Lecture 5: More on Labor Supply. Part 1: CPS Data.

Slides:

Advertisements

Similar presentations

The Role of Employment for Growth and Poverty Reduction PREM learning week 2007 Catalina Gutierrez Pieter Serneels.

Advertisements

MACROECONOMICS What is the purpose of macroeconomics? to explain how the economy as a whole works to understand why macro variables behave in the way they.

Chapter 1: The Labor Market Labor Economics: Studies the determination of wages and employment and the resulting income distribution. Most relevant to.

The Economics of Discrimination Prof. G. Loury EC 1370 March 16, 2010.

Chapter 6: Economic Growth Estimate economic growth and implications of sustained growth for standard of living. Trends in economic growth in U.S. and.

Chapter 5 Urban Growth. Purpose This chapter explores the determinants of growth in urban income and employment.

What has happened to inequality and poverty in post-apartheid South Africa Dr Max Price Vice-Chancellor University of Cape Town.

The State of Working America, The labor market recession, which began in October 2000 remains with us. This recession marks the end of the long.

Labor Markets FIN 30220: Macroeconomic Analysis Of the 317 million people that make up the US population, approximately 246 million are considered by.

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. Slide Workers, Wages, and Unemployment in the Modern Economy.

1 The distribution of the State budget – 2008: social services are one-third of the total budget Total budget: NIS 323 billion Not including debt servicing.

What are the causes of inequality of income and wealth in the UK? To see more of our products visit our website at Tony Darby, Head of.

Appendix Ghana. Conclusion per capita growth is accompanied by an increase in output per worker in the primary and tertiary sectors a decrease in output.

Introduction to Economic Fluctuations:

1 Reducing the Gaps in Society: Policy Challenges in the Era of Globalization Dr. Karnit Flug June 2007 Taub Center Conference.

Measuring GDP and Economic Growth Chapter 1 Instructor: MELTEM INCE

Stephanie Seguino University of Kansas at Lawrence November 1, 2013 THE BLACK QUEEN OF HEARTS: GENDER AND “STICKY” PARADIGMS IN ECONOMICS.

ELM Part 2- Economic models Manuela Samek

Introduction to Macroeconomics Chapter 6 Unemployment and the Labor Market © Tancred Lidderdale

The Structure of the REMI - Model. Output Market Shares Labor & Capital Demand Population & Labor Supply Wages, Prices, & Profits REMI Model Structure.

Immigration and the labor Market: Facts and Policy Professor Zvi Eckstein School of Economics, Tel Aviv University May 2006.

Chapter 6: Economic Growth Estimate economic growth and implications of sustained growth for standard of living. Trends in economic growth in U.S. and.

Chapter 4. The Labor Mkt & LFP Labor market supply and demand elasticity LFP trends Using labor mkt. to explain LFP trends Labor market supply and demand.

Unemployment and the Business Cycle

1 Introduction to Macroeconomics Chapter 20 © 2006 Thomson/South-Western.

Ch. 18: Economic Inequality

Lecture 4: Time Series and Business Cycle Patterns in Labor Supply.

1 Macroeconomic Analysis of Technological Change: Technological Change and Employment B. Verspagen, 2005 The Economics of Technological Change Chapter.

THE UK ECONOMY (MACROECONOMICS) TOPIC 2 UNEMPLOYMENT.

Copyright © 2001 by Houghton Mifflin Company. All rights reserved. 1 Economics THIRD EDITION By John B. Taylor Stanford University.

Chapter 10 Labor Market Discrimination Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Labor Economics, 4 th edition.

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 13: Wages and Unemployment 1.Discuss the four important.

The Labour Market.

Copyright © 2008 Pearson Addison-Wesley. All rights reserved. Chapter 14 Labor Markets.

Trends in U.S Economic Growth Growth in the U.S. Economy  From 1908 to 2008, annual growth in real GDP per person in the United States averaged 2%. 

First edition Global Economic Issues and Policies PowerPoint Presentation by Charlie Cook Copyright © 2004 South-Western/Thomson Learning. All rights reserved.

Perfect equality = O < G < 1 = Perfect inequality 4% 20% A B G = A/(A+B)

Chapter 2 Labor Supply.

Labor Supply (Static) Chapter 2.

Copyright © 2009 Pearson Education, Inc. Chapter 6 Supply of Labor to the Economy: The Decision to Work.

Chapter 2 Labor Supply Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

Chapter 2 Labor Supply Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

Principles of MacroEconomics: Econ101.  Recurrent swings (up and down) in Real GDP; alternating periods of expansions and recessions.

