Results

Journal article

Journal of Political Economy:

The economic dynamics of city structure: evidence from Hiroshima's recovery

We provide new theory and evidence on the resilience of the internal city structure after a large shock by analyzing the atomic bombing of Hiroshima. Exploiting newly digitized data, we document that the city structure r...Read more...

CEP discussion paper

Returns to green tasks in Europe: evidence from online job vacancies

There is growing evidence that green jobs have higher skill requirements, but whether they offer sufficient wage incentives to encourage workers to acquire those skills remains unclear. We study the green wage premium an...Read more...

CEP discussion paper

Gender equality and innovation: evidence from UK companies

We investigate the effect of intra-firm gender disparities on innovation using a unique longitudinal dataset of UK companies from 1996 to 2019. Utilising within-industry and within-firm variation, as well as an instrumen...Read more...

Journal article

Journal of Human Resources:

Workplace presenteeism, job substitutability, and gender inequality

This paper explores how the parenthood wage penalty is partially explained by an increased within-couple gap in job uniqueness (i.e., the within-establishment substitutability of workers). Uniqueness is rewarded with hig...Read more...

Journal article

Strategy Science:

Strategic confusopoly: evidence from the UK mobile telecommunications market

Can entire markets strategically confuse consumers to raise market prices? Using a detailed data set covering virtually all mobile phone tariffs and their handsets in the United Kingdom between January 2010 and September...Read more...

CEP discussion paper

When do employers share? Rent sharing, monopsony and minimum wages

When firm productivity or product demand rises, workers typically share in the gains through higher wages or expanded employment. We show that for firms under monopsony with a binding minimum wage, this link from firm ga...Read more...

CentrePiece article

Hiroshima: urban resilience after the atomic bomb

Why the city centre re-emerged from destruction....Read more...

CentrePiece article

Putting a value on safety

What the pandemic reveals about the risks that people are willing to take at work....Read more...

Journal article

The Economic Journal:

Non-compete agreements, wages and efficiency: theory and evidence from Brazilian football

The Pele Act banned non-compete agreements in Brazilian football in 1998. We explore this policy change to study how non-competes affect the labour market. The Act changed the wage profile heterogeneously, reducing young...Read more...

Journal article

The Economic Journal:

Manipulation and selection in unemployment insurance

In this paper, we study the selection patterns of individuals who manage to have their lay-off delayed around an age at lay-off threshold entitling them to four additional months of unemployment insurance, that is, manip...Read more...

Journal article

American Economic Review:

Monopsony and employer misoptimization explain why wages bunch at round numbers

We show that administrative hourly wage data exhibit considerable bunching at round numbers. We run two experiments randomizing wages around $0.10 and $1.00 to experimentally measure left-digit bias for identical tasks o...Read more...

Blog

LSE Business Review:

People value workplace safety more than traditionally believed

Some workplaces are inherently more dangerous than others, but during the pandemic almost all workplaces became risky. Massimo Anelli and Felix Koenig investigated whether workers during COVID chose to forgo earnings to ...Read more...

Journal article

The Economic Journal:

Monopsony and the wage effects of migration

If labour markets are competitive, migration can only affect native wages via marginal products. But under imperfect competition, migration may also increase wage mark-downs ? if firms have greater monopsony power over m...Read more...

CEP discussion paper

Estimating labour market power: the long and short of it

This paper combines two empirical traditions in the study of employer monopsony power. One tradition estimates static firm labour supply elasticities, while the other focuses on labour market flows, estimating separation...Read more...

CEP discussion paper

Willingness to pay for workplace amenities

We develop a revealed preference approach to measure the value of workplace amenities by analyzing how variation in non-wage job attributes affects excess mass in the earnings distribution at budget discontinuities. The ...Read more...

CEP discussion paper

Minimum wages and low wage workers: compliance as non-employment margin

This paper examines the impact of a substantial minimum wage increase in Uruguay - a middle-income developing economy - on wages and employment. Using administrative data and a difference-in-differences approach, we anal...Read more...

CEP discussion paper

Firm dynamics and growth with soft budget constraints

We develop a model of endogenous growth and firm dynamics with soft budget constraints, where firms differ in their innovation speed and slower firms need additional financing in order to eventually innovate. As creditor...Read more...

