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, including current concerns like the impact of Covid-19, and longer-term problems like inequality.
Is the return to education the same for everybody?
While a four-year college degree is financially beneficial for most people, it is not necessarily the best option for everyone
A postsecondary degree is often held up as the one sure path to financial success. But is that true regardless of institutional quality, discipline studied, or individual characteristics? Is a college degree always worth the cost? Students deciding whether to invest in college and what field to study may be making the most important financial decision of their lives. The return to education varies greatly by institutional quality, discipline, and individual characteristics. Estimating the returns for as many options as possible, and making that information as transparent as possible, are paramount in helping prospective students make the best decision.
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Estimating the return to schooling using the Mincer equation Updated
The Mincer equation gives comparable estimates of the average monetary Returns of one additional year of education
Harry Anthony Patrinos , July 2024The Mincer equation—arguably the most widely used in empirical work—can be used to explain a host of economic, and even non-economic, phenomena. One such application involves explaining (and estimating) employment earnings as a function of schooling and labor market experience. The Mincer equation provides estimates of the average monetary returns of one additional year of education. This information is important for policymakers who must decide on education spending, prioritization of schooling levels, and education financing programs such as student loans.MoreLess -
Does increasing the minimum wage reduce poverty in developing countries? Updated
Whether raising minimum wages reduces—or increases—poverty depends on the characteristics of the labor market and Households
T. H. Gindling , July 2024Raising the minimum wage in developing countries could increase or decrease poverty, depending on labor market characteristics. Minimum wages target formal sector workers—a minority in most developing countries—many of whom do not live in poor households. Whether raising minimum wages reduces poverty depends not only on whether formal sector workers lose jobs as a result, but also on whether low-wage workers live in poor households, how widely minimum wages are enforced, how minimum wages affect informal workers, and whether social safety nets are in place.MoreLess -
Sexual harassment in the workplace Updated
The #MeToo movement brought heightened attention to sexual harassment and a search for new approaches to combat it
Joni Hersch , July 2024Workplace sexual harassment is internationally condemned as sex discrimination and a violation of human rights, and more than 140 countries have enacted legislation prohibiting it. Sexual harassment increases absenteeism and turnover and lowers productivity and job satisfaction. Yet, it remains pervasive and underreported, as the #MeToo movement starkly revealed in October 2017. Standard workplace policies such as training and a complaints process have proven inadequate. Initiatives such as bans on confidential settlements and measures that support market incentives for deterrence may offer the most promise.MoreLess -
Unemployment benefits and unemployment Updated
The challenge of unemployment benefits is to protect workers while minimizing undesirable side effects
Robert MoffittWonsik Ko , June 2024All developed economies have unemployment benefit programs to protect workers against major income losses during spells of unemployment. By enabling unemployed workers to meet basic consumption needs, the programs protect workers from having to sell their assets or accept jobs below their qualifications. The programs also help stabilize the economy during recessions. If benefits are too generous, however, the programs can lengthen unemployment and raise the unemployment rate. The policy challenge is to protect workers while minimizing undesirable side effects.MoreLess -
The effects of public sector employment on the economy Updated
The size and wage level of the public sector affect overall employment volatility and the economy
Vincenzo CaponiSimone Nobili , June 2024Public sector jobs are established by governments to directly provide goods and services. Governments may also choose to regulate the size of the public sector in order to stabilize targeted national employment levels. However, economic research suggests that these effects are uncertain and critically depend on how public wages are determined. Rigid public sector wages lead to perverse effects on private employment, while flexible public wages lead to a stabilizing effect. Public employment also has important productivity and redistributive effects.MoreLess -
Public or private job placement services — Are private ones more effective? Updated
