Anja Rossen (p)

Cristina Stuffer

Significant special wage disparities can be observed in virtually all countries with free market economies. In particular, larger cities offer higher wages compared to more rural areas. There are at least two major explanations for this observation: (1) people with characteristics that are related to higher wages prefer to live in larger cities and (2) the same worker becomes more productive if she or he is located in a larger rather than a smaller city. In this paper, we shed light on the relative importance of those explanations and demonstrate that, after controlling for worker and industry sorting, there is still a significant agglomeration effect that makes wages increase with the size of local industries. We find that 3.8 percent of the variation of individual wages in a full sample of all workers subject to social security in Germany for the years 2011-19 can be attributed to factors that are specific to industry/region-cells. Furthermore, the region/industry-specific wage component increases with the number of workers in this cell with an elasticity of 0.022, which provides evidence for the existence of agglomeration effects. We contribute to the literature on spatial wage disparities in at least three ways. First, we demonstrate how the wage decomposition by CRY can be adapted to measure the magnitude of Marshall-Arrow-Romer-type agglomeration effects. Second, we discuss the intermediate results of industry- and region-specific wage premia. Those premia reveal the various sources spatial wage disparities and are informative to (local) policymakers. Finally, we measure the relative magnitude of four different mechanisms that explain spatial wage disparities.

Albert Yirmiyahu (p), Hila Axelrad

Anja Rossen

The aging population is a phenomenon faced by policymakers in many developed countries, particularly in the context of their efforts to prolong working life of the older population. From a macro-level perspective, longer working life relieves the pressure on pension systems, which are today expected to pay pension funds to more people for longer periods. The workers themselves may need to work longer for various reasons, such as increasing their pension savings and income during a longer expected period of retirement. Often, however, people want to work longer, stay active and involved, even when their finances allow them to retire.

The goal of the current study is to examine what job characteristics, workplace practices and personal feelings enhance job satisfaction among workers and encourage them to keep working longer. To do that, we use the Social Survey for 2016 from the Israel Central Bureau of Statistics (ICBS), a cross-sectional dataset focused on job conditions of more than 4,000 Israeli workers. Beyond the analysis of the impact of employees’ job satisfaction on their will to keep working, we also tried to examine the differences in effects of job characteristics and individual attributes on job satisfaction of older and younger workers.

Our findings reveal that income satisfaction is a key factor, but it is not the only one. Job security, a sense of belongingness and a sense of discrimination in the workplace are also associated with the desire to work longer. In addition, we found that workplace practices and new working methods contribute more to older workers compared to young ones, but not necessarily lead to prolonging their working life.

David Comerford (p), Michael Watts, Jose V. Rodriguez Mora

Albert Yirmiyahu

In Comerford et al (2022) we present an extended Becker-Tomes model of intergenerational human capital accumulation in which local labour markets are characterised by the information firms receive on the level of human capital of potential workers, and on the background (parental income) of potential workers. We label local labour markets in which firms exploit more the direct signals on human capital as “meritocratic”, whereas those in which firms exploit more the signals on parental income as “aristocratic”. High quality signals on either lead to income dispersion in that locality as firms discriminate between potential workers, and this naturally leads to a higher correlation on income across generations as parents invest in the skills of their children i.e. the model naturally generates a Great Gatsby Curve. Despite highly meritocratic and highly aristocratic localities both exhibiting income inequality and intergenerational persistence, they can be separately identified due to the differential incentives in the model to invest in education. A meritocratic labour market incentivises a higher degree of educational investment than an aristocratic labour market.

In this paper we exploit the comprehensive dataset from Chetty et al (2014), from which we can identify commuting zone and county data on educational expenditure, intergenerational mobility, and income inequality. We fit the model to this data and use non-targeted model outcomes to test the model. Fitting the model to this data effectively uses the model to measure the degree of meritocracy and aristocracy across US commuting zone and counties. We produce maps of the US showing these, and correlate these measures with other observables from the Chetty et al (2014) data to see what seems to associate with meritocracy and the inheritance of advantage in the USA.

Cristina Stuffer (p)

David Comerford

The topic under investigation of our research are the job preferences of young residents of the region of South Tyrol aged between 15 and 29 years. More specifically, the research question is, what these young people’s life expectations are, with a specific focus on their future or ideal workplace. We thus want to investigate which role the own job plays in young people’s life plan and if personal preferences about housing, mobility and social surroundings impact respondents career preferences.
As far as the methodology is concerned, an Adaptive Choice Based Conjoint Analysis (ACBC) is used to investigate the respondents job preferences. Originating from market research areas, we adapted this research method to our case to predict how young people make the complex decision of choosing and evaluating potential work offers and places. ACBC uses repeated answers to investigate how important each attribute is in driving each respondent’s decisions and which levels within each attribute are preferred (and by how much). Additionally, this method helps us investigate if respondents display non-compensatory behaviours.
Using the micro level data obtained with the ACBC analysis, we hope to gain a more specific insight into the factors which drive individuals’ job and career choices, as they help us to obtain a personal and differentiated preference scheme. A series of questions related to the topics of mobility, housing and the social and familiar surroundings is then supposed to help us evaluate and describe potential clusters of young people and their respective preferences. In addition to regression and cluster analysis, we hope to obtain other interesting micro level data to include in our publication. Finally, we will add a qualitative section to be informed with stakeholder interviews about the topic.
To carry out this analysis, a representative sample of 1.500 young residents of South Tyrol between 15 and 29 years will be interviewed in the following weeks using CAWI technique. In an earlier questionnaire, the attributes for the ACBC were selected with the help of a MaxDiff exercise, completed by 130 respondents of the same age group, to guarantee the relevance of the asked items.
With our analysis we want to inform employers, policy makers and other stakeholders about what changes in attitudes and preferences they are to expect in the future labour market. The tentative results and some conclusions will be ready to be presented during the conference.