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Digital labor markets are structured around tasks and not around fixed- or long-term employment contracts. We study the consequences of the granularization of work for digital micro workers. To address this question, we combine interview data from active online micro workers and online data on open projects scraped from Amazon's Mechanical Turk platform to study how the digital micro workers choose which tasks they work on. We find evidence for preferential attachment: workers prefer to attach themselves to experienced employers who are known to offer high quality projects. In addition, workers also clearly prefer long series of repeatable tasks over one-off tasks, even when one-off tasks pay considerably more. We thus see a re-emergence of certain types of organizational structure.

I use novel high-quality survey data on firms' international sourcing activities combined with firm-level financial and linked employer-employee data to study the effect of services offshoring on wages and employment. To overcome the endogeneity related to reverse causality and omitted variables, I use microsynth, a variation of the synthetic control method specially developed for high-dimensional microdata. I find that offshoring firms pay higher wages for both high-skilled and low-skilled workers, and employ fewer FTE workers compared with a synthetic control, but these effects take several years to appear.

This report sheds light on the size and composition of the digital economy in Finland and its impact on the tax gap and tax system. No generally agreed definition of digital economy exists, and only a few prior studies have assessed the size of the digital economy quantitatively. We measured the size of the digital economy by the value added generated by digitally produced goods and services. We first replicated the analysis of the US Bureau of Economic Analysis (BEA) using Finnish data by assessing the value added of fully digital products. Secondly, we also took into account in our calculations the value added of partly digital products. Our analysis shows that the share of value added generated by the digital economy in Finland has grown at a relatively slow pace during the 2010s. Our calculations indicate that the digital economy comprised 10.9% of the GDP in Finland in 2017, or over EUR 21 billion euros. We further aimed at assessing the size of the corporate income tax (CIT), the value added tax (VAT) and the personal income tax (PIT) gaps generated by the digital economy in Finland. An attempt to make a full CIT gap analysis failed due to the unavailability of industry-level national accounts data. Data on the accrued VAT from the most recent years was not available but the observations from the earlier years did not reveal tax gaps. Our data collected via a survey targeted at digital freelance workers hints that, in general, Finnish digital freelancers comply with taxation rather well and no notable PIT tax gap is generated.

Information and communication technologies have long been predicted to make cities as hubs of economic organisation obsolete and spread economic opportunities to rural areas. However, the actual trend in the 21st century has been the opposite. Knowledge spillovers have fuelled urbanisation and pulled job-seekers into large cities, increasing the gap to deprived rural areas. We argue that new assemblages of technologies and social practices, so-called ’online labour platforms’, have recently started to counter this trend. By providing effective formal and informal mechanisms of enforcing cooperation, these platforms for project-based remote knowledge work enable users to hire and find work across distance. In analysing data from a leading online labour platform in more than 3,000 urban and rural counties in the United States, we find that rural workers made disproportionate use of the online labour market. Rural counties also supplied, on average, higher skilled online work than urban areas did. However, many of the most deprived regions of the country did not participate in the online labour market at all. Our findings highlight the potentials and limitations of such platforms for regional economic development.

We study the effects of a voluntary skill certification scheme in an online freelancing labour market. We show that obtaining skill certificates increases freelancers’ earnings. This effect is not driven by increased freelancer productivity but by decreased employer uncertainty. The increase in freelancer earnings is mostly realised through an increase in the value of the projects won rather than an increase in the number of projects won. Moreover, we find evidence for negative selection to completing skill certificates, which suggests that the freelancers who complete more skill certificates are in a more disadvantaged position in the labour market.

