Search

We consider the macroeconomic implications of the interaction between nominal rigidities and labor market frictions in a framework where firms jointly make pricing and hiring decisions. In our New Keynesian model, workers randomly search for jobs and are matched with firms that post take-it-or-leave-it contracts and are subject to sticky prices. Relative to the typical model that separates search frictions and nominal frictions into wholesale and retail firms, respectively, our model implies smoother wages because firms can affect their marginal costs by adjusting prices. A consequence of smoother wages is that the vacancy-to-unemployment ratio responds much more than under the standard model. Additionally, our baseline model shows larger effects of changing the inflation target and smaller effects of changing unemployment benefits. We also show that combining search and price frictions in one firm leads to less volatility after technology shocks but more volatility after monetary policy shocks.

This paper addresses the problem of the dualism of the Italian economy, particularly of its labor market. Although the Italian labor market is considered to be the most highly regulated among OECD countries, the unemployment rate in the North, which represents two thirds of the whole economy, is one of the lowest in Europe. In contrast, the South faces an unemployment rate between two to five times higher than the North. GDP per capita is also twice in the North than in the South, while nominal wages do not differ substantially across regions. Finally internal migration is the lowest among European countries since the middle seventies. This paper argues that the uniform wage is the result of the centralized wage setting carried on by unions, and that the absence of migration is the result of the proactive role of the government, which in the seventies stopped the mass internal migration from the South to the North and since then is acting to prevent the reappearance of such phenomenon. Uniform wage across regions, the active role of the government to prevent internal mass migration and a structural productivity divide between North and South are the institutional features that, within a general equilibrium matching model, explain the high unemployment rate in the South and, perhaps more interestingly, the low unemployment rate accompanied by low wages in the North even when compared to other western European countries.

A clear consensus has emerged that agglomeration economies are an important factor explaining why firms cluster next to each other. Yet, because of non-trivial measurement challenges, disagreement remains over the sources of these agglomeration effects. This paper is the first to present direct evidence showing how localized knowledge spillovers arise from workers changing jobs within the same local labor market. Specifically, I assess the extent to which firm-to-firm labor mobility enhances the productivity of firms located near highly productive firms. Using a unique dataset combining Social Security earnings records and balance sheet information for Veneto, a region in Italy with many successful industrial clusters, I first identify a set of highly productive firms, then show that hiring workers with experience at these firms significantly increases the productivity of other firms. To address identification threats arising from both contemporaneous and future unobservable firm-level productivity shocks correlated with hiring, I use control function methods drawn from the productivity literature and a novel instrumental variable strategy, which exploits downsizing events at highly productive firms. My findings imply that worker flows can explain around 10 percent of the productivity gains experienced by incumbent firms when new highly productive firms are added to a local labor market.

Using new data matching remittances and monthly payroll disbursals, we demonstrate how fluctuations in migrants' earnings in the United Arab Emirates affect their remittances. We consider three types of income fluctuations that are observable by families at home: seasonalities, weather shocks and a labor reform. Remittances move with all of these income changes. Remittances do not move with an individual's growth in earnings over time. The slope of the relationship between earnings and time in the UAE varies across individuals and is not easy to observe by families. Thus, a key characteristic that drives remittance behavior is the observability of income rather than other features of these fluctuations. The results are consistent with a private information model where remittances are viewed by the migrant worker as payments to their families in an income-sharing contract.

The paper presents a model of an economy whose urban structure consists of cities of different types. All cities of different types. All cities produce a non-tradeable final good using both types of tradeable intermediate varieties. Each city has an internal spatial structure: individuals commute to the CBD in order to work, when employed, and to seek jobs, when unemployed. Hiring by each intermediate producing firm is subject to frictions, which are modeled in the Diamond-Mortensen-Pissarides fashion. Job matching requires either travel to the CBD for face to face contacts or, alternatively, referrals from social contacts.City type is conferred by specialization in producing one of the two types of intermediate varieties, diversified cities, where both types are produced, and there is intercity trade in intermediate varieties. The paper examines the properties of equilibrium with intercity trade and its dependence on such parameters as those pertaining to productivity, the matching process, the rate of job destruction and their consequences for unemployment, output and welfare across the economy along a steady state. The model's use of international trade tools confers a central role to labor market tightness, akin to factor intensity. A natural dependence of unemployment on city size is generated. The paper provides a framework for studying spatial mismatch. Equilibrium outcomes generically diverge from the planner's optimum: socially optimal unemployment trades off the probability of employment to search socts of firms independently for each skill type and independently of city size, and city sizes are independent of labor market tightness considerations but reflect both market size effects and the skill composition of the economy.

We develop a measure of unemployment that takes into account both the duration and intensity of unemployment. This measure satisfies several desirable properties, including distribution sensitivity, which deals with differences among the unemployed. It is particularly suited to developing countries because individuals in these countries display considerable variation in labor force participation, unemployment duration, and unemployment intensity. It can also be decomposed into mean and variance components and contributions to unemployment by various subgroups of the population. We use this measure and data from National Sample Surveys on employment and unemployment to understand unemployment in India during the period 1993 to 2012. We show that unemployment has generally fallen, although the distribution of unemployment has worsened. Moreover, unemployment is driven to a greater extent by higher educated groups; the unemployment among these groups is also fairly substantial. We explain these findings and suggest some policies.

