Wages are an element of cost crucially affecting the competitiveness of individual firms. But the wage bill is also a crucial element of aggregate demand. Hence it could be that more “flexible” and ...“fluid” labour markets, while allowing for faster inter-firm reallocation of labour, may also render the whole economic system more fragile, more prone to recession, and more volatile. In this work, we investigate some conditions under which such a conjecture applies. The paper presents an agent-based model that investigates the effects of two “archetypes of capitalism” – in terms of regimes of labour governance defined by the mechanisms of wage determination, firing, labour protection and productivity gains sharing – upon (i) labour market regularities and (ii) macroeconomic dynamics (long-term rates of growth, GDP fluctuations, unemployment rates, inequality, etc.). The model is built upon the “Keynes meets Schumpeter” family of models (Dosi et al., 2010), explicitly incorporating different microfounded labour market regimes. Our results show that seemingly more rigid labour markets and labour relations are conducive to coordination successes leading to higher and smoother growth.
. Over the past 30 years, the share of adult populations with college degrees increased more in cities with higher initial schooling levels than in initially less educated places. This tendency ...appears to be driven by shifts in labor demand as there is an increasing wage premium for skilled people working in skilled cities. In this article, we present a model where the clustering of skilled people in metropolitan areas is driven by the tendency of skilled entrepreneurs to innovate in ways that employ other skilled people and by the elasticity of housing supply.
. Motivated by differences in new‐firm survival across regions, this paper explores the impact of regional human capital on new‐firm survival rates. New‐firm survival is interpreted through ...formation rates of surviving versus closed firms in the service sector. By incorporating knowledge spillovers through a geographical variation model for Labour Market Areas, we empirically test the relationship between regional human capital stocks and new‐firm survival. The expected positive relationship between regional human capital and new‐firm survival is supported for the period 1993–1995, but is not as strong for the recession period 1990–1992. Controlling for human capital, the new‐firm survival rate is negatively related to service sector specialisation and positively related to all‐industry intensity, suggesting that city size and diversity may be an important determinant of new‐firm survival in both periods.
. Motivado por las diferencias entre economías regionales en la supervivencia de nuevas empresas, este artículo explora el impacto del capital humano regional en las tasas de supervivencia de nuevas empresas. La supervivencia de nuevas empresas se interpreta a través de las tasas de formación de empresas supervivientes respecto de empresas que han cerrado en el sector servicios. Mediante la incorporación de spillovers (efectos derrame) de conocimiento en un modelo de variación geográfica para Áreas de Mercado Laboral, analizamos empíricamente la relación entre reservas de capital humano y la supervivencia de nuevas empresas. La esperada relación positiva entre el capital humano regional y la supervivencia de nuevas empresas es válida para el periodo 1993‐1995, pero no lo es tanto para el periodo de recesión 1990‐1992. Controlando la variable capital humano, la tasa de supervivencia de nuevas empresas esta relacionada negativamente con la especialización del sector servicios y positivamente relacionada a la intensidad del total de industrias, sugiriendo que el tamaño de la ciudad y la diversidad podría ser un factor determinante de la supervivencia de nuevas empresas en ambos periodos.
Young individuals have consistently constituted a distinctive group within the labour market. They have been and continue to be among the vulnerable categories affected by the changes in the labour ...market. Thereby, in contrast to previous economic crises, the crisis generated by the COVID-19 pandemic has impacted them more significantly and within a considerably shorter time frame. Nevertheless, the impact has varied among individuals, with socio-demographic factors like gender, educational level, residential environment, occupation, and digitalization level playing a crucial role in the observed disparities. In this context, utilizing data from Eurobarometers 91.5/2019 and 93.1/2020, the study aims to analyse how young individuals perceive the economic situation and the labour market issues both before and during the COVID-19 pandemic, emphasizing the differences that have arisen as a consequence of this crisis. The paper will also investigate variations in socio-demographic variables. The findings will add to existing research, seeking to comprehend the effects of the crisis resulting from the COVID-19 pandemic on young people in the labour market.
This paper examines the impact of education and labour market challenges on the income inequality in European Union (27 Member States) within the period 2012-2022, this being calculated using the ...Panel EGLS method. Even if the effects are clearly visible from a theoretical point of view, in the latest years there were not many authors focusing their studies on the effects of the unemployment and early dropout from school and training on income inequality. In this regard, updating the figures, the impact coefficients and the theoretical background increase the understanding of the statistical processes and their results in the new economic context. Our results confirmed a positive relationship between unemployment rate and income inequality (measured by Gini coefficient), this being also the highest impact found, but also a positive link between the early leavers from education and training rate and income inequality. In addition, we used additional variables to catch the current economic challenges that are related to demographic changes and high energy prices. In this context, we found positive effects exerted by housing cost overburden rate and old-age dependency ratio on income inequality. Even if the model is limited to four income inequality drivers, we have demonstrated that the calculated coefficients are the best linear unbiased estimators.
