Showing papers in "The IZA World of Labor in 2018"
TL;DR: The relationship between female labor force participation and economic development is far more complex than often portrayed in both the academic literature and policy debates as discussed by the authors, and beyond participation rates, policymakers need to focus on improving women's access to quality employment.
Abstract: The relationship between female labor force participation and economic development is far more complex than often portrayed in both the academic literature and policy debates. Due to various economic and social factors, such as the pattern of growth, education attainment, and social norms, trends in female labor force participation do not conform consistently with the notion of a U-shaped relationship with GDP. Beyond participation rates, policymakers need to focus on improving women’s access to quality employment.
41 citations
TL;DR: This paper found that the share of high school and tertiary graduates who accept jobs suited for lower education levels (skills mismatch) is high in many countries and the reason is the low level of work-related competences held by young people.
Abstract: In a time of ever increasing educational attainment levels, young people still experience lower employment, income, and participation rates as well as higher unemployment compared to adults. The share of high school and tertiary graduates who accept jobs suited for lower education levels (skills mismatch) is high in many countries. The reason is the low level of work-related competences held by young people. Generating these competences should become a top priority for modern education systems. In addition, labor markets should be more flexible to allow earlier labor market entrance, though they should be wary of becoming over-reliant on the use of temporary contracts. In Germany, young people are no worse off than adults in the labor market, while in southern and eastern European countries, they fare three to four times worse. In Anglo-Saxon countries, both youth and adults fare better than elsewhere, but their unemployment rates fluctuate more over the business cycle. The arrangements developed in each country to help young people gain work experience explain the striking differences in their outcomes. A better understanding of what drives these differences in labor market performance of young workers is essential for policies to be effective.
40 citations
TL;DR: This article argued that workers displaced by trade cannot change jobs costlessly, and by reshaping skill demands, trade integration is likely to be permanently harmful to some workers and permanently beneficial to others.
Abstract: Economists have long recognized that free trade has the potential to raise countries’ living standards. But what applies to a country as a whole need not apply to all its citizens. Workers displaced by trade cannot change jobs costlessly, and by reshaping skill demands, trade integration is likely to be permanently harmful to some workers and permanently beneficial to others. The “China Shock”—denoting China’s rapid market integration in the 1990s and its accession to the World Trade Organization in 2001—has given new, unwelcome empirical relevance to these theoretical insights.
25 citations
TL;DR: Researchers and policymakers should pay close attention to recent developments in machine learning techniques if they want to fully take advantage of these new sources of Big Data.
Abstract: Big Data refers to data sets of much larger size, higher frequency, and often more personalized information Examples include data collected by smart sensors in homes or aggregation of tweets on Twitter In small data sets, traditional econometric methods tend to outperform more complex techniques In large data sets, however, machine learning methods shine New analytic approaches are needed to make the most of Big Data in economics Researchers and policymakers should thus pay close attention to recent developments in machine learning techniques if they want to fully take advantage of these new sources of Big Data
17 citations
TL;DR: In the early 2000s, Poland's unemployment rate reached 20%. But that is now a distant memory, as employment has increased noticeably and the unemployment rate has dropped to 5%. However, most of the net job creation has consisted of temporary jobs.
Abstract: In the early 2000s, Poland’s unemployment rate reached 20%. That is now a distant memory, as employment has increased noticeably and the unemployment rate has dropped to 5%. However, most of the net job creation has consisted of temporary jobs. Labor market segmentation has become an issue and an important factor behind wage inequality. Labor force participation of older workers increased after reforms aimed at prolonging careers, but the recent reversal of the statutory retirement age leaves Poland vulnerable to the effects of population aging.
16 citations
TL;DR: The use of anonymous job applications to combat hiring discrimination is gaining attention and interest as mentioned in this paper. But although this approach can achieve its primary aims, there are also some cautions to consider.
