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Foreign direct investment (FDI) can provide important opportunities for middle-class jobs by stimulating employment growth, paying wage premiums, and helping to shift workers out of less productive sectors. This analysis exploits regional variations in sales to examine the effect that multinational corporations (MNCs) in the manufacturing sector have on employment and wages in Indonesia between 2007 and 2015. Using interaction effects, it explores how these effects differ by workers’ education level, occupation, and employment status. The study finds that manufacturing MNCs raise average wages in their sector. Yet, higher-educated workers benefit more, and white-collar workers see greater benefits than blue-collar workers. Women also appear to benefit more than men, as a result of the type of labor-intensive sectors MNCs engage in. The study finds evidence that manufacturing FDI can help to accelerate structural transformation, as workers move out of lower-productivity sectors (agriculture and low-skilled services) and into higher-productivity manufacturing.

Bu tez, 1994-2015 yılları arasında Türkiye'deki ücret eşitsizliklerindeki gelişmeyi ve 2004-2015 yılları arasında istihdam ve ücret kutuplaşmasının olup olmadığını göstermeyi amaçlamıştır. 1994, 2002 ve 2011 yılları arasında ücret dağılımlarını analiz etmek amacıyla, Hanehalkı Bütçe Anketleri veri seti kullanılarak, quantile regresyon ve Sıradan En Küçük Kareler yöntemleriyle genişletilmiş `Mincer` kazanç denklemi tahmin edilmiştir. Sonuçlar eğitimin Türkiye'deki ücret eşitsizliği üzerinde etkili olduğunu göstermiştir. 1994-2011 yılları arasındaki yaklaşık iki on yıllık periyodu karşılaştırdığımızda üniversite mezunları arasında yüksek ücretlilerle orta ücretliler arasındaki eşitsizlik artmıştır. 2004-2015 yılları arasında, Hanehalkı İşgücü İstatistikleri kullanılmış ve sonuçlar, toplu ücret eşitsizliklerinin önce düştüğünü sonra artışa geçtiğini ve 2013 yılından sonra paralel seyrettiğini göstermiştir. Ücret dağılımının aşağı kısmında eşitsizlik bütün dönem boyunca azalırken, yukarı kısmında eşitsizlik 2008 yılına kadar paralel seyrederken, sonrasında artmış, 2014 ve 2015 yıllarında yine paralel bir seyir izlemiştir. Arz ve talep analizi yapılmış ve bu analiz, yüksek ve düşük nitelikli çalışanlar arasındaki ücret eşitsizliklerinin sadece bu çerçevede değerlendirilemeyeceğini göstermiştir. Soyut, rutin ve el emeğine dayalı görev gruplarından hangisinin süre içerisinde göreli üstünlük kazandığını bulmak amacıyla, tabakalı birinci fark En Küçük Kareler yöntemi uygulanmış ve sonuçlar soyut meslek gruplarında erkek ve kadın çalışanlarda göreli ücret üstünlüğüne yönelik kuvvetli sonuçlar elde edilememiştir. Diğer yandan, başlangıçta el emeğine dayalı uzmanlaşmış kadın demografik alt gruplarının göreli ücret üstünlüğünde bir artış gözlenmiştir. Shift share analizi ise meslekler bazında istihdam değişimlerinin sektörler arası değişimden kaynaklanmadığını göstermiştir. This thesis aimed to investigate the evolution of wage inequality from 1994 to 2015 in Turkey and to figure out whether labor market is polarized in terms of employment and wages for the period of 2004-2015. In order to analyze the changes in the wage distribution between years 1994, 2002 and 2011, the quantile regression method and OLS techniques were applied on Household Budget Survey data to estimate the extended Mincerian human capital earnings equation. The results revealed that education is one of the important parameters that affect the wage inequality in Turkey. Within wage inequality among university graduates has increased for high to medium spreads for the successive almost 10 year periods. For the period of 2004 and 2015, HLFS data was used and the findings showed that the overall wage inequality which first decreased then slightly rebound up to 2013 and followed rather stable pattern after all. The lower tail wage inequality has decreased almost entire period, while upper tail wage inequality has followed rather stable pattern up to 2008 and then increased and remains stable in 2014 and 2015. Supply and demand analysis for the same period represented that wage inequality between high and low educated workers could not be fully explained by the supply and demand framework for the given period. To find out which task group, abstract, routine or manual, has lost comparative advantage, stacked first difference OLS estimation was applied and the results reflected that relative wage of abstract occupation categories are not strongly evident after 2004 for both men and women, on the other hand an increase in the relative wage of female demographic subgroups that had an initial specialization in manual tasks was observed. Shift share analysis albeit reflected that change in the employment by occupation was not derived from industrial shift for the given period. 143

As countries become increasingly integrated into the global economy, increased trade links with other countries translate into increased access to better or cheaper imports and increased demand for exports. Both can have an impact on consumers, producers and workers through household consumption, household production, and labor incentives. The channels through which increased trade integration can affect labor include: (i) the consumption channel, typically leading to an increase in purchasing power and therefore higher real wages, and (ii) the employment effect due to increased labor demand. The extent of these gains to trade will depend on the incidence of trade policies or trade shocks; in other words, the impact will depend on which products become less expensive, which sectors increase demand for skilled or unskilled labor, and which workers can access these new jobs. This report utilizes a range of methodologies and datasets that implicitly link trade and jobs; by using these complementary analytical approaches, we generate multiple perspectives on Lao PDR’s recent labor market outcomes, and their implications for Lao PDR’s current and future trade competitiveness.