Outsourcing to the private sector can only be effective if the service quality can be contracted on
Gesine Stephan , May 2024Expenditures on job placement and related services make up a substantial share of many countries’ gross domestic products. Contracting out to private providers is often proposed as a cost-efficient alternative to the state provision of placement services. However, the responsible state agency has to be able and willing to design and monitor sufficiently complete contracts to ensure that the private contractors deliver the desired service quality. None of the empirical evidence indicates that contracting-out is necessarily more effective or more cost-efficient than public employment services.MoreLess -
Entrepreneurship for the poor in developing countries Updated
Well-designed entrepreneurship programs show promise for improving earnings and livelihoods of poor workers
Yoonyoung Cho , May 2024Can entrepreneurship programs be successful labor market policies for the poor? A large share of workers in developing countries are self-employed (mostly own-account workers without paid employees, often interchangeably used as micro entrepreneurs). Their share among all workers has not changed much over the past two decades in the developing world. Entrepreneurship programs provide access to finance (or assets) and advisory and networking services as well as business training with the aim of boosting workers’ earnings and reducing poverty. Programs vary in design, which can affect their impact on outcomes. Recent studies have identified some promising approaches that are yielding positive results, such as combining training and financial support.MoreLess -
The labor market in Brazil, 2001–2022 Updated
Brazil’s long-lasting recession has hurt the poor and has reversed inequality trends
Sergio Pinheiro FirpoAlysson Lorenzon Portella , April 2024In the first decade of the 21st century, the Brazilian economy experienced an important expansion followed by a significant decline in inequality. The minimum wage increased rapidly, reducing inequality with no negative effects on employment or formality. This resulted from economic growth and greater supply of skilled labor. However, from 2014-2021, real wages were stagnant, and unemployment rates surged. Inequality rose again, although only marginally. Some positive signs emerged in 2022, although it is still too early to know whether they mark a return to past trends or a recovery from the pandemic.MoreLess
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Jul 30, 2024
Soft skills can mitigate hiring discrimination
Study finds that signaling teamwork ability reduces ethnic bias against disfavored job applicants in Malaysia -
Jul 17, 2024
Larger, all-male groups most prone to lying
New study explores how group size and gender affect honesty in decision making -
Jul 15, 2024
Parents tend to steer sons towards traditional careers
Swiss study finds gender bias in vocational advice -
Jul 01, 2024
Why are wages often set at round numbers?
New study reveals "coarse wage-setting": Firms use simple heuristics when uncertain about optimal salaries
Are employers eager to hire the unemployed?
The surprising effects of education on family dynamics for men and women
Decoding gender bias: The role of personal interaction
10 years of IZA World of Labor
How political connections shape firm outcomes in Germany
Escaping the debt trap: Long-run effects of individual debt relief
Empowering local talent
ChatGPT in the workplace: Who's adopting and what's holding others back?
Small children, big problems
How perceived inequality shapes well-being
Reducing presenteeism
Essential yet vulnerable
Working from home increases work-home distances
Intergenerational mobility and credit
Mental health at scale
Parental investments
How differences in job search drive the gender earnings gap
From steel to skills
How human capital reshapes religious affiliation
From refugees to citizens
Transforming societies through education
The impact of abortion bans on birth rates
Reaching for gold!
Seasonal allergies and accidents
Redefining aging
Navigating innovation
Is vocational education and training (VET) an option to increase education and employment?
The parenthood penalty in mental health
How female leaders are transforming workplace dynamics
Managerial stress accelerates aging and increases mortality among CEOs
Traumas of the past
How Many Layoffs Could Be Avoided by Pay Cuts?
Were COVID and the Great Recession Well-being Reducing?
Closing the Gender Pay Gap: A Fresh Approach
Is Your Office Safe? Unpacking the #MeToo Numbers
Where are the fathers?
More accurate weather forecast and mortality
Why Degrowth won’t save the world
Exposure to war and its labor market consequences
Slow traffic, fast food: The effects of time lost on food store choice
Working from home during Covid and women’s job satisfaction
Do international tourist arrivals change residents’ attitudes toward immigration?