Effect Of Employment Growth Research Articles

Who benefits more? The heterogeneous impact of highways on employment growth

ABSTRACT This paper explores the relationship between the stock of interstate highways on employment growth of counties in Texas between 1983 and 2012. Using the Chernozhukov-Hansen instrumental variables quantile regression (IVQR) method, we examine the heterogeneous impact that highways have on employment growth at different quantiles of the conditional distribution while at the same time controlling for potential endogeneity. The results show that the employment growth effect monotonically increases as one shifts from the lower tail to the upper tail of the distribution. The range is 0.15 to 0.44, with the highest at the 95th quantile, compared to 0.189 for OLS and 0.213 for 2SLS. A 10 percent increase in interstate highway kilometers in 1983 led to about a 1.5 to 4.4 percentage point increase in county employment over a 29-year period. Our results also indicate that the counties with low initial levels of employment grew faster than those with a high initial level of employment and that this convergence monotonically decreases from the lower tail to the upper tail of the growth distribution.

Distribution and Productivity Growth: An Empirical Exercise Applied to Selected Latin American Countries

ABSTRACT The paper investigates whether productivity growth is affected by the rate of growth of income and by that of employment for a representative sample of Latin American countries from the 1980s to the early 2010s. Having post-Kaleckian models as background, the paper empirically assesses the relationship between these variables, which are believed to be behind the underdeveloped trap, low productivity growth, high income concentration and low-income growth. The results show a positive impact of the rate of growth of income over productivity, the so called Kaldor-Verdoorn coefficient. However, the vast majority of the sample, the effect of employment growth on productivity growth was not significant. The latter results are consistent to the interpretation offered by the Latin American Structuralist School, who has long argued that one of the hallmarks of underdetermine is uneven spread of the productivity gains though the economy. This is the framework used to interpret the results.

The Effects of Reforming a Federal Employment Agency on Labor Demand

In this paper we report the results of an empirical study on the employment growth effects of a policy intervention, explicitly aimed at increasing placement efficiency of the Federal Employment Agency in Germany. We use the Hartz III reform in the year 2004 as an exogenous intervention that improves the matching process and compare establishments that use the services of the Federal Employment Agency with establishments that do not use the placement services. Using detailed German establishment level data, our difference-in-differences estimates reveal an increase in employment growth among those firms that use the agency for their recruitment activities compared to non-user firms. After the Hartz III reform was in place, establishments using the agency grew roughly two percentage points faster in terms of employment relative to non-users and those establishments achieve an increase in the proportion of hires. We provide several robustness tests using, for example, inverse-probability weighting to additionally account for differences in observable characteristics. Our paper highlights the importance of the placement service on the labor demand side, in particular on the so far overlooked establishment level.

The Study on the Difference in Corporate Performance and Employment Outcomes According to the Results of Equity-Based Crowdfunding Investment

The purpose of this study is to identify the difference in firm performance and employment growth between successful and failed capital procurement through equity-based crowdfunding. We conduct an empirical analysis using entire crowdfunding projects that attempted to raise capital through equity-based crowdfunding in South Korea in 2016. We summarize our findings as follows. Descriptive statistics show that the survival rate, sales growth rate, profitability growth, absolute employment growth, and employment growth rate of companies with successful crowdfunding are higher than those of companies with failed crowdfunding. However, from the difference analysis, we do not find a significant difference in the survival rate, sales growth rate, and profitability growth between companies with crowdfunding success and companies with crowdfunding failure. We find that the absolute employment growth and employment growth rate are significantly higher for companies that succeeded in crowdfunding projects compared to companies that did not. In this study, we find that the characteristics of these firms that are conducting or verifying new projects through equity-based crowdfunding financing are similar to those of prior studies results confirming the short-term effects of entrepreneurial activities or new business activities on economic performance and employment growth. In particular, it is very meaningful to confirm that the direct effect of employment growth is also found in start-up firms that raise capital through equity-based crowdfunding. By investigating the difference in firm performance and employment outcomes according to the results of equity-based crowdfunding investment, this study provides useful insights to investors for their efforts to validate participation in crowdfunding. Also, our study raises important policy implications for regulators in their efforts to resolve unemployment and the lack of capital problem for startups and new businesses.

