Working paper of perhaps my fav project, w/ @joshbudlender.bsky.social
We know min wages can improve efficiency statically by reducing markdowns under monopsony. We show such worker benefits erode as firms' productivity rises, b/c some firms claw back markdowns rather than share benefits.
[Coda: this paper has taken a long time: had its genesis in 2019. So many people have graciously helped: see our acknowledgements! But extra special thanks must go to our PhD advisor, @arindube.bsky.social, who had so many invaluable comments & suggestions along the way]
We do a lot of other stuff, e.g. compare predictions to DMP & bargaining models.
We also estimate a structural model, & (amongst other things) show that our mechanism substantially reduces intended returns to a wage subsidy/hiring credit☹️
Please read, & send us your comments!
And pattern also holds when we look at exporters’ responses to shift-share trade shocks! And point estimates are remarkably similar to LMS results.
These identified rent-sharing & firm-facing labour supply elasticities are also some of very few estimates for developing countries
What about dynamic responses to such shocks? Again, prediction is borne out!
Using LMS-style value-added shocks, we find lower wage & employment responses in constrained region, while the profit share increases. Clear breaks around productivity thresholds from x-sect exercise.
And this is empirical pattern we observe using cross-sectional kink design, leveraging ~20 min. wage regimes!
With firm productivity (ACF) along x-axis, employment & profit share slopes change sharply at the wage kinks
Constrained region is economically important: ~20% of firms
Per our simple model, we predict that firm responses to revenue-productivity increases depend on MW regime
For unconstrained firms, workers benefit via higher wages & emp
Supply-constrained firms instead absorb revenues into higher markdowns & profits. Wages & emp. do not respond!
We reveal new monopsonistic margin, where markdowns rise w/ productivity. Shows how link from firm gains to workers can break sharply! This may undermine inclusive development. Labour shares may be high while pass-through is weak.
@cep-lse.bsky.social Working Paper: cep.lse.ac.uk/_new/publica...
🚨New Working Paper!🚨
@ihsaanbassier.bsky.social & I start with simple stylised fact: lower productivity firms pay ~minimum wage, even as productivity increases.
What does this mean for rent sharing/passthrough? Employment? Profits?
Monopsony model + 🇿🇦 admin data = striking conclusions!
Join us at UCT for our 2-day December Workshop co-hosted with ERSA, discussing frontier research in applied economics for developing countries!
2 keynotes: Taryn Dinkelman & Joseph Kaboski.
12 presenters from 7 international & 4 local universities, & PhD student panels.
Last day to submit! Get your papers in!
Really excellent short interview on ABC about the SA Expropriation Act and claims of "white genocide" with Prof. Ruth Hall (@ruthhallplaas.bsky.social), acting director of South Africa's leading agrarian studies research unit, @plaasuwc.bsky.social.
www.youtube.com/watch?v=6__b...
I genuinely feel sorry for government officials and politicians who have to engage with the Americans on the "merits" of the issue. How do you refute someone's deliberate fantasy where facts don't matter at all? It's like the Haitian cats and dogs thing all over again.
Mostly I think it's great that SA is, to substantial extent, avoiding getting sucked into this quagmire of nonsense. Perhaps a sign we're maturing. But does mean most of the "discussion" is led by grifters, morons and white nationalists (these categories not mutually exclusive)
Notable how vast majority of SA knows this Afrikaner ethnic persecution/refugee thing is such obvious bullshit--literally made-up--that it's not even worth engaging with. You can't refute baldfaced fantasy with facts etc. But wonder if it makes reality less clear to rest of world
Coördinates 😎
Of course there were both pros and cons to doing my PhD in the US, but until recently I almost always strongly recommended it to people. Incredible to me that in the space of a few months I now have real reservations about it and just don't know what to think.
Spoke with first prospective South African PhD student today who was planning on doing his PhD in the US, but now feels he cannot commit to something so long in such an unpredictable & potentially oppressive environment. There will be more.
More than 20 Metropolitan Police officers broke down the front door of a Quaker meeting house to arrest six women who had met to discuss climate change and Gaza. It is thought to be the first time in the history of the famously pacifist Quakers that police have forced their way into one of their places of worship. The women, aged between 18 and 38, were sitting in a circle eating hummus and bread sticks on Thursday evening as part of a “welcome meeting” for Youth Demand, which calls itself a non-violent protest group.
I know the right wing media finds it all very difficult so, in an attempt to be helpful, this is what an actual interference with free speech looks like.
Unidentified men grabbing someone off the street and putting her in a car because she wrote an op-Ed. This as flatly authoritarian as anything we’ve seen in this country in a very long time.
Like, seriously???
Reading this appalling story, I don't see how anyone can in good conscience send their kids to Columbia -- not even as a political statement, but from a basic "will they take care of my kid?" standpoint...
📢 SALDRU is proud to host the "South Africa at 30 Years of Democracy" conference at UCT! 🇿🇦🎉 A deep dive into our progress since 1994 & pathways for the future.
📅 Funded by AFD and the EU Commission, supported by the Presidency, Treasury ZA & NPC.
#SA30 #Democracy #Research
Tbh setting up institutional social media accounts is not my favourite use of my time... if we have to start over again (and then risk being flagged again!) maybe we just forgo @bsky.app as a social media channel...
(yes we will verify via our own webpage, but university IT stuff to navigate first)
A picture of the University of Cape Town, where SALDRU is based.
Hello, Bluesky #EconSky! We're the Southern Africa Labour & Development Research Unit (SALDRU) at UCT, dedicated to challenging inequalities through policy-relevant academic research. We are one of the leading Labour & Development #Economics units on the continent. Explore our work: saldru.uct.ac.za
The Wuhan lab is STILL doing unsafe research that could trigger a pandemic AND getting prestigious pubs as incentive.😫
To fix this for the future, we have to admit we were deliberately misled on the possibility of a lab leak in the past. Horrid but true.
Gift link
www.nytimes.com/2025/03/16/o...
"Aligned to" is a way of saying that they have no proof that he provided anything that could be legally construed as material support to Hamas, or showed allegiance to Hamas in any way, but he said some things they decided are vaguely in alignment with Hamas and they're imprisoning him for it.
UPDATE — Secretary of State Marco Rubio has now commented on the Trump admin’s detaining & attempted green card revocation of a Columbia Gaza encampment student negotiator:
“We will be revoking the visas and/or green cards of Hamas supporters in America so they can be deported.”