Blog

Vox EU:

Living wages and government contracts

Living wages are an increasingly common policy tool for reducing poverty and improving the living standards of low-income workers. But until recently, there has been little evidence on how living wage clauses effect the ...Read more...

CEP discussion paper

Trade with nominal rigidities: understanding the unemployment and welfare effects of the China shock

We present a dynamic quantitative trade and migration model that incorporates downward nominal wage rigidities and show how this framework can generate changes in unemployment and labor participation that match those unc...Read more...

Journal article

The Economic Journal:

Service offshoring and export experience

Service inputs significantly influence export costs and firm internationalisation. A new dataset on French firms? participation in global value chains reveals that experienced exporters are more likely to source services...Read more...

Journal article

German Economic Review:

The immobile incumbent problem in a model of short-term wage-posting

This paper takes the canonical Burdett-Mortensen model of wage-posting and relaxes the assumption that wages are set once-for-all, instead assuming they can only be committed one period at a time. It derives a closed-for...Read more...

CEP discussion paper

Labor market effects of global supply chain disruptions

We examine the labor market consequences of global supply chain disruptions. Specifically, we consider a temporary increase in international trade costs similar to the one observed during the COVID-19 pandemic and analyz...Read more...

Blog

Vox EU:

The evolution of gender in the labour market

Despite significant progress in closing the gender gap in earnings, work remains highly gendered, with women continuing to participate less in the workforce, work fewer hours, and face persistent wage disparities. This c...Read more...

Journal article

Journal of Monetary Economics:

Labor market effects of global supply chain disruptions

We examine the labor market consequences of global supply chain disruptions. Specifically, we consider a temporary increase in international trade costs similar to the one observed during the COVID-19 pandemic and analyz...Read more...

Journal article

Oxford Review of Economic Policy:

Ethnic minority and migrant pay gaps over the life-cycle

It is well-known that ethnic minority and migrant workers have lower average pay than the White UK-born workforce. However, we know much less about how these gaps vary over the life-cycle because of data limitations. We ...Read more...

Journal article

The Review of Economics and Statistics:

Reservation wages and the wage flexibility puzzle

Using micro data for the UK and Germany, we provide novel evidence on the cyclical properties of reservation wages and estimate that wages and reservation wages are characterised by moderate and very similar degrees of c...Read more...

Journal article

Demography:

Population growth, immigration, and labor market dynamics

This article provides a first synthesis of population flows and labor market dynamics across immigrant and native-born populations. We devise a novel dynamic accounting methodology that integrates population flows from t...Read more...

CEP discussion paper

Highway traffic in Britain: the effect of road capacity changes

This paper examines the effects of road capacity expansion on traffic volumes, population, and employment in Great Britain between 2001 and 2020, using annual data for 218 Travel-to-Work Areas and an instrumental-variabl...Read more...

Journal article

Journal of Economic Literature:

Temporary employment in markets with frictions

Temporary employment has spiked in OECD countries over the last 40 years and is now a common feature of their labor market landscape. A large body of empirical literature examines the spread of temporary employment, but ...Read more...

Blog

Vox EU:

The effect of productivity growth on within-firm inequality

Wage inequality has increased dramatically in the US since the 1970s, largely driven by within-firm earnings inequality. This column uses combined data from three large micro datasets to study the drivers and implication...Read more...

CEP discussion paper

The wage of temporary agency workers

Using French administrative data, we estimate the wage gap distribution between in-house and temporary agency workers working in the same establishment and the same occupation. The average wage gap is about 3%, but the g...Read more...

CEP election analysis

Work, wages and inactivity

The recent aggregate performance of the UK labour market looks good. But aggregate performance often obscures important changes around averages. Inequality along several dimensions remains a persistent feature of the UK ...Read more...

CentrePiece article

The national minimum wage: 25 years on

It is now just over a quarter of a century since a national minimum wage was introduced in the UK. Once a source of controversy due to fears that it would lead to fewer jobs, the policy has instead proved to be highly su...Read more...

CEP discussion paper

Why delay? Understanding the construction lag, aka the build out rate

We explore the determinants of the speed of residential development after dwelling construction starts. Using a sample of over 140,000 residential developments in England from 1996 to 2015 and employing an instrumental v...Read more...

