Institute for the Study of Labor

About: Institute for the Study of Labor is a nonprofit organization based out in Bonn, Germany. It is known for research contribution in the topics: Wage & Unemployment. The organization has 2039 authors who have published 13475 publications receiving 439376 citations.

What works and for whom: a review of OECD countries' experiences with active labour market policies

Abstract: High and persistent unemployment has been a major blot on the economic and social record of most OECD countries since the early 1970s: the OECD average standardised unemployment rate rose from an estimated 3 per cent in 1973 to a peak of 8 per cent in 1993 before falling back to 6.4 per cent in 2000. In response to growing political concerns about the seemingly inexorable rise in unemployment, various policy blueprints were developed in the 1990s to improve labour market performance on a durable basis. Prime examples include the OECD Jobs Strategy launched in 1994 and the EU Employment Guidelines which were launched in 1997 following the Amsterdam summit. These policy blueprints assign an important role to active labour market policies. But this emphasis begs the obvious question: what is the potential contribution which active labour market policies can make as part of a strategy to combat high and persistent unemployment? In order to answer this question, it is vital to know what works among active policies and f or whom. The OECD Secretariat has been working intensively on these questions in recent years and this paper summarises the main results of our work to date. The structure of the paper is as follows. Section 1 provides some factual background on public spending on labour market policies in OECD countries over the period 1985-2000. The bulk of the paper summarises the main results of on‑going OECD research into the effectiveness of active labour market policies. This review mainly exploits two sources: (i) the recent literature on the evaluation of active labour market programme (Section 2); and (ii) in-depth country reviews and analytical studies which the OECD has conducted over the past decade on the interactions between active and passive labour market policies and the role of the public employment service (Section 3). The final section draws some conclusions.

Improving Nurse Retention in the National Health Service in England: The Impact of Job Satisfaction on Intentions to Quit

Abstract: In recent years the British National Health Service (NHS) has experienced an acute shortage of qualified nurses. This has placed issues of recruitment and retention in the profession high on the political agenda. In this Paper, we investigate the determinants of job satisfaction for nurses and establish the importance of job satisfaction in determining nurses' intentions to quit the NHS. We find that nurses who report overall dissatisfaction with their jobs have a 65% higher probability of intending to quit than those reporting to be satisfied. However, dissatisfaction with promotion and training opportunities are found to have a stronger impact than workload or pay. Recent policies, which focus heavily on improving the pay of all NHS nurses, will have only limited success unless they are accompanied by improved promotion and training opportunities. Better retention will, in turn, lead to reduced workload.

Accountability and Corruption: Political Institutions Matter

Abstract: The results of a cross-country empirical analysis suggest that political institutions are extremely important in determining the prevalence of corruption: democracy, parliamentary systems, political stability, and freedom of the press are all associated with lower corruption. Using a cross-country panel, Lederman, Loayza, and Soares examine the determinants of corruption, paying particular attention to political institutions that increase political accountability. Previous empirical studies have not analyzed the role of political institutions, even though both the political science and the theoretical economics literature have indicated their importance in determining corruption. The main theoretical hypothesis guiding the authorsi empirical investigation is that political institutions affect corruption through two channels: political accountability and the structure of the provision of public goods. The results suggest that political institutions are extremely important in determining the prevalence of corruption: democracy, parliamentary systems, political stability, and freedom of the press are all associated with lower corruption. In addition, the authors show that common findings of the earlier empirical literature on the determinants of corruption related to openness and legal traditionodo not hold once political variables are taken into account. This paper - a product of the Office of the Chief Economist, Latin America and the Caribbean Region - is part of a larger effort to conduct research on pressing policy issues in the region. The authors may be contacted at dlederman@worldbank.org or nloayza@worldbank.org.

Using Maimonides' Rule to Estimate the Effect of Class Size on Student Achievement

Abstract: The effect of class size on student achievement has long been of concern to educators, parents, and scholars. In Israeli public schools today, class size is partly determined using a rule proposed by Maimonides in the 12th century. This rule induces a nonlinear and non-monotonic relationship between enroll- ment size and class size. We use this relationship to construct instrumental variables estimates of the effect of class size on the test scores of Israeli 4th and 5th graders in 1991 and 3rd graders in 1992. Because the up-and-down pattern in class size induced by Maimonides' rule matches a similar pattern in test scores, the rule provides a credible source of exogenous variation for investigation of the causal effect of class size on student achievement. Our use of Maimonides' rule can be viewed as an application of Campbell's (1969) regression-discontinuity design to the class size question. The results of this application show that reductions in class size induce a significant increase in reading and math scores for 5th graders and a smaller increase in reading scores for 4th graders. In contrast, there is little evidence of any association between class size and the test scores of 3rd graders, although this finding may result from problems with the 1992 wave of the testing program. The estimates also suggest that the gains from small classes are largest for students from disadvantaged backgrounds. Besides being of metho- dological interest and providing new evidence on the class size question, these findings are of immediate policy interest in Israel where legislation to reduce the maximum class size is pending.

The Effect of Age at School Entry on Educational Attainment: An Application of Instrumental Variables with Moments from Two Samples

Abstract: This paper tests the hypothesis that compulsory school attendance laws, which typically require school attendance until a specified birthday, induce a relationship between the years of schooling and age at school entry. Variation in school start age created by children's date of birth provides a natural experiment for estimation of the effect of age at school entry. Because no large data set contains information on both age at school entry and educational attainment, we use an Instrumental Variables (IV) estimator with data derived from the 1960 and 1980 Censuses to test the age-at-entry/compulsory schooling model. In most IV applications, the two covariance matrices that form the estimator are constructed from the same sample. We use a method of moments framework to discuss IV estimators that combine moments from different data sets. In our application, quarter of birth dummies are the instrumental variables used to link the 1960 Census, from which age at school entry can be derived for one cohort of students, to the 1980 Census, which contains educational attainment for the same cohort of students. The results suggest that roughly 10 percent of students were constrained to stay in school by compulsory schooling laws.