Do expanded unemployment benefits lower job-finding rates?
Do Employers Have More Monopsony Power in Slack Labor Markets?
This article confronts monopsony theory’s predictions regarding workers’ wages with observed wage patterns over the business cycle. Using German administrative data for the years 1985 to 2010 and an estimation framework based on duration models, the authors construct a time series of the labor supply elasticity to the firm and estimate its relationship to the unemployment rate. They find that firms possess more monopsony power during economic downturns. Half of this cyclicality stems from workers’ job separations being less wage driven when unemployment rises, and the other half mirrors that firms find it relatively easier to poach workers. Results show that the cyclicality is more pronounced in tight labor markets with low unemployment, and that the findings are robust to controlling for time-invariant unobserved worker or plant heterogeneity. The authors further document that cyclical changes in workers’ entry wages are of similar magnitude as those predicted under pure monopsonistic wage setting.
The Hidden Tax on Blue-Collar Workers and Building in America
The unemployment insurance system has a design flaw that penalizes the construction industry, leading to fewer workers and lower productivity. Over time, that means less – and more expensive – housing.
Consumer Spending during Unemployment: Positive and Normative Implications
Using de-identified bank account data, we show that spending drops sharply at the large and predictable decrease in income arising from the exhaustion of unemployment insurance (UI) benefits. We use the high-frequency response to a predictable income decline as a new test to distinguish between alternative consumption models. The sensitivity of spending to income we document is inconsistent with rational models of liquidity-constrained households, but is consistent with behavioral models with present-biased or myopic households. Depressed spending after exhaustion also implies that the consumption-smoothing gains from extending UI benefits are four times larger than from raising UI benefit levels. (JEL D14, D91, E21, E24, E70, J65)
Disappointing 29,000 jobs added in September as unemployment ticks up
Friday's jobs report is the last one that will come out before the Nov. 3 elections that will determine whether President Donald Trump's Republicans maintain full control of Congress.
Higher Wages for Early Care and Education Workers Builds a Stronger System
Higher wages for early care and education workers in California is critical to expanding affordable child care.
Unemployment in America, Mapped Over Time
Watch the regional changes across the country from 1990 to 2016.
Employment protection legislation reforms and the rising cost of job loss
A widely cited argument in favour of easing employment protection rules is that greater flexibility in hiring and firing can lead to increased job matching efficiency and productivity, but this may come at a cost for certain groups of workers. This column examines the impact of the 2012 ‘Fornero Reform’ in Italy, which lowered the legal and financial risks associated with dismissals for employers in order to encourage firms to offer more open-ended contracts and thus help bridge the divide between permanent and temporary employment. In practice, the reform increased the cost of job loss, particularly for younger and more vulnerable workers.
California AI-Unemployment Tracker (CAIT) - California Policy Lab
Tracking AI-Related Job Loss Using Unemployment Insurance Claims Data in California The California Employment Development Department partnered with the nonpartisan California Policy Lab at the University of California to conduct research to measure AI-related job loss trends in California, using Unemployment Insurance claims data, combined with AI exposure measures. The California Policy Lab developed the
Why I'm Worried About Job Loss + Thoughts on Comparative Advantage — LessWrong
David Oks published a well-written essay yesterday arguing that the current panic about AI job displacement is overblown. I agree with a few of his p…
Layoff University, Vol. 2: Progress Made, Lessons Learned - excellent notes
Reflections from my first month of unemployment
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AI Adoption and Inequality
There are competing narratives about artificial intelligence’s impact on inequality. Some argue AI will exacerbate economic disparities, while others suggest it could reduce inequality by primarily disrupting high-income jobs. Using household microdata and a calibrated task-based model, we show these narratives reflect different channels through which AI affects the economy. Unlike previous waves of automation that increased both wage and wealth inequality, AI could reduce wage inequality through the displacement of high-income workers. However, two factors may counter this effect: these workers’ tasks appear highly complementary with AI, potentially increasing their productivity, and they are better positioned to benefit from higher capital returns. When firms can choose how much AI to adopt, the wealth inequality effect is particularly pronounced, as the potential cost savings from automating high-wage tasks drive significantly higher adoption rates. Models that ignore this adoption decision risk understating the trade-off policymakers face between inequality and efficiency.
Young Graduates Face the Grimmest Job Market in Years
Artificial intelligence could reshape work, but for now a low-hire, low-fire labor market is the main impediment for young people seeking employment.
Still Waters, Rapid Currents: Early Labor Market Transformation under Generative AI
We study the early labor market impacts of AI chatbots by linking large-scale adoption surveys to administrative labor market records in Denmark. We document rapid currents: most employers in exposed occupations have adopted chatbot initiatives, workers report productivity benefits, and new AI-related tasks are widespread. Yet these currents have not broken the surface: using difference-indifferences, we estimate precise null effects on earnings and recorded hours at both the worker and workplace levels, ruling out effects larger than 2% two years after the launch of ChatGPT. What moves is the structure of work: employers absorb AI through task reorganization—including new tasks in content generation, AI oversight, and AI integration—and adopters transition into higher-paying occupations where AI chatbots are more relevant, though still too few to move average earnings. Technological change reshapes work well before it surfaces in earnings or hours.
Incentives as selection effects
When you apply a new incentive, you select for a new population that prefers the incentive.
Unauthorized Immigration Effects on Local Labor Markets
The large increase and subsequent decline of unauthorized immigrant workers in recent years have raised questions about the impact of these changes on local labor markets across the United States. New analysis linking immigration data with employment data for specific areas suggests that the rapid rise in unauthorized immigrant worker flows increased local employment roughly one-for-one. Extending the analysis to the industry level further suggests that the slowdown of net immigration had a large negative impact on local employment, particularly for construction and manufacturing.
