Search Results
Briefing
How Domestic Outsourcing Affects the Labor Market
In this article, I focus on a few ways domestic outsourcing affects our understanding of the labor market. Jobs filled and emptied by temporary workers are never included in the official tally of job creation and job destruction, which leads to significantly underestimating the magnitude of labor market flows. Domestic outsourcing also changes the interpretation of firm reactions to productivity changes, as well as the magnitude and meaning of a secular decline in measures of labor market dynamism such as the job reallocation rate. Outsourcing is important for plants in modifying their ...
Briefing
Understanding the Lack of Skill Specialization in Peru
Jobs in Peru use a larger number of skills than comparable jobs in the U.S. This lack of specialization is consistent with firms’ hiring of "toderos" (workers with many skills, do-it-alls), given the high levels of worker reallocation.Labor markets in poorer countries are characterized by higher worker reallocation rates.1 In richer economies, a dynamic labor market that seamlessly reallocates workers to jobs goes hand in hand with robust productivity growth and sustained income growth.2 Instead, in poorer countries, the brisk pace of reallocation is accompanied by high unemployment and ...
Briefing
Human Capital Investment: Would Higher-Order Skills Help Disconnected Youth?
Human capital investments remain cost-effective well into young adulthood.A multidimensional approach to human capital development emphasizes developing self-reflection abilities and strategic thinking skills alongside traditional academic knowledge.Higher-order skills — like teamwork, critical thinking and self-control — offer high returns for disconnected youth and are well-compensated in the labor market.
Briefing
Are Firms Using Remote Work to Recruit and Retain Workers?
A Richmond Fed survey of employers in the Fifth District reveals that many firms — especially larger ones — are offering hybrid and remote work options to recruit and retain employees. Those same firms have expanded the geographic reach of their recruiting efforts. Expectations about the future direction of remote work differ a lot across sectors and employers.
Briefing
Changing Recruiting Practices and Methods in the Tight Labor Market
The unusually tight labor market has generated a wide range of challenges for employers attempting to hire workers. A survey conducted jointly by the Richmond Fed and the Richmond Society for Human Resources Management in June 2022 continues our series on recruiting methods and practices. There is little doubt that recruiting effort for each open position has intensified in the last year, and firms have had to engage new and different techniques to attract candidates and fill open positions.
Briefing
Career Progressions and Wage Growth: Is There a One-Size-Fits-All Job Ladder?
Differences in earnings across workers are large and become larger as workers age. In this article, we explore the contribution of different career dynamics to the earnings gap between poorer and richer workers. We emphasize how poorer workers do not lack opportunities to change jobs, as they have high job mobility rates. Thus, they potentially could work at increasingly better-paying firms but seldom do so in practice. Indeed, despite many job changes, wages and employer quality are stagnant over the life cycle for poorer workers. We discuss this finding in light of previous economic ...
Briefing
Career Progressions and Wage Growth: Decreasing the Gap Between Richer and Poorer Workers
In our previous article, we explored the contribution of different career dynamics to the earnings gap between poorer and richer workers. We emphasized how poorer workers do not lack opportunities to change jobs, as they have high job mobility rates. Thus, they potentially could work at increasingly better-paying firms but seldom do so in practice. Looking at previous economic literature — including a leading framework for the labor market: the job ladder model — we argued that postulating a common job ladder for both poorer and richer workers is not supported by the data. In this ...
Working Paper
Minority Inflation, Unemployment, and Monetary Policy
Our paper addresses the heterogeneous effects of monetary policy on households of different races. The cyclical volatility of real income differs significantly for households of different races and income levels, reflecting differential exposure to fluctuations in employment and consumer prices. All Black households are disproportionately affected by employment fluctuations, whereas price volatility is only particularly pronounced for Black households with income above the national median. The latter face 40 percent higher price volatility than both poorer households of the same race and ...
Briefing
High Labor Market Churn During the 2020 Recession
Richmond Fed research has found that job losses during the COVID-19 recession have been concentrated in high-turnover sectors, with turnover rates in those occupations even higher than they were during the Great Recession. Workers displaced from high-turnover occupations often avoid long periods of unemployment, but they are historically less likely to develop long-term employment relationships, which limits their potential for sustained wage growth.