We offer a unified analysis of the growth of low-skill service occupations between 1980 and 2005 and the concurrent polarization of US employment and wages. We hypothesize that polarization stems from the interaction between consumer preferences, which favor variety over specialization, and the falling cost of automating routine, codifiable job tasks. Applying a spatial equilibrium model, we co...

This paper studies how optimal wage tax conclusions from the classic two-period life cycle model of human capital accumulation are affected by endogenizing the number of taxpaying workers. In the absence of a corrective policy, young individuals underinvest in human capital from a social perspective because tax premiums for transfers to nonworkers are not actuarially adjusted downward for human...

Risk Aversion and Sorting into Public Sector Employment This research note uses two German data sets – the large-scale German Socio-Economic Panel and unique data from own student questionnaires – to analyse the relationship between risk aversion and the choice for public sector employment. Main results are: (1) more risk averse individuals sort into public sector employment, (2) the impact of ...

This paper examines the influence of business cycles in childhood on economic performance later in life. I relate unemployment rates between the year before one’s birth and the year of one’s fifteenth birthday to schooling, employment, and income as an adult. The analysis exploits variation in macroeconomic conditions across states over time. I address a number of identification challenges rela...

Using three representative individual-level datasets for West Germany, we estimate the effect of the extension of maternity leave from 18 to 36 months on young women’s participation in job-related training. Specifically, we employ difference-indifferences identification strategies using control groups of older women and older women together with young and older men. We find that maternity leave...

Nonparametric Bounds on the Returns to Language Skills This paper applies the theoretical literature on nonparametric bounds on treatment effects to the estimation of how limited English proficiency (LEP) affects wages and employment opportunities for Hispanic workers in the United States. I analyze the identifying power of several weak assumptions on treatment response and selection, and stres...

The Ben-Porath (1967) model suggests that a rise in life expectancy, and the associated rise in the lifetime labor input, brings about a rise in investment in human capital. We incorporate the leisure decision into the model and develop a necessary condition regarding the lifetime labor input for the Ben-Porath mechanism to have a positive effect on investment in human capital. We show that thi...

Using the National Educational Longitudinal Study data, this paper examines the role of pre-market abilities, as well as other determinants, on young men’s self-employment decision. Our results indicate that cognitive and noncognitive abilities are two important, in opposing directions, predictors of selfemployment. We also …nd that cognitive and noncognitive abilities di¤er in their malleabili...

The paper examines the time-series evidence relating to participation rates in further education in England and Wales, and uses cointegration analysis to identify a long-run statistical relationship in the data consistent with an augmented human-capital model. The recent rapid growth of participation is attributable largely to the improvements in GCSE attainment of the last decade, coupled with...

This study analyses the effects of training participation on wages and perceived job security for employees of different ages. Based on data from the German Socio-Economic Panel, results indicate that only younger workers benefit from training by an increase in wages, whereas older employees’ worries about losing their job are reduced. This observation can also be explained by the fact that goa...