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IZA – Institute of Labor Economics

A dataverse for labor economics

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The IZA Research Data Center (IDSC) has recently launched the IDSC dataverse as a new service to improve the accessibility of research data along the FAIR principles (data is to be: Findable, Accessible, Interoperable and Reusable).

As part of a project funded by the German Federal Ministry of Education and Research (BMBF), the IDSC and IZA’s ICT group collaborated on migrating its IDSC research data repository to a version of the well-known IQQS Dataverse software. This BMBF project aims at developing tools for Trusted Data Custodians in data-driven research.

The new repository offers various models for depositing data, meta-data or code to meet the diverse needs of researchers, such as publication and funding requirements, as well as standards set by journals, projects, or organizations. Researchers or organizations that store a dataset with the IDSC dataverse can choose an availability status that meets their needs.

Options include datasets, which can be downloaded either anonymously or by registered users, a dataset under embargo or a dataset that is not available for download at all. Instead, this dataset can be processed against using Josua. In all cases, the depositors receive an IDSC-issued DOI for the proper citation of their dataset and any associated publications.

Data hosted on the IDSC Dataverse is accessible for academic purposes, including secondary research, replication, and teaching in a variety of ways. For clarity, here are examples illustrating different access modes:

For more information please contact idsc@iza.org

February is IZA Network Month

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With more than 2,000 scholars from over 60 countries, the global IZA research network is the largest of its kind. Our goal is to further expand our network and keep it vibrant, diverse and inclusive.

Once a year throughout the month of February, we invite our Research Fellows to propose prospective new members who would be a great fit for the IZA network. Nominations can be submitted and managed online.

The screening process will be informed by advice from the new IZA Network Advisory Panel. For more information on eligibility criteria and other requirements, see also our FAQ page.

New IZA Network Advisory Panel established

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Recognizing the importance of the IZA network as a widely valued international resource for labor economists and other stakeholders, we are pleased to announce the formation of a new IZA Network Advisory Panel:

The panel members cover a broad spectrum of perspectives and constituencies. They include a mix of seniority levels within the profession. The panel will discuss ways to further improve the organization of the network and where necessary offer broad advice to the Institute.

Claudia Goldin receives 2023 Nobel Prize in Economic Sciences

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Harvard University’s Claudia Goldin has been honored with the Nobel Prize in Economic Sciences for her groundbreaking research on the role of women in labor markets. IZA extends its heartfelt congratulations to Goldin, who has been a member of the global IZA research network since 2011.

Simon Jäger, Director of IZA, describes the award for Claudia Goldin as “outstanding and well-deserved.” According to Jäger, the prize recognizes the life and work of a researcher who has produced groundbreaking insights into the working world of the last 200 years, especially the role women play in the labor market and how this role has evolved.

Goldin has explored, for example, “how the participation of women in the workforce developed during industrialization and thereafter.” Recently, she has examined the roles of discrimination, social norms, and flexibility in relation to the persistent gender pay gap. Goldin has been able to clearly document this using historical data, “which she tracked down in a kind of detective work,” says Jäger.

The awarding of the Nobel Prize to Claudia Goldin not only acknowledges her outstanding contributions but also serves as a reminder of the importance of her research in unraveling the complexities of gender dynamics in the labor market.

In 2016, Claudia Goldin had already received the IZA Prize in Labor Economics. Her upcoming IZA Prize book, “An Evolving Force – A History of Women in the Economy,” will provide further insights into her impactful work.

IZA 25th anniversary event in Berlin

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On July 5 and 6, IZA celebrated its 25th anniversary with a research conference and policy panel featuring Hubertus Heil (German Federal Minister of Labor and Social Affairs), Monika Schnitzer (Chair of the German Council of Economic Experts), Uta Schönberg (University College London) and Jason Furman (Harvard Kennedy School), moderated by Christian Odendahl (The Economist). The panelists discussed such issues as the consequences of past labor market reforms and the future of the welfare state in Germany, the need for a comprehensive strategy to alleviate the labor market impact of demographic change, as well as the ramifications of digitalization and AI for occupational profiles and skills demand.

Opened by IZA Director Simon Jäger, the research conference (see full program) comprised presentations by 15 scholars and a poster session covering the full range of modern labor economics research. Keynote speeches were given by Aysegül Sahin (University of Texas at Austin) on new insights into the dual U.S. labor market, and by Patrick Kline (University of California, Berkeley) on an innovative grading scheme for hiring discrimination.

