Irene Brunetti (p), Valerio Intragili, Andrea Ricci, Claudia Vittori

Aleksandra Majchrowska

This paper investigates the relationship between the spatial distribution of occupations with a high content of peer interactions and wages among Italian provinces. At this aim, we use a unique employer-employee dataset obtained by merging administrative data on wages and labor market histories of individuals, with survey data on job tasks and contents. The spatial distribution of jobs intensive in peer-interactions is further measured according to the occupational structure of Italian provinces. The econometric analysis shows that the concentration of peer interactions leads to higher wages at the province level. These results are robust to firms and workers’ heterogeneity and endogeneity issues.

Haifeng Qian (p)

Irene Brunetti

The study examines how income inequality in the regional labor market may affect individual propensity to become entrepreneurship and the types of entrepreneurship pursued in U.S. metropolitan areas.

There is a growing body of literature on the relationship between entrepreneurship and inequality in region labor markets. Most of these studies have focused on the impacts of entrepreneurship on income inequality. However, the entrepreneurship literature is clear that local economic conditions can impact entrepreneurial decisions, suggesting a reversed causal direction from the majority of the current literature. For instance, the theory of necessity entrepreneurship posits that one can be forced to become an entrepreneur when they cannot obtain alternative employment opportunities. Therefore, there is a need to study how the undesired regional labor market conditions such as inequality may impact individual entrepreneurial activity. Another research gap in the literature is the lack of differentiation of entrepreneurship types when studying regional economic factors for entrepreneurship. In particular, there has been very limited understanding of gig workers due to the lack of high-quality data.

This quantitative study will rely on the new national survey on Entrepreneurship in the Population (NORC at the University of Chicago, 2022). NORC at the University of Chicago is conducting a five-year national survey on entrepreneurship from 2022 to 2026. The 2022 survey data with over 30,000 valid responses have been recently made available to scholars. The survey clearly distinguishes gig workers from business owners, nascent entrepreneurs, and freelancers. Multivariate regression analysis at the individual level based on the NORC survey data will be conducted to explain the propensity to become an entrepreneur, with distinctions among business owners, freelancers, and gig workers. The main explanatory variables are indicators of income inequality (e.g., Gini index) at the metropolitan level. Control variables at both individual and regional levels will be included based on the literature.

Aleksandra Majchrowska (p)

Haifeng Qian

This study examines the relationship between minimum wage increases and the inflation rate. Data from 16 Polish regional labor markets in 2003-2020 are used to analyze the pass-through effect of the minimum wage on inflation. The New Keynesian model, supported by the Minimum Wage Augmented Phillips Curve approach, and dynamic panel data methods, are used.
The results show that the minimum wage effect on inflation is statistically significant and positive and is higher when food inflation is the dependent variable. Minimum wage effects vary temporally and across regions. Minimum wage increases are more significant during times of high inflation than in low-inflation periods. As for regional differences, inflationary pressure is greater in regions with strong labor markets and relatively high wages, i.e. regions where companies can pass on more of their increased labor costs to consumers.
These findings are important for both the labor market and regional policy, especially given the high inflation rate recently observed in Poland and the minimum wage increases planned over the coming years. They show that even if minimum wage increases do not lead to a reduction in employment, they may generate additional inflationary pressure, especially during economic booms and in regions with low unemployment.

Julia Varlamova (p), Ekaterina Kadochnikova

Aleksandra Majchrowska

The scientific discussion about the impact of digitalization on the labor market theoretically predicts a negative socio-economic effect in the form of an increase in technological and structural unemployment, but empirical studies in the short term do not confirm the hypothesis. Assuming digitalization as a driver of markets, a research question is the following: is there a catalytic role of the pandemic in the impact of digitalization on the labor market? The hypothesis of the study is the assumption of a reduction in the unemployment rate during the pandemic under the influence of digitalization, taking into account spatial interactions.
Model. To analyze the Russian regional labor markets during the pandemic, we obtained estimates of an econometric model with spatial lags by the SAR (Spatial Autoregression) type with fixed effects for 2016-2019 and for 2020-2021.
Results. Econometric estimates were not found statistically significant impact of digitalization on the unemployment rate in the regions of Russia in the period 2016-2019. In the same time, during the pandemic 2020-2021, there is a statistically significant negative impact of household digitalization on the unemployment rate in the regions.
Conclusions. We empirically found negative impact of digitalization on unemployment in 2020-2021 for Russian regions, and the absence of it in the pre-pandemic period. That fact confirms the research hypothesis about positive social effect of digitalization in the labor market.

Aleksandra Majchrowska (p), Paweł Strawiński

Julia Varlamova

Increases in the minimum wage raise production costs which may be offset by reduction in employment, growth of product prices, or decrease in firms’ profits. We analyze the effects of national minimum wage changes on employment across regions, economic sectors and age groups. We use individual data on wages and workers characteristics from the Structure of Earnings Survey in Poland in 2006-2020. We discovered latent heterogeneities in the regional employment effects. The insignificant and close to zero results at regional level include both positive and negative employment elasticities for different sectors and age groups. The employment reaction to changes in the minimum wage is also related to regional labor market features. Negative employment effects are observed mostly among the youngest groups of workers; they are more likely in regions with larger proportion of workers in the private sector, in industries where it is more difficult to increase the prices of goods produced, and where small firms are widespread. Conversely, positive employment effects are observed mainly in the groups of workers aged 50 and more; moreover they are more probable in regions with a high share of workers in the public sector and with large share of employed in large enterprises.