CEP discussion paper

The economic dynamics of city structure: evidence from Hiroshima's recovery

We provide new theory and evidence on the resilience of the internal city structure after a large shock by analyzing the atomic bombing of Hiroshima. Exploiting newly digitized data, we document that the city structure r...Read more...

Blog

The Conversation:

How the national living wage helps the UK's poorest households: new research

The UK's national living wage has just been raised by 10% to #11.44 per hour. It is now payable for all workers aged 21 and over, where previously it was for those aged 23 and over. Introduced in 2016 as the flagship pol...Read more...

Blog

LSE British Politics and Policy:

The national minimum wage - 25 years on

This month marks 25 years since a national minimum wage was introduced in the UK. Once a controversial policy, due to fears that it would lead to fewer jobs, it has instead proven to be highly successful. The minimum wag...Read more...

Journal article

American Economic Journal: Applied Economics:

Measuring absolute income mobility: lessons from North America and Europe

We use linked parent-child administrative data for five countries in North America and Europe, as well as detailed survey data for two more, to investigate methodological challenges in the estimation of absolute income m...Read more...

CEP discussion paper

Global managers, local workers: wage setting inside a multinational firm

How are wages set within a multinational firm? Combining cross-country data on wages and labor regulations with personnel records of a large multinational firm, I find that wage setting depends on the rank of the employe...Read more...

Journal article

The Review of Economic Studies:

A theory of falling growth and rising rents

Growth has fallen in the U.S. amid a rise in firm concentration. Market share has shifted to low labour share firms, while within-firm labour shares have actually risen. We propose a theory linking these trends in which ...Read more...

CEP discussion paper

Individual welfare analysis: a tale of consumption, time use and preference heterogeneity

How accurately does household income reflect the well-being of the individuals living within the household? Looking at household income does not take unequal consumption sharing within families, the value of time use (le...Read more...

Journal article

Journal of Economic Perspectives:

The evolution of work from home

Full days worked at home account for 28 percent of paid workdays among Americans 20?64 years old, as of mid-2023. That's about four times the 2019 rate and ten times the rate in the mid-1990s. We first explain why the bi...Read more...

Journal article

Annual Review of Economics:

Labor market insurance policies in the Twenty-First Century

The COVID-19 crisis was a stress test for unemployment insurance schemes as it involved a sudden and unexpected shutdown of a very large set of activities. This forced countries to introduce, often from scratch, income s...Read more...

CEP discussion paper

Spatial wage inequality in North America and Western Europe: changes between and within local labour markets 1975-2019

The rise of economic inequalities in advanced economies has been often linked with the growth of spatial inequalities within countries, yet there is limited comparative research that studies the relationship between nati...Read more...

CEP discussion paper

The shift to remote work lessens wage-growth pressure

The recent shift to remote work raised the amenity value of employment. As compensation adjusts to share the amenity-value gains with employers, wage-growth pressures moderate. We find empirical support for this mechanis...Read more...

Journal article

Journal of International Economics:

Sequentially exporting products across countries

Exploiting disaggregated data on French exporters, we show that firms expand their product scope and geographical presence sequentially. This process of internationalization is uneven over time, exhibiting more volatilit...Read more...

Journal article

Journal of Econometrics:

Union membership density and wages: the role of worker, firm, and job-title heterogeneity

We examine the association between union density and wages in Portugal where just 10 percent of all workers are union members but nine-tenths of them are covered by collective agreements. Using a unique dataset on worker...Read more...

CEP discussion paper

Responsible sourcing? Theory and evidence from Costa Rica

Multinational enterprises (MNEs) increasingly impose "Responsible Sourcing" (RS) standards on their suppliers worldwide, including requirements on worker compensation, benefits and working conditions. Are these policies ...Read more...

Journal article

Econometrica:

Dynamic spatial general equilibrium

We incorporate forward-looking capital accumulation into a dynamic discrete choice model of migration. We characterize the steady-state equilibrium; generalize existing dynamic exact-hat algebra techniques to incorporate...Read more...

CEP discussion paper

Robot adoption, worker-firm sorting and wage inequality: evidence from administrative panel data

Leveraging the geographic dimension of a large administrative panel on employer-employee contracts, we study the impact of robot adoption on wage inequality through changes in worker-firm assortativity. Using recently de...Read more...

