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Part IIA Economics > Labour Empirics 2 > Flashcards

Labour Empirics 2 Flashcards

1
Q

Spence 1973

A

Signalling model. Explains how educ is merely a signal of high productivity, rather than causing it.

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2
Q

Altonji and Pierret, 2001

A

Marginal effect of educ falls with experience and marginal effect of innate ability rises with experience.
Aligns with Spence: Power of signal down over time as abil is understood by employers

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3
Q

Arcadino et al, 2010

A

Split into groups (HS vs college). Find for college grads, marginal effect of abil does not rise with exp. Because college grads have already successfully signalled abil?

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4
Q

Sheepskin effects?

A

Jaeger and Page, 1996: Controlling for years of schooling, still a 22% wage premia for BA

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5
Q

Curriculum effects should be zero if signalling?

A

Quality of educ shouldn’t matter if signalling. These face self selection issues.

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6
Q

Empirics on curriculum effects?

A

Altonji, 1995: Returns to extra HS courses small
Rose and Betts, 2001: Large math effects on earnings
Kane and Rouse, 1995: If you fail a degree, number of credits matters!

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7
Q

GED

A

High school equivalent qualification for dropouts (assume it is a good ability measure).

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8
Q

Tyler, Murrane, Willet, 2000

A

Exploit variation in passing standards. Use DiD to find variation in identically abled students. Find GED has a 19% impact on wages

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9
Q

Challenge to TMW 2000

A

Jepsen et al, 2016As individuals can retake, it is not a valid abil control. If we only allow first try, no effect!

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10
Q
A

Compulsory school attendace laws. If pure HC, only marginals affected. If Spence, all affected as value of signal down. Appears pos effect, but stat not significant

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11
Q

Hysteresis

A

Kahn, 2010: Graduating in a weak economy leads to wage loss as high as 2.5% 15 years later.

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12
Q

Card, Chetty, Weber 2007

A

Regression discontinuity. Extension of potential duration of benfits lowers finding rate in first 20 weeks by 5-9%

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13
Q

Katz and Meyer, 1990

A

Far higher chance of finding a job the week benefits expire

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14
Q

Card and Krueger 1994

A

DiD for changes to min wage Pennsylvania vs New Jersey. Assume parallel trends. Suggests Ld elasticity of +0.7

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15
Q

Critiques of CK 1994

A
  • Measurement errors: Phone survey vs actual administrative data.
  • Fast food not representative? (hungry teenager theory) (Keenan, 1995). Teenagers employed and stim demand.
  • Adjustment takes time! (Baker et al, 1999)
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16
Q

Seattle min wage

A

We see politicised debate! UC Berkeley study backed by mayor’s office so incentive to support min wage.
Key of debate is elasticity of Ld close to min wage barrier

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17
Q

Cain, 1986 on discrimination

A

Must consider wage differentials given same vector of productivity characteristics

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18
Q

Becker, 1957

A

Taste based discrimination
Employer has a discrim coefficient and acts as if wage = (1+a)w
1 - If a is common, then B members pay a ‘discrimination tax’ and so wage down.
2 - If a is from a distribution, then the a at which there is indifference rules wage differential.
Implies discrim will be driven out

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19
Q

Phelps (1972)

A

Statistical discrimination. Observable (eg race) is corr with performance (via unobservables).
Set up using a noisy evaluation process.
Implies return to training is lower for B types! Self fulfilling?

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20
Q

Empirics on race differentials are generated how?

A

Correspondence: Fictitious paper applications.
Audits: Trained auditors for job interviews

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21
Q

Audit: Pager, Western, Bonikowski (2009)

A

Blacks less likely to get a callback offer. B roughly equal to Whites with 18 month drug felony

22
Q

Critique of audit

A

Heckmann Siegelmann, 1992. Assumes unobservables identical across groups and not double blind so unconcious actions by auditors? Sample sizes inevitably small due to cost

23
Q

Correspondence:

A

Bertrand and Mullaithan (2004). Random characteristics and change name. Roughly 50% gap in B/W callback rate!

24
Q

Fryer and Levitt (2004)

A

Investigate and find no compelling reln between black names and life outcomes after controlling for background. Thus, black names perhaps used as a signal at resume stage, but not later?

25
Q

Doleac and Stein (2013)

A

iPod sales with hand visible. Black sellers: Fewer and lower offers. Particularly poor in thin markets / more racial isolation so appears consistent with this channel

26
Q

Oaxaca - Blinder

A

Decompose differences in wages into due to discrimination and due to skills gap

27
Q

Card and Krueger 1992

A

Return to educ lower for blacks due to school quality, not discrimination?

