Companies that freeze defined benefit pension plans save the equivalent of 13.5% of the long-horizon payroll of current employees. Furthermore, firms with higher prospective accruals are more likely to freeze their plans. Cost savings would not be possible in a benchmark model in which i) all workers receive compensation equal to their marginal product and ii) workers value equally all identical-cost forms of pension benefits.
We document that a large share of the gender pay gap in Brazil is due to women working at lower-paying employers. At the same time, women's revealed-preference ranking of employers is less increasing in pay compared to that of men. To interpret these facts, we develop an empirical equilibrium search model with endogenous gender differences in pay, amenities, and recruiting intensities across employers.
We show that the global human capital increase during the 20th century contributed to structural transformation. We document that almost half of the decline in aggregate agricultural employment was driven by new birth cohorts entering the labor market. We use data on educational attainment and compile a comprehensive list of policy reforms to interpret the differences in agricultural employment across cohorts. We find that the increase in schooling led to a sharp reduction in the agricultural labor supply by equipping younger cohorts with skills more valued out of agriculture.
Women make less than men in some science, technology, engineering, and math (STEM) fields. While explanations for this gender pay gap vary, they have tended to focus on differences that arise for women and men after they have worked for a period of time. In this study we argue that the gender pay gap begins when women and men with earned degrees enter the workforce. Further, we contend the gender pay gap may arise due to cultural beliefs about the appropriateness of women and men for STEM professions that shape individuals’ self-beliefs in the form of self-efficacy.
Over the past decade, data has transformed everyday life. While it has changed the way people shop and businesses operate (Goldfarb and Tucker, 2019), it has only just begun to permeate economists thinking about the aggregate economy. In the early twentieth century, economists like Schultz (1943) analyzed agrarian economies and land-use issues. As agricultural productivity improved, production shifted more to manufacturing. Modern macroeconomics adapted with models featuring capital and labor, markets for goods, and equilibrium wages (Solow, 1956).
We examine how signals of a candidate’s capability affect perceptions of that person’s commitment to an employer. In four experimental studies that use hiring managers as subjects, we test and show that managers perceive highly capable candidates to have lower commitment to the organization than less capable but adequate candidates and, as a result, penalize high-capability candidates in the hiring process.
We study optimal savings policies when there is a dual concern about under-saving for retirement and income inequality. Agents differ in time preferences and earnings ability, both unobservable to a planner with paternalistic and redistributive motives. We characterize the solution to this two-dimensional screening problem and provide a decentralization using realistic policy instruments: forced savings at low incomes — similar to Social Security — but a choice between savings accounts with different subsidies and caps at high incomes — like 401(k) and IRA accounts in the US.
Selecting more productive employees among a pool of job applicants can be a cost-effective means of improving organizational performance and may be particularly important in the public sector. We study the relationship among applicant characteristics, hiring outcomes, and job performance for teachers in the Washington DC Public Schools. Applicants' academic background (e.g., undergraduate GPA) is essentially uncorrelated with hiring.
This chapter examines the impacts of the digital economy on employment, the drivers of change, and the options to alleviate the emerging problems. The digital economy was supposed to replace and enhance industrial jobs, but it has also accelerated the outmigration of blue-collar and service jobs, with only inadequate replacements. The impact on different income classes and generational levels has been unequal. Midpay jobs decreased while low- and high-skilled jobs rose.