Journal article

Industrial and Corporate Change :

Industry concentration in Europe and North America

This paper presents new evidence on industry concentration at both the country and the world-region levels. It calculates country-level industry concentration measures from the novel data representative of the entire fir...Read more...

Journal article

Quantitative Economics:

Income dynamics in the United Kingdom and the impact of the Covid-19 recession

In this paper, we use an employer-based survey of earnings and hours to set out the key patterns in UK earnings dynamics from 1975 to 2020, with a particular focus on the most recent recession. We demonstrate that (log) ...Read more...

CEP discussion paper

Who's got the power? Wage determination and its resilience in the Great Recession

Whereas wage inequality has risen markedly in most OECD countries in recent decades, it has fallen in several Southern European economies. To shed light on this phenomenon, we embed sectoral bargaining, which is common i...Read more...

CEP discussion paper

The wage elasticity of recruitment

One of the factors affecting the market power of employers is the extent to which higher wages makes recruitment easier. There is very little research on this. This paper presents a methodology for estimating the wage el...Read more...

CEP discussion paper

Labor market insurance policies in the XXI century

The recovery from the Covid-19 crisis will force governments to accelerate transformation in their menu of labor market policy tools. The crisis was a stress test for unemployment insurance schemes as it involved a sudde...Read more...

CEP discussion paper

Firms and inequality when unemployment is high

How important are firms for wage inequality in developing countries where structural unemployment is high? Research focused on contexts close to full employment has suggested a substantial role of firms in labor market i...Read more...

CEP discussion paper

Company wage policy in a low-wage labor market

We study how firms set wages for their employees when they can legally age discriminate across workers. We exploit an age-specific minimum wage change in the UK, which raised the minimum applying to workers aged 25 and o...Read more...

Journal article

Journal of Human Resources :

Workplace presenteeism, job substitutability and gender inequality

This paper explores how the parenthood wage penalty is partially explained by an increased within-couple gap in job uniqueness (i.e., the within-establishment substitutability of workers). Uniqueness is rewarded with hig...Read more...

Blog

Economics Observatory:

Minimum wages and living wages: what happens in times of inflation?

It is widely accepted that minimum wages are an effective way to help workers at the lower end of the income distribution without damaging their job opportunities. But while the UK's minimum wage has risen faster than th...Read more...

Journal article

The Quarterly Journal of Economics :

The slope of the Phillips Curve: evidence from US States

We estimate the slope of the Phillips curve in the cross section of U.S. states using newly constructed state-level price indices for nontradeable goods back to 1978. Our estimates indicate that the slope of the Phillips...Read more...

Blog

LSE Business Review:

Low pay and insecurity in the UK labour market

Minimum wage increases have driven down the incidence of low hourly pay, but there has been much less progress elsewhere for low earners. Low pay is widespread among the self-employed, who do not benefit from the minimum...Read more...

Journal article

Mothers in the Labor Market:

Temporal flexibility, breaks at work, and the motherhood wage gap

We analyze the relationship between temporal flexibility at work (i.e., the ability to vary or change the time of beginning or ending work) and the motherhood wage gap of working parents, in the US. To that end, we first...Read more...

Chapter

Temporal flexibility, breaks at work, and the motherhood wage gap

in Mothers in the labor market

We analyze the relationship between temporal flexibility at work (i.e., the ability to vary or change the time of beginning or ending work) and the motherhood wage gap of working parents, in the US. To that end, we first...Read more...

CVER Research Paper

Variation in Parenthood Wage Effect: A human capital approach

Using German Socio-Economic Panel (GSOEP) microdata this paper contributes new empirical evidence by examining the implications of motherhood and fatherhood for wages of a sample of women and men between 2005-2015. Makin...Read more...

Journal article

Journal of Human Resources:

The urban wage premium in imperfect labor markets

Using administrative data for West Germany, this paper investigates whether part of the urban wage premium stems from fierce competition in thick labour markets. We first establish that employers possess less wage-settin...Read more...

CEP Insights

Jobs and wages

Most working-age adults depend on earnings from jobs as their main source of income. Understanding the labour market has always been a central part of research at CEP and its predecessor the Centre for Labour Economics....Read more...

