Employment Of Low-skilled Workers Research Articles

Minimum Wage and Employment of Malaysian Low-skilled Workers

The current study is inspired by inconclusive empirical findings on the impacts of minimum wage on employment. The majority of past studies have concluded that an increase in the minimum wage negatively impacts employment, despite certain scholars discovering either an insignificant or a positive impact. Hence, this study aims to investigate the impact of the Malaysian minimum wage on the employment opportunities of low-skilled workers. The data are collected annually from 1995 to 2020. An autoregressive distributed lag (ARDL) model is employed to examine the impact of the Malaysian minimum wage on the employment of low-skilled workers. The bounds test method and error correction model (ECM) are subsequently utilised to determine both short- and long-term effects. As a result, the employment of low-skilled labour is found to be positively impacted by the minimum wage, with this impact being statistically significant in both the short and long terms. However, when the interaction variables are included, the effect on the employment of low-skilled workers is negative and insignificant. Furthermore, neither increasing labour productivity nor technological advancement significantly altered the impact of the minimum wage on employment.

Minimum wages effects on low-skilled workers in less developed regions of China

PurposeThe purpose of this paper is to estimate the causal effect of minimum wages on the employment of low-skilled workers in less developed regions of China.Design/methodology/approachBased on data from the China Health and Nutrition Survey, a double-difference (DD) methodology is used to compare the employment of low-skilled individuals before and after a minimum wage increase in their provinces with a comparison group of individuals in provinces that did not have a minimum wage increase. Also, a triple-difference methodology (DDD) is used that also includes an additional control group of highly educated workers as a within-province internal comparison group that should not be affected by a minimum wage increase.FindingsNo evidence of an adverse employment effect is found in any of the 36 different estimates, consistent with recent US evidence that uses a similar DD methodology.Research limitations/implicationsThe data are not national representative; rather heavily weighted towards the less developed Central, Western and parts of the Eastern Regions of China. This may partially explain the absence of the theoretically expected adverse employment effect. Other related reasons are discussed, including: lack of enforcement in those less developed regions; a large presence of state-owned enterprises in the regions where employment security clause remains intact; the relatively less developed labour markets in the regions including where employers may behave in a monopsony fashion in their labour markets; shock effects; and cost offsets from reduced fringe benefits and increases in the pace of work. This paper was unable to disentangle the separate effect of these possible factors.Originality/valueThis is one of the few studies on minimum wages in China to focus on low-skilled workers in less developed regions, to use individuals as the unit of observation rather than aggregates, and to provide causal estimates based on DD and DDD methodologies.

The Labor Market Effects of a Refugee Wave: Synthetic Control Method Meets the Mariel Boatlift

We apply the Synthetic Control Method to re-examine the effects of the Mariel Boatlift, a large inflow of Cubans into Miami in 1980, first studied by David Card (1990). This method improves on previous studies by choosing a control group so as to best match Miami's labor market features before the Boatlift. We also provide reliable standard errors for the inference. Using data from the larger and more precise May-ORG Current Population Survey (CPS) one finds no significant departure of wages and employment of low-skilled workers between Miami and its control after 1979. The result is robust to several checks.

Subsidies on Low Skilled's Social Security Contributions: The Case of Belgium

Belgium is characterised by a comparatively high tax wedge. Starting from the end of the 90's there has been a growing concern over the effect of high labour costs on the employment of low skilled workers. One of the most innovative measures implemented by the federal government is the targeted reduction on social security contributions for low skilled workers: the Workbonus. The subsidy has increased steadily over the period 2000-2006. At the same time the eligibility to the benefit was considerably extended. The innovative feature of the tax credit is that - differently from other measure existing in OECD countries - eligibility is based on full-time equivalent earnings. The instrument therefore distinguishes between low skill and low effort and avoids the disincentive effect on labour supply at the intensive margin that is typically found in traditional measures means-tested on disposable income or earnings. This paper assesses the effects of the Workbonus on labour supply using different econometric frameworks. In particular, we compare estimates based on a traditional labour supply model, with results based on a modeling framework which accounts for heterogeneity in individuals' job opportunities. Results show that accounting for demand side constraints leads to significantly lower estimates of labour supply effects. Nevertheless, the measure has a positive impact on labour supply and comparatively low cost per additional job created.

Zur Lage auf dem Arbeitsmarkt: Reformvorschläge in der Diskussion

Abstract Johann Eekhoff deals with the employment of low skilled workers. He recommends not to subsidize recipients of social security, but to offer them unpaid jobs, so that they get a chance to render their services in return of the received social aid, to train their skills, and to improve their prospect of getting a regular job. Monetary incentives for work are not compatible with the system of social security, and they are not necessary. The main problem is not willingness to work but the denial of jobs for low skilled workers in a society with strong labor unions and restrictive regulations. Charitable employment is one way to relieve the problems of unemployed recipients of social security, to increase employment, and to reduce public spending. In his paper Wolfgang Franz points out „The Need to more Flexibility on Labor Markets in Germany”. He determinates that an important aspect distinguishes the time pattern of unemployment in Germany from that in other countries such as the United States. After a recession unemployment rates in Germany do not decline to pre-recession levels. This raises the suspicion that ratchet effects are at work. Besides an unadequate wage policy several malfunctionings of the institutional framework of the labor market are highlighted in his paper mostly associated with labor laws such as lay-off restraints, insufficient decentralized. Alexander Sperman is writing about the improving financial incentives by the Mainz employee subsidy model - a placebo pill for low qualified workers? He determinates that the Mainz employee subsidy model was introduced in March 2002. It implies a time-restricted, degressive employee subsidy that subsidizes a part of employee’s social insurance contributions for a maximum of three years. In his paper he points out the enormous bureaucratic effort associated with paying back social contributions. A much more simplier and cost effective measure to reach the same goal would be to reduce the burden of social insurance contributions directly rather than indirectly. But for political economic reasons the chosen procedure could be reasonable. Furthermore, the introduction of the Mainz model was premature because evaluation results of field experiments with a couple of employee subsidy models are still missing. Therefore, the Mainz model could easily be a placebo pill for the low qualified workers as well as „Red Bull” for the government in election times.

The impact of trade on the relative wages and employment of low skill workers in France

The impact of international trade on labour markets in developed countries will be different according to the degree of competition in product markets, the flexibility of the labour market and the skill intensity of production. An econometric analysis of the impact of trade in France has been undertaken using sectoral data for the period 1985–p1992. It is found that lower relative import prices reduce the relative employment of low skill workers in the first half the period and reduce their relative wages in the second half. In both cases the effect is more pronounced in sectors where the skill intensity of production is initially low.

The impact of trade on the relative wages and employment of low skill workers in France

The impact of trade on the relative wages and employment of low skill workers in France