Online décembre 2015 compté en 12/2015; International audience; This article contributes to the literature on knowledge transfer via labor mobility by providing new evidence regarding the role of educational diversity in knowledge transfer. In tracing worker flows between firms in Denmark over the period 1995–2005, we find that knowledge carried by workers who have been previously exposed to educationally diverse workforces significantly increases the productivity of the hiring firms. Several extensions of our baseline specification support this finding and confirm that our variable of interest affects the arrival firm's performance mainly through the knowledge transfer channel.

This is the accepted and refereed manuscript to the article The paper proposes a model of on-the-job search and industry dynamics in which search is directed. Firms permanently di er in productivity levels, their production function features constant returns to scale, and search costs are convex in search intensity. Wages are determined in a competitive manner, as rms advertise wage contracts (expected discounted incomes) so as to balance wage costs and search costs (queue length). Firms are assumed to sort out their coordination problems with their employees in such a way that the on-the-job search behavior of workers maximizes the match surplus. Our model has several novel features. First, it is close in spirit to the competitive model, with a tractable and unique equilibrium, and is therefore useful for empirical testing. Second, on-the-job search is an e cient response to rm heterogeneities and convex search costs. Third, the equilibrium leans towards a job ladder, where unemployed workers apply to low-productivity rms o ering low wages, and then gradually move on to more productive, higher-paying rms. With a continuum of rm types, the job ladder i strict, in the sense that there is a one-to-one correspondence between the productivity of the current employer and that of the rms she searches for. The paper also contributes methodologically, as the existence proof requires a version of Schauder's xed point theorem that is not commonly used by economists. Finally, our model o ers di erent implications for the dynamics of job-to-job transitions than existing models of random search. 2. Forfatterversjon

This article documents a strong connection between unemployment and mental distress using data from the Spanish National Health Survey. We exploit the collapse of the construction sector to identify the causal effect of job losses in different segments of the Spanish labor market. Our results suggest that an increase of the unemployment rate by 10 percentage points due to the breakdown in construction raised reported poor health and mental disorders in the affected population by 3 percentage points, respectively. We argue that the size of this effect responds to the fact that the construction sector was at the center of the economic recession. As a result, workers exposed to the negative labor demand shock faced very low chances of re-entering employment. We show that this led to long unemployment spells, stress, hopelessness, and feelings of uselessness. These effects point towards a potential channel for unemployment hysteresis., We acknowledge financial support from the RecerCaixa programme 2012. The funds allowed the collection of data. It also financed a research assistant to clean the data and conduct the preliminary analysis. Hannes Mueller acknowledges financial support from the Ramon y Cajal programme and Spanish Ministry of Economy and Competitiveness, through the Severo Ochoa Programme for Centres of Excellence in R&D (SEV-2011-0075). Farré acknowledges the financial support of the Government of Catalonia (grant SGR2014-325) and the Spanish Ministry of Science (grant ECO2014-59959-P). These funds were used to finance the researchers to conduct the data analysis and the writing of the manuscript.

This paper examines the evolution of immigrant earnings in the United States between 1970 and 2010. There are cohort effects not only in wage levels, with more recent cohorts having lower entry wages through 1990, but also in the rate of wage growth, with more recent cohorts experiencing less economic assimilation. The slowdown in assimilation is partly related to a concurrent decline in the rate at which the new immigrants add to their human capital stock, as measured by English language proficiency. The data also suggest that the rate of economic assimilation is significantly lower for larger national origin groups.

This paper estimates the impact of the implementation of the 2006 Massachusetts health reform on job mobility. Theoretically, the effect is ambiguous, as the public health insurance expansion and low-income subsidies would be expected to increase mobility, but the employer mandate and price effects could either increase or decrease mobility depending on the relative impacts on an individual's current job and the attractiveness of other modes of employment or retirement. Utilizing data from tax returns that span 2002–10, in which job changes are identified using employer information reported on W-2 forms, we estimate the impact of the Massachusetts reform using a difference-in-differences approach, comparing the prevalence of job changes in Massachusetts to those of a comparison group, while controlling for individual fixed effects. The estimates suggest the Massachusetts reform generally did not have a significant impact on job separations overall, though it may have increased separations from primary jobs among married women. There is evidence, however, that mobility increased among low-income married couples, young married men, and older married women.

The aim of this paper is to analyse both in theory and in practice fiscal policy effects on the employment rate. For example, even if taxation is one of the main instruments of fiscal policy of the government in reducing unemployment, high taxes reduce disposable incomes of consumers, which automatically leads to lower consumption and when consumers buy less, increases the odds that the unemployment increase. To highlight this we used the comparison of a dynamic influence of fiscal policy on macroeconomic variables with the empirical results from an identified multidimensional model. Data shows a positive conditional correlation between government expenditures increase and labour force supply.

Suppose that all people in the world are allocated only two characteristics over which they have (almost) no control: country of residence and income distribution within that country. Assume further that there is no migration. We show that more than one-half of variability in income of world population classified according to their household per capita in 1% income groups (by country) is accounted for by these two characteristics. The role of effort or luck cannot play a large role in explaining the global distribution of individual income. © 2015 The President and Fellows of Harvard College and the Massachusetts Institute of Technology

We put the current shift in the Beveridge curve into context by examining the behavior of the curve since 1950. Outward shifts in the Beveridge curve have been common occurrences during U.S. recoveries. By itself, the presence of a shift has not been a good predictor of whether the unemployment rate at the end of the expansion following a shift was higher or lower than that in the preceding expansion.

