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This article examines the issue of labor shortages in various countries, particularly in OECD countries, and how the COVID-19 pandemic has exacerbated this problem. It discusses the factors contributing to labor shortages, such as temporary demand-driven shortages and shifts in the labor force. The article emphasizes the potential impact of labor shortages on global growth, trade, and inflation, especially in developing and emerging countries. It also explores the decline in average hours worked and its implications for labor market adjustment and wage growth. The article suggests that policymakers should focus on mobilizing untapped labor supply, improving skills, and promoting productivity through digital and green transitions. Additionally, it discusses the potential role of artificial intelligence (AI) in addressing labor shortages, but highlights the concentration of market power in the AI industry as a barrier. The article concludes that addressing labor shortages requires a comprehensive approach that considers various factors such as demographics, migration, education, and macroeconomic conditions. [Extracted from the article]

In this paper we present comparative evidence from OECD countries concerning the impact of labour market institutions and regulations on technological specialization. The interplay between the degree of labour market flexibility, the system of industrial relations and the knowledge base of different industries determines the viability of different human resource strategies, thereby shaping the patterns of comparative advantage. Our empirical results show that countries with coordinated industrial-relations systems and strict employment protection tend to specialize in industries with a cumulative knowledge base. We argue that two mechanisms explain these patterns. The larger the scope for resorting to internal labour markets, the lower the adjustment costs imposed by labour market regulation. Furthermore, employment protection and coordinated industrialrelations regimes, by aligning workers' and firms' objectives, encourage firmsponsored training as well as the accumulation of firm-specific competencies, allowing firms to fully exploit the potential of the internal labour market. [ABSTRACT FROM AUTHOR]

This article explores the impact of financial market regulation on jobs. It argues that understanding the impact of finance on labor markets is key to an understanding of the trade-off between economic stability and financial sector growth. The article combines information on labor market flows with indicators of financial market development and reforms to assess the implications of financial markets on employment dynamics directly, using information from the International Labour Organization (ILO) datatabse on unemployment flows. On the basis of a matching model of the labor market, it analyses the economic, institutional, and policy determinants of unemployment in- and out-flows. Against a set of basic controls, we present evidence regarding the relationship between financial sector development and reforms and their impact on unemployment dynamics. Using scenario analysis, the article demonstrates the importance of broad financial sector re-regulation to stabilize unemployment inflows and to promote faster employment growth. In particular, we find that encompassing financial sector regulation, had it been in place prior to the global financial crisis in 2008, would have helped a faster recovery in jobs. [ABSTRACT FROM AUTHOR]

Earlier research on the links between economic growth and credit market development has abstracted from interactions between labour and financial markets. Moreover, most studies have analysed macro-finance linkages at the aggregate level, ignoring the decentralized nature of search and matching in labour and credit markets. This paper fills this void and thus allows for a more disaggregate analysis of policy effects. We show that the credit market exacerbates and accentuates the labour market effects, having amplifying effects on output, consumption, employment and welfare. Depending on the strength of the debt-dynamics, several growth dynamics emerge from this interaction between labour and credit markets with two distinct steady states: a stable growth regime and another one that is vulnerable and unstable. To test the empirical implications of the theoretical model, a multi-regime VAR (MRVAR) model is fitted to the US output and credit market data. The MRVAR estimation indicates that shocks to credit conditions during a high-growth period have markedly different effects than during a low growth and recessionary period. Also, there are substantial state-dependent asymmetries with respect to the sign of shocks to credit conditions, confirming the theoretical predictions. [ABSTRACT FROM AUTHOR]

The rapid rise in unemployment since 2008 caused by the global financial crisis has created renewed interest in the effects of well-designed unemployment benefit systems on the speed at which labour markets recover and job creation resumes. On the basis of a newly-created database on labour market flows, this article makes use of a micro-founded macroeconomic model to estimate different effects of active and passive labour market spending on employment growth and the state of public finances. It demonstrates, in particular, that for the average advanced G20 country, spending on unemployment benefits yields employment gains both in the short-term and long-term that are superior to those observed for active labour market policies. Moreover, rather than tightening their budgets prematurely, advanced G20 countries would have fared much better in accepting further deterioration in public finances stemming from higher spending on social transfers in order to stimulate faster employment growth, which would have led to a more rapid recovery in the state of public finances as well. [ABSTRACT FROM AUTHOR]

The article discusses the application of micro-founded macroeconomic model to estimate the different effects of active and passive labour market spending on employment growth and the state of public finances.