IZA World of Labor - Search Result For

January 2017

Article

The economics of employment tribunals

Understanding how employment tribunals make decisions can guide reforms of employment dispute settlement

Paul Latreille

Employment tribunals or labor courts are responsible for enforcing employment protection legislation and adjudicating rights-based disputes between employers and employees. Claim numbers are high and, in Great Britain, have been rising, affecting both administrative costs and economic competitiveness. Reforms have attempted to reduce the number of claims and to improve the speed and efficiency of dealing with them. Balancing employee protection against cost-effectiveness remains difficult, however. Gathering evidence on tribunals, including on claim instigation, resolution, decision making, and post-tribunal outcomes can inform policy efforts.

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November 2016

Article

Why do we need longitudinal survey data?

Knowing people’s history helps in understanding their present state and where they are heading

Heather Joshi

Information from longitudinal surveys transforms snapshots of a given moment into something with a time dimension. It illuminates patterns of events within an individual’s life and records mobility and immobility between older and younger generations. It can track the different pathways of men and women and people of diverse socio-economic background through the life course. It can join up data on aspects of a person’s life, health, education, family, and employment and show how these domains affect one another. It is ideal for bridging the different silos of policies that affect people’s lives.

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December 2015

Article

What makes a good job? Job quality and job satisfaction

Job satisfaction is important to well-being, but intervention may be needed only if markets are impeded from improving job quality

Andrew E. Clark

Many measures of job satisfaction have been trending downward. Because jobs are a key part of most people’s lives, knowing what makes a good job (job quality) is vital to knowing how well society is doing. Integral to worker well-being, job quality also affects the labor market through related decisions on whether to work, whether to quit, and how much effort to put into a job. Empirical work on what constitutes a good job finds that workers value more than wages; they also value job security and interest in their work. Policy to affect job quality requires information on the cost of the different aspects of job quality and how much workers value them.

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October 2017

Article

Why does part-time employment increase in recessions?

Jobs can change quickly from full- to part-time status, especially during economic downturns

Daniel Borowczyk-Martins

The share of workers employed part-time increases substantially in economic downturns. How should this phenomenon be interpreted? One hypothesis is that part-time jobs are more prevalent in sectors that are less sensitive to the business cycle, so that recessionary changes in the sectoral composition of employment explain the increase in part-time employment. The evidence shows, however, that this hypothesis only accounts for a small part of the story. Instead, the growth of part-time work operates mainly through reductions in working hours in existing jobs.

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January 2015

Article

Ethnic minority self-employment

Poor paid employment prospects push minority workers into working for themselves, often in low-reward work

Ken Clark

In many countries, ethnic minority groups are over-represented in self-employment compared with the majority community. The kind of work done by minority entrepreneurs can therefore be an important driver of the economic well-being of their ethnic group. Furthermore, growing the self-employment sector is a policy objective for many governments, which see it as a source of innovation, economic growth, and employment. While self-employment might offer economic opportunities to minority groups, it is important to understand the factors that underlie the nature and extent of ethnic entrepreneurship to evaluate whether policy measures should support it.

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August 2018

Article

Measuring employment and unemployment

Should statistical criteria for measuring employment and unemployment be re-examined?

Andrea Brandolini Eliana Viviano

Measuring employment and unemployment is essential for economic policy. Internationally agreed measures (e.g. headcount employment and unemployment rates based on standard definitions) enhance comparability across time and space, but changes in real labor markets and policy agendas challenge these traditional conventions. Boundaries between different labor market states are blurred, complicating identification. Individual experiences in each state may vary considerably, highlighting the importance of how each employed or unemployed person is weighted in statistical indices.

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September 2014

Article

Employment protection legislation in transition and emerging markets

Although market failures mean employment protection is necessary, excessive protection can be counterproductive

Alexander Muravyev

Employment protection legislation aims to shield employees against unfair dismissal and earning reductions at the time of job loss. Theory suggests that employment protection stabilizes employment over cyclical upturns and downturns without necessarily increasing general unemployment. However, recent evidence from transition and emerging economies shows that employment protection legislation tends to raise unemployment among disadvantaged groups, particularly youth, and may increase informal work. Employment protection policies thus require careful consideration of their unintended effects.

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June 2016

Article

Is maternal employment related to childhood obesity?

Institutions and policies affect whether working mothers raise heavier children

Wencke Gwozdz

Childhood obesity has been rising steadily in most parts of the world. Popular speculation attributes some of that increase to rising maternal employment. Employed mothers spend less time at home and thus less time with their children, whose diets and physical activity may suffer. Also, children of working mothers may spend more time in the care of others, whose childcare quality may vary substantially. While a majority of US studies support this hypothesis and have clear policy implications, recent studies in other countries are less conclusive, largely because institutional arrangements differ but also because methodologies do.

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January 2016

Article

Parental employment and children’s academic achievement

Quality of parental time spent with children is more important than quantity

Hannah Schildberg-Hörisch

Female labor market participation rates have increased substantially in many countries over the last decades, especially those of mothers with young children. This trend has triggered an intense debate about its implications for children’s well-being and long-term educational outcomes. The overall effect of maternal and paternal employment on children’s cognitive and educational attainment is not obvious: on the one hand, children may benefit from higher levels of family income, on the other hand, parental employment reduces the amount of time parents spend with their children.

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December 2016

Article

Childcare expansion and mothers’ employment in post-socialist countries

A range of other policies and changes are needed for childcare expansion to increase mothers’ labor supply

Anna Lovász

In 2002, the EU set targets for expanding childcare coverage, but most of the post-socialist countries are behind schedule. While childcare expansion places a heavy financial burden on governments, low participation in the labor force by mothers, especially those with children under the age of three, implies a high potential impact. However, the effectiveness of childcare expansion may be limited by some common characteristics of these countries: family policies that do not support women’s labor market re-entry, few flexible work opportunities, and cultural norms about family and gender roles shaped by the institutional and economic legacy of socialism.

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March 2021

Article

Low-wage employment Updated

Are low-paid jobs stepping stones to higher-paid jobs, do they become persistent, or do they lead to recurring unemployment?

Claus Schnabel

Low-wage employment has become an important feature of the labor market and a controversial topic for debate in many countries. How to interpret the prominence of low-paid jobs and whether they are beneficial to workers or society is still an open question. The answer depends on whether low-paid jobs are largely transitory and serve as stepping stones to higher-paid employment, whether they become persistent, or whether they result in repeated unemployment. The empirical evidence is mixed, pointing to both stepping-stone effects and “scarring” effects (i.e. long-lasting detrimental effects) of low-paid work.

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December 2015

Article

The challenges of linking survey and administrative data

Combining survey and administrative data is growing in popularity, even though data access is still highly restricted

Steffen Künn

Using administrative records data and survey data to enhance each other offers huge potential for scientific and policy-related research. Two recent changes have expanded the potential for creating such linked data: the improved availability of data sources and progress in data-matching technology. These developments are reflected, among other ways, in the growing number of academic papers in labor economics that use linked survey and administrative data. While the number of studies using linked data is still small, the trend is clearly upward. Slowing the growth, however, are concerns about data security and privacy, which impede data access.

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December 2018

Article

Employment effects of minimum wages Updated

When minimum wages are introduced or raised, are there fewer jobs?