Inequality. Household income thresholds for selected percentiles (U.S. 2013) 10 th percentile? 20 th percentile? 50 th percentile? 80 th percentile? 90.

1 Labor Market. 2 Deindustrialization? Manufacturing Wage Rate, 2005 United States.

WWII and Since. Before , Poland 1940, low countries, France, etc US, underutilized industrial capacity  Began producing munitions before 1941.

Chapter 13 Employment © 2001 South-Western College Publishing.

Macroeconomics SSEMA1 Students will explain and describe the means by which economic activity is measured by looking at gross domestic products, consumer.

Principles of Macroeconomics Lecture 5 UNEMPLOYMENT.

Elasticity of Supply Unit 5.4. Elasticity and Supply Elasticity with supply works just like elasticity with demand. Suppliers look at the amount of change.

INEQUALITY & DEVELOPMENT Lawrence Summers EC1400, ITF th November 2015.

Business Cycles, Unemployment and Inflation. Business Cycle Economic fluctuations are irregular and unpredictable. –Fluctuations in the economy are often.

Chapter 6. Supply of Labor to the Economy Importance of Labor Supply 1) Any country ’ s well-being in the long run heavily depends on the willingness of.

ECO370 LABOR ECONOMICS Ch2: Labor Supply Borjas textbook, Ch 2 Slides.

Chapter 6: Economic Growth

3 The Demand for Labor.

Labor Demand (Lectures 6 and 7).

Ageing Poorly? Accounting for the Decline in Earnings Inequality in Brazil, Francisco Ferreira, PhD1; Sergio Firpo, PhD2; Julián Messina, PhD3.

Unemployment What are the different types of unemployment?

Unemployment What are the different types of unemployment?

Unemployment What are the different types of unemployment?

Unemployment What are the different types of unemployment?

Unemployment What are the different types of unemployment?

Chapter 6: Economic Growth

Population and Labor Force

MACROECONOMICS AND THE GLOBAL BUSINESS ENVIRONMENT

A market with a price ceiling

Unemployment What are the different types of unemployment?

Chapter 8 The Urban Labor Market.

Presentation transcript:

Lecture 5: More on Labor Supply

Part 1: CPS Data

Wage, Income and Hours Data: Current Population Survey (CPS) Continue our theme of introducing you to major U.S. data. Current Population Survey: High quality data extends back to the 1960s. Large samples of U.S. households. Panel Dimension (4 months in, 8 months out, 4 months in). Detailed information about labor market status (every month). Detailed information about hours asked every month. Detailed information about hours/earnings – asked less frequently. Large sample sizes allow for analysis by U.S. states.

Part 2: Trends in The Natural Rate of Unemployment

Trends in The Natural Rate In Unemployment Did labor market conditions improve during the 1980s and 1990s? -Unemployment rates fell substantially Related concept: Do income or substitution effects dominate with respect to labor supply decisions? Must reads: Juhn, Murphy, and Topel “

Juhn, Murphy, Topel: Evolution of Wage Inequality

Real Wages Over Time

Trends in Unemployment and Nonemployment

Breakdown of the Nonemployed

Breakdown of the Non-Participators: Rising Disability

Rising Disability Among the Persistently Unemployed

Autor and Duggan For a detailed analysis of the intersection of the role of disability and labor supply, see: “The Rise in the Disability Rolls and the Decline in Unemployment” David Autor and Mark Duggan (QJE 2003) Show that during recessions, the disability margin is much more relevant now than it was during the 1980s (the benefits to the disabled are now more comparable to unemployment benefits than before).

Autor and Duggan

More Juhn, Murphy, Topel

Does the Unemployment Rate Tell the Whole Story?

Increase in Long Term Non-employment Duration

Increase in Long Term Unemployment Duration

Unemployment Trends Throughout the Wage Distribution

Nonparticipation Trends Throughout the Wage Distribution

Non-employment Trends Throughout the Wage Distribution

Income or Substitution Effects?

Nonparticipation Trends Throughout the Wage Distribution

Longterm Nonparticipation Trends Throughout the Wage Distribution

Conclusions Decline in unemployment rate may not represent accurately the trends in labor market performance. Large decline in participation rates for men. Non employment has declined much less than unemployment. The decline is much more pronounced for low wage men. Does it tell us substitution effects are important? What about changes in transfers?

Part 3: Rug Rat Race and Time Investments in Children

Parental Time With Children By Education From Guryan, Hurst, and Kearney (JEP 2008) “Parental Education and Parental Time With Children”

Parental Time With Children By Education

More Facts Richer countries spend more time with children than poorer countries. Within countries, high educated parents spend more time with children relative to low education parents.

