Monopsony and Automation

We examine the impact of labor market power on firms' adoption of automation technologies. We develop a model that incorporates labor market power into the task-based theory of automation. We show that, due to higher marginal cost of labor, monopsonistic firms have stronger incentives to automate than wage-taking firms, which could amplify or mitigate the negative employment effects of automation. Using data from US commuting zones, our results show that commuting zones that are more exposed to industrial robots exhibit considerably larger reductions in both employment and wages when their labor markets demonstrate higher levels of concentration

Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States

After a decade in which wages and employment fell precipitously in low-skill occupations and expanded in high-skill occupations, the shape of U.S. earnings and job growth sharply polarized in the 1990s. Employment shares and relative earnings rose in both low and high-skill jobs, leading to a distinct U-shaped relationship between skill levels and employment and wage growth. This paper analyzes the sources of the changing shape of the lower-tail of the U.S. wage and employment distributions. A first contribution is to document a hitherto unknown fact: the twisting of the lower tail is substantially accounted for by a single proximate cause − rising employment and wages in low-education, in-person service occupations. We study the determinants of this rise at the level of local labor markets over the period of 1950 through 2005. Our approach is rooted in a model of changing task specialization in which "routine" clerical and production tasks are displaced by automation. We find that in labor markets that were initially specialized in routine-intensive occupations, employment and wages polarized after 1980, with growing employment and earnings in both high-skill occupations and low-skill service jobs.skill demand, job tasks, inequality, polarization, technological change, occupational choice

EMPLOYMENT OUTCOMES FOR LOW-INCOME ADULTS IN RURAL AND URBAN LABOR MARKETS

This study analyzes the impact of local labor market conditions on the probability of employment and duration of employment for low-income adults in Oregon. We find that economic conditions (lower employment growth and higher unemployment rates) help to explain the less successful employment outcomes for low-income adults in non-metro areas.rural labor markets, employment, low-income workers, Labor and Human Capital,

Local Job Multipliers in the United States: Variation with Local Characteristics and with High-Tech Shocks

This paper provides new estimates of local job multipliers, the ratio of total jobs generated to some initial number of jobs created from a demand shock. Multipliers greatly affect benefits versus costs of local job-creation policies. These new estimates rely on improved methodology and data. The methodology better captures dynamic effects of demand shocks, specifies the model so that demand shocks are more comparable, and is more general in the types of demand shocks that are considered. The data has more industry detail than that used in previous studies. The local job multipliers estimated tend to be about one-quarter lower than typically estimated local multipliers, closer to 1.5 than to 2.0. In addition, demand shocks to all industries matter, not just to tradable industries. Multipliers are similar across different types of geographic areas, with county multipliers being only one-quarter below commuting zone multipliers and state multipliers only one-quarter above commuting zone multipliers. Multipliers are not larger for larger commuting zones, but they increase in commuting zones that have lower initial employment to population ratios. Multipliers are higher for high-tech industries, particularly in commuting zones with a larger initial high-tech share. In such high-tech local economies, high-tech multipliers may be close to 3. While our high-tech multipliers are greater than for other industries, our estimated high-tech multipliers are less than in some prior studies

EXPLAINING RURAL-URBAN EARNINGS DIFFERENTIALS IN THE U.S.

The persistence and widening of the rural-urban earning gap represents a continuing empirical puzzle. Using county-level data, we estimate a fixed-effects empirical model of earnings response that differentiates the impacts of schooling, unemployment shocks and macroeconomic forces on per capita earnings of rural and urban communities across the U.S.Labor and Human Capital,

The Growth of Low Skill Service Jobs and the Polarization of the U.S. Labor Market

We offer an integrated explanation and empirical analysis of the polarization of U.S. employment and wages between 1980 and 2005, and the concurrent growth of low skill service occupations. We attribute polarization to the interaction between consumer preferences, which favor variety over specialization, and the falling cost of automating routine, codifiable job tasks. Applying a spatial equilibrium model, we derive, test, and confirm four implications of this hypothesis. Local labor markets that were specialized in routine activities differentially adopted information technology, reallocated low skill labor into service occupations (employment polarization), experienced earnings growth at the tails of the distribution (wage polarization), and received inflows of skilled labor.

Local Labor Market Conditions and the Jobless Poor: How Much Does Local Job Growth Help in Rural Areas?

The employment outcomes of a group of jobless poor Oregonians are tracked in order to analyze the relative importance of local labor market conditions on their employment outcomes. Local job growth increases the probability that a jobless poor adult will get a job and shortens the length of time until she finds a job. After accounting for both the effects of personal demographic characteristics and local job growth, there is little evidence that the probability of employment or the duration of joblessness differs in rural compared with urban areas.employment, local labor markets, rural labor markets, rural poverty, unemployment, welfare reform, Labor and Human Capital,

The relevance of commuting zones for regional spending efficiency

We use data envelopment analysis (DEA) efficiency scores to show that clustering municipalities into encompassing regional clusters improves spending efficiency of single stand-alone municipalities. We propose a new geographic aggregation based on municipalities-to-municipalities commuting flows, defined using hierarchical cluster analysis. Our example for Portugal shows that from an output-oriented perspective between 83% and 98% of municipalities would increase their efficiency scores, while from an input-oriented perspective between 86% and 98% of municipalities would also be better off in terms of efficiency. Then using a linear regression model, we find that population increases positively affects the efficient scores (via scale economies). Also, increases in the share of high-educated and poorer residents leads to higher efficiency scores.info:eu-repo/semantics/publishedVersio

The relevance of commuting zones for regional spending efficiency

We use Data Envelopment Analysis (DEA) efficiency scores to show that clustering municipalities into encompassing regional clusters improves spending efficiency of single stand-alone municipalities. We propose a new geographic aggregation based on municipalities-to-municipalities commuting flows, defined using hierarchical cluster analysis. Our example for Portugal shows that from an output oriented perspective, between 85 and 95 percent of municipalities would increase their efficiency scores, while from an input oriented perspective, between 81 and 97 percent of municipalities would also be better off in terms of efficiency. Our strategy and results are naturally quite relevant in a context of public spending control.UECE is supported by Fundacão para a Ciência e a Tecnologia (Portuguese Foundation for Science and Technology) through the project PEst-OE/EGE/UI0436/2011. Financial support was provided by the Fundacão para a Ciência e a Tecnologia (Portuguese Foundation for Science and Technology) through the project PTDC/IIM-ECO/3513/201

The Rise of Technology and its Influence on Labor Market Outcomes

Technological progress has significantly changed the inputs and production processes utilized by firms. Such shifts have led to warnings throughout the past few decades that substantial numbers of jobs, particularly things belonging to the middle class, would be eliminated and replaced by technology. This paper examines the validity of this argument by estimating the impact of technology investment on local labor markets during that period. I find evidence for a positive, rather than negative, relationship between technology and employment. Furthermore, my estimates suggest there exists a complementary relationship between technology investment and growth in labor opportunities, rather than a substitution effect of workers moving from technology-intensive industries to non-technology intensive sectors