Evidence-based policy making
IZA World of Labor is an online platform that provides policy analysts, journalists, academics and society generally with relevant and concise information on labor market issues. Based on the latest research, it provides current thinking on labor markets worldwide in a clear and accessible style. IZA World of Labor aims to support evidence-based policy making and increase awareness of labor market issues, including current concerns like the impact of Covid-19, and longer-term problems like inequality.
Maximum likelihood and economic modeling
Maximum likelihood is a general and flexible method to estimate the parameters of models in labor economics
Most of the data available to economists is observational rather than the outcome of natural or quasi experiments. This complicates analysis because it is common for observationally distinct individuals to exhibit similar responses to a given environment and for observationally identical individuals to respond differently to similar incentives. In such situations, using maximum likelihood methods to fit an economic model can provide a general approach to describing the observed data, whatever its nature. The predictions obtained from a fitted model provide crucial information about the distributional outcomes of economic policies.
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Machine learning for causal inference in economics
Discover how machine learning can help to uncover causal insights from economic data to guide better informed policy decisions.
Anthony Strittmatter , April 2025Machine learning (ML) improves economic policy analysis by addressing the complexity of modern data. It complements traditional econometric methods by handling numerous control variables, managing interactions and non-linearities flexibly, and uncovering nuanced differential causal effects. However, careful validation and awareness of limitations such as risk of bias, transparency issues, and data requirements are essential for informed policy recommendations.MoreLess -
Environmental regulations and business decisions Updated
Environmental regulations impose costs on firms, affecting productivity and location but providing significant health benefits
Wayne B. GrayRon Shadbegian , April 2025Environmental regulations raise production costs at regulated firms, though in most cases the costs are only a small fraction of a firm’s total costs. Productivity tends to fall, and firms may shift new investment and production to locations with less stringent regulation. However, environmental regulations have had enormous benefits in terms of lives saved and illnesses averted, especially through reductions in airborne particulates. The potential health gains may be even greater in developing countries, where pollution levels are high. The benefits to society from environmental regulation hence appear to be much larger than the costs of compliance.MoreLess -
Innovation and employment in the era of artificial intelligence Updated
In the face of AI revolution, concerns about possible technological unemployment should be aware of the complex and mixed employment impacts of technological change.
Marco VivarelliGuillermo Arenas Díaz , March 2025The relationship between technology and employment has always been a source of concern, at least since the first industrial revolution. However, while process innovation can be job-destroying (provided that its direct labor-saving effect is not compensated through market mechanisms), product innovation can imply the emergence of new firms, new sectors, and thus new jobs (provided that its welfare effect dominates the crowding out of old products). Nowadays, the topic is even more relevant because the world economy is undergoing a new technological revolution centred on automation and the diffusion of Artificial Intelligence (AI).MoreLess -
Hiring discrimination across vulnerable groups
Discrimination in hiring based on ethnicity or gender is widely debated but appears in fact less severe than discrimination based on disability, appearance, or age
Over the past decades, academics worldwide have conducted experiments with fictitious job applications to measure discrimination in hiring. This discrimination leads to underutilization of labor market potential and higher unemployment rates for individuals from vulnerable groups. Collectively, the insights from the published research suggest that three groups face more discrimination than ethnic minorities: people with disabilities, less physically attractive people, and older people. The discrimination found in Western economies generally persists across countries and is stable over time, although some variation exists.
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Mar 27, 2025
How do future elites view inequality?
Study reveals Ivy League MBA students implement more unequal distributions than average Americans -
Mar 14, 2025
Would you read a story written by a machine?
Human authorship may matter less to you than you think -
Feb 24, 2025
Strategic Shift at DPS: Implications for IZA
Statement released by the Deutsche Post Foundation -
Feb 17, 2025
Award-winning research on the labor market impact of artificial intelligence
IRPPI Award honors the best IZA Discussion Paper on an AI-related topic published in 2024
When protests normalize intolerance: The hidden costs of far-right demonstrations
Planning for succession in family businesses
Can your doctor save you?