Labor Market Efficiency Research Articles

Elite university bachelor’s degree salary premium for master’s graduates: empirical evidence from China

ABSTRACT The labor market’s response to the signaling value of multiple qualifications (bachelor’s and master’s degrees) held by master’s graduates influences labor market efficiency and individual decisions to invest in education. Using data from the ‘Sample Survey of Chinese Higher Education Institutions’ conducted in 2017 and 2019, this study analyzes whether master’s graduates with bachelor’s degrees from elite universities earn salary premiums. The findings indicate that bachelor’s degrees from elite universities provide approximately a 12% salary premium for master’s graduates, attributable to both human capital and labor market signaling mechanisms. When accounting for individual human capital differences, the salary premium is approximately 9.1%. Furthermore, the empirical results show that these premiums are statistically significant only for master’s graduates from elite universities. The distribution of salary premiums exhibits a U-shaped trend, increasing from low to high salary quantiles. The signaling/screening mechanism’s salary premiums rise with starting salaries, while negative signaling effects are observed at lower quantiles.

Gender identity, salience of information, and tacit coordination: Gender differences in response to strategic uncertainty

We use a lab experiment to explore whether gender composition and gender identity salience influence team coordination. Identity in the experiment is induced using gender-specific and neutral avatars. In contrast with many previous studies, we do not find the presence of in-group favoritism, irrespective of whether gender identity or random avatars define the group. In addition, behavior remains unchanged when the gender of the counterpart is revealed. However, females are found to cooperate significantly more when gender information is disclosed, implying an elevation in the salience of gender identity induces the females to choose based on social expectations. This research adds to the discourse on gender dynamics in decision-making and suggests that gender identity plays a role in economic choices, innovating traditional views on diversity in teamwork. Our research sheds light on the intricate dynamics of gender composition in team settings, particularly under conditions of risk and uncertainty. These findings have the potential to inform both organizational practices and public policy, thereby contributing to a more equitable and efficient labor market.

Применение алгоритмов машинного обучения для сокращения информационной асимметрии и прогнозирования социальных изменений на рынке труда: вызовы и возможности

This paper explores the impact of machine learning (ML) algorithms on reducing information asymmetry in the labor market and forecasting social changes, presenting challenges and opportunities for employers and job seekers alike. It addresses the issues of information asymmetry stemming from disparities in data access between labor market participants, as well as variations in the quality of information obtained, complicating the hiring and job search processes. Theoretical foundations of big data and its analysis using ML are discussed for identifying trends and patterns conducive to more efficient labor market functioning. ML methods including predictive models, clustering, classification, and text analysis are presented, describing their application in reducing information asymmetry and adapting to changing market demands. Examples of ML algorithm usage in real business processes are provided, showcasing their contribution to optimizing recruitment and personnel management processes, as well as forecasting future trends regarding significant competencies and skills. The importance of adapting to new challenges and opportunities presented by ML algorithms for maintaining competitiveness and sustainable development in the labor market is emphasized. By leveraging big data analytics, employers and job seekers can make more informed decisions, leading to more efficient labor market outcomes. However, challenges such as data privacy and algorithmic bias must be addressed to fully realize the benefits of ML in the labor market.

The effect of the initial distribution of labor-related property rights on the allocative efficiency of labor markets

IntroductionThe Coase Theorem posits that frictionless markets efficiently allocate scarce resources as long as property rights are fully specified. Our empirical study investigates how the initial allocation of labor-related property rights influences the allocative efficiency in labor markets for skilled workers within a highly competitive environment—professional basketball. Specifically, we compare two regimes: one where employers can trade workers to other employers without the worker's consent, and another where workers are free agents, able to negotiate and move freely without their employer's consent.MethodsWe utilize the NBA as a “laboratory” to conduct our analysis, constructing a unique panel dataset that includes 3,132 player-season observations spanning 17 regular seasons from 2003/04 to 2019/20. To address our research question, we employ linear panel regression models to analyze the data.Results and discussionThe findings reveal a decline in productivity among workers who transition to new employers as free agents, a phenomenon not observed among non-free agents. This observation suggests that allocative efficiency might be higher when workers are traded without their consent compared to when they exercise their autonomy as free agents. These findings highlight the significant impact that the initial distribution of labor-related property rights has on labor market efficiency, potentially challenging the assumptions of the Coase Theorem. However, the lack of a statistically significant difference in productivity changes between free agents and non-free agents moving to new employers prevents us from definitively rejecting the predictions of the Coase Theorem.

