Change at Home, in the Labor Market, and On the Job: Volume 48

Some economists have argued that assortative mating between men and women has increased over the last several decades. Sociologists have argued that educational homogamy has increased. The two are conceptually distinct but often confused. We clarify the relation between the two and, using both the Current Population Surveys and the decennial Censuses/American Community Survey, show that neither conclusion is correct. Both are sensitive to how educational categories are chosen. The former is based on the use of inappropriate statistical techniques.

This chapter estimates the impact of a transitory reduction in hours during physicians' early career on their long-term labor supply, using the work-hour regulations on medical residents as the source of exogenous variation. The results show that exposure to the regulations significantly decreases practicing physicians' labor supply by about 4 hours per week on average, with female physicians being more responsive to a given reduction in early career hours. Distributional results using a changes-in-changes model confirm that the regulations primarily affect the upper end of the work-hour distribution. To reveal potential mechanisms of these effects, this study finds that the reform increases the probabilities of marriage and having a child, as well as the total number of children, for female physicians. In contrast, it does not have a significant impact on marriage and fertility outcomes for male physicians. These findings provide a better understanding of physicians' hours of work in response to the reform over time and the role of gender with respect to labor supply behavior and family formation decisions.

Within the framework of potential efforts and strategies to employment generation for young people in Africa in general and Ethiopia in particular, the agricultural sector is increasingly considered as an important sector and a valuable means for poverty reduction, the promotion of economic development, and youth's economic independence. Renewed hope is placed on the sector to offer sustainable livelihood prospects for the rural youth. Yet, the success and sustainability of the sector require a proper understanding of how households allocate youth labor time in the sector and whether agricultural labor supply is responsive to economic incentives such as shadow wages. Using gender- and age-specific plot-level panel data, we systematically analyze the impacts of shadow wages of each household member on youth agricultural labor supply across types of farms. The results indicate that agricultural shadow wages matter for the youth's labor supply in the sector, but the impact differs for male and female youth. We also show that trends and patterns of youth labor supply vary across gender and whether they work on their own farm, and so do their labor returns. The results are consistent after controlling for individual heterogeneity and instrumenting for possible endogeneity. Taking into account the intensity of youth's actual involvement in the family farm, own farm or off-farm work instead of their stated intentions, the results challenge the presumption that youth are abandoning agriculture, at least in agricultural potential areas of Ethiopia. Instead, the frequent narrative of youth disengaging from agriculture may be a result of methodological flaws or data limitations. The findings suggest that it is necessary to invest in agricultural development to enhance labor productivity and employability of young people in agriculture.

Recent empirical studies have improved methodologies for identifying the causal effects of policies especially on a minimum wage hike. This study identifies causal effects of minimum wage hikes across 47 prefectures in Japan from 2008 to 2010 on employment, average hourly wage, work hours, full-time equivalent employment (FTE), total wage costs, average tenure, separation and new hiring in establishments using a micro dataset of business establishments in restaurant, accommodation, and food takeout and delivery industry. Various regression specifications including controls for time-varying regional heterogeneity are implemented by using the bite of the minimum wage in each establishment. First, this study finds that the effects of a revision of minimum wage on employment and FTE in the establishment are statistically insignificant, but the effects on hourly wages and total wage costs are statistically significant. Subsequently, it considers how the establishments react to the increase in total wage costs caused by the revised minimum wage, and finds that separation from the establishment may decrease, and average tenure of workers may increase.

I evaluate how the tax reform of 2012 reduced informality in Colombia both theoretically and empirically. Theoretically, I develop a labor market model and obtain simulations indicating that the reform should reduce informality significantly. Empirically, I obtain difference-in-difference estimates from two household surveys. Estimates from the repeated cross-sections data indicate small, short-term effects and large long-term effects. Estimates from the household survey panel data are in line with these results. I also simulate difference-in-difference estimates with different combinations of changes in payroll taxes and enforcement indicating that large improvements would have been needed to obtain the corresponding econometric estimates.

This paper analyzes the age pay gap in Italy (22%), particularly as it is of interest in an aging society and as it may affect social cohesion. Instead of the traditional approach for model selection, we use a machine-learning approach (post double robust Least Absolute Shrinkage Operator [LASSO]). This approach allows us to reduce Omitted Variable Bias (OVB), given data restrictions, and to obtain a robust estimate of the conditional age pay gap. We then decompose the conditional gap and analyze the impact of four further potential sources of heterogeneity (workers', sectors', and occupations' permanent heterogeneity as well as sample selection bias). The results suggest that age discrimination in pay is only perceived but not real in Italy for both men and women.

This chapter studies the negative signals associated with nonpromotion. I first show theoretically that, when workers' productivity rises little with additional years on the same job level, the negative signal associated with nonpromotion leads to wage decreases. On the other hand, when additional job-level tenure leads to a sizable increase in productivity, workers' wages increase. I then test my model's predictions using the personnel records from a large US firm from 1970–1988. I find a clear hump-shaped wage-job-tenure profile for workers who stay at the same job level, which supports my model's prediction.

A proposed explanation for why business creation is often found to increase in recessions is that there are two components to entrepreneurship – “opportunity” and “necessity” – the latter of which is mostly counter-cyclical. Although there is some agreement on the conceptual distinction between these two factors driving entrepreneurship, there is little consensus in the literature on empirical definitions. The goal of this chapter is to propose an operational definition of opportunity versus necessity entrepreneurship based on the entrepreneur's prior work status (i.e., based on previous unemployment) that is straightforward, based on objective information, and empirically feasible using many large, nationally representative datasets. We then explore the validity of the definitions with theory and empirical evidence. Using datasets from the United States and Germany, we find that 80–90% of entrepreneurs are opportunity entrepreneurs. Applying our proposed definitions, we document that opportunity entrepreneurship is generally pro-cyclical and necessity entrepreneurship is strongly counter-cyclical both at the national levels and across local economic conditions. We also find that opportunity vs necessity entrepreneurship is associated with the creation of more growth-oriented businesses. The operational definitions of opportunity and necessity entrepreneurship proposed here may be useful for distinguishing between the two types of entrepreneurship in future research.