This study discovers how unemployment rate explains the changes in the crime rate tendency in Europe by the two-stage-least square regression. The crime rate in the Economic and Monetary Union (EMU) area is found evidently more sensitive to unemployment than the non-EMU countries. The adoption of a common currency also strengthens the connections of the criminal problem among the EMU countries. We found the seriousness of the endogenous bias involved using the OLS methodology, so previous findings on the small effect of unemployment on crime rate obtained by employing the OLS methodology could be unreliable. Empirically, a one-percentage-point increase in unemployment increases the property crime by nearly 9% on average. The large unemployment effect implies that the increase in the unemployment rate that occurred after the financial crisis in 2008, followed by the European sovereign-debt crisis, may account for the trending increasing tendencies of the crime rate in Europe. The high unemployment effect revealed markedly different policy implications than those that have previously been considered in the literature. These findings suggest that the key determinants for governmental authorities in the EMU area successfully mitigating crime would greatly depend on how the governments resolve their economic recession.

The Bulgarian labour market adjustment during the economic crisis stands out by significant job losses, but at the same time strong average wage growth. The predominance of job cuts over wage cuts is most problematic for vulnerable groups, sectors and regions. Wage adjustments have hardly helped limiting unemployment. Strong increases in unit labour costs (ULC) and real effective exchange rates (REER) seem not (yet) to have eroded external competitiveness as exports have remained strong. This can be explained by economic convergence, lower wage growth in tradable sectors and possibly only temporarily favourable export price developments on world markets. Rapid wage growth is influenced by a combination of factors. At first sight the institutional features of the Bulgarian labour market seem rather flexible. Some factors only impact the statistical average even without actual wage increases (like job cuts being concentrated in low paid jobs and a reduction in undeclared wages). However, actual wages have probably also increased, impacted by convergence from the lowest wage levels in the EU, skills and regional mismatches. One of the key features identified in this paper is a unique system of hundreds of different minimum income thresholds across sectors and occupations applied for the calculation of social security taxes. These thresholds are set close to the average wages prevalent in the same sectors and occupations, especially for the low-wage segment where unemployment is also the highest. To minimise the negative implications for employment, the minimum social security thresholds might usefully be reviewed. Recalibration of the thresholds could be combined with a wider set of labour market measures (ALMPs, training and education policies) to improve the employability of crisis-hit employees.

We investigate transitions between unemployment, low-paid employment and higher-paid employment using household panel data for the period 2001 to 2011. Dynamic panel data methods are used to estimate the effects of labour force status on subsequent labour force status. A distinctive feature of our study is the investigation of heterogeneity in the effects of unemployment and low-paid employment on future employment prospects. We find that there is state dependence in both unemployment and low-paid employment and clear evidence of a low-pay no-pay cycle for both men and women. Significant differences in effects across different subgroups of the population are, however, found. Typically, the young and the better educated face less severe penalties from unemployment or low-paid employment, and, for women, the cycle between low pay and no pay varies across subgroups. Moreover, in the case of men who have completed secondary schooling but have no further qualifications, low-paid employment actually decreases the chances of entering higher-paid employment by more than unemployment does. This is not the case for women, however, who clearly have a higher likelihood of entering higher-paid employment from low-paid employment than from unemployment, regardless of their age, education level or other characteristics.

Employing a lab experiment, we directly test the empirical importance of key attitudes underlying the models of taste-based and statistical discrimination in explaining ethnic hiring discrimination. We find evidence that employer concern that co-workers and customers will prefer collaborating with native individuals drives unequal treatment.

El presente documento tiene como propósito estudiar el impacto de diferentes factores externos sobre el empleo en el sector manufacturero colombiano, a través del enfoque de flujos de empleo. En particular, se analizan los efectos de la tasa de cambio real, la inversión extranjera directa y el grado de apertura de las firmas sobre la creación y la destrucción de empleo. Se encuentra que un aumento en la tasa de cambio real incrementa la creación y disminuye la destrucción de empleos, lo que sugiere un impacto positivo en el crecimiento neto del empleo en el sector. Asimismo, las firmas manufactureras que comercian activamente con el exterior magnifican el efecto que tiene la tasa de cambio real sobre los flujos de empleo. Finalmente, el empleo en el sector manufacturero es afectado negativamente por el fenómeno de la enfermedad holandesa. The aim of this paper is to study the impact of external factors on employment in the manufacturing sector in Colombia, using the job flows approach. In particular, we analyze the effects of the real exchange rate, foreign direct investment and the degree of openness of firms on job creation and destruction. We find that an increment in the real exchange rate increases job creation and decreases job destruction, suggesting a positive impact on net employment growth in the sector. Also, manufacturing firms that trade actively in the international market magnify the effect of the real exchange rate on employment flows. Finally, manufacturing employment is negatively affected by the Dutch disease phenomenon. Cet article étudie l'impact des facteurs externes sur l'emploi dans le secteur manufacturier colombien à travers l'approche des flux d'emplois. En particulier, nous étudions les effets du taux de change réel, de l'investissement direct étranger et le degré d'ouverture des entreprises sur la création et la destruction d'emplois. On constate que l'augmentation du taux de change réel augmente la création tandis qu'une diminution favorise la destruction d'emplois, un résultat qui suggère un impact positif sur la croissance nette de l'emploi dans le secteur. En outre, les entreprises manufacturières qui ont des échanges avec l'étranger accentuent l'effet du taux de change réel sur les flux de travail. Enfin, l'emploi dans le secteur manufacturier est touché négativement par le phénomène de la maladie hollandaise.

