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Is the youth labor market bearing the brunt of
the pandemic?
The Covid-19 pandemic has produced unprecedented
negative effects on the global economy, affecting both the demand and supply
side. Its consequences in terms of job losses have been important in many
European countries. A large number of firms have been forced to dismiss at
least part of their workforce or to close down all together. Considering
that young people are usually penalized more than their adult counterparts
during economic crises due to the so-called “last-in-first-out” principle,
it is worthwhile to evaluate if the youth will also end up paying the
highest price during this pandemic-induced recession.
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There is little evidence that government
spending crowds out private charitable donations of time and money
Private charitable contributions play an
essential role in most economies. From a policy perspective, there is
concern that comprehensive government spending might crowd out private
charitable donations. If perfect crowding out occurs, then every dollar
spent by the government will lead to a one-for-one decrease in private
spending, leaving the total level of welfare unaltered. Understanding the
magnitude and the causes of crowding out is crucial from a policy
perspective, as crowding out represents a hidden cost to public spending and
can thus have significant consequences for government policies toward public
welfare provision.
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Postponed childbearing improves women’s labor
market outcomes but may reduce overall fertility
The rise in the average age of women bearing
their first child is a well-established demographic trend in recent decades.
Postponed childbearing can have important consequences for the mothers and,
at a macro level, for the country in which they live. Research has primarily
focused on the effect postponing fertility has on mothers’ labor market
outcomes and on the total number of children a woman has in her lifetime.
Most research finds that postponing the first birth raises a mother's labor
force participation and wages but may have negative effects on overall
fertility, especially in the absence of supportive family-friendly
policies.
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Decentral bargaining is an instrument to
address both imminent economic crises and for increasing firm
competitiveness
In-plant alliances are plant-specific
deviations from sectoral collective agreements related to wages and working
time that are intended to hold down labor costs. These agreements enable
firm-level reorganizations to respond to an imminent economic crisis or to
improve competitiveness. They also encourage social partners to take greater
responsibility for employment issues. Both unions and works councils agree
to such contracts because they see them as helpful in avoiding severe
employment losses. Thus, these alliances substantially unburden public
employment policy.
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Infrastructure constraints are major obstacles
for working from home in developing countries
Work-from-home possibilities are lower in
developing than in developed countries. Within countries, not all workers
have equal chances of transitioning from the usual workplace to
work-from-home. Moreover, infrastructure limitations and lack of access to
certain services can limit the chances of effectively working from home.
Having a home-based job can affect, positively or negatively, work–life
balance, levels of job satisfaction and stress, and productivity. The
differential chances of working from home may end up increasing the levels
of income inequality between workers who can and those who cannot work from
home.
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There are important trade-offs between temporary
and permanent migration
Many migrants do not stay in their host
countries permanently. On average, 15% of migrants leave their host country
in a given year, many of whom will return to their home countries. Temporary
migration benefits sending countries through remittances, investment, and
skills accumulation. Receiving countries benefit via increases in their
prime-working age populations while facing fewer social security
obligations. These fiscal benefits must be balanced against lower incentives
to integrate and invest in host country specific skills for temporary
migrants.
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Insufficient sleep affects employment and
productivity
Spending time sleeping not only improves
individuals’ well-being, but it can influence employment outcomes and
productivity. Sleep can be disrupted by company schedules and deadlines,
extended working times, and several individual and household decisions.
Labor market regulation and corporate strategies should factor in the
immediate effect of insufficient sleep on employee fatigue and cognitive
performance, and the associated effects on employment disruption and
productivity loss. Sleep can be influenced by “sleep friendly” employment
regulations, technology nudges, monetary incentives, and subsidies for
sleeping.
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Search requirements for the older unemployed
affect their re-employment rates and their flows into states of
inactivity
Many OECD countries have, or have had, a
policy that exempts older unemployed people from the requirement to search
for a job. An aging population and low participation by older workers in the
labor market increasingly put public finances under strain, and spur calls
for policy measures that activate labor force participation by older
workers. Introducing job search requirements for older unemployed workers
aims to increase their re-employment rates. Abolishing the exemption from
job search requirements for the older unemployed has been shown to initiate
higher outflow rates from unemployment for them.
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New businesses are essential to keep
unemployment low, but start-ups need loans in order to create jobs
Entrepreneurship is essential for a healthy
labor market. Recent evidence shows that young businesses (at most ten years
old) have, on average, accounted for all of US employment growth over the
past few decades. New businesses are especially important for youth
employment. However, these businesses tend to borrow a lot, and the credit
constraints they face limit their ability to create jobs. Historically, much
of the discussion regarding the economic importance of entrepreneurship has
focused on small businesses. Empirical evidence increasingly suggests that,
among small businesses, those that are young create the most jobs.
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Covid-19 ended 20 years of stability and good
labor market performance, aided in part by a strong resource boom
From 2000 to 2019, Canada's economy and labor
market performed well. Important in this success was a strong resource boom
from the late 1990s to 2014. After the boom the economy and labor market
adjusted relatively smoothly, with labor and other resources exiting
resource-rich regions and moving elsewhere. Strong growth in major export
markets (Asia and the US) aided the adjustment. The Covid-19 downturn
resulted in an unprecedented decline in employment, and a steep rise in
unemployment and non-participation. Despite the severity of the Covid-19
shock, by December 2021 most key measures of labor market activity had
returned to pre-pandemic levels.
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