The Trans Pacific Labor Seminar (TPLS) was founded by Takao Kato and Peter Kuhn in 2007 to begin a much-needed process of international academic integration of labor economists in the Pacific Rim. Since then, the TPLS has been holding annual meetings in the United States, Japan and Australia. This year we are pleased to bring the TPLS meeting back to Santa Barbara.
Organizers: Peter Kuhn (UC-Santa Barbara, IZA, CESifo, and NBER), Takao Kato (Colgate, IZA, CJEB, CCP, ETLA, and Rutgers ISEOPS), and Ryo Kambayashi (Musashi and IZA).
Sponsors: the UCSB Department of Economics , the Japan Society for the Promotion of Science, and the UCSB College of Letters and Science
Dates: October 11-12, 2024
Place: UC-Santa Barbara
14th Annual TPLS Schedule, Santa Barbara October 11 and 12
Flying A Room, UCen Building
Friday, October 11
8:20 a.m. Shuttles depart Best Western South Coast Inn for University Center, UCSB
Morning session: Chair: Peter Kuhn, UCSB
9:00-9:30 Mitch Hoffman, UC Santa Barbara Wage-surging: Labor Shortages and Firm Search
Employers report labor shortages even among low skill jobs. Why don't wages adjust dynamically to clear market demand? We find high demand for wage-surging to fill vacancies and characterize why demand is higher than its implementation. We exploit quasi-random variation in wages for job postings on a large staffing platform and show that a10\% increase in wages would increase the fill rate by more than 30\% for a wide range of employers. Despite this, many firms do not raise wages even when vacancies remain unfilled. A firm-side RCT shows that firms have strong underlying demand for surge wages, yet optimization and adjustment costs suppress use. When the Platform reduces these frictions, adoption rises 14 fold and a majority of firms opts to introduce surge wages. Our results suggest unfilled vacancies could fall by 20\% with surge wages by marketplace intermediaries. (co-authored with Zoe Cullen and Felix Koenig)
9:30-10:00 Suguru OTANI U Tokyo Estimating Recruitment Elasticity in the Multi-stage and Bilateral Job Matching Process
This paper estimates the wage elasticity of recruitment using unique data from a major job-matching intermediary in Japan. We find significant variation in wage elasticity across stages: Workers are responsive to posted wages when inquiring, applying, and accepting offers, but not when deciding to attend interviews. Application is the most sensitive to wages, suggesting a potential bias from focusing on application decisions only. Additionally, there is heterogeneity across worker types: High wages attract above-median workers to inquire but deter below-median workers. Perceived competitiveness and horizontal differentiation of vacancies are crucial factors. The recruitment elasticity, combining wage elasticities across stages, is 0.4-0.5 for above-median workers and nearly zero for below-median workers. These results underscore the challenges of estimating recruitment elasticity in multi-stage job-matching processes.
10:00-10:30 Break
10:30-11:00 Taiyo FUKAI, Gakushuin U. What Boosts Family-friendly Program Take-up and Maternal Employment?: The Policy Mediating Role of Employers
This study explores whether a 2005 policy that required large Japanese firms to formulate an action plan for company-specific family-friendly programs led to behavioral changes in workers with children. We estimate the effects of this policy on workers’ take-up of family-friendly programs, mothers’ employment, and female workers’ fertility, using the Difference-in-Differences framework and panel structure data. We find that the policy increased working mothers’ take-up of maternity and parental leave, and that they were more likely to work and be employed as regular employees after the birth of their first child. While no effect on fertility was found, the results suggest the significance of the firm’s policy mediating role in effectively promoting family-friendly policies.