A data-driven approach to aligning academic offerings with industry needs for business and economy in Slovenia

ABSTRACT The success of graduates and their employability hinge on a crucial alignment between the skills and competencies sought by employers and those possessed by job seekers. This study delves into the extent to which the competencies cultivated in the curricula of selected Slovenian universities align with the ever-evolving requirements of the Slovenian labour market. Employing a combination of LLaMA-2-7B-chat, a generative language model, and the multilingual Sentence Transformer, a contextual language model, we identify skill gaps and pinpoint the most in-demand competencies that align with those generated by the faculty. This data-driven approach offers a roadmap for confirming the relevance and enhancing the university curricula, thus fostering a stronger connection between education and employment as well as improving the labour market efficiency.

Polluted air, smarter factories? China's robot imports shed light on a potential link

Robot-centered intelligent manufacturing is leading a new round of technological revolution and industrial change. Existing studies have neglected the impact of air pollution, a non-monetary factor, on firms' intelligent manufacturing transformation (FIMT). Using matched samples from China's industrial enterprise database and China's customs database, and based on enterprises' “machine replacing human” strategy, this paper reveals the facilitating effect of air pollution on FIMT. The robustness estimation results after endogeneity treatment, replacing the core variables, changing the clustering level, removing the policy influence, avoiding the interference of domestic robots, changing the estimation strategy, and restricting the import trade mode still support the conclusion. The mechanism by which air pollution accelerates FIMT lies in the first: the factor substitution effect of rising labor costs due to air pollution. The second is the skill-capital complementarity effect due to increased firms' human capital investment induced by air pollution. The third is the intelligent investment effect due to increased economic policy uncertainty induced by air pollution. In addition, air pollution accelerates FIMT more significantly in non-state-owned firms, high labor-intensity industries, and regions with high population aging. This paper argues that there is no conflict between environmental governance and intelligent manufacturing transformation. Air pollution and “machines replacing humans” in the labor market efficiency and fairness issues need attention.

Does country of resettlement influence the risk of labor market marginalization among refugees? A cohort study in Sweden and Norway.

This study aimed to compare the risk of labor market marginalization among refugees across different host countries of resettlement and examine the moderating role of birth country and length of stay on these associations. Cohorts of refugees and native-born individuals aged 19-60 in Sweden (N=3 605 949, 3.5% refugees) and Norway (N=1 784 861, 1.7% refugees) were followed during 2010-2016. Rates (per 1000 person-years) of long-term unemployment, long-term sickness absence, and disability pension were estimated for refugees and the host populations. Cox regression models estimated crude and adjusted (for sex, age, educational level, and civil status) hazard ratio (HRadj) for refugees compared to their respective host population, with 95% confidence intervals (CI). Analyses were also stratified by birth country and length of stay. Refugees in Norway and Sweden had a higher incidence of labor market marginalization compared to their host population. Refugees in Sweden had a comparatively lower relative risk of long-term unemployment but higher risk of disability pension (HRadj 3.44, 95% CI, 3.38-3.50 and HRadj 2.45, 2.35-2.56, respectively) than refugees in Norway (HRadj 3.70, 3.58-3.82 and HRadj 1.57, 1.49-1.66, respectively). These relative risks varied when stratifying by birth country. A shorter length of stay was associated with a higher risk of long-term unemployment and a lower risk of disability pension, with a stronger gradient in Sweden than in Norway. The relative risk of labor market marginalization varied by the refugees' birth country but followed similar trends in Sweden and Norway. Although speculative, these findings may hint at non-structural factors related to the refugee experience playing a more important role than host country structural factors for the risk of labor market marginalization among refugees. Future research, including host countries with more variability in structural factors, is required to further investigate these associations. The higher risk of long-term unemployment among refugees with shorter length of stay indicates a need for more efficient labor market integration policies for newly-arrived refugees.

In search of key performance indicators of regional competitiveness in the European Union

AbstractThis study investigates key performance indicators (KPIs) affecting regional competitiveness in the European Union (EU) and compares its performance across two groups of EU regions identified by their development phase based on the path dependence argument. Utilizing 40 indicators from the Regional Competitiveness Index (RCI) across 268 NUTS2 regions, it identifies five critical KPIs: Knowledge workers, Employment rate, Labor productivity, Potential market size, and not in education, employment, or training. The classification and regression tree decision tree reveals the labor market efficiency pillar as crucial for RCI classification. Offering unique insights into RCI indicators and their impact, this research provides a policy‐oriented perspective and suggests avenues for further comparative research.

