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.

The determinants of rising informality in Brazil : Evidence from gross worker flows

Abstract: This paper studies gross worker flows to explain the rising informality in Brazilian metropolitan labor markets from 1983 to 2002. This period covers two economic cycles, several stabilization plans, a far-reaching trade liberalization, and changes in labor legislation through the Constitutional reform of 1988. First, focusing on cyclical patterns, the authors confirm that for Brazil, the patterns of worker transitions between formality and informality correspond primarily to the job-to-job dynamics observed in the United States, and not to the traditional idea of the informal queuing for jobs in a segmented market. However, the analysis also confirms distinct cyclical patterns of job finding and separation rates that lead to the informal sector absorbing more labor during downturns. Second, focusing on secular movements in gross flows and the volatility of flows, the paper finds the rise in informality to be driven primarily by a reduction in job finding rates in the formal sector. A small fraction of this is driven by trade liberalization, and the remainder seems driven by rising labor costs and reduced flexibility arising from Constitutional reform.

Spillovers Through Backward Linkages from Multinationals: Measurement Matters!

Abstract: We argue that the measures of backward linkages used in recent papers on spillovers from multinational companies are potentially problematic, as they depend on a number of restrictive assumptions, namely that (i) multinationals use domestically produced inputs in the same proportion as imported inputs, (ii) multinationals have the same input sourcing behaviour as domestic firms, irrespective of their country of origin, and (iii) the demand for locally produced inputs by multinationals is proportional to their share of locally produced output. We discuss why these assumptions are likely to be violated in practice, and provide alternative measures that overcome these drawbacks. Our results, using plant level data for Ireland, show clearly that the choice of backward linkage measure and thus, the assumptions behind them, matters greatly in order to draw possible conclusions regarding the existence of FDI-related spillovers. Using the standard measure employed in the literature we fail to find robust evidence for spillovers through backward linkages. However, when we use alternative measures of backward linkages that relax assumptions (i)-(iii), we find robust evidence for positive FDI backward spillover effects.

What Makes an Entrepreneur

Abstract: Seeks to understand the impact of capital availability and psychological characteristics on one's decision to pursue self-employment. In analyzing the effect of capital availability, focus is placed on the impact that inheritance or gift has on the decision to become self-employed. This is done by studying the effects of earlier inheritances on the cross-section probability of being self-employed. A theoretical model is created to explain the liquidity constraints faced by those that are seeking to become self-employed. Data used in the first part of the analysis is from the National Child Development Survey and examines the respondents at ages 23 and 33. Results show a strong positive correlation between the size of the inheritance and the incidence of self-employment. Further analysis is done using data from the British Social Attitudes Survey and the National Survey of the Self-Employed. The findings in both of these surveys were that capital poses the greatest constraint on pursuing self-employment. Most small businesses were found to have been started with the individual's money or his family's money, not bank loans. In addition, there is support for the proposition that the self-employed are happier than those that are employees. As to psychological traits, the analysis shows that individuals who were anxious for acceptance as children were not likely to run their own business at age 33. (SRD)

Does child care availability play a role in maternal employment and children’s development? Evidence from Italy

Abstract: This paper investigates the effects of public child care availability in Italy in mothers’ working status and children’s scholastic achievements. We use a newly available dataset containing individual standardized test scores of pupils attending the second grade of primary school in 2009–2010 in conjunction with data on public child care availability. Our estimates indicate a positive and significant effects of child care availability on both mothers’ working status and children’s Language test scores. We find that a percentage change in public child care coverage increases mothers’ probability to work by 1.3 percentage points and children’s Language test scores by 0.85 percent of one standard deviation; we do not find any effect on Math test scores. Moreover, the impact of a percentage change in public child care on mothers’ employment and children’s Language test scores is greater in provinces where child care availability is more limited.

What Moves Capital to Transition Economies

Abstract: Between 1991 and 1999, capital flows to 25 transition economies in Europe and the former Soviet Union differed widely in terms of overall levels and the share and composition of private flows. With some exceptions (notably Russia), the main form of private inflows was foreign direct investment. Portfolio investment was volatile and concentrated in a handful of countries. Regressions show that direct investment can be well explained in terms of economic fundamentals, whereas the presence of a financial market infrastructure and a property-rights indicator are the only explanatory variables that seem to have had a robust effect on portfolio investment.