-
Countries set minimum wages in different ways, and some countries set different wages for different groups of workers
The minimum wage has never been as high on the political agenda as it is today, with politicians in Germany, the UK, the US, and other OECD countries implementing substantial increases in the rate. One reason for the rising interest is the growing consensus among economists and policymakers that minimum wages, set at the right level, may help low paid workers without harming employment prospects. But how should countries set their minimum wage rate? The processes that countries use to set their minimum wage rate and structure differ greatly, as do the methods for adjusting it. The different approaches have merits and shortcomings.
MoreLess
-
The earned income tax credit boosts income and work effort among low-income parents, especially single mothers, and has contributed to the steep rise in employment among single mothers in the 1990s.
The earned income tax credit provides important benefits to low-income families with children. At substantial costs (over $70 billion to the US federal government), it increases the incomes of such families while encouraging parents to work more by subsidizing their incomes. But low-income adults without children and non-custodial parents receive very low payments under the program in most years. Many of these adults are less-educated men, whose labor force participation rates and relative wages have been declining for years. They might benefit significantly from a more generous earned income tax credit for childless adults.
MoreLess
-
In post-Soviet countries, well-functioning institutions are needed to foster productive entrepreneurial development and growth
Since the collapse of the Soviet Union, the differing impact of institutions on entrepreneurship development is undeniable. Several post-Soviet countries benefitted from early international integration by joining the EU, adopting the euro, and becoming OECD members. This process enabled entrepreneurship to develop within institutional contexts where democratic and free market principles were strengthened. In general, however, post-Soviet economies continue to be characterized by higher levels of corruption, complex business regulations, weak rule of law, uncertain property rights and often, lack of political will for institutional change.
MoreLess
-
Wage losses upon re-employment can seriously
harm long-tenured displaced workers if they are not properly insured
Job displacement represents a serious earnings
risk to long-tenured workers through lower re-employment wages, and these
losses may persist for many years. Moreover, this risk is often poorly
insured, although not for a lack of policy interest. To reduce this risk,
most countries mandate scheduled wage insurance (severance pay), although it
is provided only voluntarily in others, including the US. Actual-loss wage
insurance is uncommon, although perceived difficulties may be overplayed.
Both approaches offer the hope of greater consumption smoothing, with
actual-loss plans carrying greater promise, but more uncertainty, of
success.
MoreLess
-
Caregiving for older adults is detrimental to
caregivers’ well-being and requires policy interventions to support them
Some studies estimate that the value of time
spent on unpaid caregiving is 2.7% of the GDP of the EU. Such a figure
exceeds what EU countries spend on formal long-term care as a share of GDP
(1.5%). Adult caregiving can exert significant harmful effects on the
well-being of caregivers and can exacerbate the existing gender inequalities
in employment. To overcome the detrimental cognitive costs of fulfilling the
duty of care to older adults, focus should be placed on the development of
support networks, providing caregiving subsidies, and enhancing labor market
legislation that brings flexibility and level-up pay.
MoreLess
-
Remittances have the potential to lift developing
economies
Remittances have risen spectacularly in absolute
terms and in relation to traditional sources of foreign exchange, such as
export revenues. Remittances can improve the well-being of family members
left behind and boost growth rates of receiving economies. They can also
create a culture of dependency, lowering labor force participation in
recipient nations, promoting conspicuous consumption, and accelerating
environmental degradation. A more thorough understanding of their impacts
can help formulate policies that enable developing economies to harness the
most out of these monetary inflows.
MoreLess
-
When workers and firms cannot commit to
long-term contracts and capital investments are sunk, union power can reduce
investment
Although coverage of collective bargaining
agreements has been declining for decades in most countries, it is still
extensive, especially in non-Anglo-Saxon countries. Strong unions may
influence firms' incentives to invest in capital, particularly in sectors
where capital investments are sunk (irreversible), as in research-intensive
sectors. Whether unions affect firms' investment in capital depends on the
structure and coordination of bargaining, the preference of unions between
wages and employment, the quality of labor-management relations, the
structure of corporate governance, and the existence of social pacts, among
other factors.
MoreLess
-
Firms interested in workplace diversity should
consider the post-hiring stage and why some minority employees choose to
leave
While many firms have recognized the importance
of recruiting and hiring diverse job applicants, they should also pay
attention to the challenges newly hired diverse candidates may face after
entering the company. It is possible that they are being assessed by unequal
or unequitable standards compared to their colleagues, and they may not have
sufficient access to opportunities and resources that would benefit them.
These disparities could affect the career trajectory, performance,
satisfaction, and retention of minority employees. Potential solutions
include randomizing task assignments and creating inclusive networking and
support opportunities.
MoreLess
-
Despite increasingly generous parental leave
schemes their advantages over subsidized childcare remain unclear
There is growing agreement among parents in
high-income countries that having a working mother does not harm a preschool
child. Yet, research is ongoing on what the long-term effects on children
are of being looked after at home (primarily by their mothers) or in
childcare. Most studies find positive effects of childcare on child outcomes
for children from disadvantaged backgrounds and moderate effects for
children from more advantaged backgrounds. Policymakers need to improve
compensation and the working environment for the sector if a high quality
level is to be achieved and if the beneficial effects are to be
maintained.
MoreLess
-
Additional female educational attainment
generally lowers fertility, but the relationship is complex
The negative correlation between women's
education and fertility has been observed across regions and time, although
it is now weaker among high-income countries. Women's education level could
affect fertility through its impact on women's health and their physical
capacity to give birth, children's health, the number of children desired,
and women's ability to control birth and knowledge of different birth
control methods. Each of these mechanisms depends on the individual,
institutional, and country circumstances experienced. Their relative
importance may change along a country's economic development process.
MoreLess