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21. Market power and artificial intelligence work on online labour markets

Author:
Néstor Duch-Brown, Estrella Gomez-Herrera, Frank Mueller-Langer, and Songül Tolan
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
The views are those of the authors and should not be regarded as stating an official position of the European Commission. Frank Mueller-Langer gratefully acknowledges financial support from a research grant of the University of the Bundeswehr Munich. We investigate three alternative but complementary indicators of market power on one of the largest online labour markets (OLMs) in Europe: (1) the elasticity of labour demand, (2) the elasticity of labour supply, and (3) the concentration of market shares. We explore how these indicators relate to an exogenous change in platform policy. In the middle of the observation period, the platform made it mandatory for employers to signal the rates they were willing to pay, as given by the level of experience required to perform a project: entry, intermediate or expert level. We find a positive labour supply elasticity ranging between 0.06 and 0.15, which is higher for expert-level projects. We also find that the labour demand elasticity increased while the labour supply elasticity decreased after the policy change. Based on this, we argue that market-designing platform providers can influence the labour demand and supply elasticities on OLMs with the terms and conditions they set for the platform. We also explore the demand for and supply of AI-related labour on the OLM under study. We provide evidence of a significantly higher demand for AI-related labour (ranging from +1.4 percent to +4.1 percent) and a significantly lower supply of AI-related labour (ranging from -6.8 percent to -1.6 percent) than for other types of labour. We also find that workers on AI projects receive 3.0 percent to 3.2 percent higher wages than workers on non-AI projects.
Topic:
Markets, Science and Technology, Internet, Artificial Intelligence, and Labor Market
Political Geography:
Global Focus

22. Social clauses in trade agreements: implications and action points for the private sector in developing countries

Author:
Anna Liz Thomas, Jarrod Suda, and Gaia Grasselli
Publication Date:
02-2021
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Since the 1990s, more free trade agreements have come to include social clauses, which make reference to domestic and international labour standards. As this international legal web continues to grow, so too will the questions and concerns from employers and businesses. This Tradelab report, for the International Organisation of Employers, provides practical guidance for those employers and businesses. It does so by taking the diverse array of actors, the tensions within, and the opportunities set forth by free trade agreements and elaborating upon them using three case studies.
Topic:
International Political Economy, International Trade and Finance, Treaties and Agreements, Labor Issues, Free Trade, Trade, International Business, and Labor Market
Political Geography:
Global Focus

23. Will International Migration Governance Survive the COVID-19 Pandemic?

Author:
Kathleen Newland
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
Migration Policy Institute (MPI)
Abstract:
The toolbox of international migration governance has few instruments for dealing with the migration-related challenges posed by the COVID-19 pandemic. Most international agreements on migration are designed to aid people on the move and to assist states in dealing with this movement, voluntary or forced. Yet the pandemic is a disaster characterized more by immobility than movement. While some migrants have been sent back to their origin countries or compelled to return due to job losses, many others have been stranded in destination countries by border closures and travel restrictions, and some would-be migrants have been unable to move abroad as intended. The most recent addition to the migration governance toolbox—the Global Compact for Safe, Orderly, and Regular Migration—does, however, offer states useful guidance. As this policy brief discusses, the objectives outlined in the compact include some that have gained added, real-time urgency during the pandemic and others that will be essential as states work to restart international migration safely. This brief also considers how the pandemic and its economic fallout have affected the relationship between migration and development, including in terms of its impacts on migrant workers and remittances. With remittances predicted to drop by at least 20 percent globally in 2020 compared to 2019, the effects on remittance-dependent countries will be particularly severe. This may spread the pandemic-induced economic pain even to places that have been relatively less affected by the virus itself. Looking ahead, this brief considers how greater cooperation between states and with multilateral agencies, civil-society organizations, the private sector, and philanthropies can assist in the immediate pandemic response, as well as in efforts to rebuild lost livelihoods and, eventually, reopen legal migration channels.
Topic:
Migration, Governance, Employment, COVID-19, and Labor Market
Political Geography:
Global Focus

24. Marriage, Children, and Labor Supply: Beliefs and Outcomes

Author:
Yifan Gong, Todd Stinebrickner, and Ralph Stinebrickner
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
While a large literature is interested in the relationship between family and labor supply outcomes, little is known about the expectations of these objects at earlier stages. We examine these expectations, taking advantage of unique data from the Berea Panel Study. In addition to characterizing expectations, starting during college, the data details outcomes for ten years after graduation. Methodological contributions come from approaches to validate quality of survey expectations data and the recognition that expectations data, along with longitudinal data, can potentially help address endogeneity issues arising in the estimation of the causal effect of family on labor supply.
Topic:
Economics, Labor Issues, Human Capital, Family, Labor Market, and Productivity
Political Geography:
Canada and Global Focus

25. Imperfect competition in product and labour markets. A quantitative analysis

Author:
Dario Tortarolo and Roman D. Zarate
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:
We disentangle the extent of imperfect competition in product and labor markets using plant level data. We derive a formula for the ratio between markups and markdowns assuming costminimizing firms that face upward-sloping labour supply and downward-sloping product demand curves. We then separate this combined measure of market power by estimating firm-level labour supply elasticities instrumenting wages with a different set of instruments: including the use of intermediate inputs, input price shocks, and TFP shocks. Our results suggest that both markets exhibit imperfect competition, but the variation is mainly driven by markups. We also estimate the relative gains of removing market power dispersion on allocative efficiency, finding that markups are more important on TFP than markdowns.
Topic:
Economics, Labor Issues, Finance, Labor Market, Supply Chains, and Price
Political Geography:
Global Focus