Hiring inexperienced workers generates information about their abilities. If this information is public, workers obtain its benefits. If workers cannot compensate firms for hiring them, firms will hire too few inexperienced workers. I determine the effects of hiring workers and revealing more information about their abilities through a field experiment in an online marketplace. I hired 952 randomly-selected workers, giving them either detailed or coarse public evaluations. Both hiring workers and providing more detailed evaluations substantially improved workers' subsequent employment outcomes. Under plausible assumptions, the experiment's market-level benefits exceeded its cost, suggesting that some experimental workers had been inefficiently unemployed. (JEL J23, J24, M51)

The global economic crisis is a period characterized by a sharp drop in economic activity that affects people in many ways. We can say that its beginnings were in 2007 in America with both microeconomic and macroeconomic nature causes. The effects were felt different from one nation to another, but we can say that the most affected countries are considered developing and third world. Were observed global effects, some of which - few in number - can be considered constructive, and governments have acted both individually and at EU level to protect the economy. We consider education as a victim of the economic crisis. The main objective of this study is to analyze the impact of economic crisis over the education.

Depuis 2010, la courbe de Beveridge de la zone euro, plus particulièrement celle de la France, indique une hausse simultanée du chômage et des vacances d’emploi, ce qui suggère une augmentation du chômage structurel.

Settlement in a socially deprived neighborhood may hamper individual labor market outcomes because of lack of employed or highly skilled contacts. I investigate this hypothesis by exploiting a unique natural experiment that occurred between 1986 and 1998 when refugee immigrants to Denmark were assigned to municipalities quasi-randomly, which successfully addresses the methodological problem of endogenous neighborhood selection. I show that individuals sort into neighborhoods. Taking account of location sorting, living in a socially deprived neighborhood does not affect labor market outcomes of refugee men. Their labor market outcomes are also not affected by the overall employment rate and the overall average skill level in the neighborhood. However, an increase in the average skill level of non-Western immigrantmen living in the neighborhood raises their employment probability, while an increase in the employment rate of co-national men living in the neighborhood raises their real annual earnings. This provides quasi-experimental evidence that residence-based job information networks are ethnically stratified. Settlement in a socially deprived neighborhood may hamper individual labor market outcomes because of lack of employed or highly skilled contacts. I investigate this hypothesis by exploiting a unique natural experment that occurred between 1986 and 1998 when refugee immigrants to Denmark were assigned to municpalities quasi-randomly, which successfully addresses the methodological problem of endogenous neighborhood selection. I show that individuals sort intor neighborhoods. Taking account of location sorting, living in a socially deprived neighborhood does not affect labor market outcomes of refugee men. Their labor market outcomes are also not affected by the overall employment rate and the overall average skill level in the neighborhood. However, an increase in the average skill level of non-Western immigrant men living in the neighborhood raises their employment probability, while an increase in the employment rate of co-national men living in the neighborhood raises their real annual earnings. This provides quasi-experimental evidence that residence-based job information networks are ethnically stratified.

Let $(mathcal{E}_t, tgeq0)$ be a geometric Brownian motion. In this paper, we compute the law of a generalization of Dufresne’s translated perpetuity (following the terminology of Salminen-Yor) : $$ int_0^{+infty} frac{mathcal{E}_s^2}{(mathcal{E}_s^2+2 amathcal{E}_s +b)^2} ds,$$ and show that, in some cases, this perpetuity is identical in law with the first hitting time of a three-dimensional Bessel process with drift.We also study the law of the following pair of annuities $$left(int_0^{t}left(mathcal{E}_s-1 right)^+ ds , quad int_0^{t}left(mathcal{E}_s-1 right)^-ds right)$$ via a Feynman-Kac approach, and discuss some particular cases for which we are able to recover the associated perpetuities.

To hire new workers, employers use a variety of recruiting methods in addition to posting a vacancy announcement. The intensity with which employers use these alternative methods can vary widely with a firm’s performance and with the business cycle. In fact, persistently low recruiting intensity helps to explain the sluggish pace of US job growth following the Great Recession.

I investigate the importance of the match between teachers and schools for student achievement. I show that teacher effectiveness increases after a move to a different school, and I estimate teacher-school match effects using a mixed-effects estimator. Match quality "explains away" a quarter of, and has two-thirds the explanatory power of teacher quality. Match quality is negatively correlated with turnover, unrelated with exit, and increases with experience. This paper provides the first estimates of worker-firm match quality using output data as opposed to inferring productivity from wages or employment durations. Because teacher wages are essentially unrelated to productivity, this is compelling evidence that workers may seek high-quality matches for reasons other than higher pay.

This paper aims to shed some light on the dynamics of the Spanish labor market, using data from the Spanish Labor Force Survey for the period 1987 to 2010. We examine transition rates in a three-state model and compare our results with those re- ported for the UK and the US. Explicitly introducing the employment duality present in the Spanish labor market, we study labor market dynamics in a four-state model set-up. We also analyze the behavior of these rates within two sub-periods of recession and a further two sub-periods of boom. We provide evidence of the cyclicality of the transition rates using unconditional and conditional correlations. Finally, we compute the contribution of the di erent transitions to unemployment rate volatility. Our over- all conclusion points out that the employment duality is the key to understand the unemployment volatility and the functioning of the Spanish labor market.