Increasing employment of the elderly population for sustainable demographic development of the region

Russia, like a number of other countries, is experiencing a process of population aging, which is leading to an increased role in the employment of the older generation, while at the same time, employers have a negative perception of their labor potential. The article is devoted to substantiating the hypothesis that employment of older people is an important factor in demographic development. The object of the study is North Ossetia as a typical region of Russia with a worsening demographic situation and tension in the labor market. The work used methods of statistical and graphical analysis, the "resume test" method. The problem of discrimination in hiring workers of pre-retirement age. It has been shown that limited opportunities in the labor market for the older generation lead to a decrease in the level and quality of life, and degradation of human potential. Conclusions are drawn about a decrease in the efficiency of the regional labor market in terms of employment of the elderly. Recommendations are offered to regional bodies of state regulation of the economy on the institutional prevention of the practice of age discrimination among employees; development of flexible part-time employment models; organization of continuous professional training and advanced training.

ЗОВНІШНІ ТА ВНУТРІШНІ ФАКТОРИ РОЗВИТКУ СЕРЕДОВИЩА МІСТА

The article reviews the existing approaches to assessing the impact of external and internal factors on the main aspects of the formation and implementation of development strategies. It is established how factors affect the strategy development process. Indirect external factors include state regulation, political instability of the country, the level of cultural and economic development. External factors that have a direct impact include customers, competitors, shareholders, suppliers and the workforce of the research object. The factors that influence the choice of regional development strategy are analyzed and systematized, and the need to take them into account in the general system of evaluating prospects is argued. Features of external and internal factors are identified, their classification is presented. After analyzing all the factors affecting the city's environmental management system, it can be concluded that for the successful solution of strategic tasks, it is important to carefully determine the impact of each factor on labor market efficiency assessment indicators. The timely and full mobilization of local resources is also key to stimulate the growth and improvement of the system of analysis and planning of the state of the city, as well as its effective management for the future. The need for a detailed analysis of the influence of internal environmental factors on the strategic development of a specific city is highlighted. It is noted that according to the systemic approach to management, the city acts as an open system that works and develops due to the presence of various factors that shape its internal environment. The key characteristics of the internal environment and their main components are defined, taking into account the systemic approach. It is argued that the significance of the influence of the internal factors of the city depends on their interactions, structuring and efficiency of use. The relationship between these elements is mutual and rather complex. Therefore, the effectiveness of marketing depends on the ability of the locality to adapt existing competencies and advantages to the needs of residents and to be able to adapt to attractive segments.

Labor market efficiency: output as the measure of welfare

Labor market efficiency: output as the measure of welfare

Harmonizing Human Capital: Insights from the Malaysian Labor Market

The misalignment between workforce skills and qualifications and the demands of available job opportunities, poses a pervasive concern with far-reaching implications for economic growth and labor market efficiency. This phenomenon extends across geographical boundaries, impacting both developing and developed nations. In this study, we focus on the Malaysian context, where the intersection of labor market dynamics and educational expansion has yielded both positive and concerning outcomes. Despite an expansion in the labor market and education sector in Malaysia, the underemployment rate increased to 37.4% in the fourth quarter of 2022, revealing a noteworthy challenge. This study presents empirical evidence on job matching among Malaysian employees, specifically investigating the likelihood of job mismatch attributed to human capital factors, including working experience and education attainment. The analysis is this study notably emphasizes the pivotal role of working experience and educational attainment in influencing job-matching outcomes. Individuals with a wealth of working experience, quantified in years, exhibit a reduced likelihood of job mismatch, highlighting the significance of accrued expertise in securing suitable employment. Similarly, those holding tertiary education qualifications are found to be better positioned in the job market, further diminishing the risk of job mismatch. In essence, this study serves as a clarion call for policymakers, educators, and stakeholders in the Malaysian labor market to recognize the crucial role of human capital development in addressing the pressing issue of job mismatch. The implications of these findings extend beyond Malaysia, resonating with global efforts to foster labor market efficiency and sustainable economic growth by ensuring a harmonious alignment between workforce capabilities and the demands of the contemporary job landscape.