David Neumark

The potential benefits of higher minimum wages come from the higher wages for affected workers, some of whom are in poor or low-income families. The potential downside is that a higher minimum wage may discourage firms from employing the low-wage, low-skill workers that minimum wages are intended to help. If minimum wages reduce employment of low-skill workers, then minimum wages are not a “free lunch” with which to help poor and low-income families, but instead pose a trade-off of benefits for some versus costs for others. Research findings are not unanimous, but especially for the US, evidence suggests that minimum wages reduce the jobs available to low-skill workers.

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June 2019

Article

Impact of privatization on employment and earnings Updated

Workers and policymakers may fear that privatization leads to job losses and wage cuts, but what’s the empirical evidence?

John S. Earle Solomiya Shpak

Conventional wisdom and prevailing economic theory hold that the new owners of a privatized firm will cut jobs and wages. But this ignores the possibility that new owners will expand the firm’s scale, with potentially positive effects on employment, wages, and productivity. Evidence generally shows these forces to be offsetting, usually resulting in small employment and earnings effects and sometimes in large, positive effects on productivity and scale. Foreign ownership usually has positive effects, and the effects of domestic privatization tend to be larger in countries with a more competitive business environment.

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January 2021

Article

Correspondence testing studies Updated

What is there to learn about discrimination in hiring?

Dan-Olof Rooth

Anti-discrimination policies play an important role in public discussions. However, identifying discriminatory practices in the labor market is not an easy task. Correspondence testing provides a credible way to reveal discrimination in hiring and provide hard facts for policies, and it has provided evidence of discrimination in hiring across almost all continents except Africa. The method involves sending matched pairs of identical job applications to employers posting jobs—the only difference being a characteristic that signals membership to a group.

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December 2019

Article

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

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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July 2014

Article

Unemployment benefits and job match quality

Do unemployment benefits help those seeking work to obtain better jobs?

Konstantinos Tatsiramos

Unemployment insurance schemes face a well-known trade-off between providing income support to those out of work and reducing their incentive to look for work. This trade-off between benefits and incentives is central to the public debate about extending benefit periods during the recent economic crisis. Often overlooked in this debate is that such support can increase the quality of the work found by the unemployed. This quality rise, in terms of both wages and duration, can be achieved by increasing the time and resources available to an individual to obtain a better job.

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April 2017

Article

Microfinance and rural non-farm employment in developing countries

Expansion of microfinance to rural areas may reduce credit constraints, helping non-farm sector growth, employment, and development

Shyamal Chowdhury

The rural non-farm sector plays an important role in diversifying income for rural households in developing countries and has the potential to emerge as a major source of employment. In some cases it has outgrown the agricultural sector, in part due to the expansion of credit through microfinance institutions that are supported by governments, donor agencies, and businesses. However, future expansion of the rural non-farm sector requires increased flexibility in credit contracts, as well as decreasing the cost of credit and the delivery of complementary inputs, e.g. skills training.

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March 2022

Article

Informal employment in emerging and transition economies Updated

Reducing informality requires better enforcement, more reasonable regulation, and economic growth

Fabián Slonimczyk

In developing and transition economies as much as half the labor force works in the informal sector (or “shadow economy”). Informal firms congest infrastructure and other public services but do not contribute the taxes needed to finance them. Informal workers are unprotected against such negative shocks as ill-health, but for certain groups there can be scarce opportunities to enter the formal sector meaning informal employment is the only feasible option. Reducing informality requires better enforcement, more reasonable regulation, and economic growth.

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March 2016

Article

Do childcare policies increase maternal employment?

Subsidized childcare fosters maternal employment, but employment status, childcare quality, and availability matter

Daniela Vuri

Women’s labor force participation has rapidly increased in most countries, but mothers still struggle to achieve a satisfactory work−life balance. Childcare allows the primary caregiver, usually the mother, to take time away from childrearing for employment. Family policies that subsidize childcare and increase its availability have different effects on female labor supply across countries. For policymakers to determine how well these policies work, they should consider that policy effectiveness may depend on country-specific pre-reform female employment and earnings, and childcare availability, costs, and quality.

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January 2017

Article

Should agricultural employment in transition economies be encouraged?

Encouraging agricultural employment might reduce rural–urban migration and reduce hidden rural unemployment

Zvi Lerman

The increase in agricultural employment in Central Asia and Trans-Caucasus over the last two decades has had a detrimental effect on agricultural labor productivity and rural family incomes. Transition countries in the former USSR cannot, however, encourage exits from agriculture (as, for instance, in east Germany or the Czech Republic) due to the risk of mass rural–urban migration, which may exacerbate growing urban unemployment. With large rural populations, state budgets would be unable to deal with a new wave of unemployed in urban areas.

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April 2022

Article

Employment and wage effects of extending collective bargaining agreements Updated

Sectoral collective contracts reduce inequality but may lead to job losses among workers with earnings close to the wage floors

Ernesto Villanueva Effrosyni Adamopoulou

In many countries, the wage floors and working conditions set in collective contracts negotiated by a subset of employers and unions are subsequently extended to all employees in an industry. Those extensions ensure common working conditions within the industry, mitigate wage inequality, and reduce gender wage gaps. However, little is known about the so-called bite of collective contracts and whether they limit wage adjustments for all workers. Evidence suggests that collective contract benefits come at the cost of reduced employment levels, though typically only for workers earning close to the wage floors.

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August 2019

Article

Public employment in the Middle East and North Africa

Does a changing public sector workforce in the MENA region provide an opportunity for efficient restructuring?

Ragui Assaad Ghada Barsoum

Public sector hiring has been an essential component of the social bargains that have maintained political stability in the Middle East and North Africa (MENA). As these bargains eroded, public sector workforces contracted in relative terms owing to a partial freeze on hiring and the promise of lifetime job security for incumbent workers. This had profound effects on the age composition of the workforce. The upcoming retirement of many workers provides an opportunity to restructure public sector hiring to emphasize meritocratic recruitment processes and performance-based compensation systems.

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June 2016

Article

Do product market reforms stimulate employment, investment, and innovation?

Reducing entry barriers and increasing competition can be beneficial for the economy, under certain conditions

Fabio Schiantarelli

Most OECD countries have recently introduced product market reforms with the objective of lowering barriers to entry and increasing competition in many sectors, such as telecommunications, utilities, and transport. The timing and extent of regulatory reform have varied significantly, starting in the US in the early 1980s and in the mid-1990s in many European countries. Will these developments improve economic performance in terms of creating jobs, fostering investment, and encouraging innovations—all of which are important factors for policymakers?

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March 2017

Article

Does broadband infrastructure boost employment?

Broadband infrastructure has differing effects on workers of different skills

Oliver Falck

Broadband infrastructure enables fast access to the internet, which, evidence suggests, has significant effects on economic growth. However, labor market related issues have not received as much consideration. These include quantifying employment effects of broadband infrastructure roll-out and questions about who exactly are the winners and losers in the labor market, and whether skills in information and communication technologies (ICT) are reflected in labor market outcomes such as wages. Understanding these complementary issues allows for policy conclusions that go beyond simply encouraging the subsidization of broadband internet infrastructure.

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October 2017

Article

Fighting employment informality with schooling

Labor force composition is critical for understanding employment informality in developing countries

Daniel Haanwinckel Rodrigo R. Soares

Developing countries have long been struggling to fight informality, focusing on instruments such as labor legislation enforcement, temporary contracts, and changes in taxes imposed on small firms. However, improvements in the labor force’s schooling and skill level may be more effective in reducing informality in the long term. Higher-skilled workers are typically employed by larger firms that use more capital, and that are more likely to be formal. Additionally, when skilled and unskilled workers are complementary in production, unskilled workers’ wages tend to increase, adding yet another force toward reducing informality.

