Publications
The Work-to-School Transition: Job Displacement and Skill Upgrading Among Young High School Dropouts - Accepted @ Journal of Human Resources
This paper examines how and why returning to education fosters recovery from negative employment shocks among high school dropouts. High school dropout remains a problem, particularly as employment is increasingly skilled over time. Exploiting a policy expanding a Norwegian vocational certification scheme in a triple difference framework, workers displaced post-expansion certify their skills at significantly higher rates relative to those displaced pre-expansion. Increases in certification post-expansion significantly reduce income losses after job loss. Certifying skills fosters recovery among early career displaced workers through the retention of relevant industry-specific human capital, which increases job stability over 20 years later.
Education and inequality: an international perspective Fiscal Studies, Special Issue: Changing Labour Market and Income Inequalities in Europe and North America: Part Two, 45(3), 2024.
with Kelly Foley, David Green, and Kjell Salvanes
In this paper, we summarise the existing literature and present new empirical evidence in order to address the questions of whether educational expansion is an effective tool for reducing inequality and whether some educational systems have better associations with lower inequality and others worse. We argue that – depending on the form the policies take, on the extent of intergenerational correlations in income and on the levers of educational access – policies that aim at increasing education are not necessarily beneficial in the sense of reducing inequality. Differential impacts of different systems by gender are particularly striking.
Changing Patterns of Inequality in Norway: the Roles of Gender, Education, Immigration, and Unions Fiscal Studies, Special Issue: Changing Labour Market and Income Inequalities in Europe and North America: A Parallel Project to the IFS Deaton Review of Inequalities in the 21st Century, 45(2), 2024.
with Kjell Salvanes
We assess the evolution of inequality over time in Norway and the underlying factors which determine such changes. Inequality is low in Norway, and remains relatively unchanged from 1980 to 2019. However, these aggregate measures mask persistent inequalities across sex, education and immigrant status. Among men, inequality increases from 1980 while the opposite is true for women. Low-educated workers fare increasingly worse over time relative to middle- and high-educated workers. Despite this, the earnings of women lag behind those of lower-educated men and considerable gender gaps exist. While immigration increases considerably, immigration itself does not drive the rise in inequality among men. Decomposing the importance of unions for earnings reveals that the declining importance of unionisation for earnings among men in the bottom half of the distribution may be an important factor behind rising inequality.
Losing in a Boom: Long-term Consequences of a Local Economic Shock for Female Labour Market Outcomes Labour Economics, 73, 2021. [ungated version]
with Chiara Ravetti and Po Yin Wong
This article examines the long-term labour market consequences of a positive and large-scale economic shock, the discovery of oil and gas in Norway. Using longitudinal data on the entire Norwegian population, we find that the shock increases male income by around 7%, while reducing female income by up to 14%. Although married women experience the largest income losses, they also have higher household income, revealing the importance of labour supply adjustments within households. While these income shifts persist for two decades, the subsequent generation of female workers are able to reap some of the income gains from oil.
Job Displacement, Unemployment, and Crime: Evidence from Danish Microdata and Reforms, Journal of the European Economic Association, 18(5), 2020 [ungated WP version]
with Amine Ouazad
This paper estimates the individual impact of a worker’s job loss on his/her criminal activity. Using a matched employer-employee longitudinal data set on unemployment, crime, and taxes for all residents in Denmark, the paper builds each worker’s timeline of job separation, unemployment, and crime. The paper focuses on displaced workers: high-tenure workers who lose employment during a mass-layoff event at any point between 1990 and 1994 (inclusive). Initial local industrial specialization suggests that the growth of manufacturing imports and the Nordic financial crisis in the early 1990s explain a significant share of mass layoffs. Placebo tests display no evidence of trends in crime prior to worker separation. Using Denmark’s introduction of the Act on an Active Labor Market at the end of 1993, we estimate the impacts of activation and of a reduction in benefit duration on crime: crime is lower during active benefits than during passive benefits and spikes at the end of benefit eligibility. We use policy-induced shifts in the kink formula relating prior earnings to unemployment benefits to estimate the separate impacts of labor income and unemployment benefits on crime: the results suggest that unemployment benefits do not significantly offset the impact of labor income losses on crime.
Media coverage: VoxEU
Twitter thread summarizing main findings
The Heterogeneous Effects of Education on Crime: Evidence from Danish Administrative Twin Data, Labour Economics, 52, 2018
Using administrative Danish Register Data to identify all twins born 1965-1982, this paper identifies heterogeneous effects of education on crime. Controlling for genetic and environmental factors, the completion of upper secondary education significantly lowers the probability of conviction for total, property, and violent crimes for males. Estimation by parental education reveals family factors matter—education lowers crime earlier in the life cycle for children of low educated parents and later in life for children of high educated parents. Estimation by environmental factors reveals exposure to crime during childhood also impacts the dynamics of the crime reducing effects of education across ages. Examining different educational programs reveals completing high school matters most for crime reduction, while vocational training has a smaller impact on crime. Results are robust to controlling for differences in early health, directly estimating reverse causality between education and crime, and using data on prison sentences instead of convictions.