This paper examines the earnings premiums associated with different types of employment in 73 countries. Workers are divided into four categories: non-professional own-account workers, employers and own-account professionals, informal wage employees, and formal wage employees. Approximately half of the workers in low-income countries are non-professional own-account workers and the majority of the rest are informal employees. Fewer than 10 percent are formal employees, and only 2 percent of workers in low-income countries are employers or own-account professionals. As per capita gross domestic product increases, there are large net shifts from non-professional own-account work into formal wage employment. Across all regions and income levels, non-professional own-account workers and informal wage employees face an earnings penalty compared with formal wage employees. But in low-income countries this earnings penalty is small, and non-professional own-account workers earn a positive premium relative to all wage employees. Earnings penalties for non-professional own-account workers tend to increase with gross domestic product and are largest for female workers in high-income countries. Men earn greater premiums than women for being employers or own-account professionals. These results are consistent with compensating wage differentials and firm quasi-rents playing important roles in explaining cross-country variation in earnings penalties, and raise questions about the extent to which the unskilled self-employed are rationed out of formal wage work in low-income countries.

One of the primary motivations behind the establishment of noncontributory pension programs is to allow beneficiaries to retire from the labor force. Yet, as with other unconditional cash transfer schemes, their aggregate effects may be more complex. Using panel data and instrumental variable techniques, this paper shows that the effect of one such program, Colombia Mayor, has been to raise the labor force participation of relatively younger male beneficiaries. This increase occurred precisely in the occupations with characteristics that are likely to require some up-front investment. The paper concludes that the transfer effectively loosened the liquidity constraints to remaining in these occupations. However, no such effect is found among women or older beneficiaries.

Mauritius is a high middle-income country with low levels of poverty and inequality. The headcount poverty level was 6.9 percent in 2012; measured by the international standard of United States (U.S.) $2 per day (PPP), poverty was less than 1 percent. On inequality, Mauritius also fared well compared to its peer middle-income countries. On the negative side, Mauritius’ growth has not been equally shared, despite the general improvement in welfare. The economy’s polarization was associated with a structural transformation from labor-intensive industries to services and knowledge-intensive industries. Inclusiveness remains the main challenge for the current growth pattern. When Mauritius will be able to become a high-income country will depend on its ability to improve the labor force’s skill set, develop infrastructure, and further improve the business environment to attract foreign direct investment (FDI) and generate domestic investment. Reduction in inequality and boost of shared prosperity will require more growth and a more pro-poor pattern of growth. An increase in female labor force participation, reduction of high youth unemployment rates, improving the efficiency of the social protection system will reduce growing skills mismatch facilitating inclusive growth and eradicating poverty in Mauritius.

This paper decomposes the gender gap in pay in the Russian Federation along the earnings distribution for the period 1996–2011. The analysis uses a reweighted, recentered influence function decomposition that allows estimating the contribution of each covariate on the wage structure and composition effects along the earnings distribution. The paper finds that women are in flat career paths compared with men; the importance of observable characteristics that proxy human capital in the gender pay gap decrease along the earnings distribution; and if women’s pay took into account their educational degrees as much as men’s, the gender pay gap would disappear or even reverse at the top of the earnings distribution. The results suggest that women at the bottom of the earnings distribution should be helped to increase their labor market skills, and women at the top of the distribution should be helped to break the glass ceiling and be remunerated for their skills to the same extent as men.

Wage inequality decreased significantly in the Russian Federation over the 2000s. The economic expansion experienced throughout the decade led to an improvement in social indicators, with a large reduction in poverty rates and an increase in higher education. In this context, wage inequality showed a sharp decline, with the Gini index on labor income decreasing by 18 percent between 2002 and 2012. Using data from the Russian Longitudinal Monitoring Survey, this paper documents the reduction in wage inequality and explores potential factors behind the trend. The analysis uses a decomposition technique proposed by Fortin, Lemieux, and Firpo (2011) to disentangle the main drivers behind changes in the wage distribution. The results suggest that wage structure effects are more important than composition effects for explaining changes in wage inequality. Institutional factors, such as minimum wage policies and changes in the returns to employment in different sectors and types of firms as well as the reduction of the skill premium, emerge as the most relevant factors for explaining changes in the wage structure.

