The firm gains $1.10 from increased productivity for a $1 increase in wages.
…we estimate that over half of the turnover reductions and productivity increases arise from behavioral responses as opposed to compositional differences. These aggregate patterns mask considerable heterogeneity by gender: women’s productivity responds more and their turnover responds less to wage changes than men’s, which can lead to occupational pay gaps.
That is from a new paper by Natalia Emanuel, a job market candidate from Harvard University. The paper is co-authored with Emma Harrington (also on the job market), here is their other paper on the efficiencies and inefficiencies of working from home.
She has work in progress on school closures and family violence: “After three-day weekends and snow-days, reports of family violence increase. I further show that these effects are concentrated in counties with low median income.”