26. Labor Institutions and Development Under Globalization

Author:
Servaas Storm and Jeronim Capaldo
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Labor market regulation is a controversial area of public policy in both developed and developing countries. After decades of de-regulatory advice, international financial institutions have recently come to a less extreme position. But any concessions to labor regulation are based on concerns for social stability or for short-term support to aggregate demand, while regulation continues to be viewed as harmful to economic efficiency. In this paper we take a deeper look at the impact of labor institutions on economic development in two ways. First, we propose a macroeconomic model with balance-of-payments constraint for a “small” developing country open to trade and foreign capital. This helps us clarify the importance of a dynamic view of economic efficiency, as opposed to the static view embedded in mainstream policy advice. Secondly, we discuss the political economy of labor regulation. We argue that labor institutions promote economic development though positive effects on aggregate demand, labor productivity and technology.
Topic:
Economics, Labor Issues, Regulation, Labor Market, and Labor Cost
Political Geography:
Global Focus

27. Measuring Unpaid Care Work in Household Surveys

Author:
Martin Walsh
Publication Date:
06-2018
Content Type:
Research Paper
Institution:
Oxfam Publishing
Abstract:
Caring for people and domestic work, such as cooking, cleaning and fetching water, is essential for personal wellbeing and survival. But across the world, care work is overwhelmingly done by women, which restricts their opportunities for education, employment, political engagement and leisure.
Topic:
Labor Issues, Homeownership, Labor Market, and Care
Political Geography:
Global Focus

28. Labor Market Participation, Political Ideology and Distributive Preferences

Author:
Simona Demel, Abigail Barr, Luis Miller, and Paloma Ubeda
Publication Date:
12-2016
Content Type:
Working Paper
Institution:
Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:
Using a political-frame-free, lab-in-the-field experiment, we investigate the effects of employment status and political ideology on preferences for redistribution. The experiment consists of a real-effort task, followed by a four-player dictator game. In one treatment, initial endowments depend on participants’ performance in the real-effort task, i.e., they are earned, in the other, they are randomly determined. We find that being employed or unemployed affects revealed redistributive preferences, while the political ideology of the employed and unemployed does not. In contrast, the revealed redistributive preferences of students are strongly related to their political ideologies. The employed and right-leaning students redistribute earnings less than windfalls, the unemployed and left-leaning students make no such distinction. We conclude that, when people are not exposed to the sometimes harsh realities of the labor market, their redistributive preferences depend on their political ideology but, when they are exposed, the effect of those realities overrules their ideology.
Topic:
Economics, Politics, Employment, Ideology, Labor Market, and Redistribution
Political Geography:
Global Focus

29. Aggregating Elasticities: Intensive and Extensive Margins of Female Labour Supply

Author:
Orazio P. Attanasio, Peter Levell, Hamish Low, and Virginia Sanchez-Marcos
Publication Date:
06-2015
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
There is a renewed interest in the size of labour supply elasticities and the discrepancy between micro and macro estimates. Recent contributions have stressed the distinction between changes in labour supply at the extensive and the intensive margin. In this paper, we stress the importance of individual heterogeneity and aggregation problems. There is a renewed interest in the size of labour supply elasticities and the discrepancy between micro and macro estimates. Recent contributions have stressed the distinction between changes in labour supply at the extensive and the intensive margin. In this paper, we stress the importance of individual heterogeneity and aggregation problems. At the intensive margins, simple specifications that seem to fit the data give rise to non linear expressions that do not aggregate in a simple fashion. At the extensive margin, aggregate changes in participation are likely to depend on the cross sectional distribution of state variables when a shock hits and, therefore, are likely to be history dependent. We tackle these aggregation issues directly by specifying a life cycle model to explain female labour supply in the US and estimate its various components. We estimate the parameters of different component of the model. Our results indicate that (i) at the intensive margin, Marshallian and Hicksian elasticities are very heterogeneous and, on average, relatively large; (ii) Frisch elasticities are, as implied by the theory, even larger; (iii) aggregate labour supply elasticities seem to vary over the business cycle, being larger during recessions.
Topic:
Gender Issues, Labor Issues, Feminism, and Labor Market
Political Geography:
Global Focus

30. Offshoring, Mismatch, and Labor Market Outcomes

Author:
David M. Arseneau and Brendan Epstein
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
We study the role of labor market mismatch in the adjustment to a trade liberalization that results in the offshoring of high-tech production. Our model features two-sided heterogeneity in the labor market: high- and low-skilled workers are matched in a frictional labor market with high- and low-tech firms. Mismatch employment occurs when high-skilled workers choose to accept a less desirable job in the low-tech industry. The main result is that--perhaps counter-intuitively--this type of job displacement is actually beneficial for the labor market in the country doing the offshoring. Mismatch allows the economy to reallocate domestic high-skilled labor across both high- and low-tech industries. In doing so, mismatch dampens both the increase in the aggregate unemployment rate and the decline in aggregate wages that come as a consequence of shifting domestic production abroad.
Topic:
Globalization, Industrial Policy, International Trade and Finance, Labor Issues, Work Culture, and Labor Market
Political Geography:
Global Focus