11:00-11:30 Martha Bailey, UCLA The Persistent Cost of Parenthood: Evidence from Large-Scale Administrative Data for Contemporary Mothers
Amid the social and economic changes of the last 50 years, women in the United States and other developed countries have gained substantial ground on men across a wide range of labor-market outcomes. Have the career consequences of children also changed? This paper reexamines the effect of having a larger family on women’s labor-force outcomes and the gender gap in pay since 1990. Drawing on contemporary administrative data on the near-universe of American mothers, we adapt the path-breaking research design of Angrist and Evans (1998) to study the consequences of an exogenous shock to desired fertility. We show that the influence of children’s sex on subsequent childbearing has fallen in the last 30 years: relative to mothers with one boy and one girl, women who have two same-sex children are 12% more likely to give birth to a third child versus 18% in 1990. Despite considerable changes in labor markets and policies supporting parenthood, larger families continue to carry heavy career costs: Women who have a third child earn 15% less and are 13% less likely to be employed 5 years after the birth of their second child. To explore the role that policy may play in the gender gap among parents, we also provide evidence of the relationship between the magnitude of this career penalty and access to “family friendly” amenities, such as affordable childcare and paid family leave. (with Brenden Timpe)
11:30-1:30 Lunch and campus walk (weather permitting)
Afternoon session: Chair: Takao Kato, Colgate
1:30-2:00 Yueyuan Ma, UC Santa Barbara Information Disclosure and Marriage Quality: Evidence from Premarital Medical Exams
Many countries vary in their regulations regarding premarital health examinations, which is a form of information disclosure. To examine how premarital health examinations affect marriage quality and children’s health, we exploit a policy shock in China that changes premarital health examinations from mandatory to voluntary. Consistent with our theoretical predictions, this policy shock significantly increases the marriage probability while decreasing positive assortative matching in health among married couples. We also find an increase in low birth weight rates after the policy shock. Our findings suggest that mandatory premarital examination is beneficial in promoting the quality of marriage and children’s health.
2:00-2:30 Etienne MARKDISSI, Hitotsubashi U. Returns to Education in Marriage
Recent work has been interested in the effect of the marriage market on sorting in other markets, e.g., education choice, labor supply, etc. There is an interest in evaluating the effect of the marriage market on different forms of pre-marital investment. A difficulty in these models is that unique equilibria are not guaranteed, leading to complications when evaluating the effect of policies in counterfactual scenarios. We first show that the canonical marriage market model of Choo and Siow (2006) always admits a unique equilibrium even when we allow for pre-marital investment. We then extend the work of Chiappori, Costa Dias, and Meghir (2018) to evaluate the effect of the marriage market on educational sorting in the US between 1960 and 2020. In the 20th century, marriage consideration pushed women to finish high school but away from college. That effect changed over time, giving women incentives to obtain a college degree.
2:30-3:00 Break
3:00-3:30 Tsunao OKUMURA Yokohama National U Gender Differences in Career and Family Life Expectations among College Students in Japan
We investigate gender differences in Japanese college students' subjective expectations regarding future careers and family life. We further explore how government policies—such as quotas for women in management and limits on overtime work—impact these expectations and decisions. Our findings indicate that quotas for women in management increase their labor hours but decrease fertility rates. Conversely, limiting overtime work improves work-life balance, leading to higher rates of marriage and fertility. Additionally, by estimating a dynamic life-cycle model that incorporates these expectations, our analysis identifies the determinants of career choices, marriage, fertility, and work. Simulations reveal that providing free formal childcare significantly boosts fertility rates.
3:30-4:00 Nina Rousille, MIT The Illusion of Time: Gender Gaps in Job Search and Employment
This paper documents a large gap between the employment beliefs and realized labor market outcomes of college-graduating women in Pakistan, and proposes an explanation. To do so, we field a panel survey and an experiment on~1,400 college students. A month before graduation, women believe they have about the same likelihood of working six months later as their male peers (~75%). By contrast, we uncover large employment gaps: only 37.4% of women were employed six months later, compared to 66.3% of men. Traditional supply-side (e.g. GPA, major, job preferences, search effort) and demand-side factors (e.g. interviews, wage and job offers) leave this gap virtually unchanged. However, we find that women’s employment is much more sensitive to the timing of their applications than men’s. We provide a theoretical framework and empirical evidence on why timing matters: the unexpected increase in women's reservation wages over time. To causally estimate the effect of timing, we experimentally shift students' job applications closer to graduation. We find that this treatment increases women's employment by 22.3% (7.5 ppt) six months later, and has no effect on men. Finally, we explore behavioral and cultural mechanisms through which the treatment operates.