 
(pictured left to right: Simon Jäger, Aysegül Sahin, Patrick Kline)

For more impressions of this fantastic event, see also a photo gallery with all speakers and lively informal discussions among participants during the breaks, as well as a video recording of the policy panel (mostly in German):

As a prelude to the anniversary celebration, the annual IZA Summer School in Labor Economics took place on the outskirts of Berlin, giving about 25 participants from around the world the opportunity to take part in lectures, student presentations and discussions on current issues in labor economics:

All in all, this memorable week offered a glimpse of future cutting-edge labor market research and evidence-based policy advice to come from IZA in the next 25 years.

Smart, simple, and fair: New proposal for immigration to Germany

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Due to demographic developments resulting in a shrinking pool of domestic workers, the German labor market will be facing significant shortages of skilled and unskilled workers. Increased labor migration, particularly from non-EU countries, will be a crucial factor in stabilizing the country’s labor force potential. However, the generous immigration offers for skilled workers from outside Europe have so far received little response.

In a new policy brief, experts from IZA in Bonn, Berlin and the international network suggest a significant simplification of immigration requirements for third-country nationals seeking to work in Germany. This proposal links the issuance of a temporary work permit for this target group to a job or training offer in a company that is bound by collective bargaining agreements. This linkage provides important incentives for strengthening the German collective bargaining system and the country’s model of social partnership – a key pillar of the social market economy.

This proposal would provide an additional incentive for precisely those companies that should see little downside in joining an employer association: highly productive and innovative firms that are expanding, seeking employees, and offering higher wages. The changing dynamics of employer associations resulting from the accession of these companies can also have positive effects on innovation and growth.

By linking simplified immigration to collective bargaining, employees can directly benefit from the growth dividend resulting from increased labor and skilled worker immigration. Minimum standards in terms of wages and working conditions also help prevent the risk of labor market segregation, where certain jobs are only or predominantly filled by immigrants at low wages and precarious working conditions.

The IZA team’s proposal, published in the IZA Standpunkte series (in German) and covered in Süddeutsche Zeitung, aims to contribute to labor immigration and fair participation in the labor market.

IZA promotes innovative economic research on climate change

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To foster research into the nature and implications of climate change, IZA gives an award for “Innovative Research in the Economics of Climate Change” (IRECC) for the two best topical IZA Discussion Papers of the previous year. Worth 10,000 euros, the IRECC Award recognizes important new insights into the broader, often underestimated consequences of climate change and the effects of environmental policies on society and the labor market.

From papers published between December 2021 and December 2022, these two have been selected for the 2023 IRECC Award:

 “Understanding Climate Damages: Consumption versus Investment” (IZA DP No. 14974) by Gregory Casey, Stephie Fried and Matthew Gibson shows that the welfare cost of climate change larger may be larger than currently estimated. The reason is that existing climate-economy models use aggregate damage functions to model the effects of climate change. This approach assumes climate change has equal impacts on the productivity of firms that produce consumption and investment goods or services. The authors show the split between damage to consumption and investment productivity matters for the dynamic consequences of climate change. Drawing on the structural transformation literature, they develop a framework that incorporates heterogeneous climate damages. When investment is more vulnerable to climate, short-run consumption losses will be smaller than leading models with aggregate damage functions suggest, but long-run consumption losses will be larger. The study quantifies these effects for the climate damage from heat stress and find that accounting for heterogeneous damages increases the welfare cost of climate change by approximately 4 to 24 percent, depending on the discount factor.

“Climate Change and Political Participation: Evidence from India” (IZA DP 15764) by Amrit Amirapu, Irma Clots-Figueras and Juan Pablo Rud provides new evidence about the ways in which political agents in developing countries (including both voters and candidates) may respond to climate change via political channels. The authors study the effects of extreme temperature shocks on political participation using data from Indian elections between 2009 and 2017. Taking advantage of localized, high-frequency data on land surface temperatures, they find that areas with greater cumulative exposure to extreme temperatures experience an increase in voter turnout and a change in the composition of the pool of candidates who stand for election. As a consequence, electoral outcomes are affected. The results are driven by the negative effect of climate change on agricultural productivity. First, the results are strongest in areas with a larger rural population. Second, there is a non-monotonic relationship between temperatures and turnout which closely mirrors the relationship between temperatures and agricultural productivity. Also, following temperature shocks, winning candidates are more likely to have an agricultural background. Finally, politicians with an agricultural background invest more in irrigation, which mitigates the effects of high temperatures, on both agricultural production and on turnout.