Este documento analiza las características y dinámicas de los flujos de empleo en el sector manufacturero colombiano, durante el periodo 1994-2009. El estudio realiza una caracterización desagregada de la creación, destrucción, crecimiento neto y reasignación del empleo a nivel de grupos industriales y categorías ocupacionales. Los resultados sugieren altos movimientos de creación y destrucción del empleo en las firmas del sector manufacturero, que generalmente no se evidencian en las cifras de empleo neto. En particular, el crecimiento neto promedio del empleo del sector de -0.32, se explica por tasas de creación y destrucción del empleo, cercanas al 10%, durante el periodo de análisis. Así mismo, se encuentra que los movimientos de creación y destrucción del empleo son persistentes, teniendo en cuenta que en promedio de 10 nuevos empleos que se crean, 6.8 empleos sobreviven en el siguiente año y de 10 empleos que se destruyen, 7.6 empleos no se vuelven a crear. Los resultados a nivel desagregado indican diferencias significativas por grupo industrial y categoría ocupacional.

In this article, we use a stylized model of the labor market to investigate the effects of three alternative and well-known bargaining solutions. We apply the Nash, the Egalitarian and the Kalai-Smorodinsky bargaining solutions in the small firm's matching model of unemployment. To the best of our knowledge, this is the first attempt that has been made to implement and systematically compare these solutions in search-matching economies. Our results are twofold. First from the theoretical/methodological viewpoint, we extend a somewhat flexible search-matching economy to alternative bargaining solutions. In particular, we prove that the Egalitarian and the Kalai -Smorodinsky solutions are easily implementable and mathematically tractable within search-matching economies. Second, our results show that even though the traditional results of bargaining theory apply in this context, they are generally qualitatively different and quantitatively weaker than expected. This is of particular relevance in comparison with the results established in the earlier literature.

Summary The last decade has been shaped by dramatic developments in international trade, international investment and production, both in terms of the scale of events and in terms of their qualitative nature. Intriguing questions have been thrown up concerning the labor market impact of these developments, notably welfare issues (the evolution of real wages, employment and unemployment), the distribution of income (the wage structure) and employment volatility. Path-breaking innovations in the theories of trade, location and the multinational firm allow a fresh look at these labor market effects. This paper takes stock of these theoretical innovations and contrasts these with the recent empirical research efforts to uncover the labor market implications of trade and FDI. We identify research gaps and highlight promising avenues for future research.

We analyse the rate of formation, the characteristics, and the performance of different types of new firms in Sweden over a decade. Comparisons with Denmark, Brazil, and the United States suggest that the environment for new firm formation in Sweden is not markedly different than elsewhere. In line with previous studies, spin-offs of incumbents perform better than other types of new firms, particularly if their parent firm continues to operate. A novel finding is that the larger the size of their parent, the greater is the rate of employment growth of spin-offs. This contrasts sharply with findings for firms with a single owner. Copyright 2013 The Author 2013. Published by Oxford University Press on behalf of Associazione ICC., Oxford University Press.

Financial frictions are known to raise the volatility of economies to shocks (e.g. Bernanke and Gertler 1989). We follow this line of research to the labor literature concerned by the volatility of labor market outcomes to productivity shocks initiated by Shimer (2005): in an economy with search on credit and labor markets, a financial multiplier raises the elasticity of labor market tightness to productivity shocks. This multiplier increases with total financial costs and is minimized under a credit market Hosios-Pissarides rule. Using a flexible calibration method based on small perturbations, we find the parameter values to match the US share of the financial sector. Those values are far away from Hosios and lead to a financial accelerator of about 3.6 (exogenous wages) to 4.5 (endogenous wages). Both match Shimer (2005)'s elasticity of labor market tightness to productivity shocks. Financial frictions are thus an alternative to the "small labor surplus" assumption in Hagedorn and Manovskii (2008): we keep the value of wages over productivity below 0.78. We conclude that financial frictions are a good candidate to solve the volatility puzzle and rejoin Pissarides (2009) in arguing that hiring costs must be partly non-proportional to congestion in the labor market, which is the case of financial costs.

The process of economic globalisation and liberalisation during the last two decades has reshaped the labour norms in India. As a result, the share of the informal workers in total employment has increased tremendously. During this period, a significant part of the incremental employment is being generated in the unorganised sector, where working conditions are far away from being satisfactory. Most of these workers are poor and vulnerable. Even after two decades of growth in the country, the quality of employment has been deteriorating which has led to a huge gap in productive employment. In this perspective, in this paper, an attempt has been made to explore such deficits among different types of workers as well as various sectors and regions of the economy. It has been observed that this gap is wider in the sectors/states where the informality quotient is higher. The workers in these sectors/states are largely poor and vulnerable and have no access to social security benefits while they are the neediest one. We can observe a strong positive association between the poverty of the workers (deficit in productive employment) and lack of social security. Therefore, it is suggested that on the one hand, there should be strong steps to remove (or reduce) the deficit in productive employment in every sector and region of the economy and on the other hand, the poor workers should be adequately covered with some social security benefits and for any poverty removal strategy, there should be due emphasis on provision of certain social protection to these workers.

