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.
Gender wage discrimination
Does the extent of competition in labor markets explain why female workers are paid less than men?
There are pronounced and persistent wage differences between men and women in all parts of the world. A significant element of these wage disparities can be attributed to differences in worker and workplace characteristics, which are likely to mirror differences in worker productivity. However, a large part of these differences remains unexplained, and it is common to attribute them to discrimination by the employer that is rooted in prejudice against female workers. Yet recent empirical evidence suggests that, to a large extent, the gaps reflect “monopsonistic” wage discrimination—that is, employers exploiting their wage-setting power over women—rather than any sort of prejudice.
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Unemployment benefits and unemployment Updated
The challenge of unemployment benefits is to protect workers while minimizing undesirable side effects
Robert MoffittWonsik Ko , June 2024All developed economies have unemployment benefit programs to protect workers against major income losses during spells of unemployment. By enabling unemployed workers to meet basic consumption needs, the programs protect workers from having to sell their assets or accept jobs below their qualifications. The programs also help stabilize the economy during recessions. If benefits are too generous, however, the programs can lengthen unemployment and raise the unemployment rate. The policy challenge is to protect workers while minimizing undesirable side effects.MoreLess -
The effects of public sector employment on the economy Updated
The size and wage level of the public sector affect overall employment volatility and the economy
Vincenzo CaponiSimone Nobili , June 2024Public sector jobs are established by governments to directly provide goods and services. Governments may also choose to regulate the size of the public sector in order to stabilize targeted national employment levels. However, economic research suggests that these effects are uncertain and critically depend on how public wages are determined. Rigid public sector wages lead to perverse effects on private employment, while flexible public wages lead to a stabilizing effect. Public employment also has important productivity and redistributive effects.MoreLess -
Public or private job placement services — Are private ones more effective? Updated
Outsourcing to the private sector can only be effective if the service quality can be contracted on
Gesine Stephan , May 2024Expenditures on job placement and related services make up a substantial share of many countries’ gross domestic products. Contracting out to private providers is often proposed as a cost-efficient alternative to the state provision of placement services. However, the responsible state agency has to be able and willing to design and monitor sufficiently complete contracts to ensure that the private contractors deliver the desired service quality. None of the empirical evidence indicates that contracting-out is necessarily more effective or more cost-efficient than public employment services.MoreLess -
Entrepreneurship for the poor in developing countries Updated
Well-designed entrepreneurship programs show promise for improving earnings and livelihoods of poor workers
Yoonyoung Cho , May 2024Can entrepreneurship programs be successful labor market policies for the poor? A large share of workers in developing countries are self-employed (mostly own-account workers without paid employees, often interchangeably used as micro entrepreneurs). Their share among all workers has not changed much over the past two decades in the developing world. Entrepreneurship programs provide access to finance (or assets) and advisory and networking services as well as business training with the aim of boosting workers’ earnings and reducing poverty. Programs vary in design, which can affect their impact on outcomes. Recent studies have identified some promising approaches that are yielding positive results, such as combining training and financial support.MoreLess
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Jul 15, 2024
Parents tend to steer sons towards traditional careers
Swiss study finds gender bias in vocational advice -
Jul 01, 2024
Why are wages often set at round numbers?
New study reveals "coarse wage-setting": Firms use simple heuristics when uncertain about optimal salaries -
Jun 26, 2024
Gender differences in graduate degree choices affect early-career earnings
Female graduates are less likely to do further study in STEM fields
How political connections shape firm outcomes in Germany
Escaping the debt trap: Long-run effects of individual debt relief
Empowering local talent