The Use of New Technology and Occupational Mobility: An Event History Analysis of the Swiss Labor Market

The investigation of the consequences of new technologies has a long standing tradition within economics. Particularly, labor economists are wondering how the introduction of new technologies, e.g. Personal Computers, have shaped labor markets. Former research has concentrated on the question of whether on-the-job use of PCs creates a wage bonus for employees. In this paper, we investigate whether the use of PCs increases employees’ probability of an upward shift in their employment status and whether it reduces the risk of involuntary labor market exits. We do so by applying event history analysis to the Swiss Labor Market Survey, a random sample of 3028 respondents, and by analyzing a Panel sub-sample of 650 respondents conducted recently in Switzerland. Our results show that on-the-job use of PCs was beneficial for employees in the past by increasing their probability of an upward shift by approximately 50%. The analysis also suggests that PC use reduces the risk and duration of unemployment. However, these latter results fail to reach statistical significance.

Do Labor Market Imperfections Increase Trade Protection? A Theoretical Investigation

Labor market imperfections are commonly believed to be a major reason for imposing trade impediments. In this paper, I introduce labor market rigidities that are prevalent in continental European countries into the well-known protection for sale model proposed by Grossman and Helpman (1994). I show that contrary to commonly held views, imperfections in the labor market do not necessarily increase equilibrium trade protection. A testable equilibrium trade protection equation is also derived. The findings in this paper are hence particularly relevant for empirical tests of trade policy determinants in economies with more regulated labor markets.

Shirking, Commuting and Labor Market Outcomes

Recent theoretical work has examined the spatial distribution of unemployment using the efficiency wage model as the mechanism by which unemployment arises in the urban economy. This paper extends the standard efficiency wage model in order to allow for behavioral substitution between leisure time at home and effort at work. In equilibrium, residing at a location with a long commute affects the time available for leisure at home and therefore affects the trade-off between effort at work and risk of unemployment. This model implies an empirical relationship between expected commutes and labor market outcomes, which is tested using the metropolitan sample of the American Housing Survey. No evidence is found to suggest a consistent impact of efficiency wages on the spatial pattern of unemployment or earnings.

Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes

We use a novel dataset and research design to empirically detect the effect of social interactions among neighbors on labor market outcomes. Specifically, using Census data that characterize residential and employment locations down to the city block, we examine whether individuals residing in the same block are more likely to work together than individuals in nearby but not identical blocks. We find significant evidence of social interactions operating at the block level: residing on the same versus nearby blocks increases the probability of working together by over 33 percent. The results also indicate that this referral effect is stronger when individuals are similar in sociodemographic characteristics (e.g., both have children of similar ages) and when at least one individual is well attached to the labor market. These findings are robust across various specifications intended to address concerns related to sorting and reverse causation. Further, having determined the characteristics of a pair of individuals that lead to an especially strong referral effect, we provide evidence that the increased availability of neighborhood referrals has a significant impact on a wide range of labor market outcomes including employment and wages.