Economic growth of Ukrainian regions and determinants of financial resilience: Modeling the causal nexus

Stable economic progress and upward dynamics of economic growth in the regions depend on their level of security and ability to withstand adverse macroeconomic and other shocks, as well as the state of affairs in which risks cannot be transformed into threats and dangers. The study aims to assess the causal nexus and the level of sensitivity of regional economic growth components to changes in financial resilience determinants. The research methods include systemic and structural analyses (building an information and analytical model for studying financial resilience), Granger test (identifying causal relationships between the variables under study), risk theory (studying the nature of fluctuations), and spatial and temporal approach. Data from the regions (oblasts) of Ukraine between 2015 and 2021 form the informational and analytical basis of the study. The paper reveals that the targeted use of transfers for socio-economic progress, increasing investment capacity, and bolstering financial and budgetary autonomy through increasing local budget revenues are the dominant financial determinants of regional economic growth. The results show that the most dominant causal nexus exists between (1) budgetary efficiency, interest rates on consumer/mortgage loans, and SME development, (2) the volume of loans/deposits and labor market efficiency and SME development, and (3) innovation development and foreign economic cooperation. Intensification of investment activity is crucial for ensuring real changes in the economic structure of all regions, particularly outsiders, accelerating transformation processes, mitigating regional economic divergence, and increasing competitiveness. AcknowledgmentsThe study was conducted within the framework of the “Financial Determinants of Ensuring Economic Growth of Regions and Territorial Communities based on Behavioral Economics” project (№ 2020.02/0215) funded by the National Research Foundation of Ukraine (Competition “Support for Research of Leading and Young Scientists”).

A Study on the Matching Efficiency of Malaysia's Labor Market during the Covid-19 Pandemic using the DEA-Malmquist Productivity Index

This paper analyses the matching efficiency of the Malaysian labor market during the COVID-19 pandemic. Employing Malmquist DEA, the results indicate that from January 2020 to December 2021, the average total factor productivity change is 0.967. TFPCH declined and had an average growth rate of -3.3% during the sample period. Decomposing TFPCH into technical change (TECHCH) and efficiency change (EFFCH), low TECHCH, with an average growth rate of -10.2%, is the main reason why TFPCH is far from the effective frontier. The TFPCH of the mining and quarrying industry is the highest, with an average growth of 18.7%. The TFPCH of both manufacturing and construction industries are the lowest with average annual growths of -1.7% and -7.6% respectively. Overall, it can be concluded that one of the main drivers to enhance the matching efficiency of the labor market is technical change or technological progress. One way is to strengthen online platforms that can help the firm or industry to match job vacancies to job seekers, even during economic shocks.

What drives global competitiveness in the European Union countries?

AbstractThis paper examines the effect of factors of national competitiveness measured by the Global Competitiveness Index (GCI). It aims to identify the key factors that determine GCI of the European Union (EU-28) countries. We observe the composite indicator of GCI and the 12 factors of competitiveness in the period of 2008–2019 focusing on the links between the GCI and the factors of institutions, infrastructure, macroeconomic environment and its stability and market size. The GCI is determined using correlation and regression analyses and Structural Equation Model. A significantly positive relationship with the GCI is confirmed for institutions, infrastructure, macroeconomic environment and stability, labour market efficiency, market size, technological readiness in terms of information and communication technologies, and business sophistication and dynamism, but not for higher education and training and financial market development. The quality institutions are confirmed as a fundamental positive factor for the GCI together with macroeconomic environment and stability and market size. The study contributes with an empirical analysis that confirms the relationship between the selected factors of competitiveness and the GCI in the EU-28 countries.

Cross-level assessment of process innovation practices: an empirical approach to small and medium manufacturing enterprises in Southeast Asia

Process innovation is the core that helps both firms and countries achieve development goals quickly and sustainably. However, how a country’s ecosystem aligns with the innovation development of domestic firms and reverses backwards is less discussed. This study examines how process innovation practices at different levels affect the firms’ and governments’ performance to build a global competitiveness roadmap. The data of 4,859 small and medium manufacturing firms in nine Southeast Asian countries are used to examine the critical process innovation practices at the firm level, then utilized the Global Competitiveness Index to determine whether the cross-level effects the relationship between process innovation practices and firms, and national competitiveness performance. A two-level hierarchical model shows that innovation investment positively impacts process innovation practices. Higher education, training, and labor market efficiency also have a cross-level influence on process innovation. Finally, firm performance is boosted by integrating process innovation with financial market growth and size. The contributions are: (1) demonstrating a direct and indirect impact of innovation investment on process innovation practices and (2) providing an in-depth look at the cross-level effect of process innovation on global competitiveness.

Innovation, global competitiveness, and green total factor productivity: evidence from theBelt and Road Initiative region?