CentrePiece article

In brief... How Pele changed Brazilian football

A ban on non-compete agreements in Brazilian football led to an increased lifetime income for players. But as research by Bernardo Guimaraes, Jo?o Paulo Pessoa and Vladimir Ponczek reveals, it was older players who gaine...Read more...

Blog

LSE Business Review:

What is the optimal minimum wage?

With reports from the European Commission, the UK Treasury advocating significant increases in minimum wage levels, Gabriel Ahlfeldt, Duncan Roth, and Tobias Seidel explore whether such ambitious minimum wage increases i...Read more...

CEP discussion paper

Optimal minimum wages

We develop a quantitative spatial model with heterogeneous firms and a monopsonistic labour market to derive minimum wages that maximize employment or welfare. Quantifying the model for German micro regions, we find that...Read more...

Blog

VoxEU:

The value of online gig economy platforms

The gig economy and online labour platforms often trade off increased flexibility for lower employment security. Christopher Stanton and Catherine Thomas show how traditional labour market regulations, such as minimum wa...Read more...

Journal article

Review of Economics and Statistics:

The impact of contract enforcement costs on value chains and aggregate productivity

I study how supplier contracting frictions shape the patterns of intermediate input use and quantify the impact of these distortions on aggregate productivity. Using the frequency of litigation between US firms as a nove...Read more...

CEP discussion paper

Population growth, immigration and labour market dynamics

This paper examines the role of population flows on labour market dynamics across immigrant and native-born populations in the United Kingdom. Population flows are large, and cyclical, driven first by the maturation of b...Read more...

CEP discussion paper

Dynamic spatial general equilibrium

We develop a dynamic spatial general equilibrium model with forward-looking investment and migration decisions. We characterize analytically the transition path of the spatial distribution of economic activity in respons...Read more...

CEP discussion paper

Service offshoring and export experience

Service inputs are a key component of the costs of exporting, and contribute to explain the process of internationalization of firms. A new dataset on the participation of French firms in global value chains reveals that...Read more...

CEP discussion paper

Sequential exporting across countries and products

How do exporters expand their product scope and geographical presence? We argue that new exporters are uncertain about their profitability in different countries and products, but learn it as they start to export. As a c...Read more...

Journal article

Journal of the European Economic Association:

Parents, schools and human capital differences across countries

This paper studies the contribution of parental influence in accounting for cross-country gaps in human capital achievements. We argue that the cross-country variation in unobserved parental characteristics is at least a...Read more...

CEP discussion paper

Non-compete agreements, wages and efficiency: theory and evidence from Brazilian football

We propose a model to study non-compete agreements and evaluate their quantitative effects. We explore an exogenous policy change that removed non-compete clauses in the market for Brazilian footballers, the Pele Act of ...Read more...

Journal article

Canadian Journal of Economics:

On the interpretation of diploma wage effects estimated by regression discontinuity designs

Several recent papers employ regression discontinuity (RD) designs to estimate the causal effect of a diploma or similar credentials on wages. I build a model of knowledge acquisition, test-taking and labour market caree...Read more...

CEP discussion paper

Why have house prices risen so much more than rents in superstar cities?

In most countries ? particularly in supply constrained superstar cities ? house prices have risen much more strongly than rents over the last two decades. We provide an explanation that does not rely on falling interest ...Read more...

Journal article

Journal of Economic Perspectives:

The elusive employment effect of the minimum wage

Vacant, previously-developed land in cities can generate negative externalities on surrounding areas, and is often the target of policies to promote re-development. This paper provides estimates of the price sensitivity ...Read more...

Journal article

The Economic Journal:

Trapped factors and China?s impact on global growth

After a recent increase in Chinese import competition, European firms increased innovation. We present and rationalise these patterns using `trapped factors? at the micro level within a stylised equilibrium model of prod...Read more...

Journal article

The Journal of Human Resources:

Speech and wages

Although language has been widely studied, relatively little is known about how a worker's speech, in his/her native tongue, is related to wages, or what explains the observed relationship. To address these questions, I ...Read more...

CEP discussion paper

Dream jobs

Understanding why certain jobs are `better? than others and what implications they have for a worker?s career is clearly an important but still relatively unexplored question. We provide both a theoretical framework and ...Read more...

Journal article

Journal of Economic Perspectives:

Place-based policies and spatial disparities across European cities

Spatial disparities in income and worklessness across areas of the European Union are profound and persistent. Concerns about these disparities and the appropriate policy response are longstanding. Two trends have re-ene...Read more...