Working Papers & Reports
Inequality in Norway: 1970–2017, prepared for IFS Deaton Review on inequality
with Kjell Salvanes
The Decline of Routine Tasks, Education Investments, And Intergenerational Mobility (submitted)
with Kai Liu and Kjell Salvanes
How does a large structural change to the labor market affect education investments made at young ages? Exploiting differential exposure to the national decline in routine-task intensity across local labor markets, we show that the secular decline in routine tasks causes major shifts in education investments of high school students, where they invest less in vocational-trades education and increasingly invest in college education. Our results highlight that labor demand changes impact inequality in the next generation. Low-ability and low-SES students are most responsive to task-biased demand changes and, as a result, intergenerational mobility in college education increases.
A Window of Opportunity? The Impact of Returning to Education on Earnings and Fertility (submitted)
with Richard Blundell and Kjell Salvanes
Media coverage: IZA Newsroom
We leverage high-quality Norwegian register data and a targeted second chance education reform to analyze the importance of the timing of human capital investments for adults who dropped out of high school. Exploiting variation in the age of treatment we find that adult women, by returning to education just a few years earlier, close the substantial intrahousehold education and earnings gaps with their male partners, whose education is found to be unaffected. Fertility also declines significantly post-reform. We find an important ‘window of opportunity’ for women in the timing of returning to education that points to an effective policy to reduce the gender earnings gap.
Twitter thread summarizing main findings
Intergenerational Mobility, Economic Shocks, and the Role of Human Capital (submitted)
with Jessica Botros
How do economic shocks at labor market entry shape patterns of intergenerational mobility? Both family background and negative shocks matter for future labor market success, and these two forces interact with each other. Negative economic shocks disproportionately harm those from disadvantaged backgrounds and, as a result, a one standard deviation increase in unemployment causes an 11–15% decrease in intergenerational mobility. Mobility decreases as higher unemployment widens the pre-existing gap in university education by socioeconomic status, and we show that differences in human capital are a key factor which explain rates of both relative and absolute mobility.
The Effect of Pay Secrecy Bans on Wages and Discrimination Complaints (submitted)
with Ian Burn and Luke Walsh
How can policymakers decrease wage gaps for groups covered by anti-discrimination legislation? In this paper, we show there is no impact of pay transparency laws on wages, while these policies lead to an increase in discrimination complaints. Using Current Population Survey (CPS) data we exploit the variation in US states that passed pay transparency laws between 1977 and 2021. We find no evidence of wage changes or changes in wage gaps for disadvantaged groups. However, using discrimination complaints filed with the Equal Employment Opportunity Commission (EEOC) between 2009 and 2021, we find the number of lawsuits filed due to workplace discrimination increases by 25-40%. Our findings establish that pay transparency legislation alone will not benefit workers, and that strong anti-discrimination laws are an important complement alongside pay transparency to increase equality.
The “clean energy transition” and the cost of job displacement in energy-intensive industries
with Cesar Barreto, Jonas Fluchtmann, Alexander Hijzen, Stefano Lombardi, Antoine Bertheau, Winnie Chan, Andrei Gorshkov, Jonathan Hambur, Nick Johnstone, Benjamin Lochner, Jordy Meekes, Tahsin Mehdi, Balazs Murakozy, Gulnara Nolan, Kjell Salvanes, Oskar Nordstrom Skans, and Rune Vejlin
This paper provides a comprehensive analysis of the costs of job displacement in energy-intensive industries in selected OECD countries. Based on harmonised linked employer-employee data from 14 OECD countries, we estimate the effect of job displacement in three energy-intensive industries, namely energy supply, heavy manufacturing and transport, compared to other industries. We find that workers displaced from the energy supply and heavy manufacturing, experience larger earnings losses compared with workers in non-energy-intensive and transport sectors. Larger earnings losses mainly result from weaker re-employment outcomes in terms of wages and job instability but also challenges with finding another job. They reflect significant differences in the composition of workers and firms in energy supply and heavy manufacturing and the rest of the economy. Displaced workers in these sectors tend to be older, are less skilled and more likely to be previously employed in high-wage firms.
Changes in Urban Wages, Jobs, and Workers from 1958–2017 (submitted)
with Aline Bütikofer, Kjell G. Salvanes, and Darina Steskal
The urban wage premium in Norway declined from 33% in 1958 to less than 5% in 2017, a period of rapid urbanization. The decline was concentrated among noncollege educated men, for whom the urban wage premium became zero, or even negative. The sharp decline in the urban wage premium coincided with declining demand for noncollege educated male industrial workers in urban areas. In addition, while the earnings distributions in rural and urban areas became more similar over time, the positive selection into urban areas, on observable and unobservable characteristics, decreased at the same time that the urban wage premium declined.
Negative Attitudes, Networks and Education
with Lisbeth la Cour, Birthe Larsen, and Gisela Waisman
This paper theoretically and empirically assesses the potential explanations behind the educational gap between young natives and immigrants using two measures, negative attitudes towards immigrants and networking. The paper considers that two these parameters may influence high and uneducated workers as well as immigrants and natives differently, creating different incentives to acquire education for the two groups. Using rich Danish administrative data, this paper finds suggestive evidence rejecting the theoretical case where negative attitudes decrease 1st generation immigrant education and indications that quality of networks seems to matter more for immigrants than the quantity of individuals in a potential network.
Works in Progress