4:20 Shuttles depart UCen for hotel
6:00 Shuttles depart hotel for Jane restaurant (return service will also be supplied after dinner)
6:30 pm Conference dinner at Flor de Maiz, 29 East Cabrillo Blvd. Santa Barbara, CA 93101 Santa Barbara
Saturday, October 12
8:20 a.m. Shuttles depart Best Western South Coast Inn for UCen, UCSB
Morning session: Chair: Ryo Kambayashi, Musashi
9:00-9:30 Ellora Derenoncourt, Princeton University The Historical Incarceration Penalty in the United States
The U.S. has both one of the highest incarceration rates and the largest prison population world-wide. Furthermore, reliance on incarceration in U.S. criminal justice policy dates back to the late 19th century. An active literature seeks to understand the social and economic impacts of this policy in the U.S., including the labor market effects of incarceration, reaching mixed conclusions. In this paper, we trace the labor market trajectories of incarcerated vs. non-incarcerated individuals in the U.S. during the first major increase in incarceration, from 1870-1940. Using data on millions of historical inmates from census and state prison ledgers, we provide new descriptive statistics on the evolution of incarceration in the U.S. We then provide estimates of the incarceration penalty, the difference in labor market outcomes such as occupation, earnings, employment, and labor force participation between incarcerated and non-incarcerated men across this full time period. We find a penalty in occupation-based income scores ranging from 5-15% over the period, with the penalty increasing over time as incarceration rates increased. Using double-linked samples and a linked sample of brothers, we show the penalty remains even after controlling for observed and unobserved measures of family background. Finally, we estimate a “pseudo” event study around year of prison admission for state prisoners linked to the census and show that pre-incarceration labor market trajectories cannot explain the penalty.
9:30-10:00 Micah Villarreal, UCSB Black Gold: The Effect of Wealth on Descendants of the Enslaved
Can short-term wealth shocks narrow racial wealth disparities in the long term? In this project, I leverage quasi-random oil discoveries on Black-owned land in the early 1900s to study how positive wealth shocks affected Black economic progress in the short and long term. I first establish that wealth receipt in this context can be treated as a random shock. I then demonstrate that the money had a positive causal effect on the human capital of the first generation. Landholders who find oil are more geographically mobile, leading to occupational mobility and entry nto higher status occupations. Work on longer-term outcomes, including intergenerational outcomes, is still in progress.
10:00-10:30 Break
10:30-11:00 Kentaro ASAI Vienna University of Economics and Business Firm-Level Effects of Reductions in Working Hours
This paper examines how legislative reductions in working hours impact firms' employment, output, and productivity. We exploit a Portuguese reform that reduced standard hours from 44 to 40 hours in 1996. Our findings indicate that the reform had adverse effects on the employment and output of affected firms. These effects can be attributed to an increase in hourly labor costs induced by the legal obligation not to reduce monthly salaries. Treated firms adjusted their employment by reducing hiring and significantly improved hourly labor productivity. In contrast, firms that reduced working hours through collective agreements prior to the reform were able to increase productivity without adverse effects on employment and output. A key policy takeaway of these combined findings is that estimating effects on early-adopters is likely to give a biased estimate of the overall cost of the switch to lower hours.
11:00-11:30 Atsushi YAMAGISHI IER, Hitotsubashi U. Wage Spillovers across Sectors: Evidence from a Localized Public-Sector Wage Cut
We study how institutional wage reforms in one sector spill over to other sectors by analyzing the public sector. We leverage the Japanese policy reform that cut public-sector wages only in certain municipalities and the institutional setting in which only young workers are eligible for public-sector jobs. We find that a 1% public-sector wage cut reduces the private-sector wages of young workers by 0.3%, with larger spillovers in municipalities with a larger share of public workers. It also reduces the young population by 0.4%, suggesting a welfare decline based on spatial equilibrium and a decrease in private-sector labor demand.