Abstract: The use of anonymous job applications to combat hiring discrimination is gaining attention and interest. Results from a number of field experiments in European countries (France, Germany, the Netherlands, and Sweden are considered here) shed light on their potential to reduce some of the discriminatory barriers to hiring for minority and other disadvantaged groups. But although this approach can achieve its primary aims, there are also some cautions to consider. Anonymous job applications have the potential to remove or reduce some discriminatory hiring barriers facing applicants from minority and other disadvantaged groups. When implemented effectively, anonymous job applications level the playing field in access to jobs by shifting the focus toward skills and qualifications. Anonymous job applications should not, however, be regarded as a universal remedy that is applicable in any context or that can prevent any form of discrimination.
13 citations
12 citations
TL;DR: The Netherlands is an example of a highly institutionalized labor market that places considerable attention on equity concerns as discussed by the authors, where the government and social partners seek to adjust labor market arrangements to meet the challenges of increased international competition, stronger claims on labor market positions by women and the growing population share of immigrants and their children.
Abstract: The Netherlands is an example of a highly institutionalized labor market that places considerable attention on equity concerns. The government and social partners (unions and industry associations) seek to adjust labor market arrangements to meet the challenges of increased international competition, stronger claims on labor market positions by women, and the growing population share of immigrants and their children. The most notable developments since 2001 are the significant rise in part-time and flexible work arrangements as well as rising inequalities.
11 citations
TL;DR: The authors measured employment and unemployment in real labor markets and policy agendas and found that individual experiences in each state may vary considerably, highlighting the importance of how each employed or unemployed person is weighted in statistical indices.
Abstract: Measuring employment and unemployment is essential for economic policy. Internationally agreed measures (e.g. headcount employment and unemployment rates based on standard definitions) enhance comparability across time and space, but changes in real labor markets and policy agendas challenge these traditional conventions. Boundaries between different labor market states are blurred, complicating identification. Individual experiences in each state may vary considerably, highlighting the importance of how each employed or unemployed person is weighted in statistical indices.
9 citations
TL;DR: Depending on the relative importance of the different mechanisms, retirement may either improve or cause a deterioration of retirees’ health, or eventually have no effect on it at all.
Abstract: Retirement offers the opportunity to give up potentially risky, unhealthy, and/or stressful work, which is expected to foster improvements in retirees’ health. However, retirement also bears the risk that retirees suffer from the loss of daily routines, physical and/or mental activity, a sense of identity and purpose, and social interactions, which may lead them to adopt unhealthy behaviors. Depending on the relative importance of the different mechanisms, retirement may either improve or cause a deterioration of retirees’ health, or eventually have no effect on it at all.
8 citations
TL;DR: The Indian economy entered an ongoing process of trade liberalization, domestic deregulation, and privatization of public sector units in 1991 and since then, per capita output has increased significantly, while the overall unemployment rate has remained low as mentioned in this paper.
Abstract: The Indian economy entered an ongoing process of trade liberalization, domestic deregulation, and privatization of public sector units in 1991. Since then, per capita output has increased significantly, while the overall unemployment rate has remained low. However, labor force participation rates have fallen sharply, especially for women. In addition, youth unemployment remains stubbornly high, an overwhelming proportion of the labor force continues to work in the informal sector, and there is little evidence of a sustained rise in wages for either unskilled rural or factory workers.
TL;DR: The economic crisis in the early 1990s brought about a dramatic increase in unemployment and a similar decrease in labor force participation in Sweden, and the Swedish labor market stabilized at around 6-7% as discussed by the authors.
Abstract: The economic crisis in the early 1990s brought about a dramatic increase in unemployment and a similar decrease in labor force participation. Unemployment declined afterwards, but stabilized at around 6–7%—more than twice as high as before the crisis. Today, the unemployment rate is lower than the EU average, though Sweden no longer stands out in this respect. The 2008 financial crisis had small effects on the Swedish labor market. Employment in industry declined sharply and then remained stagnant, but employment in the service sectors has continued to grow steadily.
