Research

We study the role of job-to-job transitions in shaping wage dynamics in the United Kingdom. We show that job moves have continued to generate substantial wage gains for movers even during a period of real wage stagnation and declining labour market mobility. Using an econometric model that accounts for worker, firm, and match heterogeneity, we decompose the job mobility premium and find a limited role for worker and firm effects, with most of the return explained by match-specific factors. We also examine the determinants of job mobility and show that much of its recent decline reflects compositional changes in the workforce, particularly ageing and increasing occupational professionalisation. We conclude by discussing the policy challenges of promoting job mobility as a driver of wage growth and more efficient labour market reallocation.

When minimum wage increases impose a cost shock on employers of low wage workers, there are a variety of ways in which firms can adjust. Rather than study the main focal point of much minimum wage research, possible labour demand adjustment, this paper considers a more understudied angle. It examines whether firms can offset the cost shock through changing non-wage aspects of work related to the nature of work. This includes altering employment composition in the workplace, the use of alternative work arrangements and redefining job contracts. Whether these alter in response to minimum wages is studied through the lens of the UK’s 2016 National Living Wage (NLW) introduction. In terms of traditionally studied outcomes, the NLW boosted worker wages, but with no change in total employment. Instead, firms did indeed adjust operations through changes in employment composition and by altering employment contracts. These non-labour demand adjustments of employment relations show how employment stability can be maintained in response to minimum wages as employers can restructure work through within-firm job composition and contracts. 

Can harsher criminal sanctions reduce violence inside intimate relationships? We study Brazil’s 2015 Femicide Law, which reclassified femicide as a heinous crime and raised expected penalties for genderbased killings. Using ten years of linked administrative records for the universe of individuals in the state of Rio Grande do Sul, we compare women born in municipalities with different pre-reform exposure to men with a history of violence against women. We find that the reform reduced domestic violence, with effects concentrated in serious non-fatal offences: bodily injuries, threats, and fighting. The decline does not appear to be explained by reporting changes or incapacitation. Instead, the evidence points to deterrence reinforced by victims’ use of the state: after the reform, women requested protective measures more often and did so earlier in the sequence of abuse. The results show that criminal law can reduce domestic violence before the fatal margin, not only by threatening offenders, but by making protection a more credible option for victims. 

This paper studies consequences of the large exchange rate depreciation occurring when the UK electorate unexpectedly voted to leave the European Union. Sterling plummeted, recording the biggest one-day depreciation of any of the world's four major currencies since Bretton Woods. The prospect of Brexit happening generated sizable differences in how much sterling depreciated against different currencies. Coupled with pre-referendum cross-country trade patterns, this generated variations in exchange rates facing businesses in different industries. The paper offers evidence of a cost shock from the prices of intermediate imports rising by more in higher depreciation industries, but with no revenue offset from exports. Workers were impacted by these increased cost pressures, not in terms of job loss but through relative real wage declines in higher depreciation, larger cost shock industries. This resulted in an aggregate fall in real wage growth of 3 to 3.6% cumulatively over the three years after the referendum.

We provide a unifying empirical framework to study why crime reductions occurred due to a sequence of state-level dropout age reforms enacted between 1980 and 2010 in the United States. Because the reforms changed the shape of crime-age profiles, they generate both a short-term incapacitation effect and a more sustained crime-reducing effect. In contrast to previous research looking at earlier US education reforms, we find that reform-induced crime reduction does not arise primarily from education improvements. Decomposing short- and long-run effects, the observed longer-run effect for the post-1980 education reforms is primarily attributed to dynamic incapacitation.

Do compulsory schooling laws reduce crime? Previous evidence for the US from the 1960s and 1970s suggests they do, primarily working through their effect on educational attainment to generate a causal impact on crime. In this paper, we consider whether more recent experience replicates this. There are two key findings. First, there is a strong and consistent negative effect on crime from stricter compulsory schooling laws. Second, there is a weaker and sometimes non-existent link between such laws and educational attainment. As a result, credible causal estimates of the education–crime relationship cannot in general be identified for the more recent period, though they can for some groups with lower education levels (in particular, for blacks).