While many previous studies on temporary work have found disadvantages for temporary workers as compared to workers with a permanent contract, this study compares temporary work to the alternative of unemployment. Specifically, this paper investigates the potential integrative power of taking up a temporary job for unemployed workers as compared to the counterfactual situation of remaining unemployed and searching for another job. Applying a dynamic propensity-score matching approach based on British, (West and East) German, and Swiss panel data during the period of 1991-2009, it is shown that taking up a temporary job increases the employment chances during the subsequent five years in (West and East) Germany and the UK. Moreover, the chances of having a permanent contract remain higher and a persistent wage premium can be found during the subsequent five years of the career. Advantages of taking up a temporary job are slightly stronger in West Germany compared to East Germany, where temporary contracts are often based on public job creation measures with limited integration potential. Neither long-run advantages nor disadvantages of taking up a temporary job can be found in the case of the flexible Swiss labour market.

Predkladaný článok opisuje situáciu na pracovnom trhu v Nemecku pred a po jeho otvorení 1. mája 2011 pre pracovníkov z nových členských krajín. Nemecko voči pracovníkom z týchto krajín, označovaných ako EÚ 8, využilo maximálne 7-ročné prechodné obdobie, počas ktorého postupne otváralo pracovný trh až po jeho úplnú liberalizáciu. Autori prechádzajú od krátkeho historického úvodu cez situáciu na pracovnom trhu po roku 2004, predstavujú prognózy a scenáre vývoja po otvorení pracovného trhu v máji 2011 a aktuálne výsledky mapujúce stav na trhu práce v Nemecku dva roky po jeho otvorení.

The increase of the production factors’ mobility, given the facts of the economic and financial globalization, brought again into focus the attractiveness of different states at the world level. This study is focused on the analysis of conceptual term of fiscal competition, from traditional approach such as Tiebout’s theory, up to spatial approach of fiscal competition, and also on the linkage between production factors’ mobility and fiscal competition. According to the results, our analysis reflects that while the level of the taxation rates variation represents the only explaining factor of the production factors localization in the traditional approach of the fiscal competition, in opposition the new geographical economics tries to explain the localization decisions of the companies, employees and mobile capital, by taking into consideration all the factors influencing the space distribution in the conditions of the economic integration increase

Die Jugendarbeitslosigkeit in Deutschland sinkt auf den tiefsten Stand seit der Wiedervereinigung. Zwischen 2005 und 2012 hat sich die Zahl der Erwerbslosen unter 25 Jahren mehr als halbiert. Im internationalen Vergleich steht Deutschland damit hervorragend da. Nirgendwo in Europa ist die Jugendarbeitslosigkeit niedriger. Allerdings ist das weniger strukturellen Verbesserungen oder der günstigen Arbeitsmarktentwicklung zu verdanken als dem demographischen Wandel: Der Abbau der Jugendarbeitslosigkeit hängt vor allem mit der schrumpfenden Zahl Jugendlicher zusammen. In anderen europäischen Ländern haben es selbst qualifizierte Jugendliche schwer, auf dem Arbeitsmarkt Fuß zu fassen - in Deutschland sind es vor allem die Jugendlichen ohne Berufsausbildung, die trotz vergleichsweise guter konjunktureller Lage keinen Job finden. Auf dem deutschen Arbeitsmarkt gibt es zudem offenbar eine zu geringe Mobilität. Zum einen besteht in manchen Regionen ein mehr als ausreichendes Angebot an Lehrstellen. Zum anderen zeigt sich eine zunehmende regionale Konzentration bei der Jugendarbeitslosigkeit. Insbesondere in westdeutschen altindustriellen Gegenden sowie in Ostdeutschland liegt die Arbeitslosenquote der Jugendlichen weit über dem Durchschnitt. Gerade in solchen Regionen sind allerdings die Quote der Ausbildungsabbrecher und der Anteil der Schulabgänger ohne Hauptschulabschluss besonders hoch. Diese Jugendlichen laufen Gefahr, dauerhaft in einer prekären Lage verhaftet zu bleiben. Besonders schlecht sind die Beschäftigungschancen und betrieblichen Ausbildungsmöglichkeiten der Jugend in Berlin. Youth unemployment in Germany has fallen to its lowest level since German reunification. Between 2005 and 2012, unemployment among under 25 year olds has more than halved. By international standards, Germany is in an exceptionally good position. Nowhere in Europe is youth unemployment lower. However, this is not so much due to structural improvements or positive labor market growth than to demographic change: the drop in youth employment is primarily a result of the declining number of young people. In other European countries, even qualified young people have a hard time gaining a foothold in the labor market while in Germany, it is predominantly young people with no formal vocational training who are unable to find a job despite the relatively positive economic situation. It also appears that there is insufficient mobility on the German labor market. On the one hand, there is an abundance of apprenticeships in some regions. On the other hand, an increasing regional concentration of youth unemployment is evident. Particularly in old industrial regions of western Germany and in eastern Germany, the unemployment rate for young people is well above the national average. However, it is precisely in these regions that the proportion of young people dropping out of vocational training or leaving school without qualifications is particularly high. These young people run the risk of being permanently trapped in a precarious situation. Employment and training opportunities for young people in Berlin are particularly poor.

This paper examines women?s labor mobility in Argentina in 1995-2003 across 4 sectors: formal, informal, unemployment, and inactivity. We incorporate alternative measures of labor mobility, and estimate a multinomial logit model of sector choice. The results support the hypothesis of segmented labor markets. Highly educated women, even those married with children, more easily access the formal sector than less educated women. Non-mothers experience fewer barriers to movement from informal to formal. Having more children raises the probability that women will transition from the formal to the informal sector and from the informal sector to exiting the labor market.