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September 2014

Article

Fairness and motivation

Fair treatment creates incentives, and is beneficial for workers and the firm

Armin Falk

How do firms motivate their employees to be productive? The conventional wisdom is that workers respond to monetary incentives—“Pay them more and they will work harder.” However, a large and growing body of empirical evidence from laboratory and field experiments, surveys, and observational data, as well as neuroeconomic research, suggests that workers’ perceptions of fairness and trust are also key drivers of their work effort. Treating employees with respect is not only ethically warranted, it can create positive economic outcomes for both the worker and the firm.

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January 2017

Article

Foreign direct investment and employment in transition economies

Has FDI into transition countries had the expected economic effects?

Saul Estrin

Foreign direct investment (FDI) has been argued to improve company performance and stimulate growth and employment. Transition economies of Central and Eastern Europe (CEE) faced a desperate need to join the global economy, to improve their competitiveness and to create jobs through FDI. So, did the FDI come, and did it deliver what was expected? FDI levels were high for CEE, and for some resource-rich transition countries (e.g. Russia and some of Central Asia), but primarily delivered significant benefits (e.g. employment) for the former. FDI arrived much later to other transition countries (e.g. the former Soviet republics and the Balkans) and had much less impact.

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September 2021

Article

Noncompete agreements in employment contracts

Can regulation ensure that noncompete agreements benefit both workers and firms?

Kurt Lavetti

Labor market institutions that may weaken workers’ bargaining leverage have received increased scrutiny in recent years. One example is noncompete agreements, which prevent workers from freely moving across employers, potentially weakening earnings growth. New data sources and empirical evidence have led policymakers to consider sharp restrictions on their use, especially among lower-income workers. These restrictions take many different forms, each of which has unique tradeoffs between the desire to protect workers while allowing firms to use noncompetes in cases where they may create social value.

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July 2019

Article

The importance and challenges of measuring work hours Updated

Measuring work hours correctly is important, but different surveys can tell different stories

Jay Stewart Harley Frazis

Work hours are key components in estimating productivity growth and hourly wages as well as being a useful cyclical indicator in their own right, so measuring them correctly is important. The US Bureau of Labor Statistics (BLS) collects data on work hours in several surveys and publishes four widely used series that measure average weekly hours. The series tell different stories about average weekly hours and trends in those hours but qualitatively similar stories about the cyclical behavior of work hours. The research summarized here explains the differences in levels, but only some of the differences in trends.

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September 2019

Article

Designing labor market regulations in developing countries Updated

Labor market regulation should aim to improve the functioning of the labor market while protecting workers

Gordon Betcherman

Governments regulate employment to protect workers and improve labor market efficiency. But, regulations, such as minimum wages and job security rules, can be controversial. Thus, decisions on setting employment regulations should be based on empirical evidence of their likely impacts. Research suggests that most countries set regulations in the appropriate range. But this is not always the case and it can be costly when countries over- or underregulate their labor markets. In developing countries, effective regulation also depends on enforcement and education policies that will increase compliance.

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December 2015

Article

The role of preschool in reducing inequality

Preschool improves child outcomes, especially for disadvantaged children

Jane Waldfogel

Children from disadvantaged families have lower levels of school readiness when they enter school than do children from more advantaged families. Many countries have tried to reduce this inequality through publicly provided preschool. Evidence on the potential of these programs to reduce inequality in child development is now quite strong. Long-term studies of large publicly funded programs in Europe and Latin America, and newer studies on state and local prekindergarten programs implemented more recently in the US, find that the programs do improve outcomes for young children, particularly for those from disadvantaged families.

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March 2021

Article

Disability and labor market outcomes Updated

Disability is associated with labor market disadvantage; evidence points to this being a causal relationship

Melanie Jones

In Europe, about one in eight people of working age report having a disability; that is, a long-term limiting health condition. Despite the introduction of a range of legislative and policy initiatives designed to eliminate discrimination and facilitate retention of and entry into work, disability is associated with substantial and enduring labor market disadvantage in many countries. Identifying the reasons for this is complex, but critical to determine effective policy solutions that reduce the extent, and social and economic costs, of disability-related disadvantage.

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March 2017

Article

Do payroll tax cuts boost formal jobs in developing countries?

Payroll tax cuts in developing economies might be beneficial to the formal sector, even when the informal sector is large

Carmen Pagés

Informal employment accounts for more than half of total employment in Latin America and the Caribbean, and an even higher percentage in Africa and South Asia. It is associated with lack of social insurance, low tax collection, and low productivity jobs. Lowering payroll taxes is a potential lever to increase formal employment and extend social insurance coverage among the labor force. However, the effects of tax cuts vary across countries, often resulting in large wage shifts but relatively small employment effects. Cutting payroll taxes requires levying other taxes to compensate for lost revenue, which may be difficult in developing economies.

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December 2020

Article

Health effects of job insecurity Updated

Job insecurity adversely affects health, but employability policies and otherwise better job quality can mitigate the effects

Francis Green

The fear of unemployment has increased around the world in the wake of Covid-19. Research has shown that job insecurity affects both mental and physical health, though the effects are lower when employees are easily re-employable. The detrimental effects of job insecurity could be partly mitigated if employers improved other aspects of job quality that support better health. But as job insecurity is felt by many more people than just the unemployed, the negative health effects during recessions are multiplied and extend through the majority of the population. This reinforces the need for effective, stabilising macroeconomic policies, most especially at this time of pandemic.

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April 2017

Article

The need for and use of panel data

Panel data provide an efficient and cost-effective means to measure changing behaviors and attitudes over time

Hans-Jürgen Andreß

Stability and change are essential elements of social reality and economic progress. Cross-sectional surveys are a means of providing information on specific issues at a particular point in time, though without providing any information about the prevailing stability. Limited information on change can be obtained by retrospective questioning, but this is often impaired by “recall bias.” However, valid information on change is essential for assessing whether phenomena such as poverty are permanent or only temporary. Panel data analyses can address these problems as well as provide an essential tool for effective policy design.

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April 2019

Article

Can immigrants ever earn as much as native workers? Updated

Immigrants initially earn less than natives; the wage gap falls over time, but for many immigrant groups it never closes

Zhen Huang Kathryn H. Anderson

Immigrants contribute to the economic development of the host country, but they earn less at entry and it takes many years for them to achieve parity of income. For some immigrant groups, the wage gap never closes. There is a wide variation across countries in the entry wage gap and the speed of wage assimilation over time. Wage assimilation is affected by year of entry, immigrant skill, ethnicity, and gender. Policies that facilitate assimilation of immigrant workers provide support for education, language, and employment. Such policies can also reduce barriers to entry, encourage naturalization, and target selection of immigrants.

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November 2018

Article

Environmental regulations and labor markets Updated

Balancing the benefits of environmental regulations for everyone and the costs to workers and firms

Olivier Deschenes

Environmental regulations such as air quality standards can lead to notable improvements in ambient air quality and to related health benefits. But they impose additional production costs on firms and may reduce productivity, earnings, and employment, especially in sectors exposed to trade and intensive in labor and energy. Growing empirical evidence suggests that the benefits are likely to outweigh the costs.

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July 2014

Article

Childcare subsidy policy: What it can and cannot accomplish

What are the implications of childcare subsidies for care quality, family well-being, and child development?

Erdal Tekin

Most public expenditure on childcare in the US is made through a federal program, the Child Care and Development Fund (CCDF), established as part of landmark welfare reform legislation in 1996. The main goal of the reform was to increase employment and reduce welfare dependence among low-income families. Childcare subsidies have been effective in enabling parents to work, but apparently at some cost to the well-being of parents and children.