TL;DR: In this paper, the strengths of a range of anti-discrimination policies while also addressing their weaknesses are discussed. And the authors suggest that policymakers should thoroughly address prejudice (taste based discrimination), stereotypes (statistical discrimination), cognitive biases, and attention-based discrimination.
Abstract: Discrimination is a complex, multi-factor phenomenon. Evidence shows widespread discrimination on various grounds, including ethnic origin, sexual orientation, gender identity, religion or beliefs, disability, being over 55 years old, or being a woman. Combating discrimination requires combining the strengths of a range of anti-discrimination policies while also addressing their weaknesses. In particular, policymakers should thoroughly address prejudice (taste-based discrimination), stereotypes (statistical discrimination), cognitive biases, and attention-based discrimination.
TL;DR: This paper found that central exit exams constitute an important feature of a school system's institutional framework, which can hold students, teachers, schools, and administrators accountable for student outcomes and are related to better student achievement, favorable labor market outcomes, and higher economic growth.
Abstract: Reaching the policy goal of improving student achievement by adding resources to the school system has often proven elusive. By contrast, ample evidence indicates that central exit exams constitute an important feature of a school system’s institutional framework, which can hold students, teachers, schools, and administrators accountable for student outcomes. While critics point to issues such as teaching test-only skills, which may leave students ill-prepared for the real world, the evidence does not bear this out. Overall, central exams are related to better student achievement, favorable labor market outcomes, and higher economic growth.
TL;DR: The authors in this article pointed out that this developmental path is now reaching its limits with the exhaustion of the available skilled workforce, limited investments in upgrading and research, and persistent regional inequalities.
Abstract: Central Europe has experienced one of the most impressive growth and convergence stories of recent times. In particular, this has been achieved on the back of foreign-owned, capital-intensive manufacturing production in the automotive sector. With large domestic supplier networks and high skill intensity, the presence of complex industry yields many economic benefits. However, this developmental path is now reaching its limits with the exhaustion of the available skilled workforce, limited investments in upgrading and research, and persistent regional inequalities.
TL;DR: The Belgian labor market is a strongly segmented labor market, first and foremost in an astounding north-south regional (linguistic) dimension as discussed by the authors, and this extreme heterogeneity, along with several demographic challenges should serve as a warning for the future.
Abstract: Might the Belgian labor market be included in the gallery of “Belgian surrealism”? At first sight, Belgium with its 11 million inhabitants has withstood the Great Recession and the euro area debt crisis relatively well, quickly getting back on track toward growth and employment, apparently without rising earnings inequality. But if one digs a little deeper, Belgium appears to be a strongly segmented labor market, first and foremost in an astounding north–south regional (linguistic) dimension. This extreme heterogeneity, along with several demographic challenges, should serve as a warning for the future.
TL;DR: The authors found that older workers experienced a sharp decline in employment rates and a rise in unemployment around the time of the global financial crisis and there has been a compression of earnings differentials by gender as well as by skill.
Abstract: New Zealand is a small open economy, with large international labor flows and skilled immigrants. Since 2000, employment growth has kept pace with strong migration-related population growth. While overall employment rates have remained relatively stable, they have increased substantially for older workers. In contrast, younger workers as well as the Maori and Pasifika ethnic groups experienced a sharp decline in employment rates and a rise in unemployment around the time of the global financial crisis. Wage gains have been modest and there has been a compression of earnings differentials by gender as well as by skill.
Journal Article•
TL;DR: The Netherlands is an example of a highly institutionalized labor market that places considerable attention on equity concerns as mentioned in this paper, where the government and social partners seek to adjust labor market arrangements to meet the challenges of increased international competition, stronger claims on labor market positions by women and the growing population share of immigrants and their children.
