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.

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Equal pay legislation and the gender wage gapUpdated

Despite major efforts at equal pay legislation, gender pay inequality still exists—how can this be put right?

Solomon W. Polachek

Despite equal pay legislation dating back 50 years, American women still earn 18% less than their male counterparts. In the UK, with its Equal Pay Act of 1970, and France, which legislated in 1972, the gap is 17% and 10% respectively, and in Australia it remains around 14%. Interestingly, the gender pay gap is relatively small for the young but increases as men and women grow older. Similarly, it is large when comparing married men and women, but smaller for singles. Just what can explain these wage patterns? And what can governments do to speed up wage convergence to close the gender pay gap? Clearly, the gender pay gap continues to be an important policy issue.

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  • The labor market in Ireland, 2000–2018 Updated

    A remarkable turnaround in the labor market went hand in hand with economic recovery

    Ireland was hit particularly hard by the global financial crisis, with severe impacts on the labor market. Between 2007 and 2013, the unemployment rate increased dramatically, from 5% to 15.5%, and the labor force participation rate declined by almost five percentage points between 2007 and 2012. Outward migration re-emerged as a safety valve for the Irish economy, helping to moderate impacts on unemployment via a reduction in overall labor supply. As the crisis deepened, long-term unemployment escalated. However, since 2013, there is clear evidence of a recovery in the labor market with unemployment, both overall and long-term, dropping rapidly.
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  • The labor market in South Korea, 2000–2018 Updated

    The labor market stabilized quickly after the 1998 Asian crisis, but rising inequality and demographic change are challenges

    Jungmin Lee, January 2020
    South Korea has boasted one of the world's most successful economies since the end of World War II. The South Korean labor market has recovered quickly from the depths of the Asian crisis in 1998, and has since remained surprisingly sound and stable. The unemployment rate has remained relatively low, and average real earnings have steadily increased. The South Korean labor market was resilient in the wake of the global financial crisis. However, there are issues that require attention, including high earnings inequality, an aging labor force, increasing part-time jobs, and rising youth unemployment rates.
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  • How labor market institutions affect job creation and productivity growth Updated

    Key labor market institutions, and the policies that shape them, affect the restructuring that leads to economic growth

    Magnus Henrekson, January 2020
    Economic growth requires factor reallocation across firms and continuous replacement of technologies. Labor market institutions influence economic dynamism by their impact on the supply of a key factor, skilled workers to new and expanding firms, and the shedding of workers from declining and failing firms. Growth-favoring labor market institutions include portable pension plans and other job tenure rights, health insurance untied to the current employer, individualized wage-setting, and public income insurance systems that encourage mobility and risk-taking in the labor market.
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  • Employment effects of green energy policies Updated

    Does a switch in energy policy toward more renewable sources create or destroy jobs in an industrial country?

    Nico Pestel, December 2019
    Many industrial countries are pursuing so-called green energy policies, which typically imply the replacement of conventional fossil fuel power plants with renewable sources. Such a policy shift may affect employment in different ways. On the one hand, it could create new and additional “green jobs” in the renewables sector; on the other hand, it could crowd out employment in other sectors. An additional consideration is the potential increase in energy prices, which has the potential to stifle labor demand in energy-intensive sectors and reduce the purchasing power of private households.
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  • Language proficiency and immigrants’ economic integration

    It is vital to measure language proficiency well, as it crucially determines immigrants’ earnings

    Over recent decades, Western countries have admitted many immigrants from non-traditional regions (e.g. Philippines, India, China), which has coincided with poor economic integration. Language proficiency is an important determinant of economic integration; in addition to being a component of human capital, it plays a key role in facilitating the transmission of other components of human capital. Examining the strengths and weaknesses of objective and subjective measures of language proficiency is crucial for good integration policy, as is understanding the relationship between these measures and earnings, a key indicator of economic integration.
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  • Using natural resource shocks to study economic behavior

    Natural resource shocks can help studying how low-skilled men respond to changes in labor market conditions

    Dan A. Black, December 2019
    In the context of growing worldwide inequality, it is important to know what happens when the demand for low-skilled workers changes. Because natural resource shocks are global in nature, but have highly localized impacts on labor prospects in resource extraction areas, they offer a unique opportunity to evaluate low-skilled men's behavior when faced with extreme variations in local labor market conditions. This situation can be utilized to evaluate a broad range of outcomes, from education and income, to marital and fertility status, to voting behavior.
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  • The labor market in Germany, 2000–2018 Updated

    The transformation of a notoriously rigid labor market into a role model of its own style is essentially complete

    Hilmar SchneiderUlf Rinne, December 2019
    The EU's largest economy, Germany, has managed to find an effective and unique combination of flexibility and rigidity in its labor market. Institutions that typically characterize rigid labor markets are effectively balanced by flexibility instruments. Important developments since 2000 include steadily decreasing unemployment rates (since 2005), increasing participation rates, and (since 2011) moderately increasing labor compensation. The German labor market was remarkably robust to the impacts of the Great Recession, thus providing a useful case study for other developed countries.
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  • Understanding teacher effectiveness to raise pupil attainment

    Teacher effectiveness has a dramatic effect on student outcomes—how can it be increased?

    Simon Burgess, December 2019
    Teacher effectiveness is the most important component of the education process within schools for pupil attainment. One estimate suggests that, in the US, replacing the least effective 8% of teachers with average teachers has a present value of $100 trillion. Researchers have a reasonable understanding of how to measure teacher effectiveness; but the next step, understanding the best ways to raise it, is where the research frontier now lies. Two areas in particular appear to hold the greatest promise: reforming hiring practices and contracts, and reforming teacher training and development.
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  • Feb 01, 2020

    17th Annual Migration Meeting

    Bonn, Germany

    Going into its 17th year, the Annual Migration Meeting is following a long and successful tradition of bringing together experienced scholars and talented young economists to discuss cutting-edge work on migration.

  • Apr 24, 2020 - Apr 25, 2020

    4th IZA Workshop on Gender and Family Economics

    Bonn, Germany

    The focus of the 4th Annual Workshop on Gender and Family Economics in 2020 will be on gender economics.

  • May 21, 2020 - May 22, 2020

    Save the date: IZA / World Bank / NJD 2020 Jobs and Development Conference

    Warsaw, Poland

    Following the success of the 2016, 2018 and 2019 Jobs and Development Conferences in Washington DC and Bogotá, the World Bank, IZA (Institute of Labor Economics) the Network on Jobs and Development and UNU-WIDER are organizing a follow up conference in 2020.

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