Reports from IFAU
The Institute for Labour Market and Education Policy Evaluation (IFAU) is a state research institute. They conduct research on labour market, education and social security issues. Here is a compilation of the latest reports written by researchers at the Department of Economics for IFAU.
Seniority rules and selection into job loss
2026.10.05
How much are employers willing to pay to sidestep employment protection? I study this in the context of seniority rules, aiming to shield tenured workers from job loss. Using detailed and unique Swedish layoff notification data matched with administrative registers, I identify the set of workers at risk of dismissal and construct counterfactual displacement lists based on the mandated layoff order. I find that workplaces with relatively more productive junior workers are significantly less likely to follow the seniority order. A one-standard-deviation increase in the relative productivity of recent hires reduces compliance by 7.7 percentage points. To circumvent the default order, employers provide higher severance pay and longer advance notice to senior workers, indicating that firms pay for the right to retain more productive workers. These results indicate that seniority rules impose efficiency costs on employers as employment protection is traded for financial compensation.
Read the WP "Seniority rules and selection into job loss" IFAU
A double-differences approach to inference in regression discontinuity designs with a discrete running variable
2026.10.02
We present a new approach to nonparametric inference in regression discontinuity designs where the running variable is discrete and may have few support points. The approach is based on an intuitive and comparatively weak identification assumption: In the absence of treatment, the difference in population mean outcomes at the cutoff is not the largest nor the smallest among differences at any two adjacent support points. Test statistic and confidence interval are constructed from a set of t-statistics based on double differences of the outcome variable, eliminating the need to estimate a conditional expectation function. Simulation evidence suggests that statistical power compares favorably to existing methods. We illustrate our approach by revisiting two studies from the economics of education literature.
Permanent residency policy and skilled immigration
2026.09.03
Aging populations and labor shortages in skill-intensive sectors have led many countries to pursue targeted policies to attract international talent. We study a migration reform in Sweden that offered international doctoral students from outside the EU an easier path to permanent residency. Implemented in 2014, the reform shortened the required period of residence from eight to four years, allowed these students to obtain permanent residency immediately after graduation, and granted their spouses a work permit during their doctoral studies.
Women's labor market opportunities and equality in the household
2025.10.30
We study how changes in couples’ relative wages affect the division of childcare. Using a nationwide wage reform that raised pay in the female-dominated teaching profession, we find that closing 25% of the earnings gap between female teachers and their male spouses led to a 12% reduction in the childcare time gap. This result holds when we extend the analysis to major pay raises for women at the population level. Data support the mechanism that women reduce their childcare time when the spouse can step in by working more from home. Policies that address female pay can foster household equality if men have access to flexible work arrangements.
Read the WP "Women's labor market opportunities and equality in the household" here.
Outside options and the sharing of match-specific rents
2025.10.07
We show that workers use outside options to extract match-specific rents. Exploiting unique data on worker skills, we construct a measure of match quality based on the relationship between workers’ multidimensional skills and job-specific skill requirements. Focusing on job-to-job movers, we first demonstrate that match quality associated with the previous job has a stronger impact on current wages than current match quality. This finding strongly suggests that job-to-job movers use previous match quality as an outside option in negotiations with their current employer. Our second key finding relates to wages within ongoing matches. We show that an improvement of local labor market conditions increases the wage return to match quality. This finding is robust to an unusually detailed set of controls, including job-year fixed effects that account for heterogeneity in wage cyclicality across jobs. Outside offers, which are more frequent in tighter labor markets, thus allow incumbent workers to extract a larger share of match-specific surplus. Hence, rent-sharing is pro-cyclical, counter to standard wage-sharing assumptions used in most empirical reduced-form specifications and in canonical search models.
Read the WP "Outside options and the sharing of match-specific rents" here.
Origin, norms, and the motherhood penalty
2025.02.20
We present evidence that shared institutional and economic contexts may be at least as important as culturally rooted gender equality norms for the size of the motherhood penalty. Our study covers child migrants and children of immigrants in Sweden, and while the results point to a moderate but statistically robust negative association between source country gender equality and the labor market impact of motherhood, the overall picture is more one of similarity across highly diverse groups. All groups of mothers exhibit qualitatively comparable labor market trajectories following first childbirth, but penalties are somewhat greater among those descending from the most gender unequal societies.
Read the WP "Origin, norms and the motherhood penalty" here.