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January 2019

Article

Happiness as a guide to labor market policy Updated

Happiness is key to a productive economy, and a job remains key to individual happiness, also under robotization

Jo Ritzen

Measures of individual happiness, or well-being, can guide labor market policies. Individual unemployment, as well as the rate of unemployment in society, have a negative effect on happiness. In contrast, employment protection and un-employment benefits or a basic income can contribute to happiness—though when such policies prolong unintended unemployment, the net effect on national happiness is negative. Active labor market policies that create more job opportunities increase happiness, which in turn increases productivity. Measures of individual happiness should therefore guide labor market policy more explicitly, also with substantial robotization in production.

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May 2018

Article

The usefulness of experiments

Are experiments the gold standard or just over-hyped?

Jeffrey A. Smith

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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May 2021

Article

The impact of legalizing unauthorized immigrants Updated

While legalization benefits most unauthorized immigrants, deciding how to regularize them is challenging

Cynthia Bansak Sarah Pearlman

Countries have adopted a variety of legalization programs to address unauthorized immigration. Research in the US finds improved labor market outcomes for newly authorized immigrants. Findings are more mixed for European and Latin American countries where informal labor markets play a large role and programs are often small scale. Despite unclear labor market outcomes and mixed public support, legalization will likely continue to be widely used. Comprehensive legislation can address the complex nature of legalization on immigrants and on native-born residents.

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November 2017

Article

Do post-prison job opportunities reduce recidivism?

Increasing the availability of high-quality job opportunities can reduce recidivism among released prisoners

Kevin Schnepel

The majority of individuals released from prison face limited employment opportunities and do not successfully reintegrate into society. The inability to find stable work is often cited as a key determinant of failed re-entry (or “recidivism”). However, empirical evidence that demonstrates a causal impact of job opportunities on recidivism is sparse. In fact, several randomized evaluations of employment-focused programs find increases in employment but little impact on recidivism. Recent evidence points to wages and job quality as important determinants of recidivism among former prisoners.

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November 2016

Article

Can universal preschool increase the labor supply of mothers?

The success of universal preschool education depends crucially on the policy parameters and specific country context

Sarah Cattan

Since the 1970s, many countries have established free or highly subsidized education for all preschool children in the hope of improving children’s learning and socio-economic life chances and encouraging mothers to join the labor force. Evaluations reveal that these policies can increase maternal employment in the short term and may continue to do so even after the child is no longer in preschool by enabling mothers to gain more job skills and increase their attachment to the labor force. However, their effectiveness depends on the policy design, the country context, and the characteristics of mothers of preschoolers.

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May 2014

Article

Fixed-term contracts

Are fixed-term contracts a stepping stone to a permanent job or a dead end?

Werner Eichhorst

Fixed-term contracts have become a major form of employment in Europe. Available evidence about whether temporary jobs are a stepping stone to a permanent employment or are a dead end is mixed. The usefulness of these jobs depends on the institutional and economic environment. Fixed-term contracts can be a pathway from unemployment to employment, but their potential as a stepping stone to permanent employment is undercut if there is a strong degree of segmentation in labor markets. If that is the case, the labor flexibility motive of employers ends up dominating the screening function in offering a fixed-term contract.

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September 2019

Article

The labor market in Russia, 2000–2017

Low unemployment and high employment, but also low, volatile pay and high inequality characterize the Russian labor market

Vladimir Gimpelson

Being the largest economy in the Eurasian region, Russia's labor market affects economic performance and well-being in several former Soviet countries. Over the period 2000–2017, the Russian labor market survived several deep crises and underwent substantial structural changes. Major shocks were absorbed largely via wage adjustments, while aggregate employment and unemployment showed little sensitivity. Workers have paid the price for this rather stable employment situation in the form of volatile wages and a high risk of low pay.

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January 2020

Article

The gig economy

Non-traditional employment is a great opportunity for many, but it won’t replace traditional employment

Paul Oyer

The number of people holding non-traditional jobs (independent contractors, temporary workers, “gig” workers) has grown steadily as technology increasingly enables short-term labor contracting and fixed employment costs continue to rise. For many firms that need less than a full-time person for short-term work and for many workers who value flexibility this has created a great deal of surplus. During slack economic periods, non-traditional work also serves as an alternative safety net. Non-traditional jobs will continue to become more common, though policy changes could slow or accelerate the trend.

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April 2016

Article

Are part-time workers less productive and underpaid?

The impact of part-time workers on firms’ productivity is unclear, and lower wages depend mainly on occupation and sector

Andrea Garnero

About one in five workers across OECD countries is employed part-time, and the share has been steadily increasing since the beginning of the economic and financial crisis in 2007. Part-time options play an important economic role by providing more flexible working arrangements for both workers and firms. Part-time employment has also contributed substantially to increasing the employment rate, especially among women. However, part-time work comes at a cost of lower wages for workers, mainly because part-time jobs are concentrated in lower paying occupations and sectors, while the impact on firms’ productivity is still not very clear.

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November 2020

Article

Impacts of regulation on eco-innovation and job creation Updated

Do regulation-induced environmental innovations affect employment?

Jens Horbach

New environmental technologies (environmental/eco-innovations) are often regarded as potential job creators—in addition to their positive effects on the environment. Environmental regulation may induce innovations that are accompanied by positive growth and employment effects. Recent empirical analyses show that the introduction of cleaner process innovations, rather than product-based ones, may also lead to higher employment. The rationale is that cleaner technologies lead to cost savings, which helps to improve firms’ competitiveness, thereby inducing positive effects on their market shares.

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February 2020

Article

International trade regulation and job creation Updated

Trade policy is not an employment policy and should not be expected to have major effects on overall employment

L. Alan Winters Mattia Di Ubaldo

Trade regulation can create jobs in the sectors it protects or promotes, but almost always at the expense of destroying a roughly equivalent number of jobs elsewhere in the economy. At a product-specific or micro level and in the short term, controlling trade could reduce the offending imports and save jobs, but for the economy as a whole and in the long term, this has neither theoretical support nor evidence in its favor. Given that protection may have other—usually adverse—effects, understanding the difficulties in using it to manage employment is important for economic policy.

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May 2023

Article

Maternity leave versus early childcare—What are the long-term consequences for children? Updated

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

Nabanita Datta Gupta Jonas Jessen

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.

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August 2015

Article

Institutional long-term care and government regulation

Focus on family and portable allowances to lower the costs of institutional long-term care while monitoring its quality

Elena Stancanelli

The demand for institutional long-term care is likely to remain high in OECD countries, because of longer life expectancy and falling cohabitation rates of the elderly with family members. As shortages of qualified nurses put a cap on the supply of beds at nursing homes, excess demand builds. That puts upward pressure on prices, which may not reflect the quality of the services that are provided. Monitoring the quality of nursing home services is high on the agenda of OECD governments. Enlisting feedback from family visitors and introducing portable benefits might improve quality at little extra cost.

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April 2017

Article

The changing nature of jobs in Central and Eastern Europe

Restructuring and upskilling prevents job polarization but may leave countries vulnerable to routine-biased technical change

Piotr Lewandowski

Job polarization can pose serious problems for emerging economies that rely on worker reallocation from low-skilled to middle-skilled jobs to converge toward advanced economies. Evidence from Central and Eastern European (CEE) countries shows that structural change and education expansion can prevent polarization, as they enable a shift from manual to cognitive work and prevent the “hollowing out” of middle-skilled jobs. However, in CEE countries they have also led to a high routine cognitive content of jobs, which makes such jobs susceptible to automation and computerization in the future.

