Mandatory sick pay provision: A labor market experiment

The question whether a minimum rate of sick pay should be mandated is much debated. We study the effects of this kind of intervention with student subjects in an experimental laboratory setting rich enough to allow for moral hazard, adverse selection, and crowding out of good intentions. Both wages and replacement rates offered by competing employers are reciprocated by workers. However, replacement rates are only reciprocated as long as no minimum level is mandated. Although we observe adverse selection when workers have different exogenous probabilities for being absent from work, this does not lead to a market breakdown. In our experiment, mandating replacement rates actually leads to a higher voluntary provision of replacement rates by employers.     

Commuting time and sickness absence of US workers

Empirica - This paper analyzes the relationship between commuting time and days of sickness absence of US workers. Using data from the Panel Study of Income Dynamics for the years 2011 to 2017, we...     

Entry costs and labor market dynamics

We study the cyclical dynamics of the value of a vacant position in labor markets characterized by search and matching frictions. We present a model of aggregate fluctuations in which firms face sunk costs to enter the production process. Our specification of sunk costs gives rise to a countercyclical value of a vacancy. We find that this overlooked object has important quantitative implications for the study of labor markets and business cycles. It affects the cyclical dynamics of the surplus division between workers and firms, and provides a better characterization of the movements in income shares over recessions and expansions. Understanding movements in the value of a vacant position helps to link the dynamics of income shares with recent volatility puzzles found in models of search and matching in labor markets.     

Nominal wage contracts, labor adjustment costs and the business cycle

Previous work of monetary dynamic stochastic general equilibrium models with nominal rigidity a la Taylor, particularly the Cho–Cooley model, was abandoned in favor of the New-Keynesian analysis due to the model's failure to deliver business cycle statistics that match the U.S. economy along some key dimensions. In this paper, we take a step in revitalizing the Cho–Cooley avenue of research. We add empirically plausible labor adjustment costs into a model with nominal wage rigidity and find that with labor adjustment costs our model is able to overcome some of the shortcomings otherwise present in the Cho–Cooley framework, specifically high standard deviations of real variables and a countercyclical productivity.     

Separation costs, job heterogeneity and labor market volatility in the matching model

This paper extends the standard matching model by introducing a gap in separation costs between entrant and incumbent workers. We show that when this gap is omitted from the model, these costs do not improve the labor market volatility without introducing unrealistic unemployment responses to unemployment benefits.     

A natural experiment in the organization of entry-level labor markets: regional markets for new physicians and surgeons in the United Kingdom

The histories of seven regional markets for new physicians and surgeons in the United Kingdom are considered. Like the American market, these markets have experienced failures that led to the adoption of centralized market mechanisms. Because different regions employ different centralized mechanisms, these markets provide a test of the hypothesis that the success of the American market is related to the fact that it produces matches which are stable in the sense that no two agents mutually prefer to be matched to one another than to their assigned partners. Even in the more complex U.K. markets, this kind of stability plays an important role. Centralized markets that produced unstable matches in environments in which agents could act upon instabilities fared no better than the decentralized markets they replaced.     

劳动力成本的激励效应与合理区间

劳动力成本具有二重性,对于企业是成本,对于劳动者则是收入,它既是成本支出,又是激励手段。劳动力成本是积极成本,不可与其他物质要素成本等量齐观。工资成本上升可通过不同路径对生产效率起到激励作用。但这种作用并非简单的线性关系,而是存在激励不足、合理激励、过度激励三种可能性。本文利用我国工业部门省级面板数据作了实证分析,研究表明,1999—2007年间我国地区劳动生产率与劳动力成本显著正相关,劳动力成本的激励功能明显处于加速阶段。当前应大力推进收入分配体制改革,提高职工工资水平,促进生产效率提升,从绝对劳动成本优势转向相对劳动成本优势,集聚高端要素,从物质要素驱动转向人力资本驱动,创新增长模式,实现转型发展。     

Price clustering and natural resistance points in the Dutch stock market: A natural experiment

This paper focuses on the tendency of stock prices to cluster at round numbers (like 10, 20, 30, etc. and to a lesser extent 5, 15, 25, etc.) and the related effect of round number price barriers (prices pass round numbers less frequently than other numbers). Two competing hypotheses are tested, using data from the Dutch stock market of the period 1990–2001. After 1 January 1999 stock prices were listed in euros, while guilders were still the currency of daily life until 2002. The aspiration level hypothesis predicts that round number effects in guilders will only slowly disappear. The odd price hypothesis predicts an abrupt change in round number effects after 1 January 1999. Generally, the results are consistent with the odd price hypothesis.     

A directional analysis of Federal Reserve predictions of growth in unit labor costs and productivity

Existing evidence suggests that the Federal Reserve forecasts of inflation imply asymmetric loss, as the Fed has significantly over‐predicted inflation for the post‐Volcker period. Consistent with such evidence, we show that the Federal Reserve forecasts of growth in both unit labor costs and productivity, while directionally accurate for 1983–2003, imply asymmetric loss. That is, the forecasts of growth in unit labor costs are more (less) accurate in predicting the upward (downward) moves. The forecasts of growth in productivity, however, are less (more) accurate in predicting the upward (downward) moves. The interpretation of our findings may be that, in achieving long‐term price stability, the Fed is cautious not to incorrectly predict the upward (downward) moves in growth in unit labor costs (productivity).     