Broadband internet availability and establishments\u2019 employment growth in Germany: evidence from instrumental variables estimations

This study investigates the effect of broadband internet availability on German establishments’ employment growth. The database used is a random sample of business establishments, augmented by the local availability of broadband. The observation period is 2005–2010, when broadband was introduced in rural regions of Western Germany and in large parts of Eastern Germany. For the Western German subsample, technical frictions in broadband rollout are exploited to obtain exogenous variation in broadband availability. The findings indicate a negative (albeit not very robust) employment growth effect of broadband availability for Western German manufacturers, and a robustly positive effect for Western German service establishments, including most knowledge-intensive industries. For Eastern Germany, a similar identification strategy is potentially available, but turns out invalid in this particular setting. An alternative identification approach (a long difference model) indicates positive employment growth effects in both sectors for Eastern Germany. Overall, the findings suggest that broadband expansion has helped create jobs in firms which use broadband intensely.

Marginal Employment Growth Effects In The South African Economy

South Africa relative to its peers (upper middle income countries) suffers from high unemployment and sub-optimal economic growth. This study investigates the ‘marginal effects of employment’ with respect to real output and capital in South Africa, using annual data covering the period 1946-2015. It estimates the responsiveness of employment to real output growth and capital, employing the short and long-run dynamic interactions between these variables via the application of the VAR/VECM Johansen (1991) framework. The results show that there exists a statistically significant long-run co-integrating relationship between labour employment and real GDP growth. Marginal employment growth effect is positive; a one per cent increase in GDP tends to increase employment by about one third of one per cent. Employment adjusts consistent with expectations when it overshoots its structural relationship with other variables. However, real output tends to adjust contrary to expectations, implying significant diminishing returns to employment in the economy. Growth in capital impacts positively on output and employment. The study concluded that greater labour market flexibility and higher worker productivity is needed across all sectors of the economy.

Industry diversity, competition and firm relatedness: the impact on employment before and after the 2008 global financial crisis

ABSTRACTIndustry diversity, competition and firm relatedness: the impact on employment before and after the 2008 global financial crisis. Regional Studies. This study investigates the extent to which indicators of external-scale economies impacted employment growth in Canada over the period 2004–11. It focuses on knowledge spillovers between firms while accounting for Marshallian specialization, Jacobs’ diversity and competition by industry, as well as related and unrelated firm varieties in terms of employment and sales. It is found that the employment growth effects of local competition and diversity are positive, while the effect of Marshallian specialization is negative. Diversification is found to be particularly important for employment growth during the global financial crisis and immediately thereafter.

Does employment growth increase travel time to work?: An empirical analysis using military troop movements

Employment growth is a common public policy goal, but it can lead to a number of unwanted environmental, social, and economic costs – particularly in high growth communities – due to its impact on peak-hour traffic. This paper examines the short-run impacts of rapid employment growth on travel time to work. We exploit exogenous variation in employment levels resulting from movements of military troops during the 2005 Base Realignment and Closure (BRAC) in order to identify the effect of employment growth on travel time using difference-in-difference-in-differences and instrumental variable methods. Our results show that for each additional 10 workers added per square kilometer, travel time increases by 0.171 to 0.244min per one-way commute trip per commuter in the short run, which equates to $0.07 to $0.20 in travel time cost per commuter per day. Our estimates imply that the annualized short-run congestion costs of the 2005 BRAC were $79 to $761 million per year (in constant 2005 dollars) for military commuters and $3.15 to $6.3 billion per year (in constant 2005 dollars) for civilian commuters in BRAC-affected areas.

The Celtic Tiger and home leaving among Irish young adults

This paper examines the effect of local economic growth on whether young adults move out of the parental home to form new households—an important milestone in the transition to adulthood. I use the placement of foreign direct investment during the Celtic Tiger, the large economic expansion in Ireland during the 1990s, to estimate the impact of local job growth on the likelihood that young adults leave home. This paper contributes to the literature by exploiting an exogenous shock to the local labor market to identify the main effect of employment growth on home leaving behavior. The results show that local economic growth increases the probability that young adults leave home particularly for the well-educated young adults most likely to be employed in the factories that opened during the period.

Is the Union Employment Suppression Effect Diminishing? Further Evidence from Canada

That unions suppress employment growth among their employers has been such a ubiquitous finding that it has been dubbed “the one constant” in industrial relations research (Addison and Belfield, 2004). However, all of the empirical findings on which this conclusion is based come from data collected in 1998 or earlier, and the Canadian findings (Long, 1993) date from more than twenty-five years ago. Noting this, Walsworth (2010a) utilized data from the Statistics Canada Workplace and Employee Survey (WES) covering the period 1999-2005 to investigate the more recent magnitude of the employment growth suppression effect in Canada. He found that, compared to Long’s (1993) findings, the union employment suppression effect has apparently diminished in Canada. However, we note that Walsworth’s (2010a) analysis is not comparable to that conducted by Long (1993) in several ways. For example, Walsworth (2010a) did not segment his analysis by establishment size, or by industrial sector. Moreover, Walsworth (2010a) attempted no analysis of the reasons behind a possible diminution in the union employment growth suppression effect, an omission that we address by examining employee earnings growth and the union wage premium as possible contributing factors. We analyze WES data collected during 2001-2006 and, like Long (1993), find important differences when segmenting our analysis according to establishment size, as the union employment suppression effect was evidenced in large manufacturing establishments, but not in smaller manufacturing establishments. However, unlike Long (1993), we also find important differences between the manufacturing sector and the service sector, where we find no union employment suppression effect among larger service establishments, and a significant positive union effect on employment growth among smaller service establishments—the first finding of a positive union employment growth effect in any context. Our analysis suggests that a declining union wage premium may have played a role in these results.

