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.

featured article

Trade and labor markets: Lessons from China’s rise

The China Shock has challenged economists’ benign view of how trade integration affects labor markets in developed countries

David H. Autor

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.

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  • Measuring income inequality

    Summary measures of inequality differ from one another and give different pictures of the evolution of economic inequality over time

    Ija Trapeznikova, July 2019
    Economists use various metrics for measuring income inequality. Here, the most commonly used measures—the Lorenz curve, the Gini coefficient, decile ratios, the Palma ratio, and the Theil index—are discussed in relation to their benefits and limitations. Equally important is the choice of what to measure: pre-tax and after-tax income, consumption, and wealth are useful indicators; and different sources of income such as wages, capital gains, taxes, and benefits can be examined. Understanding the dimensions of economic inequality is a key first step toward choosing the right policies to address it.
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  • Sexual orientation and labor market outcomes Updated

    Sexual orientation seems to affect job access and satisfaction, earning prospects, and interaction with colleagues

    Nick Drydakis, July 2019
    Studies from countries with laws against discrimination on the basis of sexual orientation suggest that gay and lesbian employees report more incidents of harassment and are more likely to report experiencing unfair treatment in the labor market than are heterosexual employees. Both gay men and lesbians tend to be less satisfied with their jobs than their heterosexual counterparts. Gay men are found to earn less than comparably skilled and experienced heterosexual men. For lesbians, the patterns are ambiguous: in some countries they have been found to earn less than their heterosexual counterparts, while in others they earn the same or more.
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  • The importance and challenges of measuring work hours Updated

    Measuring work hours correctly is important, but different surveys can tell different stories

    Work hours are key components in estimating productivity growth and hourly wages as well as being a useful cyclical indicator in their own right, so measuring them correctly is important. The US Bureau of Labor Statistics (BLS) collects data on work hours in several surveys and publishes four widely used series that measure average weekly hours. The series tell different stories about average weekly hours and trends in those hours but qualitatively similar stories about the cyclical behavior of work hours. The research summarized here explains the differences in levels, but only some of the differences in trends.
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  • Impact of privatization on employment and earnings Updated

    Workers and policymakers may fear that privatization leads to job losses and wage cuts, but what’s the empirical evidence?

    Conventional wisdom and prevailing economic theory hold that the new owners of a privatized firm will cut jobs and wages. But this ignores the possibility that new owners will expand the firm’s scale, with potentially positive effects on employment, wages, and productivity. Evidence generally shows these forces to be offsetting, usually resulting in small employment and earnings effects and sometimes in large, positive effects on productivity and scale. Foreign ownership usually has positive effects, and the effects of domestic privatization tend to be larger in countries with a more competitive business environment.
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  • Jul 23, 2019 - Jul 24, 2019

    3rd IZA Labor Statistics Workshop: Contract Work

    Upjohn Institute, Kalamazoo, USA

    The purpose of the 2019 workshop of IZA's "Labor Statistics" program area is to bring together senior and junior researchers to discuss their recent empirical research related to contract work.

  • Aug 12, 2019 - Aug 13, 2019

    Summer Academy on the Future of Work

    Turin, Italy

    For its 100th anniversary, the ILO is inviting young people from all over the world for a Summer Academy and Global Debate on the Future of Work.

  • Sep 06, 2019 - Sep 07, 2019

    IZA Workshop on Labor Market Institutions

    IZA, Bonn

    The aim of this year’s meeting is to bring together senior and junior researchers to discuss their most recent research related to labor market institutions.

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