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June 2022

Article

Determinants of inequality in transition countries

Market changes and limited redistribution contributed to high income and wealth inequality growth in Eastern Europe

Michal Brzezinski Katarzyna Salach

High levels of economic inequality may lead to lower economic growth and can have negative social and political impacts. Recent empirical research shows that income and wealth inequalities in Eastern Europe since the fall of socialism increased significantly more than previously suggested. Currently, the average Gini index (a common measure) of inequality in Eastern Europe is about 3 percentage points higher than in the rest of Europe. This rise in inequality was initially driven by privatization, liberalization, and deregulation reforms, and, more recently, has been amplified by technological change and globalization coupled with relatively ungenerous income and wealth redistribution policies.

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March 2022

Article

Ethnic enclaves and immigrant economic integration Updated

High-quality enclave networks encourage labor market success for newly arriving immigrants

Simone Schüller Tanika Chakraborty

Immigrants tend to live in clusters within host countries. Does clustering in ethnic enclaves explain the persistent differences in skill, employment rates, and earnings between immigrants and the native population? Empirical studies consistently find that residing in an enclave can increase earnings. While it is ambiguous whether employment probabilities are also affected or whether earnings benefits accrue to all immigrants, irrespective of their skill levels, it is clear that effects are driven by enclave “quality” (in terms of income, education, and employment) rather than enclave size.

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February 2017

Article

Does religiosity explain economic outcomes?

Understanding religiosity is crucial to informed policy making

Olga Popova

Most religions in transition economies were marginalized by their former communist regimes. Today, some of these countries are experiencing a revival of religiosity, while others are prone to secularization. Religious norms affect individual decision making with respect to human capital investment, economic reforms, marital stability, employment, and other contexts. This implies that the interests of both religious and non-religious communities may differ and must be taken into account when designing and implementing economic policies, which is a challenge for policymakers.

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June 2015

Article

Policies to support women’s paid work

Policies in developing countries to improve women’s access to paid work should also consider child welfare

Gianna Claudia Giannelli

Engaging in paid work is generally difficult for women in developing countries. Many women work unpaid in family businesses or on farms, are engaged in low-income self-employment activities, or work in low-paid wage employment. In some countries, vocational training or grants for starting a business have been effective policy tools for supporting women’s paid work. Mostly lacking, however, are job and business training programs that take into account how mothers’ employment affects child welfare. Access to free or subsidized public childcare can increase women’s labor force participation and improve children’s well-being.

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July 2019

Article

Sexual orientation and labor market outcomes Updated

Sexual orientation seems to affect job access and satisfaction, earning prospects, and interaction with colleagues

Nick Drydakis

Studies from countries with laws against discrimination on the basis of sexual orientation suggest that gay and lesbian employees report more incidents of harassment and are more likely to report experiencing unfair treatment in the labor market than are heterosexual employees. Both gay men and lesbians tend to be less satisfied with their jobs than their heterosexual counterparts. Gay men are found to earn less than comparably skilled and experienced heterosexual men. For lesbians, the patterns are ambiguous: in some countries they have been found to earn less than their heterosexual counterparts, while in others they earn the same or more.

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November 2019

Article

Intergenerational return to human capital Updated

Better educated parents invest more time and money in their children, who are more successful in the labor market

Paul J. Devereux

Governments invest a lot of money in education, so it is important to understand the benefits of this spending. One essential aspect is that education can potentially make people better parents and thus improve the educational and employment outcomes of their children. Interventions that encourage the educational attainment of children from poorer families will reduce inequality in current and future generations. In addition to purely formal education, much less expensive interventions to improve parenting skills, such as parental involvement programs in schools, may also improve child development.

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December 2015

Article

Skill mismatch and overeducation in transition economies

Substantial skill shortages coexist with overeducation, affecting both young and old workers

Olga Kupets

Large imbalances between the supply and demand for skills in transition economies are driven by rapid economic restructuring, misalignment of the education system with labor market needs, and underdeveloped adult education and training systems. The costs of mismatches can be large and long-lasting for workers, firms, and economies, with long periods of overeducation implying a loss of human capital for individuals and ineffective use of resources for the economy. To make informed decisions, policymakers need to understand how different types of workers and firms are affected by overeducation and skill shortages.

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August 2016

Article

Do youths graduating in a recession incur permanent losses?

Penalties may last ten years or more, especially for high-educated youth and in rigid labor markets

Bart Cockx

The Great Recession that began in 2008–2009 dramatically increased youth unemployment. But did it have long-lasting, adverse effects on the careers of youths? Are cohorts that graduate during a recession doomed to fall permanently behind those that graduate at other times? Are the impacts different for low- and high-educated individuals? If recessions impose penalties that persist over time, then more government outlays are justified to stabilize economic activity. Scientific evidence from a variety of countries shows that rigid labor markets can reinforce the persistence of these setbacks, which has important policy implications.

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November 2022

Article

Incentivizing sleep?

Insufficient sleep affects employment and productivity

Joan Costa-Font

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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October 2018

Article

Trade liberalization and gender inequality Updated

Can free-trade policies help to reduce gender inequalities in employment and wages?

Janneke Pieters

Women consistently work less in the labor market and earn lower wages than men. While economic empowerment of women is an important objective in itself, women's economic activity also matters as a condition for sustained economic growth. The political debate on the labor market impacts of international trade typically differentiates workers by their educational attainment or skills. Gender is a further dimension in which the impacts of trade liberalization can differ. In a globalizing world it is important to understand whether and how trade policy can contribute toward enhancing gender convergence in labor market outcomes.

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February 2020

Article

The consequences of trade union power erosion Updated

Declining union power would not be an overwhelming cause for concern if not for rising wage inequality and the loss of worker voice

John T. Addison

The micro- and macroeconomic effects of the declining power of trade unions have been hotly debated by economists and policymakers, although the empirical evidence does little to suggest that the impact of union decline on economic aggregates and firm performance is an overwhelming cause for concern. That said, the association of declining union power with rising earnings inequality and the loss of an important source of dialogue between workers and their firms have proven more worrisome if no less contentious. Causality issues dog the former association and while the diminution in representative voice seems indisputable any depiction of the non-union workplace as an authoritarian “bleak house” is more caricature than reality.

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January 2015

Article

The promises and pitfalls of universal early education

Universal early education can be beneficial, and more so for the poor, but quality matters

Elizabeth U. Cascio

There is widespread interest in universal early education, both to promote child development and to support maternal employment. Positive long-term findings from small-scale early education interventions for low-income children in the US have greatly influenced the public discussion. However, such findings may be of limited value for policymakers considering larger-scale, more widely accessible programs. Instead, the best insight into the potential impacts of universal early education comes from analysis of these programs themselves, operating at scale. This growing research base suggests that universal early education can benefit both children and families, but quality matters.

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June 2023

Article

How to support adult caregivers?

Caregiving for older adults is detrimental to caregivers’ well-being and requires policy interventions to support them

Joan Costa-Font

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.

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March 2015

Article

The welfare impact of rising food prices

The welfare impact of rising food prices differs for net food consumers and net producers

Ralitza Dimova

Dramatic food price spikes in recent years have stimulated debate on the welfare implications of food price risk. According to the Food and Agriculture Organization of the United Nations, the number of undernourished people in sub-Saharan Africa rose to a record 265 million in 2009. There is a gradually developing policy consensus in favor of income redistribution to the poor in developing countries hit by the food price crisis. This recommendation makes sense when the poor are net food consumers, but it ignores the possibility that some poor people are net producers of food and so are likely to benefit from rising food prices.