This article employs social identity and self-categorization theories as a useful heuristic framework through which to learn more about the nature of the misery experienced by the unemployed; in economic terms, the individual cost of unemployment. Utilizing this framework, the article provides different empirical identification strategies in order to disentangle the various means through which unemployment alters both the well-being and utility of an individual and shows, by reviewing some of the recent research in which I have participated, that unemployment primarily threatens an individual's identity rather than reducing the instantaneous utility derived from day-to-day experiences. Copyright The Author 2012. Published by Oxford University Press on behalf of Ifo Institute, Munich. All rights reserved. For permissions, please email: journals.permissions@oup.com, Oxford University Press.

Bubbles are recurrent events, which contribute to both macroeconomic and employment volatility. We introduce stochastic bubbles in the standard search-and matching model of the labor market. The economy alternates between latent and bubbly states, each being associated with a distinct solution for the market value of firms (respectively, stable or explosive). Bubbles in firm value induce distortions in hiring decisions and wages, which we explicitly characterize. Faced with bubbles, the social planner optimally deviates from the standard Hosios efficiency condition. The optimal share of workers in total surplus must be above the elasticity of hiring rates, by a small but increasing amount as the bubble expands. Finally, our specification for bubbles significantly improves the quantitative ability of the model to match U.S. data, along both real and financial dimensions.

It is commonly claimed that the South African labor market is unusually inflexible owing to the strength of the country's unions and the system of centralized collective bargaining. One sign of labor market inflexibility is low responsiveness of wages to local unemployment. Analyzing data from the South African Living Standards Survey, the authors find that the elasticity of wages with respect to local unemployment rates in South Africa in 1993 was about -0.1. The similarity of this elasticity to that found in other countries, including the United States and the United Kingdom, is surprising given South Africa's national unemployment rate of over 30%. The wage curve elasticity persists over a much wider range of unemployment rates in South Africa than in OECD countries, implying that unemployment in South Africa can have a large impact on wages. (Free full-text download available at http://digitalcommons.ilr.cornell.edu/ilrreview/.)

This paper studies the effects of the introduction of unemployment compensation (UC) in countries characterized by pervasive informality. We provide a simple framework to analyze the impact of UC on the allocation of workers between formal and informal activities, as well as the allocation of workers between sectors featuring different incentives to go informal. We show that a reasonable amount of UC may reduce informality, while larger amounts of UC induce large disincentives to go formal because of the level of taxation involved. We also argue that the financing of UC should be part and parcel of a well- conceived UC system. We show that UC finance based on payroll taxes is likely to entail an excess level of informality resulting from cross-subsidies between heterogenous sectors. The introduction of a simple layoff tax meant to finance the UC system is then shown to reduce informality, hence highlighting how a well-designed financing scheme may be used as a supplementary instrument to curb informality.

Based on Becker’s theoretical model, the present paper estimates econometrically the determinants of the crime rate in Argentina for the 1990-1999 period. Like previous empirical applications for Argentina, a significant deterrence effect was found. However unlike them we find a strong socio-economic effect on the crime rate. The unemployment rate and the income inequality indicator were found to have a positive and significant effects on the crime rate., El presente documento estima econométricamente los determinantes de la tasade criminalidad en Argentina para el período 1990-1999 basándose en el modeloteórico de Becker. Como otras investigaciones empíricas precedentes para esepaís, se encontró un efecto significativamente disuasivo. Sin embargo, adiferencia de los estudios previos se identificaron también indicios de un fuerteefecto socioeconómico en la tasa de criminalidad. Así, un incremento en lastasas de desempleo y en los indicadores de desigualdad del ingreso tendría unimpacto positivo en la tasa de criminalidad.

Employer-provided health insurance in the United States is suspected of restricting job mobility, resulting in “job lock.” Previous research on job lock finds mixed results using several methodologies. We take a new approach to examine whether employer-based health insurance discourages job mobility by exploiting the discontinuity created at age 65 through the qualification for Medicare. Using a novel procedure for identifying age in months from matched monthly CPS data and a relatively unexplored administration measure of job mobility, we compare job mobility among male workers in the months just prior to turning age 65 to job mobility in the months just after turning age 65. We find no evidence that job mobility increases at the age 65 threshold when Medicare eligibility starts. Our results are robust to different bandwidths, non-linear age profiles, and frequency of age measurement. The upper bounds of 95 percent confidence intervals for these estimates can rule out the existence of any job lock in some cases, and in most cases can rule out the large levels of job lock found in many previous studies in the literature. We also do not find evidence that other factors such as retirement, reduction in hours worked, social security eligibility, pension eligibility, and sample changes confound the results on job mobility in the month individuals turn 65.

Article first published online on October 10, 2012 We analyse how unemployment, job-finding and job-separation rates react to neutral and investment-specific technology shocks. Neutral shocks increase unemployment and explain a substantial portion of it volatility; investment-specific shocks expand employment and hours worked and contribute to hours worked volatility. Movements in the job-separation rates are responsible for the impact response of unemployment while job-finding rates for movements along its adjustment path. The evidence warns against using models with exogenous separation rates and challenges the conventional way of modelling technology shocks in search and sticky price models.

