Do Marriage Markets Influence the Divorce Hazard?

This paper demonstrates that a woman's propensity to separate from her husband or live-in partner depends positively on male wage inequality on her local marriage market - the more heterogeneous potential future mates are in terms of earnings power, the more likely a woman is to end her relationship. This effect is strongest for couples, were one has a college education but the other one does not. Because of the high degree of assortative matching according to education on the marriage market, college educated individuals are those most likely to marry a college graduate - if they are not currently married to one, they have the most to gain from divorcing and going back to the marriage market. This incentive becomes stronger if the college premium (the wage advantage college graduates enjoy over non-graduates) rises. The effect is robust to the inclusion of a variety of controls on the individual level, as well as state and time fixed effects and state specific time trends.Education, Inequality, Divorce

Education in a Marriage Market Model without Commitment

This paper develops a model that combines intra-household bargaining with competition on the marriage market to analyse women's and men's incentives to invest in education. Once married, spouses bargain over their share of total household income. They have the option of unilateral divorce and subsequent remarriage. Through this channel, the marriage market situation (the quality of prospective spouses and the distribution of resources in other couples) influences the distribution within existing couples. Individuals differ in their educational attainment, and more educated individuals contribute more to household income. I use this model to study the impact of changes in the rates of educational attainment of men and women on intra-household distribution. An increase in the number of women who obtain a university degree over an above the number of men who do so benefits men without degrees; university educated men, however, are not able to translate this change on the marriage market into a significantly larger share of household income. Hence, men's incentive to invest in education decreases if more women become educated. Even without assuming any heterogeneity in tastes between men and women, equilibria arise in which men and women decide to become educated at different rates.Family bargaining, Gender education gap, Investment in education

Specialization in the bargaining family

We develop a two period family decision making model in which spouses bargain over their contributions to a family public good and the distribution of private consumption. In contrast to most models in the literature, specialization within the couple emerges endogenously from the production of the public good, and is not caused by exogenous differences between the spouses. Increasing marginal benefits of labour market experience make specialization efficient, even if both spouses have equal market and household productivities on the outset. If spouses are not able to enter into a binding contract governing the distribution of private consumption in the second period, the spouse specialized in market labour cannot commit to compensate the other spouse for foregone investments in earnings power. As a consequence, this spouse may withdraw part of his/her contribution and the provision level of the household good is likely to be inefficiently low.Family bargaining, specialization, private provision of public goods

Artificial Intelligence and Employment: New Cross-Country Evidence

Recent years have seen impressive advances in artificial intelligence (AI) and this has stoked renewed concern about the impact of technological progress on the labor market, including on worker displacement. This paper looks at the possible links between AI and employment in a cross-country context. It adapts the AI occupational impact measure developed by Felten, Raj and Seamans - an indicator measuring the degree to which occupations rely on abilities in which AI has made the most progress - and extends it to 23 OECD countries. Overall, there appears to be no clear relationship between AI exposure and employment growth. However, in occupations where computer use is high, greater exposure to AI is linked to higher employment growth. The paper also finds suggestive evidence of a negative relationship between AI exposure and growth in average hours worked among occupations where computer use is low. One possible explanation is that partial automation by AI increases productivity directly as well as by shifting the task composition of occupations toward higher value-added tasks. This increase in labor productivity and output counteracts the direct displacement effect of automation through AI for workers with good digital skills, who may find it easier to use AI effectively and shift to non-automatable, higher-value added tasks within their occupations. The opposite could be true for workers with poor digital skills, who may not be able to interact efficiently with AI and thus reap all potential benefits of the technology

Essays on intra-household distribution

PhDIn the first chapter of this thesis, I develop a model that combines intrahousehold bargaining with competition on the marriage market - once married, spouses bargain over the allocation of total household income. They have the option of divorce and subsequent remarriage; the value of this outside option is determined endogenously on the marriage market. I use this model to analyse the educational choice. When more women than men obtain a university degree, men without degrees benefit; university educated men, however, are not able to translate this change on the marriage market into a significantly larger share of household income. Hence, men's incentive to invest in education decreases if women's educational attainment increases. Even without assuming any heterogeneity in tastes between men and women, equilibria arise in which men and women decide to become educated at different rates. The second chapter shows empirically, that a woman's propensity to separate from her partner depends positively on male wage inequality on her local marriage market - the more heterogeneous potential future mates are in terms of earnings power, the more likely a woman is to end her relationship. This effect is strongest for couples, where one has a college education but the other one does not. The effect is robust to the inclusion of a variety of controls on the individual level, as well as state and time fixed effects and state specific time trends. The third chapter (co-authored with Julio Robledo) develops a two period family decision making model in which spouse bargain over the allocation of individual time and consumption. If inter-temporally binding contracts are not feasible, household time allocation might be inefficient. We compare two threat point specifications, and show that the threat point specification can influence spouses time allocation, not only the distribution of private consumption

Study on the effects and incidence of labour taxation

In the aftermath of the financial crisis most European countries are continuing to face employment problems. In a number of Member States government intervention has further resulted in increasing debt levels and high tax burdens overall and in particular on labour. Therefore well-targeted tax reforms seem to be in order to improve the labour market outcomes. It is often implicitly assumed that a decrease on the employee side, i.e. in the personal income tax rate or the employee part of social security contribution, leads to a higher labour supply. Against this background four main goals of this study emerge. First, is to identify from the literature which labour market imperfections result in employment problems and to attribute them to the labour supply or on the labour demand side. Given the heterogeneity in the labour market situation of different groups, we also set out to identify which socioeconomic groups are most vulnerable to employment problems. The next step is to review the literature which assesses the short-run and long-run economic incidence of labour taxation. To further break down the incidence into its underlying determinants we also review the literature on the (tax) elasticities of labour supply and labour demand. Then the literature on the influence of the economic environment on the tax incidence outcome, most notably the wage setting mechanisms and the institutional background, is reviewed. Finally the findings of the literature review are brought together in a framework of indicators to identify the potential of tax reforms to reduce tax related employment problems

The Future of Social Protection in a New World of Work

Many social security systems were built to minimise disruptions to earnings. But 21st century systems will need to help workers maximise potential for earnings. That will require reform argue Monika Queisser and Raphaela Hyee