CEP discussion paper

Automation, globalization and vanishing jobs: a labor market sorting view

We show, theoretically and empirically, that the effects of technological change associated with automation and offshoring on the labor market can substantially deviate from standard neoclassical conclusions when search ...Read more...

CEP discussion paper

The innovation premium to soft skills in low-skilled occupations

Matched employee-employer data from the UK are used to analyze the wage premium to working in an innovative firm. We find that firms that are more R&D intensive pay higher wages on average, and this is particularly true ...Read more...

CEP discussion paper

Industry concentration in Europe and North America

This report presents new evidence on industry concentration trends in Europe and in North America. It uses two novel data sources: representative firm-level concentration measures from the OECD MultiProd project, and bus...Read more...

CEP discussion paper

The best versus the rest: divergence across firms during the global productivity slowdown

We document that labor productivity of the globally most productive firms ? the ?frontier? ? has diverged from all other firms ? the ?rest? ? throughout the 2000s. This divergence remains after controlling for capital in...Read more...

CentrePiece article

Trade and deskilling: how the post-referendum sterling depreciation hurt workers

The unexpected result of the Brexit referendum, working through the rapid depreciation of sterling, had a sizable negative impact on UK workers. New CEP work by Rui Costa, Swati Dhingra and Stephen Machin shows that the ...Read more...

Journal article

IZA Journal of Labor Economics:

Reallocation and the role of firm composition effects on aggregate wage dynamics

Aggregate wages display little cyclicality compared to what a standard model would predict. Wage rigidities are an obvious candidate, but the existing literature has emphasized the need to take into account the growing i...Read more...

CEP discussion paper

The urban wage premium in imperfect labour markets

Using administrative data for West Germany, this paper investigates whether part of the urban wage premium stems from fierce competition in thick labour markets. We first establish that employers possess less wage-settin...Read more...

Journal article

The Quarterly Journal of Economics:

Firming up inequality

We use a massive,matched employer-employee database for the United States to analyze the contribution of firms to the rise in earnings inequality from 1978 to 2013. We find that one-third of the rise in the variance of (...Read more...

Journal article

Economics Letters:

The regional effects of Germany's national minimum wage

We show that the minimum wage introduced in Germany in 2015 led to spatial wage convergence, in particular in the left tail of the distribution, without reducing relative employment in low-wage regions within the first t...Read more...

Journal article

Journal of the European Economic Association:

Firm dynamics and residual inequality in open economies

Wage inequality between similar workers has been on the rise in many rich countries. Recent empirical research suggests that heterogeneity in firm characteristics is crucial to understand wage dispersion. Lower trade cos...Read more...

Journal article

The Economic Journal:

The time value of housing: historical evidence on discount rates

Most London housing transactions involve trading long leases of varying lengths. We exploit this to estimate the time value of housing ? the relationship between the price of a property and the term of ownership ? over a...Read more...

Journal article

Economica:

Wage flexibility and employment fluctuations: evidence from the housing sector

Many economists suspect that downward nominal wage rigidities in ongoing labour contracts are an important source of employment fluctuations over the business cycle, but there is little direct empirical evidence on this ...Read more...

CentrePiece article

Care homes: effects of the National Living Wage

The National Living Wage, which was introduced in 2016, has substantially raised wages at the bottom of the hourly wage distribution in care homes in England, a sector that employs a large number of low-paid workers. Acc...Read more...

Journal article

AEA Papers and Proceedings:

Gender norms and relative working hours: why do women suffer more than men from working longer hours than their partners?

Constraints that prevent women from working longer hours are argued to be important drivers of the gender wage gap in the United States. We provide evidence that in couples where the wife's working hours exceed the husba...Read more...

CEP discussion paper

Specialization matters in the firm size-wage gap

This study applies the O-ring theory to explain the firm-size wage premium. It focuses on the joint role of the division of labor and employee characteristics. Including the firm heterogeneity of occupations in a standar...Read more...

CEP discussion paper

Changing the structure of minimum wages: firm adjustment and wage spillovers

This paper analyses the economic impact of a significant change to the structure of a minimum wage setting policy. The context is the United Kingdom where government mandated an unexpected change in the structure of mini...Read more...