2020, Paper, “While social pressure is widely believed to influence voters, evidence that information passed between social ties affects beliefs, policy preferences, and voting behavior is limited. We investigate such information diffusion by examining whether networks of strong and mostly weak social ties relay information about unemployment shocks in Denmark. We link surveys with rich population-level administrative data that logs unemployment shocks afflicting respondents’ familial, vocational, and educational networks. We find that the share of second-degree social ties—individuals that voters learn about indirectly—that became unemployed within the last year increases a voter’s perception of national unemployment, self-assessed risk of becoming unemployed, support for unemployment insurance, and voting for left-wing political parties. Voters update about national aggregates from all shocks equally, whereas subjectiveperceptionsandpreferencesrespondprimarilytounemploymentshocksafflicting second-degree ties in similar vocations. This suggests that information diffusion through social ties principally affects political preferences via egotropic—rather than sociotropic—motives.Link

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Extending the Race between Education and Technology

Extending the Race between Education and Technology. Claudia Goldin, Lawrence Katz, January 11, 2020, Paper, “The race between education and technology provides a canonical framework that does an excellent job of explaining US wage structure changes across the twentieth century. The framework involves secular increases in the demand for more-educated workers from skill-biased technological change, combined with variations in the supply of skills from changes in educational access. We expand the analysis backwards and forwards. The framework helps explain rising skill differentials in the nineteenth and twenty-first centuries, but needs to be augmented to illuminate the recent convexification of education returns and implied slowdown in the growth of the relative demand.Link

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Why Firms Offer Paid Parental Leave: An Exploratory Study

Why Firms Offer Paid Parental Leave: An Exploratory Study. Claudia Goldin, January 2020, Paper, “Why do competitive firms in the US provide paid parental leave (PPL)? Which firms do and to what extent? We use several firm- and individual-level data sets to answer these questions. These include the BLS-Employee Benefit Survey (EBS) for 2010 to 2018 and an extensive firm-level data collection that we compiled. Our work is undergirded by a two-period model with competitive firms whose workers vary by their optimal firm-specific training and the probability that each will remain on the job after PPL is taken. We find that firm-provided PPL has greatly increased in the last two decades and generally covers new fathers. The levels of provision differ greatly by the industry, firm size, and the degree of firm-specific training. But even the top-of-the-line firm in the US provides fewer fully paid parental weeks than does the median OECD nation.Link

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