Abstract: The Netherlands is an example of a highly institutionalized labor market that places considerable attention on equity concerns. The government and social partners (unions and industry associations) seek to adjust labor market arrangements to meet the challenges of increased international competition, stronger claims on labor market positions by women, and the growing population share of immigrants and their children. The most notable developments since 2001 are the significant rise in part-time and flexible work arrangements as well as rising inequalities.
TL;DR: Following a decline in employment and participation rates during the 1980s and 1990s, Israel managed to reverse these trends during the last 15 years, which was accompanied by a substantial decrease in unemployment as mentioned in this paper.
Abstract: Following a decline in employment and participation rates during the 1980s and 1990s, Israel managed to reverse these trends during the last 15 years. This was accompanied by a substantial decrease in unemployment. New labor force participants are mostly from the low end of the education distribution, and many are relatively old. They entered the labor force in response to cuts in welfare payments and increases in the mandatory retirement age. Net household income for all population groups has increased due to growth in labor income; however, inequality between households has increased.
TL;DR: In Ireland, outward migration re-emerged as a safety valve for the Irish economy, helping to moderate impacts on unemployment via a reduction in overall labor supply as mentioned in this paper. But, as the crisis deepened, long-term unemployment escalated, creating significant policy challenges.
Abstract: Ireland was hit particularly hard by the global financial crisis, with severe impacts on the labor market. The unemployment rate increased dramatically, and the labor force participation rate declined by four percentage points between 2007 and 2012. Outward migration re-emerged as a safety valve for the Irish economy, helping to moderate impacts on unemployment via a reduction in overall labor supply. As the crisis deepened, long-term unemployment escalated, creating significant policy challenges. Overall unemployment has been dropping rapidly since 2013, but remains above its pre-crisis level.
TL;DR: There are more informal workers than formal workers across the globe, and yet there remains confusion as to what makes workers or firms informal and how to measure the extent of it as mentioned in this paper.
Abstract: There are more informal workers than formal workers across the globe, and yet there remains confusion as to what makes workers or firms informal and how to measure the extent of it. Informal work and informal economic activities imply large efficiency and welfare losses, in terms of low productivity, low earnings, sub-standard working conditions, and lack of social insurance coverage. Rather than quibbling over definitions and measures of informality, it is crucial for policymakers to address these correlates of informality in order to mitigate the negative efficiency and welfare effects.
TL;DR: Li et al. as mentioned in this paper showed that rural migrants have low-paying and undesirable jobs in urban labor markets, which points to inefficient labor allocation and discrimination that may continue to impede rural-urban migration.
Abstract: China experienced significant economic progress over the past few decades with an annual average GDP growth of approximately 10%. Population expansion has certainly been a contributing factor, but that is now changing as China rapidly ages. Rural migrants are set to play a key role in compensating for future labor shortages, but inequality is a major issue. Evidence shows that rural migrants have low-paying and undesirable jobs in urban labor markets, which points to inefficient labor allocation and discrimination that may continue to impede rural–urban migration.
TL;DR: This paper found that the country-level distributions of productivity and quality of management are strikingly similar, suggesting that management practices may play a key role in the determination of worker and firm productivity.
Abstract: Productivity differences across firms and countries are surprisingly large and persistent. Recent research reveals that the country-level distributions of productivity and quality of management are strikingly similar, suggesting that management practices may play a key role in the determination of worker and firm productivity. Understanding the causal impacts of these practices on productivity and the effectiveness of various management interventions is thus of primary policy interest.
TL;DR: The salarío mínimo más alto puede desalentar a las empresas for contratar a trabajadores de bajos salarios and cualificación a los que se trata de ayudar con el salario mínimos as mentioned in this paper.