The information contained in this summary report reflects the analysis and assessment that have been undertaken beginning January 2013 mainly to assess the effectiveness of TalentCorp’s efforts to attract and retain global talent through its Returning Expert Program (REP) and Residence Pass-Talent (RP-T). The initial research included various activities aimed at improving the client’s ability to meet its mandate. The main activities completed were as follows: (1) creation of a platform to identify and monitor local labor market conditions and human capital/talent needs; (2) creation of a profile of the Malaysian diaspora living abroad; (3) creation and implementation of two surveys, both surveys focused on gauging the attractiveness of working in Malaysia and were targeted at the Malaysian diaspora and foreign talent living in Malaysia; (4) an impact evaluation of the REP, which aims to facilitate highly skilled members of the Malaysian professionals abroad back to Malaysia; and (5) an assessment of the effectiveness of the RP-T Program, which aims to retain foreign talent in Malaysia. In both the impact evaluation and the assessment, the main questions investigated are whether these programs effectively attract/retain talent.

This paper analyzes the legal and actual gaps in working conditions and returns between permanent and temporary contracts, with a focus on civil law contracts, which are at the center of the debate on widening labor market duality in Poland. We find that net employment creation in recent years occurred largely through involuntary temporary contracts, especially among the low-skilled and young people. Even accounting for workers heterogeneity, we find a persistent wage gap between permanent and temporary contracts, and limited mobility across contract typologies. Insights from qualitative evidence suggest that narrowing duality without hurting the most vulnerable workers will require a reduction in administrative burdens and implicit costs associated with permanent labor contracts, while eliminating firms’ incentives to strictly prefer temporary contracts.

This paper examines the relationship between changes in the financial sector and the increasing inequality in Germany. For this, first an overview about the development of the main inequality indicators for Germany is given, which show inequality has been rising since the 1980s. Thereafter, the main features of the German financial system and its main changes in the last decades are reviewed. It is also looked at employment and incomes in the financial sector to determine, whether exorbitant growth of the financial sector, as observed in other countries, could be responsible for the increasing inequality. Thereafter, the relation of the financial sector with the non-financial sector is examined. First, a look at the financing structure of non-financial firms is taken. Subsequently, it is studied how changed behaviour in the financial sector may have led to increased inequality. It is argued that a multitude of factors including the retreat of the big banks from the German Inc., the changes in securities market regulation, the occurrence of new types of financial investors have all changed the corporate governance system in a way that made it more conducive to inequality. Then, the most important regulatory reforms and reform proposals for the financial sector are outlined. In the last section of the paper the main results are summarised and some general conclusions are drawn.

This investment climate analysis reviews the experiences of over 3000 surveyed business owners in 26 states of Nigeria about the aspects of the business climate that affect their businesses. It complements a similar study in 2007 that covered 11 other Nigerian states. The survey asks business owners about both their perceptions and the actual costs of selected constraints. The analysis benchmarks Nigeria against comparator countries, and provides detailed data for each state. Nigerian firms have low productivity, as measured by their output in relation to their labor and capital inputs. Firms in Kenya are about 40 percent more efficient, firms in Russia almost twice as productive, and firms in South Africa almost four times as productive. Nigerian firms that export are about 90 percent more productive than non-exporters. Although labor in Nigeria is inexpensive, it is not inexpensive enough to compensate for this low productivity. The poor performance of Nigerian firms reflects many factors. This study focuses on constraints in the business climate and the serious costs they impose on Nigerian firms. Taken together, the total indirect costs of poor quality infrastructure, crime and security, and corruption amount to over 10 percent of sales for Nigerian firms. This is twice as high as in South Africa, Brazil, Russia and Indonesia. Microenterprises firms with fewer than five workers face similar constraints as larger firm's unreliable power, limited access to finance, corruption, and transportation bottlenecks. But the consequences for their businesses are far more severe. For instance, most microenterprises cannot afford generators, so power outages are more likely to shut down their operation. Lacking collateral, almost no microenterprises have access to formal external financing.

This report is organized as follows. After this introduction, the second section explains the main data sources used in the study. The third section discusses the relationship between sectoral output growth and employment generation, and presents basic estimates on growth elasticities. The fourth and fifth section presents detailed descriptive analyses on the pattern of employment growth. The sixth section summarizes the findings of an econometric analysis on labor market participation decisions, with a special emphasis on female labor, and the determinants of wages. The author estimate the multi-nominal logical model for labor market participation decisions of men and women living in urban regions for each year since 2000, and estimate the wage equation for 2006 by taking into account the labor market participation decision (the sample selection effect). The last section presents the main findings of the study.

The female labor force participation level in Turkey is currently very low at 27 percent compared with the Organization for Economic Cooperation and Development, or OECD and European Union, or EU-19 averages of 61 and 64 percent respectively. This rate has been declining in the last 30 years from a level of 48 percent in 1980. This paper looks at the most recent trends and profiles of labor force participation of women in Turkey using three different household level data sources in available Turkey (HBS, LFS and TDHS) for the period 2003-2006. The paper also reports a multivatiate analysis on the probability of working for women, controlling for various characteristics.