This thesis studies earnings differences and their dynamics empirically. It consists of an introductory chapter and three independent research papers. All of the three papers are done using Finnish registry data. Chapter two studies the evolution of income inequality from the end of 1980s until the year 2007. I present a statistical decomposition method, which is used to decompose earnings inequality into its permanent and transitory components and study their evolution through time. When the model is applied to Finnish earnings data, it turns out that the spread of earnings inequality over the observation period is driven by both permanent and transitory earnings component. It further turns out, that the earnings dynamics of men and women differ from one another considerably. Chapters three and four study earnings uncertainty within education groups. In chapter three, I compare earnings means and uncertainties among people who have completed a basic level education, secondary level education, lower and upper tertiary level education. I separate uncertainty related to education levels from individual unobserved heterogeneity by modelling selection into education levels with an ordered selection model. I find that education increases mean earnings and decreases earnings uncertainty. In addition, I find that the earnings uncertainties of men are higher than those of women in all levels of education. Chapter four compares the earnings uncertainties between university graduates from different fields of education. The fields are pooled into five fairly homogenous groups. These are: arts, law, business, engineering and natural sciences, and health. As in chapter three, I model the selection into a major to disentangle between uncertainty and heterogeneity, but the selection model is an unordered one. The main result of chapter four is that the differences in mean incomes between different majors are larger than the differences in uncertainties between majors. Taken together, the results of chapters three and four strongly suggest that education is a good investment; it increases earnings, and reduces earnings uncertainty. Väitöskirja tarkastelee empiirisesti tuloeroja ja niiden dynamiikkaa. Se koostuu johdannosta ja kolmesta itsenäisestä osatutkimuksesta, jotka kukin on tehty suomalaisella rekisteriaineistolla Luvussa kaksi tarkastelen tuloerojen kehittymistä 1980-luvun lopusta vuoteen 2007. Esittelen tilastollisen hajotelman, jolla erotetaan toisistaan pysyväistuloerot ja lyhytaikaiset tuloshokit. Kun mallia sovelletaan suomalaiseen tuloaineistoon, osoittautuu, että tuloerojen kasvu tarkasteluperiodilla johtuu sekä pysyväistuloerojen että tuloshokkien kasvusta. Lisäksi käy ilmi, että miesten ja naisten tuloprosessit ja dynamiikka eroavat toisistaan. Luvuissa kolme ja neljä tarkastelen tuloriskejä tietyn koulutusryhmän sisällä. Vertaan luvussa kolme perusasteen, toisen asteen sekä ylemmän ja alemman korkeakouluasteen suorittaneiden keskituloja ja tuloprosessien riskisyyttä. Pyrin mallintamaan valikoitumista koulutustasolle kuvaamalla koulutusvalintaa järjestetyn valinnan mallilla. Tällä tavoin pystyn erottamaan toisistaan koulutustasoon liittyvän epävarmuuden ja heterogeenisyyden eri koulutustasoille päätyneiden henkilöiden välillä. Osoittautuu, että korkeampi koulutus tuo mukanaan korkeammat keskitulot sekä pienemmät tuloriskit. Lisäksi miesten tuloprosessit ovat riskipitoisempia kuin naisten koulutustasosta riippumatta. Luvussa neljä verrataan eri korkeakoulutusaloilta valmistumisen keskituloja ja tuloriskejä toisiinsa. Koulutusalat on yhdistetty viiteen homogeeniseen luokkaan, jotka ovat humanistiset alat, lakialat, insinööri- ja luonnontieteet, kaupalliset alat, sekä lääketieteelliset alat. Kuten luvussa kolme, erotan toisistaan epävarmuuden ja havaitsemattoman heterogeenisyyden mallintamalla erikseen koulutusaloille valikoitumisen, mutta valikoitumismalli on ei-järjestetty. Luvun päätulos on, että erot keskituloissa eri korkeakoulutusalojen välillä vaikuttavat merkittävämmiltä kuin tuloriskit eri korkeakoulutusalojen välillä. Lukujen kolme ja neljä tulokset viittaavat voimakkaasti siihen, että koulutus on hyvä investointi; koulutus nostaa keskituloja ja laskee tuloepävarmuutta.

This paper estimates the monetary returns to different university majors and the risks related to them. The residuals from a Mincer-type income regression are decomposed into unobserved heterogeneity (known to the individual when making her education choice) and risk (unknown to the individual). The risk estimates are corrected for selection by applying the selection correction model of Lee (1983) and an instrument based on the local supply of education in different majors. The differences in risks between different majors are found to be mostly statistically insignificant but differences in returns to majors are larger and significant. Both, income uncertainty and mean returns are found to be larger for men than for women.

This paper studies the causal effect of education on income uncertainty using a broad measure of income which encompasses unemployment risk. To accomplish this, the variance of residuals from a Mincer-type income regression is decomposed into unobserved heterogeneity (known to the individual when making their educational choices) and uncertainty (unknown to the individual). The estimation is done using Finnish registry data. The marginal effect of having a secondary or a lower tertiary level education decreases income uncertainty. University level education is found to have a small positive marginal effect on income uncertainty. The effect of education on income uncertainty is roughly similar for men in comparison to women, but income uncertainty is larger for men than for women regardless of education. Contrary to some results from the U.S., the role of unobserved heterogeneity is found to be very small.

This study explores the short-run spillover effects of popular research papers. We consider the publicity of 'Male Organ and Economic Growth: Does Size Matter?' as an exogenous shock to economics discussion paper demand, a natural experiment of a sort. In particular, we analyze how the very substantial visibility influenced the downloads of Helsinki Center of Economic Research discussion papers. Difference in differences and regression discontinuity analysis are conducted to elicit the spillover patterns. This study finds that the spillover effect to average economics paper demand is positive and statistically significant. It seems that hit papers increase the exposure of previously less downloaded papers. We find that part of the spillover effect could be attributable to Internet search engines' influence on browsing behavior. Conforming to expected patterns, papers residing on the same web page as the hit paper evidence very significant increases in downloads which also supports the spillover thesis.