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February 2020

Article

Tax evasion, market adjustments, and income distribution Updated

Market adjustments to tax evasion alter factor and product prices, which determine the true impacts and beneficiaries of tax evasion

James Alm Matthias Kasper

How does tax evasion affect the distribution of income? In the standard analysis of tax evasion, all the benefits are assumed to accrue to tax evaders. However, tax evasion has other impacts that determine its true effects. As factors of production move from tax-compliant to tax-evading (informal) sectors, these market adjustments generate changes in relative prices of products and factors, thereby affecting what consumers pay and what workers earn. As a result, at least some of the gains from evasion are shifted to consumers of goods produced by tax evaders, and at least some of the returns to tax evaders are competed away via lower wages.

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January 2023

Article

Covid-19 and the youth-to-adult unemployment gap

Is the youth labor market bearing the brunt of the pandemic?

Francesco Pastore

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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November 2020

Article

Public sector outsourcing Updated

The desirability of outsourcing the provision of public services depends on their characteristics and market conditions

Panu Poutvaara Henrik Jordahl

The decision to outsource public provision of services is multifaceted and context dependent. Doing so tends to lower labor intensity and increase its efficiency. Costs are usually lower, but quality problems can affect services like health care, though consumer choice has stimulated innovation and quality in both education and health care. Natural monopolies are less suitable for outsourcing, while network services (public transportation) may be outsourced through public tenders. Though some jobs may be lost in the short term, the long-term effects are generally positive for a wide variety of activities.

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November 2022

Article

The labor market in Canada, 2000–2021 Updated

Covid-19 ended 20 years of stability and good labor market performance, aided in part by a strong resource boom

W. Craig Riddell

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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April 2017

Article

Do firms’ wage-setting powers increase during recessions?

Monopsony models question the classic view of wage-setting and reveal a new reason why wages may decrease during recessions

Todd Sorensen

Traditional models of the labor market typically assume that wages are set by the market, not the firm. However, over the last 15 years, a growing body of empirical research has provided evidence against this assumption. Recent studies suggest that a monopsonistic model, where individual firms and not the market set wages, may be more appropriate. This model attributes more wage-setting power to firms, particularly during economic downturns, which helps explain why wages decrease during recessions. This holds important implications for policymakers attempting to combat lost worker income during economic downturns.

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February 2018

Article

Trade and labor markets: Lessons from China’s rise

The China Shock has challenged economists’ benign view of how trade integration affects labor markets in developed countries

David H. Autor

Economists have long recognized that free trade has the potential to raise countries’ living standards. But what applies to a country as a whole need not apply to all its citizens. Workers displaced by trade cannot change jobs costlessly, and by reshaping skill demands, trade integration is likely to be permanently harmful to some workers and permanently beneficial to others. The “China Shock”—denoting China’s rapid market integration in the 1990s and its accession to the World Trade Organization in 2001—has given new, unwelcome empirical relevance to these theoretical insights.

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May 2025

Article

Gender quotas on corporate boards of directors Updated

Gender quotas for women on boards of directors improve female share on boards, but firm performance effects are mixed, and spillover effects are positive but small.

Nina Smith Emma Von Essen

Arguments for increasing gender diversity on corporate boards of directors by gender quotas range from ensuring equal opportunity to improving firm performance. The introduction of gender quotas in a number of countries, mainly in Europe, has increased female representation on boards. Current research does not unambiguously justify gender quotas on grounds of economic efficiency. In many countries, the number of women in top executive positions is limited, and it is not clear from the evidence that quotas lead to a larger pool of female top executives, who, in turn, are the main pipeline for boards of directors. Thus, other supplementary policies may be necessary if politicians want to increase the number of women in senior management positions.

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September 2015

Article

Active labor market policies and crime

Unemployment increases crime among youth, while active labor market policies can mitigate the problem

Torben Tranaes

Active labor market programs continue to receive high priority in wealthy countries despite the fact that the benefits appear small relative to the costs. This apparent discrepancy suggests that the programs may have a broader purpose than simply increasing employment—for instance, preventing anti-social behavior such as crime. Indeed, recent evidence shows that participation in active labor market programs reduces crime among unemployed young men. The existence of such effects could explain why it is the income-redistributing countries with greater income equality that spend the most on active labor market programs.

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November 2020

Article

Encouraging women’s labor force participation in transition countries Updated

Government policies can stimulate female labor force participation if coherent and well thought-out

Norberto Pignatti

Increasing women's labor force participation is important to sustainable economic development, especially in economies with highly educated women and an aging population. Women's participation varies across transition countries, driven by such economic and social factors as traditional views of gender roles and limited government support for caregivers. Still, in all countries there is clear scope for policies aimed at increasing women's participation. In particular, in countries where women's educational attainment is already high, policies to support a better work–life balance and female entrepreneurship look particularly promising.

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August 2018

Article

Defining informality vs mitigating its negative effects

More important than defining and measuring informality is focusing on reducing its detrimental consequences

Elizabeth Ruppert Bulmer

There are more informal workers than formal workers across the globe, and yet there remains confusion as to what makes workers or firms informal and how to measure the extent of it. Informal work and informal economic activities imply large efficiency and welfare losses, in terms of low productivity, low earnings, sub-standard working conditions, and lack of social insurance coverage. Rather than quibbling over definitions and measures of informality, it is crucial for policymakers to address these correlates of informality in order to mitigate the negative efficiency and welfare effects.

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August 2015

Article

Should severance pay be consistent for all workers?

Single, open-ended contracts with severance pay smoothly rising with seniority can decrease both unemployment and job losses

J. Ignacio García Pérez

The trend towards labor market flexibility in Europe has typically involved introducing legislation that makes it easier for firms to issue temporary contracts with low firing costs, while not changing the level of protection that is in place for permanent jobs. This has created a strong “dualism” in some European labor markets, which might affect turnover, wage setting, and human capital accumulation. In view of this, some economists propose replacing the existing system of temporary and permanent contracts by a single open-ended contract for new hires, with severance pay smoothly increasing with tenure on the job.

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March 2023

Article

The labor market in Poland, 2000−2021 Updated

Employment has been rising, but disadvantaged groups and low participation of older people pose challenges

Piotr Lewandowski Iga Magda

In the early 2000s, Poland's unemployment rate reached 20%. That is now a distant memory, as employment has increased noticeably and the unemployment rate had dropped to 3.4% in 2021. The labor force participation of older workers increased following reforms aimed at prolonging careers. However, participation remains low compared to most developed countries and the reversal of the statutory retirement age in 2017 leaves Poland vulnerable to the effects of population aging. Rising immigration has eased the resulting labor shortages, but women, people with disabilities, and agricultural workers remain underemployed. During the Covid-19 pandemic the slowdown in economic growth and increase in unemployment were small.

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May 2023

Article

Female education and its impact on fertility Updated

Additional female educational attainment generally lowers fertility, but the relationship is complex

Jungho Kim

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.

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October 2017

Article

Family-friendly and human-capital-based immigration policy

Shifting the focus from immigrants’ initial earnings to their propensity to invest in human capital

Harriet Duleep Mark Regets

Immigrants who start with low earnings, such as family-based immigrants, experience higher earnings growth than immigrants who are recruited for specific jobs (employment-based immigrants). This occurs because family-based immigrants with lower initial earnings invest in human capital at higher rates than natives or employment-based immigrants. Therefore, immigrants who start at low initial earnings invest in new human capital that allows them to respond to the ever-changing needs of the host country’s economy.

