Replication data for: In Search of Labor Demand

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Project Citation:

Beaudry, Paul, Green, David A., and Sand, Ben M. Replication data for: In Search of Labor Demand. Nashville, TN: American Economic Association [publisher], 2018. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113014V1

Project Description

Summary: We propose and estimate a novel specification of labor demand which encompasses search frictions and the role of entrepreneurs in new firm creation. Using city-industry variation over four decades, we estimate the wage elasticity of employment demand to be close to -1 at the industry-city level and -0.3 at the city level. We argue that the difference between these estimates reflects the congestion externalities predicted by the search literature. Our estimates also indicate that entrepreneurship should be treated as a scarce factor in the determination of labor demand. We use our estimates to evaluate the impact of large changes in the minimum wage on employment.

Scope of Project

JEL Classification:
      J23 Labor Demand
      J31 Wage Level and Structure; Wage Differentials
      J38 Wages, Compensation, and Labor Costs: Public Policy
      L26 Entrepreneurship
      M13 New Firms; Startups
      R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics

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Published Versions

V1 [2019-10-12]

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DDI 2.5

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