Macro Roundup

new paper (not peer reviewed yet) finds almost no nominal wage growth in low-wage jobs from 2010-2014, but then a catch up btw 2014-2018. over same time period time wages in high wage jobs grew at a steady rate.

"...In this paper, we introduce a concept of position specificity, where skilled workers are horizontally differentiated in the firm. In a frictional labor market with upward sloping retention functions, high-specificity workers are more costly to replace due to employers searching in thinner labor markets for a specific combination skills. This leads high-specificity firms to offer higher wages as average product at the firm rises, while also insulting workers in high-specificity positions from changes in labor market conditions....Figure 1 shows that wage growth in high wage occupations was nearly constant over these two periods, but wage growth in low-wage occupations was substantially lower in the early period but shows nearly perfect catch-up growth in the later period....Figure 2 plots employment growth by occupation over same period, showing that employment growth over these two periods are essentially identical for both high- and low-wage occupations. In addition to differences within business cycles, there is evidence that low-wage occupations' relative sensitivity to slack holds across business cycles as well...skilled workers appear to differential earn larger wage premia at more productive fi rms, not only in response to shocks to rm productivity, but also in the cross-section, thus reflecting long-term or steady state wage dispersion....We believe that this model provides insight into heterogenous wage setting decisions where it appears that different kinds of workers have different levels of “bargaining power”, as well as has the potential to help explain unresolved questions in the change of the distribution of wages in the last two business cycles. We conclude that the concept of position specificity can be useful for a wide range of questions in labor economics and may have important policy considerations for understanding and addressing wage inequality...."

Justin Bloesch and Bledi Taska, "Which Workers’ Wages Track Productivity? The Role of Position Specificity and On-the-Job Search," Harvard University, June 26, 2019, https://scholar.harvard.edu/files/bloesch/files/wages_productivity_position_specificity_otj_search.pdf

new NBER upon becoming parents, women (especially more educated women) adopt more negative views toward female employment (ie., they are more likely to say that women working hurts family life) Women on average (and, again, more educated women in particular) report that parenthood is harder than they expected.

rings true with my experience, lots of our friends are on their second kid now and lots of the mom's are thinking about leaving the workforce (granted their husbands have the ability to support a family)

"...This paper provides evidence suggesting that women do not fully anticipate the effect of motherhood. Using rich data from the British Household Panel Survey (BHPS) and an event-time framework, we document that women's labor supply exhibits a sudden, large, and persistent decline in the years immediately after the birth of the first child. Additionally, we show that women become significantly more conservative in terms of their attitudes toward the appropriate role of women and men in the household and society. The effects are considerably more muted for men...their labor supply response (if any) is about one- tenth the size of that observed for women, and while they too appear to become slightly more conservative post-childbirth, the magnitude of the effect is much smaller and not statistically significant. The effects of motherhood on women's gender-role attitudes exhibit no appreciable pre-trend and show no evidence of fadeout, suggesting that the effects of motherhood on gender-related attitudes are unexpected and long-lasting. Given that the gender-related questions asked in the BHPS are not about women's own preferences but about the appropriate role of women and men more generally, we would expect a woman who fully anticipates the effects of motherhood to report similar attitudes before and after her first birth. Therefore, we interpret the sudden conservative shift in attitudes post-childbirth as indirectly suggesting that women do not anticipate these changes in their views. To the extent that these gender- related attitudes shape employment preferences, these results also suggest that part of the employment response to motherhood is likely to be unanticipated. Interestingly, despite the fact that motherhood is a very common event, women seem surprised by the consequences. We provide more direct evidence on the question of anticipation by showing that women during the sample period appear to systematically over-estimate their likelihood of employment after first birth. While childless women in the BHPS make very accurate predictions about their labor force attachment one year later, upon the birth of the first child, women are significantly more likely to state that they expect to remain in the labor market when, in fact, they give up paid work twelve months later. To examine longer-term expectations, we turn to US data and show that beginning in 1978, female high school seniors have been increasingly under-estimating the probability that they will be home-makers by age thirty. Qualitative evidence from a series of interviews of women who graduated from Northwestern in 1993 provide additional supporting evidence of a lack of anticipation of the effects on motherhood on labor supply decisions. That women do not appear to fully anticipate the employment effects of motherhood has important implications for understanding education decisions, occupational choice, and dynamic labor supply and savings. In particular, in most dynamic models of fertility and labor supply, women's preferences are fixed and they are assumed to be able to perfectly forecast the costs of motherhood and childcare....Recent models that endogenize education to fertility decisions also assume perfect foresight of childcare costs.....Our results question the validity of these assumptions and raise the question of how these models can accommodate relaxing the assumption of fixed preferences and the (systematic) lack of anticipation of the costs of motherhood. Our findings also provide an alternative resolution to the puzzle of why women continue to make rapid gains in human capital investment relative to men in spite of their apparent stalled progress in the labor market. To the extent that before they become mothers, women expect that they will continue to have high labor market attachment after motherhood, they will make their education decisions on the basis of these potentially erroneous beliefs, resulting in some degree of over-investment" in education (at least from the point of view of the human capital model). While there may be other sources of non-labor market returns to education, the failure to correctly anticipate the employment effects of motherhood provides an alternative, though not mutually exclusive, explanation of the puzzling decoupling of women's educational gains and labor market progress...."

Ilyana Kuziemko, Jessica Pan, Jenny Shen, Ebonya Washington, "The Mommy Effect: Do Women Anticipate the Employment Effects of Motherhood?" National Bureau of Economic Research, June 2018, http://www.nber.org/papers/w24740