Jan Eeckhout and Nezih Guner analyze how federal income taxes affect the size of cities by characterizing how optimal taxes reallocate workers across cities in the United States, and the implications for the overall economy.
Francesc Obiols-Homs and Virginia Sánchez-Marcos explore the role of education policy in shaping the abilities of workers, and the effect of changing policies to improve labor market outcomes in Spain.
Migration is a given. It happens. But what effect does it have on the wages of those already living in the destination country? Joan Llull develops a new estimation technique and uses push factors and distance to investigate how wages in the United States and Canada respond to immigration.
Barcelona GSE research on VoxEU.org by Alessandra Bonfiglioli and Gino Gancia
Differences in labour market and firm statistics between the US and Europe are easy to dismiss as cultural. This column applies an equilibrium model of worker screening and effort to cross-country data, showing that a large chunk of observed differences can be explained by the strategic interaction between firm and worker strategies. Evidence suggests that the US is in a high-screening, high-effort equilibrium, while southern Europe is in the complementary equilibrium. Perhaps culture is more economic than we might assume.
Barcelona GSE research on VoxEU.org by Kerem Cosar, Nezih Guner, and James R. Tybout
Trade liberalisations are often accompanied by labour market reforms, making it difficult to isolate their effects. This column discusses the effects of trade liberalisation, globalisation, and labour-market reforms on the Colombian labour market. Reduced trade frictions increased cross-firm wage inequality and shifted the firm-size distribution rightward, with offsetting effects on overall wage inequality. Average income increased, but the gains were concentrated among employees of large, productive firms with access to export markets. Greater trade openness also increased job turnover.
Albrecht Glitz asks whether and to what extent a worker’s labor market outcomes are affected by the social network in which he or she is embedded.