Lunch 11:30-12:30
Afternoon session: Chair: Peter Kuhn, UCSB
12:30-1:00 Gaurav Khanna, UC San Diego Spatial Mobility, Economic Opportunity, and Crime
Neighborhoods are strong determinants of both economic opportunity and criminal activity. Does improving connectedness between segregated and unequal parts of a city predominantly import opportunity or export crime? We model individual decisions of where to work and whether to engage in criminal activity, with spillovers across the criminal and legitimate sectors. We match at the individual level various sources of administrative records from Colombia, to construct a novel, granular dataset recording the origin and destination of both workers and criminals. We leverage the rollout of a cable car system to identify key parameters of the model, informing how changes in transportation costs causally affect the location and sector choices of workers and criminals. Our analysis indicates that, when improving the connectedness of almost any neighborhood, overall criminal activity in the city is reduced, and total welfare is improved.
1:00-1:30 Takao Kato, Colgate U. The Effects of Overtime Regulations: Evidence from the 2018 Work Style Reform in Japan
Compared to other developed nations, Japan ranks poorly in terms of work-life balance and exhibits a persistent problem of long working hours. Karoshi, the death from overwork, remains a prominent social issue. To cope with the negative consequences of overworking, the 2018 Work Style Reform Bill introduced for the first time mandatory limits on overtime hours. Combining establishment-level panel data with granular information on the incidence of worker voice institutions (unions, labor-management committees and workplace committees) at the industry-prefecture level, this paper analyzes how Japanese establishments responded to the new regulation along different margins (total employment, part-time, fixed-term and non-standard contracts, wages). The empirical strategy leverages quasi-experimental variation in the degree of exposure to the reform and relies on difference-in-difference methods. Importantly, the study uncovers differential changes in labour market outcomes of male and female workers and analyzes whether differences in the worker voice institutional environment leads to heterogeneous responses to the reform at the establishment level (with Gabriel Burdin and Ryo Kambayashi)
1:30-2:00 Break
2:00-2:30 Minwoo Hyun, UCSB The Energy Transition and Labor Market Dynamics: Evidence from Worker-Level Microdata
I track the employment history of U.S. workers in the fossil fuel extraction sector, which is characterized by its highly volatile and cyclical nature due to fluctuations in global commodity prices and the rising demand for cleaner energy sources. Using matched worker-firm data from 2000 to 2019, I find that sectoral mobility and outmigration rates for fossil fuel workers are xx% compared to those in other industries. My analysis reveals that a one standard deviation increase in exposure to negative local labor demand shocks is associated with a x.xx% decrease in earnings for separated workers over the following seven years, followed by a x.xx% increase in the next three years; however, this rebound does not fully offset the initial earnings losses. To further understand the impact of these local labor demand shocks on workers, I examine how earnings losses are linked to transitions between industries (sectoral reallocation) or regions (geographic mobility), and how these effects vary according to different preseparation earnings levels, demographic characteristics, and firm-side factors.
2:30-3:00 Masahiro YOSHIDA, Waseda U. Climate Change and Outdoor Labor Markets: the Rise of Dropouts of Adult Males
Male labor force participation in developed economies has ubiquitously declined since the 1970s. This paper shows that contemporaneous global warming fueled dropouts of prime-aged adult males by harming their traditional advantage of working outdoors. Exploiting climate change variation across U.S. commuting zones, constructed from granular weather station records during 1970-2019, I find that 10 more annual hot days (above 75F) hurt labor force participation rate (LFPR) of prime-aged males by 0.3 percentage points, more saliently for less-educated and younger males. In the new century, climate change accounted for 10-15% of the nationwide LFPR decline. The effect of hot days is higher on non-rainy or humid days and is critically shaped by regional dependency on outdoor jobs, measured by O*NET Work Context Survey. I find that climate change both hurt employment-to-population ratio and wages of outdoor workers, with limited transfer to indoor sector and increased youth unemployment rate. The effect is partially driven by shrinkage of labor supply via prevalence of residential amenity (e.g., air conditioners and TV sets). Collectively, the findings suggest that climate change exacerbates socio-economic inequality.
3:20 Shuttles depart UCen for hotel
The fourteenth annual TPLS is generously sponsored by the UCSB Department of Economics , the Japan Society for the Promotion of Science, and the UCSB College of Letters and Science.