In the context of intensifying global competition, the Belt and Road Initiative is increasingly becoming an important choice for countries to achieve green development. Therefore, this study selected 116 countries worldwide as samples to empirically test the green development situation of Belt and Road Initiative countries from 2013 to 2020. Additionally, a simultaneous equation model was used to study the impact and mechanism of innovation capability on green total factor productivity (GTFP) in Belt and Road Initiative countries. The results show that he average annual growth in green total factor productivity was 2.9% between 2013 and 2020 in Belt and Road Initiative countries. Innovation is an effective means of promoting the improvement of GTFP, mainly relying on the single-track drive of green technical progress. Furthermore, global competitiveness has a significant moderating effect on this result, with market size, financial market, and labor market efficiency being the main regulating factors for efficiency enhancers, while infrastructure and macro-economic environment are the main regulating factors for basic requirements. In addition, developing countries rely more on innovation types that involve technology imports to promote the improvement of GTFP. Finally, in the analysis of regional heterogeneity, we found that the results of the four continents were more consistent with the regression results of the total sample, but the mechanisms of action between regions were different.

Does employment status matter for job quality? A cross-national perspective.

Dual labour market theory raises questions about the relationship between non-standard employment and job quality. While scattered empirical evidence exists, there is a paucity of systematic evidence on the relationship between workers' employment status and job quality. The authors investigated the relation between workers' employment status (e.g., open-ended, long- and short-term fixed contracts, economically dependent and independent solo self-employment, and self-employment with employees) and important dimensions of job quality (JQ) (e.g., employment prospects, physical work environment, skills and discretion, and working times quality). Cross-national variation in that relation and causes of that variation (e.g., country-level unemployment rate and labour market efficiency) were also investigated. Hierarchical regression modelling was applied using a sample of 34,094 workers from the European Working Conditions Survey 2015. The study highlighted a negative association between fixed-term contracts and JQ. For self-employed workers (except economically dependent self-employed workers) a generally positive association was observed. In this study, also positive associations were found between labour market efficiency at the country-level and some JQ indicators. National unemployment rates were negatively associated to most JQ indicators. Non-standard employment contracts exhibited poorer job quality than open-ended contracts. Stronger labour market organization centred around indicators of both flexibility and equity related to more beneficial job quality for all employment statuses, thereby promoting more labour market inclusivity.

Enhancing Labour Policies: Ensuring Fair Treatment for Contract Labourers

The article provides an overview of the procedures involved in hiring contract laborers and explores various aspects related to labour laws, occupational safety, violations, and the status of contract workers in India and other countries. The article highlights the need for registration and certification under state government, provision of facilities for laborers, and adherence to occupational safety standards. It discusses the importance of maintaining a balance between labour market efficiency and job security measures. The article emphasizes the need for proper enforcement of labour-related laws and the implementation of social security schemes to protect the rights and well-being of contract workers. It also sheds light on the violations of labour laws and the challenges faced by contract workers in terms of job security and fair wages. The article compares labour laws and practices in different countries, including China, East and Southeast Asian countries, Europe, and the United States, providing insights into their approaches towards labour protection and productivity. Furthermore, the article addresses the issue of equal pay for equal work and the Supreme Court's stance on the contract labour system. It raises concerns about the promotion of the contract labour system by the government and the exploitation faced by contract workers in various industries, including multinational companies. The article concludes with recommendations to enhance labour policies, such as providing flexibility in employment, improving skill development programs, ensuring fair wages and benefits, and enforcing labour laws effectively. Overall, this article provides a comprehensive overview of procedures for hiring contract laborers and highlights the challenges, violations, and recommendations related to labour laws and the well-being of contract workers in India and other countries.

Stay or emigrate? How social capital influences selective migration in Italy

ABSTRACT Internal migration in Italy has been characterised by deep changes in its composition, because of the growing share of high-skilled migrants (the emigration of which contributes to widening the internal brain drain) and the decreasing proportion of low-skilled migrants. Furthermore, recent interest in the literature in the role played by noneconomic elements in affecting migration decisions has highlighted the importance of a nonpecuniary factor, namely social capital (SC). For these reasons, this paper empirically investigates the role played by SC in interprovincial selective migration, considering migrants according to two education levels using data on 103 Italian provinces (2004–2012). The main findings reveal that provincial SC mainly contributes to reducing the migration flows of low-skilled individuals, albeit while also deterring the emigration of high-skilled individuals. Control variables confirm that better income conditions represent an important determinant of high-skilled migrants most likely because they seek to earn more, while better socioeconomic conditions such as labour market efficiency mostly influence those with a lower level of education.