This study examines gender differences in pay scale progression and career advancement within a rigid internal labor market: the Central Bank of Uruguay (BCU). The institution is characterized by three key features: hierarchical pay scales, promotion-based wage growth, and competitive internal contests. These features substantially limit the role of discretionary pay-setting and external mobility. Using confidential personnel records spanning 19 years, we show that substantial gender gaps emerge only among employees with children under 18. While promotion rates between women and men are similar on average, mothers experience a significantly slower accumulation of promotions early in their careers. This “slow climb” through the internal hierarchy translates into persistent differences in pay scale attainment over time, whereas gender differences among childless employees are negligible. To address concerns related to the endogeneity of fertility, we implement a control-function approach exploiting variation induced by a major national reproductive healthcare reform, and complement this strategy with lagged fertility specifications. The resulting evidence should be interpreted cautiously. Within the BCU, it is consistent with internal promotion systems amplifying parenthood-related constraints into persistent gender inequality. Because our evidence comes from a single institution, we do not extrapolate these estimates beyond the BCU.
We examine the effect of labor market rigidity on firms' employment decisions in OECD countries using a rich firm-level panel dataset covering 164,048 firm-year observations. Exploiting intertemporal variation in country-level employment protection legislation (EPL), we document a trade-off. While stricter EPL reduces the output sensitivity of firms' employment, it simultaneously lowers firms' overall employment levels. Moreover, our evidence indicates that firms respond to increases in EPL by substituting labor with additional investment in net assets, particularly in labor-intensive industries. Overall, our findings suggest that the level of EPL materially affects firm behavior and that governments should carefully consider the associated trade-offs when designing labor market policies.
The Istanbul Convention is an international treaty aimed at protecting women against violence. We employ survey datasets and investigate its effect on attitudes toward violence against women in Europe. We compare individuals’ attitudes before and after their countries signed and ratified the Convention with those in countries that signed but either never ratified or did so after the surveys were fielded. Entry into the Convention significantly reduced the likelihood that lower-educated individuals view violence against women as acceptable, but only in countries outside the former Eastern Bloc. In former Eastern Bloc countries, the Convention affected attitudes only among younger less-educated individuals who had limited exposure to communism—those who were no older than teenagers when the Soviet Union collapsed in 1990. We show that younger cohorts in these countries tend to hold more individualistic and less pro-government attitudes and express greater trust in the courts and the justice system than older individuals. Finally, we find no effect of the Convention on attitudes toward other forms of norm-violating behavior, such as tax evasion, bribery, fare evasion, or drug use. These results indicate that the Convention had a targeted impact, and that its influence on shaping preferences depends on the broader cultural context which is itself shaped by institutions.
We examine how changes in the real value of Supplemental Nutrition Assistance Program (SNAP) benefits affect labor supply among SNAP-eligible working-age adults. Using data from the Medical Expenditure Panel Survey linked to the USDA’s Quarterly Food-at-Home Price Database, we measure the real value of SNAP benefits as the ratio of the maximum allotment to local food prices. Real SNAP benefits vary substantially over time and across regions due to the variability of federally mandated benefit levels and regional food prices. We find that higher real SNAP benefit levels are associated with increased labor force participation and work hours, particularly among single women. A 10
This study examines the impact of a substantial increase in the minimum wage on labor market transitions in Mexico, with a focus on formal and informal employment, and unemployment status. Leveraging a 2019 policy that doubled the minimum wage in 43 northern border municipalities while implementing only modest increases elsewhere, we employ a difference-in-differences design using panel data from the Mexican National Survey of Occupation and Employment (ENOE) for 2016–2024. By 2024, the minimum wage in the affected municipalities had more than tripled relative to 2018 levels, while it more than doubled elsewhere. Our findings indicate that while the policy significantly raised labor incomes in both formal and informal sectors, its impact on employment transitions was modest. We observe a short-term increase in transitions from informal to formal employment, but no lasting effects on broader labor dynamics, including transitions to and from unemployment. These results contrast with theoretical models predicting substantial reallocation effects. Future research should consider theoretical frameworks that incorporate alternative adjustment mechanisms in highly informal economies.
