Does better access to foreign workers reduce firms’ willingness to provide general skills training? We analyze how the opening of the Swiss labor market to workers from the European Union affected ...the number of apprenticeships that firms provide. We exploit that the availability of foreign workers increased more in firms close to the border because they gained unrestricted access to cross-border workers from Switzerland’s neighboring countries. Our Difference-in-Differences estimates suggest that firm-provided training to unskilled workers and access to foreign workers are not necessarily substitutes: opening the borders did not have a statistically significant effect on apprenticeship provision. Using unique data on firms’ costs and motives to train apprentices, we show that the greater availability of foreign workers reduced firms’ incentive to train because hiring skilled workers externally became cheaper, among others because new hires became more productive from the start. Positive impacts on firm growth worked in the opposite direction.
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•We study how opening the labor market to foreigners affects firm-sponsored training.•Overall, free movement of workers did not reduce apprentice training in Switzerland.•Open borders made it cheaper to hire skilled workers, which reduced incentives to train.•However, open borders led to firm growth, creating more training positions.•We find negative effects on apprenticeship training in the construction sector.
The costs of hiring skilled workers Blatter, Marc; Muehlemann, Samuel; Schenker, Samuel
European economic review,
2012, 2012-1-00, 20120101, Volume:
56, Issue:
1
Journal Article
Peer reviewed
Open access
This paper analyzes the structure of hiring costs for skilled workers. We use novel Swiss administrative firm-level survey data that provide direct and detailed measures of hiring costs, including ...recruitment and adaptation. Results show that average hiring costs range, depending on firm size, from 10 to 17
weeks of wage payments. The structure of hiring costs is convex. Marginal hiring costs increase with the number of hires and reach up to 24
weeks of wage payments. We find no evidence for a fixed cost component. Hiring costs also increase with the hiring rate (the ratio of hires and skilled workers), confirming convexity. Hiring costs generally increase with skill requirements for job applicants, and depend on macroeconomic conditions: a 1% point increase in the unemployment rate reduces average hiring costs by more than 5%.
► Hiring costs consist of both recruitment and adaptation costs. ► Hiring costs of skilled workers average between 10 and 17
weeks of wage payments. ► The structure of hiring costs is convex. ► Marginal hiring costs reach up to 24
weeks of wage payments.
Optimal Fiscal Policy with Labor Selection Chugh, Sanjay K; Lechthaler, Wolfgang; Merkl, Christian
Journal of economic dynamics & control,
09/2018, Volume:
94
Journal Article
Peer reviewed
Open access
This paper characterizes long-run and short-run optimal fiscal policy in the labor selection framework. In a calibrated non-Ramsey decentralized equilibrium, labor market volatility is inefficient. ...Keeping fixed the structural parameters, the Ramsey government achieves efficient labor market volatility; doing so requires labor-income tax volatility that is orders of magnitude larger than the "tax-smoothing" results based on Walrasian labor markets, but a few times smaller than the results based on search and matching markets. We analytically characterize selection-model-consistent wedges and ine ciencies in order to understand optimal tax volatility.
•We provide Bayesian estimates for small open economy models for Australia, 1993–2013.•Nominal wage rigidity is strongly preferred to real, and hiring costs matter.•Technology shocks account for most ...unemployment and long-run real wage variance.•External shocks matter for in ation, consumption, investment and the interest rate.•External shocks play a limited role in driving labour market variables.
We estimate small open economy models with involuntary unemployment using Australian data from 1993 to 2013, assessing whether nominal or real wage rigidity and hiring costs matter. Nominal wage rigidity with hiring costs (accounting for 1.58% of GDP) are strongly preferred. Using the preferred model, technology shocks explain most short-run unemployment and long run real wage variance. External shocks have important lasting effects on inflation and consumption, and on long-run investment and interest rates, but little on the labor market. Out-of-sample conditional forecasts perform well but cannot predict the confidence effects of the crisis in 2008.
El sector de las Empresas de Trabajo Temporal (ETT) experimentó un fuerte crecimiento en la década de 1990, hasta estabilizarse en torno al 15% de la contratación temporal en España. Aún más ...significativa es la fuerte disparidad regional en el recurso a las ETT que existe entre las provincias españolas. A partir de un sencillo modelo teórico, y con metodología de datos de panel, este artículo sugiere que los costes de reclutamiento, entrenamiento y selección podrían explicar gran parte de dicha disparidad. Esta conclusión, estaría fundada en la evidencia empírica de que la cuota de mercado de las ETT es mayor en mercados con bajas tasas de desempleo, donde la duración media del paro es mayor y en aquellas provincias con más concentración de población urbana, respectivamente.
The dynamic general equilibrium model with hiring costs presented in this paper delivers involuntary unemployment in the steady state as well as involuntary fluctuations in unemployment. The ...existence of hiring frictions introduces externalities that, in turn, entail the breakdown of the “divine coincidence” without assuming real wage rigidity. We are able to show that our model with labour market imperfections outperforms the standard New Keynesian model as for the persistence of responses to monetary shocks. We also attempt an analysis of the volatility of two economies, differing in their “degrees of imperfection”. It turns out that “rigid” economies exhibit less unemployment volatility and more inflation volatility than “flexible” economies.
This paper examines the structure of firms’ hiring processes using Dutch data compiled from filled vacancies. If more than one employee is to be hired, firms may choose either to hire all their ...employees at one time (instantaneous hiring) or to hire them over a longer period of time (gradual hiring). We find that 56% of the employees are hired at one time. Furthermore, a tightening of the labour market leads to a decrease in the probability of all employees being hired at one time.
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