PROSPECTS OF ENTREPRENEURSHIP TO THE CHALLENGE OF JOB CREATION IN SOUTH AFRICA

Entrepreneurship is critical to job creation and economic growth. Unemployment in South Africa is presently at about 25 percent. The formal sector is unable to provide adequate employment opportunities for labor although the country registered positive economic growth rates over the past 17 years since the demise of apartheid. Some people manage to obtain employment in the informal sector. However, this sector also has been shedding labor recently. Although the government has responded with many initiatives to deal with employment creation, unemployment rates, especially among the youth, remain a formidable challenge. Entrepreneurship, through the creation of new ventures and expansion of business firms, can make a difference to absorb more people in the labor market. However, this depends on the level of entrepreneurial capacity and environment of the South African economy. This paper examines the problem of low employment economic growth performance over the post-apartheid period. By drawing on the Harrod-Domar model as a heuristic guide, and using regression analysis, the paper highlights the probable links between changes in economic growth and in employment. The results indicate the marginal employment growth effect is positive, the growth elasticity of employment is low over the 1994–2010 period and investment in relation to the country's desired growth in GDP is also found to be low. The paper identifies some constraints to employment creation against the entrepreneurial environmental conditions in South Africa and then examines how entrepreneurship can make a difference to employment creation.

Bayesian testing of restrictions on vector autoregressive models

In this study, we propose a prior on restricted Vector Autoregressive (VAR) models. The prior setting permits efficient Markov Chain Monte Carlo (MCMC) sampling from the posterior of the VAR parameters and estimation of the Bayes factor. Numerical simulations show that when the sample size is small, the Bayes factor is more effective in selecting the correct model than the commonly used Schwarz criterion. We conduct Bayesian hypothesis testing of VAR models on the macroeconomic, state-, and sector-specific effects of employment growth.

Foreign acquisition, plant survival, and employment growth

Abstract This paper analyzes the effect of foreign acquisition on survival and employment growth of targets using data on Swedish manufacturing plants. We separate targeted plants into those within Swedish MNEs, Swedish exporting non‐MNEs, and purely domestic firms. The results, controlling for possible endogeneity of acquisition using IV and propensity score matching approaches suggest that acquisition by foreign owners increases the lifetime of the acquired plants only if the plant was an exporter. The effect is robust to controlling for domestic acquisitions and differs between horizontal and vertical acquisitions. We find robust positive employment growth effects only for exporters and only if the takeover is vertical.

Foreign Acquisitions, Plant Survival, and Employment Growth

This paper analyses the effect of foreign acquisition on survival probability and employment growth of target plant using data on Swedish manufacturing plants during the period 1993-2002. An improvement over previous studies is that we take into account firm level heterogeneity by separating the targeted plants into those within Swedish MNEs, Swedish exporting non-MNEs, and purely domestic firms before foreign takeover. The results, controlling for possible endogeneity of the acquisition dummy using an IV and propensity score matching approach suggest that acquisition by foreign owners increases the lifetime of the acquired plants only if the plant was an exporter. The effect differs depending on whether the acquisition is horizontal or vertical. We also find robust positive employment growth effects only for exporters, and only if the takeover is vertical, not horizontal.

Foreign Acquisition, Plant Survival, and Employment Growth

This paper analyzes the effect of foreign acquisition on survival and employment growth of targets using data on Swedish manufacturing plants. We separate targeted plants into those within Swedish MNEs, Swedish exporting non-MNEs, and purely domestic firms. The results, controlling for possible endogeneity of acquisition using IV and propensity score matching approaches suggest that acquisition by foreign owners increases the lifetime of the acquired plants only if the plant was an exporter. The effect is robust to controlling for domestic acquisitions and differs between horizontal and vertical acquisitions. We find robust positive employment growth effects only for exporters and only if the takeover is vertical.