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November 2016

Article

What effect do vocational training vouchers have on the unemployed?

Vouchers can create a market for training but may lengthen participants’ unemployment duration

Anthony Strittmatter

The objective of providing vocational training for the unemployed is to increase their chances of re-employment and human capital accumulation. In comparison to mandatory course assignment by case workers, the awarding of vouchers increases recipients’ freedom to choose between different courses and makes non-redemption a possibility. In addition, vouchers may introduce market mechanisms between training providers. However, empirical evidence suggests that voucher allocation mechanisms prolong the unemployment duration of training participants. But, after an initial period of deterioration, better long-term employment opportunities are possible.

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May 2024

Article

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

Expenditures 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.

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May 2025

Article

Female labor force participation and development Updated

Improving outcomes for women takes more than raising labor force participation—good jobs are important too

Sher Verick

The relationship between female labor force participation and economic development is far more complex than often portrayed in both the academic literature and policy debates. Due to various economic and social factors, such as the pattern of growth, education attainment, and social norms, trends in female labor force participation do not conform consistently with the notion of a U-shaped relationship with gross domestic produc (GDP). Despite the initial impact, Covid-19 did not have a lasting negative effect, on average, on women’s participation. At the same time, some countries have made significant progress in increasing participation rates for women, including those who have started from a lower level.

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July 2020

Article

Labor market performance and the rise of populism

Automation, globalization, and crisis-driven spikes in unemployment have contributed to rising populism in advanced economies

Sergei Guriev

The recent rise of populism in advanced economies reveals major voter discontent. To effectively respond to voters’ grievances, researchers and policymakers need to understand their drivers. Recent empirical research shows that these drivers include both long-term trends (job polarization due to automation and globalization) and the rise in unemployment due to the recent global financial crisis. These factors have undermined public trust in the political establishment and have contributed to increased governmental representation for anti-establishment parties.

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May 2023

Article

Unions and investment in intangible capital Updated

When workers and firms cannot commit to long-term contracts and capital investments are sunk, union power can reduce investment

Gabriele Cardullo Giovanni Sulis

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.

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January 2020

Article

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

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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June 2016

Article

Are apprenticeships beneficial in sub-Saharan Africa?

As they do not lead to high-productivity jobs, apprenticeships in sub-Saharan Africa fail to generate high incomes

Francis Teal

Apprenticeships are the most common form of non-academic training in sub-Saharan Africa. Most apprenticeships are provided by the private sector, for a fee, and lead to self-employment rather than to wage jobs. Where the effects have been measured, they show that earnings are not higher, on average, for people who did an apprenticeship than for those who did not. This presents a conundrum. Why would people pay for apprenticeship training that does not benefit them? Research reveals that apprenticeships do benefit some people more than others. Especially striking is that the returns to apprenticeships can fall with the level of education.

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October 2017

Article

Wage policies in the public sector during wholesale privatization

Does the transition to market economies imply growing wage inequality and, if so, along what dimensions?

Jelena Nikolic

Examining the implications of changes in public sector wage-setting arrangements due to privatization is a relatively new area of economics research, with few studies having analyzed the effects of public sector restructuring on relative wages in developed countries. There is, however, a growing empirical literature that measures the effects of transitioning from central planning to market-based systems on public–private sector wage differentials. Policymakers can learn from this evidence about the ways in which ownership transformation affects the distribution of wages in both the public and private employment sectors.

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March 2018

Article

The labor market in India since the 1990s

Productivity growth and low unemployment have not been matched by comparable rises in wages

Indraneel Dasgupta Saibal Kar

The Indian economy entered an ongoing process of trade liberalization, domestic deregulation, and privatization of public sector units in 1991. Since then, per capita output has increased significantly, while the overall unemployment rate has remained low. However, labor force participation rates have fallen sharply, especially for women. In addition, youth unemployment remains stubbornly high, an overwhelming proportion of the labor force continues to work in the informal sector, and there is little evidence of a sustained rise in wages for either unskilled rural or factory workers.

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June 2022

Article

Parental leave and maternal labor supply Updated

Parental leave increases the family–work balance, but prolonged leave may have negative impacts on mothers’ careers

Astrid Kunze

Numerous studies have investigated whether the provision and generosity of parental leave affects the employment and career prospects of women. Parental leave systems typically provide either short unpaid leave mandated by the firm, as in the US, or more generous and universal leave mandated by the government, as in Canada and several European countries. Key economic policy questions include whether, at the macro level, female employment rates have increased due to parental leave policies; and, at the micro level, whether the probability of returning to work and career prospects have increased for mothers after childbirth.

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July 2020

Article

Are workers motivated by the greater good? Updated

Workers care about employers’ social causes, but the public sector does not attract particularly motivated employees

Mirco Tonin

Employees are more willing to work and put effort in for an employer that genuinely promotes the greater good. Some are also willing to give up part of their compensation to contribute to a social cause they share. Being able to attract a motivated workforce is particularly important for the public sector, where performance is usually more difficult to measure, but this goal remains elusive. Paying people more or underlining the career opportunities (as opposed to the social aspects) associated with public sector jobs is instrumental in attracting a more productive workforce, while a proper selection process may mitigate the negative impact on intrinsic motivation.

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October 2015

Article

Beauty pays but does investment in beauty?

Despite the large returns from an attractive appearance, the cost-effectiveness of investment in beauty is ambiguous

Soohyung Lee

Being beautiful gives a person an advantage in many settings. Attractive people earn more and have an easier time getting hired. People spend large amounts of money on goods and services to enhance their beauty. Is this enhancement worth pursuing? Research suggests that the expected improvement in beauty from these goods and services is limited. Therefore, despite the large returns from having an attractive appearance, the cost-effectiveness of investment in beauty enhancement is ambiguous. For the average person, the monetary benefits of plastic surgery, medical treatments to increase height, and expensive clothing are not worth the cost.

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January 2016

Article

Employee incentives: Bonuses or penalties?

Penalty contracts lead to higher productivity than performance-based bonuses, but at the cost of employer/staff relations

Daniele Nosenzo

Firms regularly use incentives to motivate their employees to be more productive. However, often little attention is paid to the language used in employment contracts to describe these incentives. It may be more effective to present incentives as entitlements that can be lost by failing to reach a performance target, rather than as additional rewards that can be gained by reaching that target. However, emphasizing the potential losses incurred as a result of failure may entail hidden costs for the employer, as it may damage the trust relationship between a firm and its employees.

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April 2020

Article

The labor market in South Africa, 2000–2017

The legacy of apartheid and demand for skills have resulted in high, persistent inequality and high unemployment

Jacqueline Mosomi Martin Wittenberg

The South African economy was on a positive growth trajectory from 2003 to 2008 but, like other economies around the world, it was not spared from the effects of the 2008 global financial crisis. The economy has not recovered and employment in South Africa has not yet returned to its pre-crisis levels. Overall inequality has not declined, and median wages seem to have stagnated in the post-apartheid period. Labor force participation has been stable and although progress has been made, gender imbalances persist.

