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

Conditions for high-potential female entrepreneurship

Individual and environmental factors can lead women to start innovative market-expanding and export-oriented ventures—or block them

Siri A. Terjesen

Female-led ventures that are market-expanding, export-oriented, and innovative contribute substantially to local and national economic development, as well as to the female entrepreneur’s economic welfare. Female-led ventures also serve as models that can encourage other high-potential female entrepreneurs. The supply of high-potential entrepreneurial ventures is driven by individuals’ entrepreneurial attitudes and institutional factors associated with a country’s conditions for entrepreneurial expansion. A systematic assessment of those factors can show policymakers the strengths and weaknesses of the environment for high-potential female entrepreneurship.

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  • Do social interactions in the classroom improve academic attainment?

    Student sorting into classes complicates policies that utilize peer effects to optimize educational outcomes

    Shqiponja Telhaj, June 2018
    The role of social interactions in modifying individual behavior is central to many fields of social science. In education, one essential aspect is that “good” peers can potentially improve students’ academic achievement, career choices, or labor market outcomes later in life. Indeed, evidence suggests that good peers are important in raising student attainment, both in compulsory schooling and university. Interventions that change the ability group composition in ways that improve student educational outcomes without exacerbating inequality therefore offer a promising basis for education policies.
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  • How should job displacement wage losses be insured?

    Wage losses upon re-employment can seriously harm long-tenured displaced workers if they are not properly insured

    Donald O. Parsons, June 2018
    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), and it is voluntarily provided in others. 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.
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  • Effects of regulating international trade on firms and workers

    The benefits of trade regulation increase when workers are mobile

    Raymond Robertson, June 2018
    Economists have shown that international trade increases economic growth, with trade liberalization and integration having characterized the last 50 years. While trade can increase national welfare, recent estimates from both developed and developing countries show that labor market adjustment costs matter. Regulating trade, defined as adding or removing tariffs and other trade barriers, is not the best way to help lower-income workers who suffer from trade-induced losses. Policies that reduce adjustment costs may increase aggregate welfare more than regulating trade flows does.
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  • Do anti-discrimination policies work?

    A mix of policies could be the solution to reducing discrimination in the labor market

    Marie-Anne Valfort, May 2018
    Discrimination is a complex, multi-factor phenomenon. Evidence shows widespread discrimination on various grounds, including ethnic origin, sexual orientation, gender identity, religion or beliefs, disability, being over 55 years old, or being a woman. Combating discrimination requires combining the strengths of a range of anti-discrimination policies while also addressing their weaknesses. In particular, policymakers should thoroughly address prejudice (taste-based discrimination), stereotypes (statistical discrimination), cognitive biases, and attention-based discrimination.
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  • The Chinese labor market, 2000–2016

    The world’s second largest economy has boomed, but a rapidly aging labor force presents substantial challenges

    Junsen ZhangJia Wu, May 2018
    China experienced significant economic progress over the past few decades with an annual average GDP growth of approximately 10%. Population expansion has certainly been a contributing factor, but that is now changing as China rapidly ages. Rural migrants are set to play a key role in compensating for future labor shortages, but inequality is a major issue. Evidence shows that rural migrants have low-paying and undesirable jobs in urban labor markets, which points to inefficient labor allocation and discrimination that may continue to impede rural–urban migration.
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  • Maternity leave versus early childcare—What are the long-term consequences for children?

    Despite increasingly generous parental leave schemes their advantages over subsidized childcare remain unclear

    Most OECD countries spend substantially more on maternity leave schemes than on early childcare. However, given high tax burdens and rapidly aging populations, female labor force participation is critically needed. Moreover, it is important to know whether the main beneficiaries, the children themselves, reap more benefits from one or the other in the long term. The first cohorts exposed to the introduction or extension of maternity/paternity leave schemes and subsidized childcare programs have now completed education and entered the labor market, allowing an investigation of these programs’ long-term economic effects.
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  • The labor market in Norway, 2000–2016

    Negative consequences of falling oil prices were offset by real wage flexibility, reduced immigration, and labor reallocation

    Øivind A. Nilsen, May 2018
    Norway has a high labor force participation rate and a very low unemployment rate. Part of the reason for this fortunate situation is so-called “tripartism”: a broad agreement among unions, employers, and government to maintain a high level of coordination in wage bargaining. This has led to downward real wage flexibility, which has lessened the effects of negative shocks to the economy. Reduced net immigration, especially from neighboring countries, has also mitigated the negative effects of the recent drop in oil prices. A potential drawback of this tripartism is, however, the difficulty of reducing employee absences and disability.
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  • The usefulness of experiments

    Are experiments the gold standard or just over-hyped?

    Jeffrey A. Smith, May 2018
    Non-experimental evaluations of programs compare individuals who choose to participate in a program to individuals who do not. Such comparisons run the risk of conflating non-random selection into the program with its causal effects. By randomly assigning individuals to participate in the program or not, experimental evaluations remove the potential for non-random selection to bias comparisons of participants and non-participants. In so doing, they provide compelling causal evidence of program effects. At the same time, experiments are not a panacea, and require careful design and interpretation.
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  • Jun 28, 2018 - Jun 29, 2018

    The World Labor Conference 2018

    Berlin, Germany

    The IZA will hold a World Labor Conference, to celebrate the 20th anniversary of IZA, in Berlin, Germany, on Thursday and Friday, June 28 and 29, 2018. There will be 8 sets of two-hour parallel sessions, with each of the 48 sessions containing four papers. In addition, there will be: One plenary session each day with a keynote address, one by Francine Blau (Cornell University and IZA) and one by Chris Pissarides (London School of Economics and IZA); and a ceremonial dinner on the evening of June 28, at which the biennial IZA Prize in Labor Economics will be presented. 

  • Jul 05, 2018 - Jul 06, 2018

    5th International Conference on Employer Engagement and Training: 2018

    BEIS Conference Centre, Westminster, London

    The conference will focus on employer engagement in education and training, vocational education and how these relate to the Government’s plans for increasing social mobility, the implementation of its Industrial Strategy and improving the flow of skills into the labor market post-Brexit. The conference also seeks to reflect on reforms and policy shifts in relation to vocational education and training and employer engagement internationally.

  • Jul 16, 2018 - Jul 17, 2018

    3rd IZA Junior/Senior Symposium - Call for abstracts

    IZA, Bonn

    After extremely successful Symposia in Bonn in 2016 and Austin in 2017, the third IZA Junior/Senior Labor Symposium will be held at IZA in Bonn, Germany

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