The 'Shadow of Succession': A Non-Parametric Matching Approach

The paper analyses the relationship between succession and firm performance. Applying a non-parametric matching approach on a panel of roughly 4,000 Austrian family firms we evaluate the impact of past succession as well as future succession plans on employment growth. Analysing succession plans, we do not find a 'shadow of succession' effect. No significant difference in employment growth is found between firms that plan to transfer the firm in the next ten years and those who do not. In contrast, past succession exerts a significant and positive employment growth effect which becomes stronger over time. Thus, our findings provide support for the existence of a positive employment shadow after a transfer, whereas the shadow of succession hypothesis has to be rejected prior to transition. (author's abstract)

Differential Gains from Business Link Support and Advice: A Treatment Effects Approach

The provision of advisory support to small firms is almost ubiquitous in OECD countries, although it is organised in different ways and is justified on slightly different grounds. In England publicly supported advisory services are provided through the Business Link (BL) network. Here, we consider two questions: what sort of companies receive advisory support from BL; and, what types of firms benefit most from that support? Our analysis is based on a telephone survey of 2000 firms, around half of which had received intensive assistance from BL between April and October 2003. Probit analysis suggests that the probability of receiving assistance was greater among younger businesses, those with larger numbers of directors in the firm, and those with more gender diversity among the firm's leadership team. Our business-growth models suggest that BL intensive assistance was having a positive effect on employment growth in 2003. BL had a positive but insignificant impact on sales growth over the period. Employment growth effects tend to be larger where firms have a management and organisational structure, which is more conducive to absorbing and making use of external advice. The analysis suggests that BL might increase its impact through targeting these larger, more export-orientated, businesses. Employment growth effects differ little, however, depending on either the ethnic or the gender diversity of the leadership team.

Succession and firm growth: results from a non-parametric matching approach

The article analyses the relationship between succession and firm performance. Applying a non-parametric matching approach on a panel of roughly 4,000 Austrian family firms we evaluate the impact of actual (past) succession as well as planned (future) successions on employment growth. Analysing succession plans, we do not find a significant difference in employment growth between firms that plan to transfer the firm in the next 10 years and those who do not. In contrast, past succession exerts a significant and positive employment growth effect, which becomes stronger over time.

Dispersion or concentration for the 1.5 generation? Destination choices of the children of immigrants in the US

AbstractThis paper examines the determinants of intermetropolitan destination choice between 1995 and 2000 for foreign‐born and 1.5 generation adult children of immigrants in the US. In addition to distance and labour‐force variables, metro‐level measures of immigrant–native wage inequality and immigrant concentration are considered. A competing‐destinations accessibility parameter is included in order to assess the spatial structure of destination choice. Although assimilation theories, especially in their spatial assimilation variant, might suggest that intergenerational social mobility should be connected with spatial dispersion, these models reveal the continuing importance of metro‐ and regional‐scale immigrant concentration for the children of immigrants. When the destination concentration variable is added to reduced‐form models, the positive effect of employment growth declines significantly, indicating that ethnic concentration may continue to be more important for the children of immigrants than more simply framed economic conditions. A comparative origin–destination immigrant–native wage gap measure is also a strongly positive determinant of destination choice, indicating the importance of relative wages in destination choice. Furthermore, the increased model strength and parameter estimates associated with immigrant concentration and a concentration‐weighted accessibility measure suggest that the spatial structure of destination choice has much to do with immigrant concentration at multiple scales – from metro areas to immigrant states and regions. The paper thus suggests more attention to theorising the geographical contexts within which intergenerational immigrant incorporation occurs. Copyright © 2007 John Wiley & Sons, Ltd.

Dispersion or Concentration for the 1.5 Generation? Destination Choices of the Children of Immigrants in the Us

This paper examines determinants of inter-metropolitan destination choice for foreign-born and 1.5 generation adult children of immigrants in the US. An immigrant concentrationweighted accessibility parameter is included to assess the spatial structure of destination choice. A comparative origin-destination immigrant-native wage gap measure is also a strong determinant of destination choice, indicating the significance of relative labor market position. Although spatial assimilation perspectives would suggest that intergenerational social mobility should be connected with spatial dispersion, these models reveal the continuing importance of immigrant concentration for the 1.5 generation. When the destination concentration variable is added to reduced-form models, the positive effect of employment growth declines significantly, indicating that ethnic concentration may continue to be more important for the children of immigrants than more simply-framed economic conditions. Further, the increased model strength and parameter estimates associated with immigrant concentration and the accessibility measure suggest the spatial structure of destination choice depends on immigrant concentration at multiple scales - both to metro areas and to immigrant states or regions. The paper thus presents evidence for and suggests more attention to theorizing the geographic contexts of intergenerational immigrant incorporation.