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June 2022

Article

Should unemployment insurance cover partial unemployment? Updated

Time-limited benefits may yield significant welfare gains and help underemployed part-time workers move to full-time employment

Susanne Ek Spector

A considerable share of the labor force consists of underemployed part-time workers: employed workers who, for various reasons, are unable to work as much as they would like to. Offering unemployment benefits to part-time unemployed workers is controversial. On the one hand, such benefits can strengthen incentives to take a part-time job rather than remain fully unemployed, thus raising the probability of obtaining at least some employment. On the other hand, these benefits weaken incentives for part-time workers to look for full-time employment. It is also difficult to distinguish people who work part-time by choice from those who do so involuntarily.

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October 2021

Article

Cash wage payments in transition economies: Consequences of envelope wages Updated

Reducing under-reporting of salaries requires institutional changes

Ioana Alexandra Horodnic Colin C. Williams

In transition economies, a significant number of companies reduce their tax and social contributions by paying their staff an official salary, described in a registered formal employment agreement, and an extra, undeclared “envelope wage,” via a verbal unwritten agreement. The consequences include a loss of government income and a lack of fair play for lawful companies. For employees, accepting under-reported wages reduces their access to credit and their social protections. Addressing this issue will help increase the quality of working conditions, strengthen trade unions, and reduce unfair competition.

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May 2014

Article

Roma integration in European labor markets

Nuclei of evidence tell a grim story, but a veil of ignorance impedes policy efforts

Martin Kahanec

The Roma are the largest ethnic minority in Europe—as well as one of the most disadvantaged. A triple vicious circle is at play: Substandard socio-economic outcomes reinforce each other; they fuel negative attitudes and perceptions, leading to ill-chosen policies; and segmentation is perpetuated through (statistical) discrimination. A severe lack of data precludes progress. However, existing bits of evidence point to virtuous ways out.

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November 2017

Article

Working hours: Past, present, and future

Work hours have been falling in developed countries—But where will they go in the future?

Peter Dolton

Working hours across the world are falling, but considerable variation remains. In some countries people work 70% more hours per year, on average, than in other countries. Much of this variation is due to differences in the prevalence of part-time work and patterns of female labor market participation. Looking ahead, the question of how reducing working hours will affect productivity is significant. In addition, how individuals divide up their leisure and work time and what the appropriate work−life balance is in an increasingly technological future are important concerns.

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March 2016

Article

University autonomy: Improving educational output

Universities deliver more competent graduates and higher quality research if they are more autonomous and well-funded

Jo Ritzen

University autonomy and funding is an important aspect in university-level education due to its impact on graduates’ competencies, and on the quality and quantity of research produced. Political factors influence the amount of autonomy allotted to public universities in specific countries. There is sufficient evidence to suggest that an increase in autonomy for universities would provide better educational outcomes and have a direct impact on labor market productivity. However, the debate on autonomy has been overshadowed by discussions on tuition fees and student aid in political circles.

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Understanding how employment tribunals make decisions can guide reforms of employment dispute settlement

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Jobs can change quickly from full- to part-time status, especially during economic downturns

Poor paid employment prospects push minority workers into working for themselves, often in low-reward work

Should statistical criteria for measuring employment and unemployment be re-examined?

Although market failures mean employment protection is necessary, excessive protection can be counterproductive

Institutions and policies affect whether working mothers raise heavier children

Quality of parental time spent with children is more important than quantity

A range of other policies and changes are needed for childcare expansion to increase mothers’ labor supply

Low-wage employment Updated

Are low-paid jobs stepping stones to higher-paid jobs, do they become persistent, or do they lead to recurring unemployment?

Combining survey and administrative data is growing in popularity, even though data access is still highly restricted

Employment effects of minimum wages Updated

When minimum wages are introduced or raised, are there fewer jobs?

Impact of privatization on employment and earnings Updated

Workers and policymakers may fear that privatization leads to job losses and wage cuts, but what’s the empirical evidence?

Correspondence testing studies Updated

What is there to learn about discrimination in hiring?

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?

Do unemployment benefits help those seeking work to obtain better jobs?

Expansion of microfinance to rural areas may reduce credit constraints, helping non-farm sector growth, employment, and development

Informal employment in emerging and transition economies Updated

Reducing informality requires better enforcement, more reasonable regulation, and economic growth

Subsidized childcare fosters maternal employment, but employment status, childcare quality, and availability matter

Encouraging agricultural employment might reduce rural–urban migration and reduce hidden rural unemployment

Employment and wage effects of extending collective bargaining agreements Updated

Sectoral collective contracts reduce inequality but may lead to job losses among workers with earnings close to the wage floors

Does a changing public sector workforce in the MENA region provide an opportunity for efficient restructuring?

Reducing entry barriers and increasing competition can be beneficial for the economy, under certain conditions

Broadband infrastructure has differing effects on workers of different skills

Labor force composition is critical for understanding employment informality in developing countries

Fair treatment creates incentives, and is beneficial for workers and the firm

Has FDI into transition countries had the expected economic effects?

Can regulation ensure that noncompete agreements benefit both workers and firms?

The importance and challenges of measuring work hours Updated

Measuring work hours correctly is important, but different surveys can tell different stories

Designing labor market regulations in developing countries Updated

Labor market regulation should aim to improve the functioning of the labor market while protecting workers

Preschool improves child outcomes, especially for disadvantaged children

Disability and labor market outcomes Updated

Disability is associated with labor market disadvantage; evidence points to this being a causal relationship

Payroll tax cuts in developing economies might be beneficial to the formal sector, even when the informal sector is large

Health effects of job insecurity Updated

Job insecurity adversely affects health, but employability policies and otherwise better job quality can mitigate the effects

Panel data provide an efficient and cost-effective means to measure changing behaviors and attitudes over time

Can immigrants ever earn as much as native workers? Updated

Immigrants initially earn less than natives; the wage gap falls over time, but for many immigrant groups it never closes

Environmental regulations and labor markets Updated

Balancing the benefits of environmental regulations for everyone and the costs to workers and firms

What are the implications of childcare subsidies for care quality, family well-being, and child development?

Happiness as a guide to labor market policy Updated

Happiness is key to a productive economy, and a job remains key to individual happiness, also under robotization

Are experiments the gold standard or just over-hyped?

The impact of legalizing unauthorized immigrants Updated

While legalization benefits most unauthorized immigrants, deciding how to regularize them is challenging

Increasing the availability of high-quality job opportunities can reduce recidivism among released prisoners

The success of universal preschool education depends crucially on the policy parameters and specific country context

Are fixed-term contracts a stepping stone to a permanent job or a dead end?

Low unemployment and high employment, but also low, volatile pay and high inequality characterize the Russian labor market

Non-traditional employment is a great opportunity for many, but it won’t replace traditional employment

The impact of part-time workers on firms’ productivity is unclear, and lower wages depend mainly on occupation and sector

Impacts of regulation on eco-innovation and job creation Updated

Do regulation-induced environmental innovations affect employment?

International trade regulation and job creation Updated

Trade policy is not an employment policy and should not be expected to have major effects on overall employment

Maternity leave versus early childcare—What are the long-term consequences for children? Updated

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

Focus on family and portable allowances to lower the costs of institutional long-term care while monitoring its quality

Restructuring and upskilling prevents job polarization but may leave countries vulnerable to routine-biased technical change

Market changes and limited redistribution contributed to high income and wealth inequality growth in Eastern Europe

Ethnic enclaves and immigrant economic integration Updated

High-quality enclave networks encourage labor market success for newly arriving immigrants

Understanding religiosity is crucial to informed policy making

Policies in developing countries to improve women’s access to paid work should also consider child welfare

Sexual orientation and labor market outcomes Updated

Sexual orientation seems to affect job access and satisfaction, earning prospects, and interaction with colleagues

Intergenerational return to human capital Updated