The economic crisis contributed to sharp increases in US unemployment rates for all three of the major socio-economic classes. Results from regression models using individual-level data from the 2006–2011 US Current Population Surveys indicate that members of the Creative Class had a lower probability of being unemployed over this period than individuals in the Service and Working Classes and that the impact of having a creative occupation became more beneficial in the 2 years following the recession. These patterns, if they continue, are suggestive of a structural change occurring in the US economy—one that favours knowledge-based creative activities. Copyright 2012, Oxford University Press.

JEL Cl This study constructs a new data set on unemployment rates in Latin America and the Caribbean and then explores the determinants of unemployment. We compare different countries, finding that unemployment is influenced by the size of the rural population and that the effects of government regulations are generally weak. We also examine large, persistent increases in unemployment over time, finding that they are caused by contractions in aggregate demand. These demand contractions result from either disinflationary monetary policy or the defense of an exchange - rate peg in the face of capital flight. Our evidence supports hysteresis theories in which short - run changes in unemployment influence the natural rate.

The paper aims at analyzing the dynamics of in Romanian higher education graduates in the 2006-2010 period, both in Romania and by the Romanian development regions. After highlighting the importance of human capital and its education, the paper analyzes the dynamics of Romanian higher education graduates in the targeted period, at both of the above-mentioned levels. The conclusions reveal that, during the analysed period: 2006-2010, the number of female, and, respectively, male higher education graduates, as well as the total number of higher education graduates, continuously increased in the 2006-2010 period at the whole country level and registered an increase trend, as well, by the eight development regions of Romania in the 2006-2010 period, with very few exceptions in some years of the period, in some of the the eight development regions of Romania. Therefore, the Romanian higher education system must correlate the graduates number with the number of work places in the Romanian economy, and take into account the necessities imposed by the participation at international competition.

The crises of the past few years have led to a significant increase in youth unemployment in Europe. This, in turn, has highlighted the long-standing phenomenon of well above average youth unemployment. In some countries, the youth unemployment rate reached unprecedented levels, although the rise of unemployment among young people was no more significant than among adults. Furthermore, the media portrayal of young people's situation is sometimes more negative than the reality, failing to take into consideration that the majority of young people are not even on the labor market but still completing their education. Nonetheless, across much of Europe, youth unemployment has become a more pressing social problem than it was a few years ago. In the EU as a whole, the youth unemployment rate is more than double the unemployment rate affecting the general population. Only in some countries is this connected with - alongside other factors - inadequate qualifications among young people because, even with training, young people are more likely to be unemployed than adults. However, in countries providing a high degree of professional training, employment prospects are not as poor as in those focusing predominantly on educational qualifications. Practical vocational training is obviously a potential tool for creating better job prospects for young people. The German labor market is the most open. In Germany, the fact that the youth unemployment rate is only slightly above average is solely the result of skills deficits. Young people in Italy, Romania, Sweden, the UK, and Poland are generally at a particular disadvantage compared to adults. Die Krisen der letzten Jahre haben in Europa die Jugendarbeitslosigkeit kräftig ansteigen lassen, was das schon seit langer Zeit bestehende Phänomen der weit über dem Durchschnitt liegenden Arbeitslosigkeit der Jugendlichen deutlicher hervortreten lässt. In manchen Ländern erreichte die Jugendarbeitslosenquote bisher nicht gekannte Höhen, wobei allerdings die Zahl der Erwerbslosen unter den Jugendlichen nicht stärker als unter den Erwachsenen zugelegt hat. Zudem wird mitunter in der Öffentlichkeit die Lage der Jugend schlechter dargestellt als sie tatsächlich ist, weil ausgeblendet wird, dass die meisten Jugendlichen gar nicht auf dem Arbeitsmarkt sind, sondern eine Ausbildung absolvieren. Gleichwohl ist die Jugendarbeitslosigkeit in weiten Teilen Europas zu einem noch dringlicheren sozialen Problem geworden als es das schon vor einigen Jahren war. In der gesamten EU ist die Arbeitslosenquote der Jugendlichen mehr als doppelt so hoch wie die der Erwachsenen. Nur in einigen Ländern hängt das - neben anderen Faktoren - mit einer unzureichenden Qualifikation der Jugendlichen zusammen. Denn auch wenn eine Ausbildung vorliegt, weisen Jugendliche eine viel höhere Arbeitslosigkeit auf als Erwachsene. In solchen Ländern allerdings, in denen viel betrieblich ausgebildet wird, sind die Arbeitsmarktchancen nicht so schlecht wie in Staaten, die vor allem auf eine schulische Qualifizierung setzen. Eine praxisnahe Ausbildung kann offenbar ein Mittel sein, um den Jugendlichen bessere Arbeitsmarktchancen zu verschaffen. Am offensten ist der Arbeitsmarkt in Deutschland. Hier kann die relativ wenig über dem Durchschnitt liegende Arbeitslosigkeit der Jugendlichen allein auf Qualifizierungsdefizite zurückgeführt werden. Besonders stark im Nachteil gegenüber den Erwachsenen sind die Jugendlichen generell in Italien, Rumänien, Schweden, Großbritannien und Polen.

We aim to investigate the nature and direction of the relationship between unemployment and entrepreneurial activity. Our research, using monthly data from Romania (1991-2012), brings evidence to the hypothesis that the relationship is non-linear in regard to the temporal delay factor. From our data it would seem that unemployment and entrepreneurial activity are negatively related on the short term, and positively related on the long term. Based on these results, we propose that the two effects be treated separately, and we propose two predictive models of entrepreneurial activity based on unemployment that follow this distinction.