The IRECC winners “represent the best of modern applied-economics research,” according to the award committee made up of Susana Ferreira (University of Georgia) and Andrew Oswald (IZA and University of Warwick).

All climate-related IZA discussion papers submitted in 2023 will qualify for the second IRECC award, to be given in early 2024.

G²LM|LIC Call for Proposals

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The IZA/FCDO Programme on Gender, Growth and Labour Markets in Low-Income Countries (G²LM|LIC) has opened the electronic application portal for Phase VI research proposals. Two types of research grants will be offered:

  1. Large-scale research grants for experienced researchers based in institutions and organizations from all over the world to fund larger research projects in LICs, with a minimum value of 100,000 Euros, up to a value of approximately 400,000 Euros.
  2. Small research grants to fund research projects in LICs, with a maximum value of 25,000 Euros, mainly targeting junior researchers (PhD students or researchers who have less than five years of work/research experience past their PhD) based in institutions and organizations from all over the world, as well as senior or junior researchers based in institutions and organizations in LICs. Small grants are designed to be contracted directly with individual researchers, not with the researcher’s institution.

The deadline for submission is April 10, 2023.

For details see: Call for Proposals 2023

Job matching in online markets

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As markets increasingly (and often exclusively) take place online, they generate both new types of data as well as new challenging research questions. The Internet as a data source for research in labor economics is therefore a focal point of IZA’s research data center, IDSC. Organized by Nikos Askitas and Peter J. Kuhn, the two-day workshop showcases innovative multidisciplinary research with data from internet job boards, one of the main modes of matching facilitation in labor markets worldwide today.

Algorithmic hiring

On the heels of both technological hype and techno-optimism, as well as aiming at more tangible benefits such as cost reduction and speed, a market emerges in which firms offer algorithmic matching services to hiring firms. In the workshop’s first keynote, Manish Raghavan presented the current state of affairs in this algorithm-driven job matching market with a focus on compliance with anti-discrimination law in the US.

Firms offering algorithmic hiring services have to consider and filter both on the quality of the training data used by the algorithms as well as the prediction targets and evaluate risks and trade-offs, a new and complex problem. Among the risks involved is the emergence of a monoculture: While in the pre-algorithmic hiring world there is a variation of (possibly error-prone) manual hiring procedures, in an algorithmic universe all hiring firms using the same algorithms commit the same errors – to the potential detriment of the labor market and society at large.

Recommender systems in two-sided markets

In the workshop’s second keynote, Thorsten Joachims, who also works on the border of computer science and economics, discussed research designed to produce fair rankings from biased data in two-sided markets. Search engines and recommender systems have become the dominant mode of matchmaking in a wide range of two-sided markets, such as retail, entertainment, employment, or even romantic partners. Consequently, such systems can shape markets. Distortion of opportunity allocation to market participants can occur either due to exogenous reasons, such as biased training data, but also due to reasons endogenous to the machine learning algorithms. Removing such distortions is therefore a new and important problem.

Defying distance? Provision of services in the digital age

In her paper, Amanda Dahlstrand-Rudin studies how digital platforms are transforming service provision in health care by making the physical distance between provider and user less relevant. Using data on 200,000 patients and 150 doctors, she first analyzes the effect of the random assignment of patients to primary care doctors that took place when Sweden moved these services online. Random assignment improved aggregate health outcomes, in part because it increased the exposure of high-risk patients to doctors who were better able to treat them.

Dahlstrand-Rudin then goes further, using the estimated causal effects derived from random assignment to project the possible health care benefits of using existing online information to actively match patients at high risk of avoidable hospitalizations to doctors skilled at triaging.  This would reduce avoidable hospitalizations by an additional 20 percent. Overall, the study dramatically shows how moving service provision to online platforms has the potential to improve service quality while reducing inequality at the same time.

RCTs on job seekers

The study presented by Jung Ho Choi measures how information about the diversity of a potential employer’s workforce affects individuals’ job-seeking behavior, and whether workers’ preferences explain corporate disclosure decisions. By embedding a field experiment into job recommendation e-mails sent from a leading U.S. career advice agency, the authors find that disclosing company diversity scores in job postings increases the click-through rate and willingness-to-pay of job seekers for firms with higher diversity scores.

