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Journal Article
Why Is the Labor Share Declining?
The fraction of national income accruing to labor (the labor share) had been roughly constant in developed economies for much of the 20th century but has fallen since the 1980s. We review several of the leading explanations in the literature for the declining labor share. We then point to hitherto unexplored dimensions of the data and provide suggestive evidence for a new explanation. In particular, we show that the labor share began a steeper descent in 2000. This more recent break in the labor-share trend coincides with the rapid rise of software investment, which has left a larger impact ...
Working Paper
Technology and the Task Content of Jobs across the Development Spectrum
The tasks workers perform on the job are informative about the direction and the impact of technological change. We harmonize occupational task content measures between two worker-level surveys, which separately cover developing and developed countries. Developing countries use routine-cognitive tasks and routine-manual tasks more intensively than developed countries, but less intensively use non-routine analytical tasks and non-routine interpersonal tasks. This is partly because developing countries have more workers in occupations with high routine contents and fewer workers in occupations ...
Journal Article
Hit Harder, Recover Slower? Unequal Employment Effects of the COVID-19 Shock
The destructive economic impact of the COVID-19 pandemic was distributed unequally across the population. A worker's gender, race and ethnicity, age, education, industry, and occupation all mattered. We analyze the initial negative effect and its lingering effect through the recovery phase, across demographic and socioeconomic groups. The initial negative impact on employment was larger for women, minorities, the less educated, and the young whether or not we account for the industries and occupations they worked in. By February 2021, however, the differential effects across groups had gotten ...
Journal Article
Industrial and Occupational Employment Changes During the Great Recession
The U.S. labor market contracted sharply during the Great Recession. The ensuing recovery has been sluggish and by some measures still incomplete. In this paper, we break down aggregate employment during the Recession and the recovery into changes across industries and occupations. There is a clear asymmetric pattern: The contraction is driven by sectors and the recovery by occupations. In particular, the contraction between 2008 and 2010 primarily reflects a steep decline in construction employment, partially mitigated by expansions in the food services, education, and health industries. The ...
Journal Article
Financial markets: an engine for economic growth
Do developed financial markets lead to economic growth or result from it? While some economists argue for the latter, the author maintains that financial markets?despite their shortcomings of late?are an essential ingredient for an economy to grow in the long run.
Journal Article
There are two sides to every coin—even to the bitcoin, a virtual currency
Central to Bitcoin is its independence from any institution or government, allowing anyone to engage in a direct transaction at a low cost. So, what exactly is it, and how does it work?
Working Paper
Lifetime labor supply and human capital investment
We develop a model of retirement and human capital investment to study the effects of tax and retirement policies. Workers choose the supply of raw labor (career length) and also the human capital embodied in their labor. Our model explains a significant fraction of the US-Europe difference in schooling and retirement. The model predicts that reforms of the European retirement policies modeled after the US can deliver 15?35 percent gains in per-worker output in the long run. Increased human capital investment in and out of school accounts for most of the gains, with relatively small changes ...
Journal Article
Who Should Work from Home During a Pandemic? The Wage-Infection Trade-off
Shutting down the workplace is an effective means of reducing contagion but can induce large economic losses. We harmonize the American Time Use Survey and O*NET data to construct a measure of infection risk (exposure index) and a measure of the ease with which a job can be performed remotely (work-from-home index) across both industries and occupations. The two indexes are negatively correlated but distinct, so the economic costs of containing a pandemic can be minimized by sending home only those workers that are highly exposed to infection risk but that can perform their jobs easily from ...
Working Paper
Big Push in Distorted Economies
Why don't poor countries adopt more productive technologies? Is there a role for policies that coordinate technology adoption? To answer these questions, we develop a quantitative model that features complementarity in firms' technology adoption decisions: The gains from adoption are larger when more firms adopt. When this complementarity is strong, multiple equilibria and hence coordination failures are possible. More importantly, even without equilibrium multiplicity, the model elements responsible for the complementarity can substantially amplify the effect of distortions and policies. ...
Journal Article
Occupational Mobility and Lifetime Earnings
People?s occupations have a significant amount of information about their wages. However, because people?especially young workers?go through multiple occupations and employment statuses during their working lives, we find that their occupations at a young age do not predict their lifetime earnings well. When educational attainment and gender are considered, we find that across education-gender groups the differences in lifetime earnings are even larger than the differences in average occupational wages: Workers in high-wage education-gender groups (men with college degrees, for example) work ...