Ramey and Ramey Facts

Part 4: Regional Dynamics

How Do Locations Respond to Local Shocks? Continue our theme about thinking about regional economics (house prices are one part of that). The direct mechanism:Mobility. What implications do mobility have on the response of labor supply, wages, and unemployment to local economic shocks? Some work: Blanchard/Katz (Brookings, ) Topel “Local Labor Markets” (JPE, 1986)

Consider the Following Labor Market (Inelastic Labor Supply) Labor Demand Labor Supply

Consider the Following Labor Market (Inelastic Labor Supply) Labor Demand Labor Supply In short run, adjustment takes place on wages (labor supply is less elastic in short run)

Consider the Following Labor Market (Inelastic Labor Supply) Labor Demand Labor Supply In long run, adjustment takes place on N (labor supply is more elastic in long run)

What is the Mechanism? In/out migration of workers…..

Blanchard/Katz Facts: Persistence of Growth Rates

Blanchard/Katz Facts: Cumulative Declines (relative to trend)

Blanchard/Katz Facts: : Cumulative Declines (relative to trend)

Blanchard/Katz Facts: Persistence of Unemployment Rate?

Blanchard/Katz Facts: Convergence of Wages

Blanchard/Katz Facts: Unemployment vs. Growth

Blanchard/Katz Facts: Growth vs. Wages

Blanchard/Katz Facts: Unemployment vs. Wages

Blanchard/Katz Facts: VAR of Negative Regional Shock

Blanchard/Katz Facts VAR of Negative Regional Shock

Blanchard/Katz Facts: VAR of Negative Regional Shock

Conclusions of Blanchard/Katz Regional Adjustments Take Place In short run, response occurs on unemployment and wage margins. In long run, it occurs on labor supply margin (via migration). Spatial equilibrium model has to make individuals indifferent to move across regions.

Part 5: Cross State Convergence

Cross State Convergence in Income Per Capita See a full discussion in Barro/Sali-Martin (Brookings, xxxx)

Convergence By Decades: 1940 – 1960

Convergence By Decades: 1960 – 1980

Convergence By Decades: 1980 – 2000?

Why Has Convergence Stopped? A great research question to think about Change in the skill premium? Chang-Tai Hseih and I are starting to put structure on this question How does changes in discrimination affect economic growth?

Inequality in Racial Occupational Choice Black Men vs. White Men White Men Decile Occupational Distribution Gini

Inequality in Racial Occupational Choice Black Men vs. White Men White Men Decile Wage Gap (0.006) (0.005) (0.003) (0.003) Wage Gap | Education (0.006) (0.005) (0.003) (0.002) Wage Gape | Education and Occ (0.006) (0.005) (0.003) (0.002) Wage Gap (Ed = 12) (0.024) (0.004) Wage Gap | Occ (Ed = 12) (0.024) (0.004) Wage Gap (Ed = Some College) (0.027) (0.004) Wage Gap | Occ (Ed = Some College) (0.027) (0.004) Wage Gap (Ed = 16+) (0.007) (0.006) Wage Gap | Occ (Ed = 16+) (0.007) (0.005)

Inequality in Racial Occupational Choice White Women vs. White Men White Men Decile Occupational Distribution Gini

Inequality in Racial Occupational Choice White Women vs. White Men White Men Decile Wage Gap (0.004) (0.003) (0.002) (0.002) Wage Gap | Education (0.003) (0.003) (0.002) (0.002) Wage Gape | Education and Occ (0.004) (0.003) (0.002) (0.002) Wage Gap (Ed = 12) (0.006) Wage Gap | Occ (Ed = 12) (0.008) Wage Gap (Ed > 12) (0.008) Wage Gap | Occ (Ed > 12) (0.010) Wage Gap (Ed < 12) (0.005) Wage Gap | Occ (Ed < 12) (0.006)

Inequality in Racial Occupational Choice Black Women vs. White Men White Men Decile Occupational Distribution Gini

Inequality in Racial Occupational Choice Black Women vs. White Men White Men Decile Wage Gap (0.009) (0.008) (0.003) (0.003) Wage Gap | Education (0.009) (0.007) (0.003) (0.002) Wage Gap | Education and Occ (0.014) (0.009) (0.003) (0.003) Wage Gap (Ed = 12) (0.026) Wage Gap | Occ (Ed = 12) (0.035) Wage Gap (Ed > 12) (0.033) Wage Gap | Occ (Ed > 12) (0.034) Wage Gap (Ed < 12) (0.010) Wage Gap | Occ (Ed < 12) (0.007)