28
Q

Should we control for industry / occupation?

A

No? Choices are at least partly endogenous!

29
Q

B/W wage ration over time

A

US
Men: 1940=0.4, 1967=0.65, 2009=0.77
Sig closer for women

30
Q

Reasons for closing gap in B/W wage ratio?

A

Closing gap in educ: E.g. end of seg Brown v Board of Educ 1954.
Biased employment tests abolished?
Affirmative action?
Labour force participation?
Unobserved skill differences?

31
Q

Biased employment tests abolished?
Affirmative action?

A

Black police wages up 10% following abolished tests
CRA (1964): Strengthened by executive order mandating blind treatment.

32
Q

Labour force participation?
Unobserved skill differences?

A
  • Roughly equal 1960s to 6% gap 2015. Wr up leads to avg w up no change in discrim (1/3 of differential)
  • Neal and Johnson 1996: 3/4 of wage difference is due to human capital, following work by Arrow, 1973: stat discrim
33
Q
A

Oaxace Blinder leads to same result of Neal and Johnson.
OVB? AFQT is not a pure abil measure. Childhood educ and race! - Household income?

34
Q

Gender wage gap UK

A

39% 1978 / 14% 2022
Manning and Swaffield, 2008: Gender pay gap on entry = 0, but 25% 10 years after entry. 17% is characteristics, 8% discrim.

35
Q

Characteristics and gender wage gap. Manning Swaffield 2008

A

Human capital: 11% / Occupational crowding 1.5% / Psychology 4.5%

36
Q

Human capital and gender pay gap

A

Mincer and Polachek, 1974:
- Div of labour in family means women gain less experience.
- Women: anticipate shorter / less cont. work lives so less incentive to invest in training.
- Also, employers E(leave) is higher so less willing to higher

37
Q

Occupational crowding and gender pay gap

A
  • In female dominated fields, all wages 14% lower.
  • Manning and Petrolongo, 2008: ‘Part time pay penalty’: 14% to 28% 1975-95. Disappears when controlling for occupation.
  • Connolly and Gregory (2009): FT to PT. ‘hidden brain drain’, with many women moving to lower skill
38
Q

Psychology and gender pay gap

A

Gneeze, Niederle, Rustichini (2003): Women vs men compete. Women perform worse if mixed!
Negotiations:
- Babcock, 2002: 7% of women vs 57% of men negotiate wage (Carnegie Mellon MBA students)
- Babcock and Laschever, in lab: 9x as many men vs women asked to be paid more

39
Q

Income pooling?

A

Lundberg, Pollack, Wales (1997): Change of child benefit from father to mother. Ratio of children’s clothes to men’s up (but time trend?)

40
Q

Duflo, 2003

A

Black SA can receive pensions 1993. Both weight for height and height for age significantly up for girls if Grandmother pension, not if grandfather

41
Q

Thomas, 1997

A

Brazil 1974/75: Effect of maternal income on nutrition demand is 4-7x larger vs paternal!

42
Q

Tinbergen, 1974

A

Canonical model of skills.
Leads to skill premium: Log(Wh/WL)= ((theta-1)/theta)*log(Ah/AL) - (1/theta)log(H/L).
Supply and demand side!!

43
Q

Test Tinbergen

A

Katz and Murphy 1992: Data in period: 1963-87. theta hat = 1.6 and annual 2.7% increase in rel demand for college labour.
Acemoglu and Autor, 2012. KM breaks down since 2000! Extend to 2008. theta hat = 2.4, annual increase = 1.6

44
Q

Breakdown of Tinbergen

A

Cannot explain fall in real wage as Ah up and cannot explain the U shaped changes in wage dist since 1990s.

45
Q

Non-cognitive skill measures

A

‘Big 5’ personality dimensions: Extraversion, agreeablenesss etc

46
Q

Non-cognitives important?

A

Bottom quartile are only 1/3 as likely to complete degree vs top

47
Q

Team production model

A

Deming, 2017.
If costless trade: Result similar to Acemoglu, Autor (2012): Workers trade tasks, with I* by normal task based model

48
Q

Costs of trade

A

Uses Krugman, 1991: Iceberg transport costs! Trading one unit leaves S<1 unit remaining.

49
Q

Empirics of non-cognitives

A

Comparing change from 1979 to 1997 NSLY: 1 SD cognitive on wage 20.3% to 15.1% and 1SD social: 2% to 3.7%

50
Q

Cognitives and non. Sub or complements?

A

Generally, returns higher in both so support for com

Part IIA Economics (10 decks)

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