Abstract: Los posibles beneficios de un salario mínimo más alto derivan de salarios más altos para los trabajadores afectados, algunos de los cuales pertenecen a familias pobres o de bajos ingresos. La posible desventaja es que un salario mínimo más alto puede desalentar a las empresas para contratar a los trabajadores de bajos salarios y cualificación a los que se trata de ayudar con el salario mínimo. Si el salario mínimo reduce la contratación de trabajadores poco cualificados, no es un ‘almuerzo gratis’ con el que ayudar a familias pobres y de bajos ingresos, sino que supone beneficios para algunos y costes para otros. Las investigaciones no coinciden, pero especialmente en los EE. UU., donde sugieren que el salario mínimo reduce los puestos de trabajo disponibles para trabajadores poco cualificados.
TL;DR: One-company towns typically have high concentrations of employment that normally provide much of the funding for local services, and this combination has proven problematic when faced with shocks that force restructuring or even closure as discussed by the authors.
Abstract: One-company towns are a relatively rare phenomenon. Mostly created in locations that are difficult to access, due to their association with industries such as mining, they have been a marked feature of the former planned economies. One-company towns typically have high concentrations of employment that normally provide much of the funding for local services. This combination has proven problematic when faced with shocks that force restructuring or even closure. Specific policies for the redeployment of labor and funding of services need to be in place instead of subsidies simply aimed at averting job losses.
TL;DR: Local dialects, shaped over centuries, provide a unique opportunity to measure these barriers as discussed by the authors, and they also act as natural limits to the degree of integration of a labor market, and they cannot (and perhaps should not) be easily affected by policy.
Abstract: Countries are not perfectly integrated market areas. Even if institutional differences are much smaller within than between countries, there are persistent local cultural differences. These differences act as barriers that reduce economic exchange: bilateral migration, trade, and knowledge diffusion flows are smaller, and individuals discriminate against unfamiliar dialects. They also act as natural limits to the degree of integration of a labor market, and they cannot (and perhaps should not) be easily affected by policy. Local dialects, shaped over centuries, provide a unique opportunity to measure these barriers.
TL;DR: Finland's population is aging rapidly by international comparison The shrinking working-age population means that the burden of increasing pension and health care expenditures is placed on a smaller group of employed workers, while the scope for economic growth through increased labor input diminishes as discussed by the authors.
Abstract: Finland’s population is aging rapidly by international comparison The shrinking working-age population means that the burden of increasing pension and health care expenditures is placed on a smaller group of employed workers, while the scope for economic growth through increased labor input diminishes Fiscal sustainability of the welfare state calls for a high employment rate among people of working age Recent increases in employment among older groups contribute favorably to public finances, but high overall unemployment and a large share of the long-term unemployed are serious concerns
TL;DR: The macrodatos hacen referencia a conjuntos de datos de mayor tamaño, mayor frecuencia and, a menudo, with información más personalizada as mentioned in this paper.
Abstract: Los macrodatos hacen referencia a conjuntos de datos de mayor tamaño, mayor frecuencia y, a menudo, con información más personalizada. Algunos ejemplos son los datos recabados por sensores inteligentes en los hogares o la agregación de tuits en Twitter. En conjuntos de datos pequeños, los métodos econométricos tradicionales tienden a superar a las técnicas más complejas. En conjuntos de datos grandes, destacan los métodos de aprendizaje automático. Para sacar el mayor partido a los macrodatos en economía, se necesitan nuevos enfoques analíticos. Los investigadores y responsables de políticas deben prestar atención a los recientes desarrollos en técnicas de aprendizaje automático si quieren aprovechar al máximo estas nuevas fuentes de macrodatos.
TL;DR: The authors pointed out that more university graduates in this context could exacerbate unemployment, underemployment, and overeducation of professionals, and suggested that governments should regulate the quantity or quality of university programs, depending on the specific combination of factors in each country.
Abstract: As the number of secondary school graduates rises, many developing countries expand the supply of public and private universities or face pressure to do so. However, several factors point to the need for caution, including weak job markets, low-quality university programs, and job–education mismatches. More university graduates in this context could exacerbate unemployment, underemployment, and overeducation of professionals. Whether governments should regulate the quantity or quality of university programs, however, depends on the specific combination of factors in each country.