Private consumption is considered one of the main drivers of economic growth in Western Balkan countries. The main aim of this study is to estimate the impact of private consumption on the economic ...growth of the Western Balkans, including the North Macedonia, Kosovo, Albania, Montenegro, Bosnia and Herzegovina, and Serbia. Housing wealth was even the main driver of total private consumption in the European Union (EU) countries as a whole (Barradas, 2017). Based on an extensive literature review for panel data, this study uses econometric models with fixed effect, random effect, and Hausman-Taylor test. The data are taken from the World Development Indicators by country (The World Bank, n.d.) and cover the period 2010–2019. Based on the Hausman-Taylor test, the model that fits a small sample as in our case is chosen as the fixed effect. The results of the estimator show that a 1% increase in final consumption leads to a 0.43% increase in gross domestic product (GDP) growth and that, on the other hand, a 1% increase in the employment rate increases GDP by 0.11%. The most important domestic factor continues to be private consumption, driven by record levels in the labour market and further strengthening of household purchasing power (Bank of Slovenia, 2020). The study concludes that private consumption is the main driver of economic growth and sustainability in the case of the Western Balkans.
This paper examines the impact of the fourth partial revision of the law of unemployment insurance (AVIG) on unemployment dynamics in Switzerland at a cantonal level. The authors apply the Synthetic ...Control Method (SCM), a matching method for comparative case studies. A counterfactual analysis of the cases studied is performed by combining a control group of several untreated units, which provides a better comparison to the treatment group than a single unit. The control unit is designed as a weighted average of the available cantons in the donor pool, taking into account the similarities between the chosen controls and the treated unit. Once policy changes are controlled, the results suggest a significant effect on the unemployment rate at a cantonal level: the reform had a discernible impact on lowering the unemployment rate in the Italian- and French-speaking cantons in Switzerland.
I combine a regression discontinuity design with rich data on academic and labor market outcomes for a large sample of Florida students to estimate the returns to college admission for academically ...marginal students. Students with grades just above a threshold for admissions eligibility at a large public university in Florida are much more likely to attend any university than below-threshold students. The marginal admission yields earnings gains of 22% between 8 and 14 years after high school completion. These gains outstrip the costs of college attendance, and they are largest for male students and free-lunch recipients.
This paper is the first to provide estimates of how minimum wages affect worker flows and employment growth rates in an employment scarce developing country context. We investigate the effects of a ...large, exogenous increase in agricultural minimum wages in South Africa. We find that changes occurred primarily among non‐seasonal workers. Non‐seasonal agricultural employment growth decreased in the initial periods after the minimum wage hike. This was mainly driven by slower rates of entry. The effect on the rate of entry decreases over time. While farms also responded by shedding non‐seasonal workers at higher rates, this negative effect was limited to 1 year directly after the minimum wage hike. Employment growth recovers 4 years after the policy shock, indicating that firms adjusted relatively quickly despite the large legislated minimum wage increase. Seasonal employment growth and rates of entry and exit of seasonal workers were for the most part unaffected. Descriptive statistics, however, suggest a slight compositional change among seasonal workers: Farms replaced the worst paid seasonal workers with other low‐income workers who were slightly better paid and presumably more productive.
Over the past 30 years, the U. S. inmate population has increased dramatically, and the penal system has acquired growing attention in accounts of recent trends in economic stratification. As the ...prison system has expanded, its population has aged; incarceration rates have risen sharpest among older age groups. A large body of research documents differences in criminal offending and incarceration over the life course, but little attention has been paid to how the effects of spending time in prison depend on the timing of incarceration in the life course. Using state administrative data that provide significant variance in the age of offenders, this article investigates how the timing of incarceration in the life course influences its effects on post-release employment and wages. We do not find consistent evidence that incarceration effects vary by age at admission. Instead, incarceration appears to have important consequences for employment and wage outcomes regardless of when individuals are admitted to prison. Even the most motivated offenders suffer sizeable and significant wage penalties and, over time, decreased likelihood of employment. These findings underscore the relevance of legal and institutional shifts associated with carcerai expansion and the aging of the inmate population for life course theories of criminal desistance, accounts of labor market inequality, and prisoner reentry programs.
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