Using a follow-up survey, the researchers also demonstrate that diversity information is more valuable to female job-seekers and people of color. The results provide useful new insights into how U.S. firms are likely to respond to growing pressure for firms to voluntarily disclose diversity metrics in their 10-K reports under new SEC disclosure requirements.

See the workshop program for more information.

Four IZA network members among the Citation Laureates for 2022

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IZA Research Fellows Daron Acemoglu, Richard Easterlin, Richard Layard and Andrew Oswald have been selected as Clarivate Citation Laureates for 2022. Based on their exceptional citation record, Easterlin, Layard and Oswald are recognized “for pioneering contributions to the economics of happiness and subjective well-being” while Acemoglu is honored together with Simon Johnson and James Robinson “for far-reaching analysis of the role of political and economic institutions in shaping national development”. (See the Clarivate press release for more details.)

The quantitative and qualitative analysis that underpins the selection of Citation Laureates reveals the critical contributions they have made, reflected in the influence they have had on others’ work.  Over the past 20 years, 64 Citation Laureates have gone on to become Nobel laureates – including IZA Fellows Joshua Angrist and David Card, who had been among the 2013 Citation Laureates and became co-winners of the 2021 Nobel Prize in Economics.

About the 2022 Clarivate Citation Laureates from the IZA Network

Daron Acemoglu is a Professor of Economics at MIT. One of the world’s most cited economists, he currently ranks third in the RePEc author ranking. His research covers a wide range of areas within economics, including political economy, economic development and growth, human capital theory, growth theory, innovation, search theory, network economics and learning.

Much of his work is concerned with questions of poverty and inequality. With regard to the future of work, two of his recent IZA Discussion Papers (featured in the IZA Newsroom: The wrong kind of AI?) study the consequences of artificial intelligence and automation technologies for future labor demand and labor market inequalities.

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Richard A. Easterlin is university professor emeritus of economics at the University of Southern California. Having joined IZA as a Research Fellow in November 1999, he was awarded the 2009 IZA Prize in Labor Economics for his outstanding research on the analysis of subjective well-being and on the relationship between demographic developments and economic outcomes.

The founding father of happiness economics (his key papers are presented in the IZA Prize book Happiness, Growth, and the Life Cycle) was the first to describe what came to be known as the “Easterlin Paradox.” It states that at a point in time happiness varies directly with income, both among and within nations, but over time the long-term growth rates of happiness and income are not significantly related. Easterlin identified social comparison as the principal reason for this contradiction. In several of his 16 IZA discussion papers (including The Easterlin Paradox and Paradox Lost?), he defends his findings against critics.

One of his most recent contributions is summarized in the IZA Newsroom: The Newest Revolution? Happiness!

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Richard Layard is Emeritus Professor of Economics at the London School of Economics, where he co-founded the Centre for Economic Performance and co-directs its Community Wellbeing program. He joined IZA as a Research Fellow in January 2004 and was awarded the 2008 IZA Prize in Labor Economics together with Stephen Nickell for their path-breaking work on the relationship between labor market institutions and unemployment.

For most of his life, Layard has worked on how to reduce unemployment (his key papers are presented in the IZA Prize book Combatting Unemployment) and inequality. He is also one of the first economists in Europe to work on happiness, and his main current interest is how better mental health could improve our social and economic life. See, for example, his IZA World of Labor article The economics of mental health and several of his IZA discussion papers on the topic, such as Mental Illness and Unhappiness or Do More of Those in Misery Suffer from Poverty, Unemployment or Mental Illness?.

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Andrew J. Oswald is Professor of Economics and Behavioural Science at Warwick University. He has been among the most active and influential members of IZA’s international research network ever since he became an IZA Research Fellow in October 1999. From May 2011 until December 2012 he was Visiting Research Fellow and Acting Director of Research at IZA in Bonn. He is currently a member of IZA’s Scientific Council.

Oswald’s research lies at the borders between economics, psychology, epidemiology and medicine. He is also involved in research on climate change and serves as IZA’s Special Representative on Climate Change and the Labor Market (see also his recent papers Why Do Relatively Few Economists Work on Climate Change? A Survey and Do Europeans Care about Climate Change? An Illustration of the Importance of Data on Human Feelings).

Among the nearly 60 IZA Discussion Papers co-authored by Oswald to date, recurring topics are happiness, well-being and human feelings in general, see for example a recent paper covered in the IZA Newsroom (It hurts to be economically insecure).