• Enforcement of labor regulations in developing countries

    Enforcement improves legal compliance, but its impact on welfare is country specific and unclear

    Lucas Ronconi, March 2019
    More than half of private sector employees in the developing world do not receive legally mandated labor benefits. These regulations have typically been enacted by democratically elected governments, and are valued by both formal and informal workers. Increasing public enforcement (e.g. inspections, fines, and workers’ access to the judiciary) can be a powerful tool to reduce violations (e.g. increase the number of employees earning above the minimum wage). Which factors determine enforcement, and whether enforcement produces more social benefits than costs, are, however, unanswered questions.
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  • Does accession to the EU affect firms’ productivity?

    State capture and uneven infrastructure development due to foreign direct investment can outweigh productivity gains

    Firms in the new EU member states of Eastern Europe are more productive than those in other transition economies, but with a diminishing advantage. The least productive firms benefit the most from membership, although the situation is reversed in the case of foreign-owned firms. Foreign direct investment fails to promote knowledge and technology spillovers beyond the receiving firms. The dominance of multinational enterprises in the new EU member states enhances the threat of corporate state capture and asymmetric infrastructure development, whilst access to finance remains a constricting issue for all firms.
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  • Is unconditional basic income a viable alternative to other social welfare measures?

    Countries give basic education and health care to everyone, and for good reasons—why not basic income?

    Ugo Colombino, March 2019
    Globalization and automation have brought about a tremendous increase in productivity, with enormous benefits, but also a dramatic reallocation of jobs, skills, and incomes, which might jeopardize the full realization of those benefits. Current social policies may not be adequate to successfully redistribute the gains from automation and globalization or to advance the reallocation of jobs and skills. Under certain circumstances, an unconditional basic income might be a better alternative for achieving these goals. It is simple, transparent, and has low administrative costs, though it may require higher taxes or a cut/reallocation of other public expenditures.
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  • Improvement in European labor force participation

    Do structural reforms or educational expansion drive higher employment and participation rates?

    Daniel Gros, February 2019
    Employment and labor force participation (LFP) rates have increased throughout Europe since the 1990s, with little interruption from the Great Recession. While many credit labor market reforms for this progress, ongoing educational expansion might actually be more important. This implies that the overall employment rate of an economy can change if the share of the population with tertiary education increases, even in the absence of any labor market reforms or effects of the business cycle. Taking this compositional effect into account makes it possible to disentangle the impact of reforms.
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  • Market competition and executive pay

    Increased competition affects the pay incentives firms provide to their managers and may also affect overall pay structures

    Priscila Ferreira, February 2019
    Deregulation and managerial compensation are two important topics on the political and academic agenda. The former has been a significant policy recommendation in light of the negative effects associated with overly restrictive regulation on markets and the economy. The latter relates to the sharp increase in top executives’ pay and the nature of the link between pay and performance. To the extent that product-market competition can affect the incentive schemes offered by firms to their executives, the analysis of the effects of competition on the structure of compensation can be informative for policy purposes.
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  • Efficient markets, managerial power, and CEO compensation

    CEO pay, often contentious, is the product of many forces

    Michael L. Bognanno, February 2019
    The escalation in chief executive officer (CEO) pay over recent decades, both in absolute terms and in relation to the earnings of production workers, has generated considerable attention. The pay of top executives has grown noticeably in relation to overall firm profitability. The pay gap between CEOs in the US and those in other developed countries narrowed substantially during the 2000s, making top executive pay an international concern. Researchers have taken positions on both sides of the debate over whether the level of CEO pay is economically justified or is the result of managerial power.
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  • Social protection programs for women in developing countries

    How to design social protection programs that poor women can benefit from

    Lisa Cameron, February 2019
    Women are more likely than men to work in the informal sector and to drop out of the labor force for a time, such as after childbirth, and to be impeded by social norms from working in the formal sector. This work pattern undermines productivity, increases women's vulnerability to income shocks, and impairs their ability to save for old age. Many developing countries have introduced social protection programs to protect poor people from social and economic risks, but despite women's often greater need, the programs are generally less accessible to women than to men.
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  • Happiness as a guide to labor market policy

    Happiness is key to a productive economy, and a job remains key to individual happiness, also under robotization

    Jo Ritzen, January 2019
    Measures of individual happiness, or well-being, can guide labor market policies. Individual unemployment, as well as the rate of unemployment in society, have a negative effect on happiness. In contrast, employment protection and un-employment benefits or a basic income can contribute to happiness—though when such policies prolong unintended unemployment, the net effect on national happiness is negative. Active labor market policies that create more job opportunities increase happiness, which in turn increases productivity. Measures of individual happiness should therefore guide labor market policy more explicitly, also with substantial robotization in production.
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  • Crime and immigration

    Do poor labor market opportunities lead to migrant crime?

    Brian Bell, January 2019
    Immigration is one of the most important policy debates in Western countries. However, one aspect of the debate is often mischaracterized by accusations that higher levels of immigration lead to higher levels of crime. The evidence, based on empirical studies of many countries, indicates that there is no simple link between immigration and crime, but legalizing the status of immigrants has beneficial effects on crime rates. Crucially, the evidence points to substantial differences in the impact on property crime, depending on the labor market opportunities of immigrant groups.
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  • Intergenerational income persistence

    Measures of intergenerational persistence can be indicative of equality of opportunity, but the relationship is not clear-cut

    Jo Blanden, January 2019
    A strong association between incomes across generations—with children from poor families likely to be poor as adults—is frequently considered an indicator of insufficient equality of opportunity. Studies of such “intergenerational persistence,” or lack of intergenerational mobility, measure the strength of the relationship between parents’ socio-economic status and that of their children as adults. However, the association between equality of opportunity and common measures of intergenerational persistence is not as clear-cut as is often assumed. To aid interpretation researchers often compare measures across time and space but must recognize that reliable measurement requires overcoming important data and methodological difficulties.
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