Only abstract. Paper copies of master’s theses are listed in the Helka database (http://www.helsinki.fi/helka). Electronic copies of master’s theses are either available as open access or only on thesis terminals in the Helsinki University Library. Vain tiivistelmä. Sidottujen gradujen saatavuuden voit tarkistaa Helka-tietokannasta (http://www.helsinki.fi/helka). Digitaaliset gradut voivat olla luettavissa avoimesti verkossa tai rajoitetusti kirjaston opinnäytekioskeilla. Endast sammandrag. Inbundna avhandlingar kan sökas i Helka-databasen (http://www.helsinki.fi/helka). Elektroniska kopior av avhandlingar finns antingen öppet på nätet eller endast tillgängliga i bibliotekets avhandlingsterminaler. Taloustieteellisen tutkimuksen keskeisimpiä tutkimuskohteita on yksittäisten poliittisten päätösten taloudellinen järkevyys. Sen sijaan harvemmin otetaan kantaa poliittisten päätösten tekijöiden, poliitikkojen, laatuun. Tässä tutkielmassa tarkastellaan kansalaisten ehdokkuuspäätöstä teoreettisesti ja empiirisesti. Lukujen 2 ja 3 teoreettisena analyysikehikkona ovat citizen-candidate –mallit, joissa kansalaiset valitsevat keskuudestaan poliitikot. Citizen-candidate –mallien keskeisiä rakennuspalikoita ovat politiikasta saatavat palkkiot, kansalaisten saamat työtulot politiikan ulkopuolelta, oletus kansalaisten kyvykkyyden jakautumisesta sekä signalointi. Osoittautuu, että jos kansalaiset tietävät jo ennen ehdokkuuspäätöstään, onko heillä vaalimenestyksen mahdollisuutta, on heikommilla (pienituloisemmilla) kansalaisilla suhteellinen etu vaaleissa. Tämä johtuu siitä, että pienituloiselle ehdokkaalle vaalivoitosta koituva hyöty on suurempi kuin suurituloiselle. Tällöin myös kampanjakustannusten laskeminen tai politiikasta saatavien palkkioiden nostaminen nostaa yksikäsitteisesti ehdokkaiden keskimääräistä kyvykkyyttä. Jos taas kampanjointi on informatiivista kyvykkyyden suhteen – eli jos vaalimenestyksen todennäköisyys on ehdokkaan kyvykkyyden kasvava funktio, on lähtötilanteesta riippuen mahdollista, että politiikasta saatavien palkkioiden nostaminen nostaa ehdokkaiden keskimääräistä kyvykkyyttä, laskee sitä tai on mahdollista, että ehdokkaiden keskimääräinen kyvykkyys pysyy ennallaan. Lisäksi osoittautuu, että koska istuva kabinetti vaikuttaa tulevien kabinettien palkkioihin, on mahdollista, että kabinettien kyvykkyydessä on polkuriippuvuutta; heikko kabinetti menneisyydessä voi aiheuttaa heikon kabinetin tulevaisuudessa. Puolueiden rooli on mahdollisesti hyvinvointia parantava, koska ne rajoittavat ehdokkaiden määrää ja pyrkivät valikoimaan halukkaista ehdokkaista parhaat virallisiksi ehdokkaikseen. Tutkielman neljännessä luvussa tarkastellaan edellisten lukujen teoreettisten käsitteiden avulla sitä, minkälaisessa tasapainossa suomalainen politiikka on. Aineistona on käytetty vuoden 2003 eduskuntavaalien ehdokkaiden saamia äänimääriä sekä ehdokkaiden sosioekonomista asemaa kuvaavia taustamuuttujia (ammatti, koulutus, ikä, sukupuoli). Luvussa esitellään ensin menetelmä, jolla äänimäärä normeerataan siten, että ehdokkaan äänimäärää verrataan muihin ehdokkaisiin samalla listalla. Osoittautuu, että ehdokkaan saama normeerattu äänimäärä korreloi positiivisesti sosioekonomisen aseman kanssa. Istuvat ehdokkaat saavat kuitenkin odotusarvoisesti huomattavasti enemmän ääniä, kuin kukaan haastaja. Mikäli sosioekonominen aseman avulla arvioitu kyvykkyys politiikan ulkopuolella ja kyvykkyys politiikassa korreloivat keskenään, viittaa tämä signaalin kohtuulliseen laadukkuuteen – kyvykkäämmät ehdokkaat saavat odotusarvoisesti enemmän ääniä kuin vähemmän kyvykkäät. Tärkeimmät käytetyt lähteet ovat: Caselli, F. – Morelli, M. (2004): Bad Politicians. Journal of Public Economics, 88, 759-782. Poutvaara P. – Takalo T. (2007): Candidate Quality. Journal of International Tax and Finance, 14, 7-27.

We investigate the effects of a voluntary microcredentialing scheme on an online freelancing labor market. Drawing on transaction-level data, we show that obtaining a microcredential increases workers’ earnings. This effect is not driven by increased worker productivity but by decreased employer uncertainty. The increase in worker earnings is realized through an increase in the value of the projects won rather than an increase in the number of projects. We also find that the effect of microcredentials is lower for more experienced workers, which suggests that signaling by microcredentials and other forms of verified information are partial substitutes.