The employment consequences of technological advance,demand and labor costs in 16 German industries

The decline of employment in German manufacturing industries is often attributed to technological advance, declines in demand and to increases in labor costs. Using business survey data, the study evaluates the relative importance of these determinants in 16 industries. The empirical finding of a series of probit estimates is that in most cases demand plays a dominant role, in some cases technological progress is an important factor, but in no case are labor costs a decisive determinant. Results may depend on the short-run nature of the analysis.     

A network experiment in continuous time: The influence of link costs

In recent work on non-cooperative network formation star-shaped networks play an important role. In a particular theoretical model of Bala and Goyal (2000) center-sponsored stars are the only strict Nash networks. In testing this theoretical model, Falk and Kosfeld (2003) do not find experimental evidence that players select the center-sponsored star. Based on a slight modification of Bala and Goyal’s model, we design a network formation experiment in which, depending on link costs, periphery-sponsored stars and the empty network are the only strict Nash networks. We observe that almost all groups not only reach a strict Nash network once but also switch the center player in periphery-sponsored stars several times. The main innovation in our experiment is to use a continuous time framework which we believe to be a more realistic setting to study behavior in network formation situations and which makes coordination on stars much easier than simultaneous strategy adaptation in discrete time. Electronic Supplementary Material Supplementary material is available in the online version of this article at http://dx.doi.org/10.1007/s10683-006-9125-1. JEL Classification C72 · C92 · D81     

Performance pay and worker cooperation: Evidence from an artefactual field experiment

We report the results of an artefactual field experiment with bicycle messengers in Switzerland and the United States. Messenger work is individualized enough that firms can choose to condition pay on it, but significant externalities in messenger behavior nonetheless give their on-the-job interactions the character of a social dilemma. Second-mover behavior in our sequential prisoner's dilemma allows us to characterize the cooperativeness of our participants. Among messengers, we find that employees at firms that pay for performance are significantly less cooperative than those at firms that pay hourly wages or who are members of cooperatives. To examine whether the difference is the result of treatment or selection we exploit the fact that firm type is location-specific in Switzerland and that entering messengers must work in performance pay firms in the U.S.     

Wage bargaining and turnover costs with heterogenous labor and perfect history screening

We study effects of mobility costs in a model of (Nash) wage bargaining between workers and firms, with instantaneous matching, heterogeneous workers, identical firms and free firm entry, and where firms can screen workers perfectly according to their previous work history but not their actual productivity. We derive the employment level and the minimum worker quality standard, in the market solution, and in the efficient solution established by a social planner. When workers have positive bargaining power, there is always some inefficient unemployment among desired workers in the market solution. The lowest hiring standard chosen by firms is higher than the planner's standard when firing costs are high relative to hiring costs, but may be lower in the opposite case. We show that any higher established hiring standard corresponds to a market equilibrium. The model explains a tendency for a high initial unemployment rate to remain high, particularly for low-skilled workers.     

A sticky floors model of promotion, pay, and gender

According to raw data from the British Household Panel Survey, full-time women are more likely than men to be promoted. Controlling for observed and unobserved individual heterogeneity, we find that women are promoted at roughly the same rate as men, but may receive smaller wage increases consequent upon promotion. To help explain these phenomena, we construct a new “sticky floors” model of pay and promotion. In our model, women are just as likely as men to be promoted but find themselves stuck at the bottom of the wage scale for the new grade.     

Exit polls,turnout, and bandwagon voting: Evidence from a natural experiment

We exploit a voting reform in France to estimate the causal effect of exit poll information on turnout and bandwagon voting. Before the change in legislation, individuals in some French overseas territories voted after the election result had already been made public via exit poll information from mainland France. We estimate that knowing the exit poll information decreases voter turnout by about 11 percentage points. Our study is the first clean empirical design outside of the laboratory to demonstrate the effect of such knowledge on voter turnout. Furthermore, we find that exit poll information significantly increases bandwagon voting; that is, voters who choose to turn out are more likely to vote for the expected winner.     

Work costs and nonconvex preferences in the estimation of labor supply models

Works costs have not been adequately handled in labor supply estimation, likely due to their complexity. We show that, if work costs are not accounted for in the budget and time constraints in a structural labor supply model, they will be subsumed into the data generating preferences. Even if underlying preferences over consumption and leisure are convex, the presence of unobservable work costs can make these preferences appear nonconvex. However, we show that, under plausible conditions, policy relevant calculations, such as estimates of the effect of tax changes on labor supply and deadweight loss measures, are not affected by the fact that estimated preferences incorporate work costs.     

Skilled labor, unskilled labor, and economic growth

We study a growth model in which workers with different skill levels are imperfect substitutes. We show that economies with high substitutability between skilled and unskilled workers have high levels of capital, output, and a high proportion of skilled workers.     

In absence of money: a field experiment on volunteer work motivation

Although volunteers are a critical resource for non-profit organizations, little is known about how best to motivate them to work. A non-profit organization asked episodic volunteers to produce handmade greeting cards to sell at a fundraising event. By running a natural field experiment, we study the effect of motivating these volunteers through (a) the opportunity to vote on how the money that was raised would be spent and (b) the prospect of individual performance feedback. We find an economically and statistically significant positive effect of both tools on the quantity of work done, while the quality is mostly unaffected. Moreover, we observe significant gender differences in responsiveness to the treatments. While the prospect for feedback is more motivating to men, women respond more strongly to the opportunity to decide how the money would be spent. Empowerment seems to be a simple way to increase engagement for people with low enjoyment.