The point is that having some firing flexibility - particularly in those first six months where you figure out if the candidate is a fit - gives firms a lot more hiring flexibility.

Who might this be? Depending on the job it could be people with atypical or foreign qualifications, spotty employment histories, mothers returning from multi-year leaves, people coming back into work after long illnesses, people with criminal records.

I saw Nils frahm last year. Incredible

Congratulations Jakob! Lucky IFS :)

Very interesting looking paper. @nikdatta.bsky.social has a related paper on zero-hour contracts in the UK: www.dropbox.com/scl/fi/gel89...

Very interesting, I will read!!

You don't know how much schedule instability a job at X vs Y will have. Even with reviews, you probably won't get a sense of whether you'll get 1h more shifts per week or have 5 more weeks per year w/o a last minute cancellation. Since it's so hard to measure, I can imagine its underpriced.

Yes, I think so.

Even if wage margin was adjustable, I wonder how much compensation there would be - I always wonder with these less-observable, less-salient things whether the ex-ante compensation when workers switch jobs is as much as it is actually valued.

Hannah also finds a tradeoff between schedule unpredictability and wages: when the minimum wage is increased, scheduling unpredictability increases too.

Suggests another margin that firms are able to cut costs on when minimum wages increase.

(parallels with our work on workplace injuries).

2. Firms pass demand risk onto workers: Hannah shows that on bad-weather days (when fewer people come to buy things from these retail & hospitality businesses), there are more last-minute shift cancellations.

In most jobs, the firm bears the risk of demand shocks unless extreme (-> layoffs).

1. Schedule unpredictability means you don't work full time, but can't fill the other hours.

Avg hours worked per year in hospitality is 26, compared to 35-40 in most other industries.

But workers can't fill the spare hours with another job as they don't know when they'll be scheduled to work.

Link to our paper:

papers.ssrn.com/sol3/papers....

The paper cited in the @economist article by Liu et al also finds that higher min wages cause increased injury rates.

The fact both papers find - with different methods, data, and setting - gives greater credence to the min wage-injury effect being real and important.

(Note that if the mechanism really is the work intensification it lends another interesting aspect: it suggests firms are getting higher labor productivity as a result.)

We estimate that the increase in injury risk offsets about 12% of the benefit of higher wages to employed minimum wage workers.

So it’s far from offsetting the full wage benefit - but it’